Participants: Yvonne Lewis (Host), Ryan Mack
Series Code: DAS
Program Code: DAS000016A
00:01 What is money for?
00:03 Is it a helpful resource to use for good
00:05 or is the love of it the root of all evil?
00:08 Actually, it's both,
00:10 but God may have a different definition of success.
00:13 Real success doesn't come overnight.
00:16 It takes hard work and faithful planning.
00:20 To use your dollars well,
00:22 it takes more than a little sense.
00:26 Hello and welcome to Dollars and Sense,
00:29 I'm Yvonne Lewis
00:30 and our primary host is Ryan Mack.
00:33 Ryan Mack is a financial literacy expert.
00:37 And these programs are just amazing.
00:39 If I have to say so myself,
00:41 that's because I'm basically getting taught.
00:45 It's really, really some good information
00:48 so tell everybody you know to tune into Dollars and Sense.
00:51 Hey, Ryan. That's right.
00:53 Always good to be here. Yes, indeed.
00:54 I'm having a good time on the series
00:56 and just praise God for it.
00:58 God is so good.
00:59 It's so amazing to me
01:01 that everything we need is in the Word.
01:03 It's in the Word.
01:04 And financial information is in the word.
01:07 So what's our scripture today?
01:08 Well, the scripture for the day is 1 Timothy 6:19
01:12 because today is really all about investing.
01:15 And many times we have learned a lot,
01:19 you can learn a lot from history,
01:20 learn a lot from the Word.
01:21 Again, the Word is timeless. Right.
01:23 And as we go through history,
01:25 we'll see different ebbs and flows of the stock market
01:28 and the real estate market and all these different things,
01:30 and to help get a firm grasp
01:32 on exactly how to go about investing,
01:34 well, the Word gives us a good indication
01:36 and just like as we did
01:37 on the other episode with housing,
01:39 I'm going to go back to 2000
01:41 and give a historical lesson of
01:43 what we could have done to avoid the 2000 recession
01:46 if we were to listen to the Word
01:48 in terms of how we actually invested our money.
01:52 Using the Christ way of investing.
01:54 You know, you would never think that the Word has,
01:57 you know, it doesn't say stocks and bonds
01:59 or anything like that.
02:00 Right. But it gives principles.
02:03 That can be extrapolated and applied
02:05 to what we're doing.
02:07 So 1 Timothy 6:19 says,
02:10 "Laying up in store for themselves
02:12 with a good foundation against the time to come,
02:16 that they may hold on to eternal life."
02:20 So they have to lay up a store for themselves.
02:23 You have to put things away.
02:25 And when you're thinking about the future,
02:27 you've got to lay some things away
02:28 so you know what, let's put some things...
02:30 Don't do that instant gratification.
02:32 We can have some delayed gratification
02:35 and put some things away.
02:36 So when you go back to 2000, in 1999,
02:41 I just started working as a stock trader.
02:44 And it was a small stock trading firm in Detroit,
02:46 and in 2000, I went to Wall Street,
02:48 I became a stock trader
02:50 at the largest NASDAQ trading firm in the world.
02:52 And at that time, we were going around and in October 2000,
02:58 and right after I started my job in Wall Street,
03:00 the market pretty much few months later just tanked.
03:03 It just tanked.
03:04 And people were going crazy and they couldn't believe it
03:07 'cause before that it was almost a time of Euphoria.
03:10 I mean from, I would say, '96 to '99 and 2000 area,
03:16 people were buying stocks.
03:17 I had friends of mine
03:19 who were day traders, investors,
03:21 they would buy stocks,
03:22 buy stocks in the morning at 9:30 in the open,
03:25 they would go play basketball,
03:27 then they would come back home
03:28 and sell their stocks and make a ton of money.
03:29 That's how they were going about trading.
03:31 Are you kidding me?
03:32 It literally was just buy in the morning,
03:34 sell in the afternoon, make your money and walk away.
03:36 That's how people were making money.
03:37 People were becoming independently wealthy
03:39 basically by not...
03:41 They weren't researching any investments,
03:43 they were just,
03:44 'cause the market was just going up and up and up
03:46 and it just seemed as
03:48 if there was not going to be any downfall.
03:50 I remember various stocks, Bluestone Software,
03:55 Ariba Technology, Puma Technology,
03:57 all of these technology type stocks.
03:59 And that back then,
04:01 the Internet really started to get a good basis.
04:03 Well, so people weren't really too familiar with the Internet,
04:06 weren't really familiar,
04:08 didn't know exactly how it worked,
04:09 so people were buying stocks
04:10 that didn't even have any bottom line,
04:12 they had no revenue coming in,
04:13 they didn't have any history of making revenue,
04:15 and they just knew, "Hey, you know what?
04:17 This is a good stock. So let's go ahead and buy."
04:19 And guess what?
04:20 They made a ton of money until the market fell out.
04:24 And so here in 2000
04:27 we had what they call the Internet Bubble.
04:29 And the Internet Bubble essentially meant
04:31 when individuals were buying stocks
04:33 and the bubble burst and the bottom fell out.
04:35 So what was happening in 2000
04:38 that really just exemplified what was going on,
04:41 well, people were very greedy.
04:42 They were greedy,
04:44 they didn't know about investments,
04:46 they just wanted more money
04:48 and they knew they could make a ton of money.
04:49 They were getting rich quick.
04:52 They knew that, "Hey, you know what,
04:54 if I buy stocks in the morning, go play basketball,
04:58 when I come back home, I can sell all my stocks,
05:00 I'm gonna to make a ton of money
05:01 and I'm gonna get rich."
05:03 And people actually did get rich quick
05:04 until the bottom fell out.
05:06 And then they were just buying stocks
05:07 without any knowledge.
05:09 It was all speculation.
05:10 In '99, 2000, I was trading penny stocks
05:13 and I would be writing end derivatives,
05:16 I would deal a little bit with that within my firm."
05:19 And I just saw the flows of orders
05:21 just coming in and coming in.
05:23 I mean it was just...
05:25 Some days you couldn't even,
05:26 literally from 9:30 to 4 o'clock,
05:28 you couldn't even leave your chair
05:29 because of the volume
05:31 that was going on in the stock market.
05:33 So as we know from 2000 to 2004,
05:38 tons of money was lost.
05:40 People were going crazy. They were stressed out.
05:43 But what does the Word say about greedy,
05:46 getting rich quick,
05:47 and buying stocks without knowledge?
05:49 Word, and greed, it talks about Proverbs 15:27,
05:52 "A greedy man brings trouble to his family."
05:56 So if you're greedy
05:58 and the only thing you're concerned about
05:59 is making money,
06:01 and you just want to go in
06:03 and you just want to get all the money in the world
06:04 and you just want to make as much money as possible
06:06 without any thought or with any budget or anything,
06:09 you're gonna bring trouble to your family
06:10 if greed is your motivation,
06:13 if Christ is not your motivation.
06:15 A good indication of greed is
06:17 if you ask yourself what is your motivation,
06:19 as I just said,
06:20 are you motivated to get money
06:23 or are you motivated to follow Christ?
06:25 And so if you ask yourself that basic question,
06:27 if money is your motivator,
06:29 you could have a good sign of being greedy.
06:32 But if Christ is your motivator,
06:33 He's going to tell you exactly
06:35 how much money you need in order to fulfill His will.
06:37 But if money is your motivator, then that's, you know what,
06:41 maybe I better back off
06:42 and really just try to figure out
06:44 as opposed to chasing money
06:45 as we talked about in the other episode
06:46 how people who chase money, when they found it,
06:50 ended up being broke anyway.
06:51 So greedy, the Word talked about that,
06:54 getting rich quick, Proverbs 28:22.
06:56 "He that hasteth to be rich hath an evil eye,
07:00 and considereth not
07:01 that poverty shall come upon him."
07:04 So if you get rich quick,
07:06 if someone comes in front of you
07:08 and says, "Hey, you know what, you're going to get rich
07:09 if you just invest here, you just invest there."
07:12 Now they have these thing called penny stocks, right?
07:15 And it's basically is scheme
07:17 and the scheme plays out like this.
07:20 You get an email, in your account,
07:23 you know, the average person
07:24 didn't know a lot about stocks or penny stocks,
07:26 you get this email and this email says
07:29 this stock is trading at $0.1.
07:33 "Oh, wow, that's a penny, okay. Oh, well, that's pretty cheap.
07:37 I can, you know,
07:38 put a dollar on that and buy 100 shares."
07:41 "So what if I put $10 on it?
07:43 What if I put $100 dollars on it?
07:45 What if I put a $1,000 on it?"
07:47 But they don't really tell you the price of the stock,
07:49 that's an email,
07:50 this stock is going to go up to 0.10.
07:54 So you say, "Wait. From point 0.1 to 0.10.
07:57 That's means it's gonna go up to 10 times."
07:59 So if I put a $100, I'm going to make $1,000.
08:02 If I put a $1,000, I make $10,000.
08:04 So wait a minute, this is easy money.
08:06 This has to be good
08:08 because I'm getting an email, they're saying go buy it."
08:09 So these emails are going out time and time again,
08:13 but what happens is that
08:14 the person who sends out that email,
08:16 they have a program, when they send out this email,
08:18 and this happened a lot, a ton back in '99, 2000.
08:21 They sent out a ton of all these emails
08:23 to many individuals on the database
08:25 'cause they would data mine all of these email accounts
08:28 and they would send all those emails
08:30 and people would start buying the stock.
08:33 As a trader what I was trying to do was look for volume
08:37 and so whenever I see volume, I'll say,
08:39 "Wait a minute, in WXYZQ, what's going on in WXYZQ?
08:44 What's happening there?"
08:45 So I'm a proprietary trader. I'm trading with my stock.
08:48 I would buy a little bit through my company
08:51 because that's what we do.
08:52 We buy a little bit, see what happens.
08:53 If we lose, we're trading with the company's money
08:56 and just to see what happens.
08:57 So that would actually add more value to the stock.
09:00 So the stock actually will start moving a little bit,
09:02 it will go from 0.1 to maybe 0.2, then 0.3,
09:06 now you're excited.
09:07 Now you're at home,
09:08 you're looking at that email and say, "Hey, wait a minute."
09:10 You're calling your mother, you're calling your father.
09:11 "You need to buy this stock, it actually went up.
09:13 I just made 300% of my money."
09:15 You need to borrow some more money.
09:17 You put more money in,
09:18 but the person who sent the email out,
09:20 they already own it, they already own it,
09:22 and they're already saying
09:24 that they want to do is generate volume,
09:25 generate activity
09:27 so when you and everybody else starts
09:28 buying this stock, they're going to dump it.
09:30 It's called pump and dump.
09:32 It's the oldest and easiest trick in the book.
09:34 It's just like a pyramid scheme on Internet.
09:37 So they get you, they pump you up
09:39 to get you to buy and tell everybody else to buy.
09:43 And then as soon as it starts moving...
09:45 Right. They dump it. They dump it.
09:47 And the value goes through the floor
09:50 and you don't get anything.
09:51 You create the volume for the stock to move.
09:55 So they buy it at let's say 0.1, they've already owned it,
09:58 they might have owned it for a month
09:59 or so, the company...
10:00 And by the way, this company
10:02 probably has a room full of telephones
10:04 with people answering it
10:05 because it's not even a real company, right?
10:07 And that's the problem, we had these penny stocks,
10:09 many of these penny stocks hat trade on bulletin boards
10:11 and penny stock, pink sheets,
10:14 they're not really, you can't really research them,
10:15 they're not regulated,
10:17 you don't even know if it's a real company,
10:18 they're not making any money,
10:20 so they bought this stock at 0.1,
10:22 it goes up to 0.3,
10:23 now they're dumping the stock, they're selling it
10:25 because you're buying it and they're selling it,
10:27 and meanwhile, all your friends are buying it,
10:29 they sold it, it might get up 0.3 and 0.5,
10:32 and then it all of the sudden it starts fizzling down,
10:34 they've already sold it,
10:35 they've made 300% of their money.
10:37 They're done, you've still got all the stock and you say,
10:39 "Wait, what happened?
10:40 I thought it was going to go to a dime."
10:42 Next thing you know, you're out of all your money.
10:44 It's the oldest trick in the book,
10:45 it happened a lot because why?
10:47 It's a get-rich-quick scheme. Right.
10:49 And people were so greedy
10:51 that this people are preying on other people's greed.
10:55 Just like in financial predators,
10:56 I mean it's amazing
10:57 when you see the devil working, right?
10:59 When the devil works, he preys upon all the things,
11:03 those earthly, those desires of the flesh
11:06 that make us want to do things
11:08 that are outside of what God wants us to do
11:10 and has desired in our life.
11:11 So like the payday loan or the cash advance,
11:15 come get this free money,
11:17 the same thing with these penny stocks.
11:18 Let us go ahead and do the pump and dump,
11:20 get you all greedy,
11:22 get you all excited about getting rich quick,
11:23 and then we're going to play on what you want,
11:25 next thing you know
11:26 you're gonna lose all your money.
11:27 I know a lot of people that lost a ton of money
11:29 and actually, moving on until days after that
11:32 and money and that.
11:33 And then the lastly, speculation,
11:34 And that Ecclesiastes 5:13-14 it says,
11:38 "There's another serious problem
11:40 I have seen everywhere
11:42 savings are put into risky investments
11:43 that turn sour
11:45 and soon there's nothing left to pass on to one's son.
11:47 The man who speculates is soon back
11:49 where he began with nothing.
11:52 This is, as I said, a very serious problem
11:54 for all his hard work had been for nothing,
11:56 he has been working for the wind.
11:58 It is all swept away.
12:00 All the rest of his life he is under a cloud, gloomy,
12:02 discouraged, frustrated, and angry."
12:04 This is exactly what happened
12:06 when people were buying all of these stocks
12:08 on pure speculation,
12:10 they didn't research them,
12:11 they didn't know about investing,
12:12 and so what we're gonna do,
12:14 we're gonna over today
12:15 over some Christ-like ways of making sure
12:18 that if you start investing,
12:20 you're gonna mitigate and lessen the odds
12:22 of the amount of you actually losing all your money
12:25 and do it in a smart way, in a very intelligent way.
12:30 Luckily, the Word talks about that as well.
12:33 And so, you know, a lot of people will say,
12:35 "You know, Ryan, well,
12:37 how does the Word talk about investments?"
12:38 Well, remember Enron? Yeah.
12:41 Enron the organization. Yeah, yeah.
12:43 Well, people put all their money into Enron.
12:46 And they were invested in Enron and Enron failed, it collapsed.
12:50 Well, one of the major principles of investing
12:53 is making sure that we're gonna go forward,
12:57 but then we're going to go back to make sure
12:58 you can have a proper foundation,
13:00 but talking about Enron,
13:01 one of the major principles is diversification.
13:04 So if you diversify your assets and making sure
13:07 that you don't have all your eggs in one basket,
13:08 everyone's heard of that, and it's funny too,
13:10 sometimes if you have a worldly saying
13:13 and people will believe that.
13:15 But if something is from the Bible,
13:17 they're not as quick to believe that.
13:18 That is so true.
13:20 Because they say, "No, that's just from the Bible."
13:22 But check this out, check out Ecclesiastes 11:2 that says,
13:27 "Give a portion to seven,
13:29 and also to eight for thou knowest not
13:31 what evil shall be upon the earth."
13:34 So the Word is telling you
13:36 to give a portion to seven and also to eight,
13:38 don't put all your eggs in one basket.
13:39 Don't, you know, divide up your portions
13:41 because you never know what evil lurks upon the earth.
13:43 If the people at Enron
13:45 would have actually read this scripture,
13:48 they would have been saying this, "You know what?
13:50 The Word says I shouldn't put all my money in one place,
13:52 Enron, it should be divided."
13:55 Remember Madoff? Oh, yeah.
13:57 Bernie. Yeah, Bernie Madoff.
13:58 He stole a lot of individual's money, why?
14:00 Because people gave him all their money,
14:03 and at the end of the day,
14:04 they didn't divide their portions
14:06 into seven and eight,
14:07 if you lost all your money with Madoff,
14:10 you aren't reading scripture.
14:12 If you lost maybe one-seventh of your money with Madoff,
14:16 you're probably read scripture
14:17 'cause the scripture says
14:19 that divide your portion into seven and eight,
14:21 give a portion to him
14:22 and then also divide it up amongst other individuals.
14:25 So this is, again, it excites me to see
14:29 that we have so many things and so many principles
14:32 that are actually brought out by fiscal responsibility
14:35 and by the Word and what the Word actually says
14:38 that we should be doing to make sure
14:40 that we can have a proper foundation of them.
14:43 Right, right. And that's what we need.
14:45 You know, often we want to do certain things,
14:48 but we don't know how.
14:50 And if the Word tells you,
14:51 "Give a portion to seven, also to eight,"
14:54 one here, one here, one, diversify.
14:56 Exactly. That is so good.
14:58 That is such a good principle.
15:00 And so now in order for us to invest, okay,
15:05 we have to make sure
15:06 that we can have
15:09 a sustainable level of investment.
15:11 Right. Okay.
15:12 So in another episode
15:14 we talked about budgeting, okay,
15:16 and the budget is the most critical component
15:18 of every single financial strategy.
15:21 The budget is going to tell you exactly
15:23 how much you have to invest.
15:25 And so after you invest,
15:26 you put together your budget and you have a sound budget,
15:29 and now you actually have written out your goals
15:31 of what you're investing for.
15:33 See, a lot of individuals have not written these out,
15:35 they're chasing the money,
15:37 but they're not chasing
15:39 what God has prepared in their life.
15:41 So do you feel that God
15:44 wants you to have educated children?
15:46 So you need to invest for college.
15:47 Does God have a house in store for you?
15:49 You need to save up money for your home.
15:52 Does God have in store for you a new business?
15:53 You need to be saving up money for your business.
15:56 Does God have in store for you a retirement?
15:58 Okay, so now you might want to look at some stocks
16:00 because that can be something, could be something
16:02 that you want to put into an investment strategy
16:04 if you have not written out your strategy.
16:07 And in budgeting, we actually talked about and discussed
16:09 exactly how to get your, what I call the finish line,
16:12 exactly how you get to the total dollar amount
16:15 that's going to help sustain you during retirement.
16:18 There's a way.
16:19 And your budget helps you get there
16:20 and the stocks is just a vehicle
16:22 that helps you get along the way.
16:23 So when you figure out your budget
16:26 and you figure out your goals,
16:27 let's just say now you're ready to start
16:29 doing some investing, okay.
16:31 And for those individuals who are ready to invest,
16:34 you know, what should I be putting my money in?
16:37 How should I go about diversifying my assets?
16:41 Well, there are few things you can actually look at
16:43 that I would like to give individuals
16:44 that they should, again, please do your own research.
16:47 Do your own research
16:48 and then I'm going to give some tips
16:50 on how to select the right financial advisor
16:52 and the right questions to ask
16:54 because that is a critical component as well.
16:57 And make sure you get the right assistance.
16:59 In the abundance of counselors, there's victory,
17:01 that's what the Word says.
17:02 So we have to get the right counselors as well.
17:05 So as we put together our budget,
17:08 there's a thing called dollar cost average
17:10 investment strategy, okay.
17:12 Your budget is going to tell you,
17:14 let's just say I have $200 left over
17:16 or a $100 left over every single month
17:19 and after this $100
17:21 I've got my emergency fund together,
17:23 that means I've got my,
17:24 you know, 9 to 12 months of living expenses saved,
17:26 so in case there's a rainy day
17:27 because you don't want to have to dip into your stocks
17:32 just because your roof is leaking.
17:34 You don't want to dip into your bonds or sell your home
17:38 just because your car broke down
17:39 and you have to fix your car.
17:41 So you have to have enough liquidity
17:43 in your emergency fund
17:44 to sustain any ebbs and flows that happen in our lives.
17:47 We know, if there's one consistent thing in our lives,
17:50 it's inconsistency, right?
17:51 Right. And it's emergency.
17:53 So we have to have that emergency fund put in place,
17:55 we have to have that budget put in place.
17:57 We have to make sure that we know
17:59 what we're investing for.
18:00 So again, how much money
18:02 you're putting into your five to nine investment plan,
18:05 that also is a level of investment
18:07 for your children, okay.
18:09 So the five to nine,
18:10 I love this investment strategy for children
18:12 because essentially
18:13 it's a tax deferred investment strategy
18:15 that allows you to, well,
18:16 if you put money into a savings account,
18:18 let's say you're being taxed on,
18:20 your income is $50,000 a year,
18:23 many states allow you to put up to $5,000
18:25 into this investment plan for your children,
18:27 it's invested in a very conservative
18:29 means of investment,
18:30 meaning bonds or treasury bonds or whatnot,
18:33 they give a very minimal return,
18:34 but it's supposed to be conservative
18:36 because this is a college savings account
18:38 not really an account
18:39 that's going to give you the big bang.
18:41 You're just trying to put money aside
18:42 to make sure that your child actually has it
18:44 when they go to school.
18:45 And the beautiful part about it is that
18:47 when you're investing for the five to nine plan,
18:49 that one means of investing for college
18:51 is that if your income is $50,000 a year,
18:57 if you put $5,000 a year into this five to nine plan,
19:01 you'll only be taxed on $45,000 a year.
19:04 So now that estimate maybe $1,500 a year savings
19:09 that you saved in terms of your tax bill.
19:11 So now that money grows tax free.
19:13 Now if you take that money and your child goes to school
19:16 and you pull that money out and say,
19:18 "All right, how much am I gonna have to pay?"
19:19 Well, the beautiful part about the five to nine plan
19:21 is every state has a different one,
19:23 so we have to research what your state has,
19:25 when you take that money out, that money,
19:27 as long as it goes towards college expenses,
19:29 that's also tax free.
19:32 So you don't have to pay any taxes on that.
19:33 So one of the best ways
19:35 when you're investing is figuring out
19:36 how can I minimize my tax bill.
19:39 Okay, and that's what a lot of the wealthy do, right?
19:41 It's about minimizing taxes,
19:43 making sure that as we are going through our lives,
19:47 that's why people start businesses
19:48 because you get through the tax breaks,
19:50 people use their qualified investment accounts,
19:52 meaning your retirement accounts,
19:54 your individual retirement accounts,
19:56 your 401ks, 403bs,
19:58 these are different investments
20:00 that you can use to maximize
20:02 your tax deductions and minimize your tax bill.
20:05 You want to save money at the end of the day.
20:07 So that's one means of investment.
20:12 Stocks, bonds, business, real estate,
20:17 all these are different means of investment
20:18 and there's tons more.
20:20 You have derivatives as options,
20:21 you have different means,
20:23 you have different collectibles,
20:25 you might be able to invest in stamps
20:27 or you can invest in gold,
20:28 individuals buy gold coins or silver,
20:31 all these are means of investment,
20:33 which one is the best one, according to Ecclesiastes,
20:35 divide your portion in seven, eight.
20:37 You want to buy a little bit in all of them.
20:40 Okay, and so when you're investing,
20:43 now I'll give one quick tip because I know a lot of folks,
20:45 "You know, Ryan, just give me something
20:47 that is gonna help me diversify my account."
20:50 And the beautiful part about it
20:51 is that now they have various products out there
20:53 that are available that helps you diversify, okay.
20:56 So if I buy one stock, let's just say, the stock is...
21:01 And I'm not trying to give a stock on here
21:03 because I don't want individuals to buy it.
21:06 Let's just say
21:07 this is a stock of water, right?
21:10 So this water stock,
21:12 you know, buy itself if I just buy this one stock,
21:17 it's going to be pretty risky
21:19 because this stock could go down, it can go up,
21:21 you never know what's going to happen.
21:23 But if I buy two stocks water and paper,
21:26 that becomes less risky
21:28 because water might decrease
21:29 while paper goes up in value, okay.
21:32 But if buy three stocks, water, paper, pen, and book,
21:36 now I'm diversified
21:37 because now I'm essentially what they call eliminating
21:40 what they call unsystematic risk,
21:42 risk that is only inherent to that one individual stock.
21:45 So when you invest,
21:47 you want to make sure you buy as many stocks as possible.
21:50 Is it possible to buy all stocks?
21:54 I'm asking that question,
21:55 is it possible to every single stock?
21:57 Oh, no. Most people say no.
22:00 Actually it's yes. Is it?
22:01 You can buy every single stock.
22:03 See that tells you how much I know about the stock.
22:04 Well, most people say no.
22:05 Most people would say
22:07 you cannot buy every single stock,
22:08 but they have these things out
22:09 that are called exchange traded funds.
22:11 See when stocks are traded,
22:12 they're called a stock exchange.
22:13 Right. Okay.
22:15 And I used to be a stock...
22:16 I used to be the guy when people look in television
22:18 they see all these people going buy, buy, go, and sell, sell.
22:20 Yeah, making all the noise in Wall Street.
22:22 Well, I used to be on the floor.
22:24 But I used to be down there
22:25 and I was reporting at the time,
22:27 but I always was a NASDAQ trader.
22:30 So I was doing the exact same thing
22:31 but behind a computer screen.
22:34 So the way the system is set up is called the stock exchange.
22:38 When you put an order in for a stock,
22:42 that order goes to a broker, a stock broker,
22:45 the broker takes the order,
22:47 they then send that order up to a stock trader,
22:50 and the trader takes that order
22:52 and they try to match it up
22:53 with someone across the country or next door
22:56 or wherever who wants to buy.
22:58 So you want to sell water, someone else wants to buy it,
23:01 that broker's job is to connect.
23:05 So when that broker connects those orders,
23:10 they make an exchange,
23:12 that's why they call it stock exchange.
23:15 So let's just say you're in California
23:18 and the other person is in New York,
23:21 let's say I'm in Michigan as a stock trader.
23:25 I'll match up the order, who wants to buy water,
23:28 this person wants to sell it,
23:29 I match it up and as soon as I match it up,
23:32 there's a little thing
23:33 at the bottom of the screen that it prints.
23:35 So when, you know, you're watching television
23:37 and the news comes on
23:38 and they have the markets and all that stuff.
23:41 Oh, yeah, yeah, yeah.
23:42 A lot of things at the bottom of the screen
23:44 start flashing across.
23:45 The moving screen like a marquee?
23:46 Yeah, exactly.
23:48 Well, that ticker essentially meant that a trader
23:50 just matched up in order and it printed,
23:54 they call it printed or it hit the tape.
23:56 So as soon as that order hits the tape,
23:59 it tells a price that it hits a tape
24:00 and then the tape scrolls across your screen at home.
24:03 There's only a few things that go on the news
24:05 every single day, you've got the sports, weather,
24:08 but they also have the financial markets,
24:10 and it is important enough
24:11 that individuals see this every single day.
24:14 So that exchange,
24:15 they have all these different stocks
24:17 are a part of an exchange,
24:19 you can buy all those stocks
24:20 but they call it exchange-traded funds,
24:23 so essentially what it is it's a computer generated type model
24:26 where you go out
24:27 and you purchase this one stock,
24:28 in one security that emulates
24:30 the entire exchange and how it trades.
24:32 It's basically computer run and it's a great way
24:35 to diversify your asset but only...
24:37 And I'm saying, please, I want everyone to listen,
24:40 do not start an investment strategy
24:43 if you have not had your emergency fund,
24:44 if you don't have a budget,
24:46 and if you can't commit to every single month
24:49 putting in a $100 or $200 into that,
24:53 whatever amount it is, you can put $5 a month.
24:57 If your budget says I only have $5 extra a month
25:00 after my emergency fund is full,
25:02 then please go ahead, put that $5 a month
25:04 because there's a way to put money
25:05 in that brokerage account to the tune of $5 a month.
25:08 So again, we want to just make sure that
25:11 we're cautious about not overextending ourselves
25:15 and having to liquidate and selling stocks
25:16 just because our car broke down.
25:18 Right. So let's say I want to get some stock.
25:21 Right. Where do I go?
25:24 You have to go to a stock broker.
25:25 Okay, there's things like
25:27 E-trade, Scottrade, those are online.
25:29 Right. Do you recommend those?
25:32 Well, again, it all depends on if you can make sure
25:35 you have the right amount of knowledge, okay.
25:39 So if you want to get a financial advisor, okay,
25:42 I have a list of questions for the folks at home to ask
25:45 to make sure if that financial advisor
25:48 is the right advisor for them.
25:51 The first question is do you have a CFP?
25:52 Certified Financial Planner,
25:53 it's a great designation, that person knows the stuff.
25:57 The second question is can I see a copy of your ADV?
26:01 It's short for advisor, but essentially,
26:03 this is a means of making sure
26:05 that you can see exactly how this advisor charges.
26:08 I recommend registered investment advisor
26:10 because they are fee only, they're not commission driven,
26:14 and they are truly interested
26:15 and really only giving you the best advice
26:19 without trying to make you sell
26:20 your stocks are for commission only.
26:23 Can I get some referrals, at least three referrals?
26:27 What's your area of expertise?
26:28 Many advisors have different areas of expertise.
26:32 And what sort of clients do you service?
26:34 That's huge because many different clients
26:35 are being served in various areas.
26:38 And what's your investment philosophy?
26:40 Many individuals have different philosophies.
26:42 It may not match up with who you're suited for.
26:45 That's good.
26:46 That's good 'cause I'm kind of like...
26:48 And you can go online and find that.
26:50 Yes, you can go online. Thank you.
26:51 And now we got our takeaway. Absolutely.
27:00 I was watching CNN
27:02 and I saw an older gentleman being interviewed
27:04 who was worth over $2 million.
27:06 That might not sound amazing to you,
27:08 but it is very amazing when I learned
27:10 that he had never earned in his life over $11 an hour.
27:13 He made a practice of investing his money
27:15 and living beneath his means.
27:17 He made sure to include
27:18 another monthly bill to pay himself
27:20 within a savings or investment account on a monthly basis.
27:24 Investing is not just for the rich
27:25 but for all income and age levels.
27:28 The less you earn,
27:29 the more important it is to be mindful of the expenditures.
27:32 Less income means less financial protection
27:34 to provide a financial cushion during setbacks,
27:36 like job loss, salary reduction,
27:39 rising gas prices, or medical emergencies.
27:42 Regardless of your income or financial position,
27:44 it is up to you to make the decision to begin saving
27:47 toward financial independence today.
27:49 If you have any questions,
27:50 email me at firstname.lastname@example.org
27:53 and chat with us
27:55 on our Dare to Dream Network Facebook page.
27:56 As always, be the change and remember,
27:59 the purpose of life is a life full of purpose.
28:01 Be blessed.