Episode 42: Investments to Avoid at All Costs

ABOUT THIS EPISODE

There are some things you should never do with your money. On today's episode, financial expert John Browning shares a few of the investments you should avoid at all cost.

Welcome to the build your life podcast with John Brownie. Build your life as a relaxed and unedited conversation with financial expert John Browning. John's the founder of Guardian Rock Wealth, with offices in Hawaii, Colorado and Illinois. John's also 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 meld right to your door. I'm Michael Dlan, your host for the next few minutes as we chat with financial expert, business owner and author John Brownie. Well, hello, John Browning. Hell, is your day going? Sir? My Day is going fantastic. It's beautiful day here and we are we have at nothing made you go wrong the spark, so that's a good thing. That is a great thing. It's fall. We're in what I'm want? Member? Early. No. member. Is that false, Delle, it isn't. I live in a little...

...rock. I took a walk earlier today, just crunking through the leaves and I thought that is such a cool thanks, though, and you probably have to crunch on the beach or something. I'm but crunching in the fall is all good, but that's not why we're here to talk. We are here to talk about finances and building a life, not just a portfolio. And so today, John, what I want to talk about is, are there any investments that I should avoid at all costs? Yes, yes, there are investments out there to avoid at all costs, and some of them are not, not even investments. But some people like to make the argument that their investments right. So what if some of them, some of them will not be surprising. Some of them are going be like all, of course, of course, and and then there might be a couple in here in my list that are like Oh, I hadn't thought about it that way. So so stay tuned, right. But so my my first one is anything...

...that you use for essentially enjoyment. So the idea that I'm going to buy the Ferrari and it's going to appreciate value is generally a not a great idea. Okay, I mean I know that there are some people that do it as collectors and they supposedly make money, but car, boat, plane, worst investments aver right, terrible. Yeah, now, of course the idea behind the car right or boat or plant is they're depreciating assets. So why would you invest in them? They said, well, collectors value and all that kind of stuff. And and there are some, if you really know what you're doing, that that could be that, but very few and the very expensive to maintain and when you add all that up, you're not going to come out ahead. Most like yeah, so it's okay to buy them if you want to have fun and maybe break you come. I mean you ride motorcycles, I've heard forever. You Might Harley Davison. You get to...

...write it and when you sell it you're probably going to get maybe close to what you paid for it. So it's not an investment necessarily. Yeah, but you're not. I'm not buying it for the investment part. I'm buying it for the fun I happen to get, and that's the building your life portion of what my whole philosophy is build around, or what the book is about. So building your life, not just in the future but now. If you really enjoy it and you can't afford it, then having that Ferrari corvat or that boat or that plate and might be just perfect for what for what you want to build today, as long as it's not be reeling what you want to build in the future. Right, that's right, that's right. So I shouldn't tell my wife I can go buy my Ferrari now, John says. So, yeah, John, I'm going to get a call from your wife, aren't that's not a good thing. Okay, so investments, like all right, so thanks. The first thing that came to me...

...actually was a big camper trailer. Right at Church, we're in a small group and everybody wants to go camping. I'm like, I I'll buy a camper that'll be a good investment. So, no, probably not. They're probably now. Okay, other categories outside of a yeah, automobile stuff. So now this wouldn't be come as a surprise to some people, and I might get some comments on this. That all you're absolutely wrong. But but hear me out here, and another bad investment to look at it as an investment, with a lot of people do, is your primary residents. So you absolutely can, you know, make money, especially if you're willing and able to hold it for ten years or more. But I can show you, based on what you end up paying in insurance and maintenance updates, real estate brokerage fees when you buy it and when you pay and when you sell...

...it. Legal fees serve a feast, title fees, Home Inspection Fees and of course nearly every home inspection comes up with something that you again have to repair by the time you get done with all of that throughout all of the years and you add it all up. Yes, sometimes you are in the right location at the right time and you make some money net of all that, but in general you want to view your primary residence as a roof over your head, as a very functional thing that hopefully you don't lose money paw. And if you had ever talk to somebody who had to move during the two thousand seven, two thousand and eight housing crisis, they will remind you of that. And it wasn't just that crisis where you have that same issue where people you know either the housing market is stagnant or whatever. And the thing about your primary residences you don't get a statement every month showing that it...

...went up or went down or whatever, but it does. Just because you don't get a statement on that does not mean that it's not moving. It's so true, and not only is it not moving? You many times don't understand how much it moves. Right exactly, and this is generally a very large portion of your portfolio. In an addition to that, it's usually leveraged and that you have a loan outstanding on that. And the other thing that I learned, and I may have been reading your book, I'm not sure, is that went if you're planning on that, has been part of your portfolio. What happens? Like you, I guess you kind of refer to when I'm getting ready to sell in three years and retire and the market crashes in two and a half years and I'm now lost forty percent of my housing value. What does that new? So that yeah, so would you say that your present your residence, your home, residence number one for roof of your house and be icing on the cake? I mean, if you get money, yes, but then don't you have to if you make money,...

...if you make money, don't you have to like reinvest that in two years or do something with it? Aren't there like rules? There's there's rules in terms of when and how much you pay the taxes and all that, and that should be part of her financial plan as well. But you talk about, you know, reducing fees in here. Investment Account. This, your primary residence, is a very expensive thing. When you buy it, your paying fees usually around that five percent level and then again when you sell it's another fires that ten percent on either side. And think about how much your house is worth. It's usually one of the bigger investments that you have. So it's not a low fee investment either. Wow, that's number two. Okay, you got another one. I have more. I have some anyone more? And we might have come back to this, because I was a big one there. Yeah, that's a big one and and this one again might come I let me give you two and one of them going to be obvious, the other one nuts. So obviously I hit the I'll hit the obvious one that most people already know this, but if you're ever especially for the younger investors out there, time shares maybe the quintessential worst investment ever concocted...

...of all time. I have never met a single person who has ever made, actually made money on a time share and they're expensive. So that would be the that would be the worst of all time. But here's the one that might be a little bit more surprising, and I see this because I hear it all the time, because people tend to try and time the market, and I'm here to you. Can you can hear me? I believe me later. There is no one, regardless of what you might hear in the financial press or anywhere else, they can time the market. So your worst, one of your worst investments, is cash. Is Cash, cash, and so many people hold onto that because they're so scared of losing the money that they don't invest in they same think cash is is the safest place,...

...which yes. However, you have inflation eating away at that cash and especially now, as I talk to you, at hopefully the tail into this pandemic, we've got interest rates on that cash that are essentially zero if you're holding a cash in the bank, not a so it is one of the worst investments that you can have. Interesting, yeah, I'm I have a little, you know, we have like liquid assets and in a bank of staving savings account, I looked at the interest rate the other day and is like, you're kidding me right, because the same bank wants the long Ramoney at like nine and a half percent. I'm like, well, no one are. You're a bank right, right, that's how they make their money, right. So and and again, this is not you know, the podcast here, building your life podcast, is not to give individual personal investment advice. However, there are good reasons to hold cash. There are good reasons to do that, but make sure those are the right reasons and talk to somebody about that that can of understands the market and understands you person.

That's great. Yeah, because there are and that thing I love about your booked on about how you do things. It's a it is a portfolio. You need pieces and parts because, yeah, there is a need for some liquid cash, but probably not as much as I might think, because I can get cash pretty rapidly through some other things. And but talking with somebody like you, and that's what I want to in encourage people to just reach out and call John and talk about these things, because building a life and a portfolio is very complex and for the average guy like me it gets crazy. And what happens as I stagnate and I procrastinate, I don't do anything and then I wake up when I'm sixty four and I'm going, oh right, so don't wait. Called John and ask him about the other infrestments you should avoided all cost and I will throw the fifth one in there. John. The thing you should do at all costs is, or the thing you...

...should avoided all costs is not calling John. How about that? Oh, there we go. I like that. We do like to help people out. It is a you know, it is truly great fun. So I don't work at day in my life because I really do truly enjoy putting the puzzle pieces together for folks. That's awesome. Well, reach out to John Guardian rockwealthcom. You can get a copy of his book, you can request a phone call with him, a zoom call, and just begin the dialog of how you can build a life, not a portfolio only because you'll be building a portfolio, but you're going to be enjoying life and maybe driving that Ferrari or that Harley Davison or having that boat, but for the right reason, and John's going to help you do that. So, John Browning, thank you so much, sir, for another great episode. I'd learned a lot once again, so I'll look forward to talking with you on the next one. All right, sounds good. We'll see you next time. 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 could help you build the life that you want. If you like, John Emili a free copy of his book build a life, not a portfolio. Go to John's website, Guardian rockwealthcom, and click the contact 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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