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A bite sized discussion on timely financial news and investment topics, to help you maximize your net worth and wealth for the next generation with Justin Dyer and Mena Hanna of AWM Capital.
Justin Dyer: Hey everyone.
Welcome back to another
episode of a WM Insights.
I'm your host, Justin,
alongside Mina here.
Uh, we are on two separate coasts, so
recording virtually trying this out again.
Um, and.
Here today to talk about
hype versus habits.
Why longer term investing still
is the dominant, uh, way to go.
Uh, really this was, this, this topic is
spurred on by an article on Investopedia
I came across recently around social media
influencers and, uh, really unfortunately.
The kind of the downsides to them.
Now, that's a very broad statement.
I realize that there are good, uh,
sources of information out there,
whether they're social media influencers
or otherwise, but, uh, it's just
another great cautionary tale around
media, uh, certainly social media
platforms, hype cycles, et cetera.
And we're gonna unpack our take on
that and, and why, again, long-term
investing, kind of the tried and true
boring stuff still still dominates.
Um.
So with, with that, right.
The, the idea here is, is the, the concept
which we talked about, uh, quite a bit,
and I, I already even alluded to around
media and, uh, algorithms and this whole
idea of grabbing attention and, and
how bad that is for, for our, probably
our mental health, quite honestly.
But talking today and sticking in our
lane to our, our financial health.
from one fad to the next, to the next,
to the next really gets in the way of,
of the power of con compounding wealth.
And there's, there's the, the
tried and true methods that we're
gonna get into today that, yeah.
Our, our tried and true and
have stuck around for, for
very, very, very good reason.
What we want to help you prevent the,
let's call it the, the average listener
and certainly our clients understand
that we don't want to chase these fads.
We don't want to, uh, get stuck
on the treadmill, the proverbial
treadmill or really, you know, chase
our tail where we just kind of stay
in place and don't really make, uh,
meaningful progress to our goals to
building multi-generational wealth.
Mena Hanna: And, and the tough
part with not chasing fads
and having that restraint is.
These are all shiny objects and
they all, I guess, make sense when
they're presented on on a TikTok or
a reel, they spark your attention.
They make sense, they look super sexy,
and unfortunately like Warren Buffett
did not build his wealth in a sexy way.
So that's just a harder sell.
It's naturally a harder sell,
investing being a long-term investor
in public markets that have.
Uh, really created a lot of value
historically, is just a lot less
attractive of a story to tell, um, than,
Hey, let me walk you through a crypto
strategy or a tax depreciation strategy,
which is a get rich quick scheme, but just
sounds so much more appealing on paper.
Um.
Justin Dyer: totally.
And, and not to cut you off, but like
the, the, the very simple analogy
here too is, is the lottery, right?
Like you say, get rich quick.
What we're talking about is
basically the exact opposite of that.
Now, many of you listening are clients
are fortunate enough to have this
incredible asset of human capital.
That helps.
And then we talk about really maintaining
wealth, maintaining, you know,
stay, stay, being rich, if you will.
Uh.
But the, the trade off here is
like, hey, one thing that's, I don't
wanna say, it's a sure bet, right?
We're not allowed to talk like that
with, with respect to compliance.
But, um, this steady, Eddie, boring,
like you said, kind of warren buffet
type mentality, that just takes
discipline, takes time, versus
chasing the fad, playing the lottery.
And guess what?
Someone's gonna win the lottery.
Someone's going to chase that fat
and get rich quick, but it's a
very, very low probability outcome.
Mena Hanna: Yeah, and the majority
of the people buy lottery tickets
and come home with nothing.
And that's what we see with Feds.
You, you have a bunch
of people that invest.
Late in the cycle, in the euphoria
phase where a few people that that
got in early, whether that be via
luck or skill, made a ton of money.
You have a bunch of people chasing
and those people chasing unfortunately
end up losing a lot of money because
they're the ones that get in late and
end up holding the bag on the way down.
Justin Dyer: And it, and it's good
to remind us this, these aren't just
like actual money making schemes where
it's a matter of timing and getting
in early, getting in late, like some
of these, and the way these social
media algorithms work are purely to
get your attention and in many cases.
Hopefully not many cases,
but I believe it to be true.
They, they're fraud or they're, they're,
you know, selling some sort of tax
minimization scheme that, guess what,
ha was similar to something that was
pushed, you know, 20, 30, 40 years ago
and has already kind of been rendered.
Uh uh.
It borderline illegal or certainly
just say like, Hey, you can't actually
take these losses to offset your gains.
Right?
Like the, the, the, the two good to
be true type uh, analogy definitely
comes into play here as well.
Mena Hanna: Yeah.
And, and one thing to just
build off of that, they make
it sound so simple and so easy.
And I think that's the, that's the
beautiful part on, on the sales side
and on the attention grabbing side, but.
It's, it's an incredibly hard
concept to understand tax laws,
regulations, to understand markets,
and be able to identify that
needle in a haystack opportunity.
That is the positive outcome where,
you know, we see this all the time.
We saw it with oil and gas schemes
early on a couple decades ago.
Um, the majority of these
are just losers in general.
Um, or there's legislation
that comes out to.
To stop these strategies from working,
and we've seen that time and time again.
So, uh, the analogy that I'll also
throw in here is, as a professional
athlete, you are at, at an advantage
in the sense that you get to accumulate
a lot of wealth earlier and early and
let that compound, but you're also at a
disadvantage in the sense that if you make
any mistakes early on in your career or.
Because careers are so short, pretty
much any mistake during your playing
window is early on in your career
that is punished so much more brutally
than an average person that is
going to be working for, you know,
40 or 50 years like the two of us.
Probably just less so, but, but yeah,
like a 10 year career is a solid
career for a professional athlete.
A 40 to 50 year career is.
Your average career for a normal person.
So just looking at those two, two sample
sizes, what you do in those 10 years
when you're actually building wealth.
Is four to five times more important,
more meaningful, more impactful
than someone who is your same
age just starting their career.
And if they make a mistake,
they have 40 years to recover.
Um, so it is so much more serious
and significant to take advantage of,
of your wealth in those early years.
Make sure that it compounds,
make sure that it lasts well into
retirement, and ideally becomes a
multi-generational source of wealth.
Justin Dyer: Hundred percent.
I mean, the, the, the, the idea of
con compounding, it's so simple.
It's, it's math, which I love.
It's, it is a, a.
Perfect representation of this
idea of, you know, kind of
boring, but, but Right, right.
And, and something that really,
really works if you give it time.
And this is no different in the
world of investing or finance,
personal finances or, or, you
know, pick your financial category
there or money category than it is.
To the mental game.
Our good old friend Brian Kane,
says it all the time, right?
You know this when it comes to
your own human capital, right?
These little uh, efforts, these little,
um, cha changes, tweaks each and every
day, re repeated time and time again,
lead to huge outcomes in personal life.
Your human capital on the field.
Even in the boardroom, if you're,
you're, you're a, a professional
and it certainly bleeds over
into the investing world as well.
And, and we just, we know that,
that, that really, really works.
So it's a, a great analogy.
Alright.
This isn't just to design, to be kind
of a, Hey, you know, don't do it.
It sucks, blah, blah, blah, kind of
this disparaging type type conversation.
We do wanna spend a little
bit of time as we, as we wrap
here around kind of the why.
Let, let's, let's.
Try to hold ourselves accountable here and
kind of go to a first principles approach.
Like, why does the tried and true,
the boring that we keep talking
about still, uh, still make sense.
Um, and much of it is kind of
bleeding or a great transition from
this idea of compounding wealth,
compounding, um, pr daily practices
to lead to better outcomes, right?
Process over outcome is
really what matters here.
You make these tried and true.
Uh, take these tried and true
approaches, whether it be disciplined
savings, um, putting that money
to work, not trying to time the
market, because we know predicting
the future is all but impossible.
Um.
Tax loss harvesting, right?
Where, where that is, that is
a tax minimization tool that
we know about that works.
And that's completely, uh, uh,
stood the test of time, right?
It, it's made it through challenges at
various points, and we know it works
and we know that, that, that it actually
adds to the compounding power of, of
wealth creation, um, all the way to.
Just kind of like proper alignment.
So what I would all encourage
everyone to do is take a step back
and, and think about, Hey, how
are, is where I'm consuming news?
Whether it be kind of investing news
or advice, if that's what you're
doing, or just news otherwise in
life or, or advice otherwise in life.
But, and ask what are the incentives here?
What are, what is the alignment?
Do I have proper alignment?
Charlie Munger, Warren Buffet's,
great long-term partner.
Um.
Had this great quote that I love
referencing, and it, it, it's quite
simply, uh, show me the incentives
and I'll show you the outcome.
Right?
You, you want to have as much
alignment of incentives to what
you are trying to accomplish.
You're trying to accomplish
multi-generational wealth
over the long term, right?
Kind of by definition, multi-generational
is very much the long term.
Well, okay, let's.
Let's align ourselves
with that goal, right?
And that's certainly how we have built
a WM to be long-term focused, to be
a multi-generational company kind of
alongside you, uh, versus all these
platform social media platforms, news
media platforms, et cetera, that are
driven to get your immediate attention.
They don't care if.
Whatever they're talking about today
leads to success 10 years from today.
No one's ever going to go
back and, and really hold them
accountable for that, right?
And so, uh, not to say that there isn't
good advice out there, but again, broadly
speaking, where, where are the incentives?
What is the business that they are in?
What is their business model?
If, if you're not paying for
something, well guess what?
You're probably the, the product that is,
uh, that is being sold to someone else.
Um, right.
Mena Hanna: about really the
odds, like I'm just looking
at a s and p 500 statistic.
94% of the time the s and p 500 is up.
Given, given a 10 year period of time.
So if your odds are 94, potentially
now 95%, because this is a little
bit of a stale data point and
markets have done well, your odds
of success are, are that high.
Think about the other side and
what you were talking about, about
those, these pretty convicted
social media personalities and.
All the trends that we've seen
in the past five years from small
cryptocurrencies that are celebrity,
run to SPACs, to meme stocks, to NFTs.
You know, I would probably bet that
your odds of success there are 95
5 in the other direction than just
investing in the tried and true
approaches that you've been referencing.
You really have to think about, yeah, the,
the incentives and the outcomes from, do
I want to be potentially right 95% of the
time or do I wanna hit an A home run 5% of
the time and strike out 95% of the time?
Understanding also that
striking out destroys a, a.
A large percentage of your wealth
and is not an acceptable outcome.
I think you have to lean into that
concept of maintaining and slowly
growing your wealth instead of
buying that lottery ticket and hoping
that you win the lottery twice.
It's just, yeah, it's, it's a reckless
way of investing your family's money.
Justin Dyer: 100%.
Right.
It it, I mean, I like that
you used the term reckless.
It, it really, it really is.
It really is.
It, it's not, um,
Mena Hanna: Most of the time, yeah.
Justin Dyer: right, exactly.
It.
When you think about a great analogy
here, take, take the world of
baseball or sport of baseball, right.
We wanna.
We wanna get on base consistently.
We wanna, we want make sure
we're not just trying to hit
a home run every single time.
We know that that just
generally doesn't work.
Again, maybe there's the, the very
small number, you know, less than a
probably a dozen if not a handful of
people that, that play that and do that.
Well, okay, that's fine.
That's what they're well suited at.
Guess what, they can probably only do
that one or two seasons and then what,
what goes on the rest of the time?
Right?
Versus hey, that consistency, those
singles, doubles, maybe you put in
a triple there, here and there and,
and right size stay a, a home run
attempt in, in a very well thought
out, predictable way and say, say
something like venture capital.
Um, but it's well suited, well structured,
well sized to to your overall, um,
overall wealth and, and portfolio.
Um, so hopefully this
is a good conversation.
We'll wrap here.
Uh, again, if it sounds too
good be, if it sounds too good
to be true, it probably is.
I would also say, Hey, we're not opposed
to looking at new things and looking
at new ideas, but what we always go
back to is this data-driven idea.
Right?
What is the data saying?
In terms of validating something
or not, and we didn't really get
into the data around this general
conversation or this general topic.
I referenced an article that does
have some data in it and, and the
short takeaway there is it's actually
not very supportive, which is why we
go back to our tried and true way.
Right?
It is supported by data.
It is.
Boring.
Um, at times, at least we
don't find it all that boring.
I, but I, I acknowledge that
the general, general population
might not be, but that's great.
That's why we, we are, we have
jobs and, uh, get to do what we
love to do each and every day.
Uh, but yeah, the data just doesn't
really support the overall approach.
It, it, it's, it, it is counterproductive
to your overall multi-generational
wealth building for all the
reasons we talked about today.
Uh, and we'll, we'll end there, right?
Hopefully this was helpful.
Um.
We are throwing Mina's cell phone
number out there for you all
to, uh, text, uh, a topic too.
So we'll definitely hit on that.
Um,
Mena Hanna: Yeah, my number
is 6 2 6 8 6 2 0 3 5 5.
And just one last thing from my end.
As a, as a professional athlete,
you're playing a different game.
You're.
Your game essentially starts in the
seventh or eighth inning, and the number
of outs that you have are just so limited
compared to a normal person that has
nine innings worth of outs, 27 outs,
and just a longer time to potentially
make mistakes, figure things out.
You know, you can't, as an athlete,
you can't, you have to hit the
ground running because you are in
that final stretch from day one.
So.
Tuning out the noise and, and also
understanding that as an athlete,
you just have a lot more crowd noise
than your standard person, than the
standard, you know, high school athlete.
Um, that has maybe a couple,
couple parents going to games.
You have a whole stadium filled of noise
and it's, it's overwhelming, but you just
have to stay, uh, stay consistent with
the investment strategy that you use and
probably adopt the tried and true method.
So.
Yeah.
Justin Dyer: awesome.
Well said.
All right.
Until next time, own your wealth,
make an impact, and always be a pro.
Thanks for listening.