Investments Don't Do Good | Series 7.1 - Enjoy More 30s: Family Finance

Episode 1

Investments Don't Do Good | Series 7.1

Published on: 7th March, 2022

What do you want your investments to do for you and are they on track to do it?

  • So if my investments are doing good, that means they're on track to having the fuel that I need to get me to the goal that I'm trying to reach. (05:47)
  • This is why I say investments are far less important in the grand scheme of things than planning. The planning is what gives you clarity, and the planning is what makes things possible. (06:18)
  • So if you don't have the desire or the ability to properly compare and evaluate your different funds, then you need to in my strong opinion either A) hire an advisor who knows how to do this for you, or B) use an allocation fund that has a manager who can make sure you aren't overly concentrated in any one area. (08:18)

Quote for the episode: "Goal statements: I now understand what I want my investments to do, and how I should be evaluating if they are doing that. I want my investments to get me to a goal. So are they on a path to do that? And are they doing so effectively when I compare them to their peers?" (08:45)

Securities offered through TFS Securities, Inc., and Advisory Services through TFS Advisory Services, an SEC Registered Investment Advisor Member FINRA/SIPC. TFS Securities, Inc., is located at 437 Newman Springs Road, Lincroft, NJ 07738 (732) 758-9300.

Transcript
Voiceover Audio:

Welcome to the Enjoy More 30s Family Finance

Voiceover Audio:

podcast. The only podcast dedicated to making life more

Voiceover Audio:

enjoyable for young families by hitting on the financial topics

Voiceover Audio:

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

Voiceover Audio:

from simply enjoying life.

Joseph Okaly:

Hello, and welcome to the next series here on the

Joseph Okaly:

Enjoy More 30s Family Finance podcast. As I said, at the end

Joseph Okaly:

of the last season investments aren't my favorite thing to talk

Joseph Okaly:

about, surprisingly enough coming from a financial advisor.

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But sometimes I think that I may be kind of the only one out

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there. So investments are what people have the most questions

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about. Investments or what people you don't make movies

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about but the mentalities that go with that the 'make it big'

Joseph Okaly:

mindset, from what I have seen more often hinders the way

Joseph Okaly:

people are able to operate and way they go, then then how it

Joseph Okaly:

helps. So why I'm doing this series is because I want to help

Joseph Okaly:

you reframe how you view how you utilize your investment. So it

Joseph Okaly:

can be done in hopefully, a more constructive way and hence, this

Joseph Okaly:

series is called Raising Your Investment Mindset.

Joseph Okaly:

As always, if you like what you're hearing, please make sure

Joseph Okaly:

to subscribe or follow us on Apple podcasts or really

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wherever you listen to. Clicking that star, leaving the review,

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it really really does help us reach literally millions of

Joseph Okaly:

other young families out there that are just like you. Now if

Joseph Okaly:

you want to hear a focus on finances that are related more

Joseph Okaly:

to your general mindset, maybe to your parent's mindset, or

Joseph Okaly:

even helping your kids with their own money mindset growing

Joseph Okaly:

up, please make sure to check out some of our past seasons

Joseph Okaly:

that dive deep into those areas. We started this year off even

Joseph Okaly:

with a New Year's focus mindset, getting right in the right

Joseph Okaly:

direction in the new year. So definitely check those out if

Joseph Okaly:

you have not already.

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This series, though, like I said is about raising your investment

Joseph Okaly:

mindset. How you approach investments as a tool to help

Joseph Okaly:

you reach your goals. So just like a podcast entitled Raising

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Your Healthy Mindset would focus on a holistic view vs giving you

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just you know, five minute crash diet tips. This series isn't

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about stock picking or the next best crypto asset. It's about

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giving you the opportunity to better understand investments

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and their place in your overall plan, the opportunity to not

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perhaps be afraid of investments, because they are

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some unknown that you were really never taught about in

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school. The opportunity really to potentially avoid some of

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those pitfalls that we've seen many people out there making.

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Today, we are starting off with Investments Don't Do Good. This

Joseph Okaly:

is one of my biggest pet peeves. So I will apologize in advance

Joseph Okaly:

if you are listening and find me up on the soapbox. So maybe it

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is just guys. But I so often hear people say, you know that

Joseph Okaly:

dude does really good, alluding to maybe the amount of money

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that individual makes or something. But have you ever

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just stopped and wondered what the heck that even means? Is

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there some scale that I'm not aware of out there where you

Joseph Okaly:

pass above a certain threshold in the sky, and now you're in

Joseph Okaly:

the 'doing good' camp? The truth is that whoever is likely

Joseph Okaly:

whispering this into your ear is saying so because they either A)

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see this person buying a lot of stuff and so they're just

Joseph Okaly:

assuming they have plenty of money or B) they somehow found

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out how much this person happens to earn and to them, that sounds

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like a lot. Either way that person is doing their own

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internal judgment type comparisons to arrive at that

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conclusion.

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To take this even a step further, think about if someone

Joseph Okaly:

you know is driving across the country. You say to their

Joseph Okaly:

parents, "Hey, how is Beth doing on her cross country trip?" If

Joseph Okaly:

her parents say "she's doing good", you basically know well,

Joseph Okaly:

well, nothing, right? You probably assume she's alive. But

Joseph Okaly:

is she doing good because she seen a lot of cool stuff? Is she

Joseph Okaly:

making really good time across country? Is she just driving,

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you know, really economically from a fuel perspective? How is

Joseph Okaly:

she doing good? And when it comes to your investments, I

Joseph Okaly:

want you to think about and be able to better determine what

Joseph Okaly:

'doing good' means to you, and how to therefore then better

Joseph Okaly:

evaluate it. The goal then for today's episode, so the 'if you

Joseph Okaly:

can say this at the end of the episode, then you have

Joseph Okaly:

succeeded' statement is "I now understand what I want my

Joseph Okaly:

investments to do and how I should be evaluating if they're

Joseph Okaly:

doing that." So again, "I now understand what I want my

Joseph Okaly:

investments to do and how I should be evaluating if they are

Joseph Okaly:

doing that." As you could probably tell we often get

Joseph Okaly:

people saying that their investments are doing good. This

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like other scenarios really means almost nothing other than

Joseph Okaly:

the person is currently arbitrarily satisfied with the

Joseph Okaly:

performance investments. Again, as we've talked about on many of

Joseph Okaly:

these different episodes are the tools that we're using to help

Joseph Okaly:

us reach new goals. They are the fuel, but just like launching a

Joseph Okaly:

spaceship, the fuel isn't the goal. If the goal isn't to just

Joseph Okaly:

have a lot of fuel. The destination, space in this case,

Joseph Okaly:

is the goal. So we need to adjust our thinking, first of

Joseph Okaly:

doing good from some performance number on a piece of paper that

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makes us feel good or bad, because that's really just

Joseph Okaly:

saying that we now have more or less fuel than we have before.

Joseph Okaly:

But do we have enough fuel? Do we have the right fuel? Doing

Joseph Okaly:

good therefore should mean on track to have the fuel we need

Joseph Okaly:

to get us to our goal, that destination. So if my

Joseph Okaly:

investments are doing good, that means they're on track to having

Joseph Okaly:

the fuel that I need to get me to the goal that I'm trying to

Joseph Okaly:

reach.

Joseph Okaly:

If you earn 15% a year, let's say on your investments, which

Joseph Okaly:

is a completely unreasonable expectation long term, by the

Joseph Okaly:

way, for anybody out there listening, but you are not going

Joseph Okaly:

to be able to meet your goal, then who really cares, right? I

Joseph Okaly:

mean, great, I have more fuel for my rocket, but I still can't

Joseph Okaly:

make it to outerspace. I'm going to blow up in the atmosphere,

Joseph Okaly:

still really not that useful. This is why I say investments

Joseph Okaly:

are far less important in the grand scheme of things than

Joseph Okaly:

planning. The planning is what gives you clarity, and the

Joseph Okaly:

planning is what makes things possible. So Joe, are you saying

Joseph Okaly:

I should just ignore my investment performance

Joseph Okaly:

altogether? No, I am not saying that. But if you're going to

Joseph Okaly:

dive into the performance, you need to do it properly. Properly

Joseph Okaly:

means comparing it to its peers. If you told someone about your

Joseph Okaly:

investments, it should be number one, they are or are not, excuse

Joseph Okaly:

me, they are or are not keeping me on a path to reach my goals.

Joseph Okaly:

And two, they are or are not doing well compared to their

Joseph Okaly:

peers. Again, they just can't do good on their own compared to

Joseph Okaly:

nothing.

Joseph Okaly:

Sometimes when someone has an existing investment, they say it

Joseph Okaly:

is doing good. And what this oftentimes translates into is

Joseph Okaly:

the area their fund is focused in may have done particularly

Joseph Okaly:

well. Let's say your account went up 30% in 2021. You would

Joseph Okaly:

say, "Hey, this is the best fund ever, I'm never going to sell

Joseph Okaly:

it." However, let's say that when we looked at your account,

Joseph Okaly:

all you owned was a real estate fund. While the real estate

Joseph Okaly:

category index actually went up over 45%, 45%, in 2021. So your

Joseph Okaly:

fund in reality did quite poorly. We compared it to its

Joseph Okaly:

peers, what other funds like it should have done and your fund

Joseph Okaly:

in this example, missed the mark by 15%. And this is true, by the

Joseph Okaly:

way regarding the real estate category index this last year.

Joseph Okaly:

It is also important to note that the year before that in

Joseph Okaly:

2020, it went down over 11%, just to illustrate how it like

Joseph Okaly:

most every category should be a piece of a portfolio and not

Joseph Okaly:

representing the entire thing.

Joseph Okaly:

The point though, is a huge trap we see so many people fall into.

Joseph Okaly:

So if you don't have the desire or the ability to properly

Joseph Okaly:

compare and evaluate your different funds, then you need

Joseph Okaly:

to in my strong opinion either A) hire an advisor who knows how

Joseph Okaly:

to do this for you, or B) use an allocation fund that has a

Joseph Okaly:

manager who can make sure you aren't overly concentrated in

Joseph Okaly:

any one area. So as we get to the end of this episode here,

Joseph Okaly:

let's circle back to the goal statement that we said at the

Joseph Okaly:

beginning. That statement was "I now understand what I want my

Joseph Okaly:

investments to do, and how I should be evaluating if they are

Joseph Okaly:

doing that. I want my investments to get me to a goal.

Joseph Okaly:

So are they on a path to do that? And are they doing so

Joseph Okaly:

effectively when I compare them to their peers?"

Joseph Okaly:

So thanks for tuning in today. Join us next week for the

Joseph Okaly:

episode called Buy High Sell Low. We're going to talk about

Joseph Okaly:

how overall everyone knows buying low and selling high

Joseph Okaly:

makes sense, but why so many people wind up doing the exact

Joseph Okaly:

opposite.

Joseph Okaly:

Overall, if you're able to implement what we covered today,

Joseph Okaly:

fantastic as always, less to worry about and more focus on

Joseph Okaly:

just going out there and enjoying life. If you're wanting

Joseph Okaly:

help with these things, though, if you have questions you need

Joseph Okaly:

help in clarifying, you can either head on head on over to

Joseph Okaly:

the ASK JOE section on the show's website. EnjoyMore30s,

Joseph Okaly:

that's 30s.com. You can also connect with me directly by

Joseph Okaly:

visiting my wealth management firm's site New Horizons Wealth

Joseph Okaly:

Management at nhwmllc.com. Until next week, thanks for joining me

Joseph Okaly:

today and I look forward to connecting with you again soon.

Voiceover Audio:

The conversations on this show are

Voiceover Audio:

Joe's opinions that are provided for general information purposes

Voiceover Audio:

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

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professional advice for your specific situation. You should

Voiceover Audio:

always seek appropriate advice from a financial advisor,

Voiceover Audio:

accountant, lawyer, or other professional before acting upon

Voiceover Audio:

any content or information found here first. Joe is affiliated

Voiceover Audio:

with New Horizons Wealth Management LLC, a branch office

Voiceover Audio:

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

Voiceover Audio:

Registered Investment Advisor, Member FINRA/SIPC.

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About the Podcast

Enjoy More 30s: Family Finance
Family Finance for Young Professionals.
Young families receive little to no personal finance help. We all grow up to have jobs and money, yet our education system focuses on Shakespeare and Algebra. Even professional advice can be hard to come by, with the majority of the industry chasing retirees and existing wealth.

Joe Okaly's podcast is aiming to change this, providing personal financial advice geared specifically to professionals with young families. This podcast is 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.

Joseph P Okaly is a CFP Certified Financial Advisor who fits directly in with who this podcast is focused on - a young professional with a family. With over a decade of experience as an advisor, there is passion and knowledge to make a difference.

Securities offered through TFS Securities, Inc., Advisory Services through TFS Advisory Services, a SEC Registered Investment Advisor Member FINRA / SIPC. TFS Securities, Inc. located at 437 Newman Springs Road, Lincroft, NJ 07738 (732) 758-9300.