Payne Points of Wealth
 

Payne Points of Wealth

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Welcome to the Payne Points of Wealth: The podcast that addresses all the pain points that come with creating your wealth, growing your wealth, and sustaining your wealth. Hosted by the Family Wealth Experts of Payne Capital Management, Bob, Ryan & Chris Payne. On a weekly basis, they deliver timely strategies and solutions for the pain points that come with building, preserving and managing your wealth.

Episodes

From Oh No to FOMO, Ep #56

Wednesday Oct 20, 2021

Wednesday Oct 20, 2021

What's up! It's episode 56 of Payne Points of Wealth and earning season is upon us. For all intents and purposes, it should be a blowout again this quarter, company's profits should be through the roof. We have the banks reporting this week so far, JP Morgan's reported, BlackRock blew out the estimates. These are all good omens, but funny enough, investors are extremely bearish right now with plenty of cash on the sidelines, waiting for a correction. We're gonna address that today. We're gonna tell you what you should be doing with your money. How to play the next move in the market, how they'll play the rest of the year as inflation continues to kick in. Oil, it's over $80 a barrel! At a seven-year high! Folks. Inflation. Is. Real! It's here. We've been telling you about it. We're gonna talk about that. On the Tipping Point today we're going to talk about maybe you've done a great job saving for your financial independence plan, but what are you missing right now that you need to add into your plan to make sure that you're completely financially free. We're gonna break it down.

You will want to hear this episode if you are interested in...

  • Everybody’s worried about…? [1:31]
  • Is a melt-up coming? [3:07]
  • A great example of how markets work [6:07]
  • The Tipping Point [10:14]
  • Too much risk is still risky[12:36]
  • The ticking tax timebomb [15:56]
  • It’s ok to live a little [17:22]
  • Hidden Facts of Finance [19:57]

A real-life example of how the markets work

Here's a great example of how markets work. If you look at what we call the rotation trade—when growth stocks suddenly stop leading the market and value stocks pick up—all of a sudden financials, energy, these stocks are doing better. If you go back 12 months, you’d see that's when that transition started to happen. Long before anybody recognized it. Long before any advisors or strategists or economists called it. If you look back at the trailing 12-month numbers, energy is up almost 100% versus growth up just 20%. It's amazing how the markets are able to see these things months to a year ahead of time.

This week on the tipping point: Covering your bases

We've found that a lot of you that come to see us have done such a great job on the savings front. You've done a great job with your budget, you have minimal debt, you've learned to save, and you've built up a nice net worth. What we have found is that you don't always have all your bases covered. So, we thought we would talk about some of the problems you face, even if you're a diligent saver or if you have a sizable net worth at this point, that's getting you closer to that financial independence. 

Number one on the list is having too much in cash! 

When you're saving money, a lot of us think about saving money in cash. The problem with that is it's getting less than zero. If you think about your savings in terms of super savings, you want that money to work for you. Sitting in cash is like having a lot of employees that you pay, but none of them work. Check out the episode to hear what other bases you should be covering!

This week’s hidden facts of finance

This month the energy department released a study that says as much as 40% of US electricity could be produced by solar in 2035, 45% by 2050, but today solar only provides about 4% of overall energy. That's a gigantic leap, right? Renewables are the way of the future, but they're coming a lot later than everybody thinks.

Today it costs more than a penny to make a penny. According to the US Mint, it costs them roughly 1.70 cents per coin.

Warren Buffet, considered the world's most successful investor, made 99.6% of his 87.5 billion fortune after the age of 52. as much as 72 billion of his wealth came after he turned 65. He started investing at the tenure age of 11 and paid his first taxes at age of 13.

Resources & People Mentioned

See if you qualify for a complimentary financial review from the Paynes

Connect With Ryan, Bob, and Chris


Subscribe to Payne Points of Wealth
On Apple Podcasts, On Google Podcasts, On Spotify

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Will Your Financial Flight Plan Protect You?, Ep #55

Wednesday Oct 13, 2021

Wednesday Oct 13, 2021

Welcome back! It's episode 55 of Payne Points of Wealth and inflationary pressure is mounting. We've literally had the 10-year treasury up above 1.5% as central banks around the world are starting to indicate that they're going to start to taper and potentially raise interest rates sometime next year. In addition to that, we've got oil prices surging around the world right now, a natural gas shortage in Europe, and costs are going up because oil literally runs everything. So what do you make of the current economic environment? Meanwhile, we still have fighting on Capitol Hill as they're looking to spend trillions and raise taxes. It's a tumultuous time but we're going to give you the game plan you need right now to succeed. On the Tipping Point today we'll talk about how your financial independence plan is like having a great flight plan to make sure you can create the most secure financial situation for yourself. Don’t miss it!

You will want to hear this episode if you are interested in...

  • Where are the corrections happening? [1:27]
  • Mutating economy [4:26]
  • Where the economists always get it wrong [6:53]
  • The Tipping Point [10:30]
  • Being prepared for turbulence [15:40]
  • Hidden Facts of Finance [21:12]

A mutating economy bodes well for those in the ‘stuff’ making industry

We talk about the fear of this virus mutating. Well, we mutate. The economy, the global economy, it all mutates. We've changed how we do things and the economies are booming as a result of mutating away from the way things used to be done. Now, there are some near-term problems like supply chain disruptions. But if you're making stuff right now, if you have stuff in your inventory, you can charge whatever you want for it. What a great place to be. Those in the stuff manufacturing business aren’t sitting at home twiddling their thumbs, they’re working 24/7 to get more stuff produced and manufactured so they can sell it!

Meanwhile, all this has inflationary implications, but nothing like we had in the 70s’. We're going to have higher inflation, it will be a little stickier, but we will probably end up at 2.5-3%, nothing to be afraid of, but something you have got to hedge your portfolio for.

This week on the tipping point: Financial flight plans

Like anything in life, it's important to have a plan, especially when you're flying, you have to have a flight plan. Your flight plan will be dictated by what the weather's like, the winds, how many passengers you have, how much fuel you have to take. It's important before you take off to have a good idea of not only where you're going but how you intend to get there. That same principle applies to your investment portfolio. It's not about making the most money, it’s about getting to your destination as safely as possible. 

The other thing about a flight plan is you're going to have turbulence along the way that comes out of the blue. That's what happens with the markets, like the pandemic, no one could have predicted it. It came out of the blue, the drop in the markets came out of nowhere. It's not how you react in the moment, it's about having that proactive plan ahead of time. You have to be prepared for turbulence in your portfolio. Most of you aren’t and you don’t even realize it. If the world falls apart tomorrow, you're not protected. That's why we always take your portfolio through that stress test. 

Is your portfolio built and designed to get through that turbulence?

This week’s hidden facts of finance

The total value of US stocks is now over $51 trillion, a $16 trillion dollar rise from pre-pandemic values. To put that $16 trillion advance into perspective—it took over 200 years from the founding of the earliest US stock exchange in 1790 to the 2007-09 financial crisis for the stock market to create its first $16 trillion in value. Wow! So that's an amazing amount of money in the course of a very short period of time, during a pandemic and a global shutdown to boot! If there's any doubt as to where you should be investing your money, with a $16 trillion increase in just 18 months, sounds like the stock market is the place to be.

Resources & People Mentioned

See if you qualify for a complimentary financial review from the Paynes

Connect With Ryan, Bob, and Chris

Subscribe to Payne Points of Wealth
On Apple Podcasts, On Google Podcasts, On Spotify

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Do You Have A Mystery Investments Advisor?, Ep #54

Thursday Oct 07, 2021

Thursday Oct 07, 2021

It's episode 54 of Payne Points of Wealth and the FED finally admitted it! Inflation is not as transitory as they initially thought—as we've been telling on this podcast, week after week. Interest rates moved 20% last week and we're starting to see the bond market move...in the wrong direction! Supply chains around America are a mess right now! You can't hire enough truckers. You can't hire enough people to work at the ports. We're seeing a domino effect and huge delays on all products and services as they move slowly across the country. What does this mean for you? What does this mean for your portfolio? We're going to give you our view of exactly what's happening in the economy right now and what you need to be doing strategically. Money's moving out of tech stocks and into those old-school cyclical stocks that we love. In addition to that on the Tipping Point today, we're going to talk about your financial advisor. Are they really, really nice, but they don't give you good advice? We're going to tell you exactly how to handle that.

You will want to hear this episode if you are interested in...

  • Supply chain problems causing trouble [1:32]
  • Not just inflation on products [4:41]
  • Shifting dynamics [7:49]
  • The Tipping Point [10:54]
  • Not having a full picture [13:02]
  • Breaking things down so it’s understandable to you [15:41]
  • Hidden Facts of Finance [21:37]

What’s wreaking havoc on the economy but not the market?

Companies can't find enough workers, even if the ports were open 24/7, there's not enough people to man them, there are ships sitting for weeks waiting to unload their cargo. When one part of the supply chain gets messed up, maybe a truck doesn't show up for a shipment on time, it just affects everything! It's just wreaking havoc on the entire economy right now. Inventory is running low, semiconductors are backlogged, steel and lumber are going up like crazy. People are building everywhere. Who knows what people will fill these homes with, maybe beach chairs and sleeping bags because you can't get any furniture or appliances. 

With all of this going on, the market doesn't seem to care because here's the thing about the market... the market looks forward! All of this is priced in already. We are getting a little bit of corrective action, but that's primarily because the FED didn't say transitory last week, which means they are starting to believe—like we've been telling you—that inflation is going up. So interest rates are going up and hopefully, all of you listened because those bond funds are dropping like rocks! You have to get into fixed income, not bond funds. 

This week on the tipping point: Nice advisors with bad service

Do you have a nice advisor who isn’t doing such a nice job? People are hesitant to make a switch for a variety of reasons. It seems easier to stay with someone because you have already made a time investment there, or they have handled so-and-so’s finance for years so they must be doing something right, or you’ve already moved from one bad advisor to this new bad advisor and it just seems like they are all the same so why bother. 

We are here to tell you there are good advisors! 

Good advisors are going to break things down into a simple way for you to understand it. Everything we're doing here is not rocket science, if it feels like rocket science, you've got a problem. Not only should you be able to understand what's in your portfolio, you should also understand how it relates to you and the goals that you're trying to achieve. Don't go with an advisor where you get mystery investments. Check out the segment for more on what a good advisor looks like!

This week’s hidden facts of finance

There are 13 US corporate tax hikes on record going back to 1925, and in the ensuing 12 months, the S&P rose 9 times averaging 11.1%. On the personal income side, Congress has hiked the top bracket 14 times and the S&P rose in the next 12 months after 10 of them averaging a whopping 16.8%. Sounds like raising taxes is actually good for the market. Who would have thought? 

One of the biggest fears that clients have right now is that a tax hike is going to have a negative impact on the market but based on these statistics it sounds like that's probably not going to be the reality. I think the bottom line is a bull market is going to be a bull market, regardless of short-term moves and taxes. As we've said, we know money's got to go somewhere, better be bullish than to be foolish!

Resources & People Mentioned

See if you qualify for a complimentary financial review from the Paynes

Connect With Ryan, Bob, and Chris


Subscribe to Payne Points of Wealth
On Apple Podcasts, On Google Podcasts, On Spotify

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Crazy Financial Times — Another Lehman Event?, Ep #53

Wednesday Sep 29, 2021

Wednesday Sep 29, 2021

It’s been a tumultuous week, with China Evergrande Group possibly going default on $300 BILLION of bonds. Is this going to be another Lehman event like the talking heads are saying?

We also have the Delta variant rising around the world and impacting the decisions nations are making regarding their societies and economies… and in the U.S., the government wants to raise money by taxing you. There’s a lot going on and it has investors spooked. What should you do with your investments, if anything? And how should you handle the risks involved in a time like this? Don’t miss this episode, we’re gong to provide you our insights for handing the risks times like this bring.

You will want to hear this episode if you are interested in...

  • A leveraged Chinese Real Estate Company is not going to be of much concern to us [1:25]
  • Stay on the boat even in downturns could be ahead, here’s why...[6:20]
  • The Tipping Point: Risk — How are you set up to handle risk? [9:05]
  • Hidden Facts of Finance [19:40]

Evergrande is huge in China but in the U.S. you don’t need to be concerned

100% of our clients never heard of this “Evergrande” outfit… that’s because we have no interest in ever getting involved in leveraged Chinese Real Estate companies. We’d be going from the Penthouse to the Basement if we did, and it’s just not what we do for our clients. The hype we’re seeing in the media is overblown and the correction that’s been forecast doesn’t appear to be happening as of this episode. Even if it did come about, corrections are almost always temporary. They are typically followed by a huge record high. Remember, it’s not rocket science, there are trillions of dollars out there driving the market higher. The real power is in having a diversified portfolio.

This week on the tipping point: RISK and Risk Management

One of the items we deal with day after day for our 2000 clients is risk. There are many types of risk to consider, including market risk. When markets go up and up and up… and honestly, that’s when you have the most amount of risk. But that’s not typically how people think about it. And on the converse, when the market is down is when you have the least amount of risk. So if everything in your portfolio is going up, that’s a bad sign. 1999 to 2000 is a great example, when the tech bubble was going up and up and up, and then the correction came hard. It took people 15 years to break even after that, so keep clear on your diversification objectives. 

Another huge risk to consider is interest rate risk. It hasn’t been a huge risk lately because interest rates have been low, and when interest rates go up, bond funds go down. Even though bonds are touted as the most stable part of your portfolio, they can fluctuate in a time like this as much as 60%. That’s not stable at all. Listen to hear about the risk inflation and lifetime expectancy bring into the mix and more! 

This week’s hidden facts of finance

The American public debt is ¼ larger than the economy and it’s grown substantially. Fed assets have grown 11-fold as well.

Corrections happen once every 17 months typically, but the only way to win is to be in. Don’t wait for the correction.

AMC Theaters attendance topped pre-pandemic numbers for the corresponding days in 2019. Definitely, the economy is reopening and it’s just getting started.

Listen to hear more of the hidden facts of finance that you commonly don’t hear and oftentimes, will shock you.

Resources & People Mentioned

See if you qualify for On Spotifya complimentary financial review from the Paynes

  • See the hype about the On SpotifyEvergrande default

Connect With Ryan, Bob, and Chris

Subscribe to Payne Points of Wealth
On SpotifyOn Apple Podcasts, On On SpotifyGoogle Podcasts, On Spotify

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Let’s Play Financial Jeopardy, Ep #52

Wednesday Sep 15, 2021

Wednesday Sep 15, 2021

Welcome back for episode 52 of Payne Points of Wealth. That’s one full year of musings from the Payne boys! We’re glad you’ve stuck around! Well, Labor Day is over and we are officially in the fall season! Cryptocurrency is apparently one of the primary currencies in El Salvador now. The world is getting crazy as always. We're starting to see a little bit of a slowdown in the economy. If you looked at the employment numbers that came out (while we're recording this), they came in weaker than expected. There's a lot of economists, a lot of strategists right now that believe we're going to an economic slowdown. We're going to give you the truth today. We're going to tell you what's really going on with the economy, and how to invest your money. On the tipping point today, we're going to play a little bit of financial jeopardy. We're going to talk about some financial terms you need to understand if you're going to get on your path to financial independence.

You will want to hear this episode if you are interested in...

  • Does the market have to go down just because it’s September? [2:07]
  • Big bubbles [5:20]
  • The Tipping Point [9:03]
  • What’s known for high fees, lack of liquidity, and misleading promises? [9:43]
  • What requires an advisor to put a client's best interests first? [11:34]
  • What phenomenon is eminent but no denying that it will be back eventually? [13:20]
  • What forces retirees to drain their retirement accounts [15:38]
  • Hidden Facts of Finance [18:56]

The most powerful force of monetary and fiscal policy we've ever seen

There's been $32 trillion of fiscal and monetary stimulus created since the pandemic started. $32 trillion! All the global GDP in the world, every year, is something like $93 trillion. Think about how supercharged the entire global economy is right now. It's basically on steroids. It's almost laughable that any economists or strategists would think we're going to get some sort of real sell-off because you're fighting the most powerful force of monetary and fiscal policy we've ever seen. Literally ever! That's why we're going to have big bubbles in certain areas of the economy. We have big bubbles going on right now. You just don't know when they're going to burst.

This week on the tipping point: Financial Jeopardy

In this episode, we play our own little game of Financial Jeopardy and talk about some critical financial terms that all our listeners really need to understand. In the spirit of Jeopardy, we're going to give you the answer and you're going to follow up with the question. Check out the episode to see if you got it right and to hear what the Payne men have to say about it.

#1 It's known by many for its high fees, lack of liquidity, and misleading promises. This financial product gives the financial services world a bad name. 

#2 This requires a financial advisor to put his client's best interests before his/her own. Unfortunately, not all financial professionals are governed by it.

#3 This financial phenomenon is thought by some to the eminent and by others to be far off in the distance, but there's no denying that it will be back eventually.

This week’s hidden facts of finance

As of early August, global equity funds have seen 605 billion of inflows year to date. Now to put that in perspective, global equity funds have seen 727 billion of cumulated inflows over the last 25 years. Therefore in 2021 alone, there have been 40% higher inflows than the last 25 years combined. That's insane. If that's not a melt-up, I don't know what is.

The US population increased 0.4% in 2020 to 329 million Americans marking the slowest growth rate since 1901. A falling birth rate and an aging population could portend major implications for our economy long term. You've got an aging population then fewer people going into the workforce means fewer taxes and more people for the government to have to support. Maybe people should probably start having more kids.

Resources & People Mentioned

See if you qualify for a complimentary financial review from the Paynes

Connect With Ryan, Bob, and Chris


Subscribe to Payne Points of Wealth
On Apple Podcasts, On Google Podcasts, On Spotify

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Investing Through the Ages, Ep #51

Wednesday Sep 08, 2021

Wednesday Sep 08, 2021

This is episode 51 of Payne Points of Wealth. You can't stop this market. We can't stop this market. The market is literally at all-time record highs every single day. We've got some news from the FED signaling that they're not going to raise interest rates anytime soon. A very bullish time which means the world's going to stay washed in cash. The Delta variant of the coronavirus seems to be slowing down a little bit, as we're recording this. Giving us some light at the end of the tunnel with what's going on with the economy. We're going to talk about what we see, what's going on, and where you should invest your money. On the tipping point today, we're going to talk about literally every age of your financial life, whether you're 20, 30, 40, 50, 60. What you need to be thinking about at every stage of the journey to make sure you're going to be financially independent.

You will want to hear this episode if you are interested in...

  • Record highs & a re-rotation [1:20]
  • Pop quiz! What is the best performing asset class over a 100 year period? [3:31]
  • The market isn’t in the now [5:54]
  • The Tipping Point [11:11]
  • When you’re in your 20’s [11:45]
  • When you’re in your 30’s [13:58]
  • When you’re in your 40’s [15:56]
  • When you’re in your 50’s and beyond [17:41]
  • Hidden Facts of Finance [23:18]

This week on the tipping point: Investing over a lifetime

Financial planning is a journey, not a destination. Here at Payne Capital Management, we've found that each age represents an important landmark as it relates to your financial independence. What should you be thinking about at those different stages of your financial journey? Here’s a quick look, but listen to the episode for a full breakdown!

Your twenties are the hardest time to invest because you're trying to buy big things like a car or a house, and you're just starting out in your career. But, it's the best time to get into the habit of automating your savings. Small investments in your 20s will pay off BIGTIME down the road.

In your 30s you typically start to create a little more wealth. You're a little further along in your career, money starts to get bigger, and the decisions you have to make get a bit more serious. You’ll want to have a plan not just for your creation of wealth, but also for the preservation of wealth. You should also create an estate plan, you want to have a will when you're in your 30s. 

When you get into your 40s, the stakes only get higher. This is when you should start thinking about streamlining your finances. You may have a couple of 401k plans from different employers. Perhaps an advisor who's giving you advice on your IRAs, maybe a brokerage account with somebody else. Consolidating all those finances and getting a streamlined game plan is the key when you get into your 40s. 

Your 50's are what we call the financial red zone. It's a time where you're able to maximize your contributions. Sometimes you can't do it when you're younger, so in your 50's, you want to make sure that you catch up with everything and that you're prepared for the day where you're not going to have that paycheck coming in.

In your 60's you're retired or getting close. Your 401k or retirement plan is likely a huge part of your net worth. The nice thing is if you're 59-1/2, for a lot of plans, you can do an in-service distribution. You can roll the money out of the plan with no tax, put it into an individual retirement account for yourself, and invest in a more customized way. You'll also want to start looking into things like Roth conversions because at age 72 you have to start taking money out of those pre-tax accounts.

This week’s hidden facts of finance

If the US taxes all Americans at 100% there will still be an $8 trillion federal budget deficit. I think our deficit is a problem. What an inconvenient truth! If they confiscate all the billionaires' money today, we won't even meet the current spending proposals. That's very unfortunate when you run out of billionaires. If the billionaires don't have any money to pay the taxes, guess who they'll be coming for? Taxes are going higher. So do your tax planning this year. Don't wait. 

Resources & People Mentioned

See if you qualify for a complimentary financial review from the Paynes

Connect With Ryan, Bob, and Chris


Subscribe to Payne Points of Wealth
On Apple Podcasts, On Google Podcasts, On Spotify

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The Pulse of America with Kristan Vermeulen, Ep #50

Wednesday Sep 01, 2021

Wednesday Sep 01, 2021

What's up! It's episode 50 of Payne Points of Wealth, hard to believe we're 50 episodes in and we've been doing this podcast for a year. We thank you for your support. As always, there is a lot going on right now in the economy and the stock market. We have the Delta variants still running rampant around the world. Is it going to slow the economy down is the big question on the investor's mind? As we're recording this right now, the government's looking to pass trillions of dollars. What impact is that going to have on the economy? What impact does that have on you and how do you position yourself to win right now as the market continues to go higher? We're going to break it down for you. We have a special guest on the tipping point, Kristan Vermeulen founder and CEO of Knotical Public Relations. She’s also the podcast host of Makers of the USA. She talks with business owners all across the country. She's going to give us the pulse on that so we can get a better idea of what's going on in the economy.

You will want to hear this episode if you are interested in...

  • Never trust the consensus [1:30]
  • Are we coming into a melt-up? [4:18]
  • Which market are they talking about? [6:12]
  • The only place there is no opportunity [8:35]
  • The Tipping Point [10:52]
  • What is a maker? [12:42]
  • When unemployment benefits end will we see more job applicants? [15:24]
  • Will small businesses keep struggling, retire, or sell out to large corps? [19:22]
  • Hidden Facts of Finance [24:24]

Never trust what every investor believes in unison

In a year where volatility is basically non-existent. The market was actually down last week. Like 1%, if we can even call that down at all. That just seems to be the theme, there's no sell-off. One thing we've talked about a lot on this podcast is never trust the consensus. Never trust what every strategist and every investor believes in unison. I hear it over and over again that we're in the weakest part of the year, until Halloween, and that the market's probably going to sell 10-15%, the market needs to have a correction. When everybody's looking for the same thing, we know it doesn't happen and this market just won't let you in. There's a lot of people in cash sweating it out right now.

This week on the tipping point: The pulse of America

Our guest Kristan Vermeulen founder and CEO of Knotical Public Relations is also the host of a really cool podcast, Makers of the USA. Basically, Kristan goes out and talks to a lot of business owners. American-made, niche type of companies. She explains that her definition of a maker is a broad term, you have your woodworkers, metal workers, folks that make products but she also considers a maker to be a musician, photographer, or videographer.

The Payne point that has been such a challenge amongst these makers and their mom and pop shops is they have to utilize their personal assets or personal funds to stay afloat. And like many businesses they are having a hard time with the scarcity of materials and finding workers. Unlike big companies in this community, they find it scary to increase their product prices because they're afraid of losing customers. They don't want to miss out on the customers they already have because some sales are better than no sales. Check out the episode for the full scoop from Kristan Vermeulen!

This week’s hidden facts of finance

In June, the median home price was a record $363,000. Up 23% year over year. Better than the S&P 500! Unbelievable, with all this money a wash around the world, everything's being bid up, whether it's real estate, stocks, businesses, everything but gold actually. But it isn't better than the S&P because the S&P pays a dividend. Last I checked, every month I'm paying real estate taxes. I'm paying utility bills. A home's great, but it's a place to live. As an investment, I'll take the S&P 500 any day of the week.

Resources & People Mentioned

Kristan Vermeulen Knotical Public Relations and host of Makers of the USA

Nick Rossi and his episode on Makers of the USA

See if you qualify for a complimentary financial review from the Paynes

Connect With Ryan, Bob, and Chris

Subscribe to Payne Points of Wealth
On Apple Podcasts, On Google Podcasts, On Spotify

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Bonjour Financial Disasters, Ep #49

Saturday Aug 28, 2021

Saturday Aug 28, 2021

What's up! It's episode 49 of Payne Points of Wealth and the world is in flux. We've got the Delta variant of the Coronavirus raging, which is causing more lockdowns and disruptions in the economy. The Taliban has taken over Afghanistan, adding geopolitical risk to the global economy. In addition to that, we've got infighting on Capitol Hill. What else is new? They're looking to spend trillions of dollars. Are our taxes going to go through the roof? Is inflation just going to run wild? We're going to address that today. On the tipping point, we're going to talk about financial disasters with your financial plan. What mistakes you don't want to make, that you need to avoid at all costs. Things we've seen over and over again that you need to avoid. We're going to break it down.

You will want to hear this episode if you are interested in...

  • What our podcast & the market have in common [1:15]
  • If everything is priced to perfection and there's no risk, then there's no opportunity [4:34]
  • The French market is kicking the NASDAQ’s butt! [7:39]
  • The Tipping Point [10:08]
  • Is your 401k run by a fiduciary? [12:13]
  • Keeping your risk in check with a balanced portfolio [15:17]
  • Hidden Facts of Finance [19:48]

Where to place your concerns

The market always climbs a wall of worry. There's always gotta be a headwind because if everything is priced to perfection and there's no risk, then there's no opportunity. COVID of course is a risk right now, but we've already seen that movie, the market doesn't drop on the same news twice. 

Meanwhile, you've got this infrastructure bill, which has gone from 3.5 trillion dollars down to a half-trillion dollars of new spending spread over 10 years. That's not even going to move the meter a little bit on the market, but we do have inflation. Inflation is something we should all be concerned about.

This week on the tipping point: Financial disasters

We’re blowing the whistle on the biggest scandal in the history of the financial market since the 1900s, the mutual fund industry. We all know from every study that's been done that no money manager can outperform their underlying index. So what do they do? They take money managers and sell mutual funds and they churn the account every year, charging you more, giving you a lower return, and having you pay more taxes. If that's not a scandal, I don't know what is.

The other big issue we see right now, being in a big booming bull market is a lot of times the risk in your portfolio becomes outsized and you don't even know it. Because the market has gone up by 100% since last March when you were 50 or 60% in the market, but now you're 80, 90% in the market because there’s been so much growth. You've got to keep that risk in check. At some point, we will get a huge market sell-off or a crash and if you're not allocated correctly ahead of time, you're out of luck. Check on it right now, while things are going well, that's the time you have to make those decisions.

This week’s hidden facts of finance

In the 70s, the inflation of that decade was largely a result of the explosion in energy prices. That, to a major extent, reflected oil-producing countries refusing to be paid in the ever appreciating US dollar. Could it happen again? A lot of bad things happened in the seventies like bell-bottoms and leisure suits and Bob's got pictures to prove it, but there was definitely inflation. In fact, there was hyperinflation, but a lot of it had to do with lack of productivity growth. So it wasn't just the oil companies not producing enough oil. There were a lot of other things going on that led to hyperinflation, high-interest rates, and basically the biggest bull market in bonds.

You may be hearing a lot of arguments that we're going into the 70s again with hyperinflation. We are going to see inflation but productivity, which is a big component of what's happening right now, is going through the roof. This is not like the 70s, that's a positive that says this economy is a lot different and a lot better than it was in the 1970s. 

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There's No Reward Without Risk, But If It Seems Too Good To Be True, It Probably Is, Ep #48

Wednesday Aug 18, 2021

Wednesday Aug 18, 2021

What's up it's episode 48 pain points of wealth. And as summer's rolling along here so is the economic data. We see unemployment down to 5.4% and the economy isn’t even fully reopened yet. It's a phenomenal number! We have the unemployment benefits dropping off in September, what's that going to mean for company profits and for the economy? And inflation, inflation numbers, still looking strong, no matter what the government tells you. We're going to talk about all that today. We’re also talking about the economic data, what you can expect from earnings this year, and what you should be doing with your money! On the tipping point, where we pinpoint the Payne point having the biggest impact on your wealth, we're going to give you our rules for investing. Rules that you can apply to your portfolio to make sure that you're on your path to financial independence! Check it out!

You will want to hear this episode if you are interested in...

  • More jobs than workers to fill them! [1:15]
  • Bullishness is cooled off and a bull market doesn’t let you in [3:46]
  • Higher stakes [6:28]
  • The Tipping Point [9:08]
  • The age old, excuse why we don't want to diversify [14:20]
  • Hidden Facts of Finance [19:42]

Time passes. Markets operate. Neither cares how you think.

We recently had a client that had quite a bit of cash accumulated but didn't want us to invest it because they'd like to have some money on the sidelines in case this market pulls back. We had to explain that they're getting less than a 1% return in the money market. That they have no idea what's going to happen in the future. What if it never happens? Were they just going to let it sit on the sidelines forever? 

That's the sentiment of not only our clients but a lot of the investing public. In a big booming bull market, the biggest problem is that it doesn't let you in. There are so many professional money managers, high net worth investors, and under-invested bears and bulls who are sitting on the sidelines waiting to get the dip that came last March. They're thinking they’re going to buy stocks when they're cheap because they missed the opportunity to get in when they should have. 

That's why you always have to have a strategy. Always be fully invested. Always be invested based on your goals because the market doesn't accommodate. Time passes. Markets operate. Neither cares how you think. And if you're not in, you are missing out!

This week on the tipping point

When it comes to the finances of the families we advise, we have some definitive rules that we apply to every financial plan that we work on. Let’s discuss one of the top principles that listeners can apply to their own financial planning and investing. That being, when it comes to investing, there's no reward without risk but if it seems too good to be true, it probably is. That's why we have bubbles. People would rather invest in something that's bubblicious that sounds so good, so sexy, so hot, how could you lose? There's tremendous risk in SPACs, crypto, and hedge funds!

Anything that can go up big can go down big. Crypto is a great example of that. We've seen a wild roller coaster ride in cryptocurrencies like Bitcoin. However, it was only a few years ago in 2017 when it went down 82%. And you’d be foolish to think that any asset class that can go up hundreds of percent, can't go down 80, 90% as well and that it can't happen several times. The opposite is also true in types of investments where they guarantee a certain return. But the reality is that that return may not keep up with inflation. So you sacrifice longer-term returns for “safety”.

This week’s hidden facts of finance

With nearly 3/4 of US workers fully vaccinated, many companies are trying to get workers back in person. However, based on a recent survey, about 40% of employees say they'll resign if they have to go back into the office five days a week. I really find it surprising that companies are pushing for people to be back in the office because productivity has gone through the roof. That's a hidden fact of finance that clients I've shared that with are surprised to hear, that productivity actually went up. But think about it. You're not sitting in traffic waiting to get to the office. You're not in the airport, flying out to see a client. Eventually, we're going to do more face-to-face meetings, but I think we have this hybrid workspace going on forever.

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Mindless Diversification, Ep #47

Wednesday Aug 11, 2021

Wednesday Aug 11, 2021

It's episode 47 of Payne Points of Wealth and it's rinse, wash, repeat as earnings just keep coming in better and better as of this recording. Tech companies are coming out with earnings this week, and they're just blowing the doors off estimates. No surprises there. Meanwhile, this new variant of the COVID virus is running rampant around the globe. Is that going to slow economic growth? Is that going to be a problem for the stock market? And Bitcoin is having a revival. Is Bitcoin the currency of the future? Maybe it is now. We're going to break it all down for you. On the tipping point today, we're going to talk about mindless diversification. What mindless ways do you diversify your money that is slowing progress to your goals? We're going to tell you exactly how to diversify your money. We've got a great show for you, check it out.

You will want to hear this episode if you are interested in...

  • A bull market waits for no one [1:17]
  • Financial engineering [3:36]
  • Negativity about good news [5:27]
  • Supply & demand [8:31]
  • The Tipping Point [10:55]
  • You don’t want an all or none strategy [13:08]
  • Overlap, a risk hot spot [16:57]
  • Hidden Facts of Finance [20:43]

What investing is NOT...

You may think investing is about making money or outperforming. It's not. It's about getting that return on investment that you need to achieve to get to your goals. That's why we created the A to B approach and it's at point A where you build that foundation of passive income streams that you have to incorporate into your plan. Because you have to make the right decisions. You can make some really bad decisions on the most important income streams of your life, but do you want to?

This week on the tipping point: Mindless Diversification

One of the most critical aspects of anyone's financial plan is income. Not only do you have to have an income plan, but is your income diversified? As we know from the 2000 or so families that we manage at our firm mindless diversification is mindless. Not only is it mindless but when you have mindless diversification, it's a minefield.

You may think you have a lot of different investments and that you actually have true diversification. However, as we know Wall Street loves to sell you what's working the best, in many different forms. You may own a growth fund over here and it has a different name on it than the other growth fund you own over there, but they are all the same. Or owning something like cryptocurrency and growth stocks, a lot of times, because they're working at the same time when the music stops, they're probably all going to stop working at the same time as well. And that's not true diversification.

This week’s hidden facts of finance

The housing market's fundamentals are strong from the explosion in births around 33 years ago, consumers born then are entering their peak years for starting families and buying homes. The current situation is nothing like the bubble of the 2000s when one person was buying four houses as speculation. There's a generation that's bigger and more impactful than the boomers. They're no longer on the couch in their parents' basement. They're buying homes. They're making big money. 

One out of every three new clients that come through our door is a millennial. It's an ongoing bull market with the biggest generation, since Bob's favorite, the baby boomers. It also stands in complete contrast to all the videos out there talking about a big real estate crash coming. Based on that supply-demand demographics right now, we're probably not going to see some sort of housing crash.

Resources & People Mentioned

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