0:01

Welcome to the Money Tree

0:03

Investing Podcast. Stock market,

0:05

wealth, personal finance, value stocks invest in

0:07

your life. Hello, Smart Money Tree Podcast

0:09

listeners. Welcome to the show. My name

0:12

is Kirk Chisholm and I'll be your

0:14

host. Today, I'm joined with my good

0:16

friend, Doug Hagrin. Hey, Doug. Morning,

0:18

Kirk. It's Monday. You're always going to get the best

0:20

of us on a Monday like the many of you

0:23

out there. Good news is since you'll be tired, you'll

0:25

be half listening and since we're retired, we'll be half

0:27

speaking. But hey, the most

0:29

important thing though, I was

0:31

able to still afford my cup of coffee this

0:33

morning that I brewed myself because it

0:36

sounds like nobody can afford Starbucks anymore.

0:38

However, what's interesting is I saw a

0:40

statistic last week or the week before.

0:42

Well, not statistic. If you look at

0:44

Starbucks stock, it just tanked. They missed

0:47

all these numbers. But yet this

0:49

weekend, I was on a road trip. My daughter

0:51

plays soccer. So we went to Iowa and

0:53

every Starbucks that we passed in a line

0:56

of 10, 15 cars in the

0:58

drive-thru. So I'm still trying to figure out,

1:00

I know coffee prices went through the roof

1:02

for a while and I'm sure that degraded

1:04

profits, but Starbucks didn't just have profit drop.

1:06

They have revenue drop. I don't

1:08

see it. I keep hearing all this, the sky's

1:10

falling, but if it's falling, it missed all the

1:12

cars in the drive-thru line. America doesn't

1:15

live off Duncan. Let me tell you that.

1:17

Boston does though, Doug. Boston absolutely

1:19

does every quarter. It's funny because

1:22

Duncan's theme is America runs on

1:24

Duncan and Duncan isn't everywhere. I

1:26

remember when I was young, Duncan moved

1:28

into Ohio and then all of a sudden they all

1:30

closed up shop and then they came back

1:32

several years later and then they all closed up shop and

1:35

now they're national again. America does not run

1:37

on Duncan. The Northeast runs on

1:39

Duncan, but you know who runs on? Canada

1:41

runs on Tim Hortons. That is

1:43

everywhere. You go to any small town in

1:45

Canada, that is their number

1:48

one restaurant and coffee shop. It is

1:50

busy all the time and it's really

1:52

good, by the way. But anyway, moving on. For

1:54

sure. Canada doesn't have a lot of variety up

1:56

there either, Doug. Well,

1:59

they have some different fish. a couple of different types

2:01

of deer, you know, a couple of different types of bear,

2:03

you know, so they got some variety. Yeah,

2:05

they got a few things up there. But

2:07

I get your point, Doug, certainly, Duncan's always

2:09

been a big thing here. But not until

2:11

the Super Bowl with the Dunkings, like that

2:14

was a great commercial. That was fantastic. Kudos

2:16

to Duncan for that commercial. That was great.

2:18

And kudos to the actors that got into

2:20

it. I mean, I listen, Matt Damon made

2:22

that commercial. Oh, God, here we go again.

2:24

Ben, really the stuff I do for you,

2:26

man. You owe me big time as a

2:29

friend. It was great. It's one

2:31

of the plethora of great Super

2:33

Bowl ads over the years. But I will

2:35

throw that down as probably easily in my

2:37

top five ever. It was hysterical. And

2:40

it was all Matt Damon, Ben Affleck's

2:42

willingness to do that role. Jennifer Lopez's

2:44

willingness to play in it. But Matt

2:47

Dickman's face and comments just made it.

2:52

It really was great. They work. I have to say kudos to

2:54

all of them for making it happen. Not

2:57

much makes us laugh anymore because humor is outlawed

2:59

nowadays. Seinfeld came out this last week and just

3:01

said, I couldn't make the show today. And I

3:04

guess there's a new poll that just came out

3:06

that said all these people that are going back

3:08

now, younger, listening to the old Seinfeld shows,

3:11

super offensive. It just tells you everything

3:13

you need to know. We just have a

3:16

different sensitivity these days to so many different

3:18

things. Speaking of sensitive, last night was the

3:20

roast of Tom Brady pulling that together there.

3:22

And I'm not going to talk about it,

3:24

but you should go back, look at some

3:26

clips on how that went last night. A

3:28

lot of skewering, a little bit of sensitive

3:31

nerves there too, that I think will get

3:33

people interested. And by the way, officially

3:36

now, according to Forbes, Jerry

3:38

Seinfeld has joined the billionaires club. So

3:41

he has crossed over according to estimates.

3:43

Now his publicist says, this

3:45

is not true, but I mean, he's

3:47

everywhere now. And the new movie just came out

3:49

on Pop Tarts and Seinfeld's

3:52

and syndication. If Jerry's

3:54

not a billionaire or billionaire, I'm not sure

3:56

I'm an American. I mean, it just, a

3:58

thing just keeps making. money. Jerry

4:00

has the kind of humor that can

4:03

survive our crazy era. What's interesting

4:05

is, I mean, when COVID happened before

4:07

that, but really, after COVID happened, comedy

4:09

just died. Because people lost

4:12

their sense of humor, you know, they

4:14

lost their ability to parse between comedy,

4:16

humor, and reality. People were like, that's

4:18

not funny. Well, actually, it is funny.

4:20

I mean, the whole point of comedy

4:23

is to push boundaries. Richard Pryor was

4:25

huge at pushing boundaries. And that's

4:27

one of the reasons why he was who he was.

4:31

George Carlin, the same way. I mean, so

4:33

many people push boundaries. And in this era,

4:35

people lost their sense of humor. They're not

4:37

willing to push boundaries. I mean, the whole

4:39

point of comedy is to do something provocative.

4:41

It's to do something that's like, when you

4:43

go way over the line, it's not funny.

4:45

But when you don't go near the line,

4:47

it's also not funny. The humor in it

4:49

is when you're saying things that you probably

4:51

shouldn't say, but you do it in

4:53

a way that's like, all right, that was good. Like,

4:56

that's the charm of humor. And that's

4:58

actually why I've said this, the

5:00

mark of AI being a

5:02

first-rate intelligence is when it can start

5:04

creating its own humor. Because humor

5:06

is the ability to discern between in the

5:09

provocative area. Like, there are people out there, like,

5:11

Elon Musk is a perfect example. Like, he says

5:14

things that are provocative. It's not way over the

5:16

line, but it's like, really on the line. It's

5:18

like, oh, man, that was good. When you like

5:20

them or not, you're like, all right, that was

5:22

sharp. He has that ability to dunk on people

5:25

in a way that, yeah, sometimes he goes over

5:27

and he can because he's a rich man. But

5:29

I think for the most part, the humor is

5:31

when you have the ability to know where that

5:34

line is and to straddle the line in a

5:36

way it's like, that was close. But

5:38

I guess I can laugh at that. I'm

5:40

a fan of humor. I've always been. Oh,

5:42

that's good to hear. I'm glad you're a

5:44

fan of humor. That's my, well, you know,

5:46

some people are. I know. Some people don't

5:48

have a sense of humor, but I've always

5:50

studied humor. It's really interesting to see how

5:53

they put together funny bits. And there's so

5:55

many different ways to do it. Stephen Wright,

5:57

for example, the driest of the dry sense

5:59

of humor. say things and you're

6:01

like really funny. And if you said

6:03

that same line, it's all in the

6:05

delivery. It's all in the talent. Even

6:07

though there's little one-liner snippets, it's

6:10

the talent that makes the impact. There is

6:12

a correlation that they've said in studies for

6:15

years that the ability to have cynicism

6:18

and sarcastic wit is

6:20

a sign of higher intelligence because it's the ability,

6:22

and this is what going back to your AI,

6:24

it's why AI is got a long way to

6:26

go because it cannot

6:29

at this point in time, and

6:31

again, the way technology is expanding,

6:33

this could come quickly, but it

6:35

cannot discern those little nuances there

6:37

that are so critical in the

6:39

ability to be able

6:41

to understand the meaning behind

6:43

that sarcasm and that cynicism.

6:46

And ultimately that's, I think,

6:48

a sign of a question about what's going on

6:50

with intelligence in the current world, because again, there

6:52

is a massive disconnect in this

6:54

day and age of people being able

6:57

to understand,

6:59

accept, and really

7:01

recognize the nuances that are building. There's a meme

7:03

going around right now about Blazing Saddles that if

7:05

Blazing Saddles was produced today, this is how the

7:07

movie would be. Opening credits, music,

7:10

you see the scenery of the old west, and

7:12

then it says the end. Well, you didn't

7:14

laugh at my joke the other day. What does that say

7:16

about you, Doug? Well, it wasn't good because you're not Stephen

7:18

Wright. No, just kidding. That's

7:22

why we're here. We're not on stage. Well,

7:25

you know, it's funny when you look

7:27

at movies like Blazing Saddles, you look

7:29

at movies like Tropic Thunder, they

7:31

couldn't make those movies nowadays because culture has

7:33

shifted in a way that, for example, like

7:36

when you go back and you look at,

7:38

and I'm not going to go down the

7:40

political road, but you look at like statues,

7:42

if you look at old humor, old movies,

7:44

I just went back, I was listening to

7:46

a podcast and I went back and listened

7:48

to the trailer for Reefer Madness. Holy

7:50

crap. I mean, I don't smoke pot, but somebody told me

7:52

about it. I had to watch it. It was like two

7:54

minutes. Holy crap. Was this

7:56

a huge pile of propaganda? And

7:59

at the time. Everyone believed it, but you look

8:01

at it now and be like, wow, it was

8:03

a steaming pile. When

8:06

you go back and look at other

8:08

things, you can't judge history by today's

8:10

standards. You can't. I think this

8:12

is a problem that our culture has

8:14

today, is they look at history and

8:16

say, well, that was wrong. Of course

8:18

it was wrong. But you can't say,

8:20

wait, George Washington or Hamilton or Jefferson,

8:22

you can't say, oh, these people were

8:24

horrible people because they had slaves. Yeah,

8:26

I agree. But back in the

8:28

day, that was normal. It was a different standard.

8:31

I'm not justifying. I'm just saying that it was

8:33

a different standard than today's. You can't say they're

8:35

completely horrible people. Don't pay attention to one thing

8:37

they said. The founding fathers were stupid because they

8:40

had slaves. Yeah, it was a horrible thing. I'm

8:42

not justifying. I'm very clear because I know I'm

8:44

going to get roasted on this. But the point

8:46

being is you can't look at history through the

8:49

same lens you look at the presence. It is

8:51

a different time period. And yes, we

8:53

can disagree on their values and their morals

8:55

and all these things. Totally

8:57

agree. You can't throw

8:59

out everything people did in history

9:01

just because today's standards have changed.

9:03

There's a reason we've made progress. We

9:06

don't have slavery because we've made

9:08

progress. As a people for

9:10

our values, we've made forward progress in

9:12

a lot of ways. But also

9:14

in the past, comedy is a perfect example. You

9:16

can't look at something 20 years ago and be

9:18

like, well, that wasn't funny because it dunked on

9:21

these people. That's the whole point. That's

9:23

the whole point is that it was being

9:25

provocative because at the time, the standards were

9:27

so tight that they said these

9:29

things and it was like, all right, that was

9:31

really funny because I'm not allowed to say that

9:33

or think that. You can't look at

9:35

the past through the same lens you look at the

9:37

presence. And the future is going to look at us

9:39

and be like, wow, what a bunch of idiots. That's

9:42

what they're going to say about us too. And we're going

9:44

to say, well, no, no, that's not true. We're really smart.

9:47

Yeah. Think about science. Perfect

9:49

example. Look at science. If you

9:51

don't believe me, go back 100 years. What

9:54

scientists believed was a steaming

9:56

pile compared to what it is today. You

9:58

go back long enough. People believe

10:00

bloodletting was science. Lee

10:03

Martin's Dr. Barber on Saturday Night Live,

10:05

you think it's purely comedy? It was

10:07

actually based on real? That's

10:09

exactly how it was. It's why the Barber Poll has

10:11

red and blue. It's because the Barbers

10:13

were the original doctors. There's

10:16

science for you. It's crazy, right? Back when the

10:18

world was the center of the universe, remember that?

10:20

What was it? The science has been determined. The

10:22

jury's back and science is determined. And it was

10:24

like, yep, the world's the center of the universe.

10:27

No, it's not the center. Galileo is going to

10:29

get executed. Because he believed differently. And he was

10:31

right. But yet, everyone else believed something

10:33

else. And you know what? The science

10:35

was settled. Science is settled. Don't

10:38

discuss it. Anytime somebody says the science is settled, you're

10:40

talking to somebody who doesn't understand science. Science

10:43

is not about truth. It's about the search for

10:45

truth. There is no such thing as truth.

10:47

Because as soon as you say, this is the truth,

10:50

somebody else could come and debunk it. And if they

10:52

do, it's no longer the truth. That's the whole point

10:54

of science. It's the search for truth. It's

10:56

the forward momentum of trying to find

10:58

what is actually true. Because

11:01

every time people thought something was true, it's

11:03

been debunked. Because later, we find out something

11:05

else. And science is always progressing.

11:07

And we always have a better lens on

11:09

the truth tomorrow than we do today, in

11:11

general. Of course, there are times like the

11:13

dark ages that wasn't true. But

11:15

generally speaking, that's how you have to look at

11:18

things. So when you're looking at the world, you

11:20

can't look at things definitively and

11:22

say, yes, this is true. I

11:24

know it. And it's not going to

11:26

change. But when you do that, you close

11:28

your mind off to new opportunities, to new

11:30

realities, to new truths that come up down

11:32

the road. And then you become the old

11:34

guy who's like, ah, that's still true, even

11:36

though everyone else has debunked it. So the

11:39

same is true for investing. And we're trying

11:41

to bring this into investing, because this isn't

11:43

a honky tonk show. This is an investing

11:45

show. So let's talk about how

11:47

this relates to investing. If

11:49

you look at any sort of investment

11:51

philosophy or strategy or,

11:53

quote unquote, truth, it's

11:56

always changing. We talk a lot about in the show and

11:58

how everyone says, well, buying a whole of the... best

12:00

strategy. Okay. Yeah, it is

12:02

during certain periods, but it's not always true.

12:05

If you look at 2000, 2013, buying

12:07

hold didn't do any favors. You lost

12:09

13 years of compounding. Completely

12:11

lit your money on fire for 13 years. At

12:13

the end, yes, you start to make a little

12:16

bit of a profit, but you lost 13 years

12:18

of compounding. So those of you who say that,

12:20

yeah, compounding is great, time is great because it'll

12:22

help you compound your money. Well, only if it's

12:25

growing. You look at the 70s. Same thing. There's

12:28

a period where things went up and

12:30

down, but basically we're flat during that

12:32

period. The period from 2009 up until

12:35

today, yeah, sure, the markets went up

12:37

and it was great. And you got a lot of compounding

12:39

and buying hold worked. So there are periods where

12:41

buying hold works and there are periods where it doesn't work. If

12:44

you're one of these people like, well, buying hold is the only

12:46

way to go. You're not thinking. You're

12:48

not an agile thinker and that's okay, right? It's

12:50

your money. You do whatever the heck you want,

12:52

but that's not my job. My job here is

12:54

to teach you why you should

12:56

be thinking about things differently. It's

12:58

teaching you how to be an agile thinker

13:00

and to realize that when things change, your

13:02

thinking needs to change. You can't be stuck

13:05

in history thinking, well, this thing will

13:07

eventually work. I'll eventually be right. And

13:10

that's really what it's about. And I say that because

13:13

it's really about ego. We

13:16

as human beings don't like to be proven

13:18

wrong. We don't. Our ego

13:20

is fragile. And those of you who

13:22

think you're tough, your ego is still fragile. It's just the

13:24

nature of human beings. Our ego is

13:26

fragile and we don't like being proven wrong. So

13:29

anytime I won't bring in politics, while I

13:31

bring in a term that's been politicized, which

13:33

is TDS and those of you

13:35

know it as Trump derangement syndrome that

13:37

actually has a scientific term that people

13:40

don't use because they use that to

13:42

besmirch the other side. But the actual

13:44

term is called cognitive dissonance. Now,

13:47

cognitive dissonance is when a piece

13:50

of truth smacks you in the face. So

13:53

you believe in something and something

13:55

else smacks you in the face as

13:57

being true. And it

13:59

basically... conflicts with your worldview.

14:02

And your worldview is basically being shown to be

14:04

wrong right in front of your face. And

14:07

rather than accepting that truth,

14:10

your brain goes into what they call

14:12

cognitive dissonance, which is it goes into

14:14

a mode of trying to recreate a

14:16

new reality, which shows that you're actually

14:18

right. And the whole world is wrong.

14:21

That is what cognitive dissonance is. Now people

14:23

call it Trump derangement syndrome because of the

14:26

way people act around Trump, but it's not

14:28

just that it's around a whole other bunch

14:30

of things. And it's actually politics is built

14:32

on a lot of this. If you're proven

14:34

wrong, people go out and they'll make up

14:37

a new truth. Your brain

14:39

will recreate a new reality from

14:41

scratch to show that you're

14:43

correct. And everyone else is wrong. And

14:45

the longer this goes on, the more

14:48

that this becomes a fact in your

14:50

mind, as opposed to opinion,

14:52

you begin to ultimately

14:55

rewire your brain by that. That's

14:57

why there's so much science behind

14:59

the power of positive thinking, because

15:01

that type of thinking will rewire

15:04

the way you think about things going forward

15:06

and change personality. And I

15:08

bring all this up because we're trying to

15:10

teach you how to think on this show.

15:12

So we're trying to teach you the tools.

15:14

We're trying to teach you how your brain

15:16

works so that you can think better. So

15:19

you can think, well, you can learn how to

15:21

think and how to change the wiring of your

15:23

brain and make you more agile and flexible. So

15:25

you're not stuck in your thinking. Cause if we

15:28

never changed, we'd still be believing bloodletting was a

15:30

good idea. So when you're

15:32

thinking about investing, think

15:34

about these concepts that we talk about,

15:36

how is this impacting my investing? Am

15:38

I stuck in my ways or

15:41

am I agile thinker? We're

15:43

going to get into some actual practical stuff

15:45

here, but I wanted to start with that

15:47

because I think it's really important that people

15:50

understand how their brain works so

15:52

that you'll know. And by the way, we all

15:54

have it, the cognitive distance thing. Like I said,

15:56

I know people use it and they politicize it,

15:58

but everyone does it. Your brain is not

16:00

different. If you're saying, well,

16:02

no, I never do that, you probably do

16:04

it worse than everybody else because it means

16:06

you're fixed in your thinking and you're not

16:08

willing to accept the fact that this is

16:11

truth. There's science behind this. If you talk

16:13

to any person who understands how

16:15

brains work, they will tell you this. What's

16:18

funny is that it affects everybody

16:20

and the people who don't think it affects

16:22

them probably have it the worst because they're

16:24

not recognizing it. People

16:26

who do understand it like myself, it happens to me

16:28

all the time. I know it. I

16:30

know when it's happening and it still affects me.

16:33

I can go back and reflect and be like, yeah, that

16:35

was stupid. I was definitely having cognitive distance. If

16:38

you're mindful enough to take

16:40

a step back when it's happening, if you're

16:42

able to recognize it in the moment, you

16:44

take a step back, you're like, that's really

16:46

interesting. It's really fascinating when it happens. Wow,

16:48

this is literally constructing a new reality for

16:50

me to help me prove that I'm right.

16:53

Those of you who actually appreciate the

16:55

ego and the brain wiring, go watch

16:57

the movie Revolver, Jason Statham. It

16:59

was a brilliant movie. It was a little bit artistic. If

17:01

you haven't seen it, it'll make you think. It's like one

17:03

of those movies of like, what do you mean by that?

17:05

What do you mean by that? But it's brilliant. I

17:08

love them. It's one of my favorite movies because

17:10

it talks about a lot of this and how to take control

17:13

of your ego when in reality it's controlling

17:15

you. Let's dive right in. Doug, you

17:17

had sent a lot of charts here and I want

17:19

to talk about some of them. Before you jump on

17:21

that really quickly, you said something that really meant a

17:23

lot to me that I want to stress. You talked

17:25

about people talking about compounding. It doesn't mean anything if

17:27

the market wasn't going up. This

17:29

is something I think that gets just

17:31

misused so often is, oh, well, if

17:34

you invest in the markets, you're going

17:36

to get that compounding, compounding interest, compounding

17:38

growth. Listen, people have to

17:40

be very careful about what compounding is

17:42

in the markets because they don't compound.

17:44

Yes, you might get some dividends. You

17:46

might get some interest that does buy

17:48

more shares. Otherwise, it's just a valuation

17:50

that goes up or down and it's

17:52

not compounding less consistent. This is where

17:54

I wanted to touch on. Between

17:56

2000 and 2022. your

18:00

money in the S&P 500 or

18:03

US Treasuries, which do you think

18:05

would have done better by 2020? Well,

18:07

Doug, because you posed the question, I'm going to guess

18:09

correctly, but why don't you tell us? Right.

18:12

Well, by 2020, it was the

18:14

S&P 500, but US Treasuries were

18:17

leading the charge on that compounding.

18:19

Guess what year the S&P 500 finally

18:22

overtook just investing in the US Treasuries

18:24

since I believe if you

18:26

bought in 2000, the Treasuries are around 6%. So

18:29

you would have had to not only beat

18:31

6% for 13 years, you would

18:33

have had to accelerate well past that. So

18:35

I don't know, but 6% is kind of tough to beat

18:37

when you're getting zero for 13 years. You

18:40

would have doubled your money. Basically, you would have doubled your money

18:42

at 6% in that period. If

18:44

you were sitting in that one Treasury, yeah, this is the 10-year

18:46

Treasury, so it's all over the place. It's 4.9, 5.2, 4.1, 4.4,

18:48

so it was varying. But

18:52

here's the thing, the S&P 500 did

18:55

not overtake US Treasuries

18:57

until 2019. It

19:00

started to touch on it right

19:02

around 2017. It

19:04

finally came up to about a $1,000 difference,

19:07

but then we had a negative 6%

19:09

return in 2018 that

19:11

knocked it back down. It took 19 years,

19:14

Kirk, and I know you talk about this

19:16

a lot, about the lost time. You can't

19:18

get that back. That is

19:20

19 years of lost

19:22

compounding of just having your money sitting

19:24

in 10-year bonds. So I think it's

19:26

really, really critical for people to understand

19:28

how that works. And you brought that

19:30

up, is compounding only works if the

19:32

market was going up? Or if you're

19:34

collecting interest or dividends, that you're constantly

19:36

reinvesting to buy more shares. Hey,

19:40

Doug, did you hear? We're giving away free money.

19:43

Well, I'll tell you about it in a bit. There's

19:45

a saying in the mining community. Well,

19:47

precious metals mining, that is. The

19:49

saying is that if you want the best deals, you have

19:51

to be in the room. Now, you're probably

19:54

thinking, what does it mean to be in the

19:56

room? I'll tell you. Being

19:58

in the room means that you're... the short

20:00

list of people who get invited to be

20:03

a part of the best deals. These are

20:05

the deals that most investors will never have access to.

20:07

You mean like IPOs?

20:09

Nope. IPOs are chump change.

20:11

Those are for retail investors, small potatoes.

20:14

That's nothing compared to these deals. These

20:16

deals would have you salivating to get access to them.

20:19

Once you know they exist, you will

20:21

never look at investing the same way again. I almost

20:24

don't want to tell you they exist because it'll

20:26

ruin your thinking of how the investing world really

20:28

works. Now, you might be

20:30

excited that these deals exist, but you

20:32

only have access to the deals if you're an insider

20:34

or in the room, as they call it. As

20:37

loyal listeners of the show, I'm going to give you a

20:39

chance to be in the room. Money

20:42

Tree Investing Podcast has created the Insiders

20:44

Club. This is a community of

20:46

our shows members who are loyal listeners of the show

20:48

and want to get more out of their investing experience.

20:51

Being a part of the Insiders Club

20:53

gives you insider status for upcoming events

20:55

and private webinars, discounts, free

20:57

stuff and books, and

21:00

influence on the future direction of the show. This

21:02

is an opportunity to join us as we

21:04

expand our content and services. Oh,

21:07

did I mention you're getting free money? Yes.

21:09

In the next few weeks, I will be giving free

21:11

money to members of the Insiders Club as my appreciation

21:14

for listening to the show. There's no

21:16

cost to join the Insiders Club. Just

21:18

go to moneytreepodcast.com/free

21:21

money. Do that

21:23

today to join the community. That's moneytreepodcast.com/free

21:26

money. I

21:29

hope to see you in the room. All

21:32

right, let's start with this one. Sorry, those

21:34

of you who are audio viewers have to go

21:37

to the website or YouTube to watch this. I

21:39

just thought this was such a brilliant picture. And

21:41

it's basically showing a dad holding his son up

21:43

so he could dunk a basketball. Under

21:45

the dad, it says, bull market. Under the kid,

21:48

it says, me thinking I'm good at investing. A

21:51

lot of confidence and cockiness and arrogance

21:53

going on right now in these wonderful

21:55

markets that anybody can be successful at.

21:57

And I bring it up because- I

22:00

mean, most of us think that we're brilliant investors

22:02

and really what it is is we're brilliant at

22:04

timing of it being a bull market. This

22:07

is coming right off the Berkshire Hathaway weekend, which we're

22:09

not going to talk about because I haven't had a

22:11

chance to run through it. Those of you

22:13

who listen me off and know I've got a little raspy

22:15

voice, I've got allergies, so I haven't really caught up in

22:17

that area. But I do want to say the few things

22:20

that came out of that which were fascinating, which

22:22

is Berkshire reduced their shares of Apple,

22:24

which has been headline news today for

22:27

obvious reasons. Also that they have, I

22:29

think, $189 billion. I

22:32

feel like Mike Myers. $189

22:34

billion in cash because

22:36

they can't find anything

22:38

to invest in. Now,

22:41

the Warren Buffett marker should be a marker

22:43

for us all. It doesn't mean you do

22:45

exactly what Warren Buffett says, but it should

22:47

cause you to say, huh, isn't that interesting?

22:50

Now, that being said, of course, I'm

22:53

sure Warren Buffett has a lot of

22:55

that in short-term treasuries earning 5%, 5.5%.

22:59

So let's say what it is. The opportunity

23:01

is pretty nice in short-term treasuries. He's doing

23:03

what banks are doing. They're just sitting on

23:05

collecting that Fed fund rate. There's no reason

23:07

to take any risk. Collecting that check. And

23:09

why not? Here's a guy, one of the

23:11

smartest, if not the smartest investor of our

23:13

era, and he's getting 5.5% in

23:16

treasuries. He's not

23:18

seeing opportunity elsewhere. What are you doing? So

23:20

that's the question you should ask yourself. I'm not

23:22

saying you should mimic Warren Buffett, but it

23:24

should cause you to pause and say, hmm,

23:26

isn't that interesting? Where am I wrong? Where

23:29

is my thinking inaccurate? Right. We just talked

23:31

about ego earlier in the show. Where's my

23:33

thinking inaccurate? You have to be really good

23:35

at teasing out where you're wrong because we

23:37

all want to be proved right. We all

23:39

want to be right in our thinking. And

23:42

we're constantly wrong. Here's a good example. Warren

23:44

Buffett's a value investors. How value investors done

23:46

in the last 20 years? Horrendous.

23:49

They've done terror actually more than

23:51

20. It's been probably in the

23:53

nineties. They're horrendous. There've been spots of it

23:55

in the early 2000s. There've been

23:57

spots of it, but they're very few

23:59

spots. where value investing

24:01

has done well. Is value investing

24:03

dead? No, it's not. It's not dead, but

24:06

it has been sleeping for

24:08

quite some time. Does that mean

24:10

you should stop being a value

24:12

investor? Actually, value investing has done

24:14

reasonably well this year and last

24:16

year. Most people haven't noticed

24:18

because they can't see past the magnificent seven.

24:20

Just something to think about. When you're investing,

24:22

don't throw out value investing just because it

24:24

hasn't done well in the past, because as

24:26

you're talking about in the show, the

24:29

paradigm is shifting. We're in a new paradigm. The

24:31

rules are different. The outcome's gonna be different. We

24:33

don't know what it's gonna look like. It's gonna

24:35

confuse the heck out of you because you're saying,

24:38

I don't understand what's going on. Yes, you don't

24:40

understand because the paradigm has shifted. We

24:42

don't understand. I can guess what it's gonna

24:44

be based on history, based on the 70s.

24:47

I could take a really good guess. Does it mean

24:49

I'm 100% accurate? No, absolutely not.

24:51

I've been wrong a few times. I thought it'd

24:53

be in a recession by now, and we're not.

24:55

I still think we're gonna be in a recession

24:58

down the road, but honestly, I'm not seeing the

25:00

signs of it. I've been around doing

25:02

this professionally for 25 years, and

25:04

certainly a few years in college when I was

25:07

an amateur investor in the late 90s when everyone

25:09

was a genius. I have a good feel for

25:11

the market. When you've been around long enough, you've

25:13

seen enough, you're like, all right, this

25:16

feels like it's gonna change, and the market's going

25:18

to change direction. I don't know it for sure.

25:20

You just get a sense, and yes, I can

25:23

back that up with more data and information, but

25:25

I'm just trying to be a little bit more

25:27

clear about when people have been around long enough,

25:29

you kind of get this sixth

25:31

sense. You're just like, mm, this feels a

25:33

little heavy. This feels a little weird, and

25:35

sometimes you use that to lighten up. Sometimes

25:37

you don't, but it's more of a, I've

25:39

seen this before, pattern recognition kicks

25:41

in. You're like, all right, this is probably

25:44

a good idea that I do this or

25:46

I do that, and so my point is

25:48

that don't completely tune

25:51

out things that you don't agree

25:53

with. Always look at them and say, all

25:55

right, does this have validity now? Yes

25:57

or no? It's a decision, and I want to point

25:59

that out. this out, you know, some people say, well,

26:02

you got to make a decision going in. You got

26:04

to make a decision going out of the markets. No,

26:06

you have to make a decision every single day because

26:08

if you buy ABC stock, if you decide, all

26:11

right, ABC stocks are good buy, I'm going to

26:13

buy it. You buy ABC stock tomorrow.

26:16

You have to make a decision again. Should

26:18

I continue to hold it? Now? Yes. You probably

26:20

are thinking, well, not actually make the decision. I'm

26:22

just sitting on it and waiting for it to

26:24

go where it needs to go. Sort

26:27

of, but you own the stock.

26:30

So you're making a decision to continue to

26:32

own it. You could also make

26:34

the decision to sell it. That's a decision. So

26:37

even though you're not making an action, it

26:39

doesn't mean you're not making a decision, you

26:41

are actively making a decision to hold it.

26:43

Now here's the thing. Most people's brains don't

26:45

work like this. They buy it and they

26:47

forget I'm going to buy and hold because

26:49

I'm not smart enough to know whether I

26:51

should buy or sell it tomorrow. And that's

26:54

okay. Most of us are not that smart,

26:56

but if you think about it, you're buying something.

26:59

You're making a decision to continue to hold it. Just like

27:01

a house, you buy your house. Tomorrow

27:03

you're making a decision not to move. The next

27:05

day you're making a decision not to move. It

27:07

may not be an active decision, but it's still

27:10

a decision. You're deciding to stay. Now, someday

27:12

you might decide, you know what? I want to move.

27:14

And that day you're making a decision. All right, I'm

27:16

going to switch. I'm going to move somewhere else. The

27:19

same thing with stocks. Just because you're

27:21

not selling doesn't mean you're not making

27:23

a decision. So every year in January,

27:25

usually in late December, but in early

27:27

January, I look at my portfolio, I

27:29

look through every single position and I say,

27:32

would I buy this today? And

27:34

if the answer is no, then I saw every

27:37

single year I do that. Now I actually

27:39

do it more often than that, but I'm giving

27:41

you guys a framework that everyone should do at

27:43

a bare minimum, early January, late December. You should

27:45

look at your portfolio and say, would I buy

27:47

this position today? If the answer is

27:49

yes, then hold on to it. The answer is

27:52

no, then you should sell it Because

27:54

that means you're not actively making a decision. It

27:56

means you've forgotten about it. And There are definitely

27:58

positions of my portfolio. I Forget about it. from

28:00

time to time and that's just the way things

28:03

work, but you should actively look at those. Now

28:05

as an actor portfolio manager, I have to look

28:07

at a positions every day and I make this

28:09

active decision. What? I on this again

28:11

today. Would I buy this again? and if

28:13

the answer's no then I saw it. I

28:15

do that every single day I have do

28:17

because a man's and clients want but for

28:19

most of us who are not active fund

28:22

managers and who have a life and do

28:24

other things then you're probably not making that

28:26

decision every single day. So at the bare

28:28

minimum your once a year. But. I

28:30

would advise doing it maybe once a month or wants a

28:32

quarter. Because. Things changed dramatically in

28:34

the markets and we know if you're looking

28:36

at you're like wow, this position. I forgot

28:38

about this and it's really under performing. Would

28:40

I buy this today? Most of us think

28:42

oh no, we're going to buy more. It

28:44

was super for but it's even cheaper Now

28:46

let me buy more. The stuff. If.

28:48

You're doing that. You're probably this is we

28:51

talked about earlier and show your he goes

28:53

getting the best of you. It means you

28:55

don't want to be proven wrong so you

28:57

don't want to sell it. Because if you

28:59

sell it, it means that you're admitting that

29:01

you are wrong. And rather than

29:03

a bidding, you're wrong. You're. Deciding

29:05

just to make no decision for your head in the

29:07

sand like a masters. So. I think

29:10

it's just something recognised. Just be aware

29:12

that this is how things work in

29:14

this how your brain works and if

29:16

you understand it, it allows you to

29:19

actively fight against us. You can make

29:21

these mental tricks that I'll help you

29:23

invest better and avoid some these pitfalls

29:25

for her go to a listener question.

29:28

This listener question was from Rudy Sanctuary

29:30

for your comments, always appreciate your insides

29:32

and really is basically a minute paraphrase

29:34

as question but he has once my

29:37

thoughts on the divergence between us, economy,

29:39

expectations and other economies around the world from

29:41

canada i basically said you have other thoughts

29:43

about would change the sentiment the us market

29:45

it seems that people love to push the

29:47

problems down the road hoping things get better

29:49

for what happens when it doesn't and when

29:51

they realize that as you say the marcus

29:53

or is look ahead six months when the

29:56

people look ahead six months and see a

29:58

different picture as a great question really And

30:00

this really brings into a different

30:02

framework which is we

30:05

talk about on the show is that the markets

30:08

very clear the markets look

30:10

ahead six months. And

30:12

they look at what's happening in six

30:14

months and they pull that backwards to

30:16

today. So if the

30:18

market thinks that abc stocks earnings

30:21

are gonna stink in six months

30:24

the stock price is gonna fall today. Let's

30:26

say the company comes out and says well

30:28

you know things are going fine now but

30:30

in six months earnings are gonna stink because

30:32

of abc whatever. The stock price

30:34

is gonna decline because that's information that

30:36

is being pulled back in today from six

30:39

months from now that's normal

30:41

but that's not how people think that's

30:43

how the market thinks but that's not how

30:45

people think remember this market is smarter than

30:48

you and i because it's an aggregation of

30:50

the best and brightest and the institutions that

30:52

are making these decisions and they are thinking

30:54

out six months ahead they're not thinking about

30:57

today and tomorrow. So if you look

30:59

out six months and

31:01

say oh well you know inflation is gonna

31:03

rise and gdp is gonna fall just like

31:05

the hot mess that it was last week

31:08

it's gonna get worse. Well the market's gonna

31:10

discount that today and the market's gonna fall

31:13

but people don't think that way

31:15

people think that today's news is

31:18

gonna affect the markets today. That's just

31:20

not true they think earnings are coming

31:22

out i wonder what's gonna happen well

31:24

earnings have already been baked into the

31:26

stock price people already estimate what's gonna

31:28

happen now if there's a big change

31:30

so far things come out and there's

31:33

a big change up or down. No

31:35

it's earning season still and those of you

31:37

in paying attention to know some huge swings

31:40

in stock prices up and down

31:42

we see some double digit ups i get some emails

31:44

at the end of the day they're kind of aggregators

31:46

of information at the end of the day and some

31:48

of them have like the top movers. Remember

31:51

one day there were six they

31:53

only show six six stocks that

31:55

were down ten percent plus or

31:57

more down more than negative ten

31:59

percent. Or more at the same

32:01

time. I've almost never seen that I can't remember the

32:03

last time I've seen that but this is 10% on

32:06

six plus stocks in the same day

32:09

for earnings Like that's not good. And

32:11

of course there just as many up 10%

32:13

or more what that means is that

32:15

the market hasn't accurately Predicted

32:18

what those earnings announcements would

32:20

be now generally speaking in In

32:23

quote-unquote normal times the

32:26

market generally accurately predicts

32:28

earnings now this is

32:30

usually a dance between the analysts and

32:34

The CEO or executives or whoever's doing

32:36

the call the way that works

32:38

is The analysts talk to

32:40

the company executives to try to get a sense

32:43

of what's going on The company executives are the

32:45

PR department for the company and they're like rah

32:47

rah shish boom bah This is great company. You

32:49

should invest in us. We're gonna kill it all

32:52

that stuff So their job is to pump

32:54

up the stock price and the analyst job

32:56

is to narrow down as closely as possible

32:59

What those earnings are gonna be? So

33:01

there's typically a dance This is all here say I'll

33:03

just say but I know what happens because I know

33:06

enough people do this Whereas they're

33:08

having conversations and there they can't

33:10

send inside information But the analysts

33:12

are like, well, what do you think you think you're gonna get $2.50? Sense

33:15

for example, I can't tell you that I can't tell

33:17

you meanwhile Like a lot of you listeners can't see

33:19

I'm touching my nose. You can't see that I'm not

33:21

sure what it's gonna be right? He's like anyway, they

33:24

signal to each other one way shape or form that

33:26

you're close or if you're way far off They'll probably

33:28

nudge you in the right direction. Here's

33:30

why they don't want to tell

33:32

you because they can't that's inside information They don't

33:34

want to be talking outside of bounds. They want

33:37

to be legally compliant But at the same time

33:39

they also don't want the stock price to move

33:41

significantly Significantly they want the analyst to be within

33:43

the ballpark You don't have to give them exactly

33:45

but you want to be close because if it's

33:48

close The analysts get a

33:50

bonus because they were right and the

33:52

company gets a bonus because the stock

33:54

price keeps rising And it doesn't have

33:56

these massive shifts because the analysts were

33:58

drastically wrong. They weren't want them to be close

34:01

this dance is the going on for decades i

34:03

don't know how far back it goes but certainly

34:05

since the nineties has been going on there been

34:07

books written on this so it's not me just

34:09

saying here so there's been books written on this

34:11

full of all actually is really good one that

34:14

was my favorite on this topic. Anyway,

34:16

analyst are pulling forward future

34:18

information today wall street falls

34:21

analyst wall street also is

34:24

ahead of the curve individual investors are not

34:26

you can't naturally think six months ahead is

34:28

not how our brains are wired. You're

34:30

seeing information and you're thinking oh that's

34:33

the future no that's today that's what's known as

34:35

soon as it comes out as soon as this

34:37

in the public domain it is known information which

34:39

means is no longer relevant. Market

34:41

is already discounted so soon as

34:43

you see the information the stock price might drop ten

34:46

percent arise ten percent that's because

34:48

there was a disconnect between information

34:51

and the forward looking sentiment when

34:53

earnings come out and there's like a home reaction.

34:56

Set means everyone's expected so to wrap up this

34:58

question no go back to some of the stuff

35:00

does go to the window get a shot to

35:03

don't go to some of these people here's

35:05

the sentiment so to answer rupees question.

35:08

The sentiment problem is this

35:11

there is reflexivity carl popper

35:13

came out with this is a

35:15

philosopher came out with this george

35:18

surrows actually talked about call poppers

35:20

philosophy in his book called reflexivity

35:22

reflexivity is. A thing creating

35:24

more of the thing so

35:26

if we think that there is

35:28

inflation we're gonna act in

35:30

a way that creates more inflation. If

35:33

there's deflation and we think there's deflation

35:35

that will actually cause more deflation here's

35:37

the thing if you think there's inflation

35:39

you're gonna borrow a lot of money

35:41

you're gonna leverage yourself up and you're

35:43

gonna spend it because your debt will

35:45

be worth less tomorrow. And your money

35:47

will be worth less so spend it

35:49

today That's what inflation does. Now

35:51

if there's deflation, it says your money

35:54

is gonna be worth more tomorrow, Which

35:56

means you don't spend it because you're

35:58

not spending It causes more deflation. So.

36:00

Sentiment causes more sentiments in the

36:02

same direction, but when there's a

36:04

change, it usually means there's a

36:07

drastic upheaval in that sentiment. So

36:09

if you look at two thousand

36:11

twenty two worth everything. Dropped. Stocks.

36:13

Bonds. virtually everything dropped in Two

36:16

Thousand Twenty Two because up until

36:18

then everyone thought bonds were safe,

36:20

stocks are fine, and we were

36:22

proven wrong. Everything went down because.

36:25

Bonds. Went down and value because yields

36:27

or now stocks went down because people were

36:29

expecting it. Everyone was on the wrong side

36:32

of both and yet know this was new.

36:34

Information can be crystal clear. Nothing was news

36:36

to anybody because everyone had known about this

36:38

for months. Power came out, said reefs are

36:41

raising rates were going to do it during

36:43

your like. Everything was known but the Marcus

36:45

just said we don't believe you and then

36:48

they're like oh crap now I believe you.

36:50

Let's get out. was run for the door

36:52

firing movie theater So what's gonna cause that

36:54

sentiment to change. I. Don't know. And

36:57

that's the truth of it. No one knows I'll

36:59

didn't guess. But. We just

37:01

had a quote Unquote Conflict Not or

37:04

a conflict in Ukraine which caused the

37:06

markets to take a her got and

37:08

yet no one seems to care in

37:10

Europe or and you as we have

37:12

the quote Unquote Conflict in the Middle

37:14

East. Which. Has not spilled over

37:16

into a greater war, albeit there have

37:18

been some flare ups that have been questionable.

37:21

Somehow that hasn't caused anything the at worst.

37:23

So if those aren't causing the Marcus

37:25

to get worse, I really have no idea

37:27

what's going to do it. It could

37:29

be high inflation that could cause it. But.

37:32

I just don't see high inflation in our

37:34

future. I see inflation pick it up a

37:36

little bit. Is going to be nine percent

37:38

now? Probably not. So I guess if they're going to

37:40

start raising interest rates you get that could cause it.

37:43

but I don't see that either. Could. It

37:45

happen. Could they raise rates a little bit?

37:47

Maybe. But I don't think power wants to

37:49

change direction. I think he wants to stay

37:51

pat unless he has to move. So.

37:53

I don't think it's going to drop it. I don't think

37:55

is gonna raise a thing is going stay where it is

37:57

because the market suits me fine. Why? Do you have to?

38:00

There is something of everything's. fine so

38:02

I honestly don't know. Could change a

38:04

sentiment. Usually had some piece of information

38:06

everybody kind of knows about but they

38:08

just realized oh crap, we need to

38:10

do something. So for example, in the

38:12

early thirties there's gonna be a big

38:14

tidal wave of problems hitting us at

38:16

the same time. Now there's no specific

38:18

date, but it's gonna happen right around

38:20

the early to mid thirties where we're

38:22

going to a big debt problem at

38:24

that point in time. Where is the

38:27

debt is coming? Do have a bunch

38:29

of things with. The same time if you look

38:31

at so security, Medicare and pensions are all coming do

38:33

with the same time. They're organ run a money as

38:35

me a problem but it's not a problem today. No

38:37

one seems to care and is already said kick the

38:39

can down the road. Yeah down the road. Me a

38:41

problem is not a problem that I. Saw. What

38:43

that means is at some point in

38:45

time the markets kinda sized problem and

38:47

then it will shift. But. As so

38:49

far down the road known seems to care, people

38:51

are not thinking about the future. The thing about

38:54

today, I don't know if that really answer question

38:56

Rudy, but I'm just trying to explain how the

38:58

market thinks about it. And yes, people push the

39:00

problems down the road. No one likes to address

39:02

the problems today so security won't be solved until

39:04

it's too late. Medicare punches on be solved. It's

39:06

already too late by the way for So Security

39:08

and Medicare. I'm sorry. So Security and Pensions is

39:10

already too late for many of them was on

39:12

the you do about it. So where do you

39:14

do you just put a band aid on it

39:16

and hopefully it last longer. That's how the government

39:18

handles it. They could have been

39:20

solved decades ago. It can be solved

39:22

now without massively printing money, which of

39:24

course, Causes. More problems So I

39:27

know that's not a great answer, but that's

39:29

the best answer I got for you ready.

39:31

So hopefully that helps isn't a second question

39:33

on Cpr and dress at a later date.

39:35

So I want to duncan Dave Ramsey going

39:37

to show you a tweet I think of

39:40

to eat that he sent which is the

39:42

top five careers of millionaires. engineers

39:44

number one accounts number two teacher

39:46

is number three management number for

39:48

and attorneys number five i'm sorry

39:50

he says he did this his

39:52

team conducted largest study of millionaires

39:54

ever done ten thousand millionaires about

39:56

who they are and what help

39:58

them she the goal. I'm

40:01

sorry. This does not line up with reality.

40:03

I don't know who Dave was surveying. He

40:05

must have been surveying the teachers union, the

40:07

rich teachers union, because there's no way that

40:09

this is the five top careers of millionaires.

40:11

This is, in my opinion, fake news. But

40:13

what are your thoughts, Doug? To give it

40:16

a little bit, a teeny bit of credit,

40:18

I have gotten to know a number of

40:20

teachers over the years who have

40:22

done a really good job saving. Obviously with their

40:24

pensions, it certainly helps because with their pensions, they

40:26

were able to put a lot of money away.

40:28

At the end of the day, when it comes

40:30

to retirement income, cash flows king. And for

40:33

those of you out there that are thinking

40:35

the only way to build wealth is just

40:37

build a pile of money, the statistics do

40:39

show that those that feel much more security

40:41

and retirement typically have multiple streams of income,

40:43

whether that's from pension or other things. I

40:45

know which book this was. I know who

40:48

helped it do this. They were trying to

40:50

take that millionaire next door and kind of

40:52

redo it modern wise. But I'll also tell

40:54

you that there are a lot of things

40:56

that are coming out right now. I saw

40:58

a post this morning about a teacher

41:00

who was basically trying to sell plasma

41:03

to get by. There's definitely

41:05

a big divide in

41:07

who is making the money in

41:09

education. I have met, again, several teachers

41:11

who have, they're not millionaires because they're

41:14

a teacher. It's millionaires in spite of

41:16

being a teacher. I had a teacher

41:18

that was my English teacher

41:20

growing up who on the side

41:22

had a driveway blacktop business. Very

41:25

successful locally was really the go-to

41:27

for our entire community. He drove

41:29

a very nice car that starts

41:31

with the letter P, but it

41:33

had nothing to do because he

41:35

had better grammar. It had to

41:37

do because he took the risks

41:40

of doing something outside of teaching.

41:42

So I think the biggest problem

41:44

with this is that it's not

41:46

taking into enough consideration the whys

41:49

behind where these numbers

41:51

are coming from, who they were reaching

41:53

out to, how that impacted.

41:55

Again, they did this survey. Was this

41:57

survey just of people that were. in

42:00

a certain segment. Again, there's not enough data behind it.

42:02

I know the book. I've read the book. I

42:04

find that there's truth and half-truths. I

42:07

think this falls very heavily into the

42:09

half-truth category. I would agree completely.

42:11

I read The Millionaire Next Door, I

42:13

love the book, and they talk a lot about the why, and

42:15

it actually makes a lot of sense. In this, look,

42:18

I love data. I'm a data geek

42:20

sometimes. Engineers, I can understand because

42:22

they tend to be very good with numbers and

42:24

thrifty and the engineers. I love working with engineers.

42:26

Incredible incomes. The engineer is in massive demand right

42:28

now. If you're going to come out of college

42:31

with an engineering degree, you've got five jobs trying

42:33

to get everybody graduating. I'm making that number up,

42:35

but let's put it this way. There's lots of

42:37

choice. I work with a lot of engineers as

42:39

clients and love working with them. They're

42:41

really good savers. In general, it's rare that

42:43

I've met an engineer that's not a good

42:46

saver. Accountants, I can tell you, I've seen

42:48

the statistics for accountants. They're not making a

42:50

lot of money. They're making less than

42:52

100,000 a year on average. Now, it

42:54

could be that you're taking, it says

42:56

accountants, CPA, those are actually different. CPA

42:59

is a designation. Accounting is more of

43:01

a profession. If you look at accountant,

43:03

it could be you're the CFO of

43:05

a company. Yes, I'm sure

43:07

CFOs make a lot of money. If you have

43:09

a CPA designation and you're running a company

43:11

and you're good with math, yes. If you're

43:14

talking about Joe and Susie lunchbox tax prepare,

43:16

absolutely not. They make less than six figures

43:18

on average. Some make more, a lot

43:20

make less, but I would say that

43:22

is also a half truth right there.

43:24

Teachers, obviously, half truth. As Doug said,

43:27

there's no way a teacher's salary can

43:29

become millionaires unless they're eating cat food

43:31

every day because the numbers don't add

43:33

up. Management, I get attorneys. I'm a

43:35

little shocked at attorneys. Attorneys, surprisingly,

43:37

even though they make good money, there are very few of them

43:40

that are millionaires that I've met. Most of them spend a lot

43:42

of their money. Some of them are good savers, but most of

43:44

them are not. I call BS

43:46

or half truth on this because it

43:48

doesn't line up with what I've seen.

43:50

I'd say we probably have a

43:52

higher likelihood of financial advisors being

43:54

millionaires than a teacher. Anyway,

43:56

I just wanted to point this out because just like most of

43:58

the It has said

44:00

recently it's bunk. So we'll see. Not all

44:03

of it. I mean, if you're a

44:05

Dave Ramsey fan, kudos to you. He does good stuff

44:07

with the debt snowball, but I think he's been off

44:09

his mark a little bit lately. So

44:11

Doug, what else do we want to talk about? I just told

44:13

you what US Treasuries did versus the S&P 500 says 2000 and

44:15

he still touts 12% a

44:18

year, 12% of your returns in the market.

44:20

And that's all you need to know. So

44:22

there's some great advice from being financially destitute.

44:24

But when it comes to actually, once you

44:26

start making money, what to do, the advice

44:28

really fails in many marks. Hold on. Let's take

44:31

that and pivot here. We're not even pivot, but

44:33

you're a good segue. We talked about

44:35

Dave Ramsey in debt reduction. Maybe the US government should.

44:38

What's this chart, Doug? This chart is talking

44:40

about what the interest payments of the United

44:42

States is going to have to be paying.

44:45

This goes twofold because there's another statistic I think

44:47

they have to say first. The

44:49

US has added $100,000 in federal debt every

44:52

second in the last year. Since March

44:54

1st, the US has been adding a staggering $10 billion

44:58

in debt per day. That's

45:00

$417 million per hour. There's

45:02

$6.9 million per minute and $115,000

45:04

per second as interest. Basically

45:10

what's happening is there could be $1.7 trillion

45:13

in annual interest expense in just one

45:16

year from now, just like when we

45:18

run our household. Again, the federal government

45:20

has the beautiful position right now of

45:22

being the international currency to have a

45:25

lot of flexibility you and I don't

45:27

have. At the same time, if

45:29

you go back and you look at the US

45:31

debt chart and look at the tax receipts the

45:33

US government is bringing in, and then

45:36

you look at its obligations, these are the

45:38

fixed obligations that it has to pay, we

45:40

are bringing in trillions of

45:42

dollars less than we have to pay

45:44

this year. Every

45:47

time you bring in a dollar

45:49

but have to pay $1.20, that $0.20 comes from

45:51

somewhere else.

45:54

The problem is, since none of

45:56

that money is free, since when

45:58

you borrow, It's going to. Have an

46:00

additional cost the interest on that.

46:02

It becomes an escalating, com pounding

46:05

problem because the twenty cents you

46:07

just added is Twenty cents plus

46:09

additional interest said. Now it's gonna

46:11

be one point two one the

46:13

next year and the one point

46:15

two to the next. Your all

46:18

of a sudden the cash flow

46:20

of what you're bringing in gets

46:22

squeezed more and more. More we

46:24

talked about this is the interest

46:26

obligations are exceeding what we have

46:28

in military obligations. The. Us

46:31

government. Does. Not have

46:33

enough money to pay and if you

46:35

look at where this going and this

46:37

is projected into April twenty five. We're

46:40

only talking a year from now. Look

46:42

at where we were in Nineteen Ninety.

46:45

Look. At where we were by

46:47

the end of twenty twenty, it's only

46:50

grow from what about? Two. Hundred

46:52

Fifty two? Maybe what little

46:54

over four hundred? A double?

46:56

That was thirty. Years.

46:59

And in five years

47:01

he has compounded. Another

47:03

four hundred percent, there's no end

47:06

in sight. How do they combat

47:08

that? There's. Only a couple of

47:10

ways. First, doors to cut spending. That

47:13

doesn't seem to be a very

47:15

popular political decision. The. Second way

47:17

that they could do it raise taxes.

47:19

That. Doesn't seem to be a very

47:22

popular political says it's so kirk when

47:24

you say let's look down the line.

47:27

That. Nobody wants to worry about

47:29

tackling that right now. That's not

47:31

a Now problem. Interests are now.

47:33

Problem is place. No, no prob.

47:35

it's not because the problem is.

47:38

That. People don't feel the pain. They're.

47:41

Going through there every day, but there's that

47:43

pain has a cost and at some point

47:45

like you just talked about, twenty thirty. That's

47:47

when it's all going to hit and the

47:49

problem is we're going react when as you

47:52

said, It could be too

47:54

late. The Us government has incredible

47:56

flexible but watch the Yen. Because.

47:59

what's going on Japan right

48:01

now has tremendous impact to

48:03

what we're facing because Japan

48:05

holds tons of US debt. And

48:08

if they have to figure out their own economy by

48:10

selling it, that could exacerbate and speed up some of

48:13

those challenges. Yeah,

48:15

well, that's the show for this week. Doug,

48:17

take us home here. Where can people find

48:19

more about you? If you want to find

48:21

more about me, go check out Mergent Advisors

48:24

and mergentcollegeadvisors.com. College is one

48:26

of the main things we focus on, but when

48:28

it comes down to it, college is just one

48:31

massive major purchase cost that

48:33

is fleecing the wealth of

48:35

Americans. Poor decisions, it's

48:37

an emotional decision overpaying

48:39

what you can afford for college. At the

48:41

end of the day, what does this all

48:43

come down to? I said it before, it

48:45

comes down to having enough income, having enough

48:47

income to basically afford the things you need,

48:50

but also be able to afford the things

48:52

you want. You

49:15

can't answer all those questions right now when she

49:17

find out go to emergency visors.com

49:19

go to merging college of visor.com formally

49:21

pro college planner you've heard me talk

49:24

about that those of listen we change

49:26

our name to kind of synchronize our

49:28

branding some

49:48

questions, wants to know, get that third party, figure

49:51

it out, so you can have peace of mind,

49:53

because that's what it's all about. Thanks,

49:55

Doug. I appreciate you coming on the show this week. Thank

49:57

you again for joining us and Money Tree Investing podcast. My

49:59

name is Kirk Chisholm, Wealth Manager of

50:01

Innovative Advisor Group. We don't just

50:03

manage your wealth, we make your life better. You can find

50:05

more about me at innovativewealth.com, and of course, you can find

50:08

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50:10

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50:52

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