With the market down 22%, we’re officially in a bear market. Is the pain causing you to make changes or re-evaluate your plan? Hopefully you already had a plan going into this week. But if not, use this opportunity to make necessary changes and also update your plan going forward. Know yourself and how you’re reacting.
This bear market may be short or it could be long. It might go down further, or hover at this level. The past has shown a variety of types of markets - and you need to be ready for whatever is going to come next. Is your portfolio prepared? How about your spending? Your job? Make sure you exercise control over the things in your control - because the Bear itself is outside of your control.
A few things to consider:
00:00 Matt: Welcome to real financial broadcast on WKXL and we're available wherever you get your podcast. So look, if you're listening on a podcast or if you're not, but you're podcast curious, go to whatever app please that you use for podcasts, or, you've heard about using for podcasts and just press that little plus sign that subscribe or follow button. what that's for. We'd really appreciate it. it. It. Us out and it especially helps out Mike Morton, the owner of Morton financial advice, who is the host of the terrific podcast, financial planning entrepreneurs. We also throw this podcast in the capital closeup podcast feed. Both of those would benefit from subscriptions, Mike, how are you doing?
00:43 Mike: Good man. I like plugs. I think we should have a plugs in the middle too. Cause maybe people are listening on the air. They might have not the start of the episode; they're just getting in their cars five minutes from now. So we should maybe do that or four times, you know throughout the episode.
00:55 Matt: Yeah, we'll plug. And by the way, I wanna be very clear about something by benefit. What I mean, is it benefits the podcast you get? Absolutely benefit whatsoever from doing these
01:04 Mike: Hopefully the listener will benefit. If you subscribe, you'll get the benefit of never missing an episode.
01:10 Matt: Yeah, There it is. Hey speaking of not getting too many benefits right now, look, we gotta it. We did a show where we started to prepare for the inevitable. Eventually a bear market comes, right. The bear market is coming no matter what the way the stock market works and it's here. And now that here, we thought we would revisit this talk about it and, really dive into all Right, You know plan only, never survives first contact with the So now the enemy is here. What are we all thinking about doing? First of all, could you just remind us technically. What is a bear market?
01:49 Mike: The big bear is here. The stock market, which is usually measured by the S and P 500 or Dow Jones index, or just the broad US market, now that we have better indices. Computers are easily able to track these things. Interesting that it used to be kind of the Dow, there's only 30 stocks so much easier to track. We only have to like our hand, figure out 30 things on your spreadsheet. But now we have computers. We can track the whole market. Correction, a correction is when, down the peak. So whatever the last peak was, if the market is down 10%, we call that a correction. And if it goes down by 20%, We call that a bear market. So from the most recent high, which just a few months ago to today, it is now down over 20% the market. So the S and P 500, the total US stock market and the Dow Jones, they're all, below that now below and having closed we touched at 19%, a week ago but it didn't officially close it down. So once you're down 20%. Officially closed then that is a bear market. So we are officially in bear market territory.
02:55 Matt: So Obviously past history. All history duh, but history, is no. Yeah, I've already done it. My objection on this show to past performance is not any future results. I hate that. Disclaimer, it's where else are you going to look for information about the future than the past, right, don't judge a book by its comfort. Actually it's a source of really useful information. I am gonna judge the book, but I like this author, there's a good chance I'm gonna book. But what can we read from history? There are different types of bear markets, right. And so what does it at least what does that range like? What could we be dealing with here?recent ones that.com back in:
04:32 Matt: like? Mega corrections.ree that I mentioned March of: o the new England Patriots in:
07:33 Mike: Come on.
07:33 Matt: For those of us who may have some big expenses coming We need.
07:37 Mike: That's Right,
07:37 Matt: to appreciate in 10 you know college and whatnot.a be at new all time highs in: shouldn't be worried about a:
10:58 Mike: Yeah, I would say, it's trending more to have a little bit of a recession. We already have high inflation, it's right around 9% at the moment. And we thought That would just be here for a minute or two turns out a little bit longer than that Given demand and supply, especially the demand which is good, that we have the demand. People are spending money and buying stuff. It's just hard to get. And so I think we are gonna have some inflation for a while, I think the likelihood of a recession is still fairly high. Even though we have good indicators, businesses are doing well. There's just a lot of places hurting as well. So we'll see what the economy is, and it's always one that you look backwards as a reminder. Recessions. You never know when you're in them. only afterwards that economists point out. Oh yeah. That was a recession. It
11:41 Matt: Yeah, that's
11:41 Mike: ago.
11:43 Matt: This is why people hate I mean there's many reasons
11:46 Mike: That's right.
11:47 Matt: I remember my mother, when I decided to major in economics, said to me well it's not really a a is it? It's more like a set of principles. And I did come to believe in economics. I like thanks, because she's a sociologist, which is like a definite social science. And she, very statistically anyway, I, I do her point though, which is. Economics does a lot like meteorology, which is that the weather person is always better at saying here's what happened last week. can explain that to you then here's what's gonna happen next week. Although, forecasts are improving all the time. the point about inflation and again, I commend that episode with Mark Zandy to everyone because. It did break things down in a really helpful way. And just think a little bit about the inflation piece, he made a really compelling case that inflation is almost all being caused by. COVID like the pandemic and Russia say it with me here, people COVID and Russia. There's some good news in. that. The pandemic situation, obviously we've been dealing with the Omicron wave, but what we're finding is less and less medical impact from having COVID fewer hospitalizations as people's vaccination rate has continued to go up as more and more have now had COVID and have more protection. The economic and social impact of COVID is going down. Obviously the situation in Russia is unknown. It's unknown how that's going to play out. And the disruption is likely to continue, but. As economically we begin to work way around it. We identify other sources of energy supply. As we work out expanded, liquified natural gas export capacity in the us. As we begin to expand that, we make up for Europe's needs. That puts downward pressure on prices in Europe. It's a commodity. All of those economic effects play out. So there are reasons to. That inflation is near its peak or has already hit its peak and maybe going down. And that would be obviously good economic news and good news for the
13:59 Mike: I mean that sounds wonderful. And I definitely wanna check out that episode because to me, like yeah, I agree that inflation. There were definitely a lot of causes for inflation, right? The war. And COVID being, the main ones, right? That started a chain reaction of other problems, supply chain, luckily the demand, like I said, is still really people have saved, like you mentioned the cash balances in bank accounts, people saved a lot more money, that's great. They're ready to spend it. They're ready to get out and stuff. So the demand's really high. So I do think that inflation is probably at its. I, and hopefully we'll come down obviously from a peak, but I don't know how fast or how And when the fed has always said oh, we wanna about two or 3%, man. I'm pretty hesitant to say we're gonna be at two or 3%. Anytime in the near future. So I still think you have inflation running and let's look back at that stagflation, which hopefully we will avoid, that was a 16 year run. And in 16 years, the prices of goods doubled. Over those 16 years. so I certainly hope we're gonna avoid a situation where things are gonna double, you that quickly in terms of prices. But we could be in a situation if it runs at four to 5% we could be at that situation where prices are really, on the rise for
15:10 Matt: and I did a show Well you and I did a show about inflation the kind of tried to keep it kind of I don't wanna I don't wanna redo that entire show right now, cuz this is really focused on the who are thinking about who are thinking about kind of like the overall economic situation, just go back in the podcast or the entrepreneurs podcast or the capital closeup those uh that episode. And that I think is pretty good. I think it gives a pretty good way to think about it from how to think about it from your own Here's a tip Things are Here's a tip. Things are more. done. All right.
15:45 Mike: boom there
15:46 Matt: what we wanna focus on is more of the bear of this. So let's this So let's just just in a what are you now what are you And and let me ask me let me let me ask it to you way. a slightly different way Um What are your clients concerned about? Are you getting phone calls?
16:05 Mike: Yeah, Yeah that's a good one. What's everyone saying these days? What questions are coming up and then what do you recommend? Like what are you telling me to do? So here's the good news from my perspective or from my business map. I have gotten, I think if I think about the last two months, I have received one email on this front about what we are doing with our portfolios, now given. Yeah, given Everything Everything that we're talking about today. So I haven't heard anything kind. And the reason why is, if you go back and listen to all our episodes, what have we been preaching to? Do you think so? We have been preaching tons of different financial planning tips, and strategies and little you can do, like in that inflation episode and IBOs, but in general, we have been saying consistently that This is going to happen. A bear market is going to come. I don't know if it's this year or next year or five years. Well Here we are, we're here. We have a and so that's setting the expectation of my clients, setting it with the listeners and this. If you go back and listen, we have been consistent, have a plan, and be ready for what's to happen. And so when I've set that expectation with clients, Sitting in front of me saying, here's a plan. what we're gonna do, saying it to them over time, all the time. That sets the expectations that we are ready for this. And then I've also been communicating with Matt, I've been proactive. Same as we're doing on this podcast. Hey, this is happening. What should you be thinking about? So I do the same my clients, reaching out to them saying, here's what we are, we've planned for
17:25 Matt: all right You know what we're gonna do all right. So Mike Morton, we're in a bear market. This feels like a pamphlet you're gonna get at the doctor's office. It's so you're having a bear market. so you're having a bear market. And you are just saying, good news is your clients, people you work with, they're not exactly calling you in a panic you always preach. Let's have a plan so that we know if this happens. We're set up and we're in good shape. This is the approach we're gonna take. And people have basically stuck with that. So that's good. But in general, since not everyone is your client, what should people who are worried about their own personal investments be concerned about right now?
18:05 Mike: Wait, is it? Why isn't everybody? My client
18:08 Matt: Cause you only have so many hours in the day.
18:11 Mike: yeah, yeah. Nevermind. So what should people be concerned about? Obviously hopefully I will listen to an episode from a week ago when we talked. you know Might be coming how to think about It What you really need to be prepared again, is here's where we are today. And we can't worry about what's happened in the past. We need to worry about where we're going from here. So the biggest concerns really are where you are in your life. Okay. So think about that. I've been working for many years. I've just retired. I've been retired for 10 years, where are you? What money do you have either adding to them or using them? And then how long do you need those to last? So you're thinking about your life, your situation, then overlay. What could happen from here with. Those pots of money. Now, this is what I'm talking about in terms of how long could this bear market last and how bad could it be? So it could be a nice little V-shape we talked about I think relatively unlikely, but hopefully that happens. We're right back. Remember that even today, we're recording this here towards the end of June. The stock market's still pricey, even though it's come down 22%, it's not super cheap. Okay. So I wouldn't expect going straight back up in the next six months or one year and having your portfolio completely recover. So it could be multiple years. So think about that. What your portfolio is down for 2, 3, 5 years at this level, maybe a little bit worse than this level over that number of years, how does that uh look and feel to you given your life situation? So those are the kind of scenarios you have to think about personally, Where you're going to be in one year, three years, five years, 10 years from now your portfolio. Knowing that the market could be, say flat or down over that period. And how will you respond to that?
19:53 Matt: It reminds me a little bit about the story of two friends, camping in the woods and seeing a bear and one of them starts running away. And the other one says, wait, why are you running? You can't outrun a bear. The first guy says, I have to outrun the bear. I have to outrun. Now a couple of things about that. First of all I would definitely sacrifice you for a bear. I just want you to know
20:20 Mike: Hey, wait a minute.
20:21 Matt: yeah just so we're clear. Second of all, that's not really the case when you're running from a bear market. If the bear market eats all your friends and colleagues' people in similar lives first, it's not coming for you at the same time. But I do a little bit here into what you had just said of what you do need to think about if you are thinking about outrunning the bear a little bit, what is your saving situation, your retirement situation, what are you going to need? When are you going to have to deploy your assets? You could be in my situation where your next big expense is coming up. Isn't a house purchase. It's sending kids to college. You know where that is, where we currently stand. And the kind of thing that people do with you is they look at the scenarios, what they're gonna need, what can be assumed under various scenarios. And it's back to forming a plan. So you see, depending on how fast the bear is, or how long the bear goes in this case, are you able to outrun the bear? And if not, can you sacrifice a Mike Morton to the bear's hunger
21:21 Mike: Yeah, that's right. you sacrifice someone else to the bear and hope it
21:24 Matt: Yeah,
21:25 Mike: That's exactly right. Yeah. Yeah. But wait, the first part, not the second
21:28 Matt: No, could we find a sacrifice to give to the bear? Could we say offer Warren buffet the bear? Oh, okay. No.
21:35 Mike: That's another podcast.
21:37 Matt: Enjoy this billionaire. Eat delightfully.
21:40 Mike: Eat him instead. Yeah. Yeah. Maybe he can bail the rest of us out
21:44 Matt: That would be delightful
21:46 Mike: So yeah, I think that's right. Knowing where you are and how long the bear is gonna be chasing you. Can you outlast it? So that's something to really think about, you're in retirement, hopefully you have already thought about this. I need it. Two years, five years, 10 years worth of spending that is not gonna be cut in half. So in other words I don't have that 200,000 I'm gonna spend over the next couple years or five years, all sitting in a hundred percent stock market that has just gone down, no, I need that money. So hopefully you've thought that if you need money in the next few years, it's really sitting in cash. If you need to know beyond that what's your portfolio and breakdown and it really depends on, like I said, your age and your situ.
22:23 Matt: can I I ask you a potentially dumb. I mean That's, that's implied when I'm asking questions. We were saying not just a few weeks ago, but this is a point made that the, sneaky for budgeting is don't budget. Do your savings first set aside savings first, then whatever's left over. That's you spend. It's just much easier and, more financially sound that way. quick question. If you are retired or you're about to be retired, is it the reverse? you actually have to decide here's how much I have to spend because you're no longer saving. Do you actually flip that advice on its head?
23:06 Mike: Yeah, that's a great question. I've never thought about it that way, but that's exactly right. So in retirement, what we do is exactly what you said, what am I going to spend? This year. And where is that money coming from? Of course, that's everybody. Listen, you and I haven't thought too much about it, cuz hopefully we have many good years working ahead of us, but when you're in
23:25 Matt: At the rate I'm on the podcast. I'm retiring tomorrow.
23:29 Mike: Oh yeah. I'm I'll that's right. Or a hundred years from now. Yeah. Killing it on the podcast. But if you're about to retire or you're in retirement, your number one question is. is. Where's my money coming from? Literally so where is it coming from? How much do I need and where is it coming from? And then projecting that out a year. Whether you're getting some social security, whether you're getting a pension, whether it's all in your own pile of money in 401ks that you have to manage yourself that money is exactly from. That's the whole question. So you're exactly right, Matt, figuring that out first, like how much am I spending? Where is that money coming from and then segmenting again, I always look at having, I'll just throw it out there. I use buckets in terms of retirement. So two years, the next two years, this year, next year, maybe three years, is in cash. Literally like cash, money markets, maybe CDs, they're not go down in value anywhere from two to two to eight years. From there would be very short stable bonds. Now, unfortunately those have gone down this year. And so that's been an unfortunate part of this bear market that those have really seen a hit as well due to the interest rates, and then you've got sort of 10 years of you're spending over the next 10 years in very safe assets that will be cut in half over that time.
24:47 Matt: It does sound a lot. Like the advice constantly given to the kids on my daughter's soccer team. I coach their soccer team. And they're always asking me about the next team we're playing. What's the record? How good are they? And it's like I don't know. I don't care. I literally say to them, I don't care because we are going to focus on the things that we can. And so it sounds like on either side of that retirement divide, all you do is focus on the things you can control. So if you're retired, what's the one thing you can do? You control the spending side. And so it sounds like to the extent that you have some flexibility in, on your spending side, you can control that. And maybe you become a little more risk averse. look at your five and 10 your window and you say, all right, how can I just slow the flow a little bit here? and that's something you can control if you're not, if you're on the other side of the divide like us, then you, then we've talked a little bit about some of the prep you can do, but hopefully you're not scrambling. You're not like suddenly jumping to do something right now because it was always a possibility that we would bear market territory. So might you do a little adjustment? On the overall risk in your portfolio, how much is sitting in bonds? You might do a small one, but hopefully that was a planned change. You have a wider scope of what you can what you're saving, what you're spending more options, but it comes down to that same basic
26:19 Mike: Yeah, that's right. And what's great, not great about having big bear market, but now that we're here, we, had, I feel like we
26:25 Matt: No, you're selling it. What's great about a bear market?
26:28 Mike: We always have to look a silver lining that's I love that COVID the silver
26:31 Matt: You know What's great about your broken leg, opportunity to work
26:33 Mike: get to hobble around. you can really build the muscles in your other leg, even, there it is. I feel like we had an episode a few weeks ago. It's like what, preparing for a bear market. And it just when we were talking about it, having that conversation, I feel. Yeah. Yeah. Okay. Mike and Matt. Yeah. Okay. Those are probably good ideas. And now that we're here, I feel people are probably more tuned in because suddenly the pain is real. Like you've reached that threshold of having some real pain oh my gosh, is actually happening. hearing it in the news. it's everywhere, headlines, bear market. And now, and this is true of so many things in life. Not until you reach a high pain point, will you make it. change? All Right. So what I want to think about is now that you're that pain point, and like Matt said, hopefully you're not making any changes, but if you're finding yourself, looking at your portfolio , and freaking out like, oh my gosh, was like way too invested and everything's gone down and I, I gotta sell and you're freaking out and you're wanting to make a lot of or maybe you are making a lot of changes, use that as understanding of yourself to say. Oh, was not invested the right way four months ago to handle the inevitable bear market. So really this is, what we always say when we're, when I'm meeting new clients, Hey, how did you react during the last bear market? stocks really went down? I don't just say do you want investment a, that could go up 20% or B. That could go up 5%. Of course everyone wants investment. A goes up 20% who wouldn't want. Because, oh, by the way, it goes down 20%. So what did you do during the bear market? What did you actually do with your portfolio when the pain was high and real? Will tell you what you're gonna do next time. And so therefore use this opportunity have a better plan for the next 5, 10, 20 years for
28:17 Matt: And a moment ago, I was drawing a bright line when you're retired. You're not retired. There are people who are on the cusp, they're in that liminal. oh that's a big word. they're about to retire. just retire, if you're in that zone you have an in between and the number of levers you can pull on and things you can control right. There, are a few decisions
28:38 Mike: Absolutely. No, there's all, we all have a lot of control about how we behave. So you said it exactly right? Matt, we can't control the bear market. We have no idea how long, how bad, you know, what it's gonna look like, but what we can control is our reactions and our actions. So our spending is obviously one of those we can control, to the degree we have discretionary spending, how much we are spending in retirement retirement, are you gonna take a part-time job? Are you gonna stay in your job for a few extra years? So I can decide I'll stay, geez now is the time to retire. Maybe I was thinking about it, but now I'll stick around and see what happens. I might have that opportunity too and that's a double whammy. If you can work one extra year, not only do you get to save for an extra year, but you get to not spend from your portfolio an extra year. And that double whammy makes a massive difference towards retirement success. So there's something that you can look at, having that control over that action. Hopefully you have control and in your
29:37 Matt: And you said a couple weeks ago that just delaying social security is a big windfall too right?
29:43 Mike: Yeah, absolutely. Just let me mention retirement too, going part-time right. So maybe go part-time, maybe you can do consulting for a little bit, so you can ease into, ease into retirement, not like just full, bright line stop. And then social security. You should definitely look at delaying social security as long as possible. Everybody's situation's unique of course, but the more you delay social security, the more you get guaranteed about six to 8%. Bump. In the monthly pay. All right. That's just every year that we can delay that for the rest of the time you're drawing, you will get that pay. Now here's the interesting thing about social security that I get a lot. People always think of it. Oh if I do it by a year, that means I'm not getting that money a year. And then I get a little bit of an increase, six to 8% increase, then these people go straight to what's the break even. If I delay for five years, I lose out on years worth of money and make a little bit more every year. So it might break, even when you've gotten the same amount of money from the government might be 15 years out. Okay. delay it five years and then get a little bit more, so you finally make it up, but that's the wrong way of thinking about it because it doesn't matter when you Even the only thing that matters is how long you live. Okay. Are you going to have enough money? To live, as long as you need to never run out of money, that's what really matters. So the longer you delay, if you happen to be away before or near that break even point, you won't care, you won't run out of money. okay. You were fine. You lived the way you wanted and you didn't run out of money. The only thing that matters is if you get to 80, 90, hundred years old and you're starting to run outta money. And in that case, the decision is always right to. Now don't take my word for it's always Right. to delay. There are certain situations you wanna take it early, but really think of it that way. Delaying social security, as long as you can, is usually the correct way of thinking about it.
31:34 Matt: This is an opportunity for me to spend 30 seconds on a soapbox, reminding people. This is just something I've written a memo to for potential presidential candidates as part of my. Work as a congressional staffer. I won't mention the candidate, but I've literally been trying to explain to people who are gonna run for president. Think about social security, not like a bank account. It's not a bank account. That was the number one mistake George W. Bush made back when he said he was gonna. Reform social security put the stock market, whatever. It's not a bank account. Okay. It's insurance. It is social insurance. It is insurance against being poor when you're old, that's what it is. It's insurance. And so you would not have another piece of insurance. It's like my house might light on fire. worth it To get to cash in on my policy. You don't want to have to, you don't want your house to catch on fire. And I think the way you do it is a great way to think about it. It is still insurance. If you're in this again, I'm not giving, I'm definitely not giving financial advice to people in specific situations, look into it for yourself. But as a general matter, If you are in the position of you could delay you could get that extra six to 8% bump. First of all, you were just saying that the stock market return has been 13% annually during this. What was the timeframe? The last
33:07 Mike: The last 10 years even given the recent. The last 10 years, we've gotten about 13% annual
33:14 Matt: Which is phenomenal, but listen, six to 8% is to sneeze at. That's a really strong return. So getting that kind of a bump is a BFD as our president would put it, but also you're because it's insurance deals in risk insurance deals in the likelihood of something. Bad happening to you. And in this case, the bad thing that could happen to you is you could live longer and not have other sources of money. I want everyone to live longer, but you could end up in a situation where you're insured against being poor when you're elderly. So to me I just, I love the way you put it. Don't think about it like a bank account. I'm breaking even, am I earning more total dollars? You don't think about any other insurance. Don't think about social security that way. Think about it in terms of what is going to best protect me long term against the risk that I'm going to be poor, not have enough money when I'm older. That is my soapbox. That was a little longer than 30.
34:22 Mike: All right. I love your soapbox. Appreciate insights from Matt Robison on the financial non-financial advice. is not financial advice. but really great. I wanted to . I wanna turn it around to spend a few minutes, at least on the other end. Talked about retirees about to retire. Let's go to the young investors and the bear market. How should they be thinking about Either middle of your career or even
34:43 Matt: Can I guess?
34:44 Mike: Yeah, go ahead.
34:45 Matt: It's not true that you can read on the internet or you can on the Simpsons that the Chinese use the same word for crisis and opportunity. It's not really true, but it's so truthy that it might as well be true. Is that where you're going with this? That there's a little opportunity here. truthy. There's a lot of truth to it.
35:02 Mike: Yes. Warren buffet says you should treat stocks like hamburgers, and if you like hamburgers, when they go on sale, you get to eat more hamburgers. it's
35:12 Matt: We just lost the vegan audience.
35:15 Mike: They just left
35:15 Matt: What do I do? Do I eat to more tofu
35:18 Mike: tofu if you like tofu
35:19 Matt: more Cyan.
35:20 Mike: Yeah, it's exactly right. Hopefully you are doing, like we said, before that automatic savings into your 401ks and your IRAs. Hopefully you've. Automated it just coming outta your paycheck. You're saving off the top. So that is the great news here is that you want to, you want a bear mark. If you are young or in the middle of your career, you actually want stocks to get cheap. And I told you earlier, they're not really cheap now. so I would not be surprised. Lemme say it this way. I won't be surprised if it goes up 10 or 20% from here. I'm not gonna be surprised if it goes down 10, 20, 30% from here. And as things get cheaper, you get to buy more of them. And that's great news for younger investors. Keep up with that, that is what we call dollar averaging. You're just buying in the market every month, every year, the same amount spread out over time. So as things get cheaper, you just get to buy more of them. So it's
36:09 Matt: It's such a weird psychology. The market's going down and it just feels strange. This is a bad situation. I'm running into it. Wanna buy more of
36:21 Mike: Here's the thing
36:21 Matt: Makes sense.
36:22 Mike: Like it, it's really dependent on your perspective. So much commentary. This is bad. It's a bear market. You're losing all this money based on those who are retired, retired, retired, have large portfolios that are dropping in value. It's not. really. If you're in your twenties, thirties, or forties, and you're just adding to your portfolio, you're adding way more than you've already accumulated. And so things go on sale, think of it this way, Matt. Here's the way to really think about it. Every time the market drops in value. You're adding to your future returns. Your future returns will be higher. The lower the market goes now the higher the future returns. And if you want more future returns, you want the stock market to go lower. Now.
37:03 Matt: Is that is And, and it's, it's an interesting, this is total side note. It's a total side note, but we do have a bias in our thinking in this country toward the elderly. Listen, I respect my elders. I'm going to be an elder very soon. It's just interesting that Americans over age 65 make up only 17% of the population, but we spend.
37:30 Mike: Oh, I didn't know. It was that
37:30 Matt: It's that low. About one in six Americans is over age 65. We spend about 40% of our entire federal budget and there's a reason for that because seniors in America used to be poor, which is why we created social insurance, like Medicare social security. And it's interesting that in the ultimate kind of private sector, the investing side of things, we also bias our thinking. Toward the needs of seniors and not toward the needs of young people, again, nothing but respect for our elders. It's just children. Under age 18 are the poorest age group in America. One in six children in this country lives in poverty and seniors are the opposite. They're the wealthiest group in this country. So it's just everything you just said about your stock investing. You should adopt a long term growth mindset. Of a young person, if you're in that situation and not get over biased toward the mindset that we adopt toward retirees.
38:33 Mike: Yeah. And it's a really good point, actually. Cuz if you're in your early twenties or you haven't really started in the market, you're probably haven't thought about it all, you're not listening to this podcast. You're You're not not reading anything, but it's let's target those people that in their thirties you're in your third, like you've built some money. So now, it's lost value. Hey, my 401k. Has actually come down in the value of dollars that's hurting you. It's geez, that was 20, 40, $50,000. I just lost, so that you're reading the news and offering that as a pain point, but understand What you just said, Matt, you still have 30 years, 20 years of adding that pot. So you want it to go lower actually, because you are gonna to add to it. And remember the father goes down. Now the higher, the future returns
39:11 Matt: What a delightfully high note to end the show on the idea that yes, crisis and opportunity are the same thing. It's called a Christ at opportunity. we might be in one right now, if you're young enough, if you're not, then, not so awesome, but Hey, great advice. Great perspective, Mike Morton as always. Thanks so
39:30 Mike: Thanks, Matt.
Thanks for joining us on financial planning for entrepreneurs. If you like what you heard, please subscribe to and rate the podcast on Apple iTunes, Google play Spotify, or wherever you get your podcasts. You can connect with me on linkedin or mortonfinancialadvice.com. I'd love to get your feedback. If you have a comment or question, please email me at email@example.com. Until next time thanks for tuning in!