Money Matters

Investing 101 - Where to start

March 01, 2023 Jerry Linebaugh, CEO & Founder of Game Changer Wealth Episode 25
Money Matters
Investing 101 - Where to start
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Show Notes Transcript

Thinking about getting started investing? Are you getting ready for retirement? (That question isn't just for our older audience.) When should you start thinking about it and what investment avenues are out there for you to make the most of what you have? Kim is joined by certified financial advisor & founder of Game Changer Wealth, Jerry Linebaugh, to discuss the ins and outs of getting started with investing.

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Welcome to Money Matters, the podcast that focuses on how to use the money you have, make the money you need and save the money you want – brought to you by Neighbors Federal Credit Union.

The information, opinions, and recommendations presented in this Podcast are for general information only and any reliance on the information provided in this Podcast is done at your own risk. This Podcast should not be considered professional advice.

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Welcome to Money Matters, a podcast that focuses on how to use the money you have, make the money you need, and save the money you want. Now here is your host, Miss Kim Chapman.

Kim Chapman

Welcome to another edition of Money Matters. I'm your host, Kim Chapman. Nobody knows everything. And it's only when you think you do that you set yourself up for failure. But if you want to know everything there is to know about money, you're in the right place. Because money matters. Is the right podcast for you. Hit the subscribe button because you can count on learning something new each and every new show.

Here's my quote for today. Schools teach you how to work for money, but what they don't teach you is how to make your money work for you. Well, guess what? We're going to learn about that today. We're going to talk about how can you make your money work? And my guest today is Mr. Jerry Lanza. Thank you for joining me, Jerry.

Jerry Linebaugh

Well, I'm so glad to be here.

Kim Chapman

Now you've got an extensive resume, so I know I learned about you on your radio show. So tell us a little bit about what you do.

Jerry Linebaugh

So I'm actually a registered financial advisor. Okay. So that means somebody that has a license to do financial planning to give you securities advice and to talk about your safe money expectation as well. I lead a team of fiduciaries, and a fiduciary is an important word today. A fiduciary is someone who has to has to, by law, give you what's in your best interests, not just what is suitable.

There are other financial licenses out there that don't require that. You know, I'm I'm really the specialist that you would have in your life, especially before retirement. Right Before retirement and in retirement. I do have a place for folks that we help them with their before-retirement goals. But I am truly a specialist when it comes to retirement planning.

And so if you're 25, 30 years old, you do want to be looking at how do I get to retirement? Because one day you're going to want to get paid on what you've already done versus what you got to go do.

Kim Chapman

And yes, so many of our listeners are at that stage and they want to know, what can I do? So I want to start with the real, real basics in terms of investing and a lot of times people ask me these questions, you know, what's the difference between investing and saving?

Jerry Linebaugh

Well, investing and saving are important and they're very different. Okay. So let's start with savings. Savings is what you would, you know, put aside either a daily, monthly, annually, and you don't want a loss on your savings. Okay. So savings is about earning interest. Usually an interest account. It could be a savings account. You know, it could be at your credit union, could be at a bank.

Some other institutions offer some safe money accounts. So it's about making sure that money's principle protected and it's protected outside of the institution. So your savings needs to be someplace where in case the institution went south, there is some form of backup that's savings. You're right. A return may not be that high, but it's an important part of your total portfolio.

Now, investing, investing is where you offer up the money and somebody else outside of you is going to be responsible for that growth or loss. So in investing, you could have loss, you could have gain. The longer you hold your investments and possibly how it's diversified could increase the likelihood that you'll be successful in your investing. But investing is you certainly can lose money in an investment that's actually the federal government's definition of investing.

It actually includes the idea that you could lose money, especially in the short term of what you're doing.

Kim Chapman

So of course, nobody wants to think about losing money. And of course, saving is a little bit safer. So what is the real benefit to invest over saving?

Jerry Linebaugh

So investing, of course, return is one of them. Right. In savings, you're it's really your earning interest. Okay. In investing, often the component is equity. You know, what is equity? Equity is, you know, if you own a house, real estate, you know that over time the value of that can go up. That means what somebody else is willing to pay you for that if you're ever sold it.

Same thing in stocks, stocks. And there are some other investment classes that will appreciate you hope over time and you can, you know, increase the likelihood that that's going to increase your equity over time through proper diversification and rebalancing. We might get back to that in a little bit. But investing for longer periods of without touching it right is important.

Now, we can also talk about in a minute the difference between types of investing. Right. Because but we want to make sure there's a good clarity Right, on the savings versus investing.

Kim Chapman

Right. And of course, people that are listening, of course, they want to invest. They want to be able to make money. But they're thinking to do I have to have money to invest? Where can you start? Do you need to have a lot of money just to be able to start investing?

Jerry Linebaugh

Not at all. Not at all. So someone that is young could start their investing route. But before we invest, we really want to make sure we have saved at least and this is somebody that I would say just about any age. You want to look at your lifestyle, you know, what do you spend on groceries? What are you spending on the light, bill?

You know, if you have to repair a tire once a year in a plant, a tree outside. What does that look like on a monthly on an annual basis? You know, six months of that needs to be in a savings account. So if you don't have a six months of savings, I would, you know, for your lifestyle, let's get that first right.

Then we can talk about how we invest and when we invest. You know, it could be as little as $50 a month. You know, someone that's about 20 years old, 21 years old, for example, you know, $50 a month invested. Our listeners rated that bring that to about $100 a month, you know, with adjusted for inflation. So $100 a month, you know, between now and 65 could, you know, at a modest return of only a 6 to 7%, that could actually fetch you over 75,000, maybe even over $100,000 for the rest of your life, a small amount, starting when you're young.

Now, if you're older and you're just getting started and you're trying to develop a cash flow, it might be significantly more that you need to save than a hundred $150 a month. But that would be just an example. You know, it's best to get started sooner than later. And if you haven't started at all, there's no time like the present.

Kim Chapman

Absolutely. And you brought up such a very important point that you have to have savings. You need to have at least six months of your living expenses before you start investing. But what about if I have that money saved but I still have debt? Should I be debt free before I start investing.

Jerry Linebaugh

That debt is extremely important and almost not talked about really in this country, right? In our firm game changer world, we look at that debt and especially the young folks, right? If I've got a 65 year old client and I'm also talking to their adult children. Okay. So we think that you should take a look at that debt and there are strategies in the save money world.

For example, just recently I sat down with some folks off my radio show. You know, we have the Game Changer Retirement Radio podcast and the, you know, our show on 107.3 W BRP on Saturdays. And we talk a lot about, you know, how do you invest while you have debt? Okay. So you really should think about a process to get out of debt.

And we just had a couple come in and offer our one of our radio show folks and they were about 49 and 50, had a good income, but had credit card debt, had, you know, their card debt and our home debt. You know, I would say their current trajectory to get out of debt before we got involved was about 28 years.

Right. And the majority of that being their home debt, but without paying anything else, without tightening their belt, without doing without less dinners, we took the budget that they were had that was going to their various places. You know, they were sending an extra payment every now and then on their car. They would send extra money on their credit cards, not all the time.

They would send extra money to, okay, we took that extra budget, consolidated that, and we were now able to get them out of debt in about eight years. Now, just imagine all that money that was going to go to that debt is now going to be invested for them in the future. So it's not that they couldn't invest while they were in debt because he had a41k.

We told him, look, Max, the 41k to the match. So they had a 4% match or three. He was saving more than that in the 401k, he was saving over 12 15%. We said, look, let's take the match because that's free money, but let's take that overage. And we wrapped it into our debt reduction program and saved money and got them out of debt in record time.

It will save them in excess of $300,000. And not to mention the money it will help them make in the future. To wrap that back in in their future investments for retirement.

Kim Chapman

So I think you have the attention of our listeners for sure. That sounds really, really interesting because I know a lot of people won't invest. They may have the savings, but so many Americans, we just did a podcast earlier today. Eight out of ten Americans have debt. Right. And so investing is really a broad term. And you bought it for one K.

Is that the best place for them to invest?

Jerry Linebaugh

Well, obviously, if they get a match, right, you do want to take advantage of the match. Okay. But do we want to put more than the match in that bucket? Okay. Well, one of the considerations is tax. If you put money in an IRA, a41ka43b, 457, usually a state deferred comp to all these different things. You start with the four traditional IRA, right?

You're postponing a debt. You're pushing it into the future. And most people, when I asked them, do you think taxes are going to be lower in the future or higher? Universally, overwhelmingly, people tell me they believe they're going to be higher. They don't maybe have the math and some of the pedigrees that some of the folks that I have that work for me.

I've got some really smart folks. You can play Scrabble with all the abbreviations behind some of their names. Okay. Very smart folks on these teams. But, you know, they don't they just know it intuitively, right, that the future is likely to bring higher taxes or if you push money in a for when, Kyra, above the match, you're not getting an incentive right above the match to push a tax debt that's likely to be higher.

So when you pull money out before when K IRA or for three bear in these things, you're going to be paying the tax at whatever the tax rates are. So I would say let's start with getting the match money. If you have it, let's put money there. But if you have debt. Let's talk about how can we redirect that other money over and above the match, get out of debt in record time and then we snowball.

We snowball it like crazy because we're out of debt now. And now that can go into your retirement on high speed. If you're if you're don't have a41k right you can actually start traditional IRA. There are some other programs if you don't like the idea of paying tax in the future at a higher rate, then what if I told you there are some programs in the save money world that don't lose money where you can actually push money there and it doesn't have a mandatory future withdraw it withdrawal requirement.

It doesn't have a future tax debt because you pay the tax now. Now, one of those types of instruments is called Roth. So if you have a Roth IRA, one K, maybe you might consider pushing some of that money into the Roth. Now, before we go to Roth for one K, before we push money to a Roth IRA.

You need to know the pros and cons, right? You are going to be pushing money to the future. That is not with tax debt and you'll be able to grow that money, you know, tax free growth. Tax free income when you take it out, doesn't drive tax on Social Security. When you pull money out of a Roth account and it's tax free at your passing.

Okay, Great pros. Right. What are the cons associated with doing Roth Investing? And there are some other things in the tax world that are also tax free, like Learn IRP, a life insurance retirement plan that also is tax free growth, tax free income tax. What you're passing what the cons to this is you have to pay the tax now means you won't be getting a tax deduction on your tax return today.

So usually when people weigh this out mathematically with a proper financial adviser, they they usually see that it's usually in their favor to not push all that money to the future and do some type of tax free planning, whether it be Roth four, one K or regular Roth IRA or something else in that IRS tax code that doesn't have a future mandatory requirement to pull it out.

Kim Chapman

And that's what we've been taught traditionally, you know, to defer it until we're older because it's supposed to be a lower tax bracket.

Jerry Linebaugh

Yeah, well, we've been hearing that all my life. And so some people do return a lower bracket, but most don't, especially those that have pushed most of their wealth into for one case and IRAs. And then here they are retiring. Now, if they don't have a pension and more and more people don't have pensions, right, then the Social Security is nowhere near enough to live the lifestyle that they were living prior to retirement.

So they're going to pull money out of that for one kid in our right to live on. Well, you got to take the tax out, right, so that they don't can calculate that. And again, that's another reason to have a good financial planner in your life because they can run those calculations. In fact, a good financial planner will probably do that for you at no cost or obligation just to kind of give you a seat at the table to see what it looks like in the future with taxes in mind, inflation and talked about inflation.

Yet, you know, these forces that could act on your money where you have to take more out, you know you got to kind of think what the end in mind right. Let's think what the end you know we want to get to retirement. And what does that look like with inflation? What does that look like? You know, with market losses, you know, assuming you have a risk tolerance for market.

Okay. Or market losses because some people don't. And I think that if you don't have a risk tolerance for that, you shouldn't be doing that. And you're there might be a way to get to retirement without taking big risk. We'll throw that out there. But you got to start with the end in mind so we can do that.

That's something that a financial planner could do. Typical investment advisors may not do that. That's something that they don't like to talk about. They just really want to talk about growth, you know, growth, growth, growth. But you got to look at all those pieces because that informs you on what you should be doing today with tax and money, inflation, what your Social Security might look like and the gap between the Social Security and what you're going to need.

We call that the donut hole. Okay. So the shortage, when you get that shortage and you put those other pressures in there, it actually tells you what rate of return you should have and it tells you what kind of risk you should be having. And if you know the target you need to hit, that's a lot easier target to hit one that, you know, one that you can see, one that you can't see is hard to hit.

Kim Chapman

So I have my 41k, I have a pension. If I have these things in place, what do I need to know in terms of investing to know that, okay, if I'm getting them match what what is really going on with my money? We've been hearing in the stock market people have been losing a lot of their money in retirement.

So what should I as the consumer know? What should I be watching for?

Jerry Linebaugh

You know, I would look at and I don't know if there's many free tools left like this, but this is the kind of tool you need. Okay. You need to be looking first of all, you need to take a risk tolerance questionnaire. Okay? There are several of them out there. But then Liz got one on their website. You know, we've got them on our, you know, game changer be our e-commerce site.

Schwab's got them. You need to make sure that your time horizon along with your emotional ability to lose a certain amount, is in check. Again, I'm finding that eight out of ten people I sit with there, it's not in check. They tell me, No, I don't really want to do. I could lose a little bit of money, but oh, I going over here, I get uncomfortable.

Okay, Then I reveal to them what Morningstar. Morningstar is a tool that we use in our firm. Morningstar is a database of stock statistics. You know, prices over time and if it was high or low and this price of that price, we put your stuff in there, your symbol's in there, and then we sell them. Look, you said you didn't.

You said you're okay with losing this much. Well, this is what Morningstar says. You'll really lose historically when the next correction comes. Eight out of ten people I sit with are just flabbergasted that Wait a minute, I told my person or I told my four one administrator, I checked the box on the form that I was going to be conservative.

And then they find out they're not exactly invested that way. And what happens is when those losses come unexpectedly, especially as deep as they could come in, as long as they could come, then they want to sell out because they've lost too much and they can't handle it. Well, then, now you're not in place. When the corrections do come and you've locked in those losses, better step is just don't lose the money you're not willing to lose in the first place.

That doesn't mean we go to cash. It doesn't mean we run to only safe products like there are certain kinds of annuities that don't lose money, but doesn't mean we run to all of their. You really got to start with that end in mind and and that informs what you should be doing today. You got to look at the tax you can look at the tax is going to be you got to look at the ravages of inflation and what you might discover is what a lot of our folks discover is that they don't need to take as much risk as they thought, so that when those corrections come, if they're properly invested, they don't go down. So just wait for it to come back up. And over time, that could actually make you more money.

K im Chapman

So you mentioned properly invest it. What are some basic terms and tools or or I guess, vehicles for investing that we should know about?

Jerry Linebaugh

Definitely. If you're working right for a company, let's start with that for you and care whatever plan they've got, let's put the match money in there. But let's take a look at where we might put the rest of that money. Right. If I've got somebody that is comfortable with losing 20% of their portfolio when the market corrects, okay, that might be a moderate investor.

So we might go to other asset classes outside the stock market, outside the 41k offerings outside of the traditional brokerage account offerings. You know, our custodian at game changer wealth is Schwab. Okay. They hold all kinds of merit, you know, a myriad of different kinds of stock and security and other investments that are market related. But to minimize that risk and to maximize that return, we can actually go outside of those custodians into something like a fixed indexed annuity.

Now, that's got a word, annuities got a lot of bad connotations with it, right? Kind of like the word reverse mortgage. It's got a lot of negative connotations with it. So, you know, you know, a reverse a reverse mortgage is definitely something that's very careful. This you should be doing kind of at the last resort. And I would think most people wouldn't need to do that, by the way, if they've got proper financial planning in place.

But I had to bring that up because that word annuity seems to be associated with these negative connotations. So the word annuity, there's three types of annuities, though. The one that we find most people own is the variable annuity. And that word variable means that principal can fall and rise. And that is not what most people expected when they got into that annuity.

Okay. So I would say more than half the people that own and have that and then they found out later they shouldn't have had that. Well, there's another type of annuity. The fixed annuity and the fixed indexed annuity. Now, the fixed annuities got a fixed rate. Looks a lot like a CD. Okay. The fixed index that actually it can actually go up with the market, a portion of it but when the market goes down, you don't lose money.

You can couple that with a guaranteed income stream. Now, if we're talking about retirement planning and you're more than ten years away from retirement, you probably don't need any kind of annuity, by the way. Okay, probably. But if we're ten years or less, certainly even near retirement or in retirement, that fixed indexed annuity, especially the kind that has a guaranteed increase, no matter what happens in the market and a guaranteed income stream, that's a huge benefit to employer, to retirees mindsets to help give extra income.

And then if you divide that from the rest of the portfolio, now, we can have the rest of the portfolio doing a good job of growth tied to their risk tolerance. And this part of their portfolio is going for income. Now, Morningstar, we compare that actually shows for many people how that return can actually improve when we add some of that safe money we just talked about.

So the path to the best retirement and the path, the best wealth is often not taking all the risks there is to take. I mean, think about when you go to work every day. I'm sure you have that route memorized. Is that right?

Kim Chapman


Jerry Linebaugh

Okay. And is there ever a time in your life when you had more than the route to go to work? Like, did you ever have time? Like, you know, just roughly, does it take you 30 minutes? 20 minutes was.

Kim Chapman

A 20 minute. Okay.

Jerry Linebaugh

So if one day you found a way to get to work, 5 minutes and 7 minutes and that minute was less time on the road, less risk, less wear and tear on your car. Right. Less stress in traffic, That's.

Kim Chapman

$10 a gallon. Yes.

Jerry Linebaugh

Would you continue to take the old path?

Kim Chapman

Absolutely not.

Jerry Linebaugh

So that's what we hope to teach people, Right, is with these are Morningstar analysis, because Morningstar running care, what you're invested in is is agnostic. So we need to take a look using a tool like that. Okay. And see can we get better returns, better income and do that agnostic like, right, without putting an adviser's opinion on it.

So basically it's mathematics and that's comforting to me. I like a mathematical approach. I don't want to take a political approach. I don't want to take a guess approach. You know, you don't really care about my opinion. You just want to just want to what the math say. Yes. And so just like that path to work, that was easier, better, better for you, better for your car.

You know, more time you spend on the road, the more chances we have to have an accident. Right. So that's the same thing in investing. The more risks that you take that you didn't need to take really increases your likelihood you won't be successful. And that's true all across your life, right? It's not just driving, it's investing. It's everywhere.

You know, if you had a sick kid and you needed to get to the emergency room, I bet you would do anything, including making an illegal U-turn. Right. You would be willing to break some rules to get that sick kid to the emergency room. Am I right? Right.

Kim Chapman


Jerry Linebaugh

Okay. So that means you're willing to take more risk to drive, possibly or aggressively. But the odds, the stakes are so high. Right. So what we do is we naturally sense if we need to get somewhere quickly or need to do something, we're running short on time. We will raise our risk of having a problem, having a ticket.

But then once we get to the destination or we find out there's no more emergency, what do we do? Do we keep the risk level the same?

Kim Chapman

We go back to instinctively.

Jerry Linebaugh

That's exactly what you should be doing and investing. But how many people can actually see where they're going? They just trust what's on the statement. They hope the person they're talking to has got it all figured out. There's another way you can actually work with an advisor that uses a morningstar analysis. That's one tool stratify as another. Risk allies is another.

These are important tools because it actually is a report card for the advisor or the investment fund that you're using. And I think that's missing in a lot of people's investing today because it takes the opinion out of it. It takes the politics out of it, and that's exactly what you want. And I think that's what they should seek.

Kim Chapman

And you mentioned a report card, as you say, for the financial advisor. What should we expect in terms of fees? And I know it can vary, but how costly can it be just to have somebody manage your portfolio?

Jerry Linebaugh

Let's say that you're 20 years away from retirement, okay? Because I think all of us are really wanting to retire one day at the last hour. We live in now, adjusted for inflation, for all the years we live. Right. So if you're more than ten, 15 years away, for sure, 15 or more, 20 plus 30, many of your listeners might be young, some might be a little older.

Like me, you don't you may not necessarily need an advisor. I know that sounds counterintuitive, right? Don't I want to promote myself? Okay. I just. I'm sorry. I'm a specialist. Okay? So I really work with people ideally, that are ten years away from retirement or if they have a41k that they've it's now it needs to be rolled. They might be younger than 45, but they need to find a place to put that well.

That money's meant for retirement. So that's a specialist job. Right. But if somebody is out there and they're saving for retirement and they don't, you know, I don't know that they need a professional advisor. I think if if anything, they could just get a a diversified portfolio access like in their IRA or four in K, you can pick that up for less than ten basis points.

That's like 10% of 1%, very cheap and have a diversified portfolio. You can do that in a very inexpensive mutual fund. Um, I would prefer ETF over a mutual fund for a lot of reasons, but that's probably for another show. So that just that sounds counterintuitive, right? Wouldn't everybody need a financial advisor? Like I say, I just have to be honest, you know, 15 years or less out or if you don't have a rollover for one K, you probably could just your okay, just, you know, doing inside of your conventional investments.

You can open up an account at no cost with E-Trade. You can do it with us too. You know, we have a no cost account for those that just want to get started with investing. So we actually can do that as well. And I don't know that you need to be exposed to a fee or anything, but now if you're close to retirement or if you're in that ten year window to retirement, you're probably looking at somewhere close to an average of 1%.

You know, it might be less might be a little more depending on what you need done and what needs to be handled. You know, in our shop, you know, in our firm game changer wealth, we do the tax side of it, the tax planning. So you got to look at that planning. We look at the future income because you're going to need income on a regular basis.

Right. And growth and income are kind of antithesis of each other, right? Whatever is good at growth is terrible at income and vice versa. So we have income specialty. You have the tax estate planning. That's something that when you pass away and no one wants to die, Right. But we are nobody gets out of this life. A lot of them are, right?

Kim Chapman

That's right. Then that's the bad news.

Jerry Linebaugh

Yeah, well, you know, we don't want to make it expensive or difficult for those that we leave behind. And that means that needs to be taken care of. Now, you don't want to get, you know, think I'll just get older and take care of it. One of the worst things can happen is you didn't have a will. Okay, Well, that means that when you pass away, a judge has to decide where this money goes.

And it is the most expensive process in the entire financial world. Now, Prince, the artist, right. He died over $130 million worth of estate without a will. Six years later. Actually, this past year, it finally settled tens of millions of dollars spent. And if he had just a will, just a will, didn't have to be expensive, could have avoided all that and that money would have been dispersed.

Now, that's part of what we do at game changer wealth, right? We help people also with that end of life planning to make sure it's not expensive or difficult for those take over what you leave behind. And so we do all that for that fee. You know, you can work with other advisors. I don't want to promote, you know, just us, you know, But you should be thinking somewhere, not more than two and a half.

I've see people coming all the time on their statements. I think they're not being charged much. But, you know, I look at it, I put it to Morningstar and it reveals I had one the other day is husband and wife. You know, they own a bakery won't promote the name of that their keep their privacy. They're very popular people in town.

I think they have four locations and you know they they it's well, Gerard, we go to church with this guy. You know, I've known him for years. You know, I just I don't think he's charged me, but like maybe a half a percent. And that was on their statement. But what was in the investments? There was a whole nother layer of fees that they weren't saying we call those internal fees.

And their total fees with the investor investment advisor charging only a half a percent. But the internal fees brought it up to almost 4%. That was not on their statement. So we got to look deeper and often that's not printed on the statement. Another reason they might involve a financial advisor in their life, at least to take a snapshot or an x ray.

You know, we do that at no cost relegation, you know, to to look at that for folks. So on that.

Kim Chapman

We talked a lot about especially those individuals there maybe within 15 years of retirement. Can you maybe give us a breakdown when you're in your twenties, when you're in your thirties, when you're forties? Should we be looking at that risk tolerance checklist or what type of chase checklist should we be looking at? And then how can you help our listeners with that?

Jerry Linebaugh

So again, I would definitely say it's not expensive to get that will and that stuff in place. You don't think about Dan, but let's get that done. That's cheap and that's easy, right? They can do it with us and do it with other folks. And then when you look at do we have that savings in place, remember, we need that six months cushion of whatever it takes us to live, okay.

And then we need to look and see does our job place, you know, our workplace? Does it have any savings mechanisms in place? If there's a41k, a simple IRA, a43b, is there a match? Now, I would only say let's put in this account only whatever the matches, if there's not a match, it still might be okay to to invest.

They're going to look at their investment options and see if it's going to play out what their time horizon like when they need this money. It's not just age related, it's kind of time horizon. If you get if you're saving for a college, for example, and the kid's going to go to school in four years, I would not put that in the stock market.

Okay. That means you're not going to put it in most borrowing investments. Okay. But at that time, horizon is long. You know, in this case, you mentioned 20 year old 30 year olds, Right. So they probably could do well inside their 41k, because internally those cost have been pretty cheap. I have to say the majority of the following case, I've looked at lately, but there have been some that aren't, you know, let's see what the cost is in that.

Let's make sure if we don't need income planning right now and all those other things, they probably could do good with a very low cost mutual fund or a basket of stocks in there. And then, you know, what are we trying to hit are if it's not a college saving, if it's not something short term, Right. If it's a long term goal, you know, we can work backwards into that if we're trying to if we say, look at retirement, the website dot gov will tell you what your Social Security check roughly will be.

Right. It's age. We put that in there with an estimate of taxes and then we use inflation techniques in the we arrive at an amount that they need to have by retirement. Then that helps us decide what kind of risk we really need to take. And people, again, are surprised. They know how to take as much risk as they thought.

Often I can help people find a way to take 50% less risk and often raise the returns by 20% in the process. Now, again, a good adviser should be able to do all of this stuff. You know, I'm not promoting just me. I'm just giving you the guide points about what people should be looking at when emergencies happen, like a flood.

The 2016 flood. Right. 2005, Katrina, they need to have some portion of their assets, even in the investment world that are liquid. Okay. So maybe that's going to be outside the six months that could be on the market. But there's some investments you can do that aren't liquid. You got to make sure what is our liquidity inside the investments?

Some investments have a minimum time periods. You have to own them. And so, again, if it was a college education or a flood that we're trying to get through lot to take a look closely at what those investments are and we need to get out of them. How do we get out of them if we need to? I'm okay having some periods where, you know, we're don't have 100% liquidity on some of our money because some of those accounts that have limited liquidity actually have pretty good returns and many of them are protected from downside loss.

So there's always that.

Kim Chapman

So, Gerri, we talked a lot about invest investing, definitely for the long term for people that are, you know, looking for retirement. But what about that group that does that lives for today? They're not worried about tomorrow. They want to take some money and make a quick turnaround so that they can sail off into the sunset.

Jerry Linebaugh

Yeah, so that would be the GameStop story. We heard them on the news. Some cryptocurrency folks that, you know, you hear about that got involved early on in the crypto and then it just soared, you know, 20,000%. Okay, well, I always ask, you know, who said you can do that? You can actually have some of your money that goes into some of these alternative investments, we call it.

But I'd be careful not to put more than 1 to 5% out of my total spread. So if I had $100 to invest or if I had $2,000 to invest every month, I'm not going to. My personal advice is not to put more than 1 to 5% of that amount in those alternatives because they're so volatile. And as we've heard the crypto stories, when they made all this money, well, they didn't really make money.

They had an equity. It really wasn't money. Okay. And same thing in the GameStop story. What's your strategy? The top poker players of the world, for example, have a strategy that when they're winning, how they come off the table at certain points they pour money off the risk table and put it in their pocket. What is your strategy?

If you don't have a strategy for that, then you might get lucky, but then you're probably going to evaporate before your eyes. So I would say it's another reason you might have a conversation with a financial advisor, even if you didn't have a long term relationship with one, just to have that conversation. Hey, you know what? If I was going to do this on my own and I get asked that especially by my my adult, my 55 to 70 year old clients, I told you I'm a specialist, that a lot of those folks at that age, but they're adult kids and I will have a no cost conversation with them and I will give them

these points. For example, you know, what is your strategy for taking it off the table if you make it big? And so I'm not going to be able to tell them right now, hey, go buy this stock and go do this crypto. It just doesn't work that way. You know, you can get lucky with it. And if you do, what's your strategy to keep it?

Kim Chapman

You've made this really, really simple and easy to understand. We're going to have to have you come back. But in the meantime, if our listeners want to get some more information from you, how can they reach you?

Well, they can call us at the office and call us at 225, six, six, 425, six, five. And they can also go online. They can if you just remember the word game, change your wealth and that'll pull right up in a Google search. Okay, We have offices here in Baton Rouge and Lafayette, also in Metairie and our new office in Scottsdale, Arizona.

We're actually expanding really across the country over the next 24 months. Big expansion plan. If you want to talk with me personally and I have no problem with that, just make sure if you go online again, that's you can Google search game changer wealth and it should pull us up in our local office here. That's also game changer be like boy our like Roger Akam game changer become there's an online contact form if you just if you said look I heard you're on the radio I heard you on the podcast.

Hey can I can I have a chat with him? They'll tell you how to do that and it will do that. No cost or obligation.

Kim Chapman

And we're definitely going to have you back because there's so much more for us to talk about. Thanks again.

Jerry Linebaugh

Pleasure indeed.

Kim Chapman

Saving and investing are both important components of a healthy financial plan. Saving provides a safety net and a way to achieve short term goals, while investing has potential for higher long term returns and can help achieve long term financial goals. Here are a few tips to help you determine when to save and when to invest. Savings is a smart first move when you don't have any emergency savings established, that's going to be 3 to 6 months of your living expenses.

Also, you want to save if you need the cash within five years, maybe you have your emergency savings, but your goals are set for something else, like a down payment on a home. Now, consider investing. Once you've fully funded that emergency fund and you've paid off high interest debt. It really doesn't make sense to pay 20% a year to carry debt on the credit card balance for $5,000, and then you invest 5000 and only get a return of 7%.


And finally, to learn more about saving and investing, check out neighbors FCU that or for Slayers Financial education. To learn more on how to use the money you have, make the money you need and save the money you want.