Rich, Fit and Happy Show

57 | The Unfiltered Perspective: Diving into Security Tokens and Emerging Trends in the Financial World with Mark Fidelman

• Crystal O'Connor • Season 2 • Episode 57

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Imagine a world where you can easily and securely invest in valuable assets like real estate through tokenization. How does that impact the future of investing? Meet Mark Fidelman, the tech-savvy founder of SmartBlocks.Agency, who has been making waves in the world of crypto and ecommerce for over two decades. With a background in technology sales, marketing, and customer experience, Mark has been instrumental in driving growth for organizations such as NFT leader WAX.io.

But that's not all - Mark has also been recognized as a top influencer by Forbes Magazine, named a social media keynote speaker by Inc Magazine, and ranked among the Huffington Post's Top 50 Most Social CEOs. He's even got his own YouTube channel, Cryptonized!, where he shares insights on the hottest crypto trends.

As a globally recognized thought leader on cryptocurrency and ecommerce, Mark has written for Forbes and interviewed hundreds of CXOs from Global 3000 companies. His expertise and experience make him a sought-after speaker and writer, and you can keep up with his latest insights by following him on Twitter at http://twitter.com/#!/markfidelman.

Find more about Guest at:

Sign up with Ageless Ambition by visiting https://www.AgelessAmbition.com

You can also schedule a call with me or one of my team members at https://www.calendly.com/wealthy-wellness

Health and Wellness practitioners: you can learn more at http://www.WealthyWellnessAcademy.com

Speaker 1:

If you're investing in a hotel and there's a secondary market for that hotel before any liquidity event, before any dividends, it's automatically more valuable. That's why corporations issue stock. For people that give these security tokens out, you don't have the reporting requirements that you do as a stock exchange, yet The token trades like a stock. Yes, depending on what legal structure you use, there are some reporting requirements, but they're far less than they are for publicly traded companies And it's about 30 times cheaper to be listed on a security token exchange than it is the stock market. You know NASDAQ or the New York Stock Exchange, So that's for issuers.

Speaker 2:

Welcome to the Rich, Fit and Happy podcast. I'm Crystal O'Connor, where we want to take you from drab to fab in this beautiful life. Let's go, Hello, hello. Welcome to Rich, Fit and Happy. I have someone on today that I feel like is kind of famous. He's definitely famous in the crypto world And the more I watched his videos, the more I became interested, because I've been kind of dabbling in crypto myself And you know, I just today interviewed a financial advisor, and they have a whole different attitude than Mark does, So you almost don't know who to listen to. But let me just tell you who Mark Fettelman is. Did I pronounce your name right?

Speaker 1:

Fidelman, you're close.

Speaker 2:

Fidelman. I've heard it pronounced a couple of different ways online. Okay, so Mark has been named a top influencer by Forbes magazine, recognized as a social media keynote speaker by Inc magazine and ranked among Huffington Post's top 50 most social CEO. I could go on and on, but let's just dig right in, because I want to know what tokenization is. What in the world are you talking about?

Speaker 1:

Yeah, i'm glad you asked because a lot of people don't know. So imagine any valuable asset really any asset, but right now, valuable assets that are represented by a digital token on a blockchain. Currently, if you invest in real estate, you might get a piece of paper or some sort of contract from the real estate developer, but you can't trade it. It's locked. You have to rely on what they're telling you in order to understand what's going on. The security token is on a blockchain, so it's fully transparent And, if you want, i could break down these concepts, but fully transparent, with an audit trail to show what's exactly happening. And it's very easy for that real estate development company to pay you a dividend if that's where you're going. But that's just one use case. One example You can literally tokenize anything of value, either to track it or to use it in the secondary market in order to trade it like a stock. Just thinking of it as a mini stock or any asset you can think of, that's a value.

Speaker 2:

So an NFT would be one.

Speaker 1:

NFT as long as it's backed by a real asset. An NFT, to me, is a waste of money. I'm going to get a lot of flack for this because it's a JPEG. Essentially There might be some videos, but what is it really tied to? I could just print more of them slightly different. So it's an original NFT, but what's the real value of that, whereas an NFT is backed by something. Let's say it's a piece of real estate that also gives you access to. Ok, let's just say it's a hotel. You get five nights a week at this hotel. By the way, you get dividends in the form of cash flow because the hotel is making money and if the hotel sells, you know your NFT is worth a lot more. So the differences security tokens and tokenization, which I represent are not crypto per se. They just use the same tools that crypto uses and can be traded the same way crypto is traded.

Speaker 2:

OK. So a minute ago, when I mentioned tokenization, you said you could break it down. Do you want to do that real quick?

Speaker 1:

OK, i'm going to use the hotel example, for example. A lot of us can't invest in these hotel projects. Why? Because they're either done by big private equity firms or big high net worth individuals or family offices. Because they don't want to deal with us. Let's face it. They don't want to deal with somebody putting in a thousand, five thousand, twenty thousand dollars.

Speaker 2:

Are they known as elites?

Speaker 1:

No, they're just known as limited partners.

Speaker 2:

OK.

Speaker 1:

OK, there's a general partner that controls a project and a limited partner that's investing in it. They don't want a thousand limited partners because they're a pain in the ass. However, when you tokenize the project, the hotel, and you issue, let's say, 100,000 tokens, they don't need to manage anything because the actual token does. The managing The token that I would have in my digital wallet gives me updates. It tells me I can trade it to somebody else. I can trade it through an exchange without the involvement of the general partners. I'm totally anonymous. I own a piece of your business, but I'm anonymous and all the information is coming to me and any cash flow is coming to me automatically without them having to do anything. And, by the way, unlike crypto, it's very safe. So if I lose we talk prior to this about people losing their Bitcoin If I lose it because it's white listed on these blockchains, they could cancel that and issue a new one. So if somebody hacks me or if I lose it, i can get it right back. I mean, it's very safe as well.

Speaker 2:

OK, So what are the benefits of using security tokens both in investments and for issuers?

Speaker 1:

Yeah, so the issuers? the issuers now have a way of issuing tokens for their projects or their assets that are liquid. So you might actually get more money as a result of issuing security tokens for your particular project, because people now feel like, oh my gosh, i can now invest in this And there's a secondary market for it, so that in itself makes it more valuable. If you're investing in a hotel and there's a secondary market for that hotel, before any liquidity event, before any dividends, it's automatically more valuable. That's why corporations issue stock.

Speaker 1:

For people that give these security tokens out, you don't have the reporting requirements that you do as a stock exchange yet, but token trades like a stock. Yes, depending on what legal structure you use, there are some reporting requirements, but they're far less than they are for publicly traded companies, and it's about 30 times cheaper to be listed on a security token exchange than it is the stock market. You know NASDA or the New York Stock Exchange. So that's for issuers And people like you and me that are buying them. Well, this is the best thing ever.

Speaker 1:

Millennials complain to me so does Gen Z that they can't buy a house. Well, the best thing in the world is to buy security tokens that are invested in individual projects and they're paying dividends. So I mean, you do this for three or four years. You have a pretty good income coming in in projects that you could never get in before because you didn't have $2 million to put into the hotel investment. So this is how you make money. Your show is a part about that Buying these security tokens that pay dividends and holding on to them. You not only appreciate that they're paying dividends and they're easy to trade.

Speaker 2:

Okay, so what are some of the best that you know of right now?

Speaker 1:

I get in trouble when I say this without a financial disclosure, but I just had a post on it. I would invest in the infrastructure tokens at this point because I don't want to say, like Aspen coin, it is a hotel token. They're up 46% already this year, in 2023. It's based on the St Regis Resort in Aspen, colorado, great project. But I would go like INX Group, which is the security exchange itself. Probably T0 are some other tokens that pay all these pay dividends.

Speaker 1:

There's a Bitcoin mining company I just covered and I can't remember the name, so they give off all their cash flow from all of the Bitcoin mining that they do. I think that's another legit one with a proven business model. But I'm going to put out a list of what I recommend. I've already done it on Instagram. If you go to my Instagram handle, i put out three, but I got to be very careful with what I put out A, because I'm not a financial analyst. And B, i can't be seen as promoting these things as well. These are real, legitimate tokens backed by SEC rules.

Speaker 2:

Okay, where do they go to get them?

Speaker 1:

For someone that Any security token exchange. I like INX Group, i like T0. Depending on what country you're in, there might be other ones. Uniswap, which is a decentralized exchange, and I don't know if you want me to go into that, but it can work.

Speaker 2:

I'm not halfway through, I'll tell you.

Speaker 1:

Imagine a stock exchange, if you will. You know the US stock exchange can only you can only participate as a US citizen, right? Or if you use special exemptions. There's foreigners, but for the most part, somebody in India can't buy Apple stock. However, a decentralized exchange is not controlled by anybody And it's just up on the internet, so they literally allow you to put anything up there. They're scam tokens for crypto, but for security tokens they're actually backed by. Things by reputable companies have been vetted, but you could put anything up there so anyone in any country can go to Uniswap and buy these security tokens, unlike some of the security token exchanges based here in the US. So think of Uniswap as this lawless And trustless place on the internet. It's actually very legit and it's a computer programming running. Nobody's manipulating it, so there's no red polls. But it's algorithm based And so you could go into Uniswap and buy really anything up there crypto and security tokens. So Uniswap would be another place.

Speaker 2:

Okay, okay, so there are challenges to this, obviously. So what challenges are there in terms of regulation and compliance?

Speaker 1:

Well, you named the big ones. you're doing your homework. Here's the thing technically, there's no law that says that you can issue security tokens at all, just like crypto. There's no law it says you can, but people are doing it anyway. But security tokens are tied to what's called regulation exemptions from the SEC in the United States.

Speaker 1:

It's gonna be different in other countries, meaning the SEC has said if you file under a Reg D, a Reg A or a Reg CF, which are the crowdfunding initiatives you don't have to comply with 99% of the SEC requirements that companies that go public do. You still have to comply to the rules that have been laid out, but you don't have to go through an SEC approval process. essentially, and therefore they're legal, you're not going to jail. you're not getting Wells notices like Coinbase and some of these other companies. You're getting because you're complying, and if you're complying but bolting on a security token, that's also in compliance. I don't see any situation where you're gonna get in trouble But the regulators haven't really said, hey, this particular use case is okay. They haven't said it's not okay. That's why I don't think it's well. I think almost everyone says it's no way, it's not legal. It's legal but there could be future regulations that have changed that.

Speaker 2:

Okay, let's talk about trends and development. What trends do you see right off the bat? Because we're like, we're looking at revolutions happening in the medical field and now in what do we call this, investing money in general and how money is exchanged and all of it. So what trends do you see happening in this arena?

Speaker 1:

Ritokization.

Speaker 2:

Yeah, and any new developments?

Speaker 1:

Okay, here's the thing. This is the future. I'm betting my reputation on it, betting my money on it. Everything will be tokenized because why It's easier, cost effective and transparent. I wanna know what's going on with the things I'm investing in. or I wanna know Jimmy gave me a piece of his Lamborghini and said I own 10% of it. So if Jimmy goes to sell it, then Jimmy has to pay me the 10% that he's tokenized his Lamborghini for. These are ridiculous use cases, but you kind of get the point. It's way more effective for everyone involved to have this digital representation of these real world assets, and it doesn't have to be a physical asset. It could be like a mortgage, it could be a bond, it could be a loan. In fact, debt is three times bigger than equity in this world, so a lot of debt will be tokenized eventually.

Speaker 2:

Debt being tokenized. Wow, you're a really good teacher, by the way, but it's also it's led me to like wanna dig for questions.

Speaker 2:

So, it kind of is. So. that's why it makes it kind of hard to talk about, and I don't have as much experience in this. But so my daughter has been day trading and she likes getting it. She's only 21, she likes getting it. She actually put some money into a piece of art. Now, i don't think it's an NFT, i think it's an actual piece of art. That is completely different, though, right.

Speaker 1:

Or not, Because it's like a hotel like the example of the hotel.

Speaker 1:

I guarantee they're either using a Red CF, which is a crowdfunding initiative, and they are issuing something digitally. It might be a token, it might be an NFT, but she's doing exactly what we're just describing. She's invested in a piece of art And she hasn't owned the whole thing, unless it's a very inexpensive piece of art, and she's hoping the value of it goes up. She's smart if it appeals to high net worth individuals, because these people don't care about money half the time. They care about the art in there, but willing to pay 230 million for a van go.

Speaker 1:

So I would only focus on the upper range of that, where you're dealing with people that don't care as much about money. they care about buying things that are meaningful, And she'll make a mint on that if she buys the right thing.

Speaker 2:

Okay, so what are the benefits of using the security tokens? Do you feel like there's a lot less risk, or is that even something that you don't want to answer?

Speaker 1:

Well risk. To what, though? Are you comparing it to a traditional way of buying a painting, for example?

Speaker 2:

Well, stock. I'm actually talking about stocks as opposed to stocks now.

Speaker 1:

Stock is gonna be more. It's gonna be safer. Why? Because they have many more rules that they have to go through, but unfortunately, just the management of those rules and the management of all the things that the SEC and FINRA and everybody else requires is so burdensome that it takes a big chunk of their profits in order to do that. Why? Because there's a lot of fraud in the past, so they had to have these things in place in order to do it. So a stock is safer, but a security token is pretty dang close, especially if it's an asset that can't be sold because there's some title issue Unless, like in real estate, you put this on title right, unless they pay off the token holders. So it can be much safer than a traditional way of investing in these things, but not safer than a stock.

Speaker 2:

Okay, so you had a marketing agency, right.

Speaker 1:

Yeah, well it's a telecommunication agency. So we both bring the token to market. If you want to tokenize a big real estate project or your company, your equity in your company, we bring you through the entire process and we market it at the same time.

Speaker 2:

Okay. Didn't you at one time have a marketing agency where you worked with businesses and helped them with their marketing?

Speaker 1:

Oh yeah, So that's another side. There's a tokenization side and then there's a digital marketing side.

Speaker 2:

Okay, so which started first for you?

Speaker 1:

The digital marketing, I mean tokenization is just a new thing.

Speaker 1:

But you've been in it for quite a while. I have, because we did a lot of crypto And what I found with crypto which is what other people have found is there's a lot of scammers. I don't think most of them go intentionally into it, but when they see all the money coming in, they turn into one, and to me, i don't like that. I don't like the fact that these founders are issuing tokens that aren't tied to anything. You know the utility tokens, so they're supposed to do something. They're not tied to equity, they're not tied to a real world asset, and I said, the potential for scams is unlimited. I mean, look at Peppy token.

Speaker 2:

I don't know if you've been following that, but I heard you talking about it on one of your videos. This is a meme token, so all of you people listening, you need to go to his YouTube. Got a lot of followers, by the way, and you put out some really good stuff and you're such a good teacher and not everybody is. I didn't mean to interrupt, but go ahead, Well.

Speaker 1:

I was just warned your audience don't buy these meme tokens. Yes, you're seeing them go up, you know tremendously, but most of the time it's a pyramid scheme and the people that are making money are at the top already. Like I like to relate a story I was in the 90s where people would pass around these sheets with a pyramid and you write your name on them. I don't know if you're old enough to remember that, but only the people at the top of the pyramid ever made the money. The people at the bottom were waiting for you know it to progress over time, and it never did. And the same thing happens with these meme tokens. You might make some money, but they're all. I'd say 99% of them are rug poles.

Speaker 1:

Dogecoin has survived because Elon Musk, you know, jokingly promotes it every once in a while. But if they're not backed by anything, i would avoid them. Even if they're backed by things a utility token how do you value something like that? You have to be very, very, very careful. The reason why Bitcoin is successful is because people, the community, has backed it with faith, just like the US dollar. But the US dollar is backed by taxes and a military. Bitcoin is backed just by faith. So even Bitcoin is at risk, although I know the Bitcoin maxis will come after me. but it's proven over time that you know it's here to stay for the long haul. I'm not too worried about Bitcoin. It's some of the rest that I'm more worried about.

Speaker 2:

Like what.

Speaker 1:

Anything out of the top 100, you should just avoid entirely, because I mean there's just nothing to invest in. These are utility tokens. They're not backed by anything, So I'm like what possible value is it going to bring?

Speaker 2:

Yeah. So there's just a lot of younger people that don't know what that even means And they think it's pretty much legit and safe. And it's not at all.

Speaker 1:

It's not safe. I mean, there are legitimate projects. I don't want to paint all crypto as bad. Ethereum is very legitimate, but they make money from people building on top of it and then, you know, gas fees and all that kind of stuff go to the people that are helping to validate these things. So there are legitimate tokens out there, but I wouldn't invest outside the top 100 for sure.

Speaker 2:

So do you see a lot of younger people having the ability to kind of ride this wave for lack of better terms and become multimillionaires?

Speaker 1:

I mean, some have depending on what they're doing.

Speaker 2:

Some already have.

Speaker 1:

If I were them, i would get into tokenization security tokens because it's a far bigger industry. I mean real estate tokenization alone is worth $390 trillion worldwide. The total value of real estate worldwide is estimated to be 390 trillion. Most markets that DCs get excited about are 10 billion or more. This is 390 trillion just for real estate, but anything can be tokenized of value.

Speaker 2:

So I put it 기�凄 Trans碰. How did you and I'm sorry I interrupted there How did you get to be a keynote speaker for ink magazine and get recognized by Forbes? What did you do?

Speaker 1:

Well, I wrote for Forbes for four years.

Speaker 2:

Okay, and what did you write about I?

Speaker 1:

don't know. Yeah, marketing It was mostly marketing Okay.

Speaker 1:

Yeah, i did that for four years and the schedule there was nightmare, because I wasn't a Forbes employee, i was a contributor. I was paid to contribute And for me there's very little value in the money they were giving me. It was more in the value of okay. Now I have a platform a big one at the time, i think still think they're pretty big to espouse. You know all the things I'm doing, so I got a lot of clients from it. It's a very good thing to do And it taught me how to write.

Speaker 2:

Okay, so tell me about your childhood. What about your childhood led you to become interested in being such an innovator? Really, you're kind of an innovator.

Speaker 1:

That's a tough question. What about my childhood? I mean I was obese. I mean I was obese from like nine to 14. He was.

Speaker 2:

I don't know why that wasn't very nice. What's it laughing at you? It was just the way you said it.

Speaker 1:

Well, I mean, it kind of plays into my story here, but I used to come home every day when I was 14 years old and I used to count the number of times somebody called me fat, And if it was less than five I thought I was having a good day. That's a true story, Wow. And then one day my cousin holds up my shorts and she's like these are dads. I mean, she's an attractive girl same age as me, I'm 14. And I was so embarrassed by that episode that I instantly went on a diet and then in six months I lost 60 pounds and then went back to school the next semester and no one recognized me. Over the summer No one recognized me, And so I'm like okay.

Speaker 2:

How'd you lose 60 pounds?

Speaker 1:

On a diet I would never recommend. It was basically a starvation diet. I was just so determined, so embarrassed and I didn't want to be that kid in high school that didn't go to the dance, didn't have friends, because remember, being obese back then was there was like three in the school Yeah, Yeah, it's kind of unusual.

Speaker 2:

And so what were you eating when you got home from school? Were you a latchkey kid? Have you heard of a latchkey kid?

Speaker 1:

Yeah, i was a latchkey kid. My mother stayed home, but I wouldn't eat very much. Just enough. I would eat a lot of food, just a good cook. Just enough for me to get a little bit of satiety. And then I would suffer. Suffer for six months.

Speaker 2:

Yeah, so do you feel like something about that pushed you to become successful?

Speaker 1:

Yes, because it's discipline, Because not only was I not you know the diet, which is crazy, do not recommend it Way better ways, but I was working out. I mean, i went all in And this was at a time when, you know, the internet was just starting or hadn't started yet, but there was none of this stuff telling you how to do it. You had to find out from magazines and some of these other things, and so I went all in on it, created my own program and became very disciplined on everything I did. And then I had to develop a personality, because I was so used to people calling me names and not many people being nice to me. You had to develop a personality from that. And so I first got into sales and did quite well, but it wasn't my calling. I then got into marketing, which is more or less my calling now.

Speaker 2:

And then you started your digital agency. What year was that?

Speaker 1:

The first digital agency was 2012. And smart blocks? the tokenization was a spin off of it a couple of years ago.

Speaker 2:

A spin off. Okay, i don't know, maybe if you can even share this what companies have you worked for or what companies have you helped, and what were you focusing on in terms of was it influencers or bigger?

Speaker 1:

Well, let's start with the fanatics media. That was more like Oracle, microsoft, ibm a lot of big tech companies is mainly focused on big tech. So on the smart block side, some of your listeners might know who Wax is, a very big NFT issuer and player, a company called TetraGuard, which is a crypto ETF, and then several projects in the security token space that haven't been announced yet.

Speaker 2:

Okay, so what do you do on a daily basis? Like, what does your day look like? Do you get a lot of podcast interviews?

Speaker 1:

I do. I don't get a lot. I try to limit it because I do have a lot of work in building or helping to build this agency on the tokenization side. So I'm primarily in education mode and then building the foundation in order to bring people through the tokenization process. I don't like to just throw my hat into a ring that I've not experienced myself. I had to go through it a couple of times and then say okay, here's the real pain points that tokenizing solves.

Speaker 1:

I'm just gonna focus on them. but it took some time. You gotta have the experience, otherwise you would develop a bad reputation. I don't wanna do that Okay.

Speaker 2:

So what would you like to tell us? I'm gonna put all of your information in the show Now. It kind of blew my mind with a lot of it, so I didn't feel like I was able to ask a lot of good questions because it's so new to me. But guess what? I wanna get more interested now, because watching my Bitcoin go like this isn't fun.

Speaker 1:

Yeah right.

Speaker 2:

So I should do something different. I don't know.

Speaker 1:

Well, i was just saying if you invested real things not that Bitcoin isn't, so don't come after me. I don't wanna hate mail. But if you invest in real things and you keep building that portfolio, you'll have a stream of income coming in in two or three years. I want people to do this on my Instagram channel.

Speaker 2:

That is something I was gonna say earlier, and that the monthly dividends. That's what real estate does for you And that's what I've told my kids and tried to teach them. And one of the things we used to do and I've talked about this before on podcasts, it's probably boring to people, but it wasn't to me And that is that we used to play a game called Cashflow by Robert Kiyosaki. I paid $300 for that game. It was probably the most fun game I ever played. I'm 53. I grew up playing board games. That's what we did back then. So you do the math and you try to get your. If you've never played it, i'll explain. You try to get your monthly cashflow above your bills.

Speaker 1:

Above your bills. That's always good.

Speaker 2:

Yeah, so you invest in enough real estate mostly, but other assets so that you can quit your job. That's the whole objective to get out of the rentries. So that is a big plus that maybe even I should have had you go deeper on, Because it's something that they don't take us in school, what it even means, and that's how you actually get rich And that's how you build wealth, And not that you can't get where you want trading hours for dollars. It's gonna take you a long time And it's less likely, am I right? So monthly dividends and then focusing on getting that number up to meet your monthly bills is a really smart way.

Speaker 1:

I think it's a good start, don't you. If I were in my 20s and I can't afford a house like you and I could when we were younger, in our 20s that's all I would do. I would build it up that way.

Speaker 2:

Yeah, i can remember my parents talking about what they spent on the two houses that I grew up in. It's unbelievable. I won't mention them, but you can imagine houses were anywhere from 9,000 to 80,000. And so it's just like. I live in Naples, florida. It's some of these numbers, and when I look, i like to look at real estate to see what's going on around me and it's unreal, it's absolutely unreal. So, and it's only gonna get worse, probably not gonna come down. So, anyway, it's good that these exist as a new investment. Okay, so I'm gonna put all of your links in the show notes. People follow them. Learn from him. Don't get too confused.

Speaker 1:

Well, reach out if you're confused. Yes, my team's always willing to help.

Speaker 2:

Do you have a course or something that they can take?

Speaker 1:

Or a group. I thought about a partner. Mine has a great course and it's on you to me And I can send that to you as you can post. It Really changes so fast that I'm like I'm not putting out a course, but he did and it's very good.

Speaker 2:

Yeah, that's true. By the time you've put it all together, something has changed. You got it. Yeah, okay, thanks so much, thank you. Thank you. Thank you, thanks for coming. Thanks for coming. Thanks for coming. Thanks for coming. Thanks for coming. Thanks for coming. Thanks for coming. Thanks for coming.

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