Latest / WCHS Network Podcasts / 12/16/2024 Retire Right Radio with John Burdette

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12/16/2024 Retire Right Radio with John Burdette · WCHS Network Podcasts

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Speaker 2: The views and opinions expressed on this program do not
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Speaker 2: its employees or WVRC Media. This is retire Rite Radio,
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Speaker 2: a weekly show from John Verdet at Fourth Avenue Financial
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Speaker 2: that aims to answer your questions about financial planning, investing,
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Speaker 2: and how to retire right. Fourth Avenue Financial is located
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Speaker 2: by calling three oh four three four five fifty eight
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Speaker 2: fifty eight or text three oh four nine three five
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Speaker 2: fifty oh eight. On retire Right Radio, Let's Go Lide
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Speaker 2: to the studio with host Dale Cooper and John from
1:00
Speaker 2: Fourth Avenue Financial.
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Speaker 3: Contes Hey, every Pleasant, Good Morning, Everybody. Dave weekly subbing
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Speaker 3: in for Dale Cooper today on retire Right Radio with
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Speaker 3: John Burdett from Fourth Avenue Financial, John, good morning, Hey.
1:12
Speaker 4: How are you well?
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Speaker 3: I tell you what, let's uh, let's get into it
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Speaker 3: a little bit because we've got a pretty good financial
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Speaker 3: setup in the markets today. Futures are up, S and
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Speaker 3: P five hundred futures are up, NASDA futures looking good.
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Speaker 3: Bitcoin making an all time high. And one of the
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Speaker 3: things we want to talk about this morning is the
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Speaker 3: difference between investing and gambling. Oh yeah, so let's get
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Speaker 3: into it. I mean, this is a it's kind of
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Speaker 3: a different subject. We're not talking about when you buy
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Speaker 3: a stock, whether it's for a long term investment or
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Speaker 3: just trade. That's that's another subject. What we're talking about
1:49
Speaker 3: here is what's the difference between investing and gambling. Let's
1:54
Speaker 3: get into that a little bit.
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Speaker 5: Sure, well, there's a huge proliferation of online gambling now,
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Speaker 5: sports betting, things like that that are. I was actually
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Speaker 5: in Philadelphia at a conference several months back, and you know,
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Speaker 5: after the meeting, everybody goes down to the hotel lobby
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Speaker 5: and chats and has a drink, and everyone there financial advisors,
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Speaker 5: talking about how big they were in the sports betting.
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Speaker 5: And I was setting back thinking I'm glad these guys
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Speaker 5: aren't my financial advisor. But you know, you look at
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Speaker 5: these statistics and sports betting has just grown so much
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Speaker 5: and there's so many people into it, and it's something
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Speaker 5: like almost four hundred dollars on average a person gets spent.
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Speaker 5: And I say spent because this is not winning. This
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Speaker 5: is the average loss of a person who participates over
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Speaker 5: the course of a year, and it's four hundred dollars.
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Speaker 5: And we've talked before on the show about articles about
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Speaker 5: how the average American can't come up with four one
3:00
Speaker 5: hundred dollars for an emergency fund.
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Speaker 3: Well, you know, they talk about the fact that never
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Speaker 3: gamble more than you can afford to lose, right, and
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Speaker 3: that that pertains to investing as well.
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Speaker 5: Right, Well, investing is and sometimes people look at investing
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Speaker 5: because the market goes up and down over time. People
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Speaker 5: look at investing and say it's a gamble, and it's
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Speaker 5: it's different than gambling. You know, gambling, the odds are
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Speaker 5: against you. You know, if you play long enough, the
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Speaker 5: house is going to win because that's how the odds
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Speaker 5: are set up. Investing has an element of risk, but
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Speaker 5: it's a calculated risk that you're making based on the
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Speaker 5: assumptions of how a company will do, if they will perform,
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Speaker 5: if they will earn money. You know, that's a different scenario.
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Speaker 5: You could be a long term investor in the market,
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Speaker 5: and as we know, the market over time finds higher highs.
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Speaker 5: Now there are ups and downs in between. But you know,
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Speaker 5: with gambling, you're guaranteed if you play long enough, the
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Speaker 5: house is going to win that bet.
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Speaker 3: Yeah, And that's one of those things also where if
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Speaker 3: you are betting on a hot stock and you're thinking
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Speaker 3: that this is going to be like a short term hold,
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Speaker 3: that's an example of something where you definitely need to
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Speaker 3: be following that up with stops.
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Speaker 2: Yeah.
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Speaker 5: Yeah, well, I mean certainly trading and investing are two
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Speaker 5: different things. You know, with investing, unlike gambling, you have
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Speaker 5: different tools you use to build out your portfolio. There
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Speaker 5: are short term tools for short term jobs, emergency funds,
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Speaker 5: saving for short term things, providing income and retirement, and
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Speaker 5: there are long term tools like the stock market that
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Speaker 5: has some volatility but gives you the growth potential that
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Speaker 5: you need to keep up with inflation. And so you're
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Speaker 5: crafting a portfolio with investing to match the needs you
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Speaker 5: have where you know, in gambling is just the opposite
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Speaker 5: of that. You're throwing it out there on a chance,
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Speaker 5: and you know that the odds are stacked against you
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Speaker 5: and they have to be those those casinos are big places.
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Speaker 3: It's also a matter of how much sleep you want
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Speaker 3: to get, right. I mean, if you've got If you
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Speaker 3: want to buy one hundred shares of Apple, that's one thing.
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Speaker 3: But if you want to buy one hundred shares of
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Speaker 3: say Palenteer or Apple, Lovin or something like that, that
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Speaker 3: is a that's an investment that you're gonna have to
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Speaker 3: constantly monitor.
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Speaker 5: Well, you're gonna have to constantly, you know, monitor that.
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Speaker 5: But even that is different than gambling because you're making
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Speaker 5: a calculated risk that this company is going to perform
5:38
Speaker 5: as I expect. You're looking at that company and saying, okay,
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Speaker 5: even though this is a volatile company, even though this
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Speaker 5: is a pricey company, as far as there are multiple
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Speaker 5: that you're paying for it, you must be when you're
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Speaker 5: buying that stuck making the assumption that this is going
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Speaker 5: to play out this way. That's a calculated risk you
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Speaker 5: know that could or could not happen. But that's different
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Speaker 5: than a mathematical gambling calculation that a casino makes when
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Speaker 5: they give you the odds that are definitely in their favor.
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Speaker 3: Yeah, definitely in their favor, because then you have you
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Speaker 3: have you've got to win fifty five percent of the
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Speaker 3: time to make money in sports gambling. Well, one of
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Speaker 3: the things that's different about investing is you have just
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Speaker 3: a much wider range of information to choose from. You know, hey, man,
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Speaker 3: I don't know if you've noticed, but that football is
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Speaker 3: not exactly it's not round. It takes fun it takes
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Speaker 3: funny bounces. But I can check a financial return and see,
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Speaker 3: you know, what they did the last quarter, what they're
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Speaker 3: projected to do the next quarter. In current events, you can.
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Speaker 5: Learn about the company. It's almost as if it's very
6:46
Speaker 5: similar to you deciding to open your own business. A
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Speaker 5: lot of your own businesses that you would open, they
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Speaker 5: might not make it, a lot of businesses fail, but
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Speaker 5: you still take the chance because it's a calculated risk.
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Speaker 5: And that's a whole lot different than a gambling situation.
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Speaker 5: You know, there's this almost a gambling culture that has
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Speaker 5: developed because of all of the of the sports betting.
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Speaker 5: I mean, we're even now betting on who's going to
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Speaker 5: win presidential elections and all the meme stocks that people
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Speaker 5: are buying without understanding what the companies are. It's this
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Speaker 5: get rich quick mentality that you have to be careful with.
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Speaker 5: You have to really understand the difference between gambling. You know,
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Speaker 5: I'm not saying that I've never been to a casino.
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Speaker 5: I mean, I've certainly been to many conferences in Las Vegas,
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Speaker 5: you know. But if I go play a game, I'm
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Speaker 5: doing it as entertainment, understanding that I'm going to lose
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Speaker 5: this one hundred dollars that I'm willing to lose to
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Speaker 5: have fun playing a game. That's a whole lot different
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Speaker 5: than expecting an outcome.
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Speaker 3: Yeah, talking about expecting outcomes one of the things we
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Speaker 3: talked about on our show on Hotline. We do the
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Speaker 3: financial report every day at four o'clock, talking about in
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Speaker 3: years of presidential elections, in the month of December, the
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Speaker 3: market has gone up like eighty four percent of the time.
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Speaker 3: Now that's pretty good information. Yeah, I mean, imagine if
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Speaker 3: you had that same kind of odds that you were
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Speaker 3: betting on sat Tonight's money in football game, you feel
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Speaker 3: pretty confident.
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Speaker 5: But even at that if everybody knows it that's a
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Speaker 5: funny thing about the market. If everybody knows the information,
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Speaker 5: it's probably too late to act on it.
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Speaker 3: That's very that's exactly right.
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Speaker 4: Tell you what.
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Speaker 3: Let's take a quick break. We'll come back with more
8:34
Speaker 3: with John Burdett. This is a retire Right Radio on
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Speaker 6: tax advice. All economic and performance information is historical and
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Speaker 6: not indicative of future results. Investing may involve risk of
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Speaker 4: All right, welcome back.
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Speaker 3: We're tie Right Radio Day weekly submon in for Dale
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Speaker 3: Cooper Today, and I tell you what, John Burdette from
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Speaker 3: Fourth Avenue Financial is here.
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Speaker 4: Hey.
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Speaker 3: You know we've been talking about the difference between gambling
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Speaker 3: and investing in this show. We probably got another fifteen
11:06
Speaker 3: minutes to discuss this. But one of the things I
11:08
Speaker 3: did want to mention is, you know, here we are,
11:11
Speaker 3: we're a week away from Christmas, We're coming to the
11:14
Speaker 3: end of the year. If you're an investor, what should
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Speaker 3: you be thinking about doing at the end of the year.
11:18
Speaker 3: What's a good a good way to take stock?
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Speaker 5: Well, I mean, certainly look at your situation and it
11:25
Speaker 5: gin be a good time to do some tax losses.
11:27
Speaker 5: If you have some losses for the year and you
11:30
Speaker 5: have some gains, you went offset a little bit of
11:32
Speaker 5: that harvest. Some of those losses.
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Speaker 3: Let me ask you that though. I mean, hey, you're
11:37
Speaker 3: a guy. I'm a guy. Sometimes we can be bullheaded.
11:40
Speaker 3: We don't want to give up on these stocks. But
11:42
Speaker 3: sometimes it's just prudent to go ahead and take that
11:44
Speaker 3: tax loss.
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Speaker 5: Well, yes, at least you're getting something out of it, right,
11:49
Speaker 5: you're offsetting that gain, keeping some money out Uncle Sam's hands,
11:53
Speaker 5: and you know thirty days you can buy it back. Well,
11:56
Speaker 5: that's fine, that's good point. And oftentimes too, stocks move
12:02
Speaker 5: in herds of the industry and so you may be
12:06
Speaker 5: able to take a tax loss and purchase something similar
12:11
Speaker 5: in the industry and get similar type results, so you
12:14
Speaker 5: might not miss out if there is a bounce back
12:16
Speaker 5: before you can buy it back.
12:17
Speaker 3: Hey, I've got to ask you this. We don't get
12:18
Speaker 3: a chance to talk about I don't get a chance
12:20
Speaker 3: to host the show very often. I see you in
12:22
Speaker 3: the hallway occasionally, have been dying to ask you about this.
12:25
Speaker 3: So what are you telling your clients about bitcoin right now?
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Speaker 5: Nothing? I'm not a fan. I that to me is
12:33
Speaker 5: something that is I don't see a reason to play
12:37
Speaker 5: in that space. To be honest with you, Yes, I mean,
12:41
Speaker 5: if you would have bought it. It would have been
12:43
Speaker 5: a great thing to buy a long time ago. But
12:47
Speaker 5: you know, the premise behind it is that it's a
12:49
Speaker 5: digital currency. Well, if you think about the dollar bill,
12:54
Speaker 5: a lot of times people that are really into this
12:56
Speaker 5: believe that, hey, the dollar's going to go away or
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Speaker 5: or things like this are going to happen. A lot
13:02
Speaker 5: of folks are the same people that buy gold and
13:04
Speaker 5: that sort of thing.
13:05
Speaker 3: I want to ask you about gold in a minute.
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Speaker 5: I put that in the same category. To be honest
13:10
Speaker 5: with you, is a bit quite okay as far as
13:13
Speaker 5: as far as putting my money there. You know, when
13:16
Speaker 5: you think about creating wealth, wealth to me is not
13:20
Speaker 5: the dollar bill or how we denominated. It is the
13:23
Speaker 5: ability to serve someone, the ability to meet a need,
13:27
Speaker 5: solve a problem, innovate. And that's what your companies are
13:31
Speaker 5: doing that you own. And when they do that, when
13:34
Speaker 5: you serve people, you get the currency in return. Right now,
13:38
Speaker 5: it's the dollar bill. And if the dollar bill goes
13:42
Speaker 5: away and it's bitcoin or chunks of gold or shiny shells,
13:46
Speaker 5: if I'm valuable to somebody, I'm going to get that
13:48
Speaker 5: currency in return. So when I make investments, I am
13:52
Speaker 5: simply looking at is this company valuable? Is it solving problems?
13:57
Speaker 5: Is it meeting needs? Is it is it, you know,
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Speaker 5: providing something that that people desire. And if it is,
14:05
Speaker 5: you know, that's that's an investment. That's not gambling, right,
14:09
Speaker 5: That's that you know, if I'm a if you're if
14:12
Speaker 5: I have a bad heart and you're a heart surgeon,
14:13
Speaker 5: you're valuable to me. That's wealth. And that's how I
14:18
Speaker 5: break down the investments. And that's why I stay away from,
14:21
Speaker 5: you know, commodities. I mean, people specialize in these things,
14:24
Speaker 5: but I don't. I'd rather focus on getting as close
14:29
Speaker 5: as I can to the source of service.
14:31
Speaker 3: I wanted to get your take on that, because you know,
14:33
Speaker 3: the old adage was that if you had a portfolio
14:37
Speaker 3: that five percent five to ten percent of it needed
14:40
Speaker 3: to be in precious metals just in case the government
14:43
Speaker 3: went sideways. And so you're hearing like bitcoin would be
14:48
Speaker 3: the new gold or silver or platinum, and I just
14:51
Speaker 3: kind of see that as a much more volatile investment.
14:54
Speaker 3: I mean, the idea that you would want to invest
14:57
Speaker 3: in gold would was that it was incredibly stable. The
15:01
Speaker 3: coin doesn't seem to be nearly as stable, so that
15:04
Speaker 3: so in terms of like where that should be part
15:07
Speaker 3: of a larger portfolio, that just doesn't seem to make
15:10
Speaker 3: any sense.
15:11
Speaker 5: Well, and even as the concept of a currency, at
15:15
Speaker 5: least at this point. I don't know about you, but
15:18
Speaker 5: I've never had trouble dealing with dollars right right. You know,
15:25
Speaker 5: the transaction costs are relatively low compared to bitcoin. I
15:30
Speaker 5: don't have to worry about having a secret code that
15:33
Speaker 5: if I pass away, my beneficiaries won't understand how to
15:37
Speaker 5: even access it. You know, there's just so many things
15:39
Speaker 5: I don't get. I don't get it, and maybe you know,
15:43
Speaker 5: I don't have to get it. Let other people get it.
15:45
Speaker 5: I'll do my thing.
15:45
Speaker 3: Hey, I want to double back to the original premise
15:48
Speaker 3: of this segment, which is the difference between an investment
15:52
Speaker 3: and gambling as opposed to to sports gambling. Okay, I see,
15:58
Speaker 3: for example, something's going on the market, and I'm thinking
16:02
Speaker 3: to myself, oh, well, they've been talking about this on
16:05
Speaker 3: financial television for a lot for the last week or so.
16:08
Speaker 3: So I'm going to step in and say, buy two
16:10
Speaker 3: hundred shares of Microsoft. How do I know that that
16:14
Speaker 3: is an investment rather than like a sports gamble, like
16:19
Speaker 3: betting on red or black pep. Well, one are the
16:21
Speaker 3: questions I need to be asking myself.
16:23
Speaker 5: Well, is this company providing a good or service that
16:26
Speaker 5: is valuable to people? Is there an earning stream there?
16:30
Speaker 5: Or if there isn't a current earning stream, is there
16:32
Speaker 5: a path to get an earning stream? You know, some
16:35
Speaker 5: companies don't make money, particularly early on, But that doesn't
16:38
Speaker 5: mean it's a gamble. I mean it's a risk, but
16:42
Speaker 5: it's not a gamble. A gamble is you're just playing
16:46
Speaker 5: a numbers, numerical odds, and it's stacked against you from
16:51
Speaker 5: the house.
16:53
Speaker 4: You know.
16:54
Speaker 5: Buying into a company that is unprofitable, that has a
16:57
Speaker 5: premise that you believe is not gambling. It's taking a
17:02
Speaker 5: calculated risk. And that's that's a fine line between those
17:06
Speaker 5: two things, but it is a line.
17:08
Speaker 2: Yeah.
17:08
Speaker 3: Well, they say the trend is your friend, right, And
17:10
Speaker 3: one of the things I think that it's very difficult
17:13
Speaker 3: for investors to get their minds wrapped around. And this
17:16
Speaker 3: is a problem for me where I see a very
17:19
Speaker 3: popular name that's come way way back and I'm thinking, well,
17:23
Speaker 3: this is a really low priced quality stock. I'm going
17:26
Speaker 3: to buy this now. Well, you know, it's very difficult
17:31
Speaker 3: to catch a falling knife. Either your probability of riding
17:35
Speaker 3: a stock that's going up or that is making new highs,
17:39
Speaker 3: your probability of getting a winner there as much.
17:41
Speaker 5: Higher, right, Yeah, I mean generally, but I try to
17:47
Speaker 5: stay away from, particularly on the show individual type you know,
17:54
Speaker 5: purchases things like that, are talking about individual stocks. One,
17:58
Speaker 5: I can't do it regulatory wise, okay, but because it
18:04
Speaker 5: could be construed as recommendation. So a lot of times
18:07
Speaker 5: you see that's another thing. You see folks on TV
18:09
Speaker 5: talking about all these individual stocks and buy this or
18:13
Speaker 5: sell that. They're not licensed like I am, and they
18:17
Speaker 5: don't have the same regulation.
18:19
Speaker 4: Hey, what you're associated with them?
18:20
Speaker 3: What are your thoughts on ETFs to try to to
18:23
Speaker 3: try to lower your risk just invest in a certain area.
18:29
Speaker 5: Yeah, that that can be a good thing to do,
18:32
Speaker 5: to take a look at it if it's a low
18:34
Speaker 5: cost way to get diversification sometimes and you can kind
18:39
Speaker 5: of target the areas you want to target. It can
18:42
Speaker 5: also be handy when you're building an overall portfolio to
18:45
Speaker 5: be able to know that I'm buying this sector of
18:48
Speaker 5: the market, so you know you're not getting overlap in
18:50
Speaker 5: your portfolio. You know, if you have ten different positions
18:54
Speaker 5: and all ten of those positions own the same stocks,
18:57
Speaker 5: you're not being diversified. And so you know specific UH
19:03
Speaker 5: sectors or styles. You know, some you might find something
19:07
Speaker 5: that is specifically developing markets, international markets. You might find
19:12
Speaker 5: a large cap or small cap or value or growth
19:15
Speaker 5: and so on and so forth. You can use those
19:17
Speaker 5: tools to to build out a portfolio and not get
19:21
Speaker 5: that overlap.
19:22
Speaker 3: All right, You know, I wanted to ask you also,
19:24
Speaker 3: what percentage of your customers do you think are long
19:27
Speaker 3: term investors?
19:29
Speaker 5: The majority of them, I would say almost one hundred
19:32
Speaker 5: percent per Yeah, you know, most folks that are trying
19:37
Speaker 5: to trade and swap and and doing things like that,
19:42
Speaker 5: I find do it online. I have clients that you know,
19:45
Speaker 5: they they let me have their serious money to manage
19:49
Speaker 5: prudently and UH and some will even carve out an
19:53
Speaker 5: online account and and go have fun with it. But
19:57
Speaker 5: the serious money is being managed in a in a
20:00
Speaker 5: prudent manner.
20:01
Speaker 3: The reason I bring that up is we're just coming
20:04
Speaker 3: to the end of another amazing year in the market,
20:07
Speaker 3: and for new investors, they've never experienced a down market, right, right,
20:12
Speaker 3: and that can be a pretty that could be a
20:14
Speaker 3: shock to the system.
20:16
Speaker 5: Yes, and if we've had a couple of years now,
20:18
Speaker 5: we've had a good run. New participants in the market,
20:21
Speaker 5: like you say, they've never experienced a down year, and
20:24
Speaker 5: it's very easy to get a false sense of I'm
20:28
Speaker 5: really good at this when everything's going up. It's hard
20:32
Speaker 5: to lose when the market is making record highs day
20:34
Speaker 5: after day after day, and the market doesn't work that way.
20:38
Speaker 5: You know you're going to like the market every you know,
20:41
Speaker 5: three out of four years, but you know one out
20:43
Speaker 5: of four you're probably not going to like it. And
20:46
Speaker 5: that's just part of investing.
20:47
Speaker 3: Talking with John Burdett from Fourth Avenue Financial retire Ride
20:50
Speaker 3: Radio here on five adwcchs Okay, As I mentioned, we're
20:54
Speaker 3: just a week away from Christmas, We're nearly to the
20:59
Speaker 3: end of the year, and the end of the year
21:01
Speaker 3: and the beginning of the new year is a time
21:04
Speaker 3: for New Year's resolutions. And I'm sure there's probably somebody
21:07
Speaker 3: that's listening to this broadcast right now that's thinking, you
21:10
Speaker 3: know what, I need to get a hold of my finances.
21:13
Speaker 3: And you can understand that there's a lot of things
21:16
Speaker 3: that people have to take care of their jobs, their family,
21:19
Speaker 3: and sometimes they don't really want to focus in on
21:21
Speaker 3: what's going on in their lives financially. So for the
21:24
Speaker 3: person who wants to come in and see you or
21:26
Speaker 3: wants to get a grip, how do they start? What's
21:29
Speaker 3: the plan?
21:30
Speaker 5: Well, the first thing if they want to come in
21:32
Speaker 5: and see me is just simply give me a call
21:34
Speaker 5: or go online. You can even schedule your own introductory
21:36
Speaker 5: phone call right from our Facebook or website, very easy
21:40
Speaker 5: to do. More broadly, though, if you're looking at your
21:45
Speaker 5: finances a lot of times at the end of the year,
21:47
Speaker 5: you might get a Christmas bonus, you might get a
21:49
Speaker 5: cost of living rays something like that. You know, look
21:52
Speaker 5: at your finances and say where can I use this
21:55
Speaker 5: to shore things up? You know, if you have credit
21:59
Speaker 5: card debt, that's probably the best place to put that money,
22:04
Speaker 5: not in the stock market. If you're paying twenty thirty percent,
22:08
Speaker 5: you're not going to out earn that in the stock
22:10
Speaker 5: market consistently. It's a win if you pay that debt off.
22:15
Speaker 5: And if you have that debt, it's also important to
22:19
Speaker 5: start thinking about why do I have that debt? If
22:23
Speaker 5: you have debt. That's a sign that you're living beyond
22:26
Speaker 5: your means. That's a budget problem. You have to look
22:30
Speaker 5: at your inflows of money and outflows of money and
22:34
Speaker 5: control that you have to live below your means so
22:37
Speaker 5: you can consistently create savings and investment and sometimes this
22:43
Speaker 5: year of bonuses things like that can help put you
22:46
Speaker 5: on that track and give you a fresh start. So
22:49
Speaker 5: I would be thinking about those type of things at
22:51
Speaker 5: the end of the year. If you are in good shape,
22:55
Speaker 5: you know that's where you're four oh n K At work.
22:58
Speaker 5: For instance, let's say you got a three percent cost
23:02
Speaker 5: of living adjustment for your pay at the end of
23:05
Speaker 5: the year, take one or two percent of that add
23:08
Speaker 5: it to your four oh one K contribution so you
23:11
Speaker 5: can get closer to the to the maximum contributions that
23:15
Speaker 5: you can make. You still have a little bit of
23:17
Speaker 5: a pay raise that you can you know, live on,
23:20
Speaker 5: but you're systematically putting money away. Just sure your finance
23:26
Speaker 5: is up. Like that emergency funds. If you don't have
23:30
Speaker 5: an emergency fund, use some of that extra money to
23:32
Speaker 5: build that emergency fund so that when things inevitably happen
23:36
Speaker 5: that are out of your budget, you don't acquire that
23:39
Speaker 5: credit card debt.
23:40
Speaker 3: And let me ask you also about you know, we
23:42
Speaker 3: are coming to the beginning of the new year, and
23:46
Speaker 3: if you have the cash, shouldn't you be making the
23:48
Speaker 3: maximum contribution you could to your four oh one K
23:52
Speaker 3: because if you trade inside that account, it's not it's
23:55
Speaker 3: not taxed until you take it out, right right.
23:57
Speaker 5: Yeah, anything you can do for retirement savings like that.
24:02
Speaker 5: You know, if you are relatively young and you can
24:07
Speaker 5: start out saving fifteen to twenty percent of your of
24:10
Speaker 5: your income, you will never have to worry about retirement
24:14
Speaker 5: if you if you put that in market based investments
24:17
Speaker 5: and diversified market based investments, you know you're gonna be
24:22
Speaker 5: just fine. If you wait, you got to put a
24:24
Speaker 5: lot more in. You've got to do more of the work.
24:27
Speaker 5: When you're young, the market does the work when you're
24:30
Speaker 5: When you're older, you have to do the work. So
24:33
Speaker 5: remember that if you're out there listening and you're just
24:36
Speaker 5: starting out, get started. You don't have to magically be
24:41
Speaker 5: at fifteen or twenty percent savings day one. You've got
24:45
Speaker 5: some time, Like I say, stare step into that as
24:48
Speaker 5: your as your wages rise, you know, pile into that.
24:52
Speaker 5: You can do twenty three thousand a year in your
24:54
Speaker 5: four O n K plus the match. That's a that's
24:58
Speaker 5: a you start doing that, consider instantly you're going to
25:01
Speaker 5: get somewhere.
25:01
Speaker 3: How many of your customers are over sixty five getting
25:05
Speaker 3: ready to retire and want to live off their income?
25:09
Speaker 3: Dividend cash payments coming in every quarter? Is that something
25:14
Speaker 3: you see a lot of?
25:15
Speaker 5: Yeah, a fair amount.
25:16
Speaker 3: I mean what are the ups and downs on that?
25:19
Speaker 3: Pros and cons Well, you.
25:22
Speaker 5: Know, if you do it from income, I mean there
25:26
Speaker 5: can be an over concentration in those type of stocks.
25:30
Speaker 5: If you're solely looking at how do I maximize the
25:33
Speaker 5: cash flow? They tend to be more value oring in stocks.
25:38
Speaker 5: A lot of folks that have relied on those type
25:40
Speaker 5: of things the last couple of years have been left
25:42
Speaker 5: behind a little bit because the tech stocks have roared ahead. Generally,
25:47
Speaker 5: I would more look at a portfolio more globally and
25:54
Speaker 5: say I don't care if it comes from capital appreciation
25:56
Speaker 5: or dividend. You know, we're trying to create an income
25:59
Speaker 5: stream and we need to be diversified. We need to,
26:06
Speaker 5: you know, have a little bit of growth, we need
26:08
Speaker 5: to have a little bit of value and international and
26:10
Speaker 5: fixed income and all in between, and then take a
26:15
Speaker 5: reasonable percentage off of that portfolio. And I don't care
26:19
Speaker 5: if it comes from dividends or I don't care if
26:21
Speaker 5: it comes from from capital appreciation, as long as the
26:24
Speaker 5: portfolio is making more progress over time than you're taking
26:27
Speaker 5: it out.
26:28
Speaker 3: Hey, one more question about dividend yields? Is there a
26:30
Speaker 3: number that scares you? I mean above seven percent? You know,
26:36
Speaker 3: you can look at some of these stocks like you
26:38
Speaker 3: can't make recommendations, but I'm sure we have a lot
26:41
Speaker 3: of listeners who are into AT and T and variety
26:43
Speaker 3: and AP and all those types of stock utility companies.
26:47
Speaker 3: Is there a number, because if you look hard enough,
26:50
Speaker 3: I mean, you can find stocks that yield like ten percent.
26:54
Speaker 3: But you know that's that's kind of a dangerous situation.
26:57
Speaker 3: Eventually they're probably gonna have to cut that differ. Is
27:00
Speaker 3: there a number for you that that concerns you?
27:03
Speaker 5: You know, there there's not really a number. I'd say,
27:05
Speaker 5: if you're in an industry group and you're far out
27:09
Speaker 5: earning the dividend yield is far above what it's peer
27:13
Speaker 5: group is that can be something to look at. Look
27:16
Speaker 5: at the payout ratio of the company. You know, if
27:19
Speaker 5: they're earning uh, you know, a dollar a share and
27:22
Speaker 5: if they're paying out a dollar ten a share of dividends,
27:26
Speaker 5: there's there's probably something going on there that you need
27:30
Speaker 5: to understand, you know, it's it's a There are dividend
27:37
Speaker 5: payers and there are dividend growers, and those are two
27:41
Speaker 5: different types of companies. You know, utilities tend to be
27:45
Speaker 5: more payers. They're going to pay higher dividends, but they're
27:50
Speaker 5: not growth oriented companies that are highly regulated, you know,
27:55
Speaker 5: and in very predictable, so their dividend yields are higher
28:00
Speaker 5: than a lot of other companies are. And then there
28:03
Speaker 5: are dividend growers. They're companies that are still growing their earnings,
28:08
Speaker 5: but they're also growing their dividend. They usually pay less dividend,
28:12
Speaker 5: but it because they're reinvesting some of their earnings back
28:15
Speaker 5: in their companies to get growth, but they also have
28:18
Speaker 5: a history of raising their dividends out of that future
28:22
Speaker 5: growth that they're getting.
28:23
Speaker 3: And there's a host of those, I mean, Johnson and
28:25
Speaker 3: Johnson and PG and Exon Mobile, those kinds.
28:28
Speaker 5: Of companies, right, and so there are different even within
28:32
Speaker 5: the market, there's so many different areas that you can
28:36
Speaker 5: go into. And there's not a right or wrong answer
28:40
Speaker 5: for just the type of company is a right or
28:43
Speaker 5: wrong answer depending on what your situation is and as
28:47
Speaker 5: an individual and how you want to build your portfolio,
28:50
Speaker 5: what your needs are, and what you're comfortable with.
28:52
Speaker 3: You know, I've been on quite a lifetime journey of
28:56
Speaker 3: investing in As we come down to the end of
28:58
Speaker 3: this hour, first of all, I want to thank thank
29:00
Speaker 3: you for being so informative. I enjoy sitting in for
29:02
Speaker 3: Coop on this particular hour. But the person who's here
29:06
Speaker 3: in this program that's sixty five and over probably has
29:09
Speaker 3: some experience in this realm. But for somebody who's in
29:11
Speaker 3: their car, maybe on their way to work, and they're
29:14
Speaker 3: twenty five years old regarding their financial future, what kind
29:19
Speaker 3: of advice would you have for them?
29:21
Speaker 5: Pull the car over and figure out how to start,
29:27
Speaker 5: you know, building your financial foundation today. You can't get
29:32
Speaker 5: the time back. You can get money back, you can
29:34
Speaker 5: get all kinds of things back, but time is something
29:36
Speaker 5: that is very limited, and when you let that pass,
29:41
Speaker 5: it makes the job harder to get to where you
29:43
Speaker 5: want to be down the road into retirement. You know,
29:47
Speaker 5: money doubles in the market every depending on how you
29:51
Speaker 5: invest it, seven to ten years. Historically. You know, if
29:54
Speaker 5: you're a young person in the market, let's say you
29:57
Speaker 5: you double your money every seven years, you might have
30:01
Speaker 5: five doublings before you retire.
30:03
Speaker 3: And that's really not all that difficult, right, I mean,
30:05
Speaker 3: that's ten percent ready to return exactly ten percent a year.
30:09
Speaker 5: So so you might have five doublings before you retire.
30:12
Speaker 5: So you know, one thousand dollars goes to two, goes
30:15
Speaker 5: to four, goes to eight, goes to sixteen, goes to
30:19
Speaker 5: thirty two. That's thirty two times if you start investing today,
30:24
Speaker 5: thirty two times your money by the time you retire.
30:28
Speaker 5: So when you think about spending ten bucks at Starbucks
30:31
Speaker 5: this morning, that's three hundred and twenty dollars of your retirement.
30:35
Speaker 5: You know, I'm not saying don't go to Starbucks, but
30:38
Speaker 5: be aware, be aware of those little decisions that you
30:41
Speaker 5: make and how they add up over time. And the
30:44
Speaker 5: sooner you think about that and start putting a plan
30:48
Speaker 5: together to systematically save and invest, the easier the job
30:53
Speaker 5: will be. You know, I'm fifty years old, I've got
30:57
Speaker 5: one or two doublings left that's you know that I
31:00
Speaker 5: have to do most of the work right now.
31:02
Speaker 3: Hey, I wish we had more time. One more, John,
31:05
Speaker 3: How do people get in touch with you? What's what's
31:07
Speaker 3: the phone number and what's your address online?
31:09
Speaker 5: Sure, the phone number is three zero four seven four
31:12
Speaker 5: six seven nine seven seven, and it is just fourth
31:17
Speaker 5: Avenue Financial dot com, all spelled out f O U
31:21
Speaker 5: R T h Avenue Financial dot com. That's the website.
31:25
Speaker 5: We're also on Facebook, and on the website and Facebook
31:29
Speaker 5: you can actually schedule a free ten minute introductory phone call.
31:33
Speaker 3: John enjoyed it.
31:34
Speaker 5: Take care.
31:35
Speaker 3: This is another edition of Retire Right Radio with John Burdette,
31:39
Speaker 3: Fourth Avenue Financial. My name is Dave Weekly, subbing in
31:42
Speaker 3: for Dale Cooper. I'll see you this afternoon.
31:45
Speaker 2: W c H s A L W two four three
31:47
Speaker 2: d r F M Charles stand W two eight three
31:49
Speaker 2: HU cost Lanes a WVRC media station. We're proud to
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