Bitcoin Latam Report
Hosted by Maciej Cepnik, a Canadian who moved to Mexico and is a Bitcoin entrepreneur, this show features English-language interviews with Bitcoin founders, builders, and operators across the entire Latin American region. From Mexico City to Buenos Aires, we dig into how Bitcoin is used for payments, remittances, mining, and regulation, along with the hard lessons, tactics, and opportunities shaping the LatAm ecosystem.
Bitcoin Latam Report
#EP 20 Why Real Estate Dominates Wealth in Mexico — Will It Ever Change? with Tristan Borges Solari
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In this episode of The Bitcoin Latam Report, I sit down with Tristan Borges Solari, CPO and co-founder of Aureo, to discuss our latest Aureo Quarterly report on how Mexican households build and preserve their wealth.
We explore why real estate dominates wealth in Mexico, how the formal and informal economies shape the way people save, and how decades of inflation, financial exclusion, and distrust in institutions pushed millions of Mexicans toward land, homes, and even construction materials as a form of savings.
We also look at some surprising findings: the massive concentration of wealth in non-financial assets, the number of empty homes in Mexico, rising housing costs, and why younger generations may be forced to find completely different ways to preserve their wealth.
Will Mexico’s reliance on real estate ever change?
⏱ Timestamps
00:00 — Introduction
02:34 — Tristan’s journey into Bitcoin and the industry
07:06 — Why Aureo produces institutional research about Mexico
11:56 — The strategy behind the Aureo Quarterly reports
14:06 — Why real estate dominates Mexican household wealth
16:29 — How we researched Mexico’s household wealth
20:52 — Mexico’s two economies: formal vs. informal
25:43 — Tandas: Mexico’s informal savings system
28:01 — The most shocking findings about Mexican wealth
32:42 — Empty homes, housing prices and affordability
38:46 — Inflation, peso crises and distrust in the financial system
45:04 — Will younger Mexicans move away from real estate?
55:36 — What alternatives exist for preserving wealth?
🔗 Show Notes
📊 Download the latest Aureo Quarterly report for free:
Mexico Household Wealth 2026: Why Real Estate Dominates
Available in English and Spanish:
https://www.aureobitcoin.com/en/blog/riqueza-en-Mexico-2026
🟠 Aureo Bitcoin
Buy and sell Bitcoin in Mexico with a platform built for individuals and corporations:
https://www.aureobitcoin.com
𝕏 Follow Aureo on X:
https://x.com/AureoBitcoin
🏠 La Casa de Satoshi
This episode was recorded at La Casa de Satoshi in Mexico City. We regularly organize Bitcoin meetups, technical BitDevs sessions, workshops, presentations and other community events there.
Check out our upcoming meetups and register for the next events here:
luma.com/lacasadesatoshi
Welcome to the Bitcoin Latam Report. Today I have the pleasure to have my great friend, my co-founder, and the co-author of the latest quarterly report made by Aureo. And this is what we will talk about. So thank you, Tristan, for coming up on the show. It's your first time. Are you excited?
SPEAKER_01Yeah, thanks for having me. Looking forward to have a good chat with you.
SPEAKER_00Yeah, so you know, I've been sporadically making these episodes, uh, but I intend to start them again. Uh, and I think it's a great way to restart them because uh uh I it's been a while that I wanted you uh on the podcast, and today we have the really good occasion. And you know, before we actually uh plunge into the subject, I always ask my guests, it's a little bit uh boring question, but you know, what is your Bitcoin origin story? It's really similar to mine because we all started this journey together. But uh, if you can uh do like a little recap of uh you know how you started in Bitcoin, uh so far, you know, what has been your journey and yeah.
SPEAKER_01Yeah, for sure. So uh it was maybe 2015, 2016. Uh Buddy's first heard about Bitcoin because he was more into like illicit activities. Uh and then they I remember it catching yours and Gustavo's attention. And then you guys started talking to me about it. I was a bit more hesitant because I haven't heard about it. It was nothing close to what I understood as what was a good financial investment. Again, um, I guess my knowledge at the time was more limited. Uh, but after doing some digging, I'm like, okay, I'll get into this too because uh everyone seemed excited. And I wanted to jump on board. And not long after uh we had the whole uh shitcoin cycle that started uh with the ICOs, and that was somewhat fun. You know, I was careful, ah, there's a blockchain to do X, Y, and Z. Today I have a better understanding, but at the time I was uh fascinated by I guess the potential uh that this new technology had to offer. Uh and then from there, yeah, got burned pretty hard by uh my shitcoin tradings um after about a year in 2018, 2019. Uh, but the fire was still in me. Uh, then tried mining for a little bit. It started off well, but got burned once again uh due to moratorium in Quebec, which prevented us from continuing uh any kind of mining operation. And yeah, after being burned pretty hard again, still didn't lose faith, uh, but my passion for Bitcoin had only grown. So that's when I got into verify with you guys. Uh, we just started doing a bunch of research. That's kind of I've always enjoyed doing reading and research, and that's kind of where I took it to the next level by being uh hyper focused on Bitcoin and the tech around it. Then Verify took off for a little while. I kept us busy for about four years. Then from there, uh moved to another exchange, called Bull Bitcoin, worked there for about a year. Uh I was, what was it called? The head of self-custody or something like that, self-custody support. That's where uh BitcoinSupport.com was launched, and I created a lot of documentation on there, doing consulting calls. Since back in Verifier, I grew really strong, uh, you know, self-custody consultation and whatnot. Uh and then I kind of took like a sabbatical, uh, just to learn new skills. That's where I learned how to program, improve my design skills, uh, took that to Bitcoin well. Uh, spent a couple of years there with Adam and his team, uh, learned a lot from them as well. And then I had an itch to um to work on something where I had more ownership. And that's where Swapido uh came along. And I'm like, yeah, gotta jump into this, and from Swapido to Audrey now. And along the way, yeah, I had moved to Mexico, did some traveling, and this is where we are today, uh, forefront of I guess Bitcoin brokerage here in Mexico.
SPEAKER_00Yeah, for those who don't know, we're actually uh filming this at La Casa de Satoshi, which is the the big big biggest Bitcoin physical space in Mexico, and we also built a Bitcoin community quite fast, not only us uh at Aureo, but uh the whole Mexico City community. So uh we we did everything together, we're best buddies, uh we work together, and uh yeah, that's how it works with Bitcoiners, they they stick together, I can imagine. So uh currently at Aureo, you're the CPO, but as you said, you know, you're doing many stuff. You you you can code, you can design, and you actually co-wrote the latest quality uh Aureo report. Uh so you know how to do research work and everything. Can you give us, like uh, you know, for those who don't know you, uh, you know, what what your day-to-day looks like? What are the kind of stuff that you how you bring value to Aureo and the company in general?
SPEAKER_01Certainly. So I work across uh almost all of the teams in Audio from uh the developers. Uh and on that end, I do mostly uh design work, product specing, wireframes, um distilling the feedback you collect by talking to customers into, I guess, improvements on the application. Uh, and then yeah, manage the website as well, where I also do a bunch of design work and produce content and copy. Then on the marketing team, uh, mostly the SEO stuff, blog writing, doing the research reports, uh helping organize meetups. Uh a bunch of different things, you know. Uh always a lot of exploring too on how to get our word out there um in different ways. And then uh doing some admin and operational stuff. So I work a lot with our OTC clients, uh, do some consultation every now and again uh with regards to self-custody uh or node setup, uh, you name it. We have the expertise to help our clients uh achieve their goals. And yeah, that's that's the gist of it, I think. I wear quite a few different hats, but mostly focused on product and marketing, I would say.
SPEAKER_00Perfect. Yeah, I can confirm uh Tristan is good at a lot of a lot of stuff, and uh, he's usually the first one I bother about something uh when I need a response or a quick fix. Uh so that reflects well uh what you're doing. So uh let's jump right through it. You know, we we have this thing at Aureo. Uh I think it started like this this philosophy started at verify, where the first thing we did was actually research. We didn't know what to do. We we knew we wanted to work in the Bitcoin space uh in general. So the the first thing that we started to do is doing research, publishing, like graphics, explaining technology and this kind of stuff. So I think it comes from that. But can you explain why uh you believe as uh specifically that doing some sort of really professional reports that we call the quarterly aureo is part of our strategy for the Mexican market to you know to increase Bitcoin adoption in Mexico? Uh you know, explain me why you think this is a good thing uh we're doing and why we're doing it.
SPEAKER_01Yeah, uh so several reasons. Uh one being the Spanish language uh, I guess, world with regards to Bitcoin content is uh in many ways limited, uh, compared especially to English. So that was one reason because there's a quite a big void that we can fill, and that's what we've been working on the past few months, but more so with blogs, I would say. The report itself is also because uh there's lots of Bitcoin-related content, but it's mostly tied to like price prediction, uh ideology, or short-term content, short-term stuff. Uh, we want to produce something that's more durable, serious, uh Mexico specific, so that uh business owners, families, uh institutions, or more sophisticated investors uh actually have something solid that they could use to make long-term decisions. Uh and the quarterly format, well, we called it the audio quarterly. I added we added the the at the beginning, so it's not exactly per quarter. It gives us a bit of leeway. But the goal is like we have time to actually conduct uh serious research, uh finding primary sources, doing interviews, uh, properly vetting all of the data. Um it's funny because in Mexico sometimes the data is uh is very well cataloged and you can easily come across it. Other times it's dispersed, you need to go through many different sources to put something together. Um, and also it avoids us being um affected by short-term news cycles. We focus on something that's a bit more evergreen. Um yeah, and the topics I guess follows uh in our in my mind at least, what a serious investor uh would ask. So first is well, okay, how can you actually evaluate Bitcoin? And that's why we wrote the first one. Oh, actually, let me take a step back. We first uh before putting together the idea for the audio quarterly, uh, we're like, okay, let's start these long farm research series, which is where we came up with uh comparing Bitcoin to the Aforis here in Mexico. So just comparing what we explain there was a Afores. Yeah, so Aforez is basically like a forced retirement uh savings account, where basically if you're a formal employee, they take a piece of your paycheck every two weeks here and they put it into an investment account that's managed by uh one institution or another. And we're like, okay, well, a lot of people, a lot of formal uh employees or more serious investors know about this, use it, but we wanted to compare the investment performance, performance, the risks and trade-offs of uh compared to investing in Bitcoin. So this is where we started with our first long form research series. But then the idea was to formalize it more. So we came out with the audio quarterly, and the first uh four editions of this series is what are the logical steps that uh a Mexican investor uh would want to go through or would go through in order to determine whether or not Bitcoin is uh something worth their time and money. So the first step is okay, uh, how do you actually value Bitcoin? Because it doesn't produce cash flows, it's different from everything else uh typical investor uh is familiar with. So we broke it down uh on how to actually approach um Bitcoin and how to evaluate it. Then the second question is which is our latest report, is uh why might an alternative store of value uh matter specifically in Mexico? Uh well, we wanted to get a better understanding, okay. Like now, okay, what do Mexicans actually invest in? And this report highlighted mostly that it's overwhelmingly tied to real estate. Uh there is not much investment diversification, um, and we explain why. And then the sequence will then continue. Um, logically, I guess, the third being uh, what are Bitcoin's properties? And how is it a credible credible form um of a financial instrument that I can invest in? And what risks accompany it, what are the benefits and trade-offs, et cetera? And then the fourth part of this first series is okay, now that I made the judgment call for myself as an investor, how can my business or family office or myself uh actually implement uh a Bitcoin investment strategy responsibly? And then we'll look at different use cases, different alternatives. So the sequence basically is uh valuation, the Mexican context, Bitcoin as digital capital, and the practical implementation.
SPEAKER_00Right. Because when we did the first report, we kind of like received feedback that you know we did the whole overview of the set as the pension system here in Mexico, and then we kind of push Bitcoin at the end. And of course, as Bitcoiners, that's always gonna be our response. It's like, don't buy this, don't use this, buy Bitcoin instead. It's way more easier, it's it's it's way better. So I think it it the way we're gonna do the next reports follows a more uh honest logic because the actual second report, the one we just published, doesn't mention Bitcoin at all, right? Like we're not pushing anything, we're not trying to, you know. But um, you know, when you started this report, the goal was to really give uh an overview of the wealth stack in Mexico, and and that was the initial title, but then we kind of had to change the type title because the conclusion was that overwhelmingly Mexicans are almost only exclusively exclusively uh invested in real estate. So is that the main conclusion of the report, would you say?
SPEAKER_01Uh pretty much. And to go back to your last point, yeah, exactly. Now we want readers to actually arrive at their own conclusions uh through evidence that is shared transparently, uh, all the methods, um citations, uh references, everything cited properly. So anyone can recreate their own version um of the report and they'll arrive at similar conclusions instead of starting uh with Bitcoin and working our way backwards to justify it. Uh so yeah, you kind of like Trojan horse Bitcoin in a way. Uh and yeah, the main conclusion is that Mexico has an extraordinary concentration of wealth in real estate. Um, and it's not just, I would say, a cultural preference. Uh, it's a rational response to decades of, I guess we can say like this government uh decadence, monetary instability, inflation, and in large part also um, well, we have a there's a financial system here that excludes a large majority of Mexicans.
SPEAKER_00Right. We're gonna deconstruct that uh in a moment, but before um before we do, you mentioned that you know we present the data in a honest or like uh uh you know really formal way. So what is the metal methodology that you used with uh Santiago um that is the second co-author of the report, Santiago Varela, Santiago Varela Belmont, that is also the the the founder of La Casa de Satoshi? Uh, you know, what what did you follow? Because you also mentioned that some data is easily available, some not. So just curious, like how did you actually arrive to the conclusions you arrived, and you can say with certainty this is more or less true to a certain degree.
SPEAKER_01Yeah, so I mean we first need to acknowledge that Mexico doesn't have one perfectly consolidated like balance sheet or uh current household balance sheet. Uh so we need to construct from various sources, one being um Banquico, uh Mexico's central bank. So they actually trace uh uh many things to the peso and it's publicly available. Um so like everything in the formal financial system is super transparent and we have a lot of good primary sources. Uh the issue is more to do with uh physical property that have to be built from some uh primary um sources and many secondary. So yeah, other than Mexico Central Bank or Banquico, we also used the National Institute of Statistics and Geography, uh the National Banking and Securities Commission, and a few other financial, um, a few other official institutions, mostly mostly financial. Uh there were also national surveys, um, so on household wealth. Uh again, not all of it is like done, has been done in the last year. Some of it's from 2019, 2020, and onwards. Uh so yeah, again, we don't arrive at any um, let's say, financial recommendations and whatnot. But the idea is gather all of those primary data sources um as recent as it can that we can find. Because the housing wealth can't be measured specifically, we kind of need to triangulate it based on all of these sources. Um the methods produce different estimates, uh, which is why, again, this is more of like it's a pretty solid estimate that we come out with. Uh, it's just because the exact data is very difficult to come across. Uh and there's also a lot of overlapping data, and we were careful not uh to double or triple count uh pesos because, for instance, uh bank deposits or government securities or what uh pension fund retirement funds might like they hold assets between each other. So it's important not to add them together, uh, which has been, I think, clearly uh highlighted in the report. Um and I guess another important factor is yeah, stating all the limitations that I mentioned some. Uh so we use ranges instead of like false precisions. Uh, and we include like um steel man arguments, so like really strong arguments in favor of real estate. We're not saying investing in real estate is a bad decision, uh, but we do try to have uh arguments and counter arguments just so the reader has everything at their disposal to come to their own, to use their own critical thinking and judgment to arrive at a conclusion that they're that they can judge, I guess, trustworthy in a sense. But again, don't trust, verify, which is why uh we try to make the verification part for the reader uh as easy as possible by having all of our sources, methodology, etc. very detailed in this report.
SPEAKER_00Perfect. So it doesn't pretend this is an exact figure, but you did the best you can uh according to what uh was available to you.
SPEAKER_01Yeah, we got pretty close, I think.
SPEAKER_00Perfect. So the report, one of the big parts of the report, and you know something that a lot of Mexicans know is that there's basically two economies in Mexico, the real the the official one and the unofficial one. So the people that are not familiar with with that concept, because in Canada and in in the United States and in most countries in Europe, uh there is the formal economy, and most of the people are part of the formal economy, but that is definitely not the case here in Mexico. So, can you explain this concept and why does it influence the way Mexicans are investing in general?
SPEAKER_01Yeah, uh great question. So the formal economy is registered workers. Uh so there's payroll records, tax records, and filing, social security contributions. These are the people that uh have money taken out of their paychecks to get contributed to the Afore. Uh, they have credit histories, and everything is tracked to the PESO, right? Because a lot of this data goes through Mexico's central bank. Uh, and this is about 45-46% of the population. Uh but they produce almost 75% of the GDP, the gross domestic product. On the other hand, we have um informal workers or the informal economy. This doesn't mean that they're uh doing illicit activities, right? It just mostly means that uh there's very little tax filings, but they conduct activities that's like completely outside of payroll tax uh and social security registration. So these people make up around 54 to 55 percent of the working economy, and they produce uh roughly 25% of GDP. So big, big distinction because like in Canada, for instance, yeah, everyone's most people are formal workers, everyone has access to a retirement fund or RRSP savings accounts, et cetera. Um, which is similar to whether a formal worker here, uh, like I mentioned, they have access to the Afore, uh, which is managed by the Mexican retirement uh fund administrator. They can get mortgages, they have uh most, usually they have a bank account or more than one bank account. They hold they can hold government securities and brokerage accounts, and they have access to savings that compound. Whereas the informal worker, well, they don't have access to any of that because it could be for many reasons, right? Some people it's distrust in government institutions, others is they just don't have uh paperwork to open a bank account and have access to a savings account.
SPEAKER_00So everything is done with cash, basically.
SPEAKER_01Everything, nine out of ten small transactions in this country are done with cash. Um so this leaves the informal worker with uh another savings technology being the brick. So they accumulate their savings account is basically building one room at a time on the piece of land that they own. Whether it's properly titled or not, that's a different question. Uh many times it's also given their informality, they might not have like real titles to the land they're on. And that's a whole other set of issues. Uh but yeah, they they earn everything in cash, and then either they hold on to that cash, they spend it right away, or they invest it in one of the only ways they know how or easily have access to, which is like construction materials or land. Um, so yeah, that's why we say Mexico has two balance sheets, uh, because Mexico's a big country and almost half is informal and another half is formal. Uh and they invest in completely different ways as well. And even if you break down the formal uh part of the economy, most people is limited to uh the reforced retirement savings, the afore. Some might get uh treasury bills called sets, uh, but really it's only like 2% of the formal economy that actually has like diversified uh investment portfolio or US brokerage accounts or Mexican broker brokerage accounts, etc. So yeah, it's quite the yeah.
SPEAKER_00Quite the the the division. Yeah. And I in the reports there's a mention about tandas, uh something that is really popular mostly, you know, in the rural or smaller communities. Uh and that is a concept that is really unknown in in the Canada, the states. Can you explain just for fun what is a tanda?
SPEAKER_01Yeah, so it's very peculiar. I I did not think it was real on the when it was first explained to me. Because basically, um we get together, let's say a group of friends or family members, and we each contribute, let's say, 500 pesos. And every month we'll contribute uh 500 pesos. Uh but month one, let's say it's just you and I, we each put 500. So the tanda, this savings account, has a thousand pesos. And for the first month, I'm in charge of it. So I get to spend that thousand pesos. And then the second month we each put back, and then the responsibility or the management of that account moves on to you, and then so on and so forth. Every month, a new person in the group gets access to this communal, this group money, I guess, that we regularly contribute to. It's super odd because again, you're not generating interest. Um, it's just a means for you to like one month out of depending how many people you are, you actually have extra cash to spend. Um, I still haven't fully grasped how useful it is. I guess it's just one way to see it's like, okay, if you have a if Mexicans won't have the best like relationship with uh money and long-term savings, so it's a means for them. Like at least they're saving something, even if it's not generating interest, and like they likely have a spending problem too. So at least for several months out of the year, they're not spending this extra money. Uh they can only spend it once it's their turn to actually manage the tanda. Again, the details are a bit blurry to me, but that's like the basic functioning. It's like a rotating savings account, I guess. That's crazy. Yeah, it doesn't really make sense. But like I've seen uh like the banking apps here, and there are saving accounts options, but sometimes they're like really hidden deeply. And again, the interest is terrible, but I guess it's better than zero. Or if you don't trust the bank, then yeah, it's better just having cash circulating within a group of people you trust. Again, that's another uh important issue because if someone I guess can theoretically decide to run away with the money, uh but again, you need to properly choose who makes up your tanda.
SPEAKER_00Yeah, I heard there's some horror stories uh with the tundas as well, because yeah, you don't know what happens if some of one of the person in the group says, ah, this one I can actually not even give my part. It becomes complicated. Maybe there's some fights that break out and uh the whole system uh crumples down.
SPEAKER_01That's it. It's not like you can go necessarily to court and say, Hey, are we at a tender? It's like, no, if you're not signing a contract, usually it's informal agreements.
SPEAKER_00Um maybe there should be uh an application to do it with Bitcoin, so it's actually you know more traceable or something. There might be uh some way to do it. Perfect. Um, you know, you already mentioned some data points that are pretty shocking. Uh well, actually probably the the the most shocking one is that half of the economy in in Mexico is informal, which uh is one of the big factors on why Mexicans mostly invest in real estate, because that's the only way they can do it. Uh, but what are the some other data points that are like, okay, this is shocking, uh, that might not be that might be really far away from statistics in other countries? Can you think of some of them that are really repressive for in the in the bad way?
SPEAKER_01I guess the most shocking, one of the most shocking data points we came across was like, I mean, Mexican households uh hold approximately 93% of their gross assets in non-financial assets, uh, the large majority being real estate, uh, and only like seven, eight percent in financial assets. So that means uh more than 12 pesos um of non-financial or physical property uh is uh held uh for every peso in actual financial uh assets. So yeah, this is crazy because in the US it's like 70%, it's closer to 70% that's actually held in financial assets, and the other usually is in real estate, although again, market real estate market there changes from uh state to state. Uh so that was like the first like whoa, okay. People really either don't have access or distrust um the traditional financial uh system, or they lack, I guess, um uh financial literacy. And like investing in real estate and construction materials is like as simple as it gets.
SPEAKER_00You can what do you mean by construction material? How can that be an investment?
SPEAKER_01Uh like you're expanding your house, right? Like you you'll see often around Mexico, like uh they have enough money to lay the foundation, and then you have like the metal rod sticking out of the foundation, and then okay, next year we finally saved enough to build the first floor. So they buy the materials to build the first floor, and then you always have the metal, the barbed wire, uh the barbed wire, the steel bar sticking out because they expect to build another floor or another room eventually, and you'll see that in many European countries as well. Uh, and then if the place just looks abandoned, is they probably ran out of money to buy more materials to complete the construction project. So it's an investment in the sense that at least uh I can live in it. It's not like totally useless. Uh, it's better to have a roof over your head than live in a tent, like, right? Um and maybe it's easier to like pass on as inheritance because hey, this is the house. Split it with your brother or sister or whatever. Uh, but there's no like stocks or portfolio or different currencies to pass on because everyone can live in the house as well. Because I mean the home ownership in Mexico uh is quite high. Uh and again, it's not necessarily a good thing, but it's just the point in the direction that this is what people are familiar and comfortable with. Um, I guess another good data point would be so almost 20% of, and this is from the latest data we got was like around 2020 for this specific data point. It's like almost 20% of homes aren't used every day. Um, so they're either like a a vacation home or something you use seasonally, uh like an apartment or a condo in a beach town or something, or it's literally empty, right? Because um it's just easier to manage an empty home than deal with tenants, for instance, or uh weird, like bad tenants, so there's a whole eviction process. Um yeah, so like it's it's impressive at will to the point it was ingrained uh through all of the crisis that Mexicans have lived through over the past in in our lifetimes and in the lifetimes of the generation after uh before us. Uh how much it was ingrained that well, if you want to save money, you need to buy bricks, you need to buy land, you need to get into real estate. And people really took it to heart. And it's just like one home in five is basically empty um for whatever reason the owner has in mind, right? I'm not here to the report doesn't necess doesn't judge uh on this, is they're just stating facts as clearly as we can. And what else? Yeah, I mean, all of this led to uh the prices of home like far outpacing wage growth.
SPEAKER_00And the number was I think it's uh two times the price of housing has gone two times uh faster to the wages uh in the country in the past decade.
SPEAKER_01Yeah, so if you're starting your career now as a young person, um good luck, you know. Um, because it basically just benefits current land and homeowners. Um the poor or undocumented or informal or young are basically like priced out. Uh yeah, and another one, there's um Infonavit, which is like um a lending program for homeownership here in Mexico. Uh it's a fund for workers, right? So you need to have a credit history, you need to have payroll to actually have have access to this mortgage system. Uh and they reported that more than 21% of their loan portfolio was behind on payments. So they're also getting really stressed. Their balance sheet is like getting really stressed. Uh so does this mean that in the future they'll be lending out less and less? Um maybe, because people aren't necessarily paying back their loans on time and they have other obligations to pay as well, right? And this is a reflection of like the formal middle class, right? So already the informal class is like struggling. Uh, and now we see through this metric that formal workers are also having a tough time paying their mortgage.
SPEAKER_00Isn't uh isn't that what provoked the 2008 crisis in the States? People not paying their mortgages?
SPEAKER_01Yeah, pretty much. Uh getting in way too deep. Like uh you barely have who was it? The ninja loans, no income, uh no something else. Uh so basically shitty credit history. Uh, but they're getting approved on half a million million dollar homes, right? With basically no interest, ninja, no income, no job. Yeah. Um so yeah, and then next thing you know, it's like everyone's defaulting on their loans. The messy part was that banks, multiple banks have packaged these mortgage payments into securities, which were then sold to other investors. So when people, when a large amount stopped, started defaulting on those loans, and it just made the rest of the structure collapse, right? So banks went under, uh, lost to lots of people lost their jobs. Uh, we had to have government intervention, bailouts. Got really messy. And Infonavit, I mean, it's it's uh national institute.
SPEAKER_00Is Infonavit the only lender in the country can uh but uh like the private bank can also give a loan? But I I'm guessing there'll be probably way more strict to whom they will give out their loans, or yeah.
SPEAKER_01So private banks are also give out loans. The thing is in Mexico, like the credit, credit is really tough to come by. Uh banks do not easily loan money. And so you'll end up paying 10, 15, 20% interest on your mortgage, uh, which on the long run, if you have a 30-year mortgage, you get screwed pretty hard. Uh so you're basically a slave uh to the bank for the rest of your life. Uh and hopefully your inheritors don't take on your debt as well. Uh Infonavit is just a bit more accessible, they're a bit more lenient on who gets the loans. Uh the rates are a bit better. But again, rates in Mexico are pretty high, uh, which is not necessarily a bad thing. Um people won't uh easily take on debt that they can't handle, especially if it's for risky projects. Um but at the same time, it's harder for, I guess, in certain ways, innovation to expand. Um, less risks are being taken. So again, if you have less risk, the potential return is lower. But on the other side of the coin, less risk means um you don't necessarily blow up your entire economy, right? Because people um if rates suddenly shoot up because they went from 0% uh to 3%, 5%, and now all of a sudden people got used to low rates and now they can't afford it because they didn't expect that, um yeah, there's there's a lot to weigh in on these, on these. But yeah, Infonavid is a pretty big lender for like your average uh Mexican worker.
SPEAKER_00Interesting. And you mentioned also some historical reasons, uh, some big crisis, uh something that most of the generation still remember. So you mentioned this as a historical reason why Mexicans mostly trust real estate to keep their money. Can you can you expand on that?
SPEAKER_01With which crisis can you think of uh in the past uh decades that have so there have been like inflationary, big inflationary events. So like in 1987, inflation went up to like 160%. Uh so a lot of people just got completely wrecked uh by that. Uh before that, the fixed exchange rate regime that they had broke in 72, uh in 76, and then in 82, there was a sovereign debt crisis, um, which brought like the bank nationalization. Uh, and then that's where you had like major currency collapse. So it's like these compounding events that people barely survive one, and then a few years later, there's another big one, and a few years after that, another big one. So people are like, yo, we can't trust these financial institutions or the government to take care of us. Um, because today you have a thousand peso bill, and tomorrow they're like, oh, we need to take off a few zeros. Um basically your your your savings, everything you worked your whole life for one day to the next gets completely wiped. Uh, and the regular person is like stuck footing the bill.
SPEAKER_00Uh and then, yeah, I mean But at least a house is a house. So you may have a million pesos in your bank account, and the next day they remove a bunch of zeros, and who knows uh what it's worth the next day, but then the house is a house, you know. So maybe the the the value will change, but at the end you can sleep in it, you can have a party in it, you can rent some rooms to to people. Uh-huh. Uh so I guess uh it makes sense. I actually started watching uh series on VIX, uh, which is like a Mexican uh TV uh like a broadcast, like a Netflix for but Mexican, and it's about the 80s. And and they talk about the the fixed rate change and everything. And at some point the the the the president actually nationalized all the banks, all the commercial banks in the country, uh, which made the the the crisis even worse, of course. And you see like people being interviewed like uh in their in the 80s in the Mexican markets, like hey, they're complaining about the the price of tomatoes, like the same thing that people say today. It's crazy because basically people always kind of every decade, every every generation, there's some sort of crisis that's just makes the people distrust the system all the time. You know, every every generation there's something. And you see people complaining like ah things are getting so expensive today. But they were saying this in the 70s, in the 80s, in the 90s, and the 2000s, and they're saying it today as well.
SPEAKER_01Yeah, uh, I need to look into this a bit deeper, but I in the 88 election, they introduced the SNP. It's like um basically this computer program that collects all of the voters, all of the votes, like in a centralized government building, so that all of like the news people and broadcasters have access to like the live data, and there might have been some scheming in there, or who who knows uh at what point the data that they collected uh was valid, or the data that they emitted was valid. Uh so then that's just fuels more distrust. Uh and like yeah, in the 90s, 94, 95, there was another peso crisis. Uh peso lost like 50, six, I think closer to 60% of its value compared to the dollar. Um so it's just ongoing, right? Right now we have the super peso, uh, some like to call it. So things seem to be turning around, but again, uh I think it's just a question of time before everyone just has a price to pay for uh degenerate government measures and the the money printer, right? They're they're still printing money.
SPEAKER_00Right. Always printing money. If you guys want to calculate actually the the accumulated inflation since the 70s and the resulting loss of purchasing power, you can go on inflate inflacionmexico.com. It's a website that Truston also created uh that lets uh that lets Mexican or anyone that wants to that is curious. With the help of our buddy Rudy, shout out to shout out to Rudy. I'm gonna send the the the podcast to him so he knows we we think about him. Uh because he created inflation guatemala first, and that's what inspired us to create, and he helped us uh create it. And the results are absolutely uh shocking. I think it you know you always see the graph. I think it you know, coming back to like the first point of trying to make education specifically for a certain region adapted with the the the Mexican context. I still see sometimes Bitcoin meetups in Mexico of people talking about the the the US uh the sorry, the Federal Reserve of uh of the United States and the graph of the the US dollar that has been going down. But Mexicans don't care about that. They want to see the data from their country, right? To understand. So yeah, check it out. Um at the end of the report, you actually say that for the first time in history, we're actually seeing uh like a less excitement about real estate in general in Mexico. Um, do you think younger generation, our generation, will not be as confident towards real estate? Because maybe just because they can't, they they can afford it, or they they they they have more options now, because now definitely there's a bunch of fintech startups in Mexico where people can have access to stocks in the United States or whatever. How do you see it changing uh in your opinion?
SPEAKER_01I mean, I think, yeah, like you mentioned, we're seeing the conditions for change uh through fintechs, better, I guess, access to uh investment alternatives. Um The report doesn't really contain enough evidence to claim that a complete generation. Generational shift is already happening. But from my own experience, I think so, even uh from what I've seen back in Canada, right? At least there younger people have the option to purchase a home and whatnot. But the trade-off is you're gonna be a bank slave or slave to the bank for the next for the rest of your life, basically. Uh because again, there as well, homes have outpaced uh wage growth uh similar to here. Here it's just that younger people make way less. Um so I don't think they're even considering uh owning real estate, or maybe it'll expand into other areas where that are much more rural, that the prices are more affordable if they have uh if they generate income in Mexico City or Monterrey or Guadalajara, for example. They might look elsewhere, but that comes with its own risks uh and lifestyle changes. So they're also more comfortable, I guess, younger generations managing all of like this new fintech digital finance stuff. Uh they're more tech literate compared to older generations. So they're more keen, I guess, to look at these investment alternatives. Uh, but the more important change might be one of necessity rather than preference. Um, because the traditional wealth strategy is just no longer available. So they need to find uh different alternatives where they can put because also it's like, yeah, okay, you want to invest, you want to save money for the future, but is there even anything left at the end of the day uh for you to invest, you know? Like, but at least even if it's only a hundred pesos, okay, you're not gonna buy one brick, right? But at least you can buy a little bit of Bitcoin. Uh, you can put a little bit in set this, a little bit into a savings account. Um so even if there's less to invest, at least you have more options. Um, and like the barrier for entry for many of these options is lower. So yeah, I wouldn't it's tough to see if they've completely rejected real estate. It's just what's the point of even considering it if you need to work for 20 years to first afford a down payment on your home. So they just accept the fact that they're gonna rent for the rest of their lives. Um, but again, I'm pretty sure people still want to own a home. And I guess the difference between, let's say, here in Canada is that most families already do home own a home. So at least they have the prospect of I can at least um like inherit what my parents or grandparents uh have been able to build or accumulate over the years. So not all hope is lost. Um it's just yeah, the the environment is completely different nowadays. Um so yeah, homeownership is no longer like the first step that's uh attainable um for more and more people.
SPEAKER_00Yeah, I think there is a huge opportunity as well, just for financial education in general, because I I think this is the case for almost anywhere in in Canada as well. In school, they don't teach you that what is compound interest, uh uh, what is a fixed return. Like you have to kind of guess this on your own. Yeah. Um, and I'm guessing that here in Mexico it's it's the same. Like school won't won't teach you even about set as, for example, right? Maybe people around you, if you ask questions, will tell you, yeah, set this is the most secure thing. So at least if you're young people, if they're still aspiring to buy a home, they should at least know how to put their money uh into work that will generate at least a little bit of interest to save themselves completely from the loss of purchasing power due to inflation every year, to at least have some sort of instruments and and tools to achieve the dream of purchasing a home uh and not just actually putting it in a checking account or only accumulating it in uh inefectivo uh in cash under their mattress, right? Because I'm pretty sure a lot of people are still doing that.
SPEAKER_01Yeah, so like yeah, a large majority of people, especially in the informal economy, they just save through cash. Um but that's it. Access, access is there's greater and greater access to uh investment instruments, but access is not enough, right? You like I mentioned earlier, you need to have something left over to invest in. Um because even there, like okay, there's in even in the formal uh economy, many people have um these bank accounts, these investments accounts and whatnot. But very few people actually use them. Um, because like some of these numbers say, okay, like uh or I forget exactly, but it's around like 30%, have like some sort of investment account. But most people just open it so they can receive uh their paycheck, right? Or their remittance. They're not actually using these accounts for investment purposes. Um yeah, I guess what's tough too is like uh there's not really investment products that accommodate irregular income. Or I can deposit like into my brokerage account from cash easily through an Oxo, for example. Um I guess, yeah, there's like anti-monor money laundering laws and whatnot. But the reality is that's a very small percentage of the Mexican population that is actually doing illicit activities for the large large shares, like that's all they know is cash, cash and brick. Um and also these people don't necessarily receive like a stable income every week. So like products designed around automatic uh payroll contributions just doesn't fit their economic reality, right? Um and like also you mentioned the educational thinking doesn't focus or edu, yeah, doesn't focus on like long-term uh effects of comp compounding, uh diversification, liquid liquidity, uh risks involved. Um for the most part, they're just like encouraging uh trading or gambling or just it's just product promotion, right? Because these vendors have an incentive to make money off of every trade or you're the people you refer to. Um, and if you're not necessarily the most literal literate in financial stuff, you'll there's a better chance you'll fall prey to frauds and scams, like we've seen all over the world, uh, here included, where people get promised, hey, you'll make 10% return every month, which is like crazy returns, right? For many people. And then they're like, okay, I'll give you uh 100 bucks, and then they'll pay you back 110 bucks. And you're like, okay, this is actually legit. So they put more and then they get paid back again, and then they put their life savings and money's gone, right? Because uh if it's too good to be true, it's probably too. If it sounds very nice, it's probably too good to be true, right? And we've seen this uh many times uh in the Bitcoin world as well, right? Where people promise like crazy returns, uh, but they're just scammers at the end of the day. Uh so yeah, the point is like not to just open more accounts, but actually um give more uh give uh sorry, give households more access to assets that can genuinely compound over time and not just like hope and pray um that's gonna be good because generally people won't won't take the time to properly study what they're investing in. Or they'll just follow the same old adage of like put into real estate, that's what's uh helped me, your grandparents, your great grandparents, because we've been through countless um currency crisis and what happens at the next and probably inevitable next currency crisis. Um like at least people before had access to real estate. Now it's like, what, are we just gonna all get wiped out, you know? Uh because most of us don't have access to homes and real estate, or we're all gonna have to move back in with our parents and our grandparents. And uh hopefully in five, ten years the economy's gonna recover and I'll be able to find a job. Um, or is that even worth waiting for because your currency is just not worth anything?
SPEAKER_00So basically the report doesn't argue that real estate is a bad thing. It actually argues that, you know, maybe the next crisis it won't save you. Most of the people just don't have access to that instrument anymore. And you know, so it kind of feels like it's a perfect trap, you know, for our purpose, because we believe Bitcoin is the best asset uh that you can use for long-term savings, for currency devaluations or for any any type of people seizing your money, it's way harder to seize your your Bitcoin than it is a bank account or any type of other asset. It's actually, I guess, pretty easy to seize a house because you know it's a physical thing, you cannot teleport a house. So would you uh for the people that might think like, okay, you didn't mention Bitcoin in the report, but it's a reality that the conclusion is kind of well, you should buy Bitcoin, you know. So why is this report not an actually actually a uh a trap for us that we set up for people to read and uh fell into? What would you say about that?
SPEAKER_01I mean, yeah, first we don't explicitly recommend um any investments. Uh if on your own by reading this report you arrive to the logical conclusion that Bitcoin is a viable investment for you, I mean, great. I'm not gonna lie that for me, I agree with you. Bitcoin is at least way more accessible for most people. Um but the argument stands on its own, um, independently of Bitcoin, right? This was just a study of because at first we want to understand how the Mexicans invest, and then by actually conducting the research, well, we come to the conclusion that Mexicans pretty much only invest in real estate. Here are the reasons why, um, such as financial exclusion, uh, the monetary history, culture, uh, and it's all based on official data, right? So we didn't want to say like real estate has problems, uh, therefore by Bitcoin. Uh that's not research, right? That's just a sales pitch. Uh of course, yeah, there is a broader editorial strategy. Uh, this is part of a four-part series, which most of it touches on to Bitcoin because we assume that people will be um not necessarily assume, but there's a good chance um by reading this series that you can come to this conclusion yourself, right? So you're aware of the reality of um Mexico, and now it's well, am I just completely screwed? No, if you keep doing your research, and again, I always recommend people to do their own research, understand uh what they exchange their time and effort and money for. Uh the next edition will cover that in more detail uh about Bitcoin and its trade-offs. Uh but yeah, it's it's more the hypothesis needs to be explored like separately, right? Um it's not the point here is not to hide like a sales pitch inside of a research report. Uh it's to earn enough trust that uh readers will seriously consider the next question, which is what are the alternatives? That's up to you to decide, right? Up to every person to take responsibility of their lives. Um and again, I personally recommend Bitcoin as an easy alternative, but you shouldn't go into that blindly too, because it has its own complexities that readers must be um aware about.
SPEAKER_00Interesting. You kind of answer my my next and last question, you know, like how how this report is preparing us for the next one. I think you already started writing it. And so I know it's not finished, it's not uh I don't know how much you you advanced the the next one, but can you give you okay, can you give us an overview of how we how are you gonna present that solution, either for an individual in Mexico, uh either for uh a corporation? Uh is there gonna be also an aspect for exactly the people that are undocumented? You know, a lot of people are saying like bit Bitcoin is uh has a big potential in Latin America for all the unbanked people, but we're not necessarily uh a company that can uh give them the products and services to serve them, you know. So is there is there gonna be an aspect for each one, or is it gonna be concentrated for a specific group of people? Like, how do you see it?
SPEAKER_01Right. So here we presented like um, well, we we've shown that Mexican households uh need a store of value because of their history with their currency, their government, um, because they learned that cash alone is not enough. But it also shows the limitations of the strategy they have chosen being real estate. It's expensive, it's indivisible, uh, you're stuck physically in a specific location, it can be hard to sell, uh, and it's more and more uh difficult to access for most people. So the next edition uh will be presenting Bitcoin as an alternative. So yeah, we will explain pretty much uh every method available to actually accumulating Bitcoin, getting into Bitcoin, storing it, uh what are the trade-offs, uh if it can perform some of the store value functions that uh real estate uh has performed that Mexicans are familiar with. Um and also be honest about this whole argument, right? We're not gonna, again, just be a sales pitch. Um, this is really for educational purposes. Um so the transition is not like real estate is bad, so buy Bitcoin, it's more like Mexico has a real wealth preservation problem. Uh and what properties should a modern alternative have uh to address this? And does Bitcoin meet that standard?
SPEAKER_00Pretty good. I'm looking forward for the next one. I think uh, you know, I propagated your your report so far, and the response has been really good. People have been saying keeping it out. And so I'm I'm pretty sure the next one will be even better. So thank you, Tristan. This was the Bitcoin Latime report. This was Tristan Borges Solari, the CPO of Aureo and also co-founder and the writer at Aureo. So make sure to re go read uh all our reports. Uh, they're really well made. There's nice graphics, you can share them with your friends, with your family, with people that you're trying to convince about Bitcoin. And uh, I'm gonna leave a link in the description to download it. It's free. Uh so uh no worries. And we're always open to suggestions, comments. Uh that's why we evolve and that's how we make things better over time. So thank you for listening and thank you, Tristan.
unknownThank you.
SPEAKER_01Stay tuned for the next report. Uh, they might convince you uh that yeah, there is there is a future that we can all be part of. Yes.
SPEAKER_00Thank you.
SPEAKER_01Thank you.