The Wisdom & Wealth Podcast with Josh Klooz

Hello and Welcome to another edition of Wisdom & Wealth. Thank you for joining me. Some time back I walked through a career decision with a friend. It was a tough decision between two different options and involved a change in geography component as well. There was some hesitation around making the wrong decision along with the usual questions around giftedness, calling, timing etc.Given my personal background, this particular instance tugged at my heart strings due to some similarities. Many if not all of us have been there. You know that a decision needs to be made but are tempted to do nothing. Once you decide to make a move, you worry about making the “right” decision. Then you struggle to measure intangibles with the math of the decision. My friend had the right mindset and made a great decision and it occurs to me that in some moments it is possible to be so self-aware that you are not making a “right decision, or a wrong decision” but a “different” decision. You are, in God’s providence, simply working out a different part of or chapter of your growth at one time vs another. I think when we look back with the advantage point of eternity, we will realize that the point of decision fatigue wasn’t to help us make the right decision, but rather to help us realize we are not in control and that we must move on. We must move forward and seek the future as best we can.Yes, you guessed it. This applies to our financial planning and investment lives. Here is how. I think many people get hung up on worrying about the future, worrying about the unknown because we are hoping for greater returns. Things we literally cannot control. Since they have the power to choose how we invest, we can then be deceived into thinking we can have an outsized influence on future results. Somehow, we confuse the responsibility for choosing a starting point with the power to influence the end result. While we have a responsibility to make choices and weigh the tradeoffs today, we cannot influence those outcomes…If you can, I suspect that you are in a shall we say “non regulated” industry (Fortune telling for example).So here is what I’d rather a client focus on.Am I making a wise, historically sound, principled decision based on what I know of my family, situation and financial fundamentals? All content people that I know have come to peace with the idea of tradeoffs. They understand that you are giving up one thing to get another. When we become comfortable with tradeoffs which are worth it, it allows us to be more steady than the average person because we have already done our homework. Show me someone who gives up and I’ll show you someone who didn’t fully understand or weigh the cost of their decision. Rather they saw one potential outcome and fixated their attention on it.The second trait which I think is universal amongst the types of people who are successful is that they focus on what is in their sphere of influence. They control what they can control. They are productive in this way. They are the first to suggest that they spend less, save more, work longer, give away more etc. These are the people who don’t hide the bias and are willing to see how their actions affect different goals. And yes, the thing that no one wants to hear is that one of the most powerful wealth creation techniques is to continue working. But I think our society needs to hear it as a truism. We as a society for several decades have treated work as punishment rather than a privilege. Don’t get me wrong, I’m not advocating that you have to stay in some career that you do not like. What I am saying is that rarely do people think through changing careers at age 60, taking a step back in compensation and responsibility and letting their assets grow for 10 years. The idea that someone could work till the day they died and love every second of it, is a gift reserved for someone else. I think our society makes assumptions about work in a binary way and does so to our productive, spiritual and relational detriment.Who we HireThe next thing which comes to mind which I believe is critical to someone’s success but which is overlooked by so many, is having similar economic and investment beliefs as the person you are working with. If your first principles of investing are a mystery to each other you are most likely setting yourself up for heartache at some point. The worst thing I can ever hear from someone is: “I work with so and so… he’s a genius. He’s got this black box money making machine.” I cringe every time. Maybe he or she is…maybe they do have an edge, but all edges evaporate eventually. Don’t you want to understand what value you are providing in the marketplace?Asking for HelpSuccessful people know their limits and know when and how to ask for help. It’s one of the most humbling things I can ever come across, because I work with some really smart people, who humbly come to me saying, “I know I’m smart, but I need help from someone I trust to ensure I and my family don’t go wrong.”To summarize, make your investment decisions personal, make them matter to your family. Don’t be afraid of quantifying them by balancing the tradeoffs. Be proactive by knowing what you can control and what you cannot. Lastly, make sure you don’t forget that asking for the help of someone who has the same investment worldview as you is a must.I’ll leave things there for now. Have a wonderful week and always know that I’m wishing you continued Truth, Beauty and Goodness on the road ahead.The Bahnsen Group is registered with Hightower Advisors, LLC, an SEC registered investment adviser. Registration as an investment adviser does not imply a certain level of skill or training. Securities are offered through Hightower Securities, LLC, member FINRA and SIPC. Advisory services are offered through Hightower Advisors, LLC.This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors.All data and information reference herein are from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary, it does not constitute investment advice. The team and HighTower shall not in any way be liable for claims, and make no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or omissions from the obtained data and information referenced herein. The data and information are provided as of the date referenced. Such data and information are subject to change without notice.Third-party links and references are provided solely to share social, cultural and educational information. Any reference in this post to any person, or organization, or activities, products, or services related to such person or organization, or any linkages from this post to the web site of another party, do not constitute or imply the endorsement, recommendation, or favoring of The Bahnsen Group or Hightower Advisors, LLC, or any of its affiliates, employees or contractors acting on their behalf. Hightower Advisors, LLC, do not guarantee the accuracy or safety of any linked site.Hightower Advisors do not provide tax or legal advice. This material was not intended or written to be used or presented to any entity as tax advice or tax information. Tax laws vary based on the client’s individual circumstances and can change at any time without notice. Clients are urged to consult their tax or legal advisor for related questions.This document was created for informational purposes only; the opinions expressed are solely those of the team and do not represent those of HighTower Advisors, LLC, or any of its affiliates. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit wisdomandwealthpodcast.substack.com

Welcome to another edition of Wisdom and Wealth. Thank you for joining me!This past week, I have had the lyrics of Ben Rector bouncing around my head. In this particular song, he says “I’m learning how to eat the fruit that is in season.” For some reason this has stuck with me, because I find that so much of life, we can find ourselves not doing this. Our nature is prone to want other people’s fruit, we are prone to worry, doubt or victimhood as a society. Rather than finding the ability to enjoy the things we have and the planting, growing and harvest seasons associated with our “geography,” we look past it. I’ve don’t this countless times as well. I’ve let questions I did not know the answer to yet, or problems that could only be fix with time and discipline, rob me of enjoying the common grace that was right in front of me.Now, I’m not saying we should look past difficulty or even throw up our hands and give in. What I am saying is we should seek to find the good that we are blessed with and work with the leverage of the season of life we are in. Today I want to focus on the worry and doubt portion of the above and share a common way I hear this sneak into people’s investment thesis and financial plan.From time to time, I’ll hear someone ask: “have you heard about the book “The Fourth Turning?” For those unfamiliar, it is a book written about supposedly four cycles life which include growth, rebellion, individualism and then decay. The mantra you’ll often hear associated with this is “hard times make strong men, strong men make good times, good times make weak men, and weak men make hard times.” And so, the cycle continues.While I do see some validity to the concept and think it’s a helpful framework for perhaps looking backward on history, I wonder if it is a useful framework for looking forward. Often what is being asked in the pregnant question: “What do you think of the fourth turning?” is what part of the cycle are we in? For some people I think it is a sign that they are asking “when is doomsday?” But more than this, I think it can subtly lead us into a path of victimhood. IE society and life are just this way, and we must follow along. Worse yet, I think some people then are prone to think that along the way we must look for signs and secrets which prevent us from pain or ruin.I have avoided confronting this thought process for quite a while. Mainly because my gut had such an immediate reversion to the sentiment. Frankly, I didn’t trust what would come out of my mouth! I am sure that there are numerous differences and nuances to the level and scope of beliefs to the Fourth Turning concept, so please accept my humble observations below not as judgements but as “inoculations” from what I think could be unhelpful or even harmful second and third order beliefs which eventually may find their way into action. So, with that disclaimer…below I’m going to list out a few of the implications which come through this philosophy which most concern me.Pain should be avoided / is a CurseSome of the themes I hear through this concept is that if we “just pay attention” we can avoid the pain that our neighbors will feel. This goes contrary to everything I’ve experienced and have witnessed. Pain and struggle are facts of life. They are not something to be avoided or surprised by but simply a part of life. Our approach to life remains the same when life is good or when life is a struggle. If our perspective and approach changes depending on our circumstances it reveals something about our core principles which should alarm us. The way we evaluate a company doesn’t change based upon the perception of our neighbors. The way we evaluate whether a financial plan is stable or not doesn’t radically change based upon outward circumstances. Most of what we are doing is asking: “are these first principles aligned with my own?” We cannot control the events going on around us, but if we stick to our first principles, we will look back and see who those challenging times made our relationships and financial plans even stronger.Change with the times to preserve ourselvesThis idea is never expressly said but the implication is always there. I see it when I’m out and about and people are promulgating their returns in shiny objects or new ideas, they are participating in. In focusing on returns rather than fundamentals these same people are being pulled away from prudent anchors which have stood the test of time. In doing this we underestimate how being an owner of a well-run company alleviates this need to some degree because the products and services those companies provide are making the actual innovation for us and the profits are the first measure the effectiveness.Catastrophe is predictableNow this was probably never the intent of the authors of this book, but I find this implication to be the final result for many readers. This perhaps is the deadliest of implications which I see creeping into conversations around this topic. Simply put downstream of this book written nearly 30 years ago, there is a whole cottage industry of newsletter writers and influencers out there selling you a subscription based on the fact that they have predicted 15 of the last 3 market or societal catastrophes. Yes, there is always an element of truth to some of what these types are saying, but it needs to be remembered that few of them make a living managing actual money. And I’ve got to ask, if they were so effective at predicting events…why haven’t our friends in the hedge fund industry taken them onboard? I’m being a bit sarcastic here, but for good reason. If those tasked with finding market inefficiencies and timing those inefficiencies don’t take these newsletter / influencer types seriously…why should you?The First and Final TurningTo combat this, dear reader, I’d like to consider the First Turning. For me this starts with Gratitude. I’m grateful that I get to live out my life’s purpose with those I love and those I care about. I’m grateful that I get the weighty task of passing on my first principles to those I care about most, my family and my clients and friends. These first principles will guide us and our families through whatever circumstance life brings our way. Because if you really think about it, challenge and uncertainty are the norm. Despite this fact, normal people have stood the test of time, simply by doing their best, with what they have, where they are.It is this ethos which has been the unsung hero of every period of history. Those who seek to jettison or even modify their first principles typically do so at great cost to themselves and those close to them. Rather than trying to figure out how to modify their first principles, a better use of time is figuring out how to apply our first principles to our current situation and how to pass on those same principles to those we love most. This is the idea which says that no matter what happens outside in the world at large, our first principles remain the same. Rather than focusing on and worrying about exterior factors which we cannot control, I hope we begin to focus on how we can apply and pass on our first principles. In so doing I think we worry less and begin to learn how to eat the fruit that is in season.The Bahnsen Group is registered with Hightower Advisors, LLC, an SEC registered investment adviser. Registration as an investment adviser does not imply a certain level of skill or training. Securities are offered through Hightower Securities, LLC, member FINRA and SIPC. Advisory services are offered through Hightower Advisors, LLC.This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors.All data and information reference herein are from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary, it does not constitute investment advice. The team and HighTower shall not in any way be liable for claims, and make no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or omissions from the obtained data and information referenced herein. The data and information are provided as of the date referenced. Such data and information are subject to change without notice.Third-party links and references are provided solely to share social, cultural and educational information. Any reference in this post to any person, or organization, or activities, products, or services related to such person or organization, or any linkages from this post to the web site of another party, do not constitute or imply the endorsement, recommendation, or favoring of The Bahnsen Group or Hightower Advisors, LLC, or any of its affiliates, employees or contractors acting on their behalf. Hightower Advisors, LLC, do not guarantee the accuracy or safety of any linked site.Hightower Advisors do not provide tax or legal advice. This material was not intended or written to be used or presented to any entity as tax advice or tax information. Tax laws vary based on the client’s individual circumstances and can change at any time without notice. Clients are urged to consult their tax or legal advisor for related questions.This document was created for informational purposes only; the opinions expressed are solely those of the team and do not represent those of HighTower Advisors, LLC, or any of its affiliates. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit wisdomandwealthpodcast.substack.com

Every so often someone in an initial meeting or a client meeting will ask me if I think there is a recession coming. They are typically disappointed when I answer of course. Of course there is. It’s like the coming of the seasons, or an intermittent fast after thanksgiving. It’s natural and needed. This fascination with the future never ceases to amazing me.I may have mentioned that this summer I re-read C.S. Lewis’s classic work The Screwtape Letters. In on of the chapters he talks at length about how productivity and good is stolen from us when we focus on the past or the future too much. Or worse yet, try to predict the future based on past events. I’ve met well meaning people who would say they know they cannot predict the future but yet give them a backward looking statistic and suddenly they are tempted to extrapolate that into a future event. The information age or “manipulation age” as I like to call it, being what it is, our algorithms start fetching us information which confirms our theories. If we are not careful we are listening to people who are less than reputable because we have invested our time and intellectual capital into a process that we are too proud to give up. My grandmother used to joke when we asked her how she was feeling that her headstone would one day read: “I told you all I was sick!” I remember this every time I read of someone forecasting the end of the world or the end order or the next “meltdown”. It’s like looking at someone and saying who is having a good time and saying “you are stretching yourself too thin. Eventually you are going to catch the flu or a cold and die.”Sure, all the pieces of information listed above could technically be true. But are they helpful? Are they even connected? Sure they could be. But more probably, they are not. Many people do this same thing when they focus on trying to ascertain when the next big market event is going to happen. These investors have settled on a paradigm of being a participator and timer of events rather than an owner. They view the market as if it were a bus that they can get on or off at will. In this analogy the bus due to breakdown and they try to time their decisions by guessing how long to stay on that buss.Now if they were a part owner of the bus, I have to believe that their focus would be different. Rather than focusing on things that could not be predicted, I have to believe they would focus on the things which under their control and which are knowable. IE the miles on the bus since it’s last service and etc. As an owner you ask different questions than if you are simply riding along.As I write this the S&P 500 is currently trading at a multiple of 22 times forward earnings. The 30 year average is 17 times earnings. Additionally, as of the end of the 2nd quarter this year the top ten companies in the S&P made up of 38% percent of the weight by market capitalization and 32% of the earnings. I won’t belabor this but you don’t have to analyze the situation too long before you start to realize that certain sectors and portions of the market are expensive.The person simply riding the bus asks questions like: how much long will this last? Will it go higher? How can I get out before it goes down? Etc. All incredibly unhelpful and potentially harmful questions.The owner asks: what is my exposure to those expensive companies? Do I need to rebalance? Do I need to trim my exposure? Do I need to exit those positions and reallocate elsewhere? This theme of ownership vs participation is undervalued because very few people who are either entering retirement have gone through a period of market volatility which lasted a long time. Furthermore they didn’t have to convert their portfolio into cashflow during that period. Going through volatility whilst earning a paycheck vs going through volatility when your portfolio is producing your paycheck is a very different situation both structurally and emotionally. I joke with people that our society these past 10-15 years has become addicted to V-shaped recoveries and almost entitled to hedge fund like returns whilst paying index fund prices.So while we cannot control when or even if the next recession will find us, we can prepare for how we respond to it. A better method of preparing for the inevitable is to take stock of what you own and what you are spending. Start by evaluating what percentage of your annual spending needs and trends are covered by dividends? This is a simple exercise and takes a few minutes of grabbing statements. An even better question is: what portion of the dividends paid in your portfolio are coming from companies who have a history of growing that dividend or simply not cutting that dividend? Is it 25% of your income need? 50% of your income need? 75%?These questions avoid focusing on the price or value of your portfolio and instead focus on the production of it. Notice that this exercise doesn’t take the opinion of some economic oracle into consideration. This person, though right about 5 of the last 10 recessions doesn’t control your spending rate, your number of shares owned or the products and services offered which have pricing power in the marketplace.When people send me an article which uses a salacious headline or fear tactics to gain traction I typically respond the same way. Who do you believe will have more functional staying power? A person trying to predict an event or the employees of well run companies? When you look at your portfolio I don’t want you to see stock prices, rather I want you to see products and services which are durable. I want you to see the initiative, creativity and sheer will of the employees behind those products and services. That is the formula which drives satisfied customers and the loyalty which finds its way to the bottom line of balance sheet and ultimately gets paid to you in the form of a dividend. If you must, picture the feet of million + people employed by the companies in your portfolio hitting the floor every morning seeking to better serve their customers and earn a profit. In a way you are capturing a portion of their creativity and ingenuity. The next time you are tempted to listen to someone waxing poetic about how the end is nigh. Ask yourself who you have more confidence in. This so called experts ability to be right or the creativity of your portfolio team to find their way through economic conditions good or bad?I’ll leave things there for this week. But as we move forward please keep these keep these proactive questions in the back of your mind. Have a great week and please remember that we are wishing you and your family continued Truth, Beauty and Goodness ahead. Have a great week!The Bahnsen Group is registered with Hightower Advisors, LLC, an SEC registered investment adviser. Registration as an investment adviser does not imply a certain level of skill or training. Securities are offered through Hightower Securities, LLC, member FINRA and SIPC. Advisory services are offered through Hightower Advisors, LLC.This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors.All data and information reference herein are from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary, it does not constitute investment advice. The team and HighTower shall not in any way be liable for claims, and make no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or omissions from the obtained data and information referenced herein. The data and information are provided as of the date referenced. Such data and information are subject to change without notice.Third-party links and references are provided solely to share social, cultural and educational information. Any reference in this post to any person, or organization, or activities, products, or services related to such person or organization, or any linkages from this post to the web site of another party, do not constitute or imply the endorsement, recommendation, or favoring of The Bahnsen Group or Hightower Advisors, LLC, or any of its affiliates, employees or contractors acting on their behalf. Hightower Advisors, LLC, do not guarantee the accuracy or safety of any linked site.Hightower Advisors do not provide tax or legal advice. This material was not intended or written to be used or presented to any entity as tax advice or tax information. Tax laws vary based on the client’s individual circumstances and can change at any time without notice. Clients are urged to consult their tax or legal advisor for related questions.This document was created for informational purposes only; the opinions expressed are solely those of the team and do not represent those of HighTower Advisors, LLC, or any of its affiliates. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit wisdomandwealthpodcast.substack.com

It’s Summer and this normally means that people are traveling and spending on activities which are outside the norm. This also means that we are spending more money than we normally would also. For this reason I’d like to explore lifestyle spending this week. While spending does force us to reckon with tradeoffs. I find that it is easy to simply think that spending is a zero-sum game. If we are not careful, our nature can sell us falsehoods in very non-threatening ways. We can be deceived in various micro ways and not fully realize it.From my vantage point it’s always interesting to gauge and see people’s response when we talk about spending. Some are confident where every dollar and penny is going. Others have a vague idea that providence, the universe or whatever you please, has offered them a great deal because no one is beating on their door demanding payment. Still others have a lifestyle which they cannot comprehend how their investments can support. IE “it was hard work to get here, and it can’t be this simple to replace.”Below I’m going to give my observations in the form of the feelings and or emotions I see exhibited by people when it comes to their spending. Namely, Contentment, Confusion, Guilt, Envy. So in the next several paragraphs I’ll briefly address them.ContentmentThis person or couple exude contentment because they understand what they want, what is truly important and if necessary are willing to make tradeoffs to their lifestyle, end of life net worth or both to achieve certain experiences or make good on certain priorities or commitments. They typically don’t know where every dollar is but they do have a range for the biggest fixed expenses and monitor the variable expenses periodically. Most importantly, I’d say that the happiest people I know view everything as an investment. And by everything I mean, everything from a tip at a restaurant to a date with their spouse. The other thing I’ve noticed is that they are more intentional with their time than they are with their money to a degree. At least in the level of detail. This in turn gives them the freedom and confidence necessary to spend their money in ways they find meaningful, enjoyable and fruitful. What I’ve observed in these instances is there is always a tension here though. A tension not created by fear, but a tension created by the tradeoffs which come from great opportunities. These types of households attract incredible opportunities which still cause them to have to make choices.ConfusionThis example is a hard one because the confused person or couple has never fully leveled with themselves or each other on how much they spend and ultimately, they know they spend too much but cannot admit it to themselves. This typically has resulted because of a high income or cashflow which has provided a level of affluence which the saved nest egg will have difficulty replicating. This situation can be taken over by one party and remedied via what feels like stark and austere measures but it is best remedied when the household in question aligns on a plan of action and executes. The best place to start with is all those variable expenses which are being treated like “fixed” expenses. Start back at square one. In our household, if we see a certain expense creep to a percentage which alarms us, we will go on a “fast” of that line item. It’s crazy how expensive impulse purchases or subscriptions can become. What is crazy from the “fast” exercise is more of than not, we don’t miss the line item when it’s gone. Sometimes the fear of doing without is greater than the value gained from a transaction and you don’t realize this until it’s gone. These are all things which we know intellectually but I find that practically, in an automated world, it is easy to forget.GuiltBelieve it or not I think a lot of us feel guilty every time we spend money because we are paranoid about being prepared for the future or are worried about missing out perhaps. We take pride in spending only on the bare necessities and can turn frugality into a vice. Rather than taking comfort in the simplicity of life we turn it into a game where our pride is really driving the bus and guilt is the currency we use to keep us from spending money.EnvyCharlie Munger once said he didn’t think the market was driven so much by greed as it was driven by envy. If that is true for investing it is probably most certainly true for spending. Think about it. How many retirement or financial plans are driven by a cohort rather than an individual. How many country club dues are paid not because someone likes golf or the food but because…everyone else is doing it. So much of marketing dabbles at the edges of this too. A celebrity endorses / has an item and now heaven forbid my neighbor has it too…therefore I too must have it. It is all so unoriginal. We desire things and experiences that others have far more often than the adventure of investing in our own likes, dislikes and tastes.Ultimately, what I’m driving at is so little of our spending is influenced by our first principles and rather driven by unhelpful emotions. Furthermore, spending on what we want has never been easier. We practically think about what we want and we have spent the money. My hearts desire is that those in my sphere of influence find contentment and joy from the wealth they’ve accumulated and that it serves their unique purposes not someone else’s. I’ll leave things there for this week. Thank you again for reading and please know that I’m wishing you and your family continued Truth, Beauty and Goodness on the road ahead.The Bahnsen Group is registered with Hightower Advisors, LLC, an SEC registered investment adviser. Registration as an investment adviser does not imply a certain level of skill or training. Securities are offered through Hightower Securities, LLC, member FINRA and SIPC. Advisory services are offered through Hightower Advisors, LLC.This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors.All data and information reference herein are from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary, it does not constitute investment advice. The team and HighTower shall not in any way be liable for claims, and make no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or omissions from the obtained data and information referenced herein. The data and information are provided as of the date referenced. Such data and information are subject to change without notice.Third-party links and references are provided solely to share social, cultural and educational information. Any reference in this post to any person, or organization, or activities, products, or services related to such person or organization, or any linkages from this post to the web site of another party, do not constitute or imply the endorsement, recommendation, or favoring of The Bahnsen Group or Hightower Advisors, LLC, or any of its affiliates, employees or contractors acting on their behalf. Hightower Advisors, LLC, do not guarantee the accuracy or safety of any linked site.Hightower Advisors do not provide tax or legal advice. This material was not intended or written to be used or presented to any entity as tax advice or tax information. Tax laws vary based on the client’s individual circumstances and can change at any time without notice. Clients are urged to consult their tax or legal advisor for related questions.This document was created for informational purposes only; the opinions expressed are solely those of the team and do not represent those of HighTower Advisors, LLC, or any of its affiliates. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit wisdomandwealthpodcast.substack.com

Welcome to another edition of Wisdom & Wealth. This past week I’ve started thinking about nostalgia for the past, present or future. The catalyst for this was a sign my wife got me for my home office which reads: “These are the Good Old Days”. Don’t get me wrong I agree with the statement. But something about the way it is commonly understood or communicated in practice gives me pause. So today I’m going to walk through some of what I think are common misconceptions of both sides of this nostalgic coin as it applies to our financial lives. Spoiler alert, there won’t be much math mentioned in today’s edition. Those of you heading for the exits… I respect your decision and standards!Future – I’ll be able to enjoy life when…I’ll start with what I’ll call nostalgia for the future. If I’m off base someone just tell me, but I think we as a society run into this trap quite often. It goes like this. One day, in the not-so-distant future, we will have enough money, time, prestige or whatever, and will be content. One of my favorite Keith Urban songs is coincidentally about this very thing. One day, we all probably will have more money, time or opportunity. Some day we may have an easier or less stressful life. However, I’m given pause by the idea that life will be “more enjoyable” then. Using retirement as an example, I’ve heard this quite a bit over the years. It goes something like this: Our goal is to stop working so that we can enjoy life and travel. Adventure is something that awaits when enough money is obtained etc.If I may, I worry that the mental habits which lead one to believe that the “good life” is somewhere in the future may be permanently reinforcing. When properly understood, every day is an adventure and a gift. I don’t care who you are. The people you meet, the problems you get to solve, the opportunities you get to invest in someone else, ARE the great adventure. If I may pick on my own generation for a minute, the adventure probably isn’t “grammable”. It’s a story and it takes too long to explain via social media. More likely than not, it requires a story at the dinner table. The community you have at this very moment, the friendships via work, church, school etc is a source of wealth which you won’t value until you no longer have them. You don’t enjoy relationships more because you have more money. Rather you enjoy relationships when you are all working towards a common goal. The next, position, role, company, deal, or sale will not magically make us contented enough to enjoy the present. We have to choose it.Past – we have missed our window. Good things are gone.The next one is nostalgia. If you don’t think someone my age is susceptible to this, just start scrolling social media and see what people write about the 80’s and 90’s. It is moments like this which I remember that the time period I just referenced was just like when my parents tried to explain the 1960’s to me! But there is this sentiment amongst some that the good days are behind us and that if we’d really been paying attention, we would have paid more attention and enjoyed things more. I hear this all the time from well-meaning people a few decades down the road of life. They will smile and say “don’t blink” it goes fast. They are primarily referring to kids and their development and yes, I do agree they grow quickly, but why do I inevitably feel “guilt” when I hear this phrase. I used to think this was indicative that I was in fact missing something and not being present enough or investing enough time with my kids etc. Then I realized it wasn’t me. It was an admission of guilt of the messenger. You’ll hear this from a planning or investment perspective occasionally too. Life was “simple back then”. No, I don’t want to go back to the days before there was “excel”. I really don’t want to go back to finding the stock prices in the newspaper. And I most assuredly don’t want to go back to paying someone to place individual trades. Life that we have lived is a blessing, but it shouldn’t undercut the blessing, calling and meaning of the present.Tyranny of the PresentSo, this one is rough on me. Mainly because I have young kids whose ages and stages seem to change in milliseconds. I would consider myself a pretty involved Dad. And there are still phases which go by very quickly. But I see this trend where somehow if you are not overscheduled, outside of work hours and if every weekend hour isn’t planned out…you are somehow not a committed parent or grandparent. It makes me wonder if we have lost the value of boredom in the life of a child. It can be great for creativity. But I’ve discovered that the tyranny of the present can often be a stand in for “keeping up with the Jone’s Activities. I feel no pressure whatsoever to keep up with the schedule and or activities of anyone else. What I do feel pressure for is developing the talents, curiosities and capacities of those entrusted in my care. But if I’m being honest, I didn’t find those answers personally in activities, rather I found them by working alongside those I admired and asking questions.What I am asking for is not that everyone slow down or simply that everyone “find contentment”. Although, I will say it is a rewarding drug. What I am advocating for is that we as individuals make our plans according to our personal goals and the various seasons we have been given. Just as I don’t believe we should all feel the same pressure to be financially independent at the same age, take the same vacations, be on the same travel ball teams, I also don’t think we should undervalue the relationships and experiences we are investing in today. An example recently which came to me was a client asking about investing in a specific experience this summer for their family. They were basically asking if it was okay to tweak the financial plan ever so slightly and if that tweak was going to put them off track. Of course it wasn’t!I use this example because I think it paints a good picture of holding all of life’s priorities in tension. So when I seek to help clients, my prayer, isn’t that they reach a number or an age so much as a possess a sense of awareness that allows them to invest in the right people and experiences which make their life full, meaningful and fulfilling. When I think of my kids even, I don’t see some bucket-list experiences, but I do want them to become whole. To see the world as it is and to fully recognize their place in it. I hope the people I serve enjoy fruitful work and investment which fuels the relationships which bring them meaning.So these are the good old days. Tomorrow they will remain so, and a year from now also. The growth we experience along the way will be meaningful, fun, rewarding and fruitful. But the people I admire most, never look back too long, because they are always constantly preparing for what is next.I’ll leave things there for now. Please reach out with questions as they come up and always remember that I am wishing you and your family continued Truth, Beauty and Goodness ahead.The Bahnsen Group is registered with Hightower Advisors, LLC, an SEC registered investment adviser. Registration as an investment adviser does not imply a certain level of skill or training. Securities are offered through Hightower Securities, LLC, member FINRA and SIPC. Advisory services are offered through Hightower Advisors, LLC.This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors.All data and information reference herein are from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary, it does not constitute investment advice. The team and HighTower shall not in any way be liable for claims, and make no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or omissions from the obtained data and information referenced herein. The data and information are provided as of the date referenced. Such data and information are subject to change without notice.Third-party links and references are provided solely to share social, cultural and educational information. Any reference in this post to any person, or organization, or activities, products, or services related to such person or organization, or any linkages from this post to the web site of another party, do not constitute or imply the endorsement, recommendation, or favoring of The Bahnsen Group or Hightower Advisors, LLC, or any of its affiliates, employees or contractors acting on their behalf. Hightower Advisors, LLC, do not guarantee the accuracy or safety of any linked site.Hightower Advisors do not provide tax or legal advice. This material was not intended or written to be used or presented to any entity as tax advice or tax information. Tax laws vary based on the client’s individual circumstances and can change at any time without notice. Clients are urged to consult their tax or legal advisor for related questions.This document was created for informational purposes only; the opinions expressed are solely those of the team and do not represent those of HighTower Advisors, LLC, or any of its affiliates. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit wisdomandwealthpodcast.substack.com

Welcome to another edition of Wisdom & Wealth. Thank you for joining me. This week I want to address a few questions that come up during moments of volatility like the one we are experiencing today. First, moments like this tend to have a lot in common with the grade school playground in that the most salacious rumors and half-truths make the rounds. Even if you are disciplined enough to verify every data point, talking point and rumor you hear, their net effect is to do what the communists used to call “flood the zone”. You are so overrun with bad information that you are more shaped by the fear of falsehood than by what you know to be true. I’m going to spend the rest of our time today arguing against this. I beg of you, please don’t let the “flood the zone” macro mentality affect your personal financial planning. The entertainment industry has been selling us end of the World cataclysmic stories since we were young and though that was entertaining for a couple of hours, I can’t help but worry about the negative effects those couple hours had on our forward sense of optimism.If you are reading this, you’ve probably had someone within your sphere send you a YouTube video about how the “end of the World as we know it is nigh.” In fact, it is so “nigh” that the Youtuber is probably recommending that you stop what you are doing and buy their book, subscription etc. Once you are enlightened like them, you will be a part of a select group of people who will see all the pieces fall into place five minutes before the rest of your neighbors. Now hopefully you know that I’m poking some fun here, but the point remains: Conspiracy makes for great entertainment but a poor asset allocator and advisor. You’ve also heard me say that when I was growing up, you had to go the carnival if you wanted your palm read. And you knew it was all make believe. Today the carnival comes to the palm of your hand and tries to convince you it’s real. Most of what you will see that is out there is trying to convince you that this big, broad trend is out there and is trying to conspire against you and therefore you should make a change of some sort.The other thing that you’ll see is someone “selling the secret”. In fact, this secret is so financially lucrative that it will solve all your problems, and you’ll never have to worry ever again. When I see this, it reminds me of what my Dad and Grandpa used to say about the opportunity of a lifetime being ignored because it was disguised in boots and blue jeans and looked a lot more like “work” than it did a fairy tale or daydream. I’ll spare you what could be an extended commentary of things that further come to mind, but the list is long…rest assured.With this in mind, I want to focus the remainder of our time on a type of tendency I’ve witnessed in the past. You find a version of this in the advisory world if you pay attention long enough. It goes something like the following.* You have a review meeting with your advisor* Your financial plan isn’t referenced* You review the largely passive investments you own* You review your YTD total return or rolling one year return (Whichever looks better)* You never review your “rate of return since inception”* Advisor advocates for changing the portfolio in some small way based off of a macro trend that he or she recommends.My issue with this template is that rarely have I seen this done prior to a bear market. Rather, it is done in response to market volatility and in a way, it becomes type of “market timing lite”. Put bluntly it can play into our human desire to try to chase returns. If I’ve just described your life since the great financial crisis, no doubt you’ve heard from that same advisor that the “old buy and hold” strategy doesn’t work anymore because you have to be “nimble and take advantage of new trends.” I get what is trying to be communicated, but even if it were possible to see the wave and get in front of it, I can’t help but wonder if that advisor has replaced “buy and hold” with “buy and pray.” If this is getting uncomfortable for you reading this, I’m not trying to be divisive, but I am trying to shine a light on something that I think is less than genuine and frankly can be harmful. I’m not saying you can’t be successful in the model or that it will not outperform my own planning and investment philosophy. But what I am asking is:* What are the first principles driving the decisions being made? You can’t call the above a passive allocation when you are actively trying to make changes.* The second question would be how do these changes affect the income your plan needs?* How are you resisting the urge to make changes based on feeling rather than data?At The Bahnsen Group I'm sure you are aware that we are active managers and that we believe in investing based upon income. We invest in well-run companies who earn a profit, grow that profit and share it with our clients in the form of a growing dividend. This philosophy applies to both public and private markets. We allocate based upon income need, time horizon and utilize the yield or cashflow coming from those well-run companies to meet the needs of clients.The passive allocation I’ve previously described is like buying a puzzle where every company is supposed to represent a piece of the picture on the box, but you have no idea what is all inside the box or how they fit together in your overall financial wellbeing. Our active approach stands in contrast with this because we believe we should know where every last puzzle piece belongs and how it should fit together to meet the needs of clients. This discipline allows you the ability to have cashflow through market volatility and also allows you to stay disciplined based upon measurable data of well-run companies.I’ll bring us to a close for today. Thank you for reading. Please continue to reach out with questions or suggestions and know that I’m wishing you and your family continued Truth, Beauty and Goodness ahead.The Bahnsen Group is registered with Hightower Advisors, LLC, an SEC registered investment adviser. Registration as an investment adviser does not imply a certain level of skill or training. Securities are offered through Hightower Securities, LLC, member FINRA and SIPC. Advisory services are offered through Hightower Advisors, LLC.This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors.All data and information reference herein are from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary, it does not constitute investment advice. The team and HighTower shall not in any way be liable for claims, and make no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or omissions from the obtained data and information referenced herein. The data and information are provided as of the date referenced. Such data and information are subject to change without notice.Third-party links and references are provided solely to share social, cultural and educational information. Any reference in this post to any person, or organization, or activities, products, or services related to such person or organization, or any linkages from this post to the web site of another party, do not constitute or imply the endorsement, recommendation, or favoring of The Bahnsen Group or Hightower Advisors, LLC, or any of its affiliates, employees or contractors acting on their behalf. Hightower Advisors, LLC, do not guarantee the accuracy or safety of any linked site.Hightower Advisors do not provide tax or legal advice. This material was not intended or written to be used or presented to any entity as tax advice or tax information. Tax laws vary based on the client’s individual circumstances and can change at any time without notice. Clients are urged to consult their tax or legal advisor for related questions.This document was created for informational purposes only; the opinions expressed are solely those of the team and do not represent those of HighTower Advisors, LLC, or any of its affiliates. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit wisdomandwealthpodcast.substack.com

This week I look at how your financial plan and land navigation have more similarities than we would like to admit. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit wisdomandwealthpodcast.substack.com

This week I’ve invited Parker Polidor from CareAlly to join me on the podcast. Parker and his team focus on helping families plan for the care of their aging loved ones. Often care for loved one’s becomes a line item in a person’s financial plan, but Parker puts those dollars into action by helping map out what next steps need to be planned for and thought through. Listen in for more. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit wisdomandwealthpodcast.substack.com

What are you optimistic about matters to the durability of your financial mindset. Listen in for more. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit wisdomandwealthpodcast.substack.com

“Should I reallocate?” is a question that prospective clients often ask me. The next question that is really embedded in that question is: “Should I pay the taxes necessary to get a better allocation?” This question has come to the surface the last several months. I’ve witnessed it more and more lately, especially in the realm of do it yourself investors and prospective clients who saw the market as cheap in the mid 2015’s or during the Covid period and dumped significant amounts of money into Index Funds or sector Exchange Traded Funds. Markets have seen a huge run up in the past years and large gains have been banked in passive investments. Today I want to walk through some trends I’ve seen and give some ideas on how to approach this situation. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit wisdomandwealthpodcast.substack.com

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit wisdomandwealthpodcast.substack.com

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit wisdomandwealthpodcast.substack.com

Welcome in, to another edition of Wisdom & Wealth. Thank you for joining me this week. In the past few months, I’ve had two nagging questions keep coming back to mind. One: Are we as an investing society being lulled to sleep by “V-Shaped” market recoveries? And secondly, how do I help a generation of folks who lived through the GFC, or great financial crisis, as “accumulators,” think about such an event as “decumulators” or retirees?So, the first question. What do I mean by a “V-shaped” recovery. In the last decade, most markets have quickly bounced back. It’s been a passive investor’s dream. Just like a Disney fairytale everything comes back into focus and ends with a bow on it. Take the 2020 Covid crisis for example. If you’d fallen asleep in January of 2020 and slumbered through to December of 2020 you wouldn’t have thought much of the market gyrations in-between. In fact, you’d probably have thought it was a great year. But I cannot help but wonder if the average investor is building this in as their base case as a sort of recency bias. Are we getting lulled to sleep and thinking that old fashioned things like balance sheets, and valuation don’t matter? If you have followed me for any amount of time or know anything about TBG (The Bahnsen Group), you know the answer to that question already. I’m of the bias that says this is the only thing that is readily knowable enough that a plan can be made around it.This past year, the top ten companies of the S&P 500 given their scale and market cap carried the lion share of the return for the index. Because of this, I can’t help but wonder if many investors have become numb to the reality that what market cap weighted indexes gave, they can easily take away when a reversal comes into focus. Furthermore, what might happen if markets trade sideways or stay down for a period of time that is longer than we have previously seen? What if a V-shaped recovery doesn’t happen and you have to live through 2-3 years of down markets or sideways range bound markets? Investors from 2000 -2010 experienced this “worst of both worlds” reality in what some have dubbed the “lost decade” because of a decade bookended by the “dot com bubble” and the “mortgage crisis” on the other end. Don’t get me wrong, I’m not trying to encourage fearfulness here so much as I’m trying to advocate for caution. If you are on the “participation train” to the up-side, you most likely will participate to the down side. Asking yourself how a prolonged sideways or bear market affects your personal situation is only prudent.So now, let’s move on to the second question. How is being a retiree a different situation when experiencing a market pullback or prolonged down market? For starters, it feels different because you are actually living off your portfolio. The psychology is the first thing. You actually feel like you are losing something because you are spending money that can no longer earn you a return. It’s similar to a business that is bleeding cash while not finding new business or not being able to collect on already completed business. You intuitively know it’s going to probably “be okay,” but the waiting and the silence can be deafening. Your imagination can become your enemy.Numerically, there is the obvious difference that living off your portfolio and taking money out of it during a bear market is just simply different than contributing to your portfolio on a monthly basis via your paycheck and being able to buy into the market at lower prices and valuations. It’s just math. Bear markets during the accumulation phase of life can be your best friend for building wealth. In retirement they can be far less kind. The leverage is working in reverse on this side of the hill. Scoff all you want at financial planning, but this is where the rubber meets the road for most people. If you are asking too much of your portfolio and your plan, bear markets are even worse for your financial health. It is important that an investor actually partners with someone who can communicate to them the realistic truths about their situation. Most people want to spend a lot more of their wealth in the first decade of retirement. If you are in a passive allocation, where “total return” is the focus of your investing, this can present significant cashflow challenges. Challenges which I do not believe have not been fully discovered yet because, wait for it, we’ve been having quick, “V-shaped recoveries. In more passive or growth focused investing, it is not uncommon for me to see total portfolio yields of 2% or lower. Meaning the portfolio itself is only putting off 2% in the form of dividends and interest. Simply put, if a client is living off 4% of their portfolio, paying their advisor 1% and inflation is up 2.5%, this is not a pretty picture.So please hear me. I’m not advocating for fear. I’m advocating for making a plan that shields you from the inevitable market corrections which are both healthy and normal. Furthermore, I’m advocating for you making a plan which takes into consideration they way your portfolio is built.If you have questions about these two questions or about your situation, please feel free to send questions along. Thank you for reading and as always, please know that I’m continuing to wish you and your family continued Truth, Beauty and Goodness on the read ahead.The Bahnsen Group is registered with Hightower Advisors, LLC, an SEC registered investment adviser. Registration as an investment adviser does not imply a certain level of skill or training. Securities are offered through Hightower Securities, LLC, member FINRA and SIPC. Advisory services are offered through Hightower Advisors, LLC.This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors.All data and information reference herein are from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary, it does not constitute investment advice. The team and HighTower shall not in any way be liable for claims, and make no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or omissions from the obtained data and information referenced herein. The data and information are provided as of the date referenced. Such data and information are subject to change without notice.Third-party links and references are provided solely to share social, cultural and educational information. Any reference in this post to any person, or organization, or activities, products, or services related to such person or organization, or any linkages from this post to the web site of another party, do not constitute or imply the endorsement, recommendation, or favoring of The Bahnsen Group or Hightower Advisors, LLC, or any of its affiliates, employees or contractors acting on their behalf. Hightower Advisors, LLC, do not guarantee the accuracy or safety of any linked site.Hightower Advisors do not provide tax or legal advice. This material was not intended or written to be used or presented to any entity as tax advice or tax information. Tax laws vary based on the client’s individual circumstances and can change at any time without notice. Clients are urged to consult their tax or legal advisor for related questions.This document was created for informational purposes only; the opinions expressed are solely those of the team and do not represent those of HighTower Advisors, LLC, or any of its affiliates. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit wisdomandwealthpodcast.substack.com

Check out this week’s episode of Wisdom & Wealth for more of my thoughts on how we tend to hang on to the positive and negative voices in our lives. I also get into how this tendency can cause us to make poor partnership decisions in our financial lives. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit wisdomandwealthpodcast.substack.com

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit wisdomandwealthpodcast.substack.com