The Investing for Beginners Podcast - Your Path to Financial Freedom

Announcer (00:02):

I love this podcast because it crushes your dreams and getting rich quick. They got me into reading stats for anything you’re tuned in to the Investing for Beginners podcast led by Andrew Sather and Dave Ahern. A step-by-step premium investing guide for beginners. Your path to financial freedom starts now.

Dave (00:32):

All right, folks, we’ll welcome to Investing for Beginners podcasts. Tonight is episode 175 tonight. Andrew and I are going to answer a great listener question that we got recently. It’s a, in three parts. It’s a little bit longer, but we got some great stuff in here. We thought we had unpacked for you guys. So we could talk a little bit about some stuff. So I’m going to go ahead and turn over to my friend, Andrew, and let him chat a little bit. And then we’ll do us; we’ll give and take, Andrew. Tell me all about it.

Andrew (00:59):

Yeah, let’s, let’s dig into this. So got, they got the email here from Mike. He says hello, Andrew. I am extremely grateful for your advice. I’ve listened to and read your ebook. And I’m starting research on fenders with your VTI spreadsheets. And I’ll just say, that’s a great start.

Andrew (01:15):

So moving on, I want to begin funding a Roth 401k for future tax-free distributions to complement my 401k, but between my salary and my wife’s, we don’t qualify for the fund. The Roth, I am 37 and already have a 401k I’ve been investing in for 12 years. I recently read about alternatives to funding a Roth from two avenues, either a backdoor Roth conversion or distributing money from my 401k and rolling over to a Roth IRA. So there’s a lot of terms. There is a lot of jargon. I know we tend to get a good influx of beginners who tune into our shows. So Dave, maybe you can give us a brief overview of that. I can then talk about some of these things with the backdoor Roth because, you know, once you start to make a certain salary and become a high-income earner, some of the rules on ROS change. So why don’t you start on that first?

Dave (02:11):

Okay, thanks. I sure will. All right. So I guess a brief overview of the retirement accounts. So when we’re talking about retirement accounts, there’s kind of two types of accounts that you can invest in that are, have to do with taxes. So the first is what’s called a traditional, and the other one is called a Roth. And the main difference between them easily, I guess, is that one is with a traditional, you have to decide whether you want to pay your taxes now or later. So with a traditional, you invest your money, and you pay your taxes at a much later time. Preferably when you are retired and are starting to receive

Dave (

Announcer (00:02):

II love this podcast because it crushes your dreams of getting rich quick. They actually got me into reading stats for anything you’re tuned in to the Investing for Beginners podcast led by Andrew Sather and Dave Ahern. Step-by-step premium investing guidance for beginners. Your path to financial freedom starts now.

Dave (00:33):

Welcome to the Investing for Beginners podcast. This is episode 174. Tonight, We have one of our favorite guests back for us—another show. We have Braden Dennis from Stratosphere Investing and the Canadian Investor, the top podcast investing podcast in Canada, I believe. And it is fantastic, by the way, a little side note. Suppose you’ve not checked it out easily to check it out. It’s great stuff. He and Simon are fantastic. So I’m going to go ahead and turn it over to Andrew and Braden. And we’ll go ahead and have our little conversation tonight. So Braden, welcome back to the show.

Braden (01:05):

Hey, thanks, Dave. And I appreciate the kind words I get to have you on again.

Andrew (01:11):

Braden, I figured we’d just get right to it. So you sent us a cool framework that you are describing some of the things you’d like to look for with stocks, and you call those Stratosphere Compounders, a lot of different, good elements in there.

Andrew (01:28):

Maybe you describe that for a high level, and there’s some good stuff in there that we can talk about.

Braden (01:35):

Yeah. So this framework that I made a couple of months ago was almost a stock checklist and all kind of notes I had put down on a document, but I wanted to make it into a graphic that was easy to understand, not only for interested people but for myself to wrap around what I think is a good longterm compounder and going back to basics. And sometimes you got to bring yourself back to basics. When it comes to investing, you are ultimately seeking to find companies that will be much stronger, more profitable, have a wider moat, and be more important in the future. And this is a framework to identify what those businesses are and the characteristics that they have.

Braden (02:31):

Just quickly, the elements that are consistent in a lot of these businesses are typically a...

Announcer (00:02):

I love this podcast because it crushes your dreams of getting rich quick. They actually got me into reading stats for anything you’re tuned in to the Investing for Beginners podcast led by Andrew Sather and Dave Ahern. Step-by-step premium investing guidance for beginners. Your path to financial freedom starts now

Dave (00:33):

Welcome to Investing for Beginners podcast. This is episode 172 tonight. Andrew and I are going to answer a great listener question. We got from the United Kingdom. So we’ve got a great one from England. This is from Alex. Hi Andrew. I’m a big fan of the podcast over here in the UK. I dip my toe into value investing earlier in the year after reading Warren Buffett’s snowball and then proceeding to read the intelligent investor and security analysis by Ben Graham, and then found your podcast. So I guess I’ve done this thing a bit back to front compared to most of your investors. One thing I’m struggling with is understanding what I should be getting from reading the annual reports of companies I’m interested in buying so far. I’ve read five reports and only invested in one due to some warning flags and other issues that I didn’t like in the remaining four.

Dave (01:22):

It took me several weeks to read a report because I get bogged down in reading every single word and nuance. I guess my question is, is there an easy way to read the annual reports? Is there any specific information I should be focusing on to influence my decision of whether or not to buy a company? I should point out that prior to reading the APS, I stock must already meet my strict evaluation metrics. Therefore I don’t focus on a numbers and the reports as I’ve already interrogated these in detail prior to picking up the report. I hope all this makes sense that; thanks for all you do; kind regards Alex. All right, Andrew, what are your thoughts on Alex’s great question.

Andrew (02:04):

And, yeah, it’s a great question for sure. I think to give some background information for those of you who haven’t read those books, you know, when Warren buffet talks about why he’s so successful in investing, he mentioned that he reads something like sick five, five or six hours of his day when he’s working every day is spent reading, and he reads mostly annual reports, and he also reads newspapers.

Andrew (02:34):

You know, other company filings, like quarterly reports and things and transcripts, but he mainly focuses on the annual reports. And so Alex is, is on the right path here and trying to educate himself about what these businesses are, you know, what’s the business underneath the stock. And how are you going to learn about that as a business owner? And like Buffet says, it’s