Comfort or Growth?
Invest In Your Life Podcast
Episode 24: Comfort or Growth?
Uncomfortable with the stock market? Worried about the inverted yield curve? When it comes to our investments (as well as our lives, health and relationships), we can have either comfort or growth. You choose.
Full Episode Transcription
00:04 Welcome to the Invest In Your Life Podcast, the show where we explore the connection between personal growth and personal finance. My name is Patrick King, and in each episode we'll talk about what you can do to live a life that's truly rich. Don't take this the wrong way, but I am not giving you advice. I only give advice to clients who have hired me to be their fiduciary financial advisor. If you're not one of those folks, then just consider this to be helpful tips and information and be sure to consult with your financial advisor, your attorney, your CPA, your which doctor or your mom before you try this at home.
01:00 Welcome to the show everybody. Thank you for being here. Just wants you to know that this is take two and I totally screwed up the audio on the last version. So, this is the second go-around. So hopefully this is better than last one. No idea why I needed to tell you that, but I do have a good episode today, if I don't say so myself. I'm just totally rocking the humility thing. It's my thing. I am humble as a hell. It is Friday. I'm recording this a little later in the week. This episode, it's comfort or growth. This comes from an email I almost sent out after the market decline last week. It's going to be a few days since this actually gets released, but as of right now, last week there was a market decline and I had this compulsion to write an email telling everyone don't panic, but I just stopped, took a break.
02:06 And that was the genesis of today's topic of the day. And we'll get into that in a second. First, let me tell you about The No Bullshit Guide to Investing. If you're a podcast listener, you know already, it's an online course that are created if you want to get your investment started off on the right foot, but you're not quite ready to work with a legit financial advisor like me. I created this course for you to help you get started on the right foot to give you a solid foundation on your knowledge about investments. I even get into the detail around how to open an account and how to buy a mutual fund, because a lot of folks have never done that and they certainly don't teach it in school. It's called The No Bullshit Guide to Investing. Check out my website, www.investinyourlifepodcast.com.
02:57 Go to the Resources section. It'll be there when you click on it. Use the promo code, TELL2 checkout, and it'll be free. All I ask in return is that you give me some feedback on it. Let me know if there is indeed some bullshit in there and tell two people that you know about the podcast trying to grow this sucker. So, I would appreciate getting the word out. Thank you very much for that. And with that, let's get on to the show.
03:33 All right! Gratitude for today. I always start out an episode with gratitude. We always have so much to be thankful for it so easy to focus on our problems when in doubt, when in fact we have so much awesome stuff in our lives. So that's kind of why I start each episode with this. And my gratitude today is that, man, I'm so grateful that I've got so many amazing people in my life. And this all started with, you know, my family. I've got an amazing family. I love them so much. They have been so supportive. My longtime friends the people who have helped guide me along the way to where I am. And then the people that I've got in my life around me right now. I've started going every Friday morning to this coffee from 8:00 AM to 9:00 PM at the Atlanta History Center, the Brash Coffee there. It's called The Exchange. It's a group of really bad-ass men just get together and get real and it's just a cool deal. And I'm so grateful that that these folks are in my life. Now, I've talked about this before, so check us out. Come meet us. 8:00 AM on Fridays at Brash coffee at the Atlanta History Center. We'll love to see you there. So that's my gratitude. Amazing, amazing people in my life. I’ve got a lot of them.
04:56 All right, let's jump on it. So today's episode: comfort our growth. What's it going to be? It's your choice, but choose one. They don't go together. It isn’t like chocolate and peanut butter. Unfortunately you can only choose one. So, hang with me on this episode, I'm going to talk about, you know, market shit and inverted yield curves, but I'm going to get meta on you – a couple of times actually. So, hang with me on this episode. This all started last week when the yield curve inverted and caused the market – well, who knows what the actual cause was. There was a correlation. It probably caused it when the yield curve inverts. I'm not going to get into the details of that, but what that is normally seen as is that harbinger of a recession. Now usually when there is an inversion in the yield curve, and I, I keep wanting to put like a graph in an F14 from like Top Gun: “We were inverted”, you know. You know what I'm talking about.
06:05 It's usually about two years between the time when a yield curve inverts and a recession actually happens. So, if it actually happens this way, this time we got another two years before we actually have a recession. But it could vary, you know, it could vary. So, the market dropped, and when the market drops, people tend to panic. This time it was a 3% drop in the market and for context that has happened on average three times a year since the history of the Dow Jones Industrial Average, which is, you know, jeez – way back in the 20s, I think. So, a long-ass time, you know, we have about three of these a year, so they're not uncommon. Right? What you haven't probably heard in the news is that, between then and now, which has been a little over a week, most of those gains have been clawed back.
07:03 So, the net effect is that it was one down day that wouldn't have ruffled anybody's feathers. If we zoom out a week, what you also probably haven't heard of is that markets are up for the year on top of that. If the year ended today, our returns would be better than the long-term returns that I factor into my financial planning calculations. That's not too shabby. We'll take those, but you don't hear about that in the news, right? “If it bleeds, it leads,” as they say. So, when we have any kind of event like this, it's always a good idea to cut off FPN, the “Financial Porn Network”. You know – all these financial entertainment shows that are out there because we have this 24-hour news cycle. Now, their job is not to get you in a long-term investment strategy. Their job is to sell advertising. And how do they get as many eyeballs on their shows as possible? To drum up some fear.
08:12 Their interests aren't aligned with yours at all. So, think about that. Don't buy into the hype. Always a good idea to cut off FPN and watch something maybe slightly more useful like Bachelor in Paradise. So, I kind of equate those there and, yeah, take a deep breath. In hindsight, it's always a good idea to stay in your long-term strategy if you've got one. If you're one of my clients, you are in a long-term strategy, but it's hard not be scared. That's a human reaction. And I want to give you permission to be scared. If you ever turned on the news and it looks like the shit's hitting the fan and the market's down, I want you to know that it's okay to be scared. It's okay to be scared. That is part of being a human being. It's part of having those hard-wired instincts that have kept homo sapiens alive for eons. It's kept us from starving. It's kept us from being eaten by saber tooth tigers. Unfortunately, all of those survival instincts, they do not serve us when it comes to planning strategically for the long-term for doing things that are going to help us long-term.
09:48 Across the board, not just for your money, but for your health, too. You know that a desire to gobble up all that delicious stuff on the Thanksgiving table? You know, for me, queso is my Achilles' heel. I will take down queso and it's not good, but it's those instincts that we all have. It's like, oh, this is so good, I’ve got to consume it all right now because who knows? The next time I'm going to run into queso… but it’s literally down the street.
10:23 Yes. So, now I'm going to get meta on you a little bit. Like I said, we're all subject to these hard-wired instincts. And for me, I have them too, and I felt it when the market went down. Now, my reaction to do something is not to change my investment strategy or my client's investment strategy anymore. I've done this for long enough where I don't have to squelch that, but it has morphed into this idea that I need to write an email and tell everyone, “Don't panic”. Don't panic, be calm.
11:04 So, I just stopped. I found myself in this situation. I just stopped myself and I took my own advice. I took my own advice that I calmed down. I was measured, because after all, if you've ever spoken or dealt with someone who is upset, who's scared, who's angry, and you told them calm down, how did that go for you? Probably not very well. It probably actually did the opposite, right? It made them more upset, made them more scared. So, I stopped typing my letter and it's kind of morphed into this this podcast episode. I am going to send out that email, but I'm going to include all of this kind of meta-analysis in there and include plenty of GIFs because look, we don't need to take this seriously. And whenever I talk about an inverted yield curve, I probably owe you a GIF of like a dog doing something silly. But yeah, our hard-wired instincts, they don't serve us long-term. They don't help us stay calm, but it's okay. It's okay. It's okay to feel those things, but acting on them is a whole different story. So, here's what I'm going to get meta on you one more time. Next-level meta. In your finances and in your life, you've got a choice. You can choose being comfortable and you can choose growth.
12:46 Pick one because they don't go together. And if you're listening to the news and the market's going down and you feel uncomfortable, you can choose. You've got a choice in that moment. You can choose between growth and you can choose between comfort and whether it comes to your money or your relationships or your health or just your life in general. You always have a choice between comfort and growth. Choose one. I'm not going to judge you if you choose comfort. Obviously, every once-in-a-while I've got to get some queso. I choose comfort over being healthy in that moment, right?
13:33 But when it comes to doing what you want to do in life – knocking off that bucket list – to really getting to the priorities so that when you're on your death bed and you're looking up at those stupid ceiling tiles and you're thinking to yourself, “Did I really knock out everything I needed to do?”, I want you to say, yeah, I did the best I could. I want to help you structure your money so it supports that and it's not going to be comfortable if you're a client of mine. It's not always going to be comfortable, but that's the sacrifice you have to make to get growth. Comfort, or growth.
14:18 If you just want comfort in all aspects of life, that's cool. I'm not going to judge you. You know, maybe I'm not a good fit to work with you on financial planning, but I get it. Man, I get it. I really do. But, but if you'd rather have growth, if you'd rather have something that's going to light you up, that you're going to empty the tank and you're on that death bed and you're surrounded by the people that love you, that you said, you know, I did a pretty fucking good job of doing what I need to do, live in the life that I want to live. Yeah, man, let's talk. Let's figure out a way how to pay for that. Let's do it now. Let's do the things that you need to do now and then we're going to figure out what we can cut away in order to make that important stuff happen. The stuff that we were going to leave this stuff that doesn't matter behind. Yeah, that's it. That's the topic of the day folks. I got kind of heavy there. Dropped an F bomb as well. I always just click the “x” expletive button whenever I upload a podcast episode. Who knows what that's what that's going to look like. But yeah, that’s the topic of the day.
15:38 All right. It's Pura Vida time for me. This is my highest and best form of Pura Vida minus the connection I have with family and friends. Obviously, that's the most meaningful. But outside of spending time with my family and friends, travel is important to me and I am really excited about my next trip. We have worked out the schedule for our trip to Italy for the most part. We're still trying to nail down like hotels and tours and all that kind of stuff. But yeah, I'm fired up. We're going to fly to Rome, we got some cheap round trip tickets. We're going to go to Florence, hang out in Tuscany because all the carbs and the wine and pasta in Italy don't count! And then spend a couple of days in Rome too. And I'm so psyched for the architecture and the history like that stuff fires me up and then just meeting people, meeting cool people. They're everywhere in the world. Like good people are everywhere. We hear about the bad people, but man, good people are everywhere. And so I'm excited and mix it up and, and really just enjoy like seeing places that are like 2,000 years old. Like that blows my mind. That's my Pura Vida this week.
17:00 All right folks, that's the episode. Hope you got something out of that. Comfort or growth. Let me know where are the parts in your life that you're hanging back? Because it's a little uncomfortable to mix it up and get where you want to be. And let me know if you just have questions in general, even if it's like some mechanical financial thing. I'd love to hear from you and if you want to be interviewed, let me know, especially if you're here in Atlanta. I think it would be cool for us to just meet up like I did with Dave and a half a couple of beers and just mix it up and really talk about what you've done in your life, where you've invested, whether it's time or effort or money and you've come out on the other side and it was worth 10X of what you put in. I'd love to sit down with you on that one. Hit me up, firstname.lastname@example.org. Hit the hit the website, check out The No Bullshit Guide to Investing. That's at www.investinyourlifepodcast.com. The promocode is TELL2. Let me know what you think about that and thank you for being here. And until next week, cheers.
18:20 Thank you for joining me today to find out more and get access to my free financial resources visit www.investinyourlifepodcast.com. The thoughts and opinions expressed here are my own and or for general information only. They are not intended to be recommendations or specific advice for anybody. I'm not a doctor or a licensed therapist, so please consult with your healthcare provider if you have any issues regarding your physical or mental health. Any investment performance. This referenced here is historical and of course has no guarantee of future results. Last but not least, the Easter bunny isn't real.