Timing the Market – Episode 440

This transcript was auto-generated and may contain errors.

[00:02] Prosperity thinkers in this episode, we’re gonna be talking about timing the market So pull out your crystal balls get your lottery tickets and ready to scratch. We’re coming. We’re gonna play how does that work Kim? Yes. Yes, very fun. But by the way, I do not recommend lottery tickets That was a joke. I’ve only bought two in my whole life one on my 18th birthday to see because I was legal to do it and I scratched it off and won a dollar and the lady goes by you’re so lucky. It’s your birthday You should play again. I said no, I want my dollar back Smart I don’t gamble I don’t like that and so But timing the markets right now in the social chatters Twitter social media We’ve got people like Robert Kiyosaki from rich dad poor dad saying that the market was going to tank in October and have

[00:54] your cash ready and then we’ve got the Peter shifts of the world that have been saying this for the last I don’t know 10 12 15 years. Yeah, but then we’ve got other people that are just Flourishing and thriving and they’re finding opportunity now. So Kim What do we do? well, I am so glad to address this publicly because I publicly with my clients and so like on the podcast and very personally with individual phone calls Have been suggesting to people like hey, you might want to take a little off the table, you know I’m concerned and I’ve been suggesting that for the last two or three years and clearly I was doing that with all of the Professional wherewithal that I could bring to the table and yet in a very generic way

[01:45] It was not specific at all. It wasn’t product related at all wasn’t anything that would require even a license It was just a question of like if you’re concerned about the stock market or the real estate market or whatever market you are in And you think it might go through a correction Maybe you take a little bit of your wins off the table and I still think that as a general rule That’s a good way to go about things put some money in let it rise Take some of that win off the table and let the rest keep on going Nevertheless, I’m gonna go back to some economic training that I had Probably 20 years ago, maybe 25 years ago, and I cannot recall The author but he did have a book out at the time It was an economist not a super well-known one

[02:31] But one that had been around like they’d even maybe done some White House, you know consulting or something and he said Basically, you know, this is just pretty much like the weather You’re always gonna have and I use the term economists in quote I wouldn’t call Kisaki economists, but he’s clearly a studied person he said you’re always going to have people that predict growth and people that predict crashes and so You have to kind of decide What you want to focus on and what you want to pay attention to? and so I am gonna go out on a limb here and say, you know, I I’m gonna switch my focus. I wish that over the last two or three years I hadn’t continued to be too overly focused on The I think we’re gonna have a correction. So you might want to take a little off the table

[03:33] because I absolutely feel very very strongly that it’s so important that we focus on Growth and Productivity and forward movement and yes, we might have a stock market correction or a real estate market correction or whatever But it’s not what we want to be focused on. So shame on me for letting myself get Sideline a little bit by I mean I love listening to Kisaki and I don’t always agree with him But I know that he’s a studied person I think he’s very wise and yet at the same time here. He is basically predicting doom and gloom. I’m Not going to anymore starting today Let myself be swayed by that. I’m gonna choose to be looking for the good and the opportunity and the timeliness of that and

[04:30] Yes, we might still have a correction. And so okay fine. We’ll deal with that But Joel Weldon is a person that I enjoy listening to he’s a very well-known speaker And he says So what if there is a recession going on? Choose not to participate and that’s what I’m gonna start doing again I have learned this lesson before so, you know, like all human beings. Sometimes we get to learn it two or three or ten times But that’s where I’m going again. Okay, so I have to push back and be transparent because I still need help there So help me and listeners Convert over how do we do it because I it’s not that I read the news and it’s not that My head is totally there But I want to be aware of what’s going on. So

[05:23] You know, I’ve got my toe dipped in that water yet. I want to be somewhere else. So so help us well, I think it is literally a matter of Choice at the high level and then specific actions at the next level down so choice at the high level is things like being very selective and we’ve talked about this before about listening to news because you can Absolutely positively find news and statistics to back up Which ever side of the table you want to be on you can find the news and statistics to say we’re gonna have a crash Never mind that we didn’t have it in October We’re gonna have it in November or January or whenever and you can find news and statistics to support. We’re in Growth mode and it’s gonna keep on going, you know, maybe not as high and as fast but and then of course we all know

[06:21] There’s sectors. So I think at the high level you choose growth and Then at the next level down You choose some actions that you can take that are very specific to your situation And I will lay some out That then enable you to be at peace with the choice of growth and positivity and forward thinking and goodness So as an example, we’ve already identified. Okay, so let’s say we’re gonna choose growth Now, what are we gonna do about that? It’s so critical that we focus on what we can control. I say this so many times every single day and so if Control to you means That you don’t have a lot of money at risk in the stock market or the real estate market or whatever market it is Then get a bunch of that money off the table so that you

[07:22] Can continue to choose growth in your mind I didn’t say get it all off the table leave some in there so that if we do have some nice opportunities that you can Continue to pursue them. But then there’s a really third critical step so we’re we’re on kind of the layer of the action part and That is cash and liquidity and I cannot tell you I see balance sheets and balance sheets and balance sheets all day long Literally all I look at all I talk about the lack of cash and liquidity in America is Shocking and I have said for quite some time and even more clear now That cash and liquidity needs to be 20 30 possibly 40 even 50 percent of your balance sheet And so many people are so heavily leveraged in real estate or they’re so tied up with so much of their money in

[08:19] Retirement plans which are not liquid and then of course those retirement plans are tied up in the stock market Which is only liquid until it’s not ie when it goes down It is not liquid because you do not want to sell at that point and it’s causing us To not be able to choose growth because we can’t if we’re so tied up so leveraged so Overly focused on trying to gain every single thing that we can with every dollar that we can And I’m not opposed to that but not at the risk of peace of mind, which is what? liquidity supports and what peace of mind requires liquidity and Liquidity creates peace of mind and then of course, we all know that the best place to store that liquidity is the whole life insurance

[09:09] But before we even get there Let’s work on creating more liquidity more control because liquidity does also equal Control, even though my little clue acronym I split them up and we talk about that if it’s appropriate You know you you started our conversation with a timing thing You can’t take advantage of opportunities that are clearly a timing thing if you don’t have liquidity Absolutely, so you’re mentioning 20 30 40 percent of your balance sheet, you know sitting in liquidity and yes the life insurance You mean cash on hand. Do you also account for an emergency fund in there as well? I do and for most of the clients that I’ve worked with the emergency fund is in The cash value of life insurance. You can’t get there immediately

[09:55] But it is absolutely a place where emergency funds can be stored more efficiently than any other place but then that means that those funds cannot be borrowed against for opportunities and so if You know depending on your situation if you’re just starting your life insurance and you’ve got to build it up and it may take Two or three or five years to get your emergency funds stored there and then you’ve got to keep building to get your opportunity funds stored there and opportunity funds that we should be working to have available to pursue opportunities but those are separate from our emergency funds and just In case anybody’s wondering, you know the old adage of three to six months or twelve to twenty four months of expenses

[10:36] Well, you need to decide that for your family and it should be a family decision if you know if there’s a spouse and other people relying on your monetary decisions Then figure out whatever the number is for you You know for a lot of people’s 100 grand for Oprah Winfrey is 7 million Whatever your number is, you know for a young person could be 10 grand But leave that alone as the emergency fund So if you don’t have the life insurance that should just be in savings account at a bank and yes a bummer It’s not earning anything and it’s taxable, but it is the place to start Absolutely. So, you know with the time in the markets, you know the old saying of you know, a broken clock is right twice a day

[11:15] so Eventually, you know some of these people are going to be correct now You’re focusing on growth and you’re choosing growth. You’re choosing to focus on what you can actually control What does that look like For you once you make that paradigm shift because I’m trying to give it a glimpse for our listeners Oh gosh, it’s so awesome. And I truly probably only made the shift personally Maybe five six Seven years ago. So, you know, this is this did not come overnight. It took work it took Call it 20 years of handling our own finances and lots and lots of other people’s and the learning that goes on with seeing literally thousands of personal balance sheets is pretty amazing and so over time I realized it’s the

[12:13] liquidity that gives me the peace of mind and the knowledge that I Am investing in myself by having that liquidity Because I am free to pursue opportunities including Something like let’s spend a little bit more money on marketing for my own company so that we can make a little bit more money You know that kind of thing is just as a legitimate investment as anything else, but I hear it in my clients questions Well, what do I do about inflation? there is nothing that you can do about inflation except continue to work and Store your cash and liquidity in it is in an as Efficient place as possible and an as efficient place as possible so again back to life insurance that’s going to be more efficient in a life insurance company than it is in a bank and

[13:04] Is it gonna beat inflation a little but we don’t necessarily know but we can’t control it. And so Yes, ask the question. That’s legitimate question Take the answer make a decision and move on and the freedom the mental freedom That I got because of two major mental shifts one Understanding what I couldn’t could not control and inflation and the value of the dollar those two things are kind of tied Literally economically even if that’s a tough thing for you as a listener to grasp. I know it is for me So that whole space of like what about the devaluation of the dollar and we’re about inflation Okay, just you can’t really do much about either one of them So set them aside stop worrying about them make a decision move on quit focusing on it. And then this other thing

[13:57] About continuing to work and this hit me in two different ways one I’m trying to think it was about I think it was about ten years ago when we started a big project on our farm And it was like a Saturday morning and we’re like launching this project and I’m completely stressed and overwhelmed because This is gonna be I don’t even remember, you know six to twelve month project and I want it done this weekend So yeah, not a very effective mental space to be in and I finally realized you know what this is fourth-generation property It’s a farm When Monday comes and this project is not done it will be okay and We will make further progress on the next weekend but you know what on the next weekend we may not because you know something else may come up and

[14:46] it’s gonna be fine and it was clearing this huge fence row which by the way is now done and the realization of the Longevity of my own life. I’m in my mid 50s So like I have plenty of time on this farm to clear this fence row and it wasn’t important fence row to get cleared But still, you know the idea of just get some time perspective in there Kim And then the other part that goes along with that so well Which is the realization that retirement as it is defined currently in our society is the most detrimental Human construct boy you talk about mental models that one is messed up and Again, I could hear it in my clients questions and in their voices Like oh, you know, do you think I’ll have enough to retire on? No, I don’t need a calculator to know this

[15:43] I already know the answer is no because you’re gonna live so much longer than you think and You absolutely possibly need to work so much longer than you think and so I think I was around 50 years old When I realized, you know what? I’ve got another 30 years that I can and that I should keep working and it just took all the pressure off and so my message to our listeners is Please please please expand your time horizons and we’ve got some awesome statistics like 87 is the new 65 we’ve shared that on the podcast a couple different ways and And When you expand your time horizons for work for longevity, it makes you make different decisions So here’s two quick examples one. We hired a gal about two months ago, I think

[16:33] that we’ve been trying to hire for like two years and It just wasn’t the right time for her and you know what? Unbeknownst to me, it wasn’t the right time for us either and then all of a sudden it was and so And I remember like a year ago telling her like it’s okay. We have a lifetime to work on this project We’ll get it when we get it. And then when we got it, it came together beautifully We were ready. The systems were there. The work was in alignment with her unique skills and talents and thank you, Tammy Brandon for connecting us and So it’s come together beautifully Whereas a couple years ago, it really wasn’t half So that’s a good example of where I just like got off my Natural horse and fifth gear, you know full speed ahead. I’m kind of mixing metaphors there

[17:29] You know I just settled down into the time frame and it just made things so much better and then the second thing is Please please please find work you love and if you do not love your work right now That needs to be your top priority shift it around so that you can love it or get out of it and find work that you love and Understand that you will want to be working well into your 80s. Oh I love it. There’s a phrase that I’ve heard time and time again that I think sticks well for this conversation Which is we tend to overestimate What we can do in a day and underestimate what we can do in a year. That’s awesome. Yep, and tying that in with the concept of we have the time and often high performers

[18:16] We go through and we want to be really Proficient or excellent or I’m not gonna use the word perfect, but we want to be world-class at something quickly and Sometimes it’s okay to just be good and have another skill in the tool belt That we say yeah, that was a great experience Not my thing, but I put in some time and I’ve learned that I think that’s a way of looking at it There’s one piece that I do want to push back on Because I need the clarity or maybe it’s just a language. You said find work you love is that true or is it? Find love in the work that you do Thank you Great distinction because I do think that you can find work that you love but I think that it starts with finding love in the work and

[19:11] We’ve shared the story of my friend that was putting glasses up on a shelf and had to take them back down because he wasn’t putting them up with love and when he Started putting them up with love then things got a heck of a lot better at the restaurant that he was working in as a dishwasher so it’s absolutely finding love in the work and yet It I think it’s totally fine to go after both like some people and I did it really without a lot of specific thought I Just kept peeling away the onion until I absolutely adore my work like love it love it love it but it is because I have a team and it is because I’ve been able to peel back and only do the things that I love and not all the other parts and

[19:53] It’s also because I’m sure some of it was God-directed and I’m sure some of it you know, you could just say was locker timing or whatever, but it is absolutely a bit of both in Working to find work that you love but in the meantime working and so keep you know, there’s a like 16 hours in the day if you sleep eight okay, lop off another four for food and working out and you know family and Maybe commuting. I don’t even know that people do that these days, but There’s still four and you okay. So eight hours of a day job, right? There’s still four hours every single day How are you spending them? And if you don’t have love in your work Work to find the love and then work to find other work Yeah, that’s so good. You mentioned, you know with the work that you love doing you said and it was it was so wonderful

[20:53] Cuz it was that subconscious language you’re like and you know I don’t know if it was timing or if it’s God or whatever it would be and That was the premise of this episode timing the markets Finding the deals and the thing is that’s how it does work now it depends on how we look at it and yes, we can’t time the markets, but we can time our attitude and then things tend to work out and We none of us want to be the broken clock. That was right twice a day I think we’re all gonna be a lot more happier and live a lot more of a prosperous life if we choose To focus on that growth. So this was this was really good Kim You you exposed a lot of things that I think will be helpful for all of us listeners

[21:40] Fabulous. Well, it was definitely a little detour and I loved every minute of it. So thank you for opening the door Wonderful and listeners if this type of podcast episode is something that was helpful for you One of the things that we could ask is for you to go and share it with Someone that you think could benefit Depending on how you listen into this from your phone or from your computer or wherever that may be You can click that share button Let us know we’re on Spotify Apple and all of the other major podcasts if you’re not already following the podcast make sure you hit the follow button and We also welcome listener questions send those to hello at prosperity thinkers calm Thank you for listening to the prosperity podcast to take control of your money and have it work for you

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