Latest / Money Matters with Greg / Episode #167: Money Wisdom from My Mom

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Episode #167: Money Wisdom from My Mom · Money Matters with Greg

• 0:02
  Speaker 1: All right, good afternoon.
• 0:04
  Speaker 1: The show's Money Matters with Greg.
• 0:05
  Speaker 1: I'm Greg Farrell, ceo and owner of Farrell Wealth.
• 0:09
  Speaker 1: It's a wealth management firm here locally in Valparaiso, indiana, and then helping clients in 24 states.
• 0:14
  Speaker 1: We are virtual, we are all over the place.
• 0:16
  Speaker 1: You know that if you listen to the show and we also broadcast on WVLP 103.1 FM.
• 0:24
  Speaker 1: And we also broadcast on WVLP 103.1 FM, excited to be here today to broadcast.
• 0:28
  Speaker 1: We broadcast Thursdays at 1 o'clock.
• 0:30
  Speaker 1: They're replayed at 1 o'clock on Saturdays at WVLPorg and also on the FM dial at 103.1.
• 0:38
  Speaker 1: And then you can also get the podcast anywhere you pod Apple, spotify, you name it Google and then ultimately the YouTube channel as well.
• 0:47
  Speaker 1: Farrow Wealth YouTube channel and all the socials are at Farrow Wealth.
• 0:54
  Speaker 1: We on this show have a number of different conversations about money.
• 0:58
  Speaker 1: The show's Money Matters with Greg and money does matter and that's why we talk about money and how things relate to your money.
• 1:05
  Speaker 1: We've had guests on from mortgage companies to realtors you name it CPAs just discussing the things that they want to discuss about what's important in investing and putting money away.
• 1:18
  Speaker 1: Today we are blessed to have a fantastic guest, one that has been very instrumental in my life and in our family's lives, my brother's lives, as well as a number of other people's lives as far as helping them know a little bit about investments and start investing.
• 1:41
  Speaker 1: And she's known by many in my circles, the traders that I used to work with as the guru that was her nickname was what does a guru think about this?
• 1:53
  Speaker 1: What does a guru think about that?
• 1:54
  Speaker 1: Because she does talk investing.
• 1:55
  Speaker 1: She and I talk to investing pretty much every day, or every other day, if we can, as much as we can, and I am very honored to have our special guest on today.
• 2:08
  Speaker 1: She is a qualified investor and has been investing for a very, very long time.
• 2:14
  Speaker 1: She's also a wonderful mother and a mother of three boys, and I just happen to be her middle son.
• 2:23
  Speaker 1: So, hey, mom, how are you?
• 2:26
  Speaker 2: I'm doing well, Greg.
• 2:27
  Speaker 2: How are you?
• 2:29
  Speaker 1: Great, great Known as a guru with our trader friends, but also known by many of your friends and family as Dee.
• 2:40
  Speaker 2: Is that correct?
• 2:41
  Speaker 2: That is correct, yes.
• 2:43
  Speaker 1: Yes, and Nana D, as well as Grandma on our side.
• 2:47
  Speaker 1: So, dolores Farrell, thanks so much for joining us today.
• 2:51
  Speaker 1: How are you doing?
• 2:55
  Speaker 2: I'm doing well, thank you.
• 2:57
  Speaker 1: Tell us what just a couple different things we're going to talk about today.
• 3:01
  Speaker 1: I just want to talk about the Rule of 72 and a couple other things that might be helpful for people out there investing, but tell us how are you feeling about the market right now and where things are right now here that we're into September.
• 3:19
  Speaker 2: Well, actually the market seems pretty narrow to me.
• 3:23
  Speaker 2: So pretty much, if you're going to stay invested in what is working, you've got to only be in a few sectors that are moving at all.
• 3:34
  Speaker 2: Mainly, of course, would be technology, which is really big.
• 3:39
  Speaker 2: Animal health is pretty big.
• 3:41
  Speaker 2: Housing is going to come on if the Fed lowers the interest rate and helps the mortgage situation out.
• 3:48
  Speaker 2: So pretty much that's it.
• 3:52
  Speaker 2: It's what I would call a narrow market.
• 3:55
  Speaker 1: Yeah, and then tell us, how did you get into investing?
• 3:58
  Speaker 1: Where did you start for the beginner out there, for the novice or even, you know, the advanced?
• 4:06
  Speaker 1: Where did you get your start?
• 4:08
  Speaker 1: Why, how, and you know how did it all start for you?
• 4:14
  Speaker 2: Well, it started with my husband's practice when we set up a retirement plan, and that really, basically, was the beginning of it.
• 4:25
  Speaker 2: We went with a bank first of all.
• 4:29
  Speaker 2: That didn't work out so well.
• 4:31
  Speaker 2: They lost money.
• 4:32
  Speaker 2: We went with an investment fund in Dayton Ohio and they also lost money.
• 4:40
  Speaker 2: And I remember sitting and thinking one day you know, they're all going to lose money, I can at least lose money.
• 4:46
  Speaker 2: I better learn this stuff.
• 4:48
  Speaker 2: So I did take a couple financial courses at a local college, and the one that really made the most impression on me was the one that followed a particular book.
• 5:01
  Speaker 2: It was a money dynamics for the 1990s.
• 5:06
  Speaker 2: There had been several editions of it and this was back in probably the mid 70s that I was starting to learn how to do this Not even close to what my major is, but I was determined that we could at least keep from losing money in our retirement plan.
• 5:31
  Speaker 1: So that's where it started.
• 5:33
  Speaker 1: Yeah, and what was your major?
• 5:36
  Speaker 2: Oh, my major was nursing from Ohio state.
• 5:39
  Speaker 2: Yeah, yeah.
• 5:41
  Speaker 2: So, pretty far away from business.
• 5:44
  Speaker 1: Pretty far away from that, exactly so it's not you don't have to major in investing to be an investor no, no, no, you really don't.
• 5:54
  Speaker 1: Yeah, and of course I know that.
• 5:55
  Speaker 1: But I just for the audience sake I want to make sure everybody knows.
• 5:58
  Speaker 1: You know that you studied in nursing.
• 6:00
  Speaker 1: You taught in nursing back in the know with the 60s.
• 6:05
  Speaker 1: You know back in what winsome salem right, I mean you were teaching a class.
• 6:10
  Speaker 2: Yeah, as a female yes, oh yeah yes which right happened every day, and then you know to basically got into vesting because you, just you know he needed to uh, we did, and so we eventually, uh, eventually, had we used self-directed pension plans so that I could, you know, do the investing part.
• 6:36
  Speaker 2: I studied what I could.
• 6:37
  Speaker 2: I actually in those days, if you remember, we had to have brokers to do any trading, so I had a broker that I could at least bounce things off of um while I was beginning all of this, and in that time they had this rule.
• 6:57
  Speaker 2: They always had rules um the one about how much to put in stock, and that was where I was mainly focused.
• 7:06
  Speaker 2: I like the stock part and that was the.
• 7:10
  Speaker 2: You take a number like 120 and you subtract your age from it and that's where you get the number of the percent of stocks that you would put in a portfolio.
• 7:25
  Speaker 2: Seems silly now, but that is the way it worked and that's what I was taught in the class.
• 7:35
  Speaker 1: Isn't that?
• 7:35
  Speaker 2: amazing.
• 7:37
  Speaker 2: Yes, Kind of silly actually.
• 7:40
  Speaker 1: Yeah, no doubt.
• 7:41
  Speaker 2: And then the most impressive part, though, was the rule of 72.
• 7:46
  Speaker 1: Yeah.
• 7:46
  Speaker 2: And I keep that.
• 7:47
  Speaker 2: I have that in all of my notebooks.
• 7:50
  Speaker 2: When I start the year and I get a new notebook, I put the rule of 72 in the front cover.
• 7:57
  Speaker 2: It just keeps the focus on how your money is going to be invested and what difference it'll make in what you invest in and how it's earning.
• 8:10
  Speaker 2: And it goes like this If you have $1 and you put it in for 72 years, it will become $2.
• 8:21
  Speaker 2: $2.
• 8:32
  Speaker 2: That is, if you're able to get 1.3%.
• 8:33
  Speaker 2: It'll take 55 years.
• 8:34
  Speaker 2: All of this just keeps the focus on how you're going to get your money to double over time, because that's what you're working on is the amount of time that you have.
• 8:42
  Speaker 2: So, like at 24% which is possible, by the way, I've had those years you can double your money in three years time, which sounds good, right.
• 8:56
  Speaker 1: Sure, yeah, yeah, sounds great.
• 8:58
  Speaker 2: So that's that.
• 9:00
  Speaker 2: I had a class that was based on that and that, basically, is that's what I use.
• 9:08
  Speaker 1: Yeah, that's great, and that started at Wittenberg University.
• 9:11
  Speaker 1: Is that where you first took your first class?
• 9:13
  Speaker 2: Yeah, that's where I took my first class.
• 9:15
  Speaker 2: That's correct, yeah.
• 9:16
  Speaker 2: So you either have to be and you have to be fairly aggressive given the numbers of years you have, or you have to live a really long time to get things to be where you can actually retire and live off of the income that you've put aside.
• 9:37
  Speaker 1: Dropping some knowledge here, mom.
• 9:38
  Speaker 1: Well done.
• 9:39
  Speaker 1: Thank you for this input and I know the audience thanks you as well.
• 9:44
  Speaker 1: This show's money matters with Greg.
• 9:46
  Speaker 1: I'm Greg Farrell, ceo and owner of Farrell Wealth.
• 9:49
  Speaker 1: It's a wealth management firm.
• 9:50
  Speaker 1: I got my start from investing by my mom, with the memories of its legal pads that you used to have on there.
• 9:58
  Speaker 1: Most kids would have things on their kitchen table or their dining room table that would be arts and crafts.
• 10:06
  Speaker 1: We had legal pads that had tabs on them that said IBM, msft, you name it.
• 10:16
  Speaker 1: She was tracking back in the day because there weren't apps to do that.
• 10:20
  Speaker 1: That's what I grew up with.
• 10:21
  Speaker 1: Do you remember writing all that stuff down, ma?
• 10:24
  Speaker 2: Oh, I do, I do.
• 10:26
  Speaker 2: There was not the kind of information in that time that we have now.
• 10:31
  Speaker 2: There is a lot of financial information out there now and with the television programs and all of that and you meet, you're actually able to meet major investors that come on the shows.
• 10:45
  Speaker 2: Rick Reeder was on just today.
• 10:48
  Speaker 2: Josh Brown was on today on CNBC.
• 10:51
  Speaker 2: I mean, it's just loaded.
• 10:53
  Speaker 2: It was not like that when I started.
• 10:56
  Speaker 2: Pretty much you had the Wall Street Journal, which was really kind of dead news because by the time you had the price that the stock had gone to, that was old, that was old news.
• 11:07
  Speaker 2: That was several years ago.
• 11:09
  Speaker 2: It's several days ago after the newspaper was printed.
• 11:13
  Speaker 2: So it was very limited.
• 11:14
  Speaker 2: It is incredible now really.
• 11:19
  Speaker 1: Yeah, it really is.
• 11:20
  Speaker 1: It is crazy.
• 11:21
  Speaker 2: For information yeah.
• 11:22
  Speaker 2: Maybe in some ways it's almost too much.
• 11:27
  Speaker 1: That's a really good point.
• 11:29
  Speaker 1: Sometimes it kind of keeps you from keeping the noise out.
• 11:36
  Speaker 2: Well, it also makes you hesitate to do anything because you have so many different opinions.
• 11:42
  Speaker 2: Also makes you hesitate to do anything because you have so many different opinions.
• 11:45
  Speaker 1: So you were talking about the amount of information that's out there today.
• 11:54
  Speaker 2: I mean, how do you narrow it down?
• 11:56
  Speaker 2: I only have a few things that I watch and I don't really watch those even routinely.
• 12:06
  Speaker 2: Pretty much at this point in my age anyway, I am invested.
• 12:08
  Speaker 2: I've done my homework.
• 12:10
  Speaker 2: It would really take something phenomenal to make me change my mind.
• 12:16
  Speaker 2: On a lot of the items I try to stay with what's working.
• 12:19
  Speaker 2: A lot of the items I try to stay with what's working, which is the big part.
• 12:25
  Speaker 2: You know, when tech is running away, you really don't want to be in utilities, it's just.
• 12:31
  Speaker 2: That is just one of the rules.
• 12:34
  Speaker 2: My other rule is my stop loss orders.
• 12:38
  Speaker 2: I keep stop losses onosses on everything and I keep them sometimes tighter than others.
• 12:46
  Speaker 2: It depends on what the stock is and what I think the trend is.
• 12:49
  Speaker 2: But that helps a lot.
• 12:52
  Speaker 2: So I don't have to watch it all the time and I don't have to put the orders in to sell.
• 12:58
  Speaker 2: I also use the GTCs, the good till cancel orders when I buy.
• 13:03
  Speaker 2: So there's another thing where I've done my research.
• 13:07
  Speaker 2: I know I want to accumulate the stock and so I keep a GTC on it and if it hits, that's fine.
• 13:16
  Speaker 2: If it doesn't, you know, then we'll wait until it does or move on to something else then we'll wait until it does or move on to something else.
• 13:26
  Speaker 1: So you're going through the process of finding good companies and you kind of learned that from the Peter Lynch-backed days with Fidelity Magellan right.
• 13:33
  Speaker 2: Oh yeah, that was the biggie, that was the behemoth.
• 13:37
  Speaker 2: Everybody invested in Magellan and Peter Lynch, of course, was the manager of that fund, which was just incredible.
• 13:47
  Speaker 1: I told a story about how he found the Limited and Leslie Wexner's company that ultimately became, you know, abercrombie, fitch and Victoria's Secret, and he said well, I was at a mall with my daughters and they were buying everything and all their friends were buying everything, and so that's how I found the limited.
• 14:08
  Speaker 2: That's right.
• 14:09
  Speaker 2: That's what he used to watch, which is a very makes a lot of sense.
• 14:14
  Speaker 1: Yeah, absolutely.
• 14:15
  Speaker 1: Well, I mean, just look at the trend right, see the trend, follow the trend.
• 14:25
  Speaker 2: I mean that's what you'd always taught us Take the trend and follow the trend, and when other people are talking about the trends, usually when you're probably want to get out.
• 14:31
  Speaker 2: That's usually the case.
• 14:36
  Speaker 2: Yes, there are stocks that you can hold a long time and there are others that end up being kind of a surprise and you have them briefly, but that's why you have a stop loss on your stock.
• 14:45
  Speaker 1: It's a great lesson too.
• 14:46
  Speaker 1: It also kind of the stop loss and even a GTC on the buy side.
• 14:50
  Speaker 1: It sort of takes the emotion out of things too If you put something somewhere and it hits.
• 14:55
  Speaker 2: Yeah, yeah it is.
• 14:59
  Speaker 2: It's a discipline actually.
• 15:00
  Speaker 2: Yeah absolutely, you have to be disciplined to be a good investor.
• 15:06
  Speaker 2: It's really not anything remarkable, you know.
• 15:11
  Speaker 2: That's why those orders are there to be able to do that, and it kind of puts it all on automatic.
• 15:19
  Speaker 1: Yeah, so the discipline really it's been.
• 15:21
  Speaker 1: I mean you've been a disciplined investor for all these years too.
• 15:24
  Speaker 1: I mean it's you've really stuck to it.
• 15:28
  Speaker 2: I've tried.
• 15:29
  Speaker 2: Yes, I have not had I haven't had so far anyway the losses that everybody had for us when we were paying them to manage our money Right.
• 15:40
  Speaker 1: It helps, oh, it's very, very true, everybody had for us when we were paying them to manage our money Right.
• 15:42
  Speaker 1: It helps.
• 15:45
  Speaker 1: That's very, very true.
• 15:46
  Speaker 1: Without a doubt, the show is Money Matters with Greg.
• 15:49
  Speaker 1: It's 103.1 FM WVLP, here locally in Valparaiso, indiana, broadcast on Thursdays at 1 o'clock and Saturdays replayed at 1 o'clock as well.
• 16:00
  Speaker 1: We are talking to Dolores Farrell, my esteemed mother and a wonderful investor that I got in the business with or I got in the business for for sure and she and all, all the boys that she raised have all had a part in some sort of investing and learned a long time ago how to open the Wall Street Journal and how to invest our paper route money or our mowing money and start picking stocks.
• 16:25
  Speaker 1: My first stock was Microsoft.
• 16:29
  Speaker 1: I saw a label on a floppy disk from a game in an Atari that was called Frogger.
• 16:40
  Speaker 1: I liked the game, so mom made me look it up and that was my first stock purchase.
• 16:46
  Speaker 1: I think I bought Microsoft at $5 and sold it at $20, and it was a stupid mistake because I just should have held on to it.
• 16:55
  Speaker 2: Yeah, we still own Microsoft.
• 16:57
  Speaker 2: It's in the retirement plan.
• 16:58
  Speaker 2: It's been there for years.
• 16:59
  Speaker 2: Sure sure and it only gets better.
• 17:02
  Speaker 1: It just gets better.
• 17:04
  Speaker 1: Yeah, and, of course, for compliance sake, we don't endorse any individual stocks.
• 17:09
  Speaker 1: We want to talk investing and make sure that we are investing wisely and disciplined and you're consulting your advisors as well.
• 17:18
  Speaker 1: And I want to mention that the I forgot to mention this earlier, mom, so I'm just going to rattle this off.
• 17:23
  Speaker 1: The opinions voiced in this podcast were for general information only and not intended to provide specific advice or recommendations for any individual.
• 17:33
  Speaker 1: To determine what strategies or investments may suit you, consult the appropriate qualified professional before deciding.
• 17:39
  Speaker 1: All right, sorry about that, I should have done that at the beginning, but it said any advice you have out there for, as an esteemed investor, the way you are, the way you've been so disciplined over the years, any advice for the?
• 17:57
  Speaker 1: You know the early investor.
• 17:58
  Speaker 1: It's, look, it's never too late, but you know the Gen Z, the Gen X generations.
• 18:00
  Speaker 1: You know the early investor.
• 18:01
  Speaker 1: It's, look, it's never too late, um, but you know the Gen Z, the Gen X, uh generations.
• 18:05
  Speaker 1: You know any any thoughts on, uh, how you might be able to sort of pass on some knowledge?
• 18:14
  Speaker 2: Well, like I said, there's a lot of information out there, um, and it does tend for some people to be intimidating.
• 18:23
  Speaker 2: You really just you sort of have to just begin, and the best way to follow a stock is to buy a couple shares of it.
• 18:33
  Speaker 2: You'll follow it so much better if your money's in it than if it isn't.
• 18:38
  Speaker 2: Makes a big, big difference, and you must, absolutely must, watch the trend.
• 18:44
  Speaker 2: You've got to invest in what is working and you've got to pay attention to that.
• 18:50
  Speaker 2: That's with Peter Lynch's lessons.
• 18:53
  Speaker 2: It makes a difference how well you invest your money, so you've got to pay attention.
• 19:01
  Speaker 1: That's great.
• 19:01
  Speaker 1: And then nowadays, with apps and the ability to just add a stock list to your phone, you can kind of track it while you're on oh right.
• 19:10
  Speaker 1: You don't have to track it every day, and don't recommend that either.
• 19:17
  Speaker 2: That's right.
• 19:18
  Speaker 2: No, I do a lot of my orders on the phone.
• 19:21
  Speaker 2: I put in new red notebook spiral thing just one of those cheapies at the grocery store every year and start a new one at the beginning of each year are due how the stock is trading today, any news that comes out that I hear on the stock.
• 19:47
  Speaker 2: You've just got to follow it too.
• 19:54
  Speaker 2: You cannot leave it and not pay attention to it.
• 19:55
  Speaker 2: It makes a big difference.
• 19:56
  Speaker 2: So I do all of that in my notebook.
• 19:58
  Speaker 2: Keep up with that.
• 19:59
  Speaker 2: It helps a lot.
• 20:01
  Speaker 2: It helps me know whether I want to let a stock go or I want to hang on to it for a while.
• 20:10
  Speaker 1: What's your discipline on that?
• 20:11
  Speaker 1: Is it just I mean the stock's underperforming?
• 20:14
  Speaker 1: It's just time to let it go, because it's difficult to have the discipline to sell because you have emotion involved.
• 20:23
  Speaker 2: Yeah, but I've got my stop losses on.
• 20:26
  Speaker 1: And.
• 20:27
  Speaker 2: I move those up if the stock goes up.
• 20:31
  Speaker 1: Right.
• 20:31
  Speaker 2: And pretty much my losses are around the 10% range.
• 20:36
  Speaker 1: Okay.
• 20:36
  Speaker 2: And actually that's how the rule of 72 and paying attention to that for focus helps you not allow yourself to have a stock that just keeps going down and down and down and you're losing.
• 20:51
  Speaker 1: Right.
• 20:52
  Speaker 2: Because that'll happen if you don't pay attention.
• 20:56
  Speaker 2: And there are other things that you have to do.
• 21:00
  Speaker 2: You know it's not just this, but you do, so you have to pay attention.
• 21:06
  Speaker 1: Yeah, there's other things in life, right.
• 21:09
  Speaker 2: That's right, and my notebook helps me do that because I can keep all of that.
• 21:15
  Speaker 2: And then if I hear someone on television to give a really thing, like today, apple was a big thing that they were talking about you want to make notes on that?
• 21:28
  Speaker 2: I do that because I can't remember all of it.
• 21:32
  Speaker 1: And.
• 21:32
  Speaker 2: I really basically follow about 10 stocks really well.
• 21:38
  Speaker 2: You can get in to too many, it gets confusing.
• 21:46
  Speaker 2: That's another reason for the notebook.
• 21:49
  Speaker 2: But, um, 10 is about all you can really handle Know when the earnings are coming out and all of the information that you have to have on it.
• 21:59
  Speaker 2: 10 is about my what has been about my limit.
• 22:03
  Speaker 2: I learned that over time.
• 22:06
  Speaker 1: Well, you taught it too.
• 22:07
  Speaker 1: I tell you, we have an internship program here at Farrow Wealth, and we have four interns in it, and the first thing that we do is ask them to develop a stock portfolio that they pick of their favorite 10 stocks, and so there's no judgment on any of those stocks.
• 22:25
  Speaker 1: You just basically say look if you like, if you're using a product or you're wearing a company's product or whatever like, let's add it to the list.
• 22:35
  Speaker 2: Right, right.
• 22:37
  Speaker 1: Learn how to track it yeah, so it's uh exactly.
• 22:40
  Speaker 1: Your knowledge is definitely continued, for sure.
• 22:45
  Speaker 2: So that's true, well, and I'm always following other things.
• 22:49
  Speaker 2: But as far as owning goes, where I'm really committed, that's only about 10 stocks.
• 22:56
  Speaker 2: Okay, great, I'm following other stuff too, because perhaps I want to own some of those other stocks when I can raise some cash.
• 23:07
  Speaker 2: And the other thing is, too, you sometimes do have to adjust.
• 23:12
  Speaker 2: That's probably what happens mostly in September, which is why September is always so wobbly.
• 23:20
  Speaker 2: Everybody's adjusting their portfolios, getting ready for the last quarter of the year and I'm one of them and anything that hasn't performed, or I feel as though I want more money to invest in NVIDIA or buy more of some other stock then you have to trim some of your shares, and September seems to be the month that everybody does it.
• 23:47
  Speaker 1: There you go, Mom's dropping knowledge.
• 23:49
  Speaker 1: Mom, I can't thank you enough for being here today and being on the show.
• 23:55
  Speaker 1: I just want to mention to everybody.
• 23:56
  Speaker 1: If you have any questions or you want to have Dolores Farrell on again, which I'm sure you probably do Just email me at gregatferrellwealthcom and I'd be happy to connect in any questions you have for Dee or the guru that we call her, Mom, I just want to thank you so much for being here.
• 24:18
  Speaker 1: Thanks.
• 24:19
  Speaker 2: Sure Glad to do it, Greg.
• 24:21
  Speaker 1: All right, awesome.
• 24:22
  Speaker 1: The show's Money Matters for Greg.
• 24:23
  Speaker 1: It's 103.1 FM here, locally at WVLP.
• 24:27
  Speaker 1: I want to thank WVLP.
• 24:29
  Speaker 1: I love being a part of that family and also anywhere you pod, you can catch this pod here.
• 24:34
  Speaker 1: Again, thanks, mom, appreciate it and we'll talk soon.
• 24:41
  Speaker 2: Sure Bye now.