Recapping the 9 episodes that reframe our investment mindset to ease financial anxiety!

• The worst 15 year period in the market over that same period of time going back to 1970, positive 3.7%, same exact index, different time period, very different result. (06:04)
• Uncertainty on the other hand, we talked about how it does historically show a high correlation with volatility: financial crisis of 2008, COVID in 2020, the uncertainty period was the drop. Once there was more perceived certainty, a plan of action, what are we going to do? The market started its recovery. (07:29)
• When you use a mathematical statistically diversified portfolio, the goal is like that of a healthy cookie, we want the most delicious flavor that we can get for the least amount of unhealthy ingredients. (13:46)

Quote for the episode: "The fear should not be paying for advice, it should be not getting something for that advice, not getting the value that you're paying for." (15:35)

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Welcome to the Enjoy More 30s Family Finance

podcast. The only podcast dedicated to making life more

enjoyable for young families by hitting on the financial topics

that tend to weigh on us, stress us out, and distract our focus

from simply enjoying life.

Hello there and welcome once again to the Enjoy

More 30s Family Finance podcast. And today I have for you our

Series Recap of the Raising Your Investment Mindset series. So as

always, if you're liking what you're hearing, which I hope you

do, please make sure to subscribe, please make sure to

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wherever you are listening to clicking those stars leaving a

review, it really really does help us reach literally

millions, not just a few 1000, but millions of people out there

that are young families sitting here just like you.

Today, as I said, we have the recap for you of the Raising

Your Investment Mindset series. As I opened with at the very,

very start of this series, investments really aren't my

favorite thing to talk about because quite frankly, they are

not nearly as important, in my opinion as so many of the other

planning elements when it comes to finances. But you know, as

sometimes I can be a little bit of the minority here, I wanted

to make sure that I did provide you with these main points to

cover these main things about investments because investments

are what people have the most questions about. Investments or

what people make movies about. There's no you know, well

rounded, comprehensive financial planning movie, there should be

but there's not. So you know, the mentalities that go with it

the make it big mindset that they teach you in Hollywood and

what a lot of people talk about, you know, from what I have seen

myself personally in almost 15 years, it hinders the way more

people operate, the decisions that they make than it helps. So

why I did this series was for you to help reframe how you view

and when we reframe how we view something, it can allow us to

now utilize that in a different way. So utilize investments and

a more constructive way, hence, raising your investment mindset

title.

The goal of this series, though, was very similar to the goal of

all the other series that I've done. And that's to make sure

that we are removing anxiety, we are removing financial worry. We

don't want to forget that goal. So we can focus then all of our

energy on what matters most, what matters most to you. And I

have to believe very high on that list is enjoying more

living with your family and with your friends. So you don't need

to have anxiety when it comes to money. That's crazy, right? And

with the right mindset, with a few steps in the right

direction, you can make huge, monumentally huge strides. So be

proud of every step as you take it, you're making a contribution

to yourself, you're making life more enjoyable for you. And the

natural consequence of that is now your family's life is better

as well, that's great. So lastly, at the end, today, I'm

going to talk about the next series for the podcast to come.

Always super excited. So without any further ado, let's grab your

spouse. And let's review.

Number 1, Investment Don't "Do Good". So here I got a little

bit up on the soapbox. We discussed how we don't want to

ask if our investments "do good". We want to ask if our

investments are on a path to get us to a specific goal. Are they

getting us to where we want them to be? And if they're doing so

effectively, when we compare them to their peers, when we

compare the investments to their peers, doing good is completely

arbitrary, and likely emotional with how it is generally used.

It needs to be compared to something. If you had a fun last

year and 2021 that went up 30%, you are probably like wow, this

is fantastic. Best fund ever right? However, if it was a real

estate fund, it would have actually trailed its index by

15% still, as the real estate index was up over 45% in 2021.

So we need to focus on making sure your investments are on a

path to get you to your goals and leave the investment

performance comparisons up to an advisor or an allocation fund or

something to make sure those individual pieces are performing

how they should would be my advice. Point of the investments

are to get us to our goals. Comparison wise we need to make

sure we're comparing them to the right thing, the right

alternatives to the same kind of investment box to see whether

they're doing well or not. So hopefully at the end of this

episode, everybody was able to say "I now understand what I I

want my investments to do and how I should be evaluating if

they are actually doing that."

Number 2, Buy Low, Sell High? Here we discussed how too many

people wind up buying high and selling low, because of the role

of emotions and the lack of education that's provided, the

lack of perspective on what normal actually is. So as an

example, we talked about how a 10% drop in the market, market

being the S&P 500, every 18 months on average, is normal. If

you see a 10% drop every 18 months in the market, that is

actually normal when we look back in history normal. So you

should actually expect 20 of those to occur over the next 30

years. That would be normal. The worst one month since 1970 in

the market, again, the S&P 500, the worst one month performance,

negative 21%. The worst 15 year period in the market over that

same period of time going back to 1970, positive 3.7%, same

exact index, different time period, very different result.

So time period greatly affects what normal is. Shorter term,

again, you should expect more ups and downs. Longer term, you

have a smaller range of returns and again, the worst 15 year

period was positive 3.7%. So hopefully now at the end of this

episode, everyone is able to say "I now better understand what

normal is for how often downs do occur and I am better equipped

to not emotionally sell low when that happens."

Number 3, The Stock Market Doesn't Care About Political

Parties. Here we discuss how what political party happens to

be in power tends to have very little correlation to how the

stock market performs, as well as the certainty versus

uncertainty elements that most certainly do. They've looked at

the President, they've looked at the Congress, they've combined

them all together in all different ways. And what the

past says is that you can't dictate better or worse

investment returns just by what political party happens to be in

office. Uncertainty on the other hand, we talked about how it

does historically show a high correlation with volatility:

financial crisis of 2008, COVID in 2020, the uncertainty period

was the drop. Once there was more perceived certainty, a plan

of action, what are we going to do? The market started its

recovery. So hopefully everyone after this episode was able to

say now, "I now know better what generally affects the stock

market and what generally doesn't" goal statement that we

laid out.

Number 4, Hollywood's Stock Market. Here we addressed how

our perceptions are based on what we hear and what we see,

those inputs. And when it comes to investments, Hollywood tends

to only put out very negative perceptions, which can increase

our uneasiness, decrease our likelihood of maybe taking the

steps we need to through investments or advice. Wall

Street, The Big Short, Boiler Room, Wolf of Wall Street, all

the most popular movies involve crooks, criminals, and otherwise

very unscrupulous individuals. So what are your views about

investment? Do you have positive views? Are they negative? Are

they opportunistic? Are they fearful? You know, think about

how you may have gotten to the mindset you have today. You

weren't born with it. It's something that's developed over

time. And think about what mindset you might want your kids

to have about it. Because I've seen too many clients who are in

bad, you know, situations and make bad decisions, because they

were too fearful of using investments, or too fearful of

reaching out for advice. And were in, you know, a poor

financial situation because of it. In my experience, there are

way more good people than not out there that can help you be

making decisions. So hopefully everyone is now able to say "I

recognize what can greatly affect many people's perceptions

of investments", which was the goal statement that we laid out

for that episode.

Number 5, Winners and Losers are Temporary. This episode we

focused on how just like every dog has its day, every area of

the market tends to have it's time to lead and how emotionally

to make the most of that fact. Human tendency is to assume that

what happened recently is just going to keep happening right?

Stock is going up, it's gonna go up forever, right? Nothing goes

up forever though. So we talked about how rebalancing, which is

systematically taking gains in certain well performing areas

and reinvesting them into an area that has been

underperforming is something an advisor or an allocation fund

does, because of how different areas tend to do best each year.

Again, we use the real estate example. In 2020, it went down

around 12%. Get out right? Down 12%! In 2021 it went up 45%.

It's fantastic! Get in! Through the end of January of 2022, it

was down over 6.5%. Get out again, right? So rebalancing can

help us avoid the emotional toll of selling things that have done

well, and buying things that maybe haven't. So hopefully,

everyone is now able to better say "I understand how to better

view my winners and my losers." Again, that goal statement that

we laid out for the episode.

Number 6, We Can All Save Another $100. This one is pretty

self explanatory. And we talked about how saving just a little

bit more is almost always possible. And just how hugely

significant that little extra bit can be for you and how much

farther it can take you down the road. So our credit card bills

are very easy. As an example here. They vary every month. If

we have an emergency vet visit, we figure out how to pay for it.

So use that same urgency on yourself. We spoke on how an

extra $100 a month for 30 years equates to an extra $150,000 at

8%. $100 a month that you probably not even going to

notice. And it's all linear. So $200 a month over those same

assumptions, 30 years, 8%, 300,000. So if you have a credit

card bill that varies by $200 a month, you could probably afford

to save $200 a month towards yourself over these next 30

years and walk away with another $300,000 if those assumptions

are true. So save more towards yourself. You're worth it! So

hopefully everyone is now able to say the goal statement of "I

better understand how impactful it can be to consistently push

my savings just a little bit further."

Number 7, Bingo! You Probably Own More Than the Market. Here

we clarify what exactly "the market" is, and how in all

likelihood your portfolio extends way beyond what they're

even talking about on TV. "The market" is simply an index, a

grouping of the largest 500 US companies. Just like the numbers

that they pull for bingo, it doesn't mean that what they

share on TV every night is actually what you have on your

card. If you have a portfolio 50% the S&P then only 50% of

what they talk about directly relates to you. And with US

bonds, foreign bonds, small companies, real estate funds, so

on and so on and so on that make up a true diversified portfolio,

you likely have a lot more than just "the market" that they're

discussing. So the goal statement here was, "I now

better understand what they mean when they say 'the market', and

how that may actually relate to my personal investments." And

hopefully for you that's not true.

Number 8, Emotionally Abnormal, Statistically Normal and Healthy

Cookies. In this episode, we discussed how what may feel

abnormal from an emotional standpoint can actually be very,

very normal from a statistical standpoint. By knowing what

normal is we can better protect against acting emotionally when

it comes to our investments. When you use a mathematical

statistically diversified portfolio, the goal is like that

of a healthy cookie, we want the most delicious flavor that we

can get for the least amount of unhealthy ingredients. The most

return for the amount of risk we are willing to take. That's the

goal. So normal for our 10% expected return portfolio, for

example, was positive 22 to negative 2%. When we consider

the risk number of the standard deviation, that thing that we

all tend to just ignore standard deviation, that sounds a little

too technical. I'll just ignore it and look at the return. So

this is what should occur the majority of the time though,

when we combine that standard deviation with the expected

return. So 2 out of every 3 years that should hold true.

That would be statistically normal. Now, the shorter the

time period, the greater the chance for variation. Again,

going back to that S&P 500 example since 1970, the worst

single month for the market negative 21%. Very short period

of time. The worst 15 year period, however, for that same

period of time, positive 3.7%. So if you're able to say that

goal statement of a "I now better understand how much up

and down is normal for investments, so I'm better

prepared to not freak out when it does", then you have

succeeded here.

Number 9, last episode here, Advice Should Trump Fees - The

3% Study. We live in an increasingly fee focused society

but in this episode, we reviewed in my opinion, how advice should

be viewed in context compared to fees for that advice, and what

studies have supported being true, namely Vanguard's 3%

Study. The fear is not paying for advice, or it should not be

paying for advice, it should be not getting something for that

advice, not getting the value that you're paying for. If you

go buy a Snickers bar, the Snickers bar is good. We just

don't want to pay $13 for the Snickers bar, when we could buy

it for $1. We want to get good value for what we are spending

our money on. Vanguard, if you remember, is an incredibly fee

conscious firm. Low fees are one of their bedrock principles of

where they got to now. When they looked at where you put your

money, where you take it out of and retirement, rebalancing,

behavioral elements, they came up with over 3% per year in

value provided by a proper advisor. 3% per year in inputs

provided by a proper advisor. So we did our own example even. And

we got to $1 million dollars in value over 30 years, really

without too much difficulty. By saving a little bit more, having

someone to push you to save a little bit more, increasing that

a little bit more every year, taking advantage of things like

company matches, using Roth retirement account, identifying

where to take the money out of it really, really can add up. So

if you can now say "I better understand how advice versus

fees for that advice can separately affect my situation",

then you've hit on the goal that we have for you here.

And this is really the culmination of everything from

this season. If you there is somebody out there who is

wanting advice or who would benefit from advice, I don't

want you to either be A) afraid of asking for that advice,

because what you see on TV, or B) think that there's nobody out

there that could help you. Are there bad advisors out there?

Absolutely, just like every other industry. But if you look

for one that does planning, look for one that does comprehensive

work, look for one that's trying to really make your life more

enjoyable. That's the goal of working with you not a big

number on a piece of paper. It is out there, you can find it.

So don't let fear or fee stop you from reaching your full

potential.

So that is it for this recap. Hopefully now you feel more

confident, push that chest out a little bit more about

investments, what to expect, maybe how to better utilize that

now towards your goals. But more than anything, I hope you're not

now afraid of investments, not afraid, again, to seek out

advice. Because this is really the most important takeaway that

I had. Investments I know is what everyone tends to focus on.

But it's really just one piece of the puzzle. It's just one

part of what a good comprehensive plan should

actually include.

Now for our next series to come. We all like stories, right?

They're such a powerful tool. Stories have been around for

centuries! Droning on and on about expected returns and

standard deviations and statistical norms. I know I like

that. But I also recognize that for most of the normal people

out there, it's super boring. Stories are how we connect with

our grandparents, our friends, our families, it's how as a

race, we've passed morals and histories down for generations

upon generations. It's how we put our children to bed every

night. So let's see what it can do for our finances in our next

series to come, The Financial Parables of Your Life. I'll be

picking out the most memorable, unique, powerful stories to keep

in your mind and on the right track financially.

So that takes us to the end of this Raising Your Investment

Mindset series. Take some time, review these important areas,

and remember, if you can make one positive change, not 20, not

5, not even 2, just 1. Then you're one further step along

the path of having life be more enjoyable for you and your

family. If you can absorb and implement all of them even

better. That's fantastic. You know, having an idea that I

could be helping people out there that I never meet. That's

a really cool, amazing world that we live in. If you do

happen to have questions that you want help in answering, if

it's overwhelming, you just want somebody out there to help and

do it for you reach out to me either through my website

EnjoyMore30s.com EnjoyMore30s.com Click Ask Joe

or you can connect with me directly by visiting my wealth

management firm New Horizons Wealth Management at

nhwmllc.com. I'd be happy to help. So thanks so much for

joining me today and I can't wait to connect with you again

soon.

The conversations on this show are

Joe's opinions and provided for general information purposes

only. They do not constitute accounting, legal, tax, or other

professional advice for your specific situation. You should

always seek appropriate advice from a financial advisor,

accountant, lawyer, or other professional before acting upon

any content or information found here first. Joe is affiliated

with New Horizons Wealth Management LLC, a branch office

of TFS Securities Inc., and TFS Advisory Services an SEC

Registered Investment Advisor, Member FINRA/SIPC.