What Wall Street Doesn’t Want You to Know (with Bruce Weinstein)

ABOUT THIS EPISODE

On today's episode, Financial expert and Amazon best-selling author John Browning talks with Wealth Preservation Expert, Bruce Weinstein, about what he has learned in his 30+ years on Wall Street helping hundreds of people protect and grow their wealth. Listen to Bruce's podcast: Ask the Plan Man to learn more about him. And you can always learn more when you Connect with John by texting "LIFE" to 21000 or GuardianRockWealth.com.

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. John is 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 copymailed right to your door. I'm Michael Delon, your host for the next few minutes as we chat with financial expert and business owner John Brownie. Hello everybody, that's just John Browning on the building your life podcast, and today I have with me for a is this the second or third time, Bruce, that we've had your one? I think it's the second. I think second on your show and you've been on my show a couple of times. I've been on your show a couple of times. So ruce Weinstein of Weinstein wealth. UH, he is the plan man and Bruce, I'm gonna let you introduce yourself and tell tell us a little bit about even even about your podcast. It's not quite as good as the building your life podcast, but you know well, we'll leant to give it a past. Who can match? Who Can? Thanks for having me back, John. So. Yeah, I've been the licensed in the financial securities industry since we've helped hundreds of, not thousands of clients in the financial planning, world, investments, insurance, and so I was trying to find a platform to share and give back to the world and in some sense print up a legacy. You know, for me that you know, the day I'm not walking this planet, that what's in my brain can be bestowed and shared upon the audience. So we created asked the plan man. Everyone deserves a plan in life and we talk about various topics of insurance, finance and more. It's business planning, exit planning, a state planning, retirement planning, called planning. You know, there's so many things. Planning is about vacation planning. So we each week we do different segments of do I lease a car or not lease a car? How do my credit scores get impacted? And so we've got all kinds of topics, not just about life insurance or long term care or health insurance. Uh, and you know, people like you talk about investments in the markets, but we try and bring different financial based topics that people can listen to and self educated and then contact you or I if they you don't need some help? So yeah, I guess. I guess it's you and me. I I got fixed on you and we'll free you. This is not a grammatical podcast, so I think we're all right. We're not English students. Were financed. People ask us some numbers, questions or something like that before he accepted after earnings reports. Exactly. Well, bruising. I like it. I like the fact that you are the plan man on building your life. It's what that's what...

...it's all about. It's about what do you do? Is it all about the money? Is it all about the portfolio? We say absolutely not. The portfolio is the tool, the money that you have is the tool that you use to create the life that you want, and in order to use that correctly, you need a plan. You need a plan for everything if you're gonna be very successful. And and recently you've you've lost a lot of weight and you've got a lot healthier. Right, you had a plan for that that you followed and you're still following right, and it's really all about that. If you want to get in shape, if you want to lose weight, if you want to go on a on a nice trip, the more you plan for that trip tends to be. At least in my experience, it tends just to be a better trip. Right, you know where you're gonna be, you know how to get there and you and you build out the map. But really today, what because of your experience and my experience on all street, I wanted to talk to a little bit about things that Wall Street really doesn't want the average individual on main street to know. And I know you've got some stories because of your experience on Big Wall Street, and so do I. But the first thing that comes to your mind when you think about things that Wall Street doesn't want the average individual to know? What do you think? Well, so it goes back to my early days at a brokerage firm with the initials M L, and I was a young, young account executive, as we were called, and they were pushing a stock that was highly touted rated, secure, secure dividend. Basically, it was so highly rated it was considered like safe for the Little Old Lady, you know, because we have this suitability that we always have to is this right for the you know, for the client? And so it was the highest rating they had and a couple of months later they went bankrupt. Mm Hmm, not not just dropped bankrupt, like just totally vanished and my clients were up in arms. Now, you know, I only had a handful of clients. I was just starting in the business, but it got me to realize that my clients were being treated as a distribution channel. That Merril, sorry I didn't say that. That MLS, MLS institutional investments, their portfolio managers, whoever it was, had this position of size and certainly we're seeing something coming down the road and needed to offload it and instead of taking it to the street and just dumping millions and millions of shares to the market, which would have driven the price down, they just recommended that our clients on the retail side by it. And we had an incentive. We got an extra commission kick out of it, which was allowed back then and now it's been removed. So where you get normal commission, we had commission plus eight percent, so it was paid out at one o eight. So...

...you got a little juice on it. So they want to know you're gonna go out and and push that stuff. So, yeah, I got paid a little extra. I put some clients in it and guess what? All my clients lost their money. So instead of Merrill Lynch losing the money, or the institution? Who? I said that? The institution, you know, the management doing it, or dumping the shares on Wall Street. Remember it. If the listener that doesn't understand. If I have ten million shares of a position in a portfolio, I can't just take that to the street and dump ten million shares without the price getting hammered, because now everybody knows there's blood in the street. Somebody's unloading that position and now other people gonna go well, maybe I should be getting out of my position, and the selling frenzy just it's like sharks, and so the buyers are going to disappear. And so they used their own client base to offload the stuff because we were keeping the prices inflated. They were just selling you their shares out of their portfolio. They weren't taking it to the street, they were just filling your water out of their own inventory and getting it off the books which, you know, later on was deemed to be pretty illegal, just pretty yeah, and you know that's that's a great point. I mean some of these activities have been cleaned up right, and I say cleaned up in that you can't do things that way anymore. Here's the thing with Wall Street, and you know I'm a little bit I came along a little bit behind you, not not to the year, you know, not that you're that much older than I am, but it's about ten, ten years and years behind you, and so I kind of came up in the nineties and that was sort of right after that was just rampant. That's when the wolf of Wall Street, you know, happened and all that. So in the nineties it was really interesting to me and I was knew I was young in the industry and I didn't necessarily catch on right then. Now, looking back, it's very clear to me how these are all smart guys, right, smart guys, smart Gals, and they were trying to figure out ways around. Okay, we can't do it this way, so how can we do that? The words exploit and everything with Wall Street and the term arbitrage is to exploit some gap in the system. So it doesn't matter what rules are in place or or what's considered to be right or wrong. If there's an area that they can exploit until they get caught or it's now that gap is closed that they can't exploit anymore. Well, you know, it's buy or beware, and so you're getting engaged with people who are always looking for the angle to capitalize on somebody else. The problem with Wall Street is it's not wind wind, it's wind loops. When you sell, somebody has to buy it, when you're buying, somebody has to sell it. So there's always a person on...

...the other end of that transaction. So it's a sum zero game. You and I both can't win. SOMEBODY'S gonna lose if we enter into that transaction. So you're selling it, hoping it's going to go down, I'm buying it, hoping it's going to go up, but only one of us is going to be right. That's right. Yeah, and and this is why I like what you do and what I obviously I like what I do right. But but we're both independent advisors, we both have our own firms and we are truly work fiduciaries. We are truly working for our individual clients. Whenever you work, and I spent years, I don't, I don't. You know, I am so happy that I spent years on Wall Street because I got to learn from some of the best minds in the business. I learned almost everything I know in big wall streets. So, like you know, I can't get too upset with them because of what they taught me. But that the end of the day, who are they beholden too? Are they beholden to the shareholders, where they're trying to make the company more profitable, or are they beholden to the clients and making more money to the clients? It's a really tough place for anyone to be right because they can get in trouble if they don't have the if they don't have their clients the best interests. They can also get in trouble for not having their shareholders interested in mind. It's definitely a seesaw of balance of how do they serve two masters, and it tends to be more at the retail client's expense historically, you mentioned before. I'm thinking like the wizard of Oz like you peeled back the curtain total peeled back the curtain and there's the guy. So you and I have been around long enough that we saw behind the curtain and I think the biggest thing that we do for our clients is let them know what they're up against, and so we're gonna you and I do business differently than most people, because as I did as a young adviser is I did what I was told. That's what they wanted. They didn't want you questioning authority. I used to go, I used to get challenged, how come you're not selling whatever the product of the week was, and my response was I don't think it's good for my clients. Well, the manager was like, I don't pay you to think, I pay you to sell. Go sell it. I'm like no, no, because after I got burnt on that one stock, I was much more cautious of what I put clients and because it's costing me business, it's my reputation at the end of the day. When I left that company, I had clients that didn't want to leave the big box firm because of their reputation. And then I was blamed for the stocks that they lost on and I'm like, you don't understand, like they stuck that in your accounts. They told me to tell you to buy it now. I'm I know not to do that. That's why I'm leaving this firm. It is because I don't want to be associated with the place that's out for their own interest and not my clients. I'm here for you. So I was always in the consultative sales role and after getting burned a couple of times with the products they were pushing, I'm like, no more for me.

I'm going to be a freethinker and I'm gonna do what I think is best for the client. And guess what, I was the salmon swimming upstream for many, many years. And I think you know one of the things that I used to do is I use a portfolio manager on Wall Street, and so I would go out and I would speak to financial advisors and I would maybe sponsored dinner or I would do, you know, something like that. It was to their to their benefit, and suddenly I would get more funds flowing into my my immute fund, my unit trust, my my whatever, or my exchange, straight to fund, whatever it was that I was managing. Again you run into and it's not like I don't get it. You know I get it, but that's what would happen. I would get funds in and it was it was a common thing to know that in the portfolio management on Wall Street that when you saw retail moving heavy into a particular fund or a particular sector, well we knew that was time for us to go over here and invest and sell this one, because the marketing machine of Wall Street is so powerful, right, and they they being big, Wall Street will will push in one direction all the while. To your point, you know their funds may be going somewhere out right. So that's that's one thing that I think as an independent advisor now I have as an advantage because I see that happening, I understand it and I can steer my clients in the right direction. Your to your point. We've been around the block to see four or five, maybe even six market corrections in the last thirty plus years, and so you know, one of the lines that we always say is getting in getting in as easy, getting out as hard. And the problem is when you use individual security, what's your exit strategy? Right, we're back to the plan, man. What's the plan? If I'm buying Tesla at a hundred, what's my exit strategy? Am I looking for Tesla to go to a hundred and twenty and I make am I waiting for Tesla to go to two thousand? I make times my money. And so it's just a matter of what's the timing, the horizon? And then when it starts to get to those elevated levels, we're now getting out as hard. Do I sell it at a hundred and twenty or do I wait for, you know, at two thousand? And then of course it goes hyperbolic and then you and I do deal with what's called FAMO, fear of missing out, and you see stocks go crazy and our historical wisdom, not that we're the smartest guys on the street, but we've been around enough to know something's fishy. Like something, it can't go on forever. And so the problem, the biggest problem I encountered, and and caution clients on Wall Street, is nobody's ever going to tell you to sell ever because, as we just discussed...

...with that early stock piece, is it's it's a greater full theory. And so it's musical chairs and when the music stops somebody has to be left without a chair. And so when I want to sell X Y Z stock, well, I need people to buy it from me. So if I'm trashing it, if I put a cell on it, if I'm recommending unloading it, well then that's like somebody yelling fire in a movie theater and only one person can go out the door at a time and there's seventy five people that have to get through the door. Somebody's going to get stuck inside right, somebody's gonna in the stock at seventy cents when other people got out at ninety. And that's loosened right. So the inherent conflict of interest, whether it's been cleaned up, tightened up improved, but the inherent conflict of interest people just don't understand is they're never your advisor is never going to tell you to go to cash. Ever, Hey, they don't get aid to put you in cash be their companies are not gonna let them charge their fees for you to sit into cash more than ninety days. And so you know that. The adverse conversation is you know we can't time the market, so you can't keep getting in and out and in and out, and I'm a purist in that sense as an ass allocation manager. But people just don't understand, like it's what's the hardest part of going to the casino stopping. You win a couple of hands in a row. You hit a couple of numbers that were let you throw the dice and hit it. The hardest words to come out of somebody's mouth in the casino is take me down, cash me out, because they get your drink in there, giving your room, they're feeding you. You want to keep playing. There's excitement, there's a thrill, you're hitting your you're splitting aces, you know, whatever like. But guess what, at the end of the day, like you stay there long enough, your money is given back. And so it's the same thing with your investments. Is when is enough and how do you temper your risk associated with your age and your needs? And you know this is this is why you're an iron business, is to help people mitigate through all of this, because it's clearly not easy. Right. I like here, and I usually don't mention an individual stocks, on building your life and this is not investment advice. Please do not take this as personal investment advice. Call Me, call called Bruce. He's got texted plan man three two, one four, two, one two, one three. You can get a hold of him if you don't like me. And of course you can text the word life to One tho if you want to get ahold of me and we can give you personal investment advice once we get to know you. But this is certainly not that. And full disclosure, I I do own Tesla stock and and we own an important client portfolios and I own it myself. But just to use that as any just it was just a conversation piece. It was it was just a conversation piece, but just just to just to further that conversation. As...

Tesla has gone up and it's gone way down and it's a very volatile stock. One of the hardest conversations that I have had over the past year or so was as it went up, it's time to trim, it's time to sell, not sell the whole position. Still a good company, still making money, still we still like it, but to trim that if it's appropriate for their portfolio in the first place because of how volatile it is and portion control. It's like when you go to try and lose weight or something like that. It's not about not eating. You don't go on a you know fast for Jew your mind, but that tends not to be healthy, right, and so you don't not eat, you you practice portion control and and what you eat. Both of those two things this same way in portfolio management. If you had trimmed a little bit off of Tesla or and some of those other highly volatile but stocks are really, really well in two thousand and you and you put those into a little bit less volatile stocks, well you would have actually done better than the very conservative portfolio and the high highly volatile portfolio. But it's such a hard conversation to have because nobody when you're going up, nobody wants to sell, and when you're going down, oh I know, I can't sell now. So that's a big part of what what we do in the planning process is we introduce that discipline and how to do that portfolio management to the big piece for me is labeling. It is I'm an asset allocation, disciplinarian ass allocation is a discipline approach to managing the money. It takes the emotional side out, which is where most people make their decisions. They have fall mouth fear of missing out. They go chasing things, looking by high sell higher. When you, and I know and Warren Buffett knows is when nobody want it, that's the time to buy it. When there's blood on the street, that's when he makes the most money. So what that means is buying things that are out of favor and going against the herd in a downward fashion and identifying that that's the opportunity to buy when most people don't want that. So ass allocation is a discipline approach of how to sell high and by low over periods of time to keep your risk modified to what is appropriate for that person's situation. Because if you all of a sudden owned nothing but Tesla, that is any major amount of risk. And it's not that you couldn't make money, it's not that you didn't turn a hundred thousand into five million, but if you don't know when to get out and something negative and adverse happens and suddenly they're filing bankruptcy, and I'm not saying they're going to this particular company, but I've seen it in the past. You've seen in the past. So here, here's an example. You and I have a particular colleague, I won't mention names, that uh was...

...very heavily involved in the crypto space and literally turned ten thousand dollars into a million dollars and deemed to be, I'll use the term loosely, not their word. They viewed themselves as a genius of knowing all about Crypto and how easy it is to make money. Well then it shifted and all I kept asking them was, are you taking some profits? What are you doing to sell? Oh No, it's gonna keep going higher. We're getting checks every month and you know, uh it again, blinded by reality that you turn ten grand into a million with the perception of I'm going to keep risking a million because it's going to turn into two million, into three million, into four million, instead of ever saying well, what if it does stop? What if it goes the wrong way? And so as it played out, and I would inquire over time, well, how's it doing now? How's it doing now? And eventually was told that they sold for about a seventy thousand dollar profit, not seven hundred thousand. They allowed it to drop over nine percent before they said that's enough, we got to get out. And they could have sold on the way up, they could have sold on the way down. There was zero discipline or notion of how to exit the position successfully. Now at the end of the day you could say they made six seven times their money, but clearly they're disappointed and devastated. And, by the way, this particular thing went bankrupt. So it's a good thing they took out what they had. But again, oink, oink. You know, goes the pig is. You know we say Bulls make money, bears make money, pigs get slaughtered. So you can make money and upmarket you will can money in a down market, but when you're a pig you're going to get slaughtered at some point because you just lack of the discipline. And that's where John Comes in, is to give a discipline and manage the money so that you literally have no more than four to five percent exposure of any one particular position so that if it went south. I don't want to curse on your show, but we use the term S H I t the bed right, if you wake up in the morning and the stock crap the bed, basically means that had a negative earning surprise, something detrimental happened. Uh, you know the country they're in, you know, got overthrown and now is is, you know, a national in the stock's gone right. So it crapped the bed and now it's worthless. There was, there is no way to get out overnight. It just collapsed. And so if it's no more than two or three percent of your portfolio, or you're going broke. No, no, you'll recover, you'll find something else and you'll make it back. But if it's six of your portfolio, you know we call that...

...bad day. Like you'reast yeah. Yeah, so the bottom line is there's there's Wall Street and and the Bitcoin folks are rarely, if ever, going to tell you to to sell. I don't think I know a Bitcoin guy on guy or Galla on youtube, linked in or anywhere else that has said sell any time during the last you know, we've seen that go from receiving from like sixty some thousand, I think it even got higher than that, right bitcoin itself, BTC, and now it's down where in the teens, I believe. I don't look at it every day, but I think it's back over in the in the mid twenties again, because the markets rallied a little bit again. I don't time stamp your show, but you know the markets have fluctuated. But Um, I may have shared this on your show previously, so I apologize that if I did. But a year a half ago I captured a screenshot on my phone from a CNBC alert that Goldman Sachs was now offering their retail clients access to cryptocurrencies, I. E. Bitcoin and all the others, and on that particular day, Bitcoin was fifty nine thousand dollars share a unit of coin. Okay, now again, this is in this is a February of now my understanding, because I've had some bitcoin and F T blockchain people on my podcast and we break into that like this stuff has been around for like eight to ten years. This is not an overnight sensation that it has just been morphing and building over time. But understand that that coin was ten dollars, it was a hundred dollars, it was a thousand dollars and nobody was letting John and Bruce play. We couldn't get it unless I set up my own mining farm, or whatever that means, and I went and harvested my own cryptocurrency. I had no way of getting access to it, and yet the people did. And it goes from a thousand to two thousand to five thousand to ten thousand to twenty thousand and now of a sudden fall mo people like, well, I gotta get some of this. It's twenty thousand. It was a hundred, folks, it was a hundred, and now it's twenty thousands, thirty thousands, forty thousand, and more and more clients are like, how do I get in? I'm like, I have no idea, I have no idea. I don't know how you get in. And it's fifty thousand. And so now at fifty nine thousand, six hundred or I don't even know what them six hundred percent return, six thousand percent return. Some somebody who paid a hundred dollars. It's now worth sixty. Now they're gonna let John Q public play. Does that sound like the stock that Mary Lynch was trying to unload in that nobody else wanted? Well, now I need my distribution network. Hey, come on in, folks, I'm opening the doors. You can have all you want. At fifty nine thousand, they suddenly figured out how to give it to you. No, they suddenly decided they want to give it to you,...

...and now they're giving it to you. And so they fed it out. And just to finish, you know, because you already alluded to the fact that's already crashed. It did go up a little bit more, maybe into the mid high sixty thousand range, and then pretty much it's rolled over. So whoever got in then maybe made ten and then it shipped the bed and then it just right. And so if you're in at fifty eight thousand, fifty nine thousand, sixty two thousand and it's at twenty thousand, you lost two thirds of your money. And guess what? People buy it on margin, which means they're leveraging. They didn't put up all the capital. You and I have run into people that you know put fifty sixty dollars and they're down fifty six. And then the question is, well, what do Do you walk away? Because keeping it at twenty thousand is still a decision. I could put that twenty thousand in this case. Let's just use Tesla again, because I am I better served having that twenty thousand and Tesla moving forward or live to get in Bitcoin. So everything by seller hold, everything is an investment decision. So you are allowed to assess and re design your investments based on where you think the next opportunity is. So if it's dead money, get the heck out of it and put it somewhere else. I can't tell you a bitcoin is going to go back to a hundred or it's going to go back to sixty. I have no idea. Now I'm rambling on on you here, but if it's two of my portfolio, I can afford to let it go. If it's sevent of my portfolio or a hundred percent on my portfolio, I'm hitting the panic button somewhere well before because I realized I just made a huge mistake and I'm getting covered. So what do you do? But to the point is I'm golfing on Saturday and one of my Golfing Buddy said what do you think about gold? I'm like pit shine. I'm like in what sense is it a good investment? I mean it's a deeper conversation, but my standard answer when anybody asked me questions is it depends, because you and I are financial doctors and we're not going to just give somebody a quick recommendation until we understand what they're trying to accomplish and understand their risk and their timelines. And assess their situation. That's the planning. So when a guy says, what do you think about gold, well, I got a million questions. That we're golfing. So how am I going to get into a deep dive with this with him? But I'm trying to explain to him like golds a headge it's against inflation. Depends how much you have. You know, we've used it historically against fixed income portfolios. But I said it has its place, but to what percent? In proportion control, right, right, proportion control. Like I love desserts, I love ice cream. I can't eat ice cream every day and try and keep...

...losing weight. I could have it once a month, I could have it once a quarter, but if I'm eating the gallon of ice cream every week, I'm not gonna lose that's my froubble. appruciating. That's right, John, you got now you and I both know that gallon of ice cream is not a gallon of ice cream anymore. It's you know, I sent you pictures. Yeah, yeah, it's like two thirds of gallon or whatever it is now it's that's that's a whole inflation conversation of how the system is. Uh is trying to fool us, trying to fool us into thinking that ice cream it really hasn't gone up that much in price, when actually getting less of it. Well, Bruce, let's let's wrap this up. The whole point of this show is that, you know, please, it's just to please call us. It's we're free to talk to and we really do have your best interest in mind. My goal, my mission since I left Wall Street, is to help people build their lives, not just their portfolios. And one thing I can't do, and this is the decision that has to be made. One thing I can't do, Bruce can't do, is we can't make that decision to make that phone call for you. So text life to twenty one thousand, text planned me into three to one, four to one, five, two on three and and get a hold of us. Or just go out to www guardian rock wealth dot com and hit the contact US button, or listening to more podcasts if you haven't quite decided you want to talk to me yet. There's all kinds of information there. And, Bruce is there are other ways that they can't get ahold of you as well. Yeah, let me just a couple of things. So don't go it alone. That's what you and I always talk about, is don't go it alone. And then at the beginning when we talked about build the life, not just a portfolio, is, I use the Ackerman Woody Woofy, what do you want for yourself? And so if you can identify that, whether you're working on your own or with a professional, what do you want for yourself? What are you trying to accomplish? What, John, that sounds like a plan. It's a roadmap. What we use the terminology is you and I are their navigators to help them get from point a to point B, whether that's planned for their kids college, plan for their retirement, plan for their estate, whatever it is, and that's what the plan man is all about. So you know what's your woody woofy, don't go it alone. And so yes, thank you. You can reach us at ask the plan man dot Com. You can call eight four four plan man and, as you've alluded to, we've got the podcast ask the plan man on Youtube and all the podcast channels. We do a weekly show. We talked about all kinds of different topics, insurance, finance and more. All right, well, thanks everybody for joining us. On building your life with John Browning, and thank you bruce all of the plan man for joining us this time as well. Thank you, John. Always a pleasure and enjoy our conversation. All right, 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 like, John Emeli a free copy of his book build a life, not a portfolio. Go to John's website, Guardian Rock Wealth Dot com, and click the contact to US link and send your request. John Will Mel 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 automagically when it's released. Have a terrific day. Nothing in this podcast should be construed as personal investment advice, and past performance is no guarantee of future results. Investing is not appropriate for everyone. There is a risk of loss associated with investing in the markets. No representation or implication is being made that using any methodology or system will generate profits or in sure freedom from losses. Please remember that investing carry's risk. Guardian, Rock Wealth LLC and its affiliates are fiduciary investment advisors. Please consult with US or another experienced qualified investment advisor before making any investment decisions and or trying to implement any of the strategies and tactics we may discuss in any of our publications or podcasts.

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