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In the 50th episode of the AWM NFL Players Podcast, hosts Riccardo Stewart, Zach Miller, Sam Acho, and Jeff Locke explore the complexities of public vs. private investments. They dive into the distinctions between these markets, highlighting access, regulation, and investment opportunities. Tune in for expert insights on how to navigate these options and understand their long-term impact on wealth creation.
Key Highlights
- Definition of "the market" and its historical context.
- Differences between public and private markets: access, regulation, and investable opportunities.
- Public market's 10% annualized return over the past century.
- Considerations for navigating private markets and achieving higher returns.
- Importance of long-term investing and the power of compounding.
Quotes
- "The public stock market has been one of the most incredible wealth creation tools in history." – Zach Miller
- "In the private market... it's very much buyer beware." – Zach Miller
- "Just because you have the money doesn't mean you really know what's going on." – Riccardo Stewart
Creators and Guests
Host
What is NFL Players' Podcast?
The podcast by NFL players for NFL players. Each week, we break down the biggest events in football and how they directly impact a player's career and money.
Join Former NFL Veterans Sam Acho (Bills, Bucs, Bears & Cardinals), Zach Miller (Seahawks & Raiders), Jeff Locke (Vikings, Colts, Lions, 49ers), and college coach, Riccardo Stewart, for a raw and unfiltered conversation about the game, the business, and how players can achieve generational wealth.
Riccardo Stewart: Hey, I want to
welcome you guys back to another
episode of the AWM NFL podcast.
My name is Ricardo Stewart and I'm your
host and I'm joined with my friends,
Zach Miller, Sam Ocho and Jeff Locke.
You know, we, um, you know, we've got
an opportunity to talk about, I think,
some very interesting things because
so often we've talked about
human capital on this podcast.
We've talked about having the
right insurance, estate planning.
We've talked about so much
stuff that your money touches.
That we haven't like completely explicitly
talked about the thing that most advisors
want to talk about and that's investments.
And so the last podcast, we really talked
about that, but before we could even just
talk about investments at some point,
the phrase that gets
used a lot is the market.
What is the market doing?
What is the market saying the market?
And sometimes people are like, I
have no idea what the market is.
It's kind of like this nebulous thing.
Like in the football world, especially
at this time, we think about the
market being it's free agency.
I need to test the market, see
how much somebody will pay me to
maybe go to their team, as opposed
to staying from my same team.
So before we jump in, I'm going
to lock in on the professor.
So Jeff, would you give us a
brief history and maybe even a
definition on in the financial world?
What is the market?
Jeff Locke: First, like I'm going to
stick with your example of the free agent
market, like all the free agent market
in the NFL is, is to be frank, a place
where players are bought and sold, right?
Or people bid on players who's willing
to pay the highest price for this
free agent amongst the NFL teams.
All right.
So the market, the stock market,
financial market, the same
just for investments, right?
Who's willing to pay
the highest price for an
investment or who wants to sell
an investment,
right?
And the reason it's called the market
is because back in the
day before internet,
before we had access on our
computers to buy whatever we wanted,
you had to call someone in New
York or Chicago and be like,
Yo.
Um, I don't want this stock anymore.
Can you try to sell it?
Or actually, I wanna buy
this stock.
And then they physically had
to go to a location with other
people doing the same thing.
They would call brokers or traders and
say, Hey, my client wants to sell this
stock and you don't want to buy it.
And they'd haggle on price.
So they go to the market just
like you go to like a farmer's
market and actually have to trade.
The pieces of paper.
That's why it's called the market
and there's thousands of different
kinds of markets around the world,
but that's the one that we operate in.
Riccardo Stewart: Just a bonus
question for you to tag along, Jeff.
Is there any movie that comes to
mind as you visually explain that?
Jeff Locke: Zach might actually
know one better than me.
Um, the one called boiler room Zach.
Is that one of them?
Riccardo Stewart: That's
what came to my mind.
Zach Miller: trading places,
Riccardo Stewart: Oh, nice.
Nice.
Just seeing them running around.
I could see it.
Well, okay.
Thank you for that.
Jeff.
That's helpful.
Sam, I'm gonna go with you now.
We talk about the public
market and the private market.
I think most people.
Are used to hearing about the
public market because the first
thing that comes to mind is
Starbucks or Apple or Microsoft.
Can you explain the difference between
the public and the private market?
Sam Acho: There are three main
differences between the public
market and the private market.
Number one, it's access.
Number two, it's regulation.
And number three, it's
the investable market.
We'll start with access.
So when it comes to the public stock
market, the accesses to everyone
and anyone, anyone who wants to,
to, to join in the public market,
as Jeff said on our last episode,
you can take you about five minutes.
Log in, boom, get an account and boom,
you can be a part of the public market.
There's a difference between the public
market and the private market, the
private market, in order to get access
to the best investments, you have to
be what's called a qualified purchaser.
Meaning you have to have at least 5
million of investable acts assets.
So if you want to get the best of
the best when it comes to the private
market, there's levels, you know, at
least 5 million of investable assets.
That's number one access.
The second difference is regulation.
And so when it comes to regulation,
when it comes to the public
market, it's, everyone has the
same information at the same time.
So there's no kind of secrets.
Everybody knows everything.
All the information is out there.
You can go online, look it
out, look it up, figure it out.
Everyone has the exact same information
in a public market, but there's a
difference in the private market.
And we talked about that qualified
purchaser when they, when you're
qualified purchaser, essentially they're
saying, Hey, you know what you're doing.
And so what they're saying there
when it comes to, to regulation is.
Buyer beware, meaning you may
not have all the information.
There may be stuff that you know,
or you don't know, but we think
that you're, you're qualified
enough to get in these investments.
So buyer beware, it's not the
same information at the same time.
No, it's Hey, you're on
your own buyer beware.
But the last difference between the public
market and the private market, it's when
it comes to essentially like the amount
of, of, of investments that are available.
So for example, only 2 of all
investments exist in the public market.
You're like 2 that the public all
these, you know, stock market.
Yes.
2%.
Now, mind you, that's 55, 000 companies
in 48 different countries, but it's
almost like that iceberg example.
You're all seeing that those pictures
of the iceberg, you see the tip of it,
but there's so much more below 98 of all
investments exist in the private market.
And so just to recap, the
differences between the public
market and the private market.
Number one, it's access.
Number two, it's regulation.
Number three, it's that amount of
investments, the amount of investments
that you can invest in there.
And so those are the differences between
the public and the private market.
Riccardo Stewart: that
is absolutely helpful.
And I think that just that
number one, just the image of the
iceberg that only 2 are public,
which is what most people know.
And there's 98 of what you don't know.
And you said it there's levels to this.
So Zach, if I wanted to
level up, what would I do?
And what kind of wisdom would I, would
you give me in terms of understanding
the private and the public?
Cause let's just be honest.
We all know on this.
When our clients call to talk about
investments and they want to talk about
the market, there's one particular
person that they call that they know
they're going to get a depth because
with Zach Miller, 2 percent is in the
world that we live and 98 percent is in
the world that's deep into investments.
And so Zach.
Why don't you give us some wisdom there
between the private and the public?
Zach Miller: Well, number one, I think
everyone should know that the public stock
market has been one of the most incredible
wealth creation tools in its history.
And the data is undeniable there.
The U.
S.
stock market has averaged over
almost a hundred years, over
10 percent returns annualized.
And so that's, I mean, that's a
massive amount of wealth that has been
created by investors that have had the
opportunity to invest for long periods
of time in the public stock market.
So the public stock market's great.
It's Regulated, anyone can get access.
Like Sam mentioned, you can, you can get
in there and become an investor early.
People with 401ks get access
to, to those growth assets.
Early in their careers when they have
401k matches, all those things are great.
The problem is, is those, I mean,
not everyone gets those returns.
You end up with some people that, you
know, they bail on their strategy.
They, they sell when the market's
down and end up hurt by it.
So not everything is just, you can't just.
blindly trust the public markets,
but they are still a very good tool.
The private markets, like Sam
mentioned, that kind of access matters.
If you don't have access to the best
investments within the private markets,
you actually should just avoid the private
markets altogether and just stay in the
public markets because the private markets
is where people lose the most amount of
money because they don't understand it.
They're considered
sophisticated investors, right?
You have that, those thresholds of
money that you're worth, all of a sudden
you're supposed to be sophisticated,
but if you, if you don't make the right
choices in those, in those investments,
you can actually have your money tied
up for long periods of time, which is
just called illiquidity and then not get
returns as good as the public market.
So it's very, it's very much buyer beware.
On the private market side, if you do
have the right access, if you do have
the right, um, exposure to the best
investments, the best companies in private
markets, those returns can be twice as
up to twice as much as the public market.
So no risk it, no biscuit.
If you want to really build that
well fast there, you, it does
make sense to do private markets.
I wish I did venture capital earlier than
I, than when I started all those things
do add up to the power of compounding.
And then I'll just finish off with.
Investing is actually
not gambling gambling.
There is a, there's an
expectation that you lose money.
Investing is the opposite investing.
You are Vegas.
You are the house.
You have an expectation to make money.
The capital markets in the, across
the world, they work, uh, that
investors expect to make money above
what they put in their investment.
And if you do that for long periods
of time, You have a tremendous amount
of wealth creation, but you have
to be a long term investor because
anything can happen in the short run.
Riccardo Stewart: Love
that phenomenal answer.
So in coaching, sometimes you
go, this guy played in the NFL.
He paid 10 years.
So he must be a good coach.
And we all know just because
you did it doesn't mean you
actually know how to coach it.
And Zach, it seems like
what I heard you say is.
When it comes to this qualified
purchaser, like they expect for you to
be sophisticated, but the reality is
just because you have the money doesn't
mean you really know what's going on.
So that's important.
And there was something else you
said that I'm going to actually see
if Jeff can even like expand on it.
You talked about how one of the best
wealth creation have been investing
in the public market and that over a
hundred years that it's been able to
give 10 percent annualized return.
Jeff makes sense of that.
Sure
Jeff Locke: Yeah, 10 percent
doesn't seem like a lot.
First, before I start, like,
just two huge shoutouts.
Like, Sam and Zach went
full professor mode today.
Like, I didn't say anything.
These guys were just dropping
all the stuff.
I was just kind of sitting back.
It was great.
Um, also a little bit hungry after
the biscuit reference from Zach.
So, I'd heard it that way before.
Um, but 10 return, like,
doesn't seem like that much.
Right?
It's like, oh, cool, 10%.
So, if I invest 100, it
becomes 110 the next year.
But the key is when you invest that 110
again, it doesn't just become 220, it
becomes like 225 or a little bit more.
It's the power of compounding, right?
So you keep doing it, you keep doing
it, you keep doing it over time.
And when you look at 10 over like
20, 30, 40 year time periods, you
stay invested and keep doing it.
The numbers are absolutely massive, right?
The people that fail.
are the ones that are
like, 10 ain't enough.
Like I'm going to try and
like get a little more risky.
Let's go like shoot for 20 25 I'm
going to really bet on this one company
because I think it's going to hit.
And then you, you wipe yourself
out and you start back from zero.
Right.
So early in your investing
career, you're going to see
these small little gains, right?
Like, Oh, cool.
I got 10%.
Oh, cool.
I got 10%, but 20 years from now,
30 years from now, you're like,
Oh, those 10%'s really added up.
Sam Acho: And if I could just quickly
just add one thing as I'm listening to
the professor, uh, teach, it's almost
like working out like as we train and
the athletes will get this early on.
Whether you're working on
drills, trying to gain weight
and we're trying to gain muscle.
Maybe you're working on your speed drills.
Maybe you're working on running routes.
Maybe your pastor should work on
your pastor's drills early on.
It doesn't seem like it's working,
but day after day, week after week,
month after month, year after year,
decade after decade, all of a sudden.
It's, it's almost unimaginable how far
you've come and that's the power that Jeff
just said of investing and the power that
Zach alluded to earlier of compounding.
Like if you just stay invested and
stay committed to the plan, all of a
sudden you will see those benefits.
You may not see them early on, but after
days, weeks, months, years, and as a lot
of guys listening, you're young decades,
all of a sudden that, that the gains
and the growth will blow your mind.
Riccardo Stewart: Cause I've
enjoyed this conversation.
We're definitely gonna have to talk
a little bit more about this and
tease it out on different levels.
But if you have any questions of something
you've heard about the market, the public,
the private, what does that actually mean?
How do I get invested?
How do I get in and stay in?
Please feel free to shoot us a text.
You can text us at 602 989 5022.