GMB Ep #85: Investing Myths #3: You Need To Keep Up With the Financial News

The concept that you need to keep up with the financial media in order to succeed in investing is an extremely popular belief among novice investors. However, in some cases, closely following financial media may influence your financial decisions in ways that aren’t in your best interests. Throughout today’s episode, Grant dives into how mainstream financial news can be misleading, why it isn’t necessary to keep up with financial media in order to be successful in investing, and how to choose sources that give you quality financial information.

Show Notes

[2:40] The Myth – Although more knowledge is good, getting into deep details of things via mainstream financial news might tempt you to make short-term tactical adjustments to your portfolio. Grant dives into how this occurs and why it results in bad outcomes.

[3:40] Strategic Strategies vs. Tactical Strategies – Grant shares his thoughts on why savvy investors focus more on strategic strategies than short-term tactical actions.

[6:42] Clickbait Headlines – How digital media business models based on advertising negatively affect the quality of journalism and how this behavior influences users to follow unreliable and biased financial advice.

[8:55] “If you’re not paying, you are the product” – Grant explains how free news sources may often contain misleading information and why Grant always tries to digest financial information from sources he pays for.

[10:25] Social Media – Grant shares his thoughts on investment-related misinformation that are being shared on social media platforms and how to be mindful about misleading financial news.

Resources

Investing Myths #2: It’s Dangerous to Invest At All-Time Highs:
growmoneybusiness.com/podcast/Invest At All-Time Highs

Investing Myths #1: Rising Rates Will Crush Your Bond Portfolio:
growmoneybusiness.com/podcast/Rising Rates Will Crush Your Bond Portfolio

GMB Ep #84: This is How I Evaluate Mutual Funds & ETFs

Evaluating investment funds or any other type of investment is crucial for a savvy investor. In today’s environment, it’s easy for investors to get influenced by misinformation that ultimately leads them to make sub-optimal investment decisions. We dedicated today’s episode to inspecting the process of evaluating different mutual funds, ETFs, or any other types of investment funds. Throughout the episode, we explore the process of due diligence and how to decide whether or not a potential fund is worthy of including in your portfolio.

Show Notes

[2:15] Sub-Optimal Investment Decisions – Why people make sub-optimal investment decisions by not using the right criteria to evaluate a standard investment fund.

[4:00] Terrible Evaluation of Potential Investments – Using the example of large-cap US equities, Grant explains how some of the most popular fund ratings do not provide a very good evaluation of potential investments.

[8:37] Structuring Your Portfolio – The most important decision one has to make in structuring a portfolio is allocating assets. Grant shares high thoughts on why this decision is far more important than focusing on a specific fund and how long-term asset allocation can improve the integrity of your portfolio.

[13:46] Evaluating Strategy – How to evaluate the strategies of different investment funds and how to decide whether the strategy of a specific fund aligns with your goals.

[18:05] Historical Performance – Why it’s important to take a look at the history, stability, and performance of the fund management company before you invest.

[21:33] Path to the Best Outcome – Wrapping up the episode, Grant shares his take on how having a consistent allocation, a consistent philosophy, and remaining invested through harsh conditions combine to create the path to the best investment outcomes.

Resources

ETFs vs. Mutual Funds: What’s the Right Investment Vehicle For You?
abovethecanopy.us/mutual-funds-vs-etfs-whats-the-right-investment-vehicle-for-you/

GMB Ep #83: Consider This Strategy If You’re Paid In Company Stock

Compensating employees with some form of equity has become a fairly common practice among employers. This may come in several flavors, including restricted stock units, employee stock purchase plans, incentive & non-qualified stock options. In today’s episode, Grant dives into how these programs work, how they’re taxed, common issues employees face when they’re compensated with equity, and a strategy that allows employees to benefit from equity compensations while reducing their tax bills.

Show Notes

[02:48] Common Issues – Grant shares his thoughts on two common issues that employees face when they are compensated with equity.

[04:51] Risks Associated with Company Shares – Grant talks about some of the disaster stories of a few companies that put their employees in deep financial trouble with equity compensations. However, he also talks about how equity compensations can create a whole lot of wealth for employees if the company continues to flourish.

[07:01] Restricted Stock Units – Grant reviews a few common equity compensation programs, starting with RSUs, a performance-based method of compensating employees.

[09:57] Employee Stock Purchase Plans – While rare among private companies, employee stock purchase plans are quite common in publically traded companies. Grant dives into how these plans are taxed and the pros and cons of these plans.

[13:35] Incentive & Non-qualified Stock Options – Grant dives into the benefits of another two types of equity compensation and what employees should keep in mind about them.

[15:23] Strategy – Grant shares his out-of-the-box strategy of utilizing equity compensation that allows employees to pay as little tax as possible.

Resources

Employee Stock Options: The Top 5 Mistakes That Leave Money on the Table:
abovethecanopy.us/employee-stock-options-the-top-5-mistakes-that-leave-money-on-the-table

GMB Ep #82: Debunking Investing Myths #2: It’s Dangerous to Invest At All Time Highs

A few weeks ago we started a series of podcast episodes dedicated to debunking popular misconceptions around investing. In today’s episode, we’re continuing that discussion by covering another investment myth: that it’s too dangerous to invest new money at market highs. Buying low and selling is an obvious objective for any investor, but avoiding the markets simply because they’re breaking new highs is a common mistake for many. Throughout the episode, Grant dives into why this concept is a myth and data from a few studies conducted by reputed organizations that show the potential dangers of the delay in waiting till the markets fall.

Show Notes

[04:56] Historical Data – We often use historical data to assist our investment decisions. While it is a good starting place, it comes with a lot of shortcomings. Grant reviews why we need to look beyond historical data to make savvy investment decisions.

[06:33] Study on S&P 500 Returns – Grant dives deep into a study that analyses the returns of the S&P 500 companies right before the dot com bubble crashed and after the market crash.

[11:13] Investing on Random Days vs. All-time Highs – Last year, the investment firm JP Morgan conducted a study to compare the returns of investing on any random day versus selectively investing only on the days when the markets reach certain points. Grant dives into the findings of this study and how they relate to the misconception.

[16:20] Risks – The risks associated with investing in financial markets and some of the methods we can use to mitigate the risks and the limitations.

[18:31] Looking at a Wider Dataset – Grant reviews a chart from Dimensional Fund Advisors, which uses a wider data set, a total market index, and a longer time period than the previous studies. He shares his thought on why this chart contradicts the other two studies and what investors can learn from it.

[21:23] Dividends and Distributions – How dividends and distributions can reduce the impact of a market crash and significantly increase your returns if the markets do not crash.

[24:37] Dollar Cost Averaging – How dollar-cost averaging helps us reduce risks associated with investments.

Resources

Is it too late to get invested?
jpmorgan.com/wealth-management/wealth-partners/insights/top-market-takeaways-is-it-worth-considering-investing-at-all-time-highs

The beauty of doing nothing:
jpmorgan.com/wealth-management/wealth-partners/insights/the-beauty-of-doing-nothing

GMB Ep #81: There Are Only Three Ways To Make Money In Crypto

The popularity of Bitcoin and other cryptocurrencies has exploded over the last few years, and many investors are asking about the various ways they could make money investing in them. A few months ago in episode 65, we talked about how cryptocurrencies work. In today’s episode, we’re extending that discussion and sharing the only three ways to make money with cryptocurrencies. Throughout the episode, Grant reviews how some of the money-making methods of the gold mining era relate to cryptocurrencies and three methods you can use to make money in the cryptocurrency space.

Show Notes

[02:11] Understanding Cryptocurrency – Grant reviews a framework that he’s been using to shape his understanding of the inner details of cryptocurrency and the ways to make money in the cryptocurrency world.

[06:45] Risks Associated with Crypto – Compared to rare minerals like gold, cryptocurrency does not have a long history yet. Grant explains the risks associated with cryptocurrencies due to their relatively short history and the high volatility.

[07:46] Process of Mining – Grant takes an in-depth look at how a network of computers carry out cryptocurrency mining and transaction tracking.

[12:52] Profitability of Mining – Why the awards for mining go down over time and how it affects the ROI of mining.

[15:45] Speculating – How cryptocurrency investors can make money by speculating cryptocurrency prices.

[18:11] Regulations – Grant reviews some of the regulations that are in effect in Europe due to the highly volatile nature of the cryptocurrency world and some of the instances that prove that cryptocurrencies aren’t completely out of the reach of governments.

[22:47] The Levi’s Approach – How investing in platforms that enable people to interact with cryptocurrencies can become a way to make money in the cryptocurrency arena.

[27:32] Smart Contracts – How smart contracts work, how they’re related to the technology used in crypto, and some of the investment opportunities related to smart contracts.

Resources

Ep# 65 – My Take on Bitcoin & Cryptocurrency:
growmoneybusiness.com/podcast/episode65

GMB Ep #80: Digging Into Healthcare Costs With Sailee Bhambere

The healthcare system in the United States is extremely expensive compared to other developed countries, and it has escalated to a point where healthcare costs have become a major financial burden for many people. In today’s episode, we have a distinguished guest who specializes in public health. Sailee Bhambere, a medical doctor with a master’s degree in Public Health from Harvard University, joins us today to talk about why healthcare is so expensive in the United States. Throughout the episode, we dive deep into Sailee’s research on the issues of the US healthcare system, why it’s extremely expensive, and how it could be improved.

Show Notes

[02:28] Sailee’s Background – We start the conversation with a brief review of Sailee’s work in the healthcare industry and how her research contributes to improving the quality of healthcare.

[05:56] Studying the Healthcare System – Sailee shares with us what she focuses on in her research to identify issues in the healthcare system.

[09:00] Why Healthcare is Expensive – Sailee shares her take on how expensive the US healthcare system is and some of the contributing factors to these high costs.

[14:00] Preventive Healthcare and Personal Responsibility – How our personal habits contribute to our health over a long time and how preventive healthcare could be improved in a way that makes it easier for citizens to develop healthy personal habits.

[17:12] Free Market Capitalism and Healthcare – Grant and Sailee discuss their views on how the free market environment in the United States influence the healthcare system and how other developed countries have taken measures to reduce healthcare costs.

[23:00] Most Important Policies – Sailee shares her thoughts on what policies she’d put in place if she had the authority to do so.

[26:00] Complexities – Why the US healthcare system is extremely complex and how the policymakers can approach reducing the complexities.

[31:40] Administrative Costs – The administrative costs in the US healthcare system are significantly higher than they are in other developed countries. Sailee shares her thoughts on the reasons that cause this discrepancy.

[36:34] Burnout – One of the major issues healthcare professionals are facing across the industry is burnout, which is a result of overworking as well as complex administrative tasks embedded into their workload. Sailee shares her thoughts on how this affects the performance of the healthcare system.

Resources

Connect with Sailee: linkedin.com/in/sailee-bhambere
Sailee’s Research: www.researchgate.net/profile/Sailee-Bhambere

GMB Ep #79: The Sacramento Startup Climate With Cameron Law

In recent years interest in entrepreneurship has been steadily increasing around Sacramento and around the country, leading younger generations to explore self-employment as a career option. In today’s episode, we have a distinguished guest who specializes in educating entrepreneurs and guiding them toward success. Cameron Law, Executive Director of the Carlsen Center For Innovation & Entrepreneurship in Sacramento, joins us today to talk about the startup climate in the region. Throughout the episode, we dive into how Cameron’s organization helps entrepreneurs, common mistakes entrepreneurs make, trends in the startup arena, and what entrepreneurs should know about creating successful business ventures.

Show Notes

[01:40] Cameron’s Background in Startups – Cameron shares how he got into the business world, his work in the venture capital arena, and his contribution to helping entrepreneurs thrive.

[06:18] Cameron’s Organization – Cameron dives into the mission of his organization, Carlsen Center for Innovation and Entrepreneurship.

[10:50] Generating Interest – Cameron’s organization works with students and people who are already in business. He talks about what his organization is doing to generate interest in entrepreneurship and to make its programs more accessible in the region.

[15:30] Evolution of Entrepreneurship – How the mindset of entrepreneurship has evolved over the years in the region and how recent trends in the markets and technologies have influenced it.

[28:48] Avoiding Mistakes – Common mistakes Cameron sees entrepreneurs make in their startups and bits of advice Cameron has for entrepreneurs to help them avoid their mistakes.

[35:39] Taking Risks – Entrepreneurs often have to take risks to make their new products or services successful. Cameron shares his take on what entrepreneurs should keep in mind about creating solutions that successfully solve a problem.

[38:11] Blockchain – Cameron shares his take on how cryptocurrencies and blockchain technology are being adopted in the region.

[46:05] Sports – Both Grant and Cameron were baseball players in college. They talk about how sports fit into their lives and how experiences from sports have influenced their professional skills.

[52:47] Get Involved – Cameron shares how you can get involved in entrepreneurial communities in your region and how you can utilize the resources available at the Carlsen Center for Innovation and Entrepreneurship.

Resources

Connect with the Carlsen Center for Innovation and Entrepreneurship:

Website: www.csus.edu/center/carlsen
LinkedIn: linkedin.com/company/carlsencenter

GMB Ep #78: Investing Myths Debunked #1: Rising Rates Will Crush Your Bond Portfolio

Recently, we’ve seen quite a few myths and misconceptions about investing circulating in popular media and amongst investors. Today’s episode is the first of several episodes we plan to publish with the focus of debunking these myths. Throughout today’s episode, Grant debunks the misconception of negative effects on bond portfolios caused by increasing interest rates on bonds. Stay tuned until the end of the episode, where Grant shares his take on how to get the best outcomes from bond portfolios.

Show Notes

[01:58] Understanding Bonds – Grant reviews how bonds work and how they’re different from stocks.

[07:30] Interest on Bonds – The structure of interest for bonds and how the concept of duration comes into play.

[10:35] Fluctuation of Prices – Grant shares his thoughts on why fluctuation of bond prices does not have a significant effect on long-term investors.

[13:18] Interest Rates – Grant reviews how increasing interest rates affect long-term portfolios, using an example of a worst-case scenario.

[18:39] Path to Success – Grant shares his thoughts on why consistently applied strategy and long-term focus are the keys to the best outcomes for bond portfolios.

[20:33] Unlikely Outcomes – Why it’s highly unlikely that we’ll see a huge rise in interest rates in the next five to ten years based on how our current monetary system is structured.

Resources

What is the Worst Case Scenario for Bonds? – Cullen Roche:
pragcap.com/what-is-the-worst-case-scenario-for-bonds

Bond Duration:
en.wikipedia.org/wiki/Bond_duration

Don’t Ditch Those Bonds
aarp.org/money/investing/info-09-2013/dont-ditch-those-bonds.html

GMB Ep #77: Investing in an Inflationary Environment

Last week, The Bureau of Labor Statistics released some metrics that indicate we might be experiencing a higher rate of inflation than the federal reserve and other stakeholders have been expecting. We dedicated today’s episode to exploring what inflation is and why we should be concerned about it. Throughout the episode, Grant dives into how inflation occurs, how it influences the economy, how to measure inflation, the role of the federal reserve in keeping the economy stable, and what investors should keep in mind about maintaining a healthy portfolio in an inflationary environment.

Show Notes

[04:45] Understanding Inflation – What inflation is, why it happens and why we should be concerned about it.

[07:25] Measuring Inflation – Grant reviews some of the methodologies and indices that are used for measuring inflation and how these measurements indicate recent changes in the prices of consumer goods and services.

[13:25] Inflation and Deflation – Grant shares his take on why the two extremes of the spectrum can cause adverse effects on the economy and why maintaining a stable rate of inflation is better for the economy.

[16:58] The Federal Reserve – How the federal reserve maintains its policies in order to keep the economy stable.

[22:25] Inflation and Investments – How inflation affects investments and how different asset classes perform in inflationary environments.

[25:14] Pricing Power – Why companies that offer products and services with higher pricing power can adapt better to inflation.

[28:00] Diversification – Grant reviews some of the ways you can diversify your portfolio by taking advantage of assets that are less affected by inflation in the United States.

[35:48] Real Assets – Grant shares his take on how real assets, including real estate, perform in an inflationary environment and what investors should keep in mind about investing in hard assets.

Resources

Consumer Price Index – U.S. Bureau of Labor Statistics:
www.bls.gov/news.release/cpi.toc.htm

GMB Ep #76: Business Succession Planning With M&A Expert Michael Vann

The succession of a business or exiting from a business is an important and intimate event most business owners will have to plan at some point in their journey. We dedicated today’s episode to exploring what business owners should think about when planning their succession or exit, even if they don’t anticipate it anytime soon. Today, our guest is Michael Vann, an author, certified scale architect, and the president of The Vann Group LLC. Throughout the episode, we explore the process of succession, how relationships and emotions come into play, how taxation applies to succession, and what Michael has learned through his extensive experience in the mergers and acquisitions market.

Show Notes

[01:35] Michael’s Background – We start the conversation with a brief review of Michael’s background, from being in the corporate environment to working on his father’s business.

[04:51] Acquisitions – While working in the corporate world, Michael gained lots of experience in acquisitions. He shares some of the important strategic planning points of acquisitions for buyers.

[10:21] Family Business – Once Michael left his corporate job, he started working on his father’s business. Michael talks about the work he did there and how the business evolved under his influence.

[15:44] Business Transitions – Michael’s family business has been going through a phase of transition from his father to Michael and his siblings. Michael dives deep into the process of transitioning and the emotional aspect of it.

[18:02] Process of Successions – The typical flow of business succession, deciding between different options for succession, and managing financial matters.

[23:38] Relationship Dynamics – Business transitions may get a bit more complex when they’re between family members or people with close personal relationships. Michael talks about some of the obstacles that may come up in these sorts of transitions and how to overcome them.

[27:12] COVID and the Industry – How the pandemic impacted Michael’s line of business and the new trends that emerged from it.

[33:19] Taxation – Michael shares his take on how the newly proposed tax reforms may affect buyers and sellers in the mergers and acquisitions arena.

[39:11] Michael’s Vision for Future – Michael dives into some of the possible avenues for his business to expand and grow, and some of the interesting concepts covered in the book Michael coauthored with his father.

Resources

Michael’s Book: amazon.com/Buying-Out-Boss-Successors-Succession

Website: vann-group.com
LinkedIn: linkedin.com/in/michaelvann