Participants: Yvonne Lewis (Host), Ryan Mack
Series Code: DAS
Program Code: DAS000016S
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00:01 What is money for?
00:02 Is it a helpful resource to use for good 00:05 or is the love of it the root of all evil? 00:08 Actually, it's both, 00:10 but God may have a different definition of success. 00:13 Real success doesn't come overnight. 00:16 It takes hard work and faithful planning. 00:20 To use your dollars well, 00:22 it takes more than a little sense. 00:26 Hello and welcome to Dollars and Sense, 00:29 I'm Yvonne Lewis 00:30 and our primary host is Ryan Mack. 00:33 Ryan Mack is a financial literacy expert. 00:36 And these programs are just amazing. 00:39 If I have to say so myself, 00:41 that's because I'm basically getting taught. 00:44 It's really, really some good information 00:48 so tell everybody you know to tune into Dollars and Sense. 00:51 Hey, Ryan. That's right. 00:53 Always good to be here. Yes, indeed. 00:54 I'm having a good time on the series 00:55 and just praise God for it. 00:58 God is so good. 00:59 It's so amazing to me 01:01 that everything we need is in the Word. 01:03 It's in the Word. 01:04 And financial information is in the word. 01:07 So what's our scripture today? 01:08 Well, the scripture for the day is 1 Timothy 6:19 01:12 because today is really all about investing. 01:15 And many times we have learned a lot, 01:19 you can learn a lot from history, 01:20 learn a lot from the Word. 01:21 Again, the Word is timeless. Right. 01:23 And as we go through history, 01:25 we'll see different ebbs and flows of the stock market 01:28 and the real estate market and all these different things, 01:30 and to help get a firm grasp 01:32 on exactly how to go about investing, 01:34 well, the Word gives us a good indication 01:36 and just like as we did 01:37 on the other episode with housing, 01:39 I'm going to go back to 2000 01:41 and give a historical lesson of 01:43 what we could have done to avoid the 2000 recession 01:46 if we were to listen to the Word 01:48 in terms of how we actually invested our money. 01:50 Wow. 01:52 Using the Christ way of investing. 01:53 Yes. 01:54 You know, you would never think that the Word has, 01:57 you know, it doesn't say stocks and bonds 01:59 or anything like that. 02:00 Right. But it gives principles. 02:02 Exactly. 02:03 That can be extrapolated and applied 02:05 to what we're doing. 02:06 Exactly. 02:07 So 1 Timothy 6:19 says, 02:10 "Laying up in store for themselves 02:12 with a good foundation against the time to come, 02:16 that they may hold on to eternal life." 02:20 So they have to lay up a store for themselves. 02:23 You have to put things away. 02:25 And when you're thinking about the future, 02:27 you've got to lay some things away 02:28 so you know what, let's put some things... 02:30 Don't do that instant gratification. 02:32 We can have some delayed gratification 02:35 and put some things away. 02:36 So when you go back to 2000, in 1999, 02:41 I just started working as a stock trader. 02:44 And it was a small stock trading firm in Detroit, 02:46 and in 2000, I went to Wall Street, 02:48 I became a stock trader 02:50 at the largest NASDAQ trading firm in the world. 02:52 And at that time, we were going around and in October 2000, 02:57 and right after I started my job in Wall Street, 03:00 the market pretty much few months later just tanked. 03:03 It just tanked. 03:04 And people were going crazy and they couldn't believe it 03:07 'cause before that it was almost a time of Euphoria. 03:10 I mean from, I would say, '96 to '99 and 2000 area, 03:16 people were buying stocks. 03:17 I had friends of mine 03:19 who were day traders, investors, 03:20 they would buy stocks, 03:22 buy stocks in the morning at 9:30 in the open, 03:25 they would go play basketball, 03:27 then they would come back home 03:28 and sell their stocks and make a ton of money. 03:29 That's how they were going about trading. 03:31 Are you kidding me? 03:32 It literally was just buy in the morning, 03:34 sell in the afternoon, make your money and walk away. 03:36 That's how people were making money. 03:37 People were becoming independently wealthy 03:39 basically by not... 03:41 They weren't researching any investments, 03:43 they were just, 03:44 'cause the market was just going up and up and up 03:46 and it just seemed as 03:48 if there was not going to be any downfall. 03:50 I remember various stocks, Bluestone Software, 03:55 Ariba Technology, Puma Technology, 03:57 all of these technology type stocks. 03:59 And that back then, 04:01 the Internet really started to get a good basis. 04:03 Well, so people weren't really too familiar with the Internet, 04:06 weren't really familiar, 04:08 didn't know exactly how it worked, 04:09 so people were buying stocks 04:10 that didn't even have any bottom line, 04:12 they had no revenue coming in, 04:13 they didn't have any history of making revenue, 04:15 and they just knew, "Hey, you know what? 04:17 This is a good stock. So let's go ahead and buy." 04:19 And guess what? 04:20 They made a ton of money until the market fell out. 04:24 And so here in 2000 04:27 we had what they call the Internet Bubble. 04:29 And the Internet Bubble essentially meant 04:31 when individuals were buying stocks 04:33 and the bubble burst and the bottom fell out. 04:35 So what was happening in 2000 04:38 that really just exemplified what was going on, 04:40 well, people were very greedy. 04:42 They were greedy, 04:44 they didn't know about investments, 04:46 they just wanted more money 04:47 and they knew they could make a ton of money. 04:49 They were getting rich quick. 04:52 They knew that, "Hey, you know what, 04:54 if I buy stocks in the morning, go play basketball, 04:58 when I come back home, I can sell all my stocks, 05:00 I'm gonna to make a ton of money 05:01 and I'm gonna get rich." 05:03 And people actually did get rich quick 05:04 until the bottom fell out. 05:06 And then they were just buying stocks 05:07 without any knowledge. 05:09 It was all speculation. 05:10 In '99, 2000, I was trading penny stocks 05:13 and I would be writing end derivatives, 05:16 I would deal a little bit with that within my firm." 05:19 And I just saw the flows of orders 05:21 just coming in and coming in. 05:23 I mean it was just... 05:25 Some days you couldn't even, 05:26 literally from 9:30 to 4 o'clock, 05:27 you couldn't even leave your chair 05:29 because of the volume 05:31 that was going on in the stock market. 05:33 So as we know from 2000 to 2004, 05:38 tons of money was lost. 05:40 People were going crazy. They were stressed out. 05:43 But what does the Word say about greedy, 05:46 getting rich quick, 05:47 and buying stocks without knowledge? 05:49 Word, and greed, it talks about Proverbs 15:27, 05:52 "A greedy man brings trouble to his family." 05:56 So if you're greedy 05:58 and the only thing you're concerned about 05:59 is making money, 06:01 and you just want to go in 06:03 and you just want to get all the money in the world 06:04 and you just want to make as much money as possible 06:06 without any thought or with any budget or anything, 06:09 you're gonna bring trouble to your family 06:10 if greed is your motivation, 06:13 if Christ is not your motivation. 06:15 A good indication of greed is 06:17 if you ask yourself what is your motivation, 06:19 as I just said, 06:20 are you motivated to get money 06:23 or are you motivated to follow Christ? 06:25 And so if you ask yourself that basic question, 06:27 if money is your motivator, 06:29 you could have a good sign of being greedy. 06:32 But if Christ is your motivator, 06:33 He's going to tell you exactly 06:35 how much money you need in order to fulfill His will. 06:37 But if money is your motivator, then that's, you know what, 06:41 maybe I better back off 06:42 and really just try to figure out 06:44 as opposed to chasing money 06:45 as we talked about in the other episode 06:46 how people who chase money, when they found it, 06:50 ended up being broke anyway. 06:51 So greedy, the Word talked about that, 06:53 getting rich quick, Proverbs 28:22. 06:56 "He that hasteth to be rich hath an evil eye, 07:00 and considereth not 07:01 that poverty shall come upon him." 07:04 So if you get rich quick, 07:06 if someone comes in front of you 07:08 and says, "Hey, you know what, you're going to get rich 07:09 if you just invest here, you just invest there." 07:12 Now they have these thing called penny stocks, right? 07:15 And it's basically is scheme 07:17 and the scheme plays out like this. 07:20 You get an email, in your account, 07:23 you know, the average person 07:24 didn't know a lot about stocks or penny stocks, 07:26 you get this email and this email says 07:29 this stock is trading at $0.1. 07:33 "Oh, wow, that's a penny, okay. Oh, well, that's pretty cheap. 07:37 I can, you know, 07:38 put a dollar on that and buy 100 shares." 07:40 Right. 07:41 "So what if I put $10 on it? 07:43 What if I put $100 dollars on it? 07:45 What if I put a $1,000 on it?" 07:47 But they don't really tell you the price of the stock, 07:48 that's an email, 07:50 this stock is going to go up to 0.10. 07:54 So you say, "Wait. From point 0.1 to 0.10. 07:57 That's means it's gonna go up to 10 times." 07:59 So if I put a $100, I'm going to make $1,000. 08:02 If I put a $1,000, I make $10,000. 08:04 So wait a minute, this is easy money. 08:06 This has to be good 08:08 because I'm getting an email, they're saying go buy it." 08:09 So these emails are going out time and time again, 08:13 but what happens is that 08:14 the person who sends out that email, 08:16 they have a program, when they send out this email, 08:18 and this happened a lot, a ton back in '99, 2000. 08:21 They sent out a ton of all these emails 08:23 to many individuals on the database 08:25 'cause they would data mine all of these email accounts 08:28 and they would send all those emails 08:30 and people would start buying the stock. 08:33 As a trader what I was trying to do was look for volume 08:37 and so whenever I see volume, I'll say, 08:39 "Wait a minute, in WXYZQ, what's going on in WXYZQ? 08:44 What's happening there?" 08:45 So I'm a proprietary trader. I'm trading with my stock. 08:48 I would buy a little bit through my company 08:51 because that's what we do. 08:52 We buy a little bit, see what happens. 08:53 If we lose, we're trading with the company's money 08:56 and just to see what happens. 08:57 So that would actually add more value to the stock. 09:00 So the stock actually will start moving a little bit, 09:02 it will go from 0.1 to maybe 0.2, then 0.3, 09:06 now you're excited. 09:07 Now you're at home, 09:09 you're looking at that email and say, "Hey, wait a minute." 09:10 You're calling your mother, you're calling your father. 09:11 "You need to buy this stock, it actually went up. 09:13 I just made 300% of my money." 09:15 You need to borrow some more money. 09:17 You put more money in, 09:18 but the person who sent the email out, 09:20 they already own it, they already own it, 09:22 and they're already saying 09:24 that they want to do is generate volume, 09:25 generate activity 09:27 so when you and everybody else starts 09:28 buying this stock, they're going to dump it. 09:30 It's called pump and dump. 09:31 It's the oldest and easiest trick in the book. 09:34 It's just like a pyramid scheme on Internet. 09:37 So they get you, they pump you up 09:39 to get you to buy and tell everybody else to buy. 09:42 Exactly. 09:43 And then as soon as it starts moving... 09:45 Right. They dump it. They dump it. 09:47 And the value goes through the floor 09:49 and you don't get anything. 09:51 You create the volume for the stock to move. 09:55 So they buy it at let's say 0.1, they've already owned it, 09:57 they might have owned it for a month 09:59 or so, the company... 10:00 And by the way, this company 10:02 probably has a room full of telephones 10:04 with people answering it 10:05 because it's not even a real company, right? 10:07 And that's the problem, we had these penny stocks, 10:09 many of these penny stocks hat trade on bulletin boards 10:11 and penny stock, pink sheets, 10:14 they're not really, you can't really research them, 10:15 they're not regulated, 10:17 you don't even know if it's a real company, 10:18 they're not making any money, 10:20 so they bought this stock at 0.1, 10:22 it goes up to 0.3, 10:23 now they're dumping the stock, they're selling it 10:25 because you're buying it and they're selling it, 10:27 and meanwhile, all your friends are buying it, 10:29 they sold it, it might get up 0.3 and 0.5, 10:32 and then it all of the sudden it starts fizzling down, 10:34 they've already sold it, 10:35 they've made 300% of their money. 10:37 They're done, you've still got all the stock and you say, 10:39 "Wait, what happened? 10:40 I thought it was going to go to a dime." 10:42 Next thing you know, you're out of all your money. 10:43 It's the oldest trick in the book, 10:45 it happened a lot because why? 10:47 It's a get-rich-quick scheme. Right. 10:49 And people were so greedy 10:51 that this people are preying on other people's greed. 10:53 Yeah. 10:54 Just like in financial predators, 10:56 I mean it's amazing 10:57 when you see the devil working, right? 10:59 When the devil works, he preys upon all the things, 11:03 those earthly, those desires of the flesh 11:06 that make us want to do things 11:08 that are outside of what God wants us to do 11:10 and has desired in our life. 11:11 So like the payday loan or the cash advance, 11:15 come get this free money, 11:17 the same thing with these penny stocks. 11:18 Let us go ahead and do the pump and dump, 11:20 get you all greedy, 11:21 get you all excited about getting rich quick, 11:23 and then we're going to play on what you want, 11:25 next thing you know 11:26 you're gonna lose all your money. 11:27 I know a lot of people that lost a ton of money 11:29 and actually, moving on until days after that 11:31 and money and that. 11:33 And then the lastly, speculation, 11:34 And that Ecclesiastes 5:13-14 it says, 11:38 "There's another serious problem 11:40 I have seen everywhere 11:41 savings are put into risky investments 11:43 that turn sour 11:44 and soon there's nothing left to pass on to one's son. 11:47 The man who speculates is soon back 11:49 where he began with nothing. 11:51 This is, as I said, a very serious problem 11:54 for all his hard work had been for nothing, 11:56 he has been working for the wind. 11:58 It is all swept away. 12:00 All the rest of his life he is under a cloud, gloomy, 12:02 discouraged, frustrated, and angry." 12:04 This is exactly what happened 12:06 when people were buying all of these stocks 12:08 on pure speculation, 12:10 they didn't research them, 12:11 they didn't know about investing, 12:12 and so what we're gonna do, 12:14 we're gonna over today 12:15 over some Christ-like ways of making sure 12:17 that if you start investing, 12:20 you're gonna mitigate and lessen the odds 12:22 of the amount of you actually losing all your money 12:25 and do it in a smart way, in a very intelligent way. 12:30 Luckily, the Word talks about that as well. 12:33 And so, you know, a lot of people will say, 12:35 "You know, Ryan, well, 12:37 how does the Word talk about investments?" 12:38 Well, remember Enron? Yeah. 12:41 Enron the organization. Yeah, yeah. 12:43 Well, people put all their money into Enron. 12:44 Yes. 12:46 And they were invested in Enron and Enron failed, it collapsed. 12:48 Right. 12:50 Well, one of the major principles of investing 12:53 is making sure that we're gonna go forward, 12:57 but then we're going to go back to make sure 12:58 you can have a proper foundation, 12:59 but talking about Enron, 13:01 one of the major principles is diversification. 13:04 So if you diversify your assets and making sure 13:07 that you don't have all your eggs in one basket, 13:08 everyone's heard of that, and it's funny too, 13:10 sometimes if you have a worldly saying 13:13 and people will believe that. 13:15 But if something is from the Bible, 13:17 they're not as quick to believe that. 13:18 That is so true. 13:20 Because they say, "No, that's just from the Bible." 13:21 Right. 13:22 But check this out, check out Ecclesiastes 11:2 that says, 13:27 "Give a portion to seven, 13:28 and also to eight for thou knowest not 13:31 what evil shall be upon the earth." 13:34 So the Word is telling you 13:36 to give a portion to seven and also to eight, 13:38 don't put all your eggs in one basket. 13:39 Don't, you know, divide up your portions 13:41 because you never know what evil lurks upon the earth. 13:43 If the people at Enron 13:45 would have actually read this scripture, 13:47 they would have been saying this, "You know what? 13:50 The Word says I shouldn't put all my money in one place, 13:52 Enron, it should be divided." 13:54 Remember Madoff? Oh, yeah. 13:57 Bernie. Yeah, Bernie Madoff. 13:58 He stole a lot of individual's money, why? 14:00 Because people gave him all their money, 14:03 and at the end of the day, 14:04 they didn't divide their portions 14:06 into seven and eight, 14:07 if you lost all your money with Madoff, 14:10 you aren't reading scripture. 14:12 If you lost maybe one-seventh of your money with Madoff, 14:16 you're probably read scripture 14:17 'cause the scripture says 14:19 that divide your portion into seven and eight, 14:21 give a portion to him 14:22 and then also divide it up amongst other individuals. 14:25 So this is, again, it excites me to see 14:29 that we have so many things and so many principles 14:32 that are actually brought out by fiscal responsibility 14:35 and by the Word and what the Word actually says 14:38 that we should be doing to make sure 14:40 that we can have a proper foundation of them. 14:43 Right, right. And that's what we need. 14:45 You know, often we want to do certain things, 14:48 but we don't know how. 14:50 And if the Word tells you, 14:51 "Give a portion to seven, also to eight," 14:54 one here, one here, one, diversify. 14:56 Exactly. That is so good. 14:58 That is such a good principle. 15:00 And so now in order for us to invest, okay, 15:05 we have to make sure 15:06 that we can have 15:09 a sustainable level of investment. 15:11 Right. Okay. 15:12 So in another episode 15:14 we talked about budgeting, okay, 15:16 and the budget is the most critical component 15:18 of every single financial strategy. 15:20 The budget is going to tell you exactly 15:23 how much you have to invest. 15:25 And so after you invest, 15:26 you put together your budget and you have a sound budget, 15:29 and now you actually have written out your goals 15:31 of what you're investing for. 15:33 See, a lot of individuals have not written these out, 15:35 they're chasing the money, 15:37 but they're not chasing 15:39 what God has prepared in their life. 15:41 So do you feel that God 15:44 wants you to have educated children? 15:46 So you need to invest for college. 15:47 Does God have a house in store for you? 15:49 You need to save up money for your home. 15:51 Does God have in store for you a new business? 15:53 You need to be saving up money for your business. 15:55 Does God have in store for you a retirement? 15:58 Okay, so now you might want to look at some stocks 16:00 because that can be something, could be something 16:02 that you want to put into an investment strategy 16:04 if you have not written out your strategy. 16:07 And in budgeting, we actually talked about and discussed 16:09 exactly how to get your, what I call the finish line, 16:12 exactly how you get to the total dollar amount 16:15 that's going to help sustain you during retirement. 16:17 There's a way. 16:19 And your budget helps you get there 16:20 and the stocks is just a vehicle 16:22 that helps you get along the way. 16:23 So when you figure out your budget 16:26 and you figure out your goals, 16:27 let's just say now you're ready to start 16:29 doing some investing, okay. 16:31 And for those individuals who are ready to invest, 16:34 you know, what should I be putting my money in? 16:37 How should I go about diversifying my assets? 16:41 Well, there are few things you can actually look at 16:43 that I would like to give individuals 16:44 that they should, again, please do your own research. 16:47 Do your own research 16:48 and then I'm going to give some tips 16:50 on how to select the right financial advisor 16:52 and the right questions to ask 16:53 because that is a critical component as well. 16:57 And make sure you get the right assistance. 16:58 In the abundance of counselors, there's victory, 17:01 that's what the Word says. 17:02 So we have to get the right counselors as well. 17:05 So as we put together our budget, 17:08 there's a thing called dollar cost average 17:10 investment strategy, okay. 17:12 Your budget is going to tell you, 17:14 let's just say I have $200 left over 17:16 or a $100 left over every single month 17:19 and after this $100 17:21 I've got my emergency fund together, 17:23 that means I've got my, 17:24 you know, 9 to 12 months of living expenses saved, 17:26 so in case there's a rainy day 17:27 because you don't want to have to dip into your stocks 17:32 just because your roof is leaking. 17:34 You don't want to dip into your bonds or sell your home 17:38 just because your car broke down 17:39 and you have to fix your car. 17:41 So you have to have enough liquidity 17:43 in your emergency fund 17:44 to sustain any ebbs and flows that happen in our lives. 17:47 We know, if there's one consistent thing in our lives, 17:50 it's inconsistency, right? 17:51 Right. And it's emergency. 17:53 So we have to have that emergency fund put in place, 17:55 we have to have that budget put in place. 17:57 We have to make sure that we know 17:58 what we're investing for. 18:00 So again, how much money 18:02 you're putting into your five to nine investment plan, 18:05 that also is a level of investment 18:07 for your children, okay. 18:09 So the five to nine, 18:10 I love this investment strategy for children 18:12 because essentially 18:13 it's a tax deferred investment strategy 18:15 that allows you to, well, 18:16 if you put money into a savings account, 18:18 let's say you're being taxed on, 18:20 your income is $50,000 a year, 18:23 many states allow you to put up to $5,000 18:25 into this investment plan for your children, 18:27 it's invested in a very conservative 18:29 means of investment, 18:30 meaning bonds or treasury bonds or whatnot, 18:33 they give a very minimal return, 18:34 but it's supposed to be conservative 18:36 because this is a college savings account 18:38 not really an account 18:39 that's going to give you the big bang. 18:40 You're just trying to put money aside 18:42 to make sure that your child actually has it 18:44 when they go to school. 18:45 And the beautiful part about it is that 18:47 when you're investing for the five to nine plan, 18:49 that one means of investing for college 18:51 is that if your income is $50,000 a year, 18:57 if you put $5,000 a year into this five to nine plan, 19:01 you'll only be taxed on $45,000 a year. 19:04 So now that estimate maybe $1,500 a year savings 19:09 that you saved in terms of your tax bill. 19:11 So now that money grows tax free. 19:13 Now if you take that money and your child goes to school 19:16 and you pull that money out and say, 19:18 "All right, how much am I gonna have to pay?" 19:19 Well, the beautiful part about the five to nine plan 19:21 is every state has a different one, 19:23 so we have to research what your state has, 19:25 when you take that money out, that money, 19:27 as long as it goes towards college expenses, 19:29 that's also tax free. 19:31 So you don't have to pay any taxes on that. 19:33 So one of the best ways 19:35 when you're investing is figuring out 19:36 how can I minimize my tax bill. 19:38 Right. 19:39 Okay, and that's what a lot of the wealthy do, right? 19:41 It's about minimizing taxes, 19:43 making sure that as we are going through our lives, 19:47 that's why people start businesses 19:48 because you get through the tax breaks, 19:50 people use their qualified investment accounts, 19:52 meaning your retirement accounts, 19:54 your individual retirement accounts, 19:56 your 401ks, 403bs, 19:58 these are different investments 20:00 that you can use to maximize 20:02 your tax deductions and minimize your tax bill. 20:05 You want to save money at the end of the day. 20:06 Right. 20:07 So that's one means of investment. 20:12 Stocks, bonds, business, real estate, 20:17 all these are different means of investment 20:18 and there's tons more. 20:20 You have derivatives as options, 20:21 you have different means, 20:23 you have different collectibles, 20:25 you might be able to invest in stamps 20:27 or you can invest in gold, 20:28 individuals buy gold coins or silver, 20:31 all these are means of investment, 20:32 which one is the best one, according to Ecclesiastes, 20:35 divide your portion in seven, eight. 20:37 You want to buy a little bit in all of them. 20:40 Okay, and so when you're investing, 20:42 now I'll give one quick tip because I know a lot of folks, 20:44 "You know, Ryan, just give me something 20:47 that is gonna help me diversify my account." 20:49 And the beautiful part about it 20:51 is that now they have various products out there 20:53 that are available that helps you diversify, okay. 20:56 So if I buy one stock, let's just say, the stock is... 21:01 And I'm not trying to give a stock on here 21:03 because I don't want individuals to buy it. 21:05 Right. 21:06 Let's just say 21:07 this is a stock of water, right? 21:09 Okay. 21:10 So this water stock, 21:12 you know, buy itself if I just buy this one stock, 21:17 it's going to be pretty risky 21:19 because this stock could go down, it can go up, 21:21 you never know what's going to happen. 21:23 But if I buy two stocks water and paper, 21:26 that becomes less risky 21:28 because water might decrease 21:29 while paper goes up in value, okay. 21:32 But if buy three stocks, water, paper, pen, and book, 21:36 now I'm diversified 21:37 because now I'm essentially what they call eliminating 21:40 what they call unsystematic risk, 21:42 risk that is only inherent to that one individual stock. 21:45 So when you invest, 21:47 you want to make sure you buy as many stocks as possible. 21:49 Is it possible to buy all stocks? 21:54 I'm asking that question, 21:55 is it possible to every single stock? 21:57 Oh, no. Most people say no. 22:00 Actually it's yes. Is it? 22:01 You can buy every single stock. 22:02 See that tells you how much I know about the stock. 22:04 Well, most people say no. 22:05 Most people would say 22:07 you cannot buy every single stock, 22:08 but they have these things out 22:09 that are called exchange traded funds. 22:11 See when stocks are traded, 22:12 they're called a stock exchange. 22:13 Right. Okay. 22:15 And I used to be a stock... 22:16 I used to be the guy when people look in television 22:18 they see all these people going buy, buy, go, and sell, sell. 22:20 Yeah, making all the noise in Wall Street. 22:22 Well, I used to be on the floor. 22:24 But I used to be down there 22:25 and I was reporting at the time, 22:27 but I always was a NASDAQ trader. 22:30 So I was doing the exact same thing 22:31 but behind a computer screen. 22:33 Okay. 22:34 So the way the system is set up is called the stock exchange. 22:38 When you put an order in for a stock, 22:41 that order goes to a broker, a stock broker, 22:45 the broker takes the order, 22:47 they then send that order up to a stock trader, 22:50 and the trader takes that order 22:52 and they try to match it up 22:53 with someone across the country or next door 22:56 or wherever who wants to buy. 22:58 So you want to sell water, someone else wants to buy it, 23:01 that broker's job is to connect. 23:05 So when that broker connects those orders, 23:10 they make an exchange, 23:12 that's why they call it stock exchange. 23:13 Okay. 23:15 So let's just say you're in California 23:18 and the other person is in New York, 23:21 let's say I'm in Michigan as a stock trader. 23:25 I'll match up the order, who wants to buy water, 23:28 this person wants to sell it, 23:29 I match it up and as soon as I match it up, 23:32 there's a little thing 23:33 at the bottom of the screen that it prints. 23:35 So when, you know, you're watching television 23:37 and the news comes on 23:38 and they have the markets and all that stuff. 23:41 Oh, yeah, yeah, yeah. 23:42 A lot of things at the bottom of the screen 23:44 start flashing across. 23:45 The moving screen like a marquee? 23:46 Yeah, exactly. 23:48 Well, that ticker essentially meant that a trader 23:50 just matched up in order and it printed, 23:54 they call it printed or it hit the tape. 23:56 So as soon as that order hits the tape, 23:58 it tells a price that it hits a tape 24:00 and then the tape scrolls across your screen at home. 24:03 There's only a few things that go on the news 24:05 every single day, you've got the sports, weather, 24:08 but they also have the financial markets, 24:10 and it is important enough 24:11 that individuals see this every single day. 24:14 So that exchange, 24:15 they have all these different stocks 24:17 are a part of an exchange, 24:19 you can buy all those stocks 24:20 but they call it exchange-traded funds, 24:23 so essentially what it is it's a computer generated type model 24:26 where you go out 24:27 and you purchase this one stock, 24:28 in one security that emulates 24:30 the entire exchange and how it trades. 24:32 It's basically computer run and it's a great way 24:35 to diversify your asset but only... 24:37 And I'm saying, please, I want everyone to listen, 24:40 do not start an investment strategy 24:43 if you have not had your emergency fund, 24:44 if you don't have a budget, 24:46 and if you can't commit to every single month 24:49 putting in a $100 or $200 into that, 24:53 whatever amount it is, you can put $5 a month. 24:57 If your budget says I only have $5 extra a month 25:00 after my emergency fund is full, 25:02 then please go ahead, put that $5 a month 25:04 because there's a way to put money 25:05 in that brokerage account to the tune of $5 a month. 25:08 So again, we want to just make sure that 25:11 we're cautious about not overextending ourselves 25:15 and having to liquidate and selling stocks 25:16 just because our car broke down. 25:18 Right. So let's say I want to get some stock. 25:21 Right. Where do I go? 25:24 You have to go to a stock broker. 25:25 Okay, there's things like 25:27 E-trade, Scottrade, those are online. 25:29 Right. Do you recommend those? 25:32 Well, again, it all depends on if you can make sure 25:35 you have the right amount of knowledge, okay. 25:39 So if you want to get a financial advisor, okay, 25:42 I have a list of questions for the folks at home to ask 25:45 to make sure if that financial advisor 25:48 is the right advisor for them. 25:49 Good. 25:51 The first question is do you have a CFP? 25:52 Certified Financial Planner, 25:53 it's a great designation, that person knows the stuff. 25:57 The second question is can I see a copy of your ADV? 26:01 It's short for advisor, but essentially, 26:03 this is a means of making sure 26:05 that you can see exactly how this advisor charges. 26:08 I recommend registered investment advisor 26:10 because they are fee only, they're not commission driven, 26:14 and they are truly interested 26:15 and really only giving you the best advice 26:19 without trying to make you sell 26:20 your stocks are for commission only. 26:23 Can I get some referrals, at least three referrals? 26:27 What's your area of expertise? 26:28 Many advisors have different areas of expertise. 26:32 And what sort of clients do you service? 26:34 That's huge because many different clients 26:35 are being served in various areas. 26:38 And what's your investment philosophy? 26:40 Many individuals have different philosophies. 26:42 It may not match up with who you're suited for. 26:45 That's good. 26:46 That's good 'cause I'm kind of like... 26:48 And you can go online and find that. 26:49 Yes, you can go online. Thank you. 26:51 And now we got our takeaway. Absolutely. 27:00 I was watching CNN 27:02 and I saw an older gentleman being interviewed 27:04 who was worth over $2 million. 27:06 That might not sound amazing to you, 27:08 but it is very amazing when I learned 27:10 that he had never earned in his life over $11 an hour. 27:13 He made a practice of investing his money 27:15 and living beneath his means. 27:17 He made sure to include 27:18 another monthly bill to pay himself 27:20 within a savings or investment account on a monthly basis. 27:24 Investing is not just for the rich 27:25 but for all income and age levels. 27:28 The less you earn, 27:29 the more important it is to be mindful of the expenditures. 27:32 Less income means less financial protection 27:34 to provide a financial cushion during setbacks, 27:36 like job loss, salary reduction, 27:39 rising gas prices, or medical emergencies. 27:42 Regardless of your income or financial position, 27:44 it is up to you to make the decision to begin saving 27:47 toward financial independence today. 27:49 If you have any questions, 27:50 email me at dollarsandsense@3abn.org 27:53 and chat with us 27:55 on our Dare to Dream Network Facebook page. 27:56 As always, be the change and remember, 27:59 the purpose of life is a life full of purpose. 28:01 Be blessed. |
Revised 2021-05-19