WEBVTT NOTE This file was generated by Descript 00:00:19.960 --> 00:00:21.520 Riccardo Stewart: Hey, I want to welcome you guys back to another 00:00:21.520 --> 00:00:24.430 episode of the AWM NFL podcast. 00:00:24.460 --> 00:00:27.920 My name is Ricardo Stewart and I'm your host and I'm joined with my friends, 00:00:27.920 --> 00:00:30.980 Zach Miller, Sam Ocho and Jeff Locke. 00:00:31.230 --> 00:00:35.870 You know, we, um, you know, we've got an opportunity to talk about, I think, 00:00:35.880 --> 00:00:37.770 some very interesting things because 00:00:38.070 --> 00:00:41.120 so often we've talked about human capital on this podcast. 00:00:41.130 --> 00:00:44.140 We've talked about having the right insurance, estate planning. 00:00:44.150 --> 00:00:46.380 We've talked about so much stuff that your money touches. 00:00:47.070 --> 00:00:52.200 That we haven't like completely explicitly talked about the thing that most advisors 00:00:52.200 --> 00:00:53.990 want to talk about and that's investments. 00:00:53.990 --> 00:00:57.380 And so the last podcast, we really talked about that, but before we could even just 00:00:57.380 --> 00:00:58.930 talk about investments at some point, 00:00:59.580 --> 00:01:02.070 the phrase that gets used a lot is the market. 00:01:02.295 --> 00:01:03.225 What is the market doing? 00:01:03.235 --> 00:01:04.885 What is the market saying the market? 00:01:05.215 --> 00:01:08.435 And sometimes people are like, I have no idea what the market is. 00:01:08.445 --> 00:01:10.005 It's kind of like this nebulous thing. 00:01:10.005 --> 00:01:13.405 Like in the football world, especially at this time, we think about the 00:01:13.405 --> 00:01:15.075 market being it's free agency. 00:01:15.245 --> 00:01:19.055 I need to test the market, see how much somebody will pay me to 00:01:19.085 --> 00:01:21.595 maybe go to their team, as opposed to staying from my same team. 00:01:21.595 --> 00:01:25.495 So before we jump in, I'm going to lock in on the professor. 00:01:26.085 --> 00:01:29.285 So Jeff, would you give us a brief history and maybe even a 00:01:29.285 --> 00:01:31.935 definition on in the financial world? 00:01:32.105 --> 00:01:34.375 What is the market? 00:01:35.600 --> 00:01:38.310 Jeff Locke: First, like I'm going to stick with your example of the free agent 00:01:38.320 --> 00:01:42.780 market, like all the free agent market in the NFL is, is to be frank, a place 00:01:42.780 --> 00:01:45.610 where players are bought and sold, right? 00:01:45.840 --> 00:01:51.000 Or people bid on players who's willing to pay the highest price for this 00:01:51.000 --> 00:01:52.870 free agent amongst the NFL teams. 00:01:53.280 --> 00:01:53.500 All right. 00:01:53.500 --> 00:01:58.220 So the market, the stock market, financial market, the same 00:01:58.230 --> 00:01:59.670 just for investments, right? 00:01:59.670 --> 00:02:00.590 Who's willing to pay 00:02:01.000 --> 00:02:03.230 the highest price for an investment or who wants to sell 00:02:03.630 --> 00:02:04.230 an investment, 00:02:04.560 --> 00:02:04.770 right? 00:02:04.770 --> 00:02:06.520 And the reason it's called the market 00:02:06.900 --> 00:02:08.770 is because back in the day before internet, 00:02:09.340 --> 00:02:12.030 before we had access on our computers to buy whatever we wanted, 00:02:12.460 --> 00:02:15.470 you had to call someone in New York or Chicago and be like, 00:02:15.850 --> 00:02:16.330 Yo. 00:02:16.390 --> 00:02:18.160 Um, I don't want this stock anymore. 00:02:18.160 --> 00:02:18.910 Can you try to sell it? 00:02:18.910 --> 00:02:20.290 Or actually, I wanna buy 00:02:20.620 --> 00:02:21.190 this stock. 00:02:21.220 --> 00:02:23.560 And then they physically had to go to a location with other 00:02:23.560 --> 00:02:24.760 people doing the same thing. 00:02:24.790 --> 00:02:28.780 They would call brokers or traders and say, Hey, my client wants to sell this 00:02:28.780 --> 00:02:30.040 stock and you don't want to buy it. 00:02:30.040 --> 00:02:31.210 And they'd haggle on price. 00:02:31.300 --> 00:02:33.520 So they go to the market just like you go to like a farmer's 00:02:33.520 --> 00:02:35.260 market and actually have to trade. 00:02:35.730 --> 00:02:36.760 The pieces of paper. 00:02:37.170 --> 00:02:40.280 That's why it's called the market and there's thousands of different 00:02:40.310 --> 00:02:43.630 kinds of markets around the world, but that's the one that we operate in. 00:02:44.305 --> 00:02:46.515 Riccardo Stewart: Just a bonus question for you to tag along, Jeff. 00:02:46.775 --> 00:02:50.255 Is there any movie that comes to mind as you visually explain that? 00:02:52.120 --> 00:02:54.190 Jeff Locke: Zach might actually know one better than me. 00:02:54.260 --> 00:02:57.020 Um, the one called boiler room Zach. 00:02:57.030 --> 00:02:57.680 Is that one of them? 00:02:57.995 --> 00:02:59.055 Riccardo Stewart: That's what came to my mind. 00:02:59.110 --> 00:02:59.890 Zach Miller: trading places, 00:03:01.095 --> 00:03:01.905 Riccardo Stewart: Oh, nice. 00:03:01.915 --> 00:03:02.505 Nice. 00:03:03.375 --> 00:03:04.685 Just seeing them running around. 00:03:04.705 --> 00:03:05.685 I could see it. 00:03:05.925 --> 00:03:06.935 Well, okay. 00:03:06.995 --> 00:03:07.615 Thank you for that. 00:03:07.615 --> 00:03:07.865 Jeff. 00:03:07.865 --> 00:03:08.515 That's helpful. 00:03:09.505 --> 00:03:10.855 Sam, I'm gonna go with you now. 00:03:11.875 --> 00:03:14.315 We talk about the public market and the private market. 00:03:14.765 --> 00:03:16.215 I think most people. 00:03:16.735 --> 00:03:19.605 Are used to hearing about the public market because the first 00:03:19.605 --> 00:03:22.305 thing that comes to mind is Starbucks or Apple or Microsoft. 00:03:22.755 --> 00:03:26.135 Can you explain the difference between the public and the private market? 00:03:27.640 --> 00:03:29.930 Sam Acho: There are three main differences between the public 00:03:29.930 --> 00:03:31.130 market and the private market. 00:03:31.750 --> 00:03:33.130 Number one, it's access. 00:03:33.605 --> 00:03:35.165 Number two, it's regulation. 00:03:35.435 --> 00:03:37.405 And number three, it's the investable market. 00:03:37.405 --> 00:03:38.395 We'll start with access. 00:03:38.395 --> 00:03:42.865 So when it comes to the public stock market, the accesses to everyone 00:03:42.905 --> 00:03:46.795 and anyone, anyone who wants to, to, to join in the public market, 00:03:47.275 --> 00:03:50.325 as Jeff said on our last episode, you can take you about five minutes. 00:03:50.630 --> 00:03:54.070 Log in, boom, get an account and boom, you can be a part of the public market. 00:03:54.700 --> 00:03:57.000 There's a difference between the public market and the private market, the 00:03:57.010 --> 00:04:00.940 private market, in order to get access to the best investments, you have to 00:04:00.950 --> 00:04:03.030 be what's called a qualified purchaser. 00:04:03.050 --> 00:04:07.520 Meaning you have to have at least 5 million of investable acts assets. 00:04:07.930 --> 00:04:10.410 So if you want to get the best of the best when it comes to the private 00:04:10.410 --> 00:04:14.390 market, there's levels, you know, at least 5 million of investable assets. 00:04:15.010 --> 00:04:15.990 That's number one access. 00:04:16.425 --> 00:04:18.125 The second difference is regulation. 00:04:18.465 --> 00:04:22.015 And so when it comes to regulation, when it comes to the public 00:04:22.015 --> 00:04:26.025 market, it's, everyone has the same information at the same time. 00:04:26.585 --> 00:04:28.425 So there's no kind of secrets. 00:04:28.425 --> 00:04:29.385 Everybody knows everything. 00:04:29.395 --> 00:04:30.485 All the information is out there. 00:04:30.485 --> 00:04:32.565 You can go online, look it out, look it up, figure it out. 00:04:33.035 --> 00:04:37.315 Everyone has the exact same information in a public market, but there's a 00:04:37.315 --> 00:04:38.725 difference in the private market. 00:04:39.385 --> 00:04:41.885 And we talked about that qualified purchaser when they, when you're 00:04:41.915 --> 00:04:44.335 qualified purchaser, essentially they're saying, Hey, you know what you're doing. 00:04:44.585 --> 00:04:47.385 And so what they're saying there when it comes to, to regulation is. 00:04:47.770 --> 00:04:51.830 Buyer beware, meaning you may not have all the information. 00:04:51.840 --> 00:04:54.470 There may be stuff that you know, or you don't know, but we think 00:04:54.470 --> 00:04:57.450 that you're, you're qualified enough to get in these investments. 00:04:57.450 --> 00:05:00.510 So buyer beware, it's not the same information at the same time. 00:05:00.510 --> 00:05:04.070 No, it's Hey, you're on your own buyer beware. 00:05:04.680 --> 00:05:08.690 But the last difference between the public market and the private market, it's when 00:05:08.690 --> 00:05:12.430 it comes to essentially like the amount of, of, of investments that are available. 00:05:12.430 --> 00:05:17.400 So for example, only 2 of all investments exist in the public market. 00:05:17.900 --> 00:05:20.360 You're like 2 that the public all these, you know, stock market. 00:05:20.360 --> 00:05:20.680 Yes. 00:05:20.940 --> 00:05:21.090 2%. 00:05:21.860 --> 00:05:26.440 Now, mind you, that's 55, 000 companies in 48 different countries, but it's 00:05:26.440 --> 00:05:27.810 almost like that iceberg example. 00:05:27.810 --> 00:05:30.350 You're all seeing that those pictures of the iceberg, you see the tip of it, 00:05:30.680 --> 00:05:38.230 but there's so much more below 98 of all investments exist in the private market. 00:05:38.840 --> 00:05:41.490 And so just to recap, the differences between the public 00:05:41.490 --> 00:05:42.580 market and the private market. 00:05:42.955 --> 00:05:44.645 Number one, it's access. 00:05:45.415 --> 00:05:46.755 Number two, it's regulation. 00:05:47.285 --> 00:05:50.445 Number three, it's that amount of investments, the amount of investments 00:05:50.445 --> 00:05:51.445 that you can invest in there. 00:05:51.445 --> 00:05:55.045 And so those are the differences between the public and the private market. 00:05:55.935 --> 00:05:57.475 Riccardo Stewart: that is absolutely helpful. 00:05:57.475 --> 00:06:00.185 And I think that just that number one, just the image of the 00:06:00.185 --> 00:06:04.055 iceberg that only 2 are public, which is what most people know. 00:06:04.495 --> 00:06:06.865 And there's 98 of what you don't know. 00:06:07.155 --> 00:06:08.845 And you said it there's levels to this. 00:06:09.135 --> 00:06:14.095 So Zach, if I wanted to level up, what would I do? 00:06:14.185 --> 00:06:17.495 And what kind of wisdom would I, would you give me in terms of understanding 00:06:17.495 --> 00:06:18.675 the private and the public? 00:06:18.695 --> 00:06:19.545 Cause let's just be honest. 00:06:19.545 --> 00:06:20.095 We all know on this. 00:06:20.545 --> 00:06:25.555 When our clients call to talk about investments and they want to talk about 00:06:25.555 --> 00:06:29.035 the market, there's one particular person that they call that they know 00:06:29.035 --> 00:06:33.165 they're going to get a depth because with Zach Miller, 2 percent is in the 00:06:33.165 --> 00:06:37.905 world that we live and 98 percent is in the world that's deep into investments. 00:06:37.905 --> 00:06:38.910 And so Zach. 00:06:38.960 --> 00:06:41.640 Why don't you give us some wisdom there between the private and the public? 00:06:41.980 --> 00:06:45.470 Zach Miller: Well, number one, I think everyone should know that the public stock 00:06:45.470 --> 00:06:50.980 market has been one of the most incredible wealth creation tools in its history. 00:06:51.010 --> 00:06:52.750 And the data is undeniable there. 00:06:53.010 --> 00:06:53.340 The U. 00:06:53.340 --> 00:06:53.480 S. 00:06:53.480 --> 00:06:56.980 stock market has averaged over almost a hundred years, over 00:06:56.980 --> 00:06:59.060 10 percent returns annualized. 00:06:59.410 --> 00:07:01.920 And so that's, I mean, that's a massive amount of wealth that has been 00:07:01.920 --> 00:07:06.060 created by investors that have had the opportunity to invest for long periods 00:07:06.060 --> 00:07:08.050 of time in the public stock market. 00:07:08.720 --> 00:07:10.020 So the public stock market's great. 00:07:10.020 --> 00:07:12.345 It's Regulated, anyone can get access. 00:07:12.345 --> 00:07:16.685 Like Sam mentioned, you can, you can get in there and become an investor early. 00:07:16.915 --> 00:07:20.865 People with 401ks get access to, to those growth assets. 00:07:21.280 --> 00:07:25.450 Early in their careers when they have 401k matches, all those things are great. 00:07:26.520 --> 00:07:30.020 The problem is, is those, I mean, not everyone gets those returns. 00:07:30.020 --> 00:07:33.510 You end up with some people that, you know, they bail on their strategy. 00:07:33.510 --> 00:07:37.170 They, they sell when the market's down and end up hurt by it. 00:07:37.530 --> 00:07:39.040 So not everything is just, you can't just. 00:07:39.770 --> 00:07:44.530 blindly trust the public markets, but they are still a very good tool. 00:07:44.530 --> 00:07:49.380 The private markets, like Sam mentioned, that kind of access matters. 00:07:49.660 --> 00:07:54.470 If you don't have access to the best investments within the private markets, 00:07:54.740 --> 00:07:57.580 you actually should just avoid the private markets altogether and just stay in the 00:07:57.580 --> 00:08:01.430 public markets because the private markets is where people lose the most amount of 00:08:01.430 --> 00:08:03.520 money because they don't understand it. 00:08:03.530 --> 00:08:05.720 They're considered sophisticated investors, right? 00:08:06.220 --> 00:08:09.910 You have that, those thresholds of money that you're worth, all of a sudden 00:08:09.910 --> 00:08:13.270 you're supposed to be sophisticated, but if you, if you don't make the right 00:08:13.290 --> 00:08:17.370 choices in those, in those investments, you can actually have your money tied 00:08:17.370 --> 00:08:21.850 up for long periods of time, which is just called illiquidity and then not get 00:08:21.850 --> 00:08:23.750 returns as good as the public market. 00:08:24.130 --> 00:08:26.240 So it's very, it's very much buyer beware. 00:08:26.595 --> 00:08:30.815 On the private market side, if you do have the right access, if you do have 00:08:30.875 --> 00:08:35.215 the right, um, exposure to the best investments, the best companies in private 00:08:35.215 --> 00:08:40.545 markets, those returns can be twice as up to twice as much as the public market. 00:08:40.555 --> 00:08:42.685 So no risk it, no biscuit. 00:08:42.895 --> 00:08:46.655 If you want to really build that well fast there, you, it does 00:08:46.655 --> 00:08:47.845 make sense to do private markets. 00:08:47.845 --> 00:08:51.655 I wish I did venture capital earlier than I, than when I started all those things 00:08:51.655 --> 00:08:53.605 do add up to the power of compounding. 00:08:54.025 --> 00:08:55.485 And then I'll just finish off with. 00:08:56.190 --> 00:08:58.840 Investing is actually not gambling gambling. 00:08:58.840 --> 00:09:01.900 There is a, there's an expectation that you lose money. 00:09:02.190 --> 00:09:04.080 Investing is the opposite investing. 00:09:04.090 --> 00:09:05.130 You are Vegas. 00:09:05.130 --> 00:09:06.150 You are the house. 00:09:06.400 --> 00:09:08.890 You have an expectation to make money. 00:09:09.230 --> 00:09:13.680 The capital markets in the, across the world, they work, uh, that 00:09:13.760 --> 00:09:17.760 investors expect to make money above what they put in their investment. 00:09:18.030 --> 00:09:21.660 And if you do that for long periods of time, You have a tremendous amount 00:09:21.660 --> 00:09:24.780 of wealth creation, but you have to be a long term investor because 00:09:24.780 --> 00:09:26.130 anything can happen in the short run. 00:09:26.900 --> 00:09:28.660 Riccardo Stewart: Love that phenomenal answer. 00:09:28.950 --> 00:09:32.620 So in coaching, sometimes you go, this guy played in the NFL. 00:09:32.620 --> 00:09:33.400 He paid 10 years. 00:09:33.410 --> 00:09:34.570 So he must be a good coach. 00:09:34.800 --> 00:09:37.120 And we all know just because you did it doesn't mean you 00:09:37.120 --> 00:09:38.220 actually know how to coach it. 00:09:38.520 --> 00:09:40.240 And Zach, it seems like what I heard you say is. 00:09:40.575 --> 00:09:43.095 When it comes to this qualified purchaser, like they expect for you to 00:09:43.095 --> 00:09:46.825 be sophisticated, but the reality is just because you have the money doesn't 00:09:46.825 --> 00:09:48.215 mean you really know what's going on. 00:09:48.225 --> 00:09:49.035 So that's important. 00:09:49.455 --> 00:09:51.255 And there was something else you said that I'm going to actually see 00:09:51.255 --> 00:09:53.495 if Jeff can even like expand on it. 00:09:53.845 --> 00:09:57.245 You talked about how one of the best wealth creation have been investing 00:09:57.245 --> 00:10:00.615 in the public market and that over a hundred years that it's been able to 00:10:00.615 --> 00:10:02.895 give 10 percent annualized return. 00:10:03.155 --> 00:10:04.425 Jeff makes sense of that. 00:10:04.575 --> 00:10:04.885 Sure 00:10:06.665 --> 00:10:08.695 Jeff Locke: Yeah, 10 percent doesn't seem like a lot. 00:10:08.705 --> 00:10:10.595 First, before I start, like, just two huge shoutouts. 00:10:10.665 --> 00:10:12.675 Like, Sam and Zach went full professor mode today. 00:10:12.725 --> 00:10:14.085 Like, I didn't say anything. 00:10:14.155 --> 00:10:15.355 These guys were just dropping 00:10:15.645 --> 00:10:16.465 all the stuff. 00:10:16.565 --> 00:10:17.735 I was just kind of sitting back. 00:10:17.795 --> 00:10:18.305 It was great. 00:10:18.505 --> 00:10:21.345 Um, also a little bit hungry after the biscuit reference from Zach. 00:10:21.445 --> 00:10:23.235 So, I'd heard it that way before. 00:10:23.805 --> 00:10:27.915 Um, but 10 return, like, doesn't seem like that much. 00:10:28.105 --> 00:10:28.325 Right? 00:10:28.325 --> 00:10:29.335 It's like, oh, cool, 10%. 00:10:29.935 --> 00:10:34.475 So, if I invest 100, it becomes 110 the next year. 00:10:34.490 --> 00:10:41.570 But the key is when you invest that 110 again, it doesn't just become 220, it 00:10:41.570 --> 00:10:43.850 becomes like 225 or a little bit more. 00:10:43.940 --> 00:10:45.710 It's the power of compounding, right? 00:10:45.710 --> 00:10:50.770 So you keep doing it, you keep doing it, you keep doing it over time. 00:10:51.220 --> 00:10:55.360 And when you look at 10 over like 20, 30, 40 year time periods, you 00:10:55.360 --> 00:10:56.740 stay invested and keep doing it. 00:10:56.990 --> 00:10:59.980 The numbers are absolutely massive, right? 00:10:59.980 --> 00:11:01.090 The people that fail. 00:11:01.520 --> 00:11:04.325 are the ones that are like, 10 ain't enough. 00:11:04.355 --> 00:11:06.365 Like I'm going to try and like get a little more risky. 00:11:06.405 --> 00:11:09.755 Let's go like shoot for 20 25 I'm going to really bet on this one company 00:11:09.765 --> 00:11:10.675 because I think it's going to hit. 00:11:11.095 --> 00:11:13.875 And then you, you wipe yourself out and you start back from zero. 00:11:14.345 --> 00:11:14.775 Right. 00:11:15.095 --> 00:11:18.205 So early in your investing career, you're going to see 00:11:18.205 --> 00:11:20.225 these small little gains, right? 00:11:20.245 --> 00:11:20.865 Like, Oh, cool. 00:11:20.865 --> 00:11:21.586 I got 10%. 00:11:21.586 --> 00:11:22.257 Oh, cool. 00:11:22.257 --> 00:11:25.925 I got 10%, but 20 years from now, 30 years from now, you're like, 00:11:25.975 --> 00:11:28.445 Oh, those 10%'s really added up. 00:11:29.275 --> 00:11:32.075 Sam Acho: And if I could just quickly just add one thing as I'm listening to 00:11:32.075 --> 00:11:36.925 the professor, uh, teach, it's almost like working out like as we train and 00:11:36.925 --> 00:11:38.615 the athletes will get this early on. 00:11:38.635 --> 00:11:40.975 Whether you're working on drills, trying to gain weight 00:11:40.975 --> 00:11:41.785 and we're trying to gain muscle. 00:11:41.785 --> 00:11:43.255 Maybe you're working on your speed drills. 00:11:43.265 --> 00:11:44.775 Maybe you're working on running routes. 00:11:44.785 --> 00:11:47.605 Maybe your pastor should work on your pastor's drills early on. 00:11:47.755 --> 00:11:51.827 It doesn't seem like it's working, but day after day, week after week, 00:11:51.827 --> 00:11:56.295 month after month, year after year, decade after decade, all of a sudden. 00:11:57.795 --> 00:12:03.175 It's, it's almost unimaginable how far you've come and that's the power that Jeff 00:12:03.175 --> 00:12:07.225 just said of investing and the power that Zach alluded to earlier of compounding. 00:12:07.615 --> 00:12:11.935 Like if you just stay invested and stay committed to the plan, all of a 00:12:11.935 --> 00:12:13.515 sudden you will see those benefits. 00:12:13.515 --> 00:12:18.425 You may not see them early on, but after days, weeks, months, years, and as a lot 00:12:18.425 --> 00:12:23.435 of guys listening, you're young decades, all of a sudden that, that the gains 00:12:23.435 --> 00:12:24.665 and the growth will blow your mind. 00:12:25.780 --> 00:12:27.130 Riccardo Stewart: Cause I've enjoyed this conversation. 00:12:27.130 --> 00:12:29.620 We're definitely gonna have to talk a little bit more about this and 00:12:29.830 --> 00:12:30.980 tease it out on different levels. 00:12:31.020 --> 00:12:35.310 But if you have any questions of something you've heard about the market, the public, 00:12:35.330 --> 00:12:37.380 the private, what does that actually mean? 00:12:37.390 --> 00:12:38.620 How do I get invested? 00:12:38.620 --> 00:12:40.030 How do I get in and stay in? 00:12:40.550 --> 00:12:42.390 Please feel free to shoot us a text. 00:12:42.970 --> 00:12:46.840 You can text us at 602 989 5022.