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Show highlights include:

  • The “Fiduciary Approach” that puts your “financial planning pyramid” into motion (5:05)
  • Why watching CNN destroys your financial portfolio (8:58)
  • How taking advice from your mom ruins your bank account (9:18)
  • How navigating through a market crash grows your personal wealth (11:29)
  • Why a low volatility, dividend growth portfolio outperforms Microsoft stock (13:09)

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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.

(00:20): Oh, hi everybody. This is Harold Green, AKA G money, and it is time to stop doing what you hate. Ladies and gentlemen. I hope you are having a fantastic day doing pretty good couldn't sleep last night though. Well, I could,

(00:38): But I just, I just woke up super early and I got some decent sleep and funny thing is I was watching a commercial on TV with my wife and I think his mattress firm and they were talking about a term that I guess they made up called junk sleep. And I'm just like, yeah, honey, I think that's, what's been wrong. You know, what was wrong with me is I've been getting junk sleep and sometimes I'll wake up, you know, so not feeling too hot. So I'm, I'm really gonna make an effort to make sure that I'm not getting what they call junk sleep. But anyway, again, I hope you're having a great day. It's a Saturday for me. And you know, it's been a long week, but I spent a good week. I've been very busy and man, I'm, I'm a boy.

(01:20): Am I excited to, to share today's show with you, you know, the past few weeks I've been just kind of pumping you guys up and giving you pep talks and stuff like that, you know, RA sure you guys on, you can do it. We can win. Yeah. That's all great. But today, today is where the rubber meets the road. And I'm going to get down to some real talk with you guys. I mean, like for real, for real, like for real, for real. So I'm not going to say too much more about it, but I want to, I want to start by getting into something that's important to me. And I want to share this with you folks. A lot of times when I open up a show, I share with you guys a, a proverb and I do my best to read a proper every, you know, a book of Proverbs every day.

(02:05): You know, if I can, so today's Proverbs 24 and you know, as I was reading through it, it really helped me, you know, get ready for today's show. And, and what I want to share with you guys is simply this all truth is parallel. I heard that set I'm in time. Again, all truth is parallel. A lot of, you know, self-help religious stuff. A lot of it has, you know, some of the same truths in it, right. That's why people follow a lot of different stuff because once they get in and they're like, yeah, okay. So bit of truth mixed in sometimes with a bit of error and that's how things can go awry because all truth is parallel. Sometimes people use the truth to manipulate things, and I'm not going to get too far into that, but again, all through this parallel, but I like to follow things out of the Bible because it keeps me on track personally.

(02:56): And it also helps me to make sure that I'm not like the blind, the blind. And that's a real big thing for me. I need to make sure that I'm on point because I I'm going to share something in a second, but I'm going to go into Proverbs 24 and verse 30. And it reads like this. And this is the amplified classic version. I went by the field of the lazy man and by the vineyard of the man void of under standing and behold, it was all grown over with thorns and nettles. We're covering its space and its stone wall was broken down. Then I beheld and considered it. Well, I looked and received instruction. You had a little sleep, a little slumber, a little folding of the hands to sleep. So shall your poverty come as a rubber and your want as an armed man.

(03:53): Now that was a scary one for me because I envisioned it like say an army coming to your door and they're taking, you know, taking whatever they want by force and you're, and you're helpless. And so I want to share with you, you guys today, this show built on rock, not saying I'm going to say that again, build on rock and not sand. This is going to be a little bit of a bit of a lengthy show. You've got a pen and a pad, you know, take some notes or, you know, replay this thing over and over again because I really think this is going to help you. And here's what I'm going to say. If I'm not diligent, I can call someone great harm. Okay? If I'm not diligent, studying what I need to study and learn what I need to learn or obtain the tools I need to be successful for my clients.

(04:44): I can cause a lot of harm. I can't be the blind leading the blind. And right now, like I said, I felt like in this country, there's a lot of blind people leading the blind people. A lot of people being manipulated and taken advantage of. I don't think that's right. I cannot build your financial house on sand. That would be malpractice for me. Okay. And just, it can't be done. And I want to kind of go back and talk about the fiduciary approach and the financial planning pyramid. And if you want a copy of this, you know, just just message us or whatnot, email us. I think our information is in the show notes. It should be, but get in contact with us and say, or just go online and look for the financial pyramid. I'm sure it's all there. And we start with the risk management.

(05:28): Okay. We start with risk management, health insurance term, life insurance, property, casualty, insurance, visibility, insurance long-term care, insurance liability, insurance umbrella, you know, on and on and on these types of things are called necessities. And then we have the next stack up in the pyramid, cash, cash, money y'all savings, accounts, CDs, checking accounts, home equity from an a life insurance. No, I really don't consider home equity, really cash reserves, unless you pull that money out of the house and put that and put that money somewhere else and turn it into cash. Because if it's in your house and the bank says, Hey, y'all, we're not loaning out, no money. As a matter of fact, we don't credit than what they got you. Okay. Or they have you permanent life insurance. That's one of my favorite ones to use because I pretty much can dictate the terms in that policy.

(06:22): You know, municipal bonds, government bonds, corporate bonds. Now I gotta put this disclaimer out there, right? All investments carry risk of loss before investing, do your research, do your due diligence, make sure you understand your risk and everything. That's tied into it. And also don't take anything I say in the show as a guarantee it's for informational and educational purposes only. All right. So the market accounts, immediate annuities, income producing real estate and, and that's to balance and supplement out everything else. And then we got the long-term yeah, retirement and that's for growth, common stock stuff, mutual funds, personal business, verbal annuities, verbal life insurance, some of that stuff I don't use, but it's in the financial pyramid. So we can kind of pick and choose what, what we build your financial house on. And then there's high risk options, oil and gas, collectibles, commodities, precious metals.

(07:15): And then I added my own college. When you send kids off to college, sometimes that speculation, sometimes these kids, they go out there and our kids get educations and it doesn't serve them well. So we have our own college funding program where we help guide your kid and your students. And we help them find colleges that are right for them that are in your overall financial best interest. Because again, there's a lot of manipulation going on when it comes to making sure you get the right price or get your kid's education done at the right price. It's like flying on an airplane. Not everybody pays the same price for the ticket, right? College is the same way. Okay? So that is the financial pyramid. And it leads me to ask you this, what are you building on? Are you building your house, your financial house on the rock, right?

(08:05): Or you building your financial house on sand. Now all know the story about the man who built his house on the rock. And the man who built his house on the sand, the floods came, the winds blew and washed the house away. And it was gone, right? He lost everything he had. And the man who built his house on the rock, the storms came, the winds blew. That house is still standing. And by the way, I'm going to say this to you guys. When you have storms in your life storms, don't come to make you stronger. Storms come to tear apart. Everything that you have, okay. Storms do not come to make you stronger. You look at a hurricane, it doesn't come to make your house stronger. It comes to rehab it and disruption. So you need to make sure that you are on the rock and not on sand.

(08:57): Let's look at let's look at some of this stuff. What do we consider sand? They buys from the media, right? Selling ratings gotta make their sponsors happy selling ads, right? The internet people need to stop to do so. They put out information. Some of it is good. Some of it is bad. Family relatives. People are just saying their opinion. You know, I had a client come in and she was sharing with me how somebody had owed her and her family. That's the dumbest decision you ever made? And she's like, okay, I don't know how to financial planner. And he's the one giving me that advice. She didn't say who I was, but she has me on her team. And I gave her solid, solid, solid advice, route building a solid, solid plan. And her family member tells her when she shared that. That's the dumbest thing they've ever heard.

(09:55): Come on, man. Come on, man. Come on, man. Be careful. Right? Because then there's some manipulation going on. Sometimes we have dominating family members and sometimes they're doing better because you know what? Sometimes they just get lucky. Right. But not everybody gets lucky and all of their decisions work out. Right? So sometimes people, they get kind of high on their horse and because, you know, they have stable income and they've been able to put away in the stock market and they just left it there. And now they, they, they get a sense of superiority. I'm I'm, you know, my, my stuff worked out. Right. But we don't know that yet. Give it 20 years and see where it's going to be. Oh, workers. Now the client told me she came in and she's like I said, why did you put your 401k like this? Well, my coworker she's been like playing around and she's been doing okay.

(10:49): So I figured, you know, let me just, I had her do it for me, like, okay. And I'm like, all right, oh workers. A lot of times that saying, you, you, you know, you can't take that advice and call her a fiduciary approach or fiduciary plan or a solid financial plan because it can be built on sand. Let's talk about the rock, right? What do I consider the rock historical data we're going to get into that current data. We don't get into that fundamentals. Fundamental analysis. Talk a little bit about that. And we'll talk a little bit about causation. Now. There's a lot of fear going on right now and our country. A lot of fear, a lot of issues. We got this talk about inflation. Not only just talk that stuff is real right. Inflation. We'll talk about that. Civil unrest, people looting, ridings, doing stuff, whatever political manipulation, we got.

(11:54): Some of that going on. We've always had it, but it's worse than it's ever been. And people are worried about that stuff. Pandemic, coronavirus. So real thing, people are dying from that stuff. And the market crash. I don't call it a crash. We just call it a correction because it corrects itself from time to time. And then it takes a leg up. Or sometimes it takes a, a let down. Or we want to talk about things that people are worried about, but I'm telling you right now, if you build your house on the rock, you build your financial house on the rock, man. You're going to be all right. You're going to be all right, but it has to be built on the rock. Now I want to take you guys through, through all of these things. I just talked about inflation. We're going to go back and look at 2000 to today.

(12:46): And I'm just going to take some snapshots out of this thing and just kind of share with you guys what happened now, again, past performance is no guarantee of future results. We had inflation and we had civil unrest. We had political manipulation pandemic. We had SARS to the bird flu. We had all these things, the pig, flu swine, flu, whatever. And we had the tech crash back in 2000. So what happened? I'm going to compare with you a stock by itself, which is Microsoft. And I'm going to compare a portfolio with you have low volatility, dividend growth, stock stocks that paid dividends. They pay decent dividends. And, and we're going to look at yeah, from 2002 until today. And I'm just going to take you through some snapshots of this. All right. So in that low volatility dividend growth portfolio, we had AirPod chemicals, access capital holdings, AstraZeneca, Chubb, Colgate, Palmolive, Campbell soup, Chevron, dominion, energy, general mills, Hormel boots, Johnson and Johnson, Kellogg Locky, Martin McDonald's, Medtronic PLC, McCormick, NextEra, energy, national health gore, New Jersey residents, Rez or New Jersey, Rez, Pepsi, Procter, and gamble.

(14:01): Smucker's jam Molson, Coors brewing, UGI, Wisconsin, energy, Walmart, and Exxon mobile. Most of these companies or companies you guys all know. I know. And then of course, you know, Microsoft. So back in 2000, we're going to go from January 1st, 2000 until December 31st, 2005, we're going to take a five year snapshot, right? We had a lot of things going on in that period of time, but here's what happened. Microsoft went down 47.8, 5%. It went down as low as 60% lost as much as 60% dividend growth, however, provided and act sure these are actual returns. These are not hypothetical. These are actual returns based on historical data. This is real stuff. Okay. Not make believe that period of time, dividend growth was up 114.2, 2%. And if you want to minus fees, you can minus like say 2%. The average fee is 2% minus 2% out of that.

(15:03): Minus 2% of that. And then you get your, your net rate. All right. If you didn't sell it, we're not looking at the tax ramifications or anything like that. We're just looking at straight up, you know, historical data. So dividend growth portfolio, low volatility, you got some dividends and you got 114% and divide that out by five man, you get like, you get like 20% and tech just kinda like tech lost it. It lost its marbles. Okay. Now let's pick up from January 1st, 2006 until December 31st, 2010 dividend growth would have given you a 50.4, 7% and Microsoft, it gave you 16.8, 3%. You guys are pretty smart. You can do the math. And so, but I want to take a deep dive into this because if we just look at this right here without looking at what should be happening, being in these portfolios, it's pretty distorted.

(16:04): Now I talked to you guys quite a bit about the retired program and inside the rapid retire program and the income generation section and the long-term planning section. We have the short term, intermediate long term portfolios. And the goal of these portfolios is quite simple. I want to try to get five to 10% on the short-term portfolio, 10 to 15% on the intermediate portfolio and long-term portfolio. I want to get 15 to 20% on that. So that's my goal and these different portfolios, but in 2008, I think could have happened. Now. I don't just let my clients right. Hide their portfolios down and lose 47%. Then I should be fired. Like I'm really not. Yeah. Doing my job if I let something like that happens. But if you're doing it on your own, it can happen because a lot of people are sitting in a buy and hold position.

(16:52): But what if we rotate it in 2008? What if we rotate it from dividend growth back to Microsoft? What would have happened if we did that? Okay. From 2008, until 2010 dividend growth gave us 26.3, 5%. But guess what? Microsoft gave us. Microsoft gave us 50%. These are actual numbers. These are real numbers. Okay. This is not make-believe stuff 50%, but the problem there's a lot of people don't rotate at the right time. They don't know when to rotate because they don't know what they don't know. They hear stuff on TV. It's all sand. Okay. Do not take advice from people in the media. You got to go plug this stuff into charts and run these numbers out and do that houses to understand what's going on. Okay. So I want to fast forward a little bit and go from one, one, 2011 until, or say yesterday, close of market yesterday.

(17:53): From that period of time, that's basically 10 and a half years. Dividend growth gave us 233.5, 5%. That's an actual return of roughly about, you know, if you just kind of divide it out, divide that to 33.55 by 10 and a half years, you get 22% minus your 2% B that's 20% a year [inaudible] but Microsoft, if you were to rotate it out of that dividend growth into Microsoft, Microsoft was up 1000, 211.4, 1%. That's some crazy stuff, right there. That's a return of 115.3, 7% a year. If you divide it out by 10 and a half minus our 2% B 113.3, 7%. I was talking to a client yesterday and we were having our you know, review lunch and just kind of going through the financial plan and going through all the numbers. And you know, we're looking back on this stuff and we're looking at, you know, his projections and we, you know, we ran them down on a, basically like a 5.3, 7% return.

(18:54): And because with the rapid his heart program, you split the money up. And then, you know, I managed the three different buckets, but we pretended like we left all of his money in one bucket. And by 0.3, 7%, if he got that, he'd be in the tens of millions of dollars. You know, by the time he died, right? He's like, Harold, that's crazy. That's like crazy money. And I said, people in the world exist like that, right? Just because we don't know them, or you may not know them. There's people who leave hundreds of millions of dollars behind to their kids through trust businesses, corporations, and different things like that. And you know, if you're investing a large sum of that money, it can be some phenomenal returns. Even if they're just doing dividend growth, investing some with large amounts of money, you could generate magnificent returns.

(19:40): You can also lose a lot of money too. You just have to know what you are doing. So from that period of time, from 2000, until today, we've had inflations, we've had civil unrest, we've had political manipulation. We had pandemics, we had market crash. I mean, the highest inflation I've found over that period of time was back in, I think July, July of 2008 inflation was up by 0.6%. And that's when the technology stocks, stocks were just crashing and crashing and crashing and people were rotating. And so last week I think it was on seven 19 beginning of the week. I sent out a newsletter and I sent out a newsletter periodically to my clients because it helps them make sense of what's going on. And it helps them to understand and be at peace with things. And, you know, I communicate with my clients on good days and I communicate with my clients about the market on bad days.

(20:39): And so I'll just kind of read to you guys a snapshot of what I said. And I'd like to take a moment to address what's happening. I'll write this to you. The dollar is down 875 points. We hadn't had a drop like that in a while. S and P was down 84, NASDAQ down 1 79. Last week, I sold out of some positions to give us more cash over the last month. There has been another rotation back doors technology and things seen strange given the rise and inflation numbers. Tech is going up even in the base of inflation. Normally during periods of high inflation, tech stocks usually underperform other sectors, but thing Bill's different this time around. And that's what I wrote. Something bills different this time around and what's feeling different is the fact that we're so dependent on technology. It's ingrained in every part of our lives.

(21:29): Our daily lives are just, oh my God, we leave the phone at the house. As our passwords in there, we got to authenticate to get into different websites. Sometimes we pay for our coffee with our phone. I mean, we are man technology rules our life. And so I said, because of this, I believe we will see a trend back to believing in the fundamentals of buying and holding companies with strong earnings, strong growth projections, and very strong balance sheets. And I said, I will be using this downturn to buy more tech stocks along with some other sectors to ride this period out. And so I send out these newsletters and what it does is even on like really bad days and clients are like, oh my God, Harold must be going crazy. No, no, man, I'm not going crazy. I'm using these as opportunities to buy because we're getting better and better and better every year at rotating, we did it with coronavirus and we're doing it right now.

(22:19): I'm getting better and better and better at rotating out of different sectors at different times. And because of things that are going on, sometimes it's just crazy. But that's where causation comes in. And causation is something that we look at and we say, you know, we have the fundamentals that we're we're looking at. And then we also say, okay, beyond the fundamentals, let's say fundamentals, be down. If you can say that fundamentals, lesson, say we have no fundamentals to look at what, what can we use to understand what could potentially happen? Right. Go in a shopping mall, look at the stores that are, you know, with lines out the door, look at Footlocker, look at some of the other places, Chipotle Mexican grill. Look at, just, just drive. We look at McDonald's drive through your community. And then, and then just kind of look, I'm not saying buy stocks based on you.

(23:07): See people lining up out the door. I'm not saying that, but I'm saying it could be an indicator of what could be happening or could potentially happen in the future. And I bought, yeah, the Mexican grill for my clients' portfolios, a while back, some of them anyway, and I had one client say, Harold, why, why are you buying Chipotle Mexican grill? And I said, look, they were one of the companies that pivoted the fastest during the coronavirus situation, right? They went into a lot of technology curves. I'd pick up, they were doing it safe. They're doing it fast, doing it. Right. And they'll look at that stuff. Chipotle Mexican grill, this sort of roof, right? So causation can help you analyze the data and then kind of get an idea of where things are going. But you know what? You guys don't have to worry about that. Put me on your team, get my team on your team and let us help you get from where you are today, to where you want to be. Now, if you want to subscribe to my newsletter, give us a call, send us an email. And then we will put your information into our newsletter list. And then periodically you will receive my market minutes. And it's just common sense. It's not a lot of commentary, not a lot of analytical stuff. I'm not going to bore you with that. I just want to

(24:20): Help people understand how they can take advantage of different swings in the market and how I take advantage of that for my clients to help grow their wealth. Yes, there's risk involved, right? And that's why we look at ways to mitigate risk. We also look at ways to understand your risk score and then put you in portfolios based on the level of risk that you should be taking by the word, the rapid retire program. There's things that we can do to allow us to take different types of risks at different times. So reach out to us, get subscribed to the newsletter. If you're not yet a client, get in contact with us, get on the schedule. Let us talk to you. The consultation is free one hour, but if you want an analysis or deep dive into your holdings in your portfolio, I charge 3 75 an hour for that. I'll give you two hours for the price of one, get in contact with us and I'll help you stop doing what you hate. All right. So until next time everybody stay safe. Enjoy life. Let's win 1, 2, 3, let's get it.

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