Transcript

Money Monday · Brian Thomas

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Speaker 1: On those committees and understand what they're thinking is with
0:03
Speaker 1: regard to interest rates, and that that becomes used as a.
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Speaker 2: FED rate forecast.
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Speaker 1: That the that we hear every quarter when when we hear,
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Speaker 1: you know, Andy Stout, our chief investment officer, comes and
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Speaker 1: talks about what we think industrates to do, and a
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Speaker 1: lot of that has to do with what is.
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Speaker 2: The FED thinking. That's what the dot plot tells us.
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Speaker 1: And Kevin declined to participate in this time around, so
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Speaker 1: he seems to believe that that there's there's too much
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Speaker 1: communication and it affects prices. The FED would rather sit
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Speaker 1: back and watch what the market does to prices and
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Speaker 1: make decisions.
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Speaker 2: Based off of that. So we'll see if there's a
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Speaker 2: good idea not Well.
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Speaker 3: Isn't the dot plot as you refer to it, basically
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Speaker 3: putting your finger in the air and seeing which direction
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Speaker 3: the wind is blowing, and so far as all the
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Speaker 3: individuals might have by way of opinion on the raising
0:43
Speaker 3: of the rates or not. I think that's a valuable
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Speaker 3: piece of information, isn't it. But I guess they know
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Speaker 3: the answer to the questions raise the rates right? Nobody
0:51
Speaker 3: wants to hear that.
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Speaker 2: At the end of the day.
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Speaker 1: Rates are not raised or lowered by what is happening
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Speaker 1: in the you know what, by what the data is
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Speaker 1: telling us.
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Speaker 2: They are raised lowered by human beings. Right, So this
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Speaker 2: is a poll of human opinions.
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Speaker 1: Right, So not having that anymore leaves us to we're
1:06
Speaker 1: simply guessing. Now the poll in somebody's going to step
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Speaker 1: in and do this. The poll is simply going to
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Speaker 1: be who's going to guess what is in the minds
1:13
Speaker 1: of the of the Federal Reserve government? Now, he that
1:16
Speaker 1: doesn't mean we don't have this dot plot anymore. We
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Speaker 1: just don't have the fedhair's opinion of it. And he's
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Speaker 1: the ultimate arbiter of which way we go an interest rates.
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Speaker 1: So yeah, this is going to be less information, and
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Speaker 1: the purported goal is to prevent the FED from giving
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Speaker 1: information that drives the markets. He thinks that market prices
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Speaker 1: are the most important source of information for policymakers, and
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Speaker 1: if we influence those market prices, then we're really kind
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Speaker 1: of what are we really accomplishing here?
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Speaker 3: Hmm, Well, I know, I thought this is the kind
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Speaker 3: of thing we rely on all the time. It just
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Speaker 3: seems to me, though, that it's it's kind of a
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Speaker 3: poor job of covering up. I think everybody probably realizes
1:55
Speaker 3: that the right thing to do, at least under traditional
1:57
Speaker 3: reactions to inflation is to raise the interest But of
2:00
Speaker 3: course that creates problems, and the T bills are going
2:03
Speaker 3: to have to be more, are going to going to
2:05
Speaker 3: go out at a higher payment rate.
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Speaker 2: And I don't know, Brian, I.
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Speaker 3: Just it seems to me that it's the So the
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Speaker 3: the FED chair ultimately is the the ultimate decision maker, period,
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Speaker 3: end of story. If everybody around him, all the FED
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Speaker 3: chairs collectively said you must raise the raid to half
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Speaker 3: point point whatever they say, he can say no and
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Speaker 3: say no, we're going to lower them right, correct.
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Speaker 1: Yeah, that that is is ultimately his decision. These are
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Speaker 1: just opinions that are gathered to support him from his
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Speaker 1: other you know, ominions who can see around their different
2:40
Speaker 1: regions of the world and share their opinions as well.
2:43
Speaker 1: You know, some of this may be that maybe we
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Speaker 1: don't want to progress project. This is pure speculation on
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Speaker 1: my part, but let's think about it. Could you kind
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Speaker 1: of went down this path a second ago. Let's think
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Speaker 1: about what this means. If we choose to raise interest rates,
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Speaker 1: we are choosing to pay more interest.
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Speaker 2: This is effectively like and it may.
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Speaker 1: Be necessary, but it's effectively like calling your bank and
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Speaker 1: asking for a higher rate on your mortgage.
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Speaker 2: It's not something that we want to do.
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Speaker 1: And I'm sure in today's day and age of political
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Speaker 1: shenanigans and jerrymandering and all that other stuff, I doubt
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Speaker 1: we want to telegraph that we might be about to
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Speaker 1: do that.
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Speaker 2: But as you said, all everything points.
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Speaker 1: To we probably do need to raise rates to get
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Speaker 1: inflation back under control a little bit. It seems to
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Speaker 1: be wobbling just a bit.
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Speaker 3: Well perhaps, and I'm just throwing this out as a
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Speaker 3: possibility rather than just trying to hide what everybody thinks
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Speaker 3: really should happen and keep the interest rates down for
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Speaker 3: a variety of other reasons. Maybe it's the strait of
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Speaker 3: horror moves. We're waiting to figure out if we can
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Speaker 3: get that back open, maybe provide some economic relief to
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Speaker 3: the globe. Maybe the inflation will be addressed by reopening
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Speaker 3: that waterway up. Is that potentially a reason why you
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Speaker 3: wouldn't want to say anything.
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Speaker 1: Of course, yeah, and kind of hoping for that, you know,
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Speaker 1: that miracle from left field to take interest rates down
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Speaker 1: or to take inflation down for us. You know, I'm
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Speaker 1: not sure if I'm not exactly convinced that we're at
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Speaker 1: that point. What I heard over the weekend was no,
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Speaker 1: we're going to close the Straight of Horror moves over
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Speaker 1: the way, and I heard from from the United States
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Speaker 1: side that everything's great. We're almost at an agreement here.
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Speaker 1: So you know, there's just going to be I think
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Speaker 1: there's just going to be less information coming out of
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Speaker 1: this administration than we've ever had that we've had in decades.
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Speaker 3: Certainly the possibility all right, well, pivoting over Straight of
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Speaker 3: Horn moves obviously impacting the price of oil, but the
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Speaker 3: oil prices have been dropping, maybe there's cautious optimism. I
4:22
Speaker 3: just pulled up Brent crewed this morning. It's seventy eight
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Speaker 3: bucks and not that long ag just within the last
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Speaker 3: few weeks it was almost at one hundred bucks a barrel.
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Speaker 3: So there's one particular oil future and the markets are
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Speaker 3: kind of flat this morning in terms of futures, just
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Speaker 3: really flat. So on this instability in the Straight of
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Speaker 3: Horror moves, You're right, it was closed on Saturday, maybe
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Speaker 3: got opened partially yesterday. It seems to be completely in
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Speaker 3: a state of flux, but oil has nonetheless dropped, so
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Speaker 3: we're getting some relief there, subject to changing on a
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Speaker 3: moment's notice, Brian, I guess I'm kind of wondering that.
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Speaker 1: Well, everything, I mean, I think everything is subject to
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Speaker 1: change on a moment noticed, because that's how we operate,
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Speaker 1: you know. I think the markets are quiet today because
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Speaker 1: nobody wants to believe that what we're hearing is the
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Speaker 1: final answer. The market hates insecurity, it hates not knowing
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Speaker 1: what the result is. So I'm almost a little surprised
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Speaker 1: that we don't have more wobbly markets, but I think
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Speaker 1: we are. We're a couple of years into this administration
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Speaker 1: and not knowing what's coming, you know, and not knowing
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Speaker 1: whether we're going to zig right or zag left and
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Speaker 1: so forth. So but it does seem we're getting used
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Speaker 1: to the idea because underneath this is still as we're
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Speaker 1: sitting here right now and this moment is still a
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Speaker 1: solid economy. Money is still moving in circles. It's just
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Speaker 1: the unknown, so the market doesn't want to commit one
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Speaker 1: way or another. We're not anticipating, you know, going over
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Speaker 1: the cliff, but we're also not saying that everything's wonderful.
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Speaker 1: Everybody back in the pool. We're just kind of holding steady,
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Speaker 1: which is ironic because we are an award that of
5:48
Speaker 1: the type we've not seen in a very, very, very
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Speaker 1: long time, and we don't seem to be able to
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Speaker 1: get control of it as much as easily as we
5:55
Speaker 1: have in the past and other conflicts. Yet the market
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Speaker 1: is still holding steady because you know, there's mentioned. I
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Speaker 1: think we're just not in panic mode yet. Hopefully we
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Speaker 1: won't get there, but we're okay right now.
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Speaker 3: Well, maybe the market is beyond panic mode. I guess
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Speaker 3: I capitulation just well, it's you know already its continues
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Speaker 3: to increase. I think many are of the mind that
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Speaker 3: perhaps the market generally speaking is overvalued, but you know,
6:21
Speaker 3: you've convinced the rest of the world, and any every
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Speaker 3: other financial planner who's been at this game for a
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Speaker 3: while realizes the joy of compounding interest, and the market
6:29
Speaker 3: always ends up doing well over time. So people invest
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Speaker 3: in the market. The market stays up regardless of what's
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Speaker 3: going on in the world. We've already thrown out the
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Speaker 3: whole concept of valuing stocks based on things like pe ratios.
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Speaker 3: It's not just like just meme stock trading these days.
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Speaker 1: Yeah, it's it's purely based off of I should say purely.
6:47
Speaker 1: That's other there There is no always en never, but
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Speaker 1: much more so than in the past. It's simply an
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Speaker 1: opinion of the overall community on many stocks. If the
6:55
Speaker 1: herd wants to buy it, we're going to buy it.
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Speaker 1: And the herd isn't really paying attention to price to
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Speaker 1: earnings ratios and sales and book value and all that
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Speaker 1: kind of stuff anymore. It's simply valued at what it
7:05
Speaker 1: is because it's valued at what it is, and that has.
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Speaker 2: Been true for a long time.
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Speaker 1: That we just that defines the cryptocurrency industry, by the way,
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Speaker 1: there's no there's no structure behind that, and yet people
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Speaker 1: continue to throw money into it. So it's just a
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Speaker 1: pricing based off of demand, not actual reality.
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Speaker 3: It's an amazing world we live in right now. Don't go
7:24
Speaker 3: away more with money Monday's Brian James. Are women better
7:27
Speaker 3: savers than men?
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Speaker 2: Huh? We'll find that out.
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Speaker 3: Also, why are young investors all ditching the stock market
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Speaker 3: going the opposite direction of my theory A moment ago
7:36
Speaker 3: that's coming up with Brian James, don't go away.
7:38
Speaker 2: Fifty five from KARS Talk Station.
7:43
Speaker 3: Eighteen fifty five KRCD Talk Station at the Monday Brian
7:46
Speaker 3: Thomas with Brian James to what we call Money Monday.
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Speaker 3: Of course, Brian's a certified financial planner, trying to get
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Speaker 3: people on the right path thinking about the retirement and
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Speaker 3: doing the right thing by way of planning and maybe
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Speaker 3: providing some consultation to women. Wait a second, are women
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Speaker 3: have lower balances in their four to one K but
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Speaker 3: they're described as maybe better at saving? Brian, You're gonna
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Speaker 3: have to make some sense out of this one.
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Speaker 2: Yeah, a little bit. This is a little bit of
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Speaker 2: this is counterintuitive.
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Speaker 1: This comes from a Vanguard study that they call pow
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Speaker 1: America Saves, and that's something.
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Speaker 2: We look at every year.
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Speaker 1: It's very helpble for me to understand, and it's pretty
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Speaker 1: accurate to my own experience with my clients. So here's
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Speaker 1: the conclusions that they drew. Women have lower average FOURROW
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Speaker 1: and K balances than men, tend to contribute at similar
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Speaker 1: or higher rates, though also more likely to use professionally
8:34
Speaker 1: managed target date funds and more likely to stay invested
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Speaker 1: and less likely to trade excessively. Now that last point there,
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Speaker 1: I think is the difference between all of this. I
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Speaker 1: think there's a couple conclusions that you can draw here.
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Speaker 1: First off, let's talk about the balance gap. Why is
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Speaker 1: one lower than the other? Well, that has to do
8:52
Speaker 1: with women tend to earn a little bit less, and
8:55
Speaker 1: they also tend to experience more workforce interruptions of course
8:59
Speaker 1: than men do. Historic speaking, right, this isn't political chat.
9:01
Speaker 1: This is merely results of a survey. All these questions
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Speaker 1: were asked in the survey and the women who responded
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Speaker 1: were in these types of situations, and that makes logical sense, right.
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Speaker 1: I don't know that any company has correctly solved the
9:13
Speaker 1: idea for how do you let someone take a lot
9:15
Speaker 1: of time off several times to have children and then
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Speaker 1: make sure that the income is equivalent to I'm not
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Speaker 1: saying it shouldn't be that way.
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Speaker 2: I just don't know how the math work. Right.
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Speaker 3: They are the ges dating parent, since we've in modern parlance,
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Speaker 3: as opposed to the men who are a nonjest dating parent.
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Speaker 3: So somebody's got to have the baby.
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Speaker 2: And the last time I googled that was how that worked.
9:34
Speaker 3: Yeah, Yeah, the feat is in the womb and you've
9:36
Speaker 3: got to have a womb and yeah, right, we all
9:37
Speaker 3: go down that.
9:38
Speaker 2: I see.
9:38
Speaker 3: I'm gonna get political on it, Brian, now ignore me,
9:41
Speaker 3: But yes, that is a reality.
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Speaker 2: Now.
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Speaker 3: They looked at five million people's investment accounts and savings.
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Speaker 3: There's a whole lot. Did did they cross check it
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Speaker 3: against whether the individuals were married or not? Because I'm
9:54
Speaker 3: kind of curious, because apparently the key to financial success
9:57
Speaker 3: quite often is a good marriage.
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Speaker 2: It lasts. Yes, I don't know.
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Speaker 1: I don't know that the study looks specifically at that,
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Speaker 1: but I've looked at that for decades, and yes, I
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Speaker 1: can confirm.
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Speaker 2: And it's a simple question. This has less to.
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Speaker 1: Do with the morality or non morality or whatever you
10:12
Speaker 1: want to call it of being married that Hey, if
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Speaker 1: I have a roommate for the rest of my life,
10:15
Speaker 1: my life is cheaper, especially if that roommate also happens
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Speaker 1: to have their own source of income. Then yeah, absolutely,
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Speaker 1: two people together with two sets of resources, ultimately trying
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Speaker 1: to cover the same goals of keeping a house, going
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Speaker 1: in a family, and so forth, Yes, they're going to
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Speaker 1: land in better shape. So you know, the math simply
10:33
Speaker 1: supports that a lot better. But I wanted to focus
10:36
Speaker 1: on what I can confirm too, with the comment that
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Speaker 1: was made in here about excessive trading and men panicking
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Speaker 1: sooner than women, I can confirm that is the case
10:45
Speaker 1: because men like tend to like to grab a hold
10:47
Speaker 1: of things.
10:47
Speaker 2: We like to fix things right.
10:49
Speaker 1: If there's something wrong or I perceive there's something wrong,
10:52
Speaker 1: I want to touch it. I want to screw around
10:53
Speaker 1: with it, I want to make it better. And that
10:56
Speaker 1: is really the opposite. There's a whole lot about investing
10:58
Speaker 1: that is completely counter intuitive, messing it with it every day.
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Speaker 2: You know.
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Speaker 1: The analogy that I always use is if you're trying
11:05
Speaker 1: to grow carrots and you pull them up every day
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Speaker 1: to see how they're looking, they're not going to do
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Speaker 1: very well, right, And so women do tend to this's
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Speaker 1: in my experience.
11:14
Speaker 2: Now.
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Speaker 1: Women do tend to stay an arm's length or two
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Speaker 1: away and they will leave it alone, which means they
11:19
Speaker 1: do tend to ride out the ups and downs a
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Speaker 1: little better. But they also tend to lean toward a
11:24
Speaker 1: less risky portfolio to begin with. Men want to roll
11:27
Speaker 1: the dice and they want to screw with it all
11:29
Speaker 1: the time. Neither is the exact precise right way to go,
11:32
Speaker 1: which is why most married couples who are willing to
11:34
Speaker 1: communicate are going to be just fine. It's the ones
11:36
Speaker 1: that won't talk to each other that are going to
11:38
Speaker 1: have some financial issues.
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Speaker 3: Well, I got the impression from the article that women
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Speaker 3: also are better at like a rainy day fund, you know,
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Speaker 3: keeping that extra cash on hand just in case something
11:47
Speaker 3: bad happens, easily accessible cash.
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Speaker 1: Yeah, and that has to do with that whole risk
11:52
Speaker 1: profile thing. So I write a rainy day fund. An
11:54
Speaker 1: emergency fund is its job is to be there. Its
11:56
Speaker 1: job is not to return, you know, a decent amount
11:59
Speaker 1: of its job is to simply be there.
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Speaker 2: Like you said, in case it RNs. Men tend to
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Speaker 2: be a.
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Speaker 1: Little bit more resistant to the idea of why should
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Speaker 1: I park you know, six months, twelve months worth of expenses,
12:10
Speaker 1: that's a decent amount of money. Why should I park
12:12
Speaker 1: that in something that's not going to return very much
12:14
Speaker 1: when the market's doing great. And those are the ones
12:17
Speaker 1: who suffer the most when you know, the economy takes
12:19
Speaker 1: a downturn and we.
12:20
Speaker 2: Lose a job, get laid off or whatever, because.
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Speaker 1: All those things tend to come at the same time.
12:26
Speaker 1: And that happens, of course when the market is also
12:28
Speaker 1: taking a beating. So if your emergency fund is in
12:30
Speaker 1: the market, you probably tend to be a dude more
12:33
Speaker 1: than a woman, and that that's where the risk is.
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Speaker 1: Women tend to plan ahead a little bit more, a
12:38
Speaker 1: little bit better than men do. And therefore that emergency
12:41
Speaker 1: fund is really something. When I'm talking to a married couple,
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Speaker 1: it will usually come from the from the wife in
12:47
Speaker 1: the relationship, not so much the husband, in terms of, yes,
12:50
Speaker 1: we need an emergency fund, and let's calculate it and
12:52
Speaker 1: let's make an intelligent.
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Speaker 3: Decision, all right, and not to play one off against
12:55
Speaker 3: each other, not the man of the women, but the
12:57
Speaker 3: emergency fund of the investment. I can only imagine that
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Speaker 3: establishing that kind of emergency fund, you know, six months
13:03
Speaker 3: of to live off of that you have parked in
13:06
Speaker 3: an easily accessible count, that's a big ask when you're
13:09
Speaker 3: also trying to contribute to the longer term investment. So,
13:11
Speaker 3: as a financial planner, should the quick cash rainy day
13:16
Speaker 3: fund take priority in terms of establishment over the investment
13:19
Speaker 3: or should you kind of like do a little bit
13:21
Speaker 3: in both directions the entire time you're investing.
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Speaker 1: If somebody is completely starting from zero, right here, I
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Speaker 1: have X dollars left over every month, should I should
13:31
Speaker 1: I build up my emergency fund or should I build
13:33
Speaker 1: up my four O O K. When somebody is going
13:35
Speaker 1: to starting in that manner, I always recommend let's let's
13:38
Speaker 1: do a little bit of both, because ignoring one uh
13:42
Speaker 1: to to completely favor the other is going to lead
13:45
Speaker 1: to more stress, honestly, because you'll simply focus on I've
13:47
Speaker 1: done nothing about this when I've done everything over here.
13:49
Speaker 1: So if you're getting started, I think a little bit
13:51
Speaker 1: of both is fine. You're not going to hit that
13:53
Speaker 1: goal right away all at once anyway. You know. It's
13:55
Speaker 1: kind of like if you want to you want to
13:57
Speaker 1: go on a diet, you want to lose some pounds,
13:58
Speaker 1: Well you shouldn't ownly eat better and not exercise. You
14:01
Speaker 1: should do a little of both, make sacrifices on both
14:04
Speaker 1: sides to make the progress that you need. And eventually,
14:07
Speaker 1: if you do that for a while, you'll start to
14:09
Speaker 1: see you'll have wind falls. Somebody gets a raise and
14:11
Speaker 1: all of a sudden there's a little more cash, or
14:13
Speaker 1: we inherit something, or you know, some kind of windfall. Well,
14:16
Speaker 1: that windfall can be treated to kind of cap off
14:19
Speaker 1: the emergency fundal It doesn't take nearly as long to
14:22
Speaker 1: reach an emergency fund goal as people might think. It
14:24
Speaker 1: looks like when you're sitting at the bottom of mount
14:26
Speaker 1: it looks insurmountable. Yeah, but it does happen fairly quickly.
14:30
Speaker 1: You can get there and but no, but here's the
14:31
Speaker 1: important part. Brand know what the goal is. Know what
14:34
Speaker 1: you're shooting for, so that you'll know when you hit it,
14:36
Speaker 1: and then you can completely ignore it. If you think
14:38
Speaker 1: about an emergency fund, you fill that bucket.
14:40
Speaker 2: You're done.
14:40
Speaker 1: Now you can focus completely on four oh one k.
14:42
Speaker 1: There is no benefit to hoarding cash without a goal.
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Speaker 2: Figure out what.
14:47
Speaker 1: Your emergency fund is amount needs to be, figure out
14:49
Speaker 1: what you're gonna need over the next twelve months, and
14:51
Speaker 1: then kill it after that.
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Speaker 3: And if you can't do that on your own, get
14:54
Speaker 3: a financial planner to help walk you through and put
14:55
Speaker 3: you on a plan.
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Speaker 2: Smart thing to do. Eight twenty five.
14:58
Speaker 3: Right now we're gonna find out why young investors are
15:00
Speaker 3: ditching the stock market. That's with Brian James coming up
15:04
Speaker 3: next to O Koleay fifty five KARC John eight to
15:07
Speaker 3: fifty five KRCD Talk Station, Brian Thomas here with Brian James,
15:11
Speaker 3: all with financials, Brian James doing what we call money
15:13
Speaker 3: Monday and pitting over young investors moving away from the
15:17
Speaker 3: stock market. And I note this is rich the survey
15:20
Speaker 3: done by Bank America, and I don't know how many
15:22
Speaker 3: of them there are out there, but they looked at
15:24
Speaker 3: individuals aged twenty one to forty three with at least
15:28
Speaker 3: three million dollars in assets. So that's kind of rarefied
15:31
Speaker 3: air at that age, isn't it.
15:33
Speaker 2: Brian James.
15:34
Speaker 1: Yeah, that was the very first thing I saw in
15:36
Speaker 1: this survey was, you know, young people pulling away from
15:39
Speaker 1: the stock market. And then the first thing I've learned
15:42
Speaker 1: Brian to kind of figure out who are we talking
15:44
Speaker 1: to here, Let's make sure.
15:45
Speaker 2: We understand a little bit about the perspective. So, yeah,
15:47
Speaker 2: these are twenty one anybody at least twenty one years.
15:50
Speaker 1: Old, So yes, there's older groups in here too, but
15:52
Speaker 1: everybody has at least three million dollars in investable assets.
15:55
Speaker 1: In other words, the exact opposite of your average American.
15:59
Speaker 1: And so the three generations are a few generations involved
16:03
Speaker 1: in your gen Z and millennials basically twenty one to
16:06
Speaker 1: forty five older investors, Gen X, boomers, and the silent generation,
16:09
Speaker 1: anybody older than forty six. Basically, big big lumps were
16:12
Speaker 1: lumping together your non average person. So most of this
16:16
Speaker 1: and some of this kind of devalued to me the
16:20
Speaker 1: value of the study of the yeah person. Sixty two
16:23
Speaker 1: thirds of these inherited their wealth. Seventy four percent of
16:26
Speaker 1: them received trust distribution. So hopefully this is another one.
16:30
Speaker 3: Brian, I was just gonna say, what we need to
16:31
Speaker 3: know is not where these guys are investing their money,
16:33
Speaker 3: or these people are investing their money, then how in
16:35
Speaker 3: the hell they end up with three million dollars on
16:37
Speaker 3: their hands by age twenty one.
16:38
Speaker 1: That's the key element right there. It is answered it yeah, yeah,
16:41
Speaker 1: reminds me of that old Steve Martin. But how do
16:43
Speaker 1: you make a million dollars? Well, first start with three
16:46
Speaker 1: million dollars and go from there.
16:53
Speaker 2: Whoops, my bad.
16:55
Speaker 1: But now the point of this study was to see
16:57
Speaker 1: where this money is going. If they're saying that they
16:59
Speaker 1: don't leave in the stock market, where are they going? Well, well,
17:03
Speaker 1: a lot of them are saying that forty five percent
17:05
Speaker 1: of this survey base is invested in physical gold. The
17:08
Speaker 1: other forty five percent is interested in physical gold, And honestly,
17:11
Speaker 1: this whole section here of this survey you could put
17:14
Speaker 1: back in any timeframe because they're citing all the same
17:17
Speaker 1: things people always cite when it comes to gold.
17:19
Speaker 2: Inflation concerns, we've.
17:20
Speaker 1: Got huge federal debt, there's geopolitical tensions, concerns about stock valuations.
17:24
Speaker 1: You could have said that anytime over the last forty
17:26
Speaker 1: years and made a valid argument. But at the same time,
17:31
Speaker 1: gold has simply not kept up with other things you
17:34
Speaker 1: can do.
17:34
Speaker 2: There's nothing wrong with having a little bit of, you know, gold.
17:36
Speaker 2: I don't have a problem with that. I don't own
17:38
Speaker 2: any because I don't really care.
17:39
Speaker 1: It doesn't matter to me what the market does over
17:42
Speaker 1: two a three year period. I've got other ways to
17:45
Speaker 1: deal with that situation, so it doesn't matter to me
17:46
Speaker 1: that I have an asset that held its value. Gold
17:49
Speaker 1: doesn't generate any income. It doesn't provide any value other
17:51
Speaker 1: than what people think it's worth, as opposed to like
17:54
Speaker 1: a rental property that at least spits out income those
17:56
Speaker 1: kinds of things. But these younger folks in this survey
17:59
Speaker 1: are apparently putting decent chunks of money away their inherited
18:02
Speaker 1: wealth into physical gold.
18:04
Speaker 3: Does gold have its own marketing team? Because you know,
18:06
Speaker 3: as you were talking about gold, I just wrote down platinum, zinc, copper.
18:10
Speaker 3: I mean, there's a gazillion commodities they are available on
18:13
Speaker 3: the market, and many of which might provide you with
18:15
Speaker 3: a better return on investment. They just don't have the
18:18
Speaker 3: long term historical significance or marketing that gold has had
18:22
Speaker 3: behind it.
18:23
Speaker 1: Well, and gold goes back, you know, literally thousands of years,
18:26
Speaker 1: and we just respond to that, you know, because it's
18:29
Speaker 1: the thing we're most used to. The marketing team, as
18:32
Speaker 1: you termed it, those are the brokers. Those are the
18:34
Speaker 1: ones who come out of the woodwork to spend millions
18:36
Speaker 1: of dollars on commercials telling you you got to buy
18:38
Speaker 1: gold and go find your jewel My favorite was this,
18:40
Speaker 1: probably twenty five years ago. But go find your jewelry,
18:43
Speaker 1: put it in this little plastic baggie, a self address,
18:46
Speaker 1: the addressed back to us, and we will value it
18:48
Speaker 1: and write you a check. And those folks are not
18:51
Speaker 1: I I always tell people think about it this way.
18:53
Speaker 1: If gold was really the greatest investment that they are
18:56
Speaker 1: saying it is, then why are they taking this money
18:58
Speaker 1: and spending it on commercials to get you to tell
19:00
Speaker 1: your gold versus just buying gold themselves. They're just trying
19:03
Speaker 1: to create the activity.
19:06
Speaker 3: Well, I recall that one of the cases I worked
19:08
Speaker 3: on when I was practicing Launch Chicago was a real
19:10
Speaker 3: estate investment trust case and we had a huge room
19:13
Speaker 3: full of lawyers because it was a massive, massive litigation,
19:16
Speaker 3: multi multi million dollar case. Must have been twenty twenty
19:19
Speaker 3: five lawyers in the room. And they asked the group,
19:22
Speaker 3: you know, what would you most likely want to put
19:24
Speaker 3: your money in in terms of an investment, And people
19:27
Speaker 3: had raised their hands and mentioned a couple of different things,
19:30
Speaker 3: one of which which is mentioned in the article art.
19:33
Speaker 3: And I scratched my head over investing in art, like
19:37
Speaker 3: who determines the value of art? Seems to be a
19:39
Speaker 3: rather subjective thing. But I don't think that's a prudent idea.
19:43
Speaker 3: But real estate was the point that the guys were making. Listen,
19:46
Speaker 3: and there was a period in time when every single
19:48
Speaker 3: person would raise their hand and said, real estate is
19:50
Speaker 3: the place to put your money. Well, that happens to
19:53
Speaker 3: be one of the places where these young wealthy investors
19:55
Speaker 3: are putting their money.
19:57
Speaker 1: Yeah, And another thing to bear in mind is your
19:59
Speaker 1: people and buying real estate right now, and I'm sure
20:01
Speaker 1: there's many people out there trying to do this nodding
20:03
Speaker 1: along with me. You can't get the returns out of
20:05
Speaker 1: it that you used to because real estate is at
20:07
Speaker 1: a peak. If I've got a property and apartment building
20:10
Speaker 1: or whatever, I want to squeeze as much money out
20:11
Speaker 1: of as I possibly can currently I can do that.
20:14
Speaker 1: That means I have to accept as a buyer, I
20:16
Speaker 1: got to accept a cap rate in the maybe four
20:18
Speaker 1: to five percent range.
20:18
Speaker 2: That's not great.
20:19
Speaker 1: You know, I might as well just leave it in
20:21
Speaker 1: an S and P five hundred index fund and get
20:22
Speaker 1: more than that.
20:23
Speaker 2: And ride the volatility out. I would.
20:25
Speaker 1: Historically speaking, and real estate investors usually look for a
20:28
Speaker 1: six to.
20:29
Speaker 2: Seven percent rate of return.
20:30
Speaker 1: That's basically a calculation that says, and I'm gonna throw
20:33
Speaker 1: a bunch of money at this and deal with tenants
20:34
Speaker 1: and pay rent how much comes out versus if I
20:37
Speaker 1: just invested in some traditional type of thing. Usually we
20:40
Speaker 1: want six to seven percent. Nowadays you got to accept
20:43
Speaker 1: four to five.
20:44
Speaker 3: Wow, And everything involving real estate is getting more expensive.
20:47
Speaker 3: Other than just acquisition costs, the cost of maintenance and
20:50
Speaker 3: upkeep has gone through the roof with inflationary pressures, just
20:53
Speaker 3: like everything else.
20:55
Speaker 1: Absolutely, And here's another bullet point I've come across recently,
20:58
Speaker 1: a property management company. If you don't want to have
21:00
Speaker 1: anything to do with it, if you just want to
21:01
Speaker 1: put the money in it and ignore it. It used
21:03
Speaker 1: to be you'd pay a property management company ten percent.
21:06
Speaker 1: Now they're asking twelve to fifteen percent. If you are
21:08
Speaker 1: a brand new investor.
21:10
Speaker 2: WHOA.
21:11
Speaker 3: That is an inflationary reality as well, taking the well
21:14
Speaker 3: and taking the shine off of that being an investment opportunity.
21:18
Speaker 2: That's why I'm making any more of it though, Brian Thomas,
21:20
Speaker 2: I understand that.
21:21
Speaker 3: Well, that's where we have you, Brian James, trying to
21:23
Speaker 3: keep us on the state straighten their or get yourself
21:25
Speaker 3: a financial planner to help you through these matters. If
21:27
Speaker 3: it's not making any sense to you, or you want
21:28
Speaker 3: some guidance, maybe someone to just help you keep in line.
21:32
Speaker 3: It's a good thing. Brian James will do this again
21:34
Speaker 3: next Monday. Have a great week, my friend. Thanks for
21:35
Speaker 3: your time today, Have a good week. Talk to you
21:38
Speaker 3: next Monday.
21:38
Speaker 2: Thank you.
21:39
Speaker 3: Eight thirty five right now fifty five care see the
21:41
Speaker 3: talk station, get Joe, open the phone lines if you
21:43
Speaker 3: have a comment.
21:43
Speaker 2: I love