What is money for?
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Is it a helpful
resource to use for good
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or is the love of it
the root of all evil?
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Actually, it's both,
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but God may have a
different definition of success.
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Real success
doesn't come overnight.
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It takes hard work
and faithful planning.
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To use your dollars well,
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it takes more
than a little sense.
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Hello and welcome
to Dollars and Sense,
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I'm Yvonne Lewis
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and our primary
host is Ryan Mack.
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Ryan Mack is a
financial literacy expert.
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And these
programs are just amazing.
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If I have to say so myself,
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that's because I'm
basically getting taught.
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It's really, really
some good information
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so tell everybody you know
to tune into Dollars and Sense.
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Hey, Ryan. That's right.
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Always good to be
here. Yes, indeed.
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I'm having a good
time on the series
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and just praise God for it.
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God is so good.
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It's so amazing to me
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that everything we
need is in the Word.
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It's in the Word.
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And financial
information is in the word.
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So what's our scripture today?
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Well, the scripture for
the day is 1 Timothy 6:19
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because today is
really all about investing.
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And many times we
have learned a lot,
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you can learn a
lot from history,
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learn a lot from the Word.
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Again, the Word
is timeless. Right.
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And as we go through history,
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we'll see different ebbs
and flows of the stock market
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and the real estate market
and all these different things,
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and to help get a firm grasp
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on exactly how to
go about investing,
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well, the Word
gives us a good indication
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and just like as we did
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on the other
episode with housing,
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I'm going to go back to 2000
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and give a historical lesson of
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what we could have done
to avoid the 2000 recession
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if we were to listen to the Word
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in terms of how we
actually invested our money.
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Wow.
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Using the Christ
way of investing.
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Yes.
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You know, you would
never think that the Word has,
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you know, it
doesn't say stocks and bonds
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or anything like that.
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Right. But it gives principles.
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Exactly.
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That can be
extrapolated and applied
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to what we're doing.
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Exactly.
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So 1 Timothy 6:19 says,
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"Laying up in
store for themselves
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with a good foundation
against the time to come,
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that they may hold
on to eternal life."
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So they have to lay up
a store for themselves.
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You have to put things away.
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And when you're
thinking about the future,
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you've got to
lay some things away
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so you know what,
let's put some things...
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Don't do that
instant gratification.
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We can have some
delayed gratification
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and put some things away.
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So when you go
back to 2000, in 1999,
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I just started
working as a stock trader.
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And it was a small
stock trading firm in Detroit,
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and in 2000, I
went to Wall Street,
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I became a stock trader
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at the largest NASDAQ
trading firm in the world.
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And at that time, we were going
around and in October 2000,
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and right after I
started my job in Wall Street,
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the market pretty much
few months later just tanked.
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It just tanked.
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And people were going crazy
and they couldn't believe it
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'cause before that it was
almost a time of Euphoria.
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I mean from, I would
say, '96 to '99 and 2000 area,
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people were buying stocks.
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I had friends of mine
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who were day traders, investors,
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they would buy stocks,
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buy stocks in the
morning at 9:30 in the open,
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they would go play basketball,
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then they would come back home
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and sell their stocks
and make a ton of money.
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That's how they
were going about trading.
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Are you kidding me?
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It literally was
just buy in the morning,
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sell in the afternoon,
make your money and walk away.
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That's how people
were making money.
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People were becoming
independently wealthy
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basically by not...
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They weren't
researching any investments,
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they were just,
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'cause the market was
just going up and up and up
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and it just seemed as
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if there was not
going to be any downfall.
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I remember various
stocks, Bluestone Software,
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Ariba
Technology, Puma Technology,
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all of these
technology type stocks.
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And that back then,
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the Internet really
started to get a good basis.
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Well, so people weren't really
too familiar with the Internet,
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weren't really familiar,
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didn't know
exactly how it worked,
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so people were buying stocks
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that didn't even
have any bottom line,
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they had no revenue coming in,
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they didn't have any
history of making revenue,
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and they just knew,
"Hey, you know what?
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This is a good stock.
So let's go ahead and buy."
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And guess what?
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They made a ton of money
until the market fell out.
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And so here in 2000
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we had what they
call the Internet Bubble.
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And the Internet
Bubble essentially meant
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when individuals
were buying stocks
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and the bubble burst
and the bottom fell out.
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So what was happening in 2000
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that really just
exemplified what was going on,
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well, people were very greedy.
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They were greedy,
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they didn't know
about investments,
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they just wanted more money
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and they knew they
could make a ton of money.
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They were getting rich quick.
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They knew that,
"Hey, you know what,
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if I buy stocks in the
morning, go play basketball,
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when I come back home,
I can sell all my stocks,
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I'm gonna to make a ton of money
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and I'm gonna get rich."
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And people
actually did get rich quick
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until the bottom fell out.
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And then they
were just buying stocks
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without any knowledge.
00:05:07.80\00:05:09.14
It was all speculation.
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In '99, 2000, I was
trading penny stocks
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and I would be
writing end derivatives,
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I would deal a little bit
with that within my firm."
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And I just saw
the flows of orders
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just coming in and coming in.
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I mean it was just...
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Some days you couldn't even,
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literally from
9:30 to 4 o'clock,
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you couldn't
even leave your chair
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because of the volume
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that was going on
in the stock market.
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So as we know from 2000 to 2004,
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tons of money was lost.
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People were going
crazy. They were stressed out.
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But what does the
Word say about greedy,
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getting rich quick,
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and buying stocks
without knowledge?
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Word, and greed, it
talks about Proverbs 15:27,
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"A greedy man brings
trouble to his family."
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So if you're greedy
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and the only thing
you're concerned about
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is making money,
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and you just want to go in
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and you just want to get
all the money in the world
00:06:03.09\00:06:04.43
and you just want to
make as much money as possible
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without any thought or
with any budget or anything,
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you're gonna bring
trouble to your family
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if greed is your motivation,
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if Christ is
not your motivation.
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A good indication of greed is
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if you ask yourself
what is your motivation,
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as I just said,
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are you motivated to get money
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or are you
motivated to follow Christ?
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And so if you ask
yourself that basic question,
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if money is your motivator,
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you could have a
good sign of being greedy.
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But if Christ is your motivator,
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He's going to tell you exactly
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how much money you need
in order to fulfill His will.
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But if money is your motivator,
then that's, you know what,
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maybe I better back off
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and really just
try to figure out
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as opposed to chasing money
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as we talked about
in the other episode
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how people who chase
money, when they found it,
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ended up being broke anyway.
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So greedy, the
Word talked about that,
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getting rich
quick, Proverbs 28:22.
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"He that hasteth to
be rich hath an evil eye,
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and considereth not
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that poverty
shall come upon him."
00:07:01.75\00:07:04.15
So if you get rich quick,
00:07:04.22\00:07:06.55
if someone comes in front of you
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and says, "Hey, you know
what, you're going to get rich
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if you just invest
here, you just invest there."
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Now they have these thing
called penny stocks, right?
00:07:12.33\00:07:15.86
And it's basically is scheme
00:07:15.90\00:07:17.70
and the scheme
plays out like this.
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You get an
email, in your account,
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you know, the average person
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didn't know a lot
about stocks or penny stocks,
00:07:24.67\00:07:26.68
you get this email
and this email says
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this stock is trading at $0.1.
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"Oh, wow, that's a penny, okay.
Oh, well, that's pretty cheap.
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I can, you know,
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put a dollar on
that and buy 100 shares."
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Right.
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"So what if I put $10 on it?
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What if I put
$100 dollars on it?
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What if I put a $1,000 on it?"
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But they don't really tell
you the price of the stock,
00:07:47.10\00:07:48.90
that's an email,
00:07:48.93\00:07:50.27
this stock is
going to go up to 0.10.
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So you say, "Wait.
From point 0.1 to 0.10.
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That's means it's
gonna go up to 10 times."
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So if I put a $100,
I'm going to make $1,000.
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If I put a
$1,000, I make $10,000.
00:08:02.24\00:08:04.38
So wait a minute,
this is easy money.
00:08:04.41\00:08:06.68
This has to be good
00:08:06.75\00:08:08.08
because I'm getting an email,
they're saying go buy it."
00:08:08.12\00:08:09.85
So these emails are
going out time and time again,
00:08:09.88\00:08:13.12
but what happens is that
00:08:13.15\00:08:14.49
the person who
sends out that email,
00:08:14.52\00:08:16.62
they have a program,
when they send out this email,
00:08:16.66\00:08:18.46
and this happened a
lot, a ton back in '99, 2000.
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They sent out a
ton of all these emails
00:08:21.36\00:08:23.70
to many
individuals on the database
00:08:23.77\00:08:25.73
'cause they would data
mine all of these email accounts
00:08:25.77\00:08:28.57
and they would
send all those emails
00:08:28.60\00:08:30.41
and people would
start buying the stock.
00:08:30.44\00:08:33.58
As a trader what I was
trying to do was look for volume
00:08:33.61\00:08:37.18
and so whenever I
see volume, I'll say,
00:08:37.25\00:08:39.35
"Wait a minute, in
WXYZQ, what's going on in WXYZQ?
00:08:39.38\00:08:44.49
What's happening there?"
00:08:44.52\00:08:45.85
So I'm a proprietary trader.
I'm trading with my stock.
00:08:45.89\00:08:48.66
I would buy a little
bit through my company
00:08:48.69\00:08:51.03
because that's what we do.
00:08:51.06\00:08:52.39
We buy a little
bit, see what happens.
00:08:52.43\00:08:53.80
If we lose, we're
trading with the company's money
00:08:53.83\00:08:56.40
and just to see what happens.
00:08:56.43\00:08:57.77
So that would actually
add more value to the stock.
00:08:57.80\00:09:00.17
So the stock actually
will start moving a little bit,
00:09:00.20\00:09:02.30
it will go from 0.1
to maybe 0.2, then 0.3,
00:09:02.34\00:09:06.11
now you're excited.
00:09:06.14\00:09:07.61
Now you're at home,
00:09:07.64\00:09:08.98
you're looking at that email
and say, "Hey, wait a minute."
00:09:09.01\00:09:10.35
You're calling your mother,
you're calling your father.
00:09:10.38\00:09:11.71
"You need to buy this
stock, it actually went up.
00:09:11.75\00:09:13.35
I just made 300% of my money."
00:09:13.38\00:09:15.88
You need to
borrow some more money.
00:09:15.92\00:09:17.25
You put more money in,
00:09:17.32\00:09:18.65
but the person who
sent the email out,
00:09:18.69\00:09:20.02
they already own
it, they already own it,
00:09:20.06\00:09:22.86
and they're already saying
00:09:22.89\00:09:24.26
that they want to
do is generate volume,
00:09:24.29\00:09:25.63
generate activity
00:09:25.66\00:09:27.00
so when you and
everybody else starts
00:09:27.03\00:09:28.33
buying this stock,
they're going to dump it.
00:09:28.36\00:09:30.57
It's called pump and dump.
00:09:30.60\00:09:31.93
It's the oldest and
easiest trick in the book.
00:09:31.97\00:09:34.80
It's just like a
pyramid scheme on Internet.
00:09:34.84\00:09:37.11
So they get
you, they pump you up
00:09:37.14\00:09:39.54
to get you to buy and
tell everybody else to buy.
00:09:39.57\00:09:42.21
Exactly.
00:09:42.24\00:09:43.58
And then as soon
as it starts moving...
00:09:43.65\00:09:45.38
Right. They dump
it. They dump it.
00:09:45.41\00:09:47.62
And the value
goes through the floor
00:09:47.65\00:09:49.95
and you don't get anything.
00:09:49.98\00:09:51.32
You create the volume
for the stock to move.
00:09:51.35\00:09:54.99
So they buy it at let's say
0.1, they've already owned it,
00:09:55.02\00:09:57.96
they might have
owned it for a month
00:09:57.99\00:09:59.33
or so, the company...
00:09:59.36\00:10:00.70
And by the way, this company
00:10:00.73\00:10:02.03
probably has a
room full of telephones
00:10:02.06\00:10:04.23
with people answering it
00:10:04.27\00:10:05.60
because it's not even
a real company, right?
00:10:05.63\00:10:07.34
And that's the problem,
we had these penny stocks,
00:10:07.40\00:10:09.20
many of these penny stocks
hat trade on bulletin boards
00:10:09.24\00:10:11.21
and penny stock, pink sheets,
00:10:11.24\00:10:14.04
they're not really, you
can't really research them,
00:10:14.08\00:10:15.88
they're not regulated,
00:10:15.91\00:10:17.25
you don't even know
if it's a real company,
00:10:17.31\00:10:18.65
they're not making any money,
00:10:18.68\00:10:20.02
so they bought
this stock at 0.1,
00:10:20.05\00:10:22.02
it goes up to 0.3,
00:10:22.05\00:10:23.39
now they're dumping the
stock, they're selling it
00:10:23.45\00:10:25.42
because you're buying
it and they're selling it,
00:10:25.45\00:10:27.76
and meanwhile, all
your friends are buying it,
00:10:27.79\00:10:29.52
they sold it, it
might get up 0.3 and 0.5,
00:10:29.56\00:10:32.16
and then it all of the
sudden it starts fizzling down,
00:10:32.19\00:10:34.23
they've already sold it,
00:10:34.30\00:10:35.60
they've made
300% of their money.
00:10:35.63\00:10:36.97
They're done, you've still
got all the stock and you say,
00:10:37.00\00:10:39.33
"Wait, what happened?
00:10:39.37\00:10:40.70
I thought it was
going to go to a dime."
00:10:40.77\00:10:42.30
Next thing you know,
you're out of all your money.
00:10:42.34\00:10:43.94
It's the oldest
trick in the book,
00:10:43.97\00:10:45.51
it happened a lot because why?
00:10:45.54\00:10:47.04
It's a
get-rich-quick scheme. Right.
00:10:47.11\00:10:49.61
And people were so greedy
00:10:49.64\00:10:51.41
that this people are
preying on other people's greed.
00:10:51.45\00:10:53.55
Yeah.
00:10:53.58\00:10:54.92
Just like in
financial predators,
00:10:54.95\00:10:56.28
I mean it's amazing
00:10:56.32\00:10:57.65
when you see the
devil working, right?
00:10:57.69\00:10:59.42
When the devil works, he
preys upon all the things,
00:10:59.45\00:11:03.63
those earthly,
those desires of the flesh
00:11:03.66\00:11:06.33
that make us want to do things
00:11:06.36\00:11:08.13
that are outside of
what God wants us to do
00:11:08.16\00:11:10.33
and has desired in our life.
00:11:10.37\00:11:11.70
So like the payday
loan or the cash advance,
00:11:11.73\00:11:15.67
come get this free money,
00:11:15.70\00:11:17.07
the same thing
with these penny stocks.
00:11:17.11\00:11:18.67
Let us go ahead and
do the pump and dump,
00:11:18.71\00:11:20.54
get you all greedy,
00:11:20.58\00:11:21.91
get you all excited
about getting rich quick,
00:11:21.94\00:11:23.61
and then we're going
to play on what you want,
00:11:23.65\00:11:25.01
next thing you know
00:11:25.05\00:11:26.38
you're gonna
lose all your money.
00:11:26.41\00:11:27.75
I know a lot of people
that lost a ton of money
00:11:27.78\00:11:29.32
and actually, moving
on until days after that
00:11:29.35\00:11:31.95
and money and that.
00:11:31.99\00:11:33.32
And then the
lastly, speculation,
00:11:33.36\00:11:34.76
And that
Ecclesiastes 5:13-14 it says,
00:11:34.79\00:11:38.49
"There's another serious problem
00:11:38.53\00:11:40.50
I have seen everywhere
00:11:40.56\00:11:41.86
savings are put
into risky investments
00:11:41.90\00:11:43.53
that turn sour
00:11:43.60\00:11:44.93
and soon there's nothing
left to pass on to one's son.
00:11:44.97\00:11:47.50
The man who
speculates is soon back
00:11:47.57\00:11:49.44
where he began with nothing.
00:11:49.47\00:11:51.94
This is, as I said,
a very serious problem
00:11:51.97\00:11:54.14
for all his hard
work had been for nothing,
00:11:54.21\00:11:56.58
he has been
working for the wind.
00:11:56.61\00:11:58.61
It is all swept away.
00:11:58.65\00:12:00.15
All the rest of his life
he is under a cloud, gloomy,
00:12:00.22\00:12:02.52
discouraged,
frustrated, and angry."
00:12:02.55\00:12:04.42
This is exactly what happened
00:12:04.45\00:12:06.42
when people were
buying all of these stocks
00:12:06.45\00:12:08.66
on pure speculation,
00:12:08.69\00:12:10.16
they didn't research them,
00:12:10.23\00:12:11.56
they didn't
know about investing,
00:12:11.59\00:12:12.93
and so what we're gonna do,
00:12:12.96\00:12:14.30
we're gonna over today
00:12:14.30\00:12:15.63
over some
Christ-like ways of making sure
00:12:15.66\00:12:17.90
that if you start investing,
00:12:17.93\00:12:20.10
you're gonna
mitigate and lessen the odds
00:12:20.14\00:12:22.37
of the amount of you
actually losing all your money
00:12:22.40\00:12:25.04
and do it in a smart way,
in a very intelligent way.
00:12:25.07\00:12:30.01
Luckily, the Word
talks about that as well.
00:12:30.05\00:12:33.08
And so, you know, a
lot of people will say,
00:12:33.11\00:12:35.62
"You know, Ryan, well,
00:12:35.65\00:12:36.99
how does the Word
talk about investments?"
00:12:37.05\00:12:38.39
Well, remember Enron? Yeah.
00:12:38.42\00:12:41.62
Enron the
organization. Yeah, yeah.
00:12:41.66\00:12:42.99
Well, people put all
their money into Enron.
00:12:43.02\00:12:44.66
Yes.
00:12:44.69\00:12:46.03
And they were invested in Enron
and Enron failed, it collapsed.
00:12:46.06\00:12:48.86
Right.
00:12:48.90\00:12:50.23
Well, one of the major
principles of investing
00:12:50.30\00:12:53.87
is making sure that
we're gonna go forward,
00:12:53.90\00:12:56.97
but then we're going
to go back to make sure
00:12:57.04\00:12:58.37
you can have a
proper foundation,
00:12:58.41\00:12:59.91
but talking about Enron,
00:12:59.94\00:13:01.34
one of the major
principles is diversification.
00:13:01.38\00:13:04.61
So if you diversify
your assets and making sure
00:13:04.65\00:13:07.12
that you don't have all
your eggs in one basket,
00:13:07.15\00:13:08.75
everyone's heard of
that, and it's funny too,
00:13:08.78\00:13:10.59
sometimes if you
have a worldly saying
00:13:10.62\00:13:13.66
and people will believe that.
00:13:13.69\00:13:15.19
But if something
is from the Bible,
00:13:15.22\00:13:17.16
they're not as
quick to believe that.
00:13:17.23\00:13:18.73
That is so true.
00:13:18.76\00:13:20.10
Because they say, "No,
that's just from the Bible."
00:13:20.13\00:13:21.43
Right.
00:13:21.46\00:13:22.80
But check this out, check
out Ecclesiastes 11:2 that says,
00:13:22.83\00:13:27.04
"Give a portion to seven,
00:13:27.10\00:13:28.90
and also to eight
for thou knowest not
00:13:28.94\00:13:31.24
what evil shall
be upon the earth."
00:13:31.27\00:13:34.14
So the Word is telling you
00:13:34.18\00:13:36.04
to give a portion to
seven and also to eight,
00:13:36.08\00:13:38.05
don't put all your
eggs in one basket.
00:13:38.08\00:13:39.71
Don't, you know,
divide up your portions
00:13:39.75\00:13:41.58
because you never know
what evil lurks upon the earth.
00:13:41.62\00:13:43.85
If the people at Enron
00:13:43.89\00:13:45.82
would have actually
read this scripture,
00:13:45.85\00:13:47.96
they would have been
saying this, "You know what?
00:13:47.99\00:13:50.03
The Word says I shouldn't
put all my money in one place,
00:13:50.09\00:13:52.73
Enron, it should be divided."
00:13:52.76\00:13:54.86
Remember Madoff? Oh, yeah.
00:13:54.93\00:13:57.10
Bernie. Yeah, Bernie Madoff.
00:13:57.13\00:13:58.47
He stole a lot of
individual's money, why?
00:13:58.50\00:14:00.74
Because people gave
him all their money,
00:14:00.77\00:14:03.51
and at the end of the day,
00:14:03.54\00:14:04.87
they didn't
divide their portions
00:14:04.91\00:14:06.24
into seven and eight,
00:14:06.27\00:14:07.71
if you lost all
your money with Madoff,
00:14:07.74\00:14:10.48
you aren't reading scripture.
00:14:10.55\00:14:12.25
If you lost maybe one-seventh
of your money with Madoff,
00:14:12.28\00:14:16.38
you're probably read scripture
00:14:16.42\00:14:17.75
'cause the scripture says
00:14:17.79\00:14:19.12
that divide your
portion into seven and eight,
00:14:19.15\00:14:21.09
give a portion to him
00:14:21.12\00:14:22.46
and then also divide it
up amongst other individuals.
00:14:22.49\00:14:25.09
So this is, again,
it excites me to see
00:14:25.13\00:14:29.50
that we have so many
things and so many principles
00:14:29.53\00:14:32.70
that are actually brought
out by fiscal responsibility
00:14:32.73\00:14:35.64
and by the Word and
what the Word actually says
00:14:35.67\00:14:38.41
that we should be
doing to make sure
00:14:38.44\00:14:40.48
that we can have a
proper foundation of them.
00:14:40.54\00:14:43.08
Right, right. And
that's what we need.
00:14:43.11\00:14:45.15
You know, often we
want to do certain things,
00:14:45.18\00:14:48.68
but we don't know how.
00:14:48.72\00:14:50.45
And if the Word tells you,
00:14:50.49\00:14:51.82
"Give a portion to
seven, also to eight,"
00:14:51.85\00:14:54.06
one here, one
here, one, diversify.
00:14:54.12\00:14:56.36
Exactly. That is so good.
00:14:56.39\00:14:58.26
That is such a good principle.
00:14:58.29\00:15:00.06
And so now in order
for us to invest, okay,
00:15:00.13\00:15:05.40
we have to make sure
00:15:05.43\00:15:06.84
that we can have
00:15:06.87\00:15:08.97
a sustainable
level of investment.
00:15:09.00\00:15:11.07
Right. Okay.
00:15:11.11\00:15:12.44
So in another episode
00:15:12.47\00:15:14.28
we talked about budgeting, okay,
00:15:14.31\00:15:16.38
and the budget is the
most critical component
00:15:16.41\00:15:18.68
of every single
financial strategy.
00:15:18.71\00:15:20.95
The budget is
going to tell you exactly
00:15:20.98\00:15:23.12
how much you have to invest.
00:15:23.15\00:15:25.29
And so after you invest,
00:15:25.32\00:15:26.65
you put together your budget
and you have a sound budget,
00:15:26.69\00:15:29.76
and now you actually
have written out your goals
00:15:29.79\00:15:31.46
of what you're investing for.
00:15:31.49\00:15:33.29
See, a lot of individuals
have not written these out,
00:15:33.33\00:15:35.86
they're chasing the money,
00:15:35.90\00:15:37.87
but they're not chasing
00:15:37.90\00:15:39.23
what God has
prepared in their life.
00:15:39.27\00:15:41.20
So do you feel that God
00:15:41.24\00:15:43.97
wants you to have
educated children?
00:15:44.01\00:15:46.21
So you need to
invest for college.
00:15:46.24\00:15:47.81
Does God have a
house in store for you?
00:15:47.84\00:15:49.71
You need to save up
money for your home.
00:15:49.74\00:15:51.91
Does God have in store
for you a new business?
00:15:51.95\00:15:53.82
You need to be saving
up money for your business.
00:15:53.88\00:15:55.92
Does God have in
store for you a retirement?
00:15:55.95\00:15:58.29
Okay, so now you might
want to look at some stocks
00:15:58.32\00:16:00.39
because that can be
something, could be something
00:16:00.42\00:16:02.76
that you want to put
into an investment strategy
00:16:02.79\00:16:04.93
if you have not
written out your strategy.
00:16:04.96\00:16:06.96
And in budgeting, we actually
talked about and discussed
00:16:07.03\00:16:09.40
exactly how to get your,
what I call the finish line,
00:16:09.43\00:16:12.47
exactly how you get to
the total dollar amount
00:16:12.50\00:16:15.67
that's going to help
sustain you during retirement.
00:16:15.70\00:16:17.94
There's a way.
00:16:17.97\00:16:19.31
And your budget
helps you get there
00:16:19.34\00:16:20.68
and the stocks is just a vehicle
00:16:20.71\00:16:22.04
that helps you
get along the way.
00:16:22.08\00:16:23.95
So when you
figure out your budget
00:16:23.98\00:16:26.35
and you figure out your goals,
00:16:26.38\00:16:27.72
let's just say now
you're ready to start
00:16:27.75\00:16:29.45
doing some investing, okay.
00:16:29.48\00:16:31.85
And for those individuals
who are ready to invest,
00:16:31.89\00:16:34.56
you know, what should
I be putting my money in?
00:16:34.59\00:16:37.73
How should I go about
diversifying my assets?
00:16:37.76\00:16:41.26
Well, there are few
things you can actually look at
00:16:41.30\00:16:43.06
that I would like
to give individuals
00:16:43.10\00:16:44.43
that they should, again,
please do your own research.
00:16:44.47\00:16:47.50
Do your own research
00:16:47.54\00:16:48.87
and then I'm
going to give some tips
00:16:48.90\00:16:50.24
on how to select the
right financial advisor
00:16:50.27\00:16:52.07
and the right questions to ask
00:16:52.11\00:16:53.94
because that is a
critical component as well.
00:16:53.98\00:16:57.31
And make sure you
get the right assistance.
00:16:57.35\00:16:58.91
In the abundance of
counselors, there's victory,
00:16:58.95\00:17:01.55
that's what the Word says.
00:17:01.58\00:17:02.92
So we have to get the
right counselors as well.
00:17:02.95\00:17:05.25
So as we put
together our budget,
00:17:05.29\00:17:08.19
there's a thing
called dollar cost average
00:17:08.22\00:17:10.59
investment strategy, okay.
00:17:10.66\00:17:12.59
Your budget is
going to tell you,
00:17:12.63\00:17:13.96
let's just say I
have $200 left over
00:17:14.00\00:17:16.53
or a $100 left
over every single month
00:17:16.56\00:17:19.37
and after this $100
00:17:19.40\00:17:21.37
I've got my
emergency fund together,
00:17:21.40\00:17:23.00
that means I've got my,
00:17:23.04\00:17:24.37
you know, 9 to 12 months
of living expenses saved,
00:17:24.41\00:17:26.41
so in case there's a rainy day
00:17:26.44\00:17:27.78
because you don't want to
have to dip into your stocks
00:17:27.81\00:17:32.88
just because
your roof is leaking.
00:17:32.91\00:17:34.78
You don't want to dip into
your bonds or sell your home
00:17:34.82\00:17:38.02
just because your car broke down
00:17:38.05\00:17:39.92
and you have to fix your car.
00:17:39.95\00:17:41.39
So you have to
have enough liquidity
00:17:41.42\00:17:43.06
in your emergency fund
00:17:43.09\00:17:44.46
to sustain any ebbs and
flows that happen in our lives.
00:17:44.49\00:17:47.30
We know, if there's one
consistent thing in our lives,
00:17:47.40\00:17:50.03
it's inconsistency, right?
00:17:50.07\00:17:51.60
Right. And it's emergency.
00:17:51.63\00:17:53.70
So we have to have that
emergency fund put in place,
00:17:53.74\00:17:55.74
we have to have
that budget put in place.
00:17:55.77\00:17:57.51
We have to make
sure that we know
00:17:57.57\00:17:58.91
what we're investing for.
00:17:58.94\00:18:00.34
So again, how much money
00:18:00.41\00:18:02.74
you're putting into your
five to nine investment plan,
00:18:02.78\00:18:05.28
that also is a
level of investment
00:18:05.31\00:18:07.18
for your children, okay.
00:18:07.25\00:18:09.05
So the five to nine,
00:18:09.08\00:18:10.42
I love this
investment strategy for children
00:18:10.45\00:18:12.39
because essentially
00:18:12.42\00:18:13.79
it's a tax
deferred investment strategy
00:18:13.82\00:18:15.16
that allows you to, well,
00:18:15.19\00:18:16.52
if you put money
into a savings account,
00:18:16.56\00:18:18.76
let's say you're being taxed on,
00:18:18.79\00:18:20.56
your income is $50,000 a year,
00:18:20.63\00:18:23.00
many states allow
you to put up to $5,000
00:18:23.03\00:18:25.47
into this investment
plan for your children,
00:18:25.50\00:18:27.70
it's invested in
a very conservative
00:18:27.74\00:18:29.54
means of investment,
00:18:29.57\00:18:30.91
meaning bonds or
treasury bonds or whatnot,
00:18:30.94\00:18:33.21
they give a very minimal return,
00:18:33.24\00:18:34.88
but it's supposed
to be conservative
00:18:34.91\00:18:36.61
because this is a
college savings account
00:18:36.64\00:18:38.08
not really an account
00:18:38.11\00:18:39.58
that's going to
give you the big bang.
00:18:39.61\00:18:40.95
You're just
trying to put money aside
00:18:40.98\00:18:42.32
to make sure that
your child actually has it
00:18:42.35\00:18:44.39
when they go to school.
00:18:44.42\00:18:45.75
And the beautiful
part about it is that
00:18:45.79\00:18:47.56
when you're investing
for the five to nine plan,
00:18:47.59\00:18:49.79
that one means of
investing for college
00:18:49.82\00:18:51.86
is that if your
income is $50,000 a year,
00:18:51.89\00:18:57.03
if you put $5,000 a year
into this five to nine plan,
00:18:57.07\00:19:01.20
you'll only be
taxed on $45,000 a year.
00:19:01.24\00:19:04.81
So now that estimate
maybe $1,500 a year savings
00:19:04.84\00:19:09.14
that you saved in
terms of your tax bill.
00:19:09.18\00:19:11.31
So now that
money grows tax free.
00:19:11.35\00:19:13.88
Now if you take that money
and your child goes to school
00:19:13.95\00:19:16.85
and you pull that
money out and say,
00:19:16.92\00:19:18.25
"All right, how much
am I gonna have to pay?"
00:19:18.29\00:19:19.62
Well, the beautiful part
about the five to nine plan
00:19:19.65\00:19:21.22
is every state
has a different one,
00:19:21.26\00:19:23.16
so we have to
research what your state has,
00:19:23.19\00:19:25.93
when you take that
money out, that money,
00:19:25.96\00:19:27.86
as long as it goes
towards college expenses,
00:19:27.86\00:19:29.63
that's also tax free.
00:19:29.66\00:19:31.93
So you don't have to
pay any taxes on that.
00:19:31.97\00:19:33.44
So one of the best ways
00:19:33.47\00:19:35.10
when you're
investing is figuring out
00:19:35.14\00:19:36.71
how can I minimize my tax bill.
00:19:36.74\00:19:38.17
Right.
00:19:38.21\00:19:39.54
Okay, and that's what a
lot of the wealthy do, right?
00:19:39.57\00:19:41.88
It's about minimizing taxes,
00:19:41.91\00:19:43.78
making sure that as we
are going through our lives,
00:19:43.85\00:19:47.15
that's why
people start businesses
00:19:47.22\00:19:48.55
because you get
through the tax breaks,
00:19:48.58\00:19:50.09
people use their
qualified investment accounts,
00:19:50.12\00:19:52.52
meaning your
retirement accounts,
00:19:52.55\00:19:54.32
your individual
retirement accounts,
00:19:54.36\00:19:56.12
your 401ks, 403bs,
00:19:56.16\00:19:58.56
these are different investments
00:19:58.59\00:19:59.93
that you can use to maximize
00:20:00.00\00:20:02.30
your tax deductions
and minimize your tax bill.
00:20:02.33\00:20:05.07
You want to save
money at the end of the day.
00:20:05.10\00:20:06.43
Right.
00:20:06.47\00:20:07.80
So that's one
means of investment.
00:20:07.84\00:20:12.57
Stocks, bonds,
business, real estate,
00:20:12.61\00:20:17.01
all these are
different means of investment
00:20:17.05\00:20:18.58
and there's tons more.
00:20:18.61\00:20:19.98
You have derivatives as options,
00:20:20.02\00:20:21.35
you have different means,
00:20:21.38\00:20:23.08
you have different collectibles,
00:20:23.12\00:20:25.59
you might be able
to invest in stamps
00:20:25.62\00:20:27.12
or you can invest in gold,
00:20:27.16\00:20:28.82
individuals buy
gold coins or silver,
00:20:28.86\00:20:31.23
all these are
means of investment,
00:20:31.26\00:20:32.93
which one is the best
one, according to Ecclesiastes,
00:20:32.96\00:20:35.76
divide your
portion in seven, eight.
00:20:35.80\00:20:37.70
You want to buy a
little bit in all of them.
00:20:37.73\00:20:39.97
Okay, and so
when you're investing,
00:20:40.00\00:20:42.87
now I'll give one quick tip
because I know a lot of folks,
00:20:42.90\00:20:44.87
"You know, Ryan,
just give me something
00:20:44.91\00:20:47.74
that is gonna help me
diversify my account."
00:20:47.78\00:20:49.88
And the beautiful part about it
00:20:49.91\00:20:51.25
is that now they have
various products out there
00:20:51.28\00:20:53.35
that are available that
helps you diversify, okay.
00:20:53.38\00:20:56.65
So if I buy one stock,
let's just say, the stock is...
00:20:56.72\00:21:01.49
And I'm not trying
to give a stock on here
00:21:01.52\00:21:03.63
because I don't want
individuals to buy it.
00:21:03.66\00:21:04.99
Right.
00:21:05.03\00:21:06.36
Let's just say
00:21:06.39\00:21:07.73
this is a stock of water, right?
00:21:07.76\00:21:09.10
Okay.
00:21:09.13\00:21:10.47
So this water stock,
00:21:10.53\00:21:12.57
you know, buy itself if
I just buy this one stock,
00:21:12.60\00:21:17.61
it's going to be pretty risky
00:21:17.64\00:21:19.11
because this stock
could go down, it can go up,
00:21:19.14\00:21:21.61
you never know
what's going to happen.
00:21:21.64\00:21:23.41
But if I buy two
stocks water and paper,
00:21:23.45\00:21:26.78
that becomes less risky
00:21:26.82\00:21:28.15
because water might decrease
00:21:28.18\00:21:29.52
while paper goes
up in value, okay.
00:21:29.55\00:21:32.32
But if buy three stocks,
water, paper, pen, and book,
00:21:32.35\00:21:36.22
now I'm diversified
00:21:36.26\00:21:37.59
because now I'm essentially
what they call eliminating
00:21:37.63\00:21:40.26
what they call
unsystematic risk,
00:21:40.30\00:21:42.13
risk that is only inherent
to that one individual stock.
00:21:42.16\00:21:45.23
So when you invest,
00:21:45.27\00:21:47.17
you want to make sure you
buy as many stocks as possible.
00:21:47.20\00:21:49.94
Is it possible
to buy all stocks?
00:21:49.97\00:21:54.21
I'm asking that question,
00:21:54.24\00:21:55.58
is it possible to
every single stock?
00:21:55.61\00:21:56.98
Oh, no. Most people say no.
00:21:57.01\00:21:59.95
Actually it's yes. Is it?
00:22:00.05\00:22:01.58
You can buy every single stock.
00:22:01.62\00:22:02.95
See that tells you how
much I know about the stock.
00:22:02.98\00:22:04.32
Well, most people say no.
00:22:04.35\00:22:05.69
Most people would say
00:22:05.72\00:22:07.06
you cannot buy
every single stock,
00:22:07.09\00:22:08.42
but they have these things out
00:22:08.46\00:22:09.79
that are called
exchange traded funds.
00:22:09.82\00:22:11.16
See when stocks are traded,
00:22:11.19\00:22:12.53
they're called a stock exchange.
00:22:12.56\00:22:13.90
Right. Okay.
00:22:13.93\00:22:15.23
And I used to be a stock...
00:22:15.26\00:22:16.63
I used to be the guy
when people look in television
00:22:16.67\00:22:18.17
they see all these people going
buy, buy, go, and sell, sell.
00:22:18.20\00:22:20.00
Yeah, making all the
noise in Wall Street.
00:22:20.04\00:22:22.17
Well, I used to be on the floor.
00:22:22.20\00:22:24.37
But I used to be down there
00:22:24.41\00:22:25.74
and I was reporting at the time,
00:22:25.77\00:22:27.34
but I always
was a NASDAQ trader.
00:22:27.38\00:22:30.35
So I was doing
the exact same thing
00:22:30.41\00:22:31.88
but behind a computer screen.
00:22:31.91\00:22:33.25
Okay.
00:22:33.28\00:22:34.62
So the way the system is set
up is called the stock exchange.
00:22:34.65\00:22:38.55
When you put an
order in for a stock,
00:22:38.59\00:22:41.96
that order goes to a
broker, a stock broker,
00:22:41.99\00:22:45.19
the broker takes the order,
00:22:45.23\00:22:47.23
they then send that
order up to a stock trader,
00:22:47.30\00:22:50.60
and the trader takes that order
00:22:50.63\00:22:52.20
and they try to match it up
00:22:52.23\00:22:53.87
with someone across
the country or next door
00:22:53.90\00:22:56.47
or wherever who wants to buy.
00:22:56.50\00:22:58.11
So you want to sell water,
someone else wants to buy it,
00:22:58.14\00:23:01.88
that broker's job is to connect.
00:23:01.91\00:23:04.98
So when that broker
connects those orders,
00:23:05.01\00:23:10.62
they make an exchange,
00:23:10.69\00:23:12.22
that's why they
call it stock exchange.
00:23:12.25\00:23:13.59
Okay.
00:23:13.66\00:23:14.99
So let's just say
you're in California
00:23:15.02\00:23:18.79
and the other
person is in New York,
00:23:18.83\00:23:21.50
let's say I'm in
Michigan as a stock trader.
00:23:21.53\00:23:25.07
I'll match up the
order, who wants to buy water,
00:23:25.10\00:23:28.14
this person wants to sell it,
00:23:28.17\00:23:29.50
I match it up and as
soon as I match it up,
00:23:29.54\00:23:32.17
there's a little thing
00:23:32.21\00:23:33.54
at the bottom of the
screen that it prints.
00:23:33.58\00:23:35.68
So when, you know,
you're watching television
00:23:35.71\00:23:37.51
and the news comes on
00:23:37.55\00:23:38.88
and they have the
markets and all that stuff.
00:23:38.91\00:23:41.32
Oh, yeah, yeah, yeah.
00:23:41.35\00:23:42.68
A lot of things at
the bottom of the screen
00:23:42.72\00:23:44.05
start flashing across.
00:23:44.09\00:23:45.42
The moving
screen like a marquee?
00:23:45.45\00:23:46.82
Yeah, exactly.
00:23:46.86\00:23:48.19
Well, that ticker
essentially meant that a trader
00:23:48.22\00:23:50.59
just matched up in
order and it printed,
00:23:50.63\00:23:54.30
they call it
printed or it hit the tape.
00:23:54.30\00:23:56.70
So as soon as that
order hits the tape,
00:23:56.73\00:23:58.87
it tells a price
that it hits a tape
00:23:58.90\00:24:00.54
and then the tape scrolls
across your screen at home.
00:24:00.57\00:24:03.71
There's only a few
things that go on the news
00:24:03.74\00:24:05.07
every single day,
you've got the sports, weather,
00:24:05.11\00:24:08.38
but they also have
the financial markets,
00:24:08.41\00:24:10.35
and it is important enough
00:24:10.38\00:24:11.71
that individuals see
this every single day.
00:24:11.75\00:24:14.02
So that exchange,
00:24:14.05\00:24:15.62
they have all
these different stocks
00:24:15.65\00:24:16.99
are a part of an exchange,
00:24:17.02\00:24:19.32
you can buy all those stocks
00:24:19.35\00:24:20.76
but they call it
exchange-traded funds,
00:24:20.79\00:24:23.26
so essentially what it is it's
a computer generated type model
00:24:23.29\00:24:25.99
where you go out
00:24:26.03\00:24:27.40
and you purchase this one stock,
00:24:27.40\00:24:28.73
in one security that emulates
00:24:28.76\00:24:30.53
the entire
exchange and how it trades.
00:24:30.57\00:24:32.53
It's basically computer
run and it's a great way
00:24:32.57\00:24:35.14
to diversify
your asset but only...
00:24:35.17\00:24:37.71
And I'm saying, please,
I want everyone to listen,
00:24:37.74\00:24:40.58
do not start an
investment strategy
00:24:40.64\00:24:43.08
if you have not had
your emergency fund,
00:24:43.11\00:24:44.68
if you don't have a budget,
00:24:44.71\00:24:46.05
and if you can't
commit to every single month
00:24:46.08\00:24:48.98
putting in a $100
or $200 into that,
00:24:49.02\00:24:53.86
whatever amount it is,
you can put $5 a month.
00:24:53.92\00:24:57.63
If your budget says I
only have $5 extra a month
00:24:57.66\00:25:00.66
after my emergency fund is full,
00:25:00.73\00:25:02.43
then please go
ahead, put that $5 a month
00:25:02.46\00:25:04.37
because there's
a way to put money
00:25:04.40\00:25:05.73
in that brokerage account
to the tune of $5 a month.
00:25:05.77\00:25:08.64
So again, we want
to just make sure that
00:25:08.67\00:25:11.24
we're cautious about
not overextending ourselves
00:25:11.27\00:25:15.04
and having to
liquidate and selling stocks
00:25:15.08\00:25:16.85
just because our car broke down.
00:25:16.88\00:25:18.21
Right. So let's say I
want to get some stock.
00:25:18.25\00:25:21.82
Right. Where do I go?
00:25:21.85\00:25:24.22
You have to go
to a stock broker.
00:25:24.29\00:25:25.89
Okay, there's things like
00:25:25.92\00:25:27.36
E-trade,
Scottrade, those are online.
00:25:27.39\00:25:29.79
Right. Do you recommend those?
00:25:29.82\00:25:32.33
Well, again, it all
depends on if you can make sure
00:25:32.36\00:25:35.40
you have the right
amount of knowledge, okay.
00:25:35.43\00:25:39.23
So if you want to get a
financial advisor, okay,
00:25:39.27\00:25:42.54
I have a list of questions
for the folks at home to ask
00:25:42.57\00:25:45.71
to make sure if
that financial advisor
00:25:45.74\00:25:48.31
is the right advisor for them.
00:25:48.34\00:25:49.68
Good.
00:25:49.71\00:25:51.05
The first question
is do you have a CFP?
00:25:51.08\00:25:52.41
Certified Financial Planner,
00:25:52.45\00:25:53.78
it's a great designation,
that person knows the stuff.
00:25:53.82\00:25:57.59
The second question is
can I see a copy of your ADV?
00:25:57.62\00:26:01.12
It's short for
advisor, but essentially,
00:26:01.16\00:26:03.66
this is a means of making sure
00:26:03.69\00:26:05.03
that you can see exactly
how this advisor charges.
00:26:05.06\00:26:08.70
I recommend
registered investment advisor
00:26:08.73\00:26:10.87
because they are fee only,
they're not commission driven,
00:26:10.90\00:26:14.07
and they are truly interested
00:26:14.14\00:26:15.47
and really only
giving you the best advice
00:26:15.50\00:26:19.04
without trying to make you sell
00:26:19.07\00:26:20.41
your stocks are
for commission only.
00:26:20.48\00:26:23.85
Can I get some referrals,
at least three referrals?
00:26:23.88\00:26:27.12
What's your area of expertise?
00:26:27.15\00:26:28.75
Many advisors have
different areas of expertise.
00:26:28.78\00:26:32.19
And what sort of
clients do you service?
00:26:32.22\00:26:34.16
That's huge because
many different clients
00:26:34.19\00:26:35.79
are being served
in various areas.
00:26:35.82\00:26:38.76
And what's your
investment philosophy?
00:26:38.79\00:26:40.13
Many individuals have
different philosophies.
00:26:40.20\00:26:42.23
It may not match up
with who you're suited for.
00:26:42.26\00:26:45.03
That's good.
00:26:45.07\00:26:46.40
That's good 'cause
I'm kind of like...
00:26:46.43\00:26:48.04
And you can go
online and find that.
00:26:48.07\00:26:49.90
Yes, you can go
online. Thank you.
00:26:49.97\00:26:51.81
And now we got our
takeaway. Absolutely.
00:26:51.84\00:26:53.84
I was watching CNN
00:27:00.95\00:27:02.28
and I saw an older
gentleman being interviewed
00:27:02.32\00:27:04.25
who was worth over $2 million.
00:27:04.32\00:27:06.39
That might not
sound amazing to you,
00:27:06.42\00:27:08.36
but it is very
amazing when I learned
00:27:08.39\00:27:10.06
that he had never earned
in his life over $11 an hour.
00:27:10.09\00:27:13.53
He made a practice
of investing his money
00:27:13.56\00:27:15.56
and living beneath his means.
00:27:15.60\00:27:17.27
He made sure to include
00:27:17.30\00:27:18.63
another monthly
bill to pay himself
00:27:18.67\00:27:20.54
within a savings or investment
account on a monthly basis.
00:27:20.57\00:27:24.04
Investing is not
just for the rich
00:27:24.11\00:27:25.71
but for all
income and age levels.
00:27:25.74\00:27:28.01
The less you earn,
00:27:28.04\00:27:29.38
the more important it is to
be mindful of the expenditures.
00:27:29.41\00:27:32.05
Less income means
less financial protection
00:27:32.08\00:27:34.12
to provide a financial
cushion during setbacks,
00:27:34.15\00:27:36.79
like job loss, salary reduction,
00:27:36.82\00:27:39.15
rising gas prices,
or medical emergencies.
00:27:39.19\00:27:41.99
Regardless of your
income or financial position,
00:27:42.02\00:27:44.56
it is up to you to make
the decision to begin saving
00:27:44.59\00:27:47.10
toward financial
independence today.
00:27:47.13\00:27:49.20
If you have any questions,
00:27:49.23\00:27:50.57
email me at
dollarsandsense@3abn.org
00:27:50.63\00:27:53.74
and chat with us
00:27:53.80\00:27:55.14
on our Dare to Dream
Network Facebook page.
00:27:55.17\00:27:56.67
As always, be the
change and remember,
00:27:56.71\00:27:58.97
the purpose of life is
a life full of purpose.
00:27:59.01\00:28:01.38
Be blessed.
00:28:01.41\00:28:02.74