Speaker 1: Welcome to another edition of the Chicks on the Right podcast.
We are here with Zach Abraham, who is the chief
investment officer for Boer Capital and Financial Guy Extraordinary. This week,
I have an assignment from my fifteen year old daughter.
She is nothing like me, dak Like when I was fifteen,
I was thinking about blue eyeshadow and Duran, Duran and
like all things nineteen eighty six. You know, my daughter.
My daughter is asking me the other day. She was like, Mom,
I have this friend of mine, her friend Emma, is
already investing. She has like ten thousand dollars in an ira.
She was telling her because she does the stock market stuff,
and she was like, I want to do this too.
I'm really interested in it. I want to learn how
to play the stock market. How can we do this?
And I was like okay. And she already has a
checking account and she has a savings account and so
like when she gets checked her birthday and stuff like that,
I always tell her. I'm like, try to pay yourself
first and put like ten to fifteen percent of whatever
you get, you know, for your birthdays, put it into
savings and then whatever. I don't care what you do
with the rest, but try to save a little bit
each time you get money from whoever or whatever.
Speaker 2: So she does that.
Speaker 1: So she has her little chase, you know, checking cout.
She's got her little app, and she does all of
her things, and she learns how to manage money. And
no one ever has to balance like a checkbook anymore.
But at least that's how kids are learning how to
manage their money.
Speaker 3: Right.
Speaker 1: But when it comes to this stock stuff, I'm not
very well versed on stock, like I use you to
help me with that kind of stuff, right, right, But
Gwen is very interested. She's like, I want to know
how this works. I want to see it. I want
to do it myself. It's kind of like a game,
and you know, kids are really into games. So Fidelity
has a little I guess it's like a it's like
an app for teens thirteen to seventeen. I believe it's
where it's like a youth account and it's kind of
like a mini brokerage account, and that it gives them
training wheels and so teens get to invest real money
in stock ets, fidelity and stuff like that. But I
think parents have to have an account themselves and then
they can set their teams up. I'm curious to know,
like what you think about all of this, if there
are alternatives to that, if what if parents don't have fidelity,
or there are there other things that they can use,
Like this is what she wants to know. I'm asking
all these questions for her. Yeah, on her best.
Speaker 3: So I love it. I love it.
Speaker 4: So first of all, funny, I've got a fifteen year
old working in the office right now.
Speaker 3: He's a he's a kid of one of our friends.
Speaker 4: Yeah, that's got an interest in finance, and I I, well,
I don't think it's a surprise to most people that
I love what I do, that I'm.
Speaker 3: Getting into it.
Speaker 4: But I also love explaining it to kids, and I
love explaining it to us, like because it's not.
Speaker 3: You know I and I totally get it.
Speaker 4: I think it's one of those things that's really intimidating
from the outside looking in, like, oh, I don't know
how it works.
Speaker 3: And the one thing I.
Speaker 2: Tell people all the time, yeah.
Speaker 4: Well, and part of it is part of it is
the ecosystem built around it, which is so much of that.
And now this will sound like I'm selling against myself
because I do this for a living, but so much
of it, I am convinced is vernacular that's been put
in place to make Wall Street people sound smart and
to make the average person sound like they, you know,
think that they've got no idea what they're doing right, right,
And I always tell my clients, I go, you understand
this more than you think you do.
Speaker 3: You're just not up on the words and the catch phrases.
Speaker 1: Right. It's like a different end of that makes me
feel a little bit better, but it's still it's scary,
Like it's really scary. There's a lot of suff You're like,
I don't know what that isn't like I don't this fun?
That fun like that kind of account like it's it
is hard to navigate, and like where to get started?
How do you get started on it? What should you invet?
I mean that's why obviously people need somebody like you,
But I think it's really important for kids to at
least have that education.
Speaker 4: Yeah, yes, so right out of the gate, now we've
looked there's a bunch of different tools out there. The
one that I have found that I think has been
the best. Fidelity's got a good way to do it.
But the one that was even easier for younger kids.
Was this green Light that my wife and I use.
Speaker 1: Yeah, we'd use green Light for a while with Gwen.
Speaker 4: Yeah yeah, And it's really easy to move money back
and forth. I also like their trading platform because you
don't have to put a quote unquote enough money, because
the trading platform lets you buy partial shares. Okay, So like,
let's say the kids want to buy a share of
you know, let's say the kids have one hundred and
fifty bucks in their account, right, right, and they want
to buy a share of Google. Okay, Well, Google's trading
at one hundred and eighty right, so that'd be you know,
so what it allows them to do.
Speaker 3: They can buy twenty dollars worth of Google stuff.
Speaker 2: Okay.
Speaker 4: So I really love that my kids use that. My
youngest is the most interested in it. He's the one
that will most often bring me a portfolio and go, hey, dad,
let's move some things around with picture stock.
Speaker 2: Shay is Zach.
Speaker 1: I had no idea that they had an investment part
of it. I used Dream simply as like a checking
account before I moved her over in Chase. I had
no idea. So this is news to me. I'm an idiot,
so this is news to me and maybe news to
other people. Maybe I'm not the only idiot. So it
so it has an investment part of it that you
can actually give kids like two hundred bucks and stay here,
go play in the market.
Speaker 4: Yeah, and then and then you can do stuff. So
we've looked at the kids a couple of times been like, okay,
now you've made some we've made some nice returns here, right,
so what are we going to do? And they're like, oh, well,
I want to buy this or you know, and just
teaching them like okay, you know, letting them watch that
account grow and be like, oh now I started with fifty,
but now there's fifty and I can go buy something.
And the other thing it does is it opens up
conversations and it helps them be And it's such a
strange thing.
Speaker 3: Because we live in the Internet world where we've.
Speaker 4: Got all of this right, We've got access to more
information than we've ever had and human beings I've ever had, right,
and yet financial literacy, I think it's just as bad,
if not the worst, as I've ever seen it, especially
among young kids, right, Yeah, and they all are aware
of nicer things like, for instance, when I was a kid,
I didn't know what a my Bock Mercedes was.
Speaker 3: Kids today do, right, So.
Speaker 4: There's an awareness of more expensive things, but the idea
of what they can afford, how that works, it's just
as alien to them as it's ever been. Right, And
the one thing I love about walking through stocks and
explaining it to the kids is I think it provides
a really good understanding of just the way money works.
For instance, Dad, what kind of stocks are you investing in?
And explaining them the difference between chasing what is popular today,
which is what most people are doing, and being more
of a long term fundamentalist fundamental investor, which is looking
to buy things at values that are less than what.
Speaker 3: We believe the intrinsic value of that investment to be.
Speaker 4: Warren Buffett's got a great line, which I think it's
a miss way too often investing which is the number
one most important factor that will decide the success or
failure of an investment, or how much the success or
failure of an investment. There's nothing more important than what
price you paid, right, And so keeping that idea kind.
Speaker 3: Of a weird thing.
Speaker 4: We all sit there and go really and then you
start thinking about it. Yes, right, the less you pay
for any investment, that's where the win is made. It's
not when you sell it, it's when you buy it, right, Yeah,
and so and so getting them to understand that, getting
them to understand the way that money floats around. Why
is this stock at this price? And then do it, well,
this is how much profit it made. You know, here's
interest rates, and you know, just showing them how these
things all work. And you don't need to be a
One thing I've told a bunch of my other friends
is like, hey, you don't need to be an expert
to teach your kid. You guys can go down this
path together, right, and learn it together and kind of
you know, work your way through it and figure it
out and ask those questions.
Speaker 3: And people are like, well, what should I let them by?
Speaker 4: And I'm like, you know what, Honestly, some of the
best ways to learn how to do this. Don't be
too worried about them winning or losing. Some of the
best ways to teach people, it's like anything else. The
best way to get somebody how to manage money is
we have a joke around here. Thank god, I've never
done it with a client account. But I you know,
I don't think that you're a good money manager until
you've blown an account up, right.
Speaker 1: I think it takes more than that athlete until you've failed,
or good anything until you've fallen on your face really right?
Speaker 3: Yeah? Right? And you know it's it. And it's funny
because you learn over time.
Speaker 4: There's so many little things where they'll be like, well
what about that, And I'm like, oh no, no, we're
not going to do that, and they're like why and
I'm going, well, because that's bit me before, right, Can.
Speaker 1: I learn because I learned by falling down?
Speaker 2: Exactly?
Speaker 3: Right?
Speaker 1: Do you think already your kids interested in finance because
of this stuff or do you think just intrinsically they're
like maybe one or two of them are interested just
because dad does it.
Speaker 4: I think that I think that the one my youngest
is interesting, he got it. Yeah, he's got an interest
in it. I think my middle yeah, he does, and
he's just he's just kind of he's kind of bent
that way. I you know, we'll see the way it
plays out. Like early on, we didn't have yeah, but
we didn't have act like there was you know, there
was no way for me to trade stocks or do
anything like that.
Speaker 3: I mean, I remember, I.
Speaker 4: Remember, I think I shorted my first stock at like
seventeen years old.
Speaker 1: Oh my gosh. See that's still like I wouldn't have known.
I wouldn't at seventeen. I didn't care about any of
that stuff.
Speaker 2: I had no.
Speaker 3: But I but my dad.
Speaker 4: So I've grown up in the business. Like literally, yeah,
my dad had a brokerage firm. I've got pictures of
me being like in a crib in a brokerage firm.
Speaker 1: Oh gosh, yeah.
Speaker 3: So yeah, and.
Speaker 4: And but it but it was always there was something about,
especially value investing, and I can't really explain why, but
there was something as a kid that was so intriguing
to me about the idea of buying something that everybody
else is thrown away and doesn't think it's worth anything,
and that you know that it is, and then turning
back around later and going, see we were you know,
there was just something that was so exciting about that.
Speaker 3: I don't know why.
Speaker 4: It sounds weird to say it's exciting, but no, I
mean it's really cool.
Speaker 1: But you're either going to do it and you were
going to grab onto it and you're going to do
it yourself, or you're going to go the complete op
the direction and become like an underwater basket weaver or something.
Speaker 4: Right, which, by the way, I'm sure you can get
a degree for these days.
Speaker 3: Yea, absolutely you can.
Speaker 4: Yeah, you can spend two hundred and fifty grand learning
how to be an underwater basket we Yeah.
Speaker 1: It's probably like lesbian underwater basket.
Speaker 4: Yeah, you know the other the other thing that and this.
This sounds kind of crazy, but I'm probably gonna do
with my kids too, And I think it's another great
lesson I would have if my kids are running a
trading account, I would have them buy a little bit.
Speaker 3: Of crypto currency, a little bit of crypto.
Speaker 1: Yeah, that's what a lot of like this fidelities is
that they don't do, which I think is interesting.
Speaker 4: Yeah, and here's why I think the vast majority of
things in the crypto world.
Speaker 3: And I always get pushed.
Speaker 4: Back when I say this, I don't really understand why,
but I think the vast majority of the things in
the crypto world are completely worthless.
Speaker 3: Okay, okay, And.
Speaker 4: This sounds bizarre, but one of the best ways to
teach somebody about investing and about money is to have
them lose it. Yeah, right, And I think that that
is such an important thing for them to see something
lose substantial value and realize this isn't just a game.
Speaker 1: And you think that generation, that generation thinks that crypto
is like the shiny object right now.
Speaker 3: Oh and look, I know people.
Speaker 4: I was listening to a previously what a guy that's
considered very well respected in the industry and very conservative.
I heard an interview recently where he was saying that
people should own twenty five to forty percent of their
portfolio crypto. Oh, I'm got no, and I and I'm
watching him say this, and I'm like, you're out of
your mind.
Speaker 3: You're out of your mind. And here's why.
Speaker 4: Here's why you don't know what it is. Right, this
is their retirement portfolio.
Speaker 3: You can't.
Speaker 4: This isn't black box time, This isn't hey, let's throw
three hundred grand in this and see if it pans out.
Speaker 1: Oh my right god, yeah no.
Speaker 4: And there's and look, the problem is that so many
people are anesthetized to the risks and crypto, and the
one way they justify it is they go, well, it's
gone up, and you're like, yeah, That's what people were
saying about tulips in sixteen hundred until they quit going
up right the other people, and I've had that conversation,
they go, tulips, what are you talking about? And You're like, dude, hey,
do yourself favor and go home and read about tulipmania.
Speaker 3: Hey, this is not a new thing that you're doing. Right,
There is nothing new under the sun.
Speaker 4: One of my favorite Bible verses, right, Solomon talking about
there is nothing new under the sun.
Speaker 3: You have not invented anything. Right. We have seen it before.
Speaker 4: It's happened with tulips, It's happened with sardines, It's happened
with all kinds of weird stuff.
Speaker 3: Right.
Speaker 4: When I was a kid coming up, it wasn't crypto,
but it was dot com. Any company that ipoed with
the name dot com and their title, the ipo up
on one hundred and fifty to two hundred percent every
single time, first day of action, sometimes more right, everybody thought, hey,
we found a way of investing where you can't lose. Then,
minute you hear that, grab your chips and head for
the door. Right, And just teaching the kids that right,
understanding that money is a fluid thing, and you're gonna
make it, you're gonna lose it at times. That's the game, right,
and to not be afraid of that, but to be
aware of it, and then also trying to keep them
in that mindset of and you see this everywhere today.
What do you make Now? I make X amount of dollars? Okay,
why does your life look like you make twenty percent
more than that?
Speaker 3: Right? Your life should look ideally, it should look.
Speaker 4: Like you make thirty or forty percent of what you make, right, buffer.
Speaker 3: Quality of life? Yeah, all those kinds of things.
Speaker 4: And you know, I just think that one of the
best ways to teach your kids that is through you know,
running through that investing. And then when really big shocks happen,
like coronavirus or like a great recession or whatever, the
kids have something you know, palatable, They've got something tangible
that they can actually see, and they're like, wow, people
have lost you know what I mean.
Speaker 3: I think it helps them put context to Yeah.
Speaker 1: I just think in general, like I know that Gwen,
my daughter, I know that the youngest are older ones,
are older ones, and are younger youngest is they're just
way smarter than we.
Speaker 2: Ever were, which is a good thing. And I think
that's big boiames.
Speaker 1: Because a lot of times we hear that this generation
is dumb or they're they're dumbed down, or they're being
dumb down because they're not. I think that they actually
are way more astute than we ever were, which is
a good thing, because they do have some of these
fo and I hope that they're using them in the
best way possible.
Speaker 2: Parents can use these tools like green light. I'm going
to start using them. I think that one is.
Speaker 1: Probably the one that we're going to use to do
the investing stuff to try to navigate those waters with her,
because I remember the interface with the checking and all that,
and I like that. I like that the greenlight, and
so we'll try that and see what happens and she
can play around a little bit in that.
Speaker 2: I think that's great.
Speaker 4: And it gives them little cards, right, like little debit
cards that they can actually use places and do things. Yes,
and so it's just that, you know, it's it's that practical.
You know, Now we're mixing and balancing a checkbook and
balancing a debit card and payments with investing, right and
just like anything else, the more you see those things interact,
the more you see those those things whirling around and
working together, the better idea it's going to give you
of the world around you.
Speaker 3: And you know, you got all.
Speaker 4: Like I said, the kids are smarter these days. Yeah,
But at the same time, on the financial side of it,
like I said, so much of it is geared toward
the material side of money as opposed to the working
side of it. And you know, teaching them to understand.
I have these conversations with my daughter's friends. My daughter's fifteen,
and I have my conversations with her and her friends
all the time where I'm like, guys, it's not just
about what you can buy, right, It's about owning your
assets them not owning you, right.
Speaker 3: And you know, just all these things that we learn,
and we learn either because we.
Speaker 4: Listen to somebody that's a really good example, or we
learn the old fashioned way because we do it wrong.
Speaker 2: And it's usually the old fast it's usually the old
fashion way. I mean, it's real, and it's gonna that will.
Speaker 1: Be learned probably in the next five to fifteen years
when they learn it.
Speaker 3: The old fact.
Speaker 1: Yes, Now, if you could actually do seminars with kids
I think that would be amazing. You probably should think
about doing that, Zach, But I know you have one
coming up on July twenty fourth with adults.
Speaker 2: Yes, can your kids if they wanted to.
Speaker 3: Yeah. Yeah.
Speaker 4: So we're doing our same as the road shows we
do before, but this one we're really tailoring it toward
the environment we're living in, talking about like, you know,
how urgently we really need There's another.
Speaker 3: One we saw today. Okay.
Speaker 4: So it's the what we call the Warren Buffett valuation Indicator,
and Warren Buffett has always looked at the value of
the US stock market as a percentage of the amount
of economic activity that we put out. Okay, that metric
just the other day, I believe it was just yesterday,
hit a new high, a new all time high. And again,
it doesn't say that there's panic you need to sell
everything and get out. What it does mean, though, is
the composition of the portfolios that have worked from US
the last fifteen years. Like this year, you know, the
US is one of the worst performing markets in the world.
And one of the reasons that we're having a great
year is because we're internationally diversified and most people are not.
Speaker 3: At all they're not at all. They're all loaded up.
So we're going to walk through that.
Speaker 4: We're going to walk through the opportunities that we see
in dollar alternatives like precious metals, the opportunities that we
see in international markets, lifetime hype opportunities, and international markets
because they've never been cheaper in comparison to US stocks.
So just walking through that, showing everybody, hey, here's how
we do things. Here's how we manage risk. This is
how we you know, try to prevent against the big losses.
But also the world has just changed and if history
is prologue, this is what we need to be looking
at and these are the kind of changes that we
need to make in the portfolios to be successful going forward.
Speaker 3: So that's a lot of good stuff.
Speaker 2: And that's July twenty fourth at three thirty pacific. Right.
You got to where can they go sign up for that?
Speaker 4: Wellworkcapitalmanagement dot Com. We'll have a dialogue box that'll pop up.
You can sign up for it. There's no cost, there's
no obligation. We're not calling you on Saturday afternoons trying
to and truthfully, one of the reasons we do this
is because it's an interface people can get kind of
like a halfway into the firm and understand how we
do things, how we think without having to make a
commitment financially right. And the reason we like to do
that is this is a partnership. And in order to
know if a partnership is going to work, we got
to feel each other out.
Speaker 3: We got to know, you know, how each other thinks.
And I think this is a great opportunity for day.
Speaker 2: Don't have a copy day? Was that there?
Speaker 3: We go?
Speaker 1: Yeah, curiously, just check out you guys, exactly check out
you guys.
Speaker 2: Definitely do that exactly.
Speaker 3: You bet, you bet, thank you.
Speaker 4: It was always Investment Advisory services offered through TREK Financial
loc and SEC Registered Investment advisor. The opinions expressed in
this programmer for general informational purposes only and are not
intended to provide specific advice or recommendations for any individual
or on any specific security. Any references to performance of
security so it thought to be materially accurate, and actual
performance may different.
Speaker 3: Investments involved risk and or not guaranteed. Past performance doesn't
guarantee future results. Check twenty four three zero