EP 274: A Refresher... check it out!

Well, here's a blast in the past.

We're doing something a little bit different today, replaying an episode from a couple years ago where we talked about how to think and what are some actions that you might think about taking when the markets are going up and down.

Now, this episode was recorded back when there was a large fear of recession.

We're not quite in that area right now, but we've had some ups and downs of the markets this year.

And I wanted you to have a refresher on some mindsets that might serve you well with when we're not seeing accounts go straight up by 20%.

Like sometimes we get spoiled with so hope that you enjoy this episode.

This is the weekly wealth podcast with.

Certified financial planner David Chudick, where we discuss the wealth building mindsets and tactics that can help you to build and maintain wealth for you, your family and your business.

Well, hey everybody, welcome to this week's episode of the weekly wealth podcast where we talk about the mindsets, the tactics and the strategies that help you to build and maintain wealth.

As you know, my name is David Chudick and I'm a financial advisor with Parallel Financial.

And what that means is I help my clients to make the right financial decisions for them for the reasons that are important to them.

So if there's anything keeping you up at night, you know, shoot me an email.

Davidarallelfinancial.com we can talk about kind of what's going on in your financial life and, and see if there are any next steps.

But today, Mike DeJoseph is on with us and we're going to talk about some financial decisions that people make or maybe even some lack of decisions.

We're going to talk a little bit about why it typically is in a client's best interest to work with a financial advisor, what some of the things that financial advisors bring to the table for their clients.

So, hey, Mike, how are you?

I'm doing well, David.

Thanks so much for having me.

Tell us a little bit about yourself and where in the world you reside.

Sure thing.

So, Mike De Joseph, I am at Vanguard, and so I work on our team that's in our intermediary business or financial advisor services division.

And we have a research team within that division called the Investment Advisory Research Center.

And so our team's goal is to work with individuals like yourself, financial advisors.

You know, I think Vanguard's known predominantly as the big, you know, retail investor shop, the Jack Bogle shop.

But it might be underappreciated that we're our Biggest division is actually working with individuals like yourself, financial advisors.

And so my team exists to help you help your clients because we firmly believe that you helping your clients is the best thing you can do to help your own business as well.

And so trying to get everything aligned.

I think your theme of your podcast here, the mindset, the tactics, all of those things, are the type of stuff that we talk about.

Yeah.

What's interesting is the fpa, the Financial Planning association, which incidentally is where you and I met at the annual symposium for our state.

But the FPA is pushing to have some standardized criteria for someone to be able to call themselves a financial planner.

Typically, and it happens to me all the time, is, you know, you'll meet someone and say, hey, what do you do for a living?

Well, I'm a financial planner.

Oh, really?

Okay, well, what's the market going to do?

Or, hey, if I gave you $100,000 right now, where would you invest it?

And I always say some version of, I have no idea where I would invest your money.

I don't know anything about you.

You might have a bunch of debt you need to pay off.

I don't know what your risk tolerance is.

I don't know what you want to do with the money.

So I plan.

I mean, in part of the planning process, absolutely, is investment management, but we're looking holistically at the financial planning process to help, to help our clients.

So, yeah, so I've been watching on the news and there's all these different news stories about, you know, a recession is coming or recession's not coming, or there's X percent that a recession is coming.

And then you get questions from clients on, well, should I be invested?

I mean, is the market going to crash into recession?

So from your research background, talk to me a little bit about, like, is a recession a huge fear?

Does it mean the stock market's going to tank?

And just talk to me a little bit about, like, when people are watching the financial news, should they.

Well, should they watch the financial news at all?

Is, I guess, question number one.

And number two, how do you deal with this recession question?

David, that's a fantastic question.

And we're hearing similar things.

I'll answer the second part first.

And it's conditional, right?

I would say no, they shouldn't be watching the financial news unless they acknowledge that it's more or less entertainment.

And the reason I say that is because, again, I mean, we're sitting here in late October, all the economists, the news media, the cnbc, they're all talking about, well, what are the chances of recession in 2023?

And so people hear that and they see person XYZ trusted source saying 60%, 80%, 100%.

We've seen some big bank CEOs basically say things are going to get really bad in the economy.

And so I think it would only be natural for most investors to assume, well, if things are going to get bad in the economy, they're going to get bad in the market.

The way we address those concerns is to just remind people that markets are forward looking.

The stock market today is not reacting necessarily to what happened yesterday or even to what's going to happen in the next three to six months.

They tend to look forward through those different things and really they price in all of the aggregate viewpoints and opinions and bets that investors are taking over different time horizons.

So I mean, the way I would put it is if you think the economy is going to go in a recession next year, there's a very good chance that that's why the market has been down year to date, because the market priced that in.

Right.

And so as we sit here, we've been on a couple weeks of good market returns and maybe it's the bottom, maybe it's not.

We don't know.

My intuition is if it is, in fact the bottom is in and the market has kind of started to bounce back.

That's because people are pricing in the economy, going through a recession and bouncing back and you know, all the different things that go along with that.

So I think it's really important to just remind people, especially amateur investors, that the markets are forward looking.

Well, and after every recession comes what I mean, the recession ends and the economy improves.

That's right.

I mean a thought exercise I use sometimes.

Let's use Tesla, just a huge company, one of the biggest companies out there.

Just incredible success story over the last decade.

Let's just say you think things are going to be so bad over the next 12 months that they will sell zero cars, but then the economy will recover and 10 years from now they're going to still be one of the biggest electric vehicle manufacturers.

Will the stock go to zero because they sell zero cars next year?

Or will you know, or will it trade on some multiple of those future cash flows far down the history line there?

So what does somebody do if you just hear so many different and it could even honestly depend on which news channel you're watching and I've even seen you pull up your CNBC app, just see where the markets are and you'll see a headline that says, market struggles to hold today's gains.

But it could just have easily said, hey, wow, the markets are up today.

That's a good thing.

So you can turn anything into a bad thing or a good thing.

So how did.

How should somebody react to the news?

That is, you know, again, it is entertainment and if it.

If it bleeds, it leads.

Good news doesn't get viewership, so how should the individuals react to the news?

Yeah, you know, it's funny you say that.

I've seen people kind of point out a couple times, you'll go on one of the big news sources and, you know, maybe early in the day the market's down and the headline will be, market is down because xyz.

And then the market kind of bounces back and they only change the one word in the headline.

They'll say, the market is up because of xyz.

Right.

It's just.

It's just kind of crazy.

You can take the same headline and just fill in whether the market's up or down and still run with it.

So it's hard.

So I think, you know, let's acknowledge that up front with empathy and understanding here.

A big part of, you know, the research my team does is why people make the decisions they make.

And, you know, it really just comes down to.

It's extremely difficult in the first place.

But what do you do directly?

Well, you know, the one thing that we would say is, whether on your own or really ideally with an advisor, is to prepare ahead of time.

That's first and foremost.

It's understanding when you put into place your asset allocation and your risk tolerance and all those things are taken into account.

It's just understanding, I mean, if you have a large allocation to stocks in your portfolio, or really we could say bonds today, just given the activity in the bond market, there's just taking stock of what's happened in the past, right.

What are the worst years, what are the best years?

And just understanding that risk is not this abstract thing that the stock market might go down at some point.

And that's what risk is.

Risk is the reality that the stock market will go down and you will go through periods of significant downturns.

And so you want to prepare yourself ahead of time for the fact that those moments will happen, even if they're only once every 10 years or once every two years, whatever they're going to be.

And then we say, you can't control the markets.

Right.

None of us have a crystal ball.

We don't know what they're going to do, but what we can control is our exposure to them.

We can try to control our emotional reactions to the markets when they happen.

And then, you know, I'll say there are.

There are certain things that you can actually do.

So we say staying the course doesn't mean standing still.

And the analogy, right.

Vanguard's known for our analogies towards boats and maritime theme.

We say it's like, you know, it's like setting sail, right?

If you don't just point in your direction and you're there.

You have tides and winds and they're constantly making these minor changes.

So you're staying the course.

But that does require changes along the way.

And so those are things like rebalancing, which our data would show in aggregate, people generally don't do.

It's hard when the market's going up.

You have to sell your winners and you get attached to them.

And it's hard when the market's going down.

You have to buy the losers.

And the natural tendency there is, well, just wait and let it go down the rest of the way and see what happens.

So it's things like that and then, David, stuff that you might be doing, right?

Roth conversions and tax loss, harvesting some of the more complex financial strategies that are really most applicable during a market downturn, you know, and it's not to, you know, it's not to gloss over the negative effects.

I mean, losing money hurts, especially if you're in retirement, for example.

You know, it's not easy, but there are things that you can do.

In today's world of social media, politics is just huge.

And I'm not going to ask you.

Who you voted for.

I don't care.

You're a nice guy.

Whether we voted for the same person or not, I don't care.

But.

But we live in a pretty divisive world now on political views are held pretty strongly.

So what do you say to the person that says if the other party, whoever the other party is, gets elected, the markets are gonna, quote, go to zero, or if my guy doesn't stay elected, or if the other guy gets elected.

How much does the political party that's in power affect markets?

Historically, it's a great question.

Try not to get myself or you in trouble in answering it, but it is something that firm has looked at and, you know, I would just take a step back and I mean, I'm a big voracious reader of US history and I often tell people, you know, as rough as some of our history has been.

Sometimes it can be advantageous to just take a look at it and make yourself feel a little better about where we are today.

So are we in a period of divisiveness?

For sure.

Do we all wish that wasn't the case?

Absolutely.

But here we are, and it's.

It's really not new in US History or really world history.

And if you look back, I mean, we've been through much worse than this.

Civil War, two, World Wars, Great Depression, all of those things.

And yet here we are.

So I would say again, similar theme, kind of zoom out a little bit.

Now, what our research has showed is that it often doesn't really matter who's in charge in terms of market returns and things like that.

And I know the temptations there, right?

If this person's in and their policy is going to be this and this is what's going to happen.

But the markets aren't really simple and linear like that.

I mean, the perfect example, you know, most Recently, I think 2016.

So if you look, you know, when you and I went to bed on election election night in 2016, the stock market futures were down, what, 6, 7, 800 points?

And that might sound quaint today, just given what we've been through since then, but, I mean, that was a big drop at the time.

And yet by the time I got into the office the next day, the market was up 600.

So, I mean, the conventional wisdom there, right, was if this guy gets in and this is going to be bad, and ended up being the opposite.

We actually had a great few years of returns there up until Covid.

And so I don't know how to handicap that personally.

Right.

You say if this person gets in, they're going to do this policy.

And I said, markets are reacting to what other people are pricing in.

And David, I would even go so far to say right now, whichever side it is, let's just say you believe, hey, this party is going to take power.

They're actually going to be able to get things done.

They're going to do policy xyz, and that's going to be bad for the economy.

Well, now we have this world where sometimes what's bad for the economy means the Fed maybe stops raising rates and becomes more accommodative, and that's good for the stock market, maybe that's good for the bond market.

So those are the kind of questions you have to ask yourself.

I just encourage people to just again, zoom out.

I mean, you're going to go through, you know, this party in power and that party in power.

And your most people aren't going to agree with most of the decisions and policies over periods of time.

And yet, you know, over the long periods of time, the markets have done well and people have been able to achieve their goals if they are able to stick through.

I've always kind of looked at market returns and president like a football coach.

You know, the coach gets way more credit when they win and way too much blame when they lose.

I mean, sometimes, you know, quarterback throws a ball and the receiver just doesn't catch it.

Coach really can't change that.

And other times the receiver does catch it and makes a great play and then the coach says, you know, then the coach is a brilliant coach that coached a great game and they won.

And you know, I kind of look at, you know, the party in power being now, you know, we all need to be informed and vote by your principles and everything.

But I just don't think it's that simple.

As if, you know, the other party gets in power, you know, you can lose all your money in the markets.

Hey, let's take a quick break from the podcast.

Are you a business owner and are.

You hoping at some point to sell your business and have those funds fund your retirement?

Well, if so, I'd love for you to go to www.allofmyassets.com freedom score.

You can take the questionnaire and it gives you some knowledge of your readiness, of how close or how far you are from having freedom in your financial life.

That's www.allofmyassets.com freedomscore and let's get back to the podcast.

Totally agree.

And I mean, if you're making, you know, if you're getting in and out of the market based on that, I mean, chances are you're probably looking at other stuff and kind of making the same decisions.

It's just you really have to separate, you know, ultimately, right.

The markets and investing is a means to an end.

And I know, you know, from your and I conversations, you're focused on helping your clients meet their goals.

You're not necessarily focused on, you know, the highest possible return year after year or necessarily avoiding losses.

It's basically impossible to predict ahead of time.

So just going back to what those goals are and just reminding investors and, you know, if you're not working with advisors, just making sure that you keep it front of mind that your goal here is not to just maximize returns, it's something else, something, you know, potentially far down the road.

You work a lot in kind of the behavioral stuff side of decision making.

And over the last few years, when a lot of clients were getting 15 to 25% returns on their portfolios, you heard no complaints.

Obviously, this year you're hearing clients say, well, I don't believe in the stock market.

I can lose all my money.

What makes the human mind forget so quickly that my portfolio is up big time over the last five years, this year it's down, but I've still basically lost only some of my gain.

How does it.

Like, what does the mind.

What controls that in the mind to make people forget?

Like almost having a change of opinion based on the results.

Well, I'll start with this.

So Daniel Kahneman, who I'm sure you're familiar with, basically invented the field of behavioral finance and behavioral psychology, recently won a Nobel prize for it.

So he's famous for saying, the more he's learned about how the brain has worked and how decision making works, he has gotten no better at actually making decisions.

And so even if I, you know, first of all, I don't know, right?

I don't know the exact answer to that.

I mean, there's plenty of studies around about recency bias and just short memory span and things like that.

Point being, even if I did know the exact answer for every single human being of why that exactly is, I'm not sure it really matters a whole lot.

But ultimately, I think it just does come down to that recency bias.

And humans have a hard time thinking over multiple time horizons and thinking about probabilities and tracking what I call alternate universes, or what an academic would call counterfactual.

So what I mean by that is, and it's particularly pervasive in the investment world, where the second you make a decision, there is another decision that would have been better, and it's in your face.

We talked about the media and people watching the financial news and all that.

And that's an issue because I could sit here and buy a stock, and a millisecond later, there's probably another stock somewhere in the market that did better.

Compound that minute by minute, day after day, year after year.

And it just, I think it, especially in the age of information, I would say, breeds a unique quantity of regret because of that.

And so we don't have a counterfactual for what else could have been based on your decisions.

So we also don't know, hey, if I had bailed out of the market when I wanted to, how bad would things have been?

And I use this thought experiment, and I actually Have a chart of it where we took the market in 2020 and we tracked it down to its bottom and then back up.

I think it was up almost 20% on the year, even though it was down 30 at one point.

So massive turnaround there.

And we actually overlay on the chart the different headlines throughout the year and we make the point that there's never going to be an all clear signal.

And to the extent that there is, it's probably too late.

And I think 2020 was a perfect year because I know early on in that year, during the shutdowns and everything from COVID we were hearing, I'm going to bail out of the market and I'll get back in when there's a cure, I'll get back in when the pandemic's over, whatever it may have been.

And so if you think about that, I mean, there was kind of like a really, you know, a really definitive all clear signal in that case, which was the vaccine being approved.

Right.

So if you're sitting there at the bottom and saying, I'm going to get out, I'm going to get back in when there's a vaccine, well, that all happened in the same year.

And here's what would have happened.

So if you had, let's just say, a million dollar portfolio at the beginning of the year, let's say you bailed out somewhere along the way.

Right?

Even a relatively 40 balanced portfolio was down 20 plus percent at one point.

Just say you timed it really poorly, got out at the bottom, it happened fast.

So that's not unreasonable.

I mean, we have data that people did that happened within a couple weeks.

And I think a lot of people capitulated.

All right, so you have your million dollars, you lock in your $800,000 and say, I'll get back in, I'll get back in when the all clear signal arrives.

So fast forward later that year, let's say you get back in when the vaccine's approved.

Well, the market was up almost 20% at the point that it happened.

So your million dollar portfolio, if you had just done nothing and let's not even account for rebalancing and all of those things that we just talked about, right, that were to add value and you'd actually be better off for having gone through the downturn.

And that's again, not to just gloss over the tragedy and the nature of why the market was down.

You're talking an $800,000 portfolio versus a $1.2 million portfolio just from not bailing out at the bottom when it hurt and waiting for the all clear signal.

So now devil's advocate, you know, hindsight is 20 20.

So you know, if you were a client facing financial advisor, talking to that same person when their million dollars had talk turned into $800,000 and let's assume it's not their only money, they have some cash and they still have some income.

And you know, like, what are you telling this person?

Because again, you don't have the benefit of knowing the future.

Yep.

I mean, if I'm sitting there and I'm an advisor, what I'm telling them is, hey, we've had this conversation before, right.

When we put your asset allocation into place, we were very aware that, you know, the markets could go down 20, 30, I mean, 2008, not all that long ago.

You and I were both in the industry at the time.

I mean, the stock market was down 50% at one point.

You go back to the tech bubble bursting.

I was in college at the time.

I mean, the market was down greater than 50%.

I mean, I'm not that old and I've seen the market go down -50 multiple times just in my adult life.

And so I would say, hey, you know, we were prepared for this.

We knew that this was a possibility.

It doesn't make it any easier.

I would be talking to them with empathy and understanding.

And certainly I, I can't speak for you, but I know I was sitting in that moment just absolutely terrified of what was going on in the markets in the world.

And so I think we acknowledge that and be vulnerable.

Right.

We're all humans too.

It's not like we're robots over here.

But I would just say time and time again throughout history, the markets go down.

They price in what the recovery is going to be, and that's when the money's made.

Those are the moments that probably decide whether you're going to reach your goals or not.

And so, you know, ultimately it's, we can get out of the market.

Now.

Historically, every single time the market had ever been down in the past, and every time's a little bit different.

And it's always possible that moment will be different and this will be the big one.

You know, every single time throughout all of investing history, if you had made that move, you know, those are the big mistakes and that's the, that's the one that cost you your ability to meet your goals or not.

And so it's either hang on for the ride or hope that the same thing happens this time and it bounces back eventually and you're able to meet your goals or you get out.

And I think the thing there too is if you don't believe that it's going to bounce back this time, if you do believe that, that's it and the system's over.

And again.

Early on in my career during the financial crisis, I remember being on a trading floor and I remember watching Congress vote down tarp, the Troubled Asset Relief Program.

And I want to say the Dow was at like 8 or 9,000 or something and it went down a thousand.

And you know, I hadn't been through it as a professional at that point I'm just thinking to myself, man, I wonder if the whole thing's over, right?

Is the house of cards crumbling?

That's it.

And at that point you just ask, well then what's the difference, right?

That's true.

Yeah.

Yeah.

I don't know.

Well, I'm sure you're aware of Nick Murray and his work as a coach of financial advisors.

He says quite simply the finance a financial advisor is a behavior modifier and someone who just helps their clients to make the sound decisions.

They're not always, I don't want to say right decisions, but you have to kind of have a plan and a philosophy and stick with that and then use that as a basis for your future decisions.

So in your last point on that, I would say too, like, you know, how do you get through these moments?

I talk about the percents that clients care about.

Again I mentioned investing is a means to an end.

And it's almost like, I don't want to say changing the subject, but it is, it's changing the topic of conversation back to that end.

And so what I mean by that and one of the great things about the markets is that forward looking returns generally improve as the market goes down.

Right.

If you believe over a long time horizon, returns are going to be xyz obviously in the moment.

If they're down, you know, that means the returns are higher.

And so oftentimes financial planners will use software or technology to do what's called a Monte Carlo simulation that just says hey, in a thousand or ten thousand future paths in which the way the world could go, this is the percentage of times that you're going to be able to reach your goals.

And there's kind of this self correcting mechanism in there where it's if the market goes down 20% that means the returns are looking better in the future.

And so while the market may be down 20%, your progress towards your goal Right.

Your probability of reaching that goal is not down 20%.

And so, you know, maybe you go from 90% chance to 85% chance.

But here's the issue.

If you do bail out of the market at any point along that way, that actually locks in the loss on your ability to meet your goal.

Right.

So you can either lock in the loss of the portfolio or you lock in the loss on the goal.

And I think that's a really powerful kind of tactic, again, whether with an advisor or on your own, to get through it.

It may feel great to just not be in the market, but does it feel great when you realize you're fundamentally altering your ability to meet your future goals because of it?

Yeah, because it's all about meeting the goals, for sure.

Not necessarily, you know, beating the S and P or beating an index.

You know, one of the things that I do that's a little bit different than a lot of financial advisors is I figured that a lot of my clients are business owners and their biggest asset is their business itself.

And you have direct control or some direct control over how much your business is going to be valued.

Whereas if I buy Amazon, I have zero control over what if Amazon's value is going to increase.

So I became a certified value builder advisor.

And in addition to the typical financial planning vehicles, I also help business owners to increase the value of their business because there's eight drivers of business value.

So that does two things.

It gives business owners a feeling of control because they can have some control, especially during times like this.

And it also, you know, typically business owners just don't know what their business is worth and how much they can sell it for.

So we've kind of worked through a lot of of those issues that helps business owners to, you know, to build up their biggest asset.

Because like I said, your brokerage portfolio, we have a great process, but we still don't have direct, direct control over the value of those assets.

So in your work, have you been able to quantify like the value of a good financial advisor and what it means to kind of a typical client?

Yeah, that's.

First of all, I appreciate the commentary about working with the small business owners.

I think that's so important and so underappreciated.

And I know, you know, even yourself as a financial advisor, I mean, you are effectively a small business owner.

I think we, we could all use a little bit of help on that front.

But on the financial advisor side, we have.

So our firm has published under this research franchise we call Advisors Alpha, which is Slang for the value that someone like yourself can add to a client.

And we've been studying it for years.

I've been part of that team going all the way back to 2010.

And so we found in our work Quantifying Advisors Alpha that a good advisor that's following a holistic wealth management process is worth about 3% in net returns over the long term.

So a few caveats there, a few big caveats.

One is that's much more of an art than a science.

Sure.

We're not saying that's precise.

It's not something that's going to show up on a statement.

So it's not.

At the end of the year, David, your clients get a statement and said, this is David's value right here.

It's exactly 3.0%.

It's going to be over a long period of time through the ups and downs of the markets and things like that.

And then the third one is, that is relative to what we've been able to kind of define as the average experience.

So if we look at aggregate data of what investors are doing on their own versus what could be, if they had a little bit of help with someone like yourself, that's about what they would get.

And it's really powerful.

I would say it's probably underestimated because that's the year over year, but it doesn't account for you.

Go back to the dollar example I just used with the COVID Right.

The million dollars versus 800 versus 1.2.

I mean, that's basically a 50% relative difference, 800 versus 1.2.

That may have occurred in a 15 minute phone call, ostensibly.

And so the other point there is that it's really about closing the gap between gross and net returns.

I think some advisors take on an investment process where they try to beat the market and produce alpha outperformance.

That's great.

It's really difficult.

Ultimately, you know, there's a lot of value to be added between the percent that's on the paper.

Right.

So whatever that, whatever that final return is, whether it's active, whether it's all index funds and you're just getting the market, whether it's, you know, a 2080 conservative portfolio or 100% stock aggressive portfolio, what happens is you're gonna lose, you're gonna lose out on high costs, you're gonna lose out on taxes, and you're gonna lose out on behavior.

And so our work is really focused on how can we minimize the leakage in those three areas.

And that's A tremendous value that advisors bring and most individuals aren't doing on their own.

And candidly, not all advisors are doing that either.

So it's not just hire an advisor and you get that there's some due diligence required there and you have to actually be good at being a financial advisor.

Absolutely.

So let's go back.

Let's say you were that guy that had the million dollar portfolio in 2020 and then a few months later you had $800,000.

A couple things that you can control.

Number one, let's make sure you have a will to make sure that your assets are disposed of according to your wishes.

Number two, let's look at your insurances.

Right.

So what if you rear ended me and my family's in my car and you're found you're at fault.

And let's say that you had minimum car insurance, whatever that means in your state.

Now I sue you and now you're having to take money out of a depleted portfolio to pay for my damages.

So think about the difference between the hundreds of thousands of dollars you would personally be writing to my family to pay for our injuries or if we put you in touch, made sure that you had an insurance review for your property and casualty versus not that could be a several hundred or million dollar swing.

And those are the things that people just don't do.

We don't do do them on their own.

We don't typically go to an attorney and say, hey, what financial documents do I need?

We don't typically go and say what type of insurance?

You know, where are my risk exposures on my insurance?

We don't typically do tax loss harvesting.

And I, while it's a good idea, you could really screw a lot of things up.

So you should need some professional help.

You don't typically go to your CPA in November and say, hey, what are some things we can do for this year before it's too late.

And that's where the financial advisors come in a lot.

In addition to managing the investments in a way that makes sense for their clients.

Yeah.

And David, I would say making sure that you're keeping that stuff up to date.

I have family down in Naples, Florida.

I was just down there a couple weeks ago right after Hurricane Ian and driving around, just you know, absolutely heartbreaking seeing some of the devastation and just people have lost their homes and their belongings.

But what's even worse, I'm talking to my stepdad who is a mortgage banker down there and he was saying a lot of the older individuals there they may have had flood insurance, they may have had hurricane insurance, and they might not have looked at it for 20 years or so.

And so when we're in a period like today with inflation and everything seems like it's so darn expensive to replace.

You might have had $200,000 of insurance 20 years ago, and now your home's worth a million dollars and you lose everything in it.

And like, how do you replace that?

And, you know, relative to the relatively small increase in premiums to have yourself protected, I think it's things like that, like you said, most people just aren't thinking about it.

And that's just, you know, there are so many of those things, it's hard to keep on top of them all.

Yeah, it's almost like a personal trainer, like losing weight, getting stronger, getting in shape.

Maybe not rocket science, but if you're paying me to be at the gym to make you work out at 6:00 in the morning, you're going to show up.

If you're not paying me, you probably show up a lot of the time, but not all the time.

So which one are you going to have more results is when you're actually implementing.

And of course, as a, you know, as a personal trainer, I would have even more insight and expertise that could help accelerate, accelerate your progress and your results.

So I really always stress with just about everybody, get help, make sure there's accountability, make sure there's expertise, because there's just so much that we all don't know that that can really, really have a negative impact on our financial health.

So this is really fascinating and I'm really going to be interested in this final question that I didn't tell you that I was going to ask you.

So, as the weekly wealth podcast, we talk about wealth and we talk about the mindsets, the tactics and the strategies that can help you to build wealth.

So I would love to know, like, what is your definition of, of wealth for you personally, what does wealth mean?

That's a really fantastic question for me and I'll say my household, for my wife and I.

And luckily, given what I do for a living, we actually have these conversations, which is great for us, it's independence.

So we would like to be able to someday be flexible and independent and spend time, more time with our families, especially as they get older.

David, I think I told you, my wife's entire family is based down in your world there in Greenville.

I'm up here in Philadelphia.

I have some family here, some family in Florida.

People starting to Kind of disperse.

And so for us, we would love to just be independent, able to kind of move around, spend time with nieces and nephews and children and aging parents someday and things like that.

So everything we do, when it comes time for those moments of should we get out of the market?

Should we not, we have to ask ourselves, is this going to give us more or less flexibility in the future if we do that?

I love it.

So you're making decisions based on your values, which is super, super important.

Walt Disney's brother said, when your values are clear, your decisions are easy.

I love that quote.

Yeah, I like it.

Well, awesome.

Well, I appreciate your time.

You know, a lot of times I'll have guests on and they're giving valuable information, but they also have something to sell or some.

Some service to sell.

You're just.

You're just out here preaching kind of the good news of making good financial decisions.

And I hold to the philosophy that how we handle our money should positively impact our lives and the lives of those around us.

And money's not anything, really, but it provides independence and choices and options.

So if you needed four new tires on your car, and if you don't have money, you're pretty screwed because you can't get to work, which means you're going to get fired, you're going to have less money.

But if you need four new tires on your car and you do have the money, then you have a little bit of a pain in the neck day where you have to figure out a way to get your car there and pay for it, but it's just an inconvenience.

So if we handle our money properly, and the way you should handle your money is different than me, but how we handle our money should just help us to sleep at night and make our lives better.

So with all of that being said,.

Mike, I appreciate your time.

And yeah, until next week, we wish.

Everybody a blessed week.

Thanks, Mike.

Thanks, David.

The information presented on this podcast is for general educational purposes only and does not constitute financial investment, legal or tax advice.

Parallel Financial is registered with the U.S. securities and Exchanges, Exchange Commission, SEC as a registered investment advisor.

Registration does not imply a certain level of skill or training, nor does it constitute an endorsement by the sec.

All investing involves risk, including the potential loss of principal.

Please consult a qualified financial professional before making any financial decisions.

And here is your bonus content for this week's episode.

And actually, really, it's not content.

It is is a question.

So what do you think?

Do you like interview episodes or do you like solo episodes.

You know, I started looking back and a lot of my episodes used to be interviews.

Should we go back to having maybe half episodes interviews and half solo?

Or what are your thoughts?

I'd love to know.

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Davidarallelfinancial.com all right, everybody, have a wonderful week.