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Highlights from this episode include:

  • The #1 reason you are a bad investor (4:05)
  • Understand these 3 fundamentals to cure your investing woes (5:48)
  • How emotions destroy your investments and how to control them (6:49)
  • Do you have these 3 essential components in your financial plan? If not, it may be costing you thousands (or more) (10:47)
  • Are you treating your investments like a Vegas casino without realizing it? Find out. (11:50)
  • How to sift through thousands of stocks to pick the right ones for YOU (12:00)
  • When fee-free services are the right choice… and when they’ll leave you broke (16:23)
Read Full Transcript

Do you hate the thought of working past 55 or 60 do you hate not being able to live the life you deserve today? Do you hate not knowing what your financial future looks like? It's time to stop doing what you hate, here's your host, Mr. Harold Green.

Hello everyone and welcome to this show. It is time to stop doing what you hate. Now. Today's show is going to be a very interesting one. Investing is so easy. Even a monkey can do it. Now we're going to talk about that in a little bit, but because the show is primarily about investments and we're going to go ahead and put our disclosure out in the beginning and using our rapid retire program, there can be no guarantees made that you will be in a position to retire seven to 10 years sooner. The results of this program is going to vary by user.

00:50 Now, past performance is no guarantee of future results. All investments, including real estate, are speculative in nature and involve substantial risk of loss. We encourage our investors to invest carefully. We also encourage our investors to get personal advice from your own personal investment advisor and to make independent investigations before acting on information that we published. Okay? Now you all know that I'm joking, right? Monkeys cannot be trained to invest money. They can be trained to push buttons or you know, even circus types activities. So why would I create such a show title? Well, I wanted to shed a little light on the investment world. And by the way, the investment world or universe I should I should say, involves many different planets and the investment universe. You have advisors, you have investors, you have money managers, you have institutions, you have regulators, and much, much more.

01:48 It's an exciting universe with a lot of wonders. And right now the market is at an all time high. It seems like a majority of the funds are doing well. But if investing was so easy, why isn't everyone succeeding at it? Well, let me tell you a little story real quick. When I was a, when I was a kid and I was growing up, I had this friend who could dunk a basketball in sixth grade. Of course it was on the elementary school REMS and they're a little bit lower. But man, you know, even in sixth grade you can dung. That was pretty, pretty cool. So I said, Hey D, how, how you jump so high? Is this something in your cereal that I'm not getting in my cereal man? Like what is it? So he showed me but I still couldn't dunk a basketball in the sixth grade, although we were the same.

02:32 I now in my junior year of high school, I finally struck up the nerve to go out for the varsity basketball team. And believe it or not, I made the varsity basketball team and my junior year of high school I could shoot threes like crazy. But my problem was this, I was a little too slow and I had a lot of other interests that I was pursuing. And making basketball a professional career was just not one of them. My lateral quickness, quickness, it's sucked. And I probably should have tried out for golf, but I had a lot of other things. I was interested in student government, marching band, jazz band, track wrestling shop. But this cause all these different things that I was pursuing, I just was in too many different things. I'd like I said I should have tried off for golf because I really love playing golf.

03:20 And back then, you know, we didn't have the videos. You can just kind of watch it at home and do the YouTube thing. You know, we had training camps that cost a lot of money and if he didn't have the money you can do it. My point is all of the things I needed to improve were available during that time. I just didn't know how to put it all together or I'm not sure Rob was willing to put in the time and effort. And you know what, to be honest, investing is the same way. You have everything you need to be a super successful investor. But the question is this, why aren't you all right? You're ready? One, two, three, let's get it now. The number one reason you may be a bad investor is timing. Timing, timing, timing. Investing is a lot like, like fishing.

04:05 And you know, I'm not sure if you guys ever have ever fished before, but I grew up fishing all the time. As a matter of fact, my grandpop's had a fishing pond on his property. Truth is he had three of them, right? So we had three different fishing holes to choose from. So after school, my brother and I would, we would go down to the pond, forget about homework, you know, we, we wanted to catch some fish, right? So we'd go down to the pond, cast our lines in the water, and the next thing you know, we got fish and we got a lot of fish. Now, something, something funny happened. One day my uncle Daniel came down and he started throwing bread in the water. We said, Oh, what you doing man? And he replied, I'm beating the fish. My brother and I, we laughed at him and we said, Oh, fish don't eat bread.

04:54 They only eat worms. And see what we didn't know at the time was that the fish being raised in that pond were being raised on flour products as it made them, you know, fatter, fatter. Jucier and the truth is you could actually use bread and catch fish. So later on, my uncle came back down, he took out a piece of white bread from like a loaf of bread he had, he made a realm ball out of it and he put it on his hook and he threw out his line. I tell you, he caught some of the biggest fish we ever saw coming out of that pond. Now do the fish always bite? No. Sometimes we, we caught nothing. You know, even though we knew the fish was were there in the pond, it was full of fish. They also had wheelset alligators in there.

05:37 We had a lot of stuff and those fishing ponds. But when you invest, you must understand three basic things. All right? Number one, are you buying the right stock or the right fund at the right time for a right price? What do I mean by that? We all know about boiling and the tragedy that a lot of people went through because of what happened, right? So their stock fail. And after this, you know, their stock went down. And, and do you think when that stock fell would have been a good time to buy yes or no? Now my answer is going to depend on a couple of things. Number one, what is your longterm game plan for owning I just boiling stock, but any particular stock? Then number two, where do you see this company going in the future? If you think rationally, you may say yes Harold.

06:32 It's a very good idea to own that stock. As you, you're going to go through your due diligence, you're going to do your research to back up your assessment. All right? That's, that's how you do it. If you think from emotional standpoint, you may say no, it's a bad idea to own that stock because Harold, you just saw what happened. You just saw what happened. Right now, of course I, I saw it just as well as everybody else, but a lot of people, a lot of investors are just that irrational and sometimes very emotional. And the truth is I find that to be the standard for almost everything consumption wise. And again, we tend to buy what we want and not what we need. Buying what we want is an emotional thing. Number two, what is the level of risk you can handle? Right?

07:20 Risk tolerance is a, is a big one. I hear it thrown around a lot out there. A lot of people they really don't understand risk and by the way, how do you, how do you gauge the low level of risk in any particular stock? There is a website for a lot of people. You know, you can go and look at it and research but it's called Investopedia and you can check out risk tolerance and different things like that. However, you know, when I sit down with a client and we go through their risk tolerance, their software that we use to analyze the level of risk that the client should or should not be taking. The problem is, is sometimes it'll give us a false reading. And what do I mean by that? Sometimes a client will say, Harold, you know, based on how I'm going to answer these questions, you know, you should put me in a low risk position and my thing is this, are you low risk for all of your money?

08:13 Okay, are you low risk for all of your money? Let's say you have a million or $2 million and the software says you're a risk. Just say you're low risk and so that low risk portfolio is going to generate you 5% return that comes out to $50,000 a year. Now is that enough or should you be doing something different? And we're going to talk about that in a second, but back to my third point in regards to investing is what is your exit strategy for getting out of a particular stock or fun? In other words, at what point do you plan on exiting that stock or fun and then taking your gains and then moving them somewhere else? Now the buy and strategy that's served a lot of people well, it also has destroyed a ton of portfolios. And why do I, why do I say that?

09:01 Because I equate it to like buying a piece of property in a neighborhood and then not checking up on it from time to time. The value could increase based on what's happening in that and that community or it could decrease. I hear a lot of people say, you know, when you ask them how their investment account is doing and they say, you know, I don't know, I haven't checked on it. I'm not sure. Market looks good. So it should be, it should be okay. But you gotta you gotta check on your stuff. Okay. Sounds like a lot of work, right? Not really. It's all about how much time and effort and you're, you're willing to, you're willing to put into this. Okay. Number two, the number two reason you, you may be a bad investor is bad advice. And you guys remember the story I just told about feeding the fish and based on my experience, a lot of the information being put out by the media is a lot like feeding the fish.

09:53 Everyone has an expert opinion. But no one seems to be able to agree. And the big question out there now is how long you know, how long has this current market going to run? Some predict a slow down next year, while some think things will keep moving forward based on the new trade agreements and something the market is going to crash. But how do you make sense out of everything you hear? I think you just really have to build your portfolio based on your financial planning objectives. And I talked about in the last show how your financial plan is your navigation system. It will keep you on track every single time and if you don't have a plan, you gotta get one. So I think every portfolio should have a short term, intermediate and longterm components built in. So short term is one to five years.

10:45 Intermediate is five to 10 years and longterm is basically 10 years plus. So you come to me with 1 million bucks and you're going to retire. What I'm going to do is I'm going to split that money up into three buckets, a short term bucket and intermediate bucket, a longterm bucket because I know you're probably gonna live another 20, 30 years, especially if you're 60 years of age. And we'd really have to make sure that that money is growing at different percentages with different risk in order to make sure we're staying away from something called portfolio failure. And that's basically running out of money because you took too much. No. The number three reason why you may be a bad investor is you've made a lot of bad investment choices, right? It's kinda like you go to Las Vegas and you just seem like your luck won't turn.

11:37 It's just one bad choice after the other or, or, you know what seems to be a good choice, turn out to be a bad choice because some things are out of our control. And this is tough because there are so many investments to choose from. I mean thousands and thousands of stocks and mutual. You've got bonds, you got ETFs, you got coins and metals. There's so much out there. How in the world can you know what to put in your portfolio? [inaudible] You're a consumer right now. I'd say look at the items you consume and the companies who created them. Let's look at Apple for example. Is it a great stock to own or is it not? I have an iPhone. I don't have an Apple watch yet. I'm thinking about getting one. Don't know if I like the interface or and things like that, but I own, I own Apple products and so I'm a consumer of Apple, so for me personally, I do own Apple stock.

12:34 I'm not saying how much of it and and it's based on my plan and what it is that I'm doing with that stock and that portfolio. Is it a great stock to own or not? Now I'm not going to give you that answer because I'm not your investment advisor and I did not build your financial plan, but let's say it was a good stock to own. Is it a good idea to just hold all Apple stock in your portfolio or do you mix other stuff in there? Now that's going to depend on what the portfolio is being built for. Is it for a travel fund 20 years down the road? Do you want to take extravagant vacations and you know, and just really live it up, but you really don't want to dig into your, you know, your your basic necessity retirement fund. And do you just, you just want to keep that stock in there for your slush fund down the road.

13:22 I have some clients who do that, right as if we're your grandkids down the road or your kids. Do you want to, are you investing to, to give them a better start in life? Or do you just like owning the stock because of who the company is and, and what it does? And, and I think once you figure these things out, you can pretty much go down the list of items you consume and build a pretty stout portfolio that may generate you some pretty good returns. Now, for most of you is going to consist of maybe tech stocks, airlines, some soda, you know, Coca Cola, Pepsi, whatever. Maybe some CVS. I don't know. I'm not telling you to go out and buy that stuff as is not what I'm saying. It's just examples. Maybe some materials who know, who knows? I'm just guessing at this point.

14:07 So what I've just shared with you, based on what I've just shared, investing does seem pretty easy, but far too many people get it wrong for [inaudible] for a variety of different reasons. Here's something interesting. Sometimes clients will, they'll come to me and they'll bring stock ideas from other people or something they read. And my response is always this, let's look under the hood and check off the fundamentals. In other words, let's analyze this thing and see if it should be a part of your portfolio. And to my surprise, sometimes it should, but chances are I already knew that. And it's in their portfolio and some quantity, I'm a little bit or a lot, it depends. Other times it just doesn't check out as people are hyping it up and waiting for it to pop or catch fire. So Tesla did both. They popped and they caught fire or they caught fire first and then they popped, whichever.

15:05 But that that stock did take off. But again, don't just start buying stuff based on the advice you're hearing out there and, and you know what, don't get me wrong advice from the right place could be golden. You, you guys have [inaudible] and you have to make sure is coming from the right place and if it's free you better watch out because free doesn't always equates to what's best for you. There's a lot of free advice out there on a hotlines and different things like that that you can call. But if that advice is not based on your longterm financial plan, let me back up and say this. If you're getting advice and it's not based on a longterm financial plan, you might not want to take that. Okay. Now with the, with the progression of FinTech and investment platforms and things like that, it's becoming easier and easier for people to do it themselves.

15:56 And one of the biggest arguments I hear is why pay someone fees to invest when you can do it yourself? That is true. That's a fair argument. And I've been on both sides of that argument with many things in my life, and I'll say it to you like this, you're only going to get promoted one level higher than your current level of competence, right? So you may know something about investing, but you may not know everything there is to know. But if you're willing to learn everything there is to know about investing and you're willing to invest the time it takes to become proficient, then you can knock yourself out. Kudos to you. That's great. Just make sure you create your financial plan that guide your investment plan, right? Everybody can be a hot stock jock and this economy, right? It's hard to miss right now.

16:45 And I think a lot of people, we're going to get complacent. The question is, is what's going to happen when the market turns? What is your risk mitigation system that you have in place? In other words, do you have a fire extinguisher to put out the planes in your portfolio when this thing starts to burn up? Are you going to be able to catch it in time and save it? Okay? So if you're dabbling with your financial future, then you're not willing to see this thing through all the way, then it is time to stop doing what you hate because I'm sure Rocher you hate seeing that portfolio go up and down and you feel like you have no control over it. Now, to some extent you do. It's called an investment plan, and again, if you don't have one, right, there's no better time like today to trade an investment plan and yes, I can help you with that. Go to retire now, retire wild.com download the rapid retire brochure, fill out the game changer form, and I'll be in touch with you to help you stop doing what you hate until next show. One, two, three. Let's get it.

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