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Welcome to How to Retire on Time, a show that answers your retirement questions. Say goodbye to the oversimplified advice you've heard hundreds of times. This show is about getting into the nitty-gritty so you can make better decisions as you prepare for retirement. Text your questions to 913-363-1234 and we'll feature them on the show. Don't forget to grab a copy of the book, How to Retire on Time, or check out our resources by going to www.retireontime.com.
Welcome to How to Retire On Time, a show that answers your questions about all things retirement, including income, taxes, Social Security, health care, and more. This show is an extension of the book, How to Retire On Time, which you can grab today by going to www.howtoretireontime.com, or if you wanna buy a physical copy, go to Amazon and search for the book, How to Retire On Time, and you can buy a copy there. My name is Mike Decker. I'm the author of the book, How to Retire On Time, but I'm also a licensed financial adviser, insurance agent, and tax professional, which means when it comes to financial topics, we can cover it all. Now that said, please remember this is just a show.
Mike:It's not financial advice. But if you want personalized financial advice, you can request your wealth analysis from my team today by going to www.yourwealthanalysis.com. With me in the studio today is mister David Franson. David, thanks for being here today.
David:Yep. Glad to be here.
Mike:Now David's gonna be reading your questions, and I'm gonna do my best to answer them. You can always submit your questions by texting them either to (913) 363-1234. Again, that's (913) 363-1234, or you can email them to hey, Mike at how to retire on time dot com. Let's begin.
David:Hey Mike, do you have any favorite stocks that you can recommend?
Mike:I can. I won't. This show doesn't give financial advice. So if I were to recommend
David:I tried to get you there.
Mike:Yeah. As a blanket statement, I would get in trouble. Yeah. So but I do wanna answer the question. So let me take it in the best way I can.
Mike:Alright. Okay? Generally speaking, there are certain sectors that have more growth potential than others. Okay? Think about scalability.
Mike:How much easier is it to scale a technology company than it is to scale a farming company or a farming base? You're limited by land. You've got crops. You've got seasonality. But a tech company, you just write more code, and it the code builds on itself and so on.
Mike:So tech, a general rule for long term, could be a good growth industry. Not to get political Mhmm. But if you want a fun comparison, look at a couple of defense company stocks.
David:Okay.
Mike:Go back to February and look at the S and P 500 and growth today, and then a bunch of like, I won't say their names because I don't wanna recommend them, but defense or anything based around war Mhmm. And see how they've grown. So when you look at where the money goes, tech and defense can be good, lucrative businesses, ethics, society. I don't want to get political here. I'm just saying where's money where could money grow?
Mike:Now that said, I do hesitate even going that far. Because if you look at the tech stocks from 02/2001 and o two, guess who lost the most money? It's tech. Oh, right. The Nasdaq was down, like, 70 something percent from February to the lowest point.
Mike:Can you stomach that kind of risk? I mean, really, if you lost 70% of your life savings
David:Yeah. It was a
Mike:It came back. It's done well, but can you handle that?
David:Right.
Mike:So stock picking has risk. All of your money in equities has risk. Please be aware of that risk. Here is a way that you can go about looking for stocks. So you've got technical analysis.
Mike:You've got absolute return theory, all these different things. If you wanna dive into one of the rabbit holes here, we can, but here is a way that you can look at it. So there's the Piotrowski's f score.
David:Okay.
Mike:It's a really cool, fundamental, simple way that you can look at the company. Basically, looks at nine fundamental analysis or financial indicators. This was written by a Stanford professor in accounting, CPA, who basically said, I wanna know if the company's healthy. And if they score a seven, eight, or nine, they're probably a pretty stable, healthy company.
David:Okay.
Mike:K? So when I say healthier, like well, let me back up. How it works is there's nine questions. Does the company x fulfill a certain fundamental balance sheet kind of requirements? So does the company have a certain amount of debt or extreme amount of debt or things like that?
Mike:Either they do or they don't. And based on the yes or no answer, they will get a point.
David:Okay.
Mike:You can get up to nine points. Nine points would be the most financially stable. Other companies that maybe have a lot of debt, they're leveraged, things like, does the company have more or less debt than it did a year ago? You get a point for that. So you could Google this, by the way.
Mike:If you don't know how to spell Piotrowski, that's okay. Just look up f dash score, f score, f as in foxtrot. Okay. F score, and you can start looking about this. But it's a way to say, okay.
Mike:Well, what companies are potentially more stable? Because a company that has more financial stability has probably a better chance of going through market volatility or uncertain times. K? I'm not as concerned about certain companies like I don't wanna say a specific company because I don't wanna give investment advice here.
David:I was just saying.
Mike:This is why we have the one on one conversation. But if you look at a stock and you say, okay, this company's scoring an eight or a nine. They're financially sound. Mhmm. They're probably going to get through the financially difficult times of a market crash, or when government policy puts a strain on a business, or whatever it might be.
Mike:They're probably gonna be a little bit better off than some company that borrowed a bunch of money, and then they're like, oh shoot, things got more difficult. How are we gonna take this down? So that that's the idea is Okay. If you want a good place to start, look for financially stable companies, look for long term positions that you understand. That might be a good place to start.
Mike:Does that suffice?
David:Yeah. Think so. Yeah. Short of naming any financially stable companies. We don't wanna do that.
Mike:Yeah. I can't bait you into it. Well, yeah. Knock on wood. The second I name it, then they're gonna get a lower score.
Mike:Something's gonna happen. Right. Right. So and and things change. So there was one company, it was Super Micro Company, I think was their name.
Mike:They entered the S and P, they looked great, they were up and comer. Right? And then Ernst and Young couldn't validate their earnings, couldn't validate their books, and then things changed. So if if you can't get a major accounting company to confirm your books, that's a problem. Uh-huh.
Mike:And this is why, not to toot my own horn, but like, why do you hire a financial professionals to do the research, and to stay on top of these things?
David:Sure.
Mike:I mean, reality is you hire someone if you can get a couple of percent better potential return than you would on your own, net of fees. So if you like doing this sort of thing, then great, maybe you can do this on your own. If you don't wanna do this thing day in and day out, maintain things, pick the right stocks, maybe sell some of those stocks because things have changed. If you don't wanna be doing it day in and day out, that's okay. That's why you find a good financial adviser like one of ours, or if you wanna work with someone else too, find the right person for you.
Mike:But the idea here is if you're stock picking, make sure you understand it, that it's more financially stable, if that makes sense. You know, don't take excessive unnecessary risks.
David:Yeah. It's worth it if you can find someone who has the time and knowledge to devote all of the
Mike:It's worth it if you don't wanna devote the time.
David:Yes. Yes. Yes. Mean, how much time do we devote at Kedrick on doing all this research?
Mike:A lot.
David:Yeah.
Mike:The research starts at 02:30 in the morning. Our algorithms run it, send me it when I wake up. That's one of the first emails I look at.
David:Oh, interesting.
Mike:And then that structure is part of the day of the additional research needs to be done, and so on. That's all the time we've got for the show today. If you enjoyed the show, consider subscribing to it wherever you get your podcast. Just search for how to retire on time. Discover if your portfolio is built to weather flat market cycles if you're missing tax minimization opportunities that you may not even know exist.
Mike:Explore strategies that may be able to help you lower your overall risk while potentially increasing your overall growth and lifestyle flexibility. This is not your ordinary financial analysis. Learn more about Your Wealth Analysis and what it could do for you regardless of your age, asset, or target retirement date. Go to www.yourwealthanalysis.com today to learn more and get started.