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