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Hi everyone and welcome to another wealthy and wise Wednesday, you know maybe if you have been on my video channel, you have seen that I have had this other playlist, if you will, they are called 3 minutes to money mastery and it is just a bunch of short videos that are 3 minutes long, they talk about certain concepts and what they do is they try to keep them under 3 minutes and get a lot of contents out there. I tried to make one or two or three of those each week. But this past week, I did one on equity and I talked about how equity get a zero percent rate or return forever and then I got to thinking you know what? That is a concept that really needs a little bit more understanding and developing, so I thought I would at least start a podcast and video of talking about equity at home. [00:01:08] so there is a couple, mhen there are two or three different ways to get equity in your home, okay. Now let's define what equity is? Equity is eventually when it is all said and done, it is the money that you get in your hands if you sold your home. So if you think about your home, you think about what you pay for, you think about what you could sell it for, you think about what your balance is on your mortgage. So let's just say you bought a house for 200 hundred thousand dollars, it is now worth 250 thousand and maybe you have paid your mortgage down for a number of years and you only owe a 190 thousand. So the equity is the difference between what you owed, a 190 thousand and what you can sell it for 250 thousand. So basically, you have got $60,000 in equity. [00:02:08] So the question was, what is the rate of return that your equity gets each year and most people try to figure out how much their house grew by that year and then figure out the rate of return and saying oh, well homes in our area went up 4% this year. So my equity must be getting 4% and what I was trying to explain in a very short 3 minutes' video is that equity actually get a 0% rate of return every day year in and year out forever and ever. It never makes a rate of return and let me kind of show you some of the number and how you can kind of see this for yourself. It is also a good question to ask some of your friends and neighbor and see if they know what kind of return equity gives. Most of them are probably going to figure out how much their home grew that year and assume that is their rate of return on their equity. [00:03:10] Before I jump into the numbers though, let me ask you or let me talk about the different ways you could get equities in your home. Number one way is to pay down your mortgage. So if I start with a $200,000 mortgage and then I pay that down to a 190, I have essentially created myself $10000 of equity assuming I can still sell the house of $200,000. The other way is for the house to increase in value, so if my house grows from 200,000 to 210,000, I have also created some equity right there. So now, I have got an additional $10,000 in equity due to my house increasing in value. Okay, so those are basically the two ways that you get equity. Another way, which kind of is the start of this whole thing is what your down payment is? [00:04:16] Okay, so if I come into a $200,000 house and I need to put down 10% or $20,000, I put that 20 in and essentially I have 20,000 in equity again assuming I can turn around and sell the house for the same price that I bought it. But now, let's look at how equity get a 0% rate of return, we are going to look at two situations. We will first be going to look at somebody who has a 100% mortgage, so they are buying a $200,000 house and they are putting no money down, so they have a $200,000 mortgage. Next year, that house grew in value by 5%, so now it is worth $210,000 or could be sold for $210,000, okay? Now, how much equity did they have in the house when they first bought it. Remember they had a 100% mortgage, so they really had 0 equity to start with. The house grew by $10,000 so now they had $10,000 equity. [00:05:38] now, let's take scenario number 2. Scenario number two pays cash, they have $200,000 sit in the bank and they go but a $200,000 house with cash, okay? They have $200,000 in equity, same thing occurs the following years, their house grows in market value from 200,000 to 210,000, okay? They now have 210,000 in equity but here is the key, it didn't matter if the person was mortgage up to their eyeballs or if the person pay cash, both homes grew 10,000. Equity had nothing to do with it, didn't matter how much or how little you put in, equity that $10,000 growth was derived from what was going on in the market. So it was the market that created that $10,000 growth or that extra $10,000 in equity. If you really want to look at it from a rate of return perspective, you could say that the guy who paid cash put two hundred thousand dollars down on his home and that 200,000 turn into 210, okay? [00:07:06] You could then say that the guy who put zero down on his home had a 100% mortgage that he made $10,000 on no money down. So if you want to look at it from that perspective, the guy who did much better well, maybe did much better depends on what his mortgage rate was but his payment was obviously he had money out of pocket throughout that year but he certainly going to have a whole lot less than 200,000 for the guy who paid cash. The point is, the equity made no rate of return, what made the rate of return was the house, it was just the market value of the house, the house grew from 200 to 210 and it had nothing to do with how much it is involved. Okay, so that is kind of a little more thorough understanding of why equity get a zero percent rate of return because equity is only derived two ways, the market goes up in value, your house goes up in value, you get some equity or you pay down your mortgage, you get some equity or like the first guy he dropped in $200,000, he has all that equity but that 200,000 isn't going anymore for him than the market value of the home. [00:08:32] You with me, hope that makes sense? And those of you who were driving and listening to this as a podcast, I hope that all kind of came together. So now what we have to look at is how some people utilize their equity. You know you see it often especially in booming economies and we are starting to see it more and more now where people use what is called a home equity line of credit and they basically assess the home equity by going to a bank or some kind of a lender, the lender then put a lean on their home and then they loan money out to the borrower or to the home owner. So if I got $20,000 in equity and maybe I want to buy a new car, I can potentially go to a bank, have them put home equity line of credit on my house, give me $20,000 and then I can go pay cash for the car. [00:09:41] The downside to that is home equity lines of credit has some sort of repayment. Some of them are just interest only for a while, I remember back in the early, oh it is probably the early 2007, 2006, 2005 where home equity line was huge, in fact, homes were being sold with a first mortgage of 80% and a home equity line of 20%. So you can almost get a 100% where you could, you can get a 100% financing with two different loans on a home. That turned out to be a very risky proposition because as home value fell, now you are upside down, you actually owe more than your house's worth and a lot of people just walk away from their home because there is no way they could pay them back. A lot of home equity lines also have increasing interest rate, so every year, the payment back to the bank is larger but nevertheless most home equity lines of credit has some sort of repayment. [00:10:49] Some are just interest only for say like 10 years, so you would just pay interest on that loan for the first 10 years then they would [00:10:57] out to where you are paying both principals and interest maybe for 20 years after that. Something that nature, so home equity lines of credit have a lot of different ways to go about it. The problem again is like I was saying, the home equity line of credit typically requires some sort of a payment. So if I am going to have a mortgage and then I am going to use a home equity line of credit, I am effectively going to have two payments and depending on how that works out, that might take me over the top based on my income and just might be a struggle every year. So be extremely careful with home equity lines of credit. [00:11:40] Those are called HELOC for short, just in case you hear that time HELOC but from another perspective if you have a ton of equity in your home and a wonderful opportunity comes along and you have access to that capital, you might be able to take that and for instance maybe open up a business. A lot of people use it to remodel their homes, there is a million thing you can do with the home equity line of credit. But just be very careful and don't just assume because you got equity, you should be assessing and putting it into all kind of different places but if you do have that great opportunities that comes along, it can be a good place to assess some capital. [00:12:32] Now, one thing that is kind of new this day and this is really interesting is a home equity line of credit, they don't even call it a HELOC, it goes by a different name but they actually invest into your house, you get your equity but you make no payments and that can be as long as 10 and even as long 30 years before you have to make that repayment and when you make that repayment you do it in a lump sum and most likely you will do it because you are expecting money from another source or maybe you are expecting to sell your house in 10, 20 or 30 years and then you can pay off that investment. But the investment comes in and they will literally loan money against your home equity, give you your equity and you never have to make payments. This could work out really well for some if they are trying to get in a passive investment, maybe some real estate, another income producing asset so that they can produce more income for retirement because a lot of equity sitting there may not be doing that much for them. [00:13:56] But if they take out a HELOC and then have to make payment, it may not be enough to even be worthwhile. So this new form of equity investing is opening up a whole another opportunity for those who are nearing retirement with tons of equity and they need to create some passive income and now they can get equity out, go get some passive income and not make any payments back and maybe 20, 30 years from now, at their death, they sell the home and then can pay off the investors. Now, of course the investment money is accruing and it can be anywhere from 2-5-6% depending on the amount of equity you have, your credit, all that kind of stuff. Actually that is not even true, it hardly has anything to do with your credit any longer because it is all about the property value and the equity that you have in your home. [00:14:59] So they are kind of unique, they are certainly, you know they are new enough that I will be very cautious and they are new enough that we probably had to look at what happens over the next few years but I think it is a very interesting concept and again if it only works. Get this again, it only works if you have got a really solid location for that money to go if you were to take that investment loan of your equity but anyway. So that is equity and that is how it works. Now you know that equity gives a zero percent rate of return forever and ever. Now of course, you always have to calculate payments and interests and those kinds of things for the guy who doesn't have any, who didn't put any money down on his house then you also. [00:15:56] So yeah, I got to hit this real quick, so you either going to pay or give up interest right? If I pay off my home 100%, now I am giving up the interest that that money could do for me elsewhere, okay. If I am taking a 100% mortgage, then I am going to be paying interest to somebody. So I am either going to pay it somebody who loans me the money or I might loss interest because I've got it all tied up in my sticks and stones and it is not working for me. So those are you know things that you got to really consider as to how much equity you want in your home. And by the way, I got to say this too, I think owning your home is a worthwhile endeavor and if in your heart and then your soul you want to own that home [00:16:48] so you don't have any payments, no obligations, I think that is awesome and you should do that. [00:16:54] Always go with your guts, there are somethings that you can put down on paper and pencil and calculate it but still your guts override that. So make sure you consider that as well. But there are some great options out there and I hope this has at least got you stirred up and thinking and how you might handle home equity in your particular case and not every case is the same, so what works for one may not for another. Alright, any questions, shoot them to [email protected] and I will be happy to answer them as quick as I can, if you would like a strategy session, talk about some of these things, see how your situation is going and what you might be able to do to improve let me know as well. [00:17:42] And finally, don't forget to subscribe and tell your friends to subscribe and let's really build a worthwhile channel here and that is about it. Glad you were able to join me today, hope you learn something and I would talk to you next week, take care.

Well, hi everyone and welcome to another wealthy and wise Wednesday, I am really glad you can join me today and I think our conversations will be a little eye opening and maybe interesting. Because I wanted to start off by asking you this questions, what do you ultimately want your money or your investment to do for you? You probably have the answer right off the top of your head. Maybe you don't say it quite like this but I will bet it something like you want your money and your investments to provide income for you so that eventually you can retire and have the freedom to do whatever it is that you want to do without having to worry about money. [00:00:51] Now, maybe I said that a little bit more in debt than you have even [00:00:58] but I have done this now for 33-34 years and I have found that it is almost that answer straight across the board in some version that they are currently putting away money in 401K's, IRA's and other investments so that it builds up this pool of money and eventually they can retire not afterwards and that it would provide income for the rest of their life, okay. Now we call that kind of income passive income, so the difference between passive and active income? Pretty obvious, active income, you typically need to be there, you need to put in the hours or the time, it is also considered active income when you are managing something, so for instance maybe you have an apartment complex, that is probably a good idea. [00:01:59] You might be actively involved who know, maybe you are mowing the lawn, trimming the trees, getting the new tenants and old tenants out, you know and you are actively working it and then the income that comes in from those rents could be considered active income. Now, passive income is just about the opposite, you don't have to be actively involved. Maybe you own some apartments but they are managed completely by another person or a young couple, they are doing all the work and you are taking the income so that will be considered as passive income. A lot of time we still refer to passive income as mailbox income, in other words it is going to show up in your mailbox every month no matter what. And there was a lot of sources for passive income, one of the most popular sources, one that I am sure you are familiar with. [00:02:56] One that I am not sure it is going to be here for the next 100 years but that is social security. You have been paying in to social security all these years. At some point in the future, 60, 65, 70 years old, you start to take income. When that now become passive income, you are no longer working, you are no longer putting any more money into it but it is showing up into your mailbox or your bank account any month. And you don't necessary have to do anything for it, you don't have to even manage it. Another source of passive income is the pension. Now those are kind of [00:03:39] those aren't very popular because the 401K kind of replace the pension many years ago. So a lot of you who are probably younger than let's just say 50 years old, you might not even have the opportunity to have a pension and most companies have gotten rid of them. [00:04:02] And again like I said they replaced it with 401K. The 401k, this is where you put money in, the company in a lot of case with matches and the pension there was typically funded solely by the employer. But eventually, you would retire, you would request your pension benefits and it too is a lot like social security, you just got a paycheck every month in the mailbox or deposited into your bank account. And you could choose how you wanted that to be paid out in the pension, you could choose what is called a life only. I mean just your lifetime; income will last as long as you do. You could do a joint, which means it might be with a spouse, so that income will be guaranteed to last in your lifetime, in your spouse's lifetime. You could also just do period certain where you can say well I want this to go 10 years or 20 years. [00:05:05] So there were quite a few different choices there on your pension but again passive income. And nowadays, there are several things you can do for passive income, I already mention apartments but let's just call it real estate in general. This might be rental real estate; it could be real estate that you leaned on which has becomes a big thing too. Where you can actually lend money, kind of like being a mortgage ore and you can then take income from the mortgage payment that these people are paying back. This can be done through second mortgages, it can be done through first mortgages, there is a lot of lending going on in the world out there and it can be a good way to get a few extra percentage point in return than sitting and then checking a saving account or a [00:05:59] Especially with where rates are with those. [00:06:03] So lending in real estate is a big deal, again owning real estate is a good way to have passive income and as I have already mentioned, you can be actively involved in your rental real estate or you could passively income. Actively meaning you are going to take care of the tenants and the toilets and the issues that come up or passive where you are going to hire that out and just travel around the country around the world and take in the rents. The other thing you can especially if you have been a business owner, when you sell your business, you could carry that paper or carry back a loan against the business instead of being cashed out, you could effectively have the new buyer of your business pay you income payments every month and those could last for many years. The obvious downside to that is hopefully the owner doesn't run it into ground and then they can't pay you and maybe the whole company even go defunct or bankrupt, so that is a risk you want to at least assess. [00:07:16] But it is a good way to have passive income especially if you have got a good growing business, you have got a solid new ownership coming in and they have the capacity to grow that business and to pay you that income instead of taking that lump sum of cash and then you have got to do something with it. At least you know where it is at and at least you have known the business and if you are comfortable with the business, it might be a good place to store your capital because they have the capacity to pay you back. [00:07:47] Another good passive income source is what's called annuity, now annuity has got a bad rap, I get that, there is a lot probably sold that shouldn't be and there is a lot of people who probably should have one that don't. You know I mentioned the other day in my 3 minutes to money mastery video that I do where I do a bunch of video that are just 3 minutes long and they are quick, you should get on those if you haven't seen them. But anyway I mentioned in there that almost any investment can be a great investment or a horrible investment, it just depends on the situation. So yeah, there are certainly times where people bought an annuity and the price doesn't fit, horrible place to put in money. But then there is other who it just fit perfectly, they don't want risk, they want to get out of traffic, all they want to do is know they are going to have income coming in and they never want to be able to outlive it and they just don't want to worry. [00:08:48] So an annuity can be very similar to a pension and very similar to social security or just pay you income every single month, every single year that you don't have to worry about. So that is a good passive income source. The other is a little bit more on the risk side but you could own a very nice stock portfolio, a blue chip, high quality dividend paying stocks and you could essentially just take the dividend in cash each year rather than re-investing and that could be an income source. Because you can see volatility and fluctuation in the value of those stocks over the years but what usually happens in terms of dividend is these companies even when they don't have a stellar year, they figure out a way to pay dividend if they have been paying them for sometimes. [00:09:47] Now, I got to say this, sometimes that could be dangerous too. I remember years ago, pre 2008, when general motors were struggling and it look like they are going to go bankrupt and they ended up defaulting on their bonds. Where they are actually paying money to pay their dividends, so stock holders thought everything was hunky dory because they kept getting their dividends and it was really more mischievous and I don't know, I shouldn't say mischievous but it wasn't very accurate as to what was going on in the company. So you definitely want to, if you are going to own a stock portfolio, you definitely want to know everything about these companies, you are comfortable with them, you understand what they do, you understand their cyclical nature if there is such and you understand how the dividends is being paid, where it is coming from. Is it coming from profit or they are borrowing money from the bank to pay that? [00:10:48] and if you have all that into control, dividends can be a nice way to have passive income during retirement as well. And the final one that I will mention, you know there is definitely more that I am even talking about but the final one I will mention is using cash valued life insurance. It too pays a dividend, the only difference is cash value life insurance is guaranteed, it is essentially one of the most stable investment out there and you can work with companies who never miss a dividend in 110, 130, 140 years or even longer and never missed. So we are talking about through the crash of '29, through the horrible years of the '70s inflation, the good years of the '80s, the .com burst, the 2008 crash. These companies still maintained their financial very strong stout companies and their dividends also were continued to be paid. [00:11:55] Dividends can fluctuate for sure but being able to get that dividends each year and I might add if it is handled properly, it is a tax free dividends. Yeah, it is a tax free dividends and it doesn't even get counted against other income that get added up to see if your social security should be taxed. Now, many of you might not know this but if you make too much money, when you are taking social security then your social security can also be taxed. That is a horrible tax, completely unfair tax in my opinion but it is the way it is. However, income that is coming off a life insurance policy tax free, again handle properly is not counted against the income bear the income that you are going to take to see if your social security is going to be taxed. So it works out pretty well. [00:12:57] And again, you have got the safety, you have got the benefits, so there is definitely some reasoning to at least look at that, the only downside I should say to using life insurance is it something you need to plan for many years in advance? Because the IRS wants you to hold those things for several years before you start taking income for distributions, or I should say distributions for incomes. Yeah, so those are just some of the things that you can do because ultimately we would all like passive income, I mean that is the day where we get to just live our life in freedom and do what we want, when we want, however long we want, travel, play golf, play tennis, enjoy the world, enjoy your family, grandkids, all that fun stuffs and we can get that way when we have a plan to ultimately have passive income. [00:14:00] So along those lines, if you want to look and see how your situation is unfolding and what that might look out for you and how you are going to create the passive income down the road, feel free to reach out and also with your questions, you send it all to [email protected] we can have a quick strategy session, look at where things are, look where they are heading and then the nice part about it is that you can correct that course before you get there and make sure that you have a good plan for your passive income and for your retirement years where they should be. Or that they say golden, right, those are the golden years. Alright, so reach out, any questions, comments, even the snide remarks, happy to hear them, happy to discuss anything further if you have any suggestion for other future podcast, happy to hear them as well, don't forget to subscribe, you don't want to miss any of this episodes and tell your friends to subscribe as well and we will build this thing up and really have some good contents and info for you over the months and years to come, so that is about it, great to have you with me and I will talk to you next week, take care.

Well, hi everyone, welcome to another wealthy and wise Wednesday, glad you can join me today. As the summer draws to a close, kids back to school, hope your world going okay for you? And if you do have those youngster, I hope they are enjoying school? Because you know school is just an interesting thing. You know when I went to high school, I grew up in California, I went to a very unique high school and you know maybe I got a few friends out there listening to this podcast to remember this. I mean how could we forget? [00:00:42] So the high school ran on what is called modular scheduling and what it basically did is it broke the whole day down into modules and each module is 15 minutes, each class was about three modules or 45 minutes. What was interesting about the school is that you had a teacher and you had a classroom but you could go any time throughout the day. Well not quite exactly, every day you would make up a schedule as to when you are going to go through that particular class. So for instance, you go into the first 15 minutes of the day, you went into this group called ad in the sense what you will do is you will get a big legal size sheet of paper and every teacher at the school was listed on there and the list of the time at a day that the teacher was offering that class. [00:01:48] So you might have a teacher who offers the class 1-3, 4- 6, 7-9, so you would choose what time of the day you wanted to go to that class. So each day, you effectively could mix up your schedules. Maybe one day you start with English and you end with Math and the next day you start with Math and end with English. So you could just pretty much pick the time of the day as long as the teacher was offering the class during that particular time of the day. The other thing that was unique about it is we really didn't have classroom. You know how most high school, you walk down the hall and there is classroom on the left and the right and it is a closed off room. Well these were just huge open spaces and the classrooms were divided by essentially big dividers and if you can imagine having a huge room and then it has a divider that look kind of like a cross and then there were four classrooms in each big designated area, sometimes 8, depending on how big the area was. [00:03:05] So there wasn't really always classroom where everything was private, in fact, you could, you weren't supposed to but often times you had to walk through classrooms to get to yours and it was somewhat disruptive. Then what you did is each day that you went to the class, they had what was called the sign in sheet, so you would just sign your name and that verify that you were there for the day. Rules were very free and open school system as you could imagine and you could in some day you can walk around and just sign your names into classes and basically be counted, be in there for the day and not really even end up going. It was also a very open campus, so you can come and go as you please and a lot of kids drove cars, you could go to lunch, you can run home and grab a snack whatever you want to do because it was an open campus, no one was asking you about going in and out. [00:04:15] What was interesting about the whole school is that it gave you some independence and it gave you some free thinking, it also either make you very very rigid and self-disciplined or you are a little more of a slacker and look for ways to maybe get out of class because there was this thing call a conflict. A conflict arose when two teachers offered their classes at the same time and you couldn't get to both of them so you have a conflict and you have to end up not going to one versus the other. Now, if the teacher offers two or three times during a day, it was hard to have a conflict but kids tended to look for conflicts anytime they could. And then we have some really neat classes as well, we had a, I don't know if it is Olympic size but certainly a competition size swimming pool, so we had swimming, diving, we had sailing. Yes, I actually took sailing, you could learn to sail not so much in the pool, we kind of learn a few things in the pool but then we were taken to the lake where you actually could sail. [00:05:33] Oh, there was karate, there was volleyball, basketball, all the normal sport as well and Tennis was a big deal, Water pool was a big deal, so it was quite unique in how it was set-up. So if you have a conflict and maybe I don't know kind of like myself, you either like to swim or play basketball, you can spend a little more time in the pool or on the basketball court and maybe miss some of the more rigid classes if you will. Well, you know what it did for me, is it taught me a couple of things and the first thing I think it taught me is to ask a lot of questions as to how could things be done better. Because I didn't have a teacher looking over my shoulder or this rigid schedule, it gave me a time to kind of think how things could be better, how you could learn faster, quicker, I mean I would always try to figure out how I could get ahead so that I didn't have to go to class. [00:06:44] So it made it a little bit more innovative maybe, I guess it is a good word. But what it kind of ultimately did for me is when I got out into the real world, I realize I was not made for 8-5 a boss looking over my shoulder and this schedule of work and I found pretty quickly that I needed to be independent, that I needed to build and see if I can do things better. When I first started in this business in 1986, I started with a big firm and that big firm require me to be in certain places for training, it require me to kind of be there from 8-5 and there was a lot of structure. I remember when we learned about investing, when we learned about financial planning and all the different part that goes with this business. I always find my myself asking well, can it be done better? You know it is the way that this has being done for 10, 15, 20, 50 years, really the most accurate way. Or is it the most profitable way or is there a way to do it better? [00:08:06] And so I have always asked myself that question. In fact, as I was getting more involved in the big brokerage firm and how they run, you know I was asked to be put on the management track quite early in my career and within just about a year. They already wanted to push me into management but I can see right away that this was not going to work. It just has too many walls, too many perimeters and I kept asking, in fact, I remember one time we were talking about mutual funds and they were talking about what a growth mutual fund is. And I remember asking well how do we know that is a growth mutual fund and is there a way to do this better outside of mutual fund? And I was like oh, you know Dan, just quit asking questions, this is how we do it, this is how it is done and just throw your money into this mutual funds and let these professional managers take over and it is going to be alright. [00:09:23] And it just drives me crazy that I couldn't either get a good answer as to why what they were doing actually work. But more importantly was there a better way. So probably since I got into this business, I have always been asking myself is there a better way, is there a more efficient way, is there a way people can do this themselves without having to rely on an advisers all the time? Because advisers don't really know much more than you do, the only difference is they have a license and they have been indoctrinated into some of these financial planning, traditional financial planning ways of doing business but it doesn't necessary mean it is better. So it has been fun over the years as I have researched and look and try to find more practical, easier, more profitable ways of doing things. And so it took right away from the brokerage companies, in fact, I ended up within 18 months leaving the big firm, opening my own shop, an independent shop, a very independent shop. [00:10:35] Once again, I didn't just want to be told what product I had to sell, whether they were the best or not. I remember this really got me one day, I was looking through some financial periodicals, I don't know some kind of magazine and I was looking at some of the best performing stocks in mutual funds and everything like that. And as I look down that list, I realize, I couldn't sell a good portion of them, you see in a broker dealer community. The broker dealer basically tells you what you can and can't sell. So they have a list of a prude, what they call a prude product and if your, the products that you want to actually look at and work with and maybe even use for your client, if it is not on that list, you had a luck. And I notice that the things that were on most brokerage fund list were the things that made them the most money, it was either funds they created and high sales commission funds, high fee funds and lot of partnership, that you know I talked about this couple of weeks ago and how those partnerships just really, I just never found one that did anything good for clients. [00:12:04] Anyway, you had to work up this approved list, so when I left the brokerage firm, the first thing I want to do is be as an independent and as objectively as fast as I possibly can to find what work best, what had the best performance, what looked like would have the best long term outlook for a success. Anyway, I opened up my own shop, ended up growing from there, had 5 offices, had 60 reps, I mean we were moving and shaking. But I was still a bit frustrated, I was getting myself in this [00:12:43] and losing a lot of freedom and control because everything I had to do was to oversee these 60 guys and it was amazing to me how these some of these guys were magnum cum latte at their college, I mean great degrees but when it came to some of these financial stuff, they were dumber than a post. [00:13:13] And I was nervous for not only them but I was nervous for their client, I am like you are out there, you know helping people with their money and you don't even understand these small basic things. Some of the questions that I was asked where can we do this, how does this work? I am like oh my gosh and you are going to go with client money into this. So it was tough for me, so I ended up selling those offices, going really independent again and then spend years and just constantly researching looking for better ways to do things which drew me to this whole banking system and the reason why I liked it were exactly some of the reason why Warren Buffet does what he does and I tried to find and mimic some of the greatest investors out there and interestingly enough some of the greatest investors out there don't do tradition financial planning. They don't live in the box of broker dealers, they don't work with financial advisors on diversification and mutual funds and all that. [00:14:21] So I am like if these are the greatest investors ever and here in this professional word is how we are supposed to do it. Why are these not one and the same? Won't you think the professional world would be doing what some of the greatest investors were doing? It is just unfortunately isn't that way. So I will be really kind of grateful for how I went to high school, I can't say I handle that freedom all that well. And there were certainly things that I probably could have improved upon but what it did do is it made me think and it gave me an opportunity to think, it gave me an opportunity to look and see wow, is there a better way? And I think certainly some of the things we teach are definitely the better way. And I really appreciate that and I am not sure how I'd stayed in that box of the broker dealer community, if I ever would have learned some of the things that I have learned. And it has been a lot of fun and I enjoy this. [00:15:24] So, if you ask a little bit of a history as to how I got to where I am now and more importantly to give you a hope, a sense that you can do a lot of these stuff, you can learn this stuff, you can be your best financial advisor and if you could do that, you are going to have much more control. You are going to be able to make the decisions that are going to help you get where you want to be financially and that is where I would love to see all my clients eventually get. So that is about it, if you have any questions or thoughts or comments, please send them to [email protected] and don't forget to subscribe, don't forget to tell your friends to subscribe. This build a huge base out there of people who can really learn and understand investing, money and how to do it better themselves. So I will talk to you next week, until then take care.

Hi everyone and welcome to another wealthy and wise Wednesday. Well, as promised from our last episode, we are going to talk about indexes and what an index is and why you might want to pay attention every once in a while to what is going on in the index. So what is an index? The most famous one is called the Dial Jones Industrial Average (DJIA) you might have seen that a time or two or every time you turn on the news, you might have seen it and what that basically means just so you know. This is only 30 companies, this is 30 large, stagy, what I often referred to as blue chip companies. [00:00:49] and they have what is called a weighted index, okay. So, there is a difference between a weighted and an un weighted index. Most by the way are what are called weighted. So here is how it would work, let just take the dial Jones because there is only 30 stocks in there. Basically you take the total market capitalization of each stock, so market capitalization is basically the number of shares that are outstanding and the current price. So if a company has a thousand shares out there and the current share price is 10, we know that the market cap for that company is 10,000 dollars. All the shares added up and so today's market price will tell us the market capitalization for that company. [00:01:45] so often referred to as the market cap, what we want to know of the market cap is really what the company's total value is. So what the Dial Jones industrial average does is it adds up the market cap or the value of all 30 companies and then divide it by 30 and that essentially gives us a weighted average of each of the different companies. So if we have them all added up and the equal I don't know a 100 to make it easy, they divide it by 30 and that is what gives us kind of that weighted average between each one of the stock companies. [00:02:29] Now the S and P 500 is also a weighted index which means that, well let's just talk about some of the companies in there. The largest company in there, actually the largest company in the world and one we talked about a few weeks ago is Apple. It had over a trillion dollars in market cap or value, it is the number one stock in S&P 500, number one stock as far as market cap all over the world. Then we got Microsoft in there, we got Amazon in there, we got Facebook in there. Here it is really interesting, all four of the top five companies are tech companies and relatively young by you know standard of like Johnson and Johnson [00:03:20] IBM things like that. [00:03:24] so these companies just came on and came on strong, you can tell how important tech is to the world. Anyway, so Apple, Microsoft, Amazon, Facebook the top four companies in the S&P 500. Then we have Bookshire hathway. Now what is Bookshire Hathway? Maybe you have heard it, maybe you don't know really know what that is, that is Warren Buffet company, this is where he made all his purchases. So Bookshire Hathway owns companies like Gaiko, Seize-candy, Coca-Cola and so when Warren Buffet decides on what company he wants to buy, they buy it out of Bookshire Hathway. So Bookshire Hathway technically owns the stock or those companies outright. And then Bookshire Hathway is back sold just like any other stock, you and I can go in and buy Bookshire Hathway stock and essentially own Geiko and Seize candy and Coca cola and so on. [00:04:27] Interesting and I think we have said this many times, Bookshire Hathway sitting on over a 100 billion dollars in cash waiting for some kind of opportunity or at least some better price on what is going in the market today. Well, we have got JP Morgan Chase, that is number six on the six, then alphabet, do you know what Alphabet is? I don't know if you know this or not but Alphabet is actually Google but its corporate name is Alphabet. Then we got Johnson and Johnson, Exon mobile, rounding up the top ten. Then we have some banks, Bank of America, Wells Fargo moving up right behind. [00:05:15] So those are kind of the largest market capitalization companies likely in the world. So what a weighted index is it takes all those 500 different companies, add them up together in market capital and divide it by 500 and that gives us a weighted number, that gives us a value. So here is the problem with the weighted index, it is that the biggest company have more of an effect if you will on the S&P or on the Dial because they are both weighted. So if Apple really have a great year because it so much larger than any of the companies in the index, it can pull them along and make it look like the whole market doing well when potentially maybe it is just the top few companies that are doing well and conversely if Apple stocks have a bad week, month, year, that can have a drag on the whole index not proportion to what is going on with the other companies. [00:06:34] In those 500 companies, we can still have companies doing very well but because the big boys aren't doing so well, it is dragging the entire index down. And this of course has been a problem with weighted indexes since the beginning of time because one or two companies can pull or decline those values pretty quickly. So what is un-weighted index? There are actually awesome out there, they are not followed all that well but there is actually an S&P 500 equal weight index as well and essentially what they do is they just take, it doesn't matter what the market capitalization is, they just take 0.2% of every company. So it doesn't matter how big you are 0.2% of your shares are going to be represented in this index and that gets weighted to 100% and at that 100% level that is how we can see whether or not the market has a whole. [00:07:41] It is going to be a much more effective way to see how more or fewer stocks are doing well versus just the one or two or five or ten that can pull a market along pretty easily. So it is probably a good idea to get an idea of what the equal weight index is versus what a weighted index is and quite honestly right now with the market in this past few year, just pretty much going forward, they are going to look quite the same and where that might change is like I say if some of these big boys start to take a little breather, take a little decline but even some of the smaller companies still doing well and moving well. Then an equal weighted index is probably not going to look quite as bad as the weighted index. [00:08:38] Okay, wow, that is probably more information than you wanted to know on indexes but I think it is kind of critical to know what is going on so you can access when a market, is it dropping because just a few of the big boys are having some troubles or is it dropping because the whole economy and everything really having an event so to speak. So keep your eyes on the weighted and an equal weighted index, just for comparison especially next time we have some kind of a correction or a drop. [00:09:13] Now why is the index important? One is it is a very popular place to invest money, people who just don't necessary know what to do with their money typically can but into an index. The other that has made them very popular is that they are so cheap, the fees are very little especially in an ETF which is an Exchanged Traded Funds, you can get in those for pennies, you do not need a broker, you do not a financial advisors and in fact, there is a good chance your financial advisor isn't going to be the index anyway and so having somebody diversify and do all those things for you and pretty much fall short of the index. Well, that is why Buffet and many recommended that if you don't know what you are doing just get involved in the index. [00:10:03] So the index is very popular for a lot investor, especially those that don't want to understand or learn or really do much, they just kind of want to put their money away and hope for the best. An index can be a good resource or a good alternative for that. The other thing is, that is how we weight whether or not market is doing well, that is how we kind of get a sense of should I be panicking, should I be greedy, right? We should always be looking at this market as opportunity and when others are very greedy and keeps buying and pushing this market up, that is when we probably want to be a little fearful. Sometimes we are fearful on a wrong in for many years, I mean 3,4 years or 5 years, we could be sitting on the sidelines because this thing just gets pushed up more and more and more. [00:11:03] then the opposite happens, when the market is getting pushed down and people are fearful and they are selling out, this is where we want to start picking off the cherries and make sure we are buying good companies at a very good price and taking advantage of those events of those opportunities. Just literally the opposite of what probably 99% of your co-workers and people you know and your neighbors do. They are continually buying and putting into this market even though it is picking out and PE ratios and things like that or out of this stratosphere, they are still euphoria. And I am not saying that is not going to last for a while, it could but this market, there is a lot of power behind it, lot of good things going on, so I can't really say that it is on its way down because I don't know when that is going to happen, I just know that if Buffet send there with a 100 billion dollars, he probably feels that there is a very angst to trying to get involved in this market when it could potentially be overvalued. [00:12:19] and it is certainly over valued I mean I look all the time trying to find something of value and it is really hard and so you sit on the sidelines which makes our banking system even the more popular and works well because at least we are doing something with our dough while it is populating and growing until our opportunities come along. And this doesn't matter if it is in stock or if it is in oil, if it is in gold, if it is real estate, whatever it is, we just always wanted to be ready for an opportunity and the only way to do that is to have some capital. What is happening though is everybody is going to ride and their capital is going to look really good and they are going to have all this money and then they are going to ride the rollercoaster down and who knows. [00:13:09] we saw 401k's turning to 201K's we saw market drop 50% and then that is when we kind of want to get excited and maybe look some opportunities, so in the meantime, I hope this has been helpful, that is an index, that is the differences, watch for both of them. Maybe put on your radar a weighted index and an unweighted index, just so you kind of see how they run in comparison to one another but know that when the S&P or the [00:13:40] are moving forward, there is a good chance they are getting pulled by the top 2, 3, 5 companies that are just doing very well and when those things do break and they start to drop off the planet, there could still be some values in the one behind because they are not necessarily having the struggle that big boys are, that are pulling down the average. [00:14:04] Alright, little more technical maybe that you are used to but if you have any questions, always shoot them out to [email protected] Love to hear your comment, your suggestions, even your snide remarks and if you have any incline that you want to talk about this kind of stuff, have a little strategy session, feel free to reach out, we will make sure that happens as well. So that is about it, talk to you next week, take care.

Warren Buffet says that diversifcation is for the ignorant. Pretty strong words, right? In this episode, we talk about diversification and why so many advisors push it. Hi everyone and welcome to another wealthy and wise Wednesday and I hope your week is going great for you and let's see just a couple of more days to the weekend, hope you got some good plans, hope where you are at the weather is good? I think right now we have been in some record heat so it has been most welcome to jump in the pool or the lake and to cool off a little bit. [00:00:34] So this week, I want to talk to you about a couple different things. You know when I first started in this business, I had this manager, this district manager, if you will and he was kind of in charge of me and what he would do is help me make sure that I was doing the correct thing for clients when they came, kind of looking over my shoulder. And I had been doing a little bit of marketing and ran in to some an older couple, he had retired a couple of years ago and they didn't really have any kind of financial adviser and they were wondering what kind of thing they should do. [00:01:15] so I spent significant amount of time with them, we talked about where their money is currently, we talked about their risk tolerance. If they were risked based or trying to be a little more conservative. Now, keep in mind this is the 80s, so in the mid to late 80s, markets are just going crazy, it doesn't seem like they ever going to end, everybody has been making money, interest rate has been dropping since the late 70s. Inflation has been dropping since the late 70s and as a whole, with what is going on in the economy and politically even it looks like we are going to keep running on forever. [00:02:01] seems like we do this about every decade, right, it happened again in the 90s, it happened in 2000, I mean it just seems to occur about as Buffet says about every 10 years. So I was talking to these folks, made you know pretty good junk of money and I was trying to do the traditional financial planner thing and make sure that they were completely diversified and the had the correct allocation and all that good stuffs. But what I was a little bit shocked about is all the different investment alternatives that just really are not very client friendly. In fact, they just downright stinks. [00:02:52] But I am the new guy, I don't know any difference, so I am talking with my manager, he is trying to help me make sure I put together good portfolio for these people. What we essentially do is we market wise, we buy some mutual funds then we even get some bonds just for the diversification, all that good stuffs. Then finally, he starts putting some of their money into limited partnerships. Now for those of you who don't know what limited partnerships are. These are investments that you can get in to and they had different objectives, one might be based around oil and gas. One might be based around in this case cable, TV systems. [00:03:43] Some might be based around real estate. It is just a whole varieties of limited partnership out there. We have seen equipment, all kind of stuff. Anyway, so he started picking four or five limited partnership. Now, here is the downside to limited partnerships, one is they are very ill liquid. In fact, to go and get out of the limited partnership, you have to go out to what I call the vulture market where they just discount your limited partner shares down to penny so that you can get out. The problem is you will never get out with anywhere near what you started with. [00:04:25] So it is a horrible market and it just never going to be somewhere where you can go on the secondary market and sell your shares whenever you want such as you can with the stock or bond. So, they are very ill-liquid, the other thing is they are some of the highest fees you will ever see. It is not uncommon for limited partnership to have 20-25% of all their money raised go to fees. So if they raise 100 million dollars, 20-25 million dollars just go to fees. I mean, it is just absurd and by the time the investors who put up the money and the risk get their return, it is peanut if anything. The third thing is, it is based on kind of on this return concept and that is the way they send out distribution is typically a portion of your principal and your interest. [00:05:27] It is kind of like a mortgage, every time you pay off your mortgage, some of its principal, some of its interest and a lot of limited partnership backed in the same thing. They would send you this nice distribution but what you didn't realize is that a good portion of that was principal and a very small portion was interest. It looked great tax-wise but fast forward to few years when they quit paying distributions and you haven't even got all your money back, it can be really frustrating. [00:06:00] now, I mean I just feel horrible for the situation that I was putting to sell those things. This is what financial planners are taught, this is the traditional method and back in the 80s and 90s, limited partnerships were a big part of the "diversification" and there were just tons of them out there and the problem is no one really did any study, did any kind of analysis as to whether or not this was going to be a good investment, it was just diversification. Anyway so district manager of mine, picked 4 or 5 limited partnership, I think there was cable in there, some oil and gas, some real estate and maybe some [00:06:51] then mutual funds, a little bit of bonds and this was supposedly this awesome portfolio that was going to carry these people the rest of their life. [00:07:02] well, I don't think they ever got any of their funds back from the limited partnership or I should say any return. There might have been one that actually return what they put in but most of them failed dramatically short of what they even put in. The mutual funds, I did okay but like all markets, they do well when the market are doing great and they really stink when the market are going down. The problem is there are still fees associated with those things. So those turned out to be somewhat horrible as well. The only thing that almost made any sense were the bonds and that was simply because interest rate was on the decline and interest rate move inversely with bond, so in market when interest rate go down, market value go up. So they actually did okay in the bond. [00:07:59] I met with these people about every six months for years and years and then he finally passed away and then few years later, she did too and most of our conversation were built around what probably should have been done differently. And this district manager of mine ended up having all kinds of problems and anyway just very common unfortunately in traditional planning world to get so caught up in this diversification thing that they missed really the purpose of the investment in the first place and that is first to preserve capital, second to have a return on capital. Now, so why am I talking about this? [00:08:46] I am talking about this for a couple of reasons, one is true diversification is really horrible and to think about it, the only way to be truly diversified is while something is going up in value, something has to be going down. Otherwise, you are not diversified. If everything is going up together, guess what, everything is going down together. This is what Buffet said diversification are for those who are ignorant and basically don't really know what to do or how to do it and so they diversify. But then he goes on to say, every time you have something do well, you most likely going to have something that didn't do so well and offset those gains. So you are just fighting against each other. [00:09:32] Diversification basically fights one investment against each other and it is really hard to get anywhere if you are properly diversified. Here is the deal though, diversification in a lot of people's mind is oh I have got some American funds, I have got some Fidelity funds, I have got some Vanguard funds and this is diversification when in reality that is not diversification. Again, diversification in the true sense is something needs to be going up while something is going down and who really wants to live with that kind of portfolio. But this is the battle that traditional financial face because if they don't do asset allocation, if they don't do diversification, they are going to have somebody looking over their shoulder saying why did you put their money here or here or here and you didn't diversify. [00:10:28] And this is even the problem in the CFP community. CFP stands for Certified Financial Planner, it is a test, it becomes a designation and a lot of these guys wear it proudly. And truthfully, it is not an easy course. I went through it, I actually dropped out in the last two because I was so frustrated that all they were really doing was essentially brainwashing me into the whole wall street jugging so that people would all warm and fuzzy because they were diversified but never really get anywhere. So I really don't want to carry around that title or that designation and unfortunately they are very indoctrinated into this whole traditional financial planning thing and diversification, asset allocation, dollar cost averaging, all those buzz words that really don't mean anything other than like I say they try to make you feel warm and fuzzy but that is not how to invest. [00:11:33] And they go back to my podcast and video just a week or two ago where I talked about why in the world do our financial planners not trained in how Warren Buffet invests? You know he tells you that it is not that hard, he tells you that it is pretty easy to do but the problem is most people don't take the time to learn it. Traditional financial planners aren't on it, no one is trained in the whole Wall Street community on how to do this and it is really such a very simple concept and it is basically this: You wait to buy companies, great companies, companies you enjoy or one of the companies, you love them, you want to be a part of them. You wait for them to go on sale and when they go on sale, you go out and you buy 10 dollar bills for 5 dollars. [00:12:27] I know that sound easy and it is somewhat easy but that is really the whole basis to what Warren Buffet, Monger, and [00:12:36] of those types of investors have been doing for decades. So more of this story and the reason for this podcast was to really talk about what diversification is, why it doesn't work and why tradition financial planners use it. Maybe we didn't really touch on that, the reason why they use it is because it is easy, it sounds good, it lets them just throw you know seed in the field and hopes something takes. Hopefully how to diversifying something is going to do well and it is going to look like they know what they are doing and have done the right thing by diversifying. [00:13:20] And I don't want to get too, I know sometimes I get too much on my soap box, diversification in some cases actually is probably what you should do if you don't want to take the time to learn and understand. But when you diversify it might be best just to go into index. I am going to talk about indexes and how they work in the next podcast. You know Warren Buffet even told his family, when I die just take my money and put it in the index because overall he believes in the American economy, he believes America is going to continue to grow and the S and P index for instance is 500 of the strongest largest companies and over time it is probably going to do okay. [00:14:08] he doesn't want them diversifying, he doesn't want them buying 50 different mutual funds, all he wants them to do is put the money in the index and ride with America. So for those who don't want to learn how to invest, you don't want to take advantage of the opportunities as they come along and just want to try to ride on the American co tails, then just probably going into index is the best thing to do. First of all, it is going to be much more less expensive in fees and cost and you do not need a financial adviser to get one. [00:14:43] now with all that said, I want to just little disclaimer here, this is not a recommendation okay, I am not trying to encourage you to buy or sell or do anything in that effort at all. I just simply want you to understand what diversification, asset allocation, all those things really mean. I don't even want you to go out and buy the index if that doesn't make sense in your situation. So make sure that you are very comfortable, you understand the decision you are making and what that means to you in your financial life. Alright this might stir up some questions and I am excited for it, so if you have any question, feel free to reach out [email protected] and I will try to answer them just as quick as I can and let's see if we can get into a little battle royal just kidding with the traditional financial advisers so that they can tell us why diversification and asset allocation really do what and now that you know why, I and Warren Buffet thing it doesn't work, let see what we come up with in our comment. [00:15:50] alright, that is about it for this week, great to talk to you and again send your questions and your comments, even your snide remarks and if you ever want to have a strategy session and just talk? Let us know about that too and we will spend a few minutes with you on the webinar of some sort and we will talk about your particular situation and what you might be able to do a little better and until next time, I will talk to you later take care.

Hi everyone, here we are again with another wealthy and wise Wednesday, thanks for joining me whether you are on video or podcast, want to welcome you all. You know I am kind of a water ski fanatic, I try to go at least two or three times a week and I ski the course, you might have seen a tournament [00:00:44] course skiing, there are 6 balls that you got to get around and it is really fun and they keep shortening the rope every time you get through and it is really kind of competitive and I just love. [00:00:58] But you know one thing that happen every year that you get going is you have the winter, we have been skiing much at least not around here, we spend more of our time in the snow on snow bikes in the winter. But here comes a whole March, April and it is time to get skiing again. And lo and behold no matter how many times you have worked out in the gym, you know whether you do [00:01:30] or all the different things you could do, there is still something about getting up the first few times of water skiing where you just feel that muscle ache. [00:01:42] It is muscle that you just don't use very often and it is hard to workout keeping those muscle strong, so you are always sore those first few days. And I often think mhen shouldn't it be nice if I can just stay in shape all year because it takes me two or three weeks in pain just to get back into somewhat of waterskiing shape and then now, we are at the last day of July beginning of August for this podcast and now you are just in great shape, you might have some aches and pains, I have a tendon giving me trouble this year but still you just don't get sore from skiing anymore. [00:02:28] And I think all the time, mhen if I can just somehow stay in shape all through the years, this would sure be a lot easier and I wouldn't dred those April water ski days. First it is pretty cold water and then just ready to get back in shape. And I compare that sometimes to debt, you know there is nothing worse than debt hanging over your head all the time, 24/7, never ends, monthly payments, got to come up with that and it just can be kind of overwhelming at times especially if you are using debt for credit card and car payment and house payment, you know maybe personal loans, it just can be overwhelming. [00:03:15] And debt is a lot like working out, it is so much easier to stay out of debt that to get out of debt, it is so much easier to stay in shape than to get back into shape. And even though you dred those days sometimes where you are working out maybe 3-4 times a week and someday you just don't feel like doing it, just stay in shape is so much easier than getting back into the shape. And again, you know when all winter long without skiing and I jump into that lake and getting back into shape is just getting harder and harder every year as I get a little more grey. And I think about this people who just constantly go into debt, they may be in debt, they dig this hole and they finally get out of debt and then what did they do turn around and now it is time to buy a car or this or that and they just constantly in debt. [00:04:25] And again I say it is so much easier, I know not in the beginning just like getting in shape the first time, it is not all that easy but it is easier to stay out of debt than to dig yourself out of debt. So let's just use an example, let's just say I need a car, I got to have a car, [00:04:47] is falling to pieces, just not going to happen, got to get a car, what are my choices? Well it will be much better for me to ink that car along, I mean strap it together with duct tape if I have to and save all I can and try to build up somewhat of a capital base so that I can use that for my next purchase. [00:05:16] obviously we love our banking system for that, where we are putting away capital and it is getting ready to be used for those major purchases. Now I have said this over 100 times, major purchases for the most part are with depreciating assets and they are big waste of money anyway. But if my choices to just constantly have the banker in control of my life and debt hanging over my head, it is much better if I learn to stay out of debt and to become a saver rather than a debtor. [00:05:56] And just again like working out, if I start today, if I haven't worked out in years, maybe I haven't saved in years but I have got to start somewhere and so I start saving a little then a little bit more, look the fact is if you can't save then what makes you think you can make those payments, right? So one of the first thing you should do is learn to make payments to yourself, prove it you can do it, save that money and save as much as you need to, to buy the least car that you possibly have to and then stay out of debt and keep making those payments to yourself. [00:06:38] you know we don't ever, I shouldn't say because a lot of people do but most, there is too many people who don't pay themselves. You know one of the greatest books ever, "richest man in Babylon" and it talks about taking your income and first carving off 10% to give to your church, your charity, some sort of a donation, then carve out another 10% and pay yourself, right? I mean you are the one doing all the work, you are doing one putting in 40,50,60 hours a week, you should pay yourself. Then you can use the rest of it for taxes and lifestyle and different things in life but it kills me to watch people who can't even save then go out and get into debt for major purchase, that makes no sense, they haven't proven to themselves that they can save some money. [00:07:36] So okay, it is time to work out, I haven't work out in 5 years, I know it is going to hurt but sometimes saving hurts but I am going to just suck it up, I am going to get tough, I am going to carve out 10, 20, 50, 100 dollars of pay period and I am going to prove to myself that I can save. I am going to get into saving shape to where I am just built up, I feel good, now saving is just a natural, easy, bye product of my hard work at the office. Now I can say to myself, I have proven, I have got capital, now I can go make that purchase. But to stay in shape, to keep making payments to yourself, to keep saving is so much easier than digging yourself a debt hole and having that banker looking for your payment every single month. [00:08:40] So that was kind of the message of today, I was thinking about this when I was talking to some people who called me up and they were talking about their debt and I was like well you know at 12 and 15% interest rate it is going to be so much better if you knock out that debt before you start putting away money. But because there is just nowhere that you can safely put money that is going to get you 15,18% return to offset the cost of that debt. They will weigh out of shape and they needed to get in shape and it is going to hurt and they are going to have to lift a lot of weight and they are going to have to push and push to get themselves back into financial shape. [00:09:32] But the moral of the story is it is so much easier, I will say it as we leave here today, so much easier to stay out of debt than to get into debt and get out of debt. How do I want to say that, I didn't say that right? So much easier to stay out of debt that to get out of debt, sorry, that is what I meant to say. So much easier to stay out of debt than to get out of debt. So much easier to stay in shape than to get out of shape and have to start over again. [00:10:03] Okay, so I hope that was helpful, I hope that makes you think just a little bit differently when it comes to managing your money, your finances, and certainly managing debt. If you have any questions, thoughts, comments, even the snide remarks I will take them and shoot those to [email protected]. Make sure you subscribe always so that you never miss a podcast or video and finally if you are ready for a strategy session to see what you can do with your money and the best way to capitalize on what is going on in this market and market to come, feel free to shoot us an email, we will set that up and have a little quick strategy with you. [00:10:48] Other than that, that is it, stay out of debt, stay in shape, I will talk to you next week, take care.

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