The Biggest Mistakes I'm Making That I May not Realize I'm Making

ABOUT THIS EPISODE

How would you know if you are making a mistake in planning your future? Listen to financial expert John Browning share some of the biggest mistakes people make. Today he talks about how much cash to keep on-hand, when will the market correct and can you time it? This is a really helpful episode that gives you some very practical perspectives to help you build a life not just a portfolio. 

Welcome to the build your life podcast with John Browning. Build your life as a relaxed and unedited conversation with financial expert and number one Amazon bestselling author, John Browning Jones the founder of Guardian rock wealth and serves clients across the United States. John's the author of the book build a life, not a portfolio, a guide to your financial future based on your personal values, which you can purchase on Amazon, or stay around to the end of today's show and I'll tell you how to get a free copy mailed right to your door. I'm Michael The lawn, your host for the next few minutes as we chat with financial expert and business owner John Browning. Well, hello, John Browning. How is your day going today? Sir, fine and Bandy, like sugar candy like that, and that rhymes. That's good. We do some rhyming around our house all the time because I'm a word guide. So my girls were at the table there and I just doing their own rhyming. I just sent back and enjoyed it, so I like that. That's a great way to do that. But what's up? Different every once in a while. Well, it is, yeah, because you don't want to get olden stale. So that. But sometimes when I'm riding John, I make mistakes right and I try to put words together don't don't go together and that's never a good thing. And I know in investing what you do, with helping people with their investment and retirements and things, people make mistakes sometimes. But I want to talk today about some mistakes that that might be making that I don't even know that I'm making, because I'm sure they're out there. But that's one thing I love about hosting this podcast with you as I learn how kinds of things that I need to change, but I'm sure our listeners do as well. So let's talk about the biggest mistakes I'm making John, that I might not even realize I'm making. HMM, it's a it's a great question and it's one that, unfortunately, people don't ask because they since they don't know they're making the mistake, they just think that it's the right thing...

...to do. And a lot of these mistakes that people make our mistakes that you wouldn't think like, historically speaking, they weren't mistakes. We've been taught this by the financial media and from some really smart people along the way and some of these things are just the way the world has changed. So do we do things the same way? Do you do things in your business the same way today that you did ten years ago? Yeah, I mean maybe some things, but but pretty much it changes. Right. Well, one of those one of those things, and this is probably the most prevalent mistake that I see, is holding too much in cash because, well, I'm conservative, I'm risk averse. And for the folks, I try and talk to them about the what we call the rule of seventy two, which this is an old rule, but this is a mathematical rule, so it doesn't actually change. And have you ever heard of the rule of seventy two? Oh, I think you're on mute. You are definitely on mute. Think you're on mute there. Oh, I'm on me. You know, it's amazing, John. There's another mistake that I just made. You know, it's hitting that little button and and forgetting that, because I let I answered you and you gave me that look and I thought, what is go why is he looking at me that way? was that's what not we're talking about mistakes. And Yeah, the rule of seventy two, I've heard it, but I don't know that I could explain it, but I know that the rule of seventy two is something that I will be quiet and listen to you, since the timing words. Well, the rule of seventy two, it's...

...really simple. It's basically if you take your percentage aren't that you're earning on your money and divide it by seventy two, that's how many years it will take to double. Okay, get only imagine today, right you? I mean you can't get any simpler than that, though, right, but that's exact. But you're laughing because of where rates are today. So let's say. I mean you can sometimes find maybe fifty basis points, or what that actually means is half a percentage points on your cash. Right. Most places are actually lower in that. But for simplicity steak, let's just say it's half a percentage point that you're making on your the money that's sitting in the bank. That is very safe. So you feel really good about it. Well, let's do the math on that. So if you have a dollar and you invest that at half a percent in a hundred and forty four years that's going to double to two dollars. So I'm not going to be around. I'm probably not going to be around unless they figure out some sort of Star Trek thinging they can keep me alive that long. Not Sure I want to be alive that long. So I probably won't even see that. Two dollars. Yeah, that's crazy. But here's the catch is, if we if history is any guide, and we look at inflation, which historically has been about three percent. Now it's a little bit lower, but given all the money that's being pumped into the system, I'm guessing it's going to go higher, but right now it's around they anticipate this year is going to be say, two percent, but historically three. Either way. You look at it, that two dollars and for as far as value and what you can buy with it, is going to be worth about eight cents. Wow, we've waited all that time for your money to be safe and you actually have eight cents, the equivalent of eight sense left overund it's a big mistake that people get so for paid of the risk when they're not actually seeing the risk...

...of having their money in cash. So that's probably the biggest most prevalent mistake that we see is having too much. Now I'm not saying you should have no money in cash. Right, okay, you an episode of small right, down right recent episodes on different allocations of money in cash. Is One aspect of us. So don't, don't dwindle yourself down to zero. Right. They don't know. As always, this is not investment advice for individuals. We only do that after talking with you one on one, but this is some general guidelines to talk about. So now the second biggest mistake that you might not know you're making is this idea, and we're seeing this a lot now because of the markets run up quite a bit since last March. Is The markets too high? I'm too late to start investing. So this is the way that I look at it, because I understand that, you know, is it due for a correction? We hear on the news, CNBC or wherever it might be. Oh, looks like we're looking frothy. Looks like we may be in a bubble. You know, nobody calls that right, by the way, and you know they may get close or but they're certainly not going to call it right on the uptick and and the and the down swing. You just never going to get it. So market timing is the third one that we're going to talk about here in a minute. But let's think about this again historically speaking, so the market has not moved lower. Market being like the broad overall market, has not moved lower for more than three and a half years in a row, ever, and that period where it was down for about three and a half years was back in one thousand nine hundred twenty, so about a hundred years ago. Since one thousand nine hundred and fifty, when the SMP five hundred actually became a thing. It the longest period of consecutive down time was about thirty one months,...

...which is a long time psychologically for us to deal with. But if you think about it on an a dollar cost averaging so if you continue with if your plan and if you're discipline with your plan and you're continually putting money into that plan, you're investing at the then lower rates of the market. So if you have a dollar cost averaging plan, do you really care? And especially if you're time horizon is longer than that thirty state, thirty one months, or what I always use is is your time horizon about five years? If so much of your investment should be in the equity or equity like securities. So that's a another mistake investors tend to make. And then that third one that I did want to just hit again because it's a big one, that it seems as though every youtuber out there, and and it's what people want to hear, is when will the market go down or when will the market go up, or when will this stock go up and this stock go down? Everybody wants to to know that or feel like they do know that or something, and it just bears mention, mentioning because it's so prevalent from listening to TV. But no one, and I will say this with complete confidence, can time the market. If they do suggest that they can do that, that they've maybe done it in the past, if they suggest they can do it in the future, well, they're just they're lying if they if they are, maybe they are lying to themselves as well. So maybe they don't mean to lie, but it's just not true. And if they say they did it in the past, they can say that and be they might be right. Maybe they did, but I have yet to meet anyone who has accurately predicted it more than once or twice. Yeah, so and...

...and and and the whole day and everything that you talk about with your clients and everything you've talked about this podcast is, you know, you talk about diversification, you talk about buying not just the stocks but the companies, knowing the management of the company. So it's so much more John than just oh, the stocks up for the stocks down, let's by, let's so it's building a life, which is really what you're talking about, not just a portfolio. has so much more to do than where the stock market is today. That's right, right, Yep, and and when you do it right, it gives you the ability to build a life because you're not stressed out and you're not always worrying about it. Is it upposite down? What? What? Exactly? Exactly? Yeah, and it's it's really about that quality life, right, building a life, not a portfolio. Building a life today, and I think we're going to talk about this in an upcoming episode, building my life today, in living it today, planning for the future, versus postponing today to live for the future because the future may never come right. So living your life, building your life today and for the future, by in going about it in a pretty strategic fashion that you guys do at Guardian Rock Wealth. So yeah, I think one of the biggest mistakes people are making, John, is they're not reaching out and calling you. That's I think that's just one of the biggest mistakes, and I can say that. So I want to encourage people to reach out. Just pick up the phone or a zoom or go to your website, while Guardian Rock wealthcom and you've got a contact form there, and Rejohn. Talk to John About how how you're doing with your life in your portfolio and have a conversation, because it's as you can tell from John's demeanor, he's not a high pressured cells guy at all. And so that's not what I'm about. Yeah, and so if you want to be about building a life and that today and in the future and putting together a great portfolio for your family, talk to...

John and he'll just he'll just walk you through some questions. So let's do some really hard questions. They'll make you think and that's part of the process and the planning to build a life, not a Portfolo. That happens to be the name of his Amazon best selling book as well, and I'm sure he can put a copy of that in your hand if you haven't ready, you need to read that. So that's really cool. Any other big mistakes or just are those three? I'm sure there are lots of mistakes were making. Those are the three big ones. Right, holding cash. What was it? Hoarding Cash? And market timing, and it's trying to Figuet when the market is going to correct again. That did I get them yet? Those are the big three. Bonus it would be following the crowd, like we kind of saw in the recent read it and game stop, and so were other stocks that were bit up. For that, I mean following the crowd and even, frankly, for many investors they follow the crowd into just invest in the SP five hundred, just invest in the index and go to sleep and don't worry about it. Not that there's necessarily anything wrong with that for some individuals, but for a lot of people that's not really the right answer for them. But because the crowd has told them for so many years that this is the way to go, they're going and following the crowds. That's another big one. Not being willing to take profits, which I've never fully under I guess I kind of understand it because there's that Foamo or fear of missing out right, but letting like one position in your portfolio gets so large. This is something that is kind of misunderstood right because on Wall Street, you know, I spent, you know, a quarter of a century there, and we always had rules in place so that that would never happen. Right as a position in our portfolios got to a certain level, there was a rule that we had to take our profits. And what that did is it in sure who you'll never go broke taking a profit. And so,...

...yeah, you have to pay taxes on it, yes, but that's that's a good thing. You made money. And there's been so many times, I think we've talked about this before, another episodes where we've had clients who held on for too long said well, I don't want to pay taxes, and then that particular position just plummeted and they were right. They didn't have to pay taxes on it, but they did have a loss of Fortunyeah. So, and another mistake I'm just going to throw in here because it ties into what I said earlier, is trying to do this on your own. That's a big mistake. You need somebody like drawn on your side who understands all of this and so much more, to just be another voice, and in a voice of freason, sometimes because they know it's time to sell and this is why, or it's time to buy and this is why, or it's time to hold. But that's what those are mistakes that people make. Is and you know, I would say the biggest mistake is just waiting to reach out and and talk to somebody like John. So let me encourage you to do that, because we could spend the next hour talking about other mistakes in a the lit in the other, because they are just massive, because we are not like John Brownie in this is your world and I'm grateful that you know God's made you this way, that you you love this stuff. So reach out to John Browning, Guardian rockwealthcom and John, we will be back next episode with another great episode. Hopefully it's not about all the mistakes I'm making, but it'll. It'll be something fun, regardless of what we talked about. Right, that's right, all right, we'll talk to you in buddy. All right, we'll see. Money really is a big part of our lives and John Browning can help you and your family learn how to keep money in the proper perspective. It's important, but it's only a tool that can help you build the life that you want. If you'd like John Emilie a free copy of his book build a life, not a portfolio, go to John's website, Guardian rockwealthcom, and click the contact to US link and send your request. John Will Mell a copy of his book right to your door absolutely free. Thanks for listening to building your life podcast with...

John Browning. Be Sure to subscribe to this podcast so each new episode will be sent to you automatically when it's released. Have a terrific day.

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