Latest / WCHS Network Podcasts / 05-20-2024 Retire Right Radio with John Burdette from Fourth Avenue Financial

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05-20-2024 Retire Right Radio with John Burdette from Fourth Avenue Financial · WCHS Network Podcasts

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Contact us at Meeks dot us. The views and opinions expressed on this
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employees or WVRC Media. This is Retire Right Radio, a weekly show from
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John Verdet at Fourth Avenue Financial that aims to answer your questions about financial planning,
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investing, and how to retire right. Fourth Avenue Financial is located in
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downtown Charleston at one seventy Court Street. More information online at Fourth Avenue Financial
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eight fifty eight or text three oh four nine three five fifty oh eight.
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On Retire Right Radio, Let's go live to the studio with host Dale Cooper
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and John Verdet from Fourth Avenue Financial Show. And it was a Monday morning
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to you, it is a gorgeous Monday as you're coming into work. This
1:06
morning. It is uh, sunny and bright and warm outside. Welcome to
1:10
the summer. I guess you're listening to five adw c HS, the voice
1:11
for Charleston. This is retire Right Radio with John B. Debt F for
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Fourth Avenue Financial for Avenue Financial, Dot Comments and studio with me this morning.
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John, Good morning, how you doing this morning? It's great,
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great day to be out there, man, it is uh, it's it's
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really just a nice morning. It was one of those mornings when I woke
1:26
up and uh, you know, once the sun came up and I was
1:30
looking around outside, it just got nicer and nicer and nicer. It's uh,
1:34
I was looking forward to coming to work. I mean, honestly,
1:34
it's like I wanted to drive around. I wanted to come to work.
1:38
It's nice outside. Always opened the door this morning, and it's likely exactly
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it's one of those poster postcard days and hopefully we can talk a little bit
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about some good financial stuff as well this morning. Let me get our contact
1:51
information out there for you. If you have any questions for John, we'd
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encourage you to call in. We love for you to take control of the
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show and point the direction that you want to learn about and John can help
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you do that and all so different ways. You can call in this morning
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at three zero four three four five fifty eight fifty eight three four five fifty
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eight fifty eight. You can also text in any questions you have to three
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zero four non three five five zero zero eight. Anything to do with how
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you can learn to retire right with financial planning, any questions that you have
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about the market, investment strategies, anything along those lines that you can get
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proper resolution on, or maybe you're looking at getting some professional advice. This
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is your perfect opportunity to get that advice on the radio. Three zero four
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three four five fifty eight fifty eight three four five fifty eight fifty eight.
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You can text three zero four non three five five zero zero eight. Fourth
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Avenue Financial. You can find them on line at Facebook. You search out
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that whole thing, Fourth Avenue Financial, spell it out. You can find
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it, and also Fourth Avenue Financial dot Com where you spell out Fourth Avenue
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and Financial, but the dot com behind it, and you find the web
2:42
page over there as well. Big, big, big week coming up.
2:46
A lot of big news last week as far as the market goes. We
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can talk about the break of the market breaking forty thousand. Now, I
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know that we've talked on you kind of prepped everybody for it last week you
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said it was coming, that we knew that was coming very soon. It's
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more of a psychological benchmark than it is anything else, but it's still a
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psychological benchmark. Is still a benchmarket. It means that it does have some
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sort of a positive momentum. Usually, yeah, absolutely, people focus on
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it. I mean, the reality is, you know, the market was
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up one percent last week, Well, it was up one percent two percent
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weeks before, and but but people pay more attention when it hits that round
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number. It feels like you've achieved something, I guess, And it really
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doesn't make a difference as far as the uh, you know, your portfolio
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goes I mean, obviously, if the market goes up, hopefully your portfolio
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is following along. But uh, but there's no real significance in just hitting
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the milestone. That's just happens to be. How the how the calculations work
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out when they do the averages. You know, I will say that that
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a lot of times when you hit a high like this, you get a
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couple of things from from my perspective that I hear from clients. One is
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that you know, oh gosh, I'm going to miss out. You know,
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the market's on a tear, and you know I need to get in.
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And that's, you know, not necessarily a bad thought. It always
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makes sense to participate in the market long term, not not for short term
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gains, but long term. And then the other the other thing that I
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hear a lot of times when we hit these records is oh, I should
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have gotten in now the market's too high, and uh, you know,
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the reality is what is too high? How do you how do you define
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too high? You know, the averages that they're just numbers and and and
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they move over time. If you go back to nineteen eighty, the Dows
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would have had a thousand, and it took until two thousand to reach ten
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thousand, So it ten times itself in that twenty years. And that was
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an extraordinary time for the market. The market was really rip roaring through the
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eighties and nineties, and of course when two thousand happened, we had a
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rough first decade, but still it went from ten thousand and out of forty
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in the last twenty some years. The thing that I was reading a little
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bit about this last week. The thing that just boggles my mind that the
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market hit twenty thousand for the first time in twenty seventeen. It went all
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the way down to around below twenty thousand about nineteen thousand in the early portions
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of the pandemic. So we're talking about US economy struggling or whatever. But
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since the course of the lowest of the pandemic, we've doubled the market size,
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right from twenty to forty. I mean, that's not terrible, right,
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you know that terrible. And you know what supports that are earnings.
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Right. You know, if you look at where earnings are today versus back
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then, companies are earning more money. That helps support the stock prices.
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And you can follow earnings back over time, and that's that, ultimately is
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what is supporting stock prices higher and higher. But you know, you start
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extrapolating things out, you know what is what is high? You know when
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people say, well the market is high, well, in the last twenty
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twenty four years, the market has basically quadrupled. Twenty four years from now,
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if the market quadruples, it's Dow one sixty. Wow. You know,
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if we get a twenty year period like we had from nineteen eighty to
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two thousand, that's ten times, that's now four hundred thousand. You know,
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they're just numbers, they're benchmark numbers, and you know when you see
6:23
something like that, you know it's not too high. It's what are the
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companies going to earn ultimately that will termine those prices. Another thing that I
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read last week and I thought it was I guess from a when you look
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at it, like we always talk about zooming out and looking at things,
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I guess when you think about it logically, it makes a lot of sense,
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but when it comes to people talking about their day to day lives and
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things like that, you don't think about it all. And that is simply
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the rising cost of things. I was reading. I was reading an article
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was talking about the rising cost of things, and yes, things have gotten
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more expensive, but the language a lot of times surrounding these things. If
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we've talked about on this program, the fact that the matter is there hasn't
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been a year since since the Great Depression that prices have gone back to anything.
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So prices never go back to anything. You don't want prices to go
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back to it, So even when they coom. When everything's doing good and
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everything's moving the way they should from year over year over year over year,
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the prices always go up. So the fact that prices are going up is
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not actually the issue, because prices always go up and they never go back.
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That's just the way it is. Prices follow earnings, and earnings a
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function of that is inflation. You know, companies keep up with inflation.
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They're the ones producing the goods and services. And you see the the you
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know, the dollar profits of the companies, and you look at overlay a
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chart of the of the stock market over long periods of time, not necessarily
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short periods of time. It follows a pretty dog on close. Another thing
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I was wondering about and I thought this was interesting and the things that we've
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talked about in the past with you know, large companies have been around for
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a while know how to make their money. I was I was just reading
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a little bit about McDonald's and so, you know, McDonald's obviously isn't struggling
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as far as as a business goes, but they see some of these economic
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pressures when it comes to the cost of that it costs to get a McDonald's
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meal, so they're coming up with different ideas to try to do that.
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So they've come out with like this five dollars McDonald's meal or something. It's
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only gonna be around like a month or something. It's like, hey,
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we have cheaper meals for a month. But nevertheless, that might be like
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a trial balloon. You know, it's a month now, but maybe it's
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something else depending on the response and stuff like that to it. It might
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come back later. But when things like that start happening and a company like
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McDonald's gets you know, well, we have to worry about what people are
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spending and there's this idea that our food is too expensive and stuff like that.
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They're usually an industry leader, right, So we're going to see more
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of this in the food space probably where people are trying to come up with
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ways to make it affordable for people to eat. Yeah, and a lot
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of that's going to be done through substitution and portion sizes and the rise of
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that nature because the companies are are are you know, if McDonald's did that
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issue, that that promotion more than a month, that could be a profitability
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issue, like the all you can eat thing from from uh right that didn't
9:09
work out any shrimp. Yeah, that didn't work out too well for for
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red lobster. But but yes, at the break before the show started,
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they were talking about Target announcing some thousands of items that are cutting prices on
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in the food space. So there is a pushback I think from the consumer
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on some of these prices, and we've you know, that's a sign that
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we've probably are reaching that moderation and inflation. It's there are limits to how
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much things can go because the consumer can only consume so much. And I
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understand at the individual level, people struggle. I mean there's been I mean,
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my pantry is not as stocked as it once was. I mean,
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you know, like it's there's just been noticeable differences in shifts after the times
9:56
of COVID in the way that prices of things will work. But because even
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though there are individuals that obviously are suffering through things like this, this is
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sort of the way things happen. I mean, businesses apply these pressures.
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There's a cost pressures that are on there. People push back in some way,
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shape or formance. So then there's a resettling of where like kind of
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the new normal goes, and hopefully it settles on you know, maybe the
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consumer plus side of things. If we're lucky, well yeah, yeah,
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we'll see how that all plays out. I mean, the really, I
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mean, it is a market at work, that's what we're talking about,
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right. It's a healthy reaction really. I mean again, people can have
10:31
individually that can be suffering from that, but it is a healthy reaction that
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you're seeing right now with the push and the pull up right right. I
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mean that's one of the terms or sayings people use in the oil market.
10:43
You know, what's the cure for high oil prices? High oil price?
10:46
You know, that's the signal that, hey, we need to produce more,
10:48
we need to drill more. Again, things that we talk about a
10:52
lot on this program is you know, keep your head out of the headlines
10:54
too much. It's not something that you want to suffer on. But again,
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we come through a weekend and it's hard not to see a bunch of
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the stuff in the headlines. We have what's happened with the Iranian president and
11:03
what's going on in that area of the world, geopolitical politics, wars.
11:07
It seems like at every corner right now, these things are can have they
11:15
can have an impact. Of course, but the thing to keep in mind
11:18
is is a lot of the places that that provide war items also make money
11:26
during war times. So I mean there is I mean, it's just the
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fact of life. There is a balance of those things too. Just because
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there's political unrest doesn't mean that there's not there's not companies and situations where people
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are finding a way to turn that into profitability. No, well, no
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doubt. And and you know, most of the companies you're going to typically
11:43
own your portfolio are probably not drawing a lot of profits out of you know,
11:46
Iran and yeah, right, Axiety, Russia and that sort of thing,
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so that those headlines don't necessarily affect the earnings of those companies that greatly.
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And there again, that's what the market is based on. If you
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own a company, what do you want it to do? You want it
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to be profitable, and that's that's what you know, that's why you invest
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to make a profit. One thing I wanted to touch on before we go
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to the break, and it seems like this came out of nowhere and we've
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i mean, we've been doing this show forever and I don't think we've talked
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about this before, which is pretty amazing. But suddenly this weekend I start
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seeing references to AI E F T S and AI AI. I guess what
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we're using now? What not we but what some people are using now is
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artificial intelligence to actually select stocks and to rebalance people's accounts and different things along
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those lines. These are things that I guess that there's some it's been around
12:37
for a little while now because they have some comparison data. Some of them
12:39
work, some of them don't. But this is something another product that's being
12:43
offered out there. I guess where AI is actually helping people make some of
12:46
their choices within their different accounts and so forth. Yeah, we'll see how
12:50
that works out. But have you seen anything like that? I mean,
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I was a little shocked to think that people would be willing at this point
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to be like, Okay, let's see what AI does to my retirement.
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I don't know right Well, you know, there have been trading based on
13:05
algorithms for a long time, and you know the problem with you know,
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the market is dynamic, and so you you can back test something and say,
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well, gosh, that's worked in the past, that must go to
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that must be the right thing to do in the future. And it usually
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doesn't play out that way. Why, because the market's dynamic. If everybody
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says, hey, this worked really well and everybody paus into that trade,
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that's a crowded trade. Who's going to bet it up next? You know?
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Are the things that that were left behind a better opportunity? And so
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you know that is a dynamics dynamics that whatever that is something like that.
13:52
Anyway, it's dynamic. It it uh, you know, changes over time,
13:58
and you these back tests almost always fail, and so say are going
14:05
to be better than that? I don't know, it's it's you know,
14:11
that's almost one of the things too with these index index trades. The index
14:15
ETF said, they're blind packages of stocks without anybody you know, actually analyzing
14:24
is this a good value? Am I paying the right price for the earnings
14:28
that come with this company? You know, there's there's been a huge movement
14:33
into blind index investing, and there are advantages to it, you know,
14:37
it's it's inexpensive that sort of thing, but but there's nobody you know,
14:46
making those judgment calls, and and the last decade or so, you know
14:52
that is actually outperformed active management. But will it in the future. I
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don't know. I don't know, because we said we've had a lot of
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easy in the last decade, so it's really hard to tell for sure.
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And at some point, you know, there are a lot of valuable companies
15:07
that are being overlooked in the way that those those that capital is allocated.
15:13
You know, are we at the point where where you know that's that's going
15:20
to start start failing or not working as well? I don't know the answer
15:24
to that. That's why, you know, when we were building portfolios out
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we're trying to have some active management and have some passive management in there,
15:33
you know, diversify not just with the companies, but the style of management
15:37
as well. When I was reading about the the AI taking a crack at
15:39
the market on different things, that what made it pop into my head again
15:43
was this morning, I was actually listening to an interview from the CEO of
15:48
the Weather Company, who owns basically every weather I think other than Aquweather is
15:52
basically the provider of every other weather imprint you can think of out there,
15:54
from weather dot com to the Weather Channel to weather Underground like that, they
15:58
provide weather for everything. And he was talking about how AI and the history
16:04
of weather data and trying to predict the weather data. And I felt like
16:07
when I was listening to this interview and driving over and getting ready for their
16:11
show, then a lot of what he was saying about predicting the weather and
16:14
how complex it was is also true with trying to predict the market and how
16:18
complex it was, because you can get so many layers deep on different variables
16:22
and things like that, but eventually you just get to a layer of variables
16:25
and things that are so deep that there's just no way that you know.
16:26
I think that this guy gave an example that you just don't know what the
16:32
exact temperature is five miles above the Pacific Ocean and the helosphere or whatever it
16:36
might be. You can take a pretty good guess based on the things surrounding
16:40
it, and you can get a pretty but you don't know what the actual
16:41
temperature is. And I think the market's a lot like that. We can
16:42
make pretty good guesses about things, but we don't always know exactly what the
16:47
underlying things are going to pivot off of all the things that are bouncing around
16:51
in the butterfly effect of things, that's going to affect this broadly, right,
16:56
And I think the markets maybe even more difficult because you have human emotion
17:00
and reactions that can be unpredictable sometimes. So just keep that in mind when
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if you hear anybody say that they have like a super formula or super AI
17:10
or something like that, not so fast, be careful about things like that
17:12
as well. It's always good to let their professionals take a crack at it.
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You can let John take a crack at any questions that you have this
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morning, three zer a fourth three four five fifty eight fifty eight, three
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four five fifty fifty We're gonna talk a little bit about graduating high school seniors
17:22
when we come back. What are some tips that John can provide to them
17:26
to hit their ground running for their next steps in life. We're gonna talk
17:29
about those things when we come back, and plus any of the questions that
17:30
you have at three zero four three four five fifty eight eight fifty eight text
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three zero four non three five five zero zero eight. More information over at
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Fourth Avenue Financial dot com, Fourth Avenue Financial dot com, or on Facebook
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Fourth Avenue Financial. John Burdett is here from Fourth Avenue Financial. I'm del
17:45
Cooper. You're listening to retire Right Radio five adwc HS, The Voice of
17:48
Charleston retire Right Radio was sponsored by Fourth Avenue Financial, which is solo responsible
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for its content. Security is offered through JW CALL Financial member Fenricipic. Investment
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advice offered through JW CO Advisors. Fourth Avenue Financial, jw CAL Financial and
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JW CO Advisors are unaffiliated entities. The opinions expressed by John Bredett should not
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be construed as specific investment, legal or tax advice. All economic and performance
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information is historical and not indicative of future results. Investing may involve risk of
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loss of principle. Any tax advice on this show is not intended to be
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used by any person for the purpose of avoiding US federal or state tax penalties
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that may be imposed on such a person, and each listener should seek advice
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from their tax advisor or legal console on topics that arise from the show.
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John Burdett is not providing legal or tax advice. Nothing should be construed as
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solicitation of an offer to buy securities. This program is sponsored by Fourth Avenue
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Financial, which is solely responsible for its content. Are you changing jobs or
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gearing up for retirement? Don't navigate your financial journey alone. At Fourth Avenue
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Financial, we specialize in guiding individuals through life's transitions, from optimizing your retirement
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Radio with John Burdett from Fourth Avenue Financial, taking your calls at three oh
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four three four five fifty eight fifty eight. Text on three h four nine
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five fifty eight too. You're listening with super Ty you Right Radio, Bob.
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You know if you see h as the voice Charlson. I'm del for
20:15
the guys for tuning in one this Monday morning. As we said, we'll
20:18
get kicked off the show. It is a beautiful day out there. Day
20:19
supposal be about ninety. Today is gonna be a little bit on the warm
20:22
side, but sunny. Not a cloud in the sky for the next couple
20:25
of days. I think today and tomorrow is supposed to be very nice.
20:26
Some clouds rolling in of midweek and then maybe some rain by the weekend.
20:30
But hey, you got to enjoy this weather while it's in and it is
20:33
absolutely beautiful in the Capital City right now. John Burdad is here from fourth
20:37
Avenue Financial, three zeror A four three four five fifty eight fifty eight three
20:40
four five fifty eight fifty eight. Any questions that you have about how you
20:42
can retire right for your future or maybe the future for your youngster, And
20:47
we're gonna talk a little bit about maybe some tips that we can give to
20:51
high school seniors on how they can hit the ground running as far as preparing
20:56
for their financial future. And if there's one thing, and I know that
20:59
there's been some school systems and there's been some move over the past years,
21:03
however long it's been to to try to teach some financial literacy at the high
21:08
school level. A lot of times it's elective. Sometimes it's just a portion
21:11
of another class or something like that. In my estimation, and looking back
21:15
also at my experiences when I was through school, I think that some sort
21:19
of a financial literacy would certainly have played a larger role in my life than
21:25
algebra two. You know, I would use it actively every day, whereas
21:27
algebra two. I really don't. You know, it seems like that we
21:32
maybe prioritize the wrong things, but that that's not what you're here for.
21:36
What are some tips that we can give for these for these for these folks
21:40
coming out of high school. A lot of you know, it's an interesting
21:42
time because you're sort of transitioning. You know, all high school kids at
21:47
that age want to be an adult. You're not, you're not quite there
21:49
yet. From a legal standpoint, some kids wrestle that mantle away much earlier
21:53
than what they used to as far as being an adult. But the bottom
21:56
line is, you don't have the financial ability to do things until you get
22:00
to be eighteen, you know, until you probably graduate high school. So
22:03
what are some of the things that high school seniors should keep in mind at
22:07
this early point of their career. Well, I mean this was a topic
22:11
because my youngest is actually graduating this week from GW and uh so, you
22:18
know, I'll be uh, I'd like to say that you know, we're
22:19
gonna work kind of through, right, but there are lots of years of
22:26
paying left to do. You did you make your kids could take like a
22:30
checkbook or anything, did you like trying to instill that sort of like awareness.
22:37
No, not a not a checkbook that I mean pass, but there
22:44
are there are accounts that you know, you can load up cards and you
22:48
can load up things so that you can kind of track the spending and uh
22:53
uh you know, of course, then you get those texts all the time.
22:56
Hey could you add money to of course, but but yes, to
23:03
kind of get them used to you know what things cost. You know,
23:07
you go out to eat and you know, you had twenty dollars in the
23:12
in your in your account and you spend it. Well, now what do
23:17
you have, You've you've got no money. So just making choices, and
23:21
that's really what it's all about. It's pretty tough when you first get out
23:26
on your own. You know, well you talk about what happens the first
23:30
you know, you can think about when you went to college. What happens
23:33
all the credit card companies show up? Oh yeah, right, you know,
23:37
oh you know back in I don't know what they give away now,
23:38
back in back in the day, they'd give out free calculators. You know,
23:41
if you open up a credit card or applied for a credit card,
23:44
and you know, you think about eighteen year olds with very little experience with
23:49
money. You know, people are offering and loaded them up with student loan
23:55
debt, offering to load them up with credit card debt, all of these
23:57
things before they even have a career. Yeah, and think if you come
24:00
from relatively modest background, or maybe you even come from a background or mom
24:03
and dads like, hey, you got to earn your own way or whatever.
24:06
Once you turn eighteen, you can get that credit card on your own,
24:07
and you may consider earning your own waybying like, well, I'll get
24:11
a credit card, you know, which isn't. Hey, I made that
24:14
mistake when I was eighteen, and it was a mistake, you know,
24:15
wasn't It wasn't a very large balance. You know, you don't think that
24:18
carrying a thousand dollars ballance or something like that would be all that big of
24:22
a deal. But I tell you what, it took. Like, it
24:25
was probably ten years later before I actually got that card completely paid off and
24:27
closed out and stuff like. Once you start down that path, it's hard
24:32
to self correct, especially when you don't have a ton of capital to give
24:36
yourself that maneuver. That's why you have to live within your means to start
24:38
with. Yeah, and that's very, very difficult because all the pressures around
24:44
you act like that is a wonderful thing. You know, everybody's marketing it
24:48
to you. You have to get great credit, so you have to get
24:51
a credit cards. You can get great credit right right, and and so
24:56
you know, society and these companies push push that on folks, and uh,
25:00
it's sometimes hard to deal with if you don't have any experience or background
25:03
with that. So you know, it comes down to the basics, and
25:07
it's you know, budgeting. You know, it's okay to go out to
25:11
dinner occasionally if you can, if you could afford it. But you know
25:17
it's okay to eat ramen noodles occasionally. You're when you're off to college.
25:22
I mean, you've got to be able to manage your budget and and live
25:26
within your means and uh. And if you're taking debt on you know,
25:30
even in school, there's going to be a price to pay for that.
25:34
And it's not a free free lunch. I mean, there will be a
25:38
price to pay. And it takes a lot of time to dig out of
25:41
a hole that you put yourself into. And it's a shame to start out
25:45
your life that way. And you talk about incurring debt early. Another thing
25:52
that you can do though, and and I'm assuming that this would be a
25:55
very good idea. Is throughout like when I was a kid, you always
25:59
had I got my first job or I actually got a paycheck when I was
26:02
like sixteen or something. But even even before that, you know, I
26:04
had I had the lawnmowing business where I did lawnmowing all around the place.
26:10
You know, I got paid different chores, different things like that this.
26:14
I didn't do this, but it seems to me like in something that I've
26:15
tried to do with see unofficially my daughter so far, and hopefully officially we'll
26:19
open up an account for her a little bit later. But I've tried to
26:22
show her like her total amount of money and then take some of the money
26:26
away, like you want to get this, you want to get this,
26:26
and so forth. I guess that you could. You could open an account
26:30
up with your child when they're fairly young, and you could walk through the
26:33
saving process for him. Hey, you got twenty dollars mowing this lawn,
26:37
even if it's just three or four bucks that you end up depositing into a
26:41
quote unquote savings if you put that, if you put that habit in,
26:45
I guess that that's something that you could install in somebody from a very young
26:48
age. Oh absolutely, And even even items. Oh I'd like to have
26:52
this new whatever PlayStation or whatever the case may be, and it costs three
26:56
hundred dollars, Well are you going to get three hundred dollars? You know,
27:00
have a goal and then save for it and save to it, and
27:04
and yes, it's it's doing a couple of things. One, it's you
27:10
know, showing that there's a price to be paid and a sacrifice to get
27:12
that and you're going to enjoy it more most likely because you've achieved something,
27:18
you know, when you actually get that item. But you know it also
27:22
is building this idea of delayed gratification. You know, if you look at
27:29
the most successful people, that is one of the key elements psychological elements,
27:34
being able to delay gratification. You know, it's very easy with a credit
27:38
card, that's what it feels good. You know, boom, I have
27:41
it today and I'll just pay it back later. But you know, successful
27:45
people have a higher tendency to be able to delay gratification. This is a
27:52
question that and I don't know the answer to this. Has most department stores
27:55
done away with Layoway? I don't know if you could go to Walmart and
27:59
get Layoway. Kmart was the last department store that I'm aware of that really
28:02
did it. And I just wonder if that is something else that's put like
28:04
even if it's not like have been acted, it's certainly not part of our
28:10
popular lexicon like it once was. You know, Layowe used to be a
28:12
thing everybody did you wanted to get something, you could put on a layoway
28:15
and pay on it over a certain amount of time or whatever. It seems
28:18
to me in my brain anyway, that was actually a fairly decent way to
28:22
go about doing things the now. Some department stores you had to worry about
28:26
losing your items sometimes or whatever, I guess, if you didn't stay up
28:29
with the payments. But generally speaking, if you fulfilled your end of the
28:32
layaway, you were able to buy something that you couldn't afford at the time
28:34
without taking out credit and an appropriate amount of time. You can do that
28:37
yourself, of course, you know. I mean, I remember the satisfaction.
28:41
I remember clearly when I was a kid when I got paid, or
28:45
not a kid, but like a youngish teen or young twenty or something like
28:48
that, that my disposable income was around one hundred, one hundred and fifty
28:52
dollars a paycheck, which back in nineteen ninety money wasn't all that bad,
28:56
you know, it was a decent amount of money, and so I knew
28:57
if I wanted to get like the new PlayStation game or something, okay that
29:00
thing calls sixty bucks or whatever, I didn't want to afford all of it
29:03
now, So I would put away thirty from one hundred and fifty dollars this
29:07
paycheck. The next paycheck I got, I took the other thirty out and
29:08
the like, hey, I went and got my game. It took two
29:11
weeks to get it, but I didn't even think about credit or anything at
29:14
the time, and it was just that's what you had to do. You
29:15
had to save sixty dollars over to paychecks and you go pick it up.
29:18
We don't really teach that at all anymore, you know, or we should,
29:22
but it seems like that that's not something we teach it all anymore,
29:25
that that strategy is even something we can do. Have you seen the I
29:29
believe it was a Saturday Night Live clip Steve Martin and I can't remember who
29:33
all of a sudden, but it was a financial help book the Sky wrote
29:37
and it was titled don't buy things you can't afford. Said, He's like,
29:45
and where would I get this saved money? That's a good one.
29:51
But let me get this straight. If if I want something and don't have
29:53
the money, I shouldn't buy it. It's just a funny you have to
29:57
go YouTube that out there. No, that's good stuff. But I know
30:00
exactly what you're talking about, and it makes a lot of sense, you
30:03
know. It's it's like one of those fundamentally obvious things that we don't really
30:06
talk about in that way. But it really is true that if you put
30:08
if you think about these things and you put it forward, that that better
30:12
things could happen to you. Yeah, no doubt about it. You know,
30:15
if you are saving in advance, you're not buying the fancy buildings of
30:22
the bank owns. You know, you want to be the earner of interest,
30:26
not the payer of interest. Now that that being said, we've kind
30:32
of drug dragged a credit card debt. Is there any ever an appropriate time
30:37
where you should think, Okay, maybe I do need a credit card for
30:41
this, or should you really do everything you can until you get into a
30:44
situation where it makes sense. Well, I think in a modern world,
30:48
a credit card is hard to you know, you need one to rent a
30:52
car or a hotel or things like that. It's very difficult, and there
30:56
is some protection because it's not attached to your money money, so right,
31:00
I mean, it's very difficult sometimes to operate without one. But I would
31:03
say that you know, before you take on having the responsibility of of of
31:10
of that in your in your wallet. Make sure you understand your budget first
31:18
and how and how that process works, because like you say, once you
31:22
once you get it. You know, if you get that credit card for
31:26
the first time the first week you're up at school, and you know,
31:30
before you know it, you could be one thousand dollars in debt, right
31:34
right. You know, that's a couple of nice, good weekends up in
31:37
Morgantown, you know, I mean, seriously, all you have to do
31:41
is by you know, decide you're going to get pizza a couple of times,
31:42
and then a grocery run and then something else, and then before you
31:45
know it, you're a thousand bucks in debt right right. And now that's
31:48
one thousand dollars you have to not just dig out of the hole, but
31:52
but you're probably paying at least twenty five percent interest at this stage. Just
31:59
hard to get out of that. And it's just a shame to get yourself
32:01
into that situation right out of the shoot. As far as like with student
32:07
loans and things like that, if that's of course been people were waiting to
32:10
see if they're going to get forgiven or whatever. It is, But how
32:14
do you plan for that if you're if you're if you are still in school
32:16
and actively in school, and you know that you have this student loan debt
32:22
that's going to be hanging out there? Is that something that I mean?
32:23
Is it behoove you to start working on that as soon as possible? So
32:27
should you just start working towards that thing to pay it off? Should you
32:29
take the grace period of time to start paying on it? What's the best
32:32
solution for someone? Well, I think, first of all, the best
32:35
solution if you're if you are in a situation where you have to take a
32:38
student loan out, think really hard about what the career is at the end
32:43
of that, because you know there will be a payback, and if it
32:47
doesn't economically make sense, I mean, when you think about college, it's
32:53
almost like you know, starting a business. You start a business, you
32:57
invest us money, you borrow money sometimes to get that business going, and
33:00
you expect a payback. You know, college should be somewhat that same calculus.
33:07
You know, am am, I going to get a return on my
33:10
not just money, but your time investment that you're putting into that, and
33:15
so be very smart about what the outcome should look like you know, too
33:21
often, if you take on one hundred thousand dollars worth of debt and you
33:25
don't have a profitable career at the end of it, are you ever going
33:31
to pay that back? It's just not possible. And and I think that
33:36
is the that is really the crime might be too too strong of a word
33:43
that's being committed on on you know, youth. It's like there's no education
33:51
to that process and and and how that works. You know, you've got
33:54
to have a payback if you're making an investment today, and education is the
33:59
best thing you can invest in. You know, skill, So, as
34:02
we've talked about before, what is wealth. Wealth is the ability to serve
34:07
people. How do you do that well? You can? You have to
34:08
be good at something, you have to have skills, you have to be
34:10
valuable in the marketplace. So you know, education is key to it all.
34:15
But you have to make wise decisions with that, just like you know,
34:20
any other financial decision you make. And it really seems to come to
34:27
you know, we are obsessed with brands. It seems like, you know,
34:29
I mean that's just that's a maybe not an American thing, but it's
34:31
certainly something that we celebrate as brands and the culture of brands and different things
34:35
like that, and universities are largely brands. But if the fundamentals that you
34:40
want to do your job, whatever it might be, whether it's a financial
34:44
advisor or whatever it might be that you're wanting to do, sure, going
34:47
to the school that costs the most might provide you the best education and give
34:52
you the best path to get to the place where you can make a living.
34:54
But also it may not be. It may be the stuff that you
34:58
learn at the high price universe may be the exact same thing that you learn
35:00
at state university or as a community college or something like that. All you
35:06
need is the skills. You don't necessarily need the quality of paper that's hung
35:09
on necessarily in order to get it by in life. You just need to
35:13
learn the skills are involved in You don't have to invest everything to get there.
35:16
Yeah, and there are a lot of choices that can be made outside
35:21
of college. You know, trade schools. I mean, my gosh,
35:24
an electrician, an HVAC person, a plumber, all of those. If
35:28
you've ever tried to get anybody in to do any of these, This work
35:30
on your house. Now it's impossible to and you make a great amount of
35:34
money. You generally set your own schedule. It's a be an electrician is
35:37
a great job. Oh, it is a great job, right right,
35:39
And frequently it's going to cost a lot less to have that outcome, you
35:45
know, if that's something you want to pursue, So just be wise in
35:49
those things. And then if you do have to take that off, you
35:52
work part time, you know, pay towards that, so you're taking less
35:55
debt and building less of a you know, an obstacle that you're going to
36:01
ultimately have to overcome, which is the debt load. That's this left at
36:06
the end. I did literally hear a college student last weekend talk about how
36:14
that they're just trying to get to a situation where they don't have to work
36:17
while they're in school. But they went into the situation knowing that they would
36:22
have to work to put themselves through school. So I mean, if your
36:25
goal is to not have to work, you know, twenty or thirty hours
36:29
a week to put yourself through school, then maybe look at a different school,
36:31
because if you're not getting the financial to back that up, then you
36:36
don't have a choice I mean, that's the way it's going to have to
36:37
work, right, and a little bit of sweat, equity and sacrifice is
36:44
a good lesson to learn in life. I still believe that as well.
36:46
That's John Berdett for Fourth Avenue Financial that men get the information out to you
36:50
one more time, so you can get a hold of John if you have
36:52
any questions all about how you can face retirement, or maybe you have a
36:54
high school senior as we talked about the second half of the program and you
36:58
want to get them out on the right foot. You can find four Avenue
37:00
Financial at one seventy Court Street, downtown Charleston. It's right across from the
37:02
Town Center mall and their phone number is three zero four seven four six seven
37:07
don seven seven three zero four seven four six seven non seven seven on line
37:10
fourth Avenue Financial dot com you spell out the whole thing. Do that same
37:14
search and you can like the page on Facebook. This podcast will be up
37:16
at WHS network dot com slash retire right in about an hour or so,
37:20
and you can catch all of our previous podcasts up there as well. John
37:22
takes much so much for your time today. As always, we appreciate you
37:24
coming in and sharing some of your knowledge. All right, take care of
37:28
one. We'll catch you back here next week. That's John our Debt from
37:30
Fourth Avenue Financial, Fourth Avenue Financial dot Com. Three zero four seven four
37:34
six seven non seven seven. Have a great day everyone. Dave Allan is
37:37
coming up next with five eight Live. I'll be back this afternoon at three
37:38
oh six one hotline with the Weekly. Have a great day everyone. On
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