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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.
We're continuing our series on
developing a sound investment portfolio.
Uh, the focus today is how to make
your portfolio human centered.
So, uh, we've covered the how and why
of developing, uh, a best in class
portfolio, kind of the foundational
principles of this overall topic.
Um, and today we're gonna go
away from the numbers and more
to the people side of things.
Like I said, the human centered side.
How do we actually.
Make a portfolio human centered,
how do we bridge that, uh, that
gap, if you want to call it, um,
or bridge those topics rather.
And I mean, I, the first
question, let, let's jump into
is really why does this matter?
Why, why do we consider and
really optimize to the human
and consider ourselves a human
centered, uh, organization?
Mena Hanna: Yeah.
And I think the, the most
important question in that
is why do we invest at all?
Like, why That's a good one.
Yeah.
Yeah.
And I, I think really just speaking
blindly, you invest to make money,
but that's not the end all, be all.
Ideally you invest to make money and
use that money to do something with.
and typically that's something
that's important to you.
So that purpose really is the
true reason of why you invest.
If you're only investing to
make money, that's not enough.
You should be investing with a purpose
and with a goal in mind, which yeah,
ultimately creates even more purpose.
So we talk about it all the time.
Money is a tool and you need to really
find your why in this situation and
everyone's why is going to be different.
Justin Dyer: Totally.
Yeah.
And it, I love that it's, it's, I think
really, hopefully, really, resonating to
everyone listening, in this day and age.
'cause we live in this day of kind
of, he heightened awareness, super
awareness around one's self and health
and wellness and all that stuff.
we've been thinking about this really
since the, founding days of, AWM and
it's cool to see this age of, broader,
just a awareness and consideration
of, why, of purpose, et cetera.
And we really don't think investing
should be excluded from that.
obviously there's also a great quote,
I think I've said it on the podcast
plenty of times, but you talked about.
Returns.
but with a purpose really.
No one's ever gonna lay on their
deathbed and say, oh yes, I beat the
S&P 500 or, go pick your benchmark.
Mena Hanna: What they
Justin Dyer: will remember is what
the impact was that their money,
their portfolio had on the, their
lives and the lives of others.
And really, that's core to
what we're talking about here.
you said money is a tool.
can you explain that a little bit more?
Mena Hanna: Yeah, and I
think your point about just.
The, scorecard that you set
or the bar that you set is, so
important because money's a tool.
And the way I think about
it, is money's like a ticket.
It's a ticket to get you somewhere,
but it's not the destination.
You have a destination.
Money's the tool that helps you get
there, but it's not the end point.
if you're, taking the subway.
You take the subway to travel a distance.
You don't just stay on the subway
forever because it's fun and you're
moving around and I don't know, your
portfolio is accumulating money.
Like if that's what you're
doing then, then good for you.
But that's not what I want to do.
I want to get on, you
know, a subway, a flight.
To get to my destination, because
ultimately that's what matters.
So your personal values shape where
you want to go, shape your destination.
Um, and, and ultimately it really helps
you build, I would say, a solid foundation
and relationship with money in general.
So I would encourage people to, to
really think about their destination.
So,
Justin Dyer: so unpack that a little bit.
I'm gonna be a devil's advocate here.
You know, I think a lot of people may
maybe look at the financial media or just
media in general and, and have a tendency
to say, oh, I need to invest in this, I
need to invest in that, and kind of keep
up with the Joneses or, or whatever, you
know, anecdote you wanna apply to it.
Like if that's the way someone thinks.
How would we reply to that?
Mena Hanna: Yeah, and, and I really would.
I, I would still validate the
fact that it's important to make
money ultimately, that that's a
big component as to why we invest.
And you need to have a best in class
portfolio that that helps you make money.
Um, but if that's the only point
then, then really what you're gonna
cause yourself is you're gonna cause
yourself consistent comparison anxiety.
You're probably gonna make bad
decisions at some point because of
the element of keeping up with the
Joneses that you, you brought up.
You're gonna be chasing things that
might not matter to you or be irrelevant
or just unsuitable for your situation
and I think really what that causes
is just general unhappiness and you're
just gonna be not at ease and you're
gonna be thinking about how you can
make your next buck at night where.
There's, significantly more important
things in your life to be thinking about.
Justin Dyer: Yeah.
I think at the heart of what we're talking
about is a reframing, we're not talking
about deemphasizing returns, we're talking
about reframing how we, interpret and,
consider returns and optimizing returns.
Yeah.
given those, those goals, so
we've talked a, decent amount.
of philosophy here, let's bring
it to the application level.
What does this actually turn into
when we're building a portfolio?
Mena Hanna: Yeah, and it, and I would
say it turns into specific intentions
and goals that really create the
building blocks for your portfolio.
So once you identify your, intentions set,
your intention, you can use your money
to shore up each individual intention.
On that end.
You have three kids, they
all want to go to school.
You can build specific
buckets like sub-portfolios.
We like to think about where you're
funding each child's education, depending
on, you know, how old they are, where they
want to go to school, and all of, all of
these intentions, they're small building
blocks, like to think about them as Legos.
They all compile together and build the
portfolio that ideally you want to, you
want to have and hold and is the most.
Efficient portfolio for you
to achieve all of those micro
intentions, um, if you will.
So ultimately that's
liability driven investing.
And we've harped on this a million
times, but, but the building blocks,
the individual Lego pieces are.
Justin Dyer: are
Mena Hanna: Foundational and so
important to make sure that you fulfill
all of these goals and really tying
back to the previous point, it becomes
a lot less about just making dollars
and making your, it becomes more
so about making your dollars count
for what you're trying to achieve.
So that's really, a one
point in time assessment.
Obviously lives are ever changing.
Very dynamic.
Yep.
Yeah.
you had three kids and now you have four.
so now you have four kids colleges that
you have to, don't remind me pay for.
but yeah, there, there's also a part of
this where there's constant reflection.
There's constant adjustment
that needs to be made.
Whether you, want to pay for all
four kids colleges or not, you maybe
stick it to them at some point,
whether you want to buy them cars.
Help them with down payments,
help them with their weddings.
All of these constant
reflections need to be made.
And, ideally that's where you talk
to your, family office to make sure
that you're, constantly aligned
with your portfolio and your assets.
Justin Dyer: Yeah.
That's great.
it, I'm gonna go back to this idea of,
this is a reframing, but comparing to
how the common, the common practice is
actually implemented, via what's called
a mul, excuse me, a model portfolio.
How I want to, I wanna draw
a differentiation here that
those are fine applications.
They're very, um, one size fits all.
We use that term.
And, uh, for the masses, I would say what
we're talking about here is reframing
Mena Hanna: the
Justin Dyer: purpose of money, number one,
but then optimizing an actual portfolio
given that purpose and still maximizing
returns given that optimization.
Hopefully that all, all
makes sense to everyone here.
So bringing this all together, right?
Like I said, it's not
a set it and forget it.
Um.
Strategy is, as is quite
common in our industry.
This is tailored to every single
individual client's goals and purposes,
which is, uh, hopefully something that
gives a lot more meaning to your money.
This, that's a whole idea here, but uh,
you know, kind of from a more traditional
portfolio construction standpoint,
it also is, is more resilient, right?
It's managed to your specific needs.
It's not just, uh, hey, we're gonna
put all of our clients that are.
32 years old and with X number
of, uh, x amount of assets into
the same portfolio, which is also
very common in this industry.
It is
Mena Hanna: built
Justin Dyer: in a way that is resilient
and risk managed to your specific
needs, which I think is a, a very,
very strong, uh, point to make.
And it adapts and grows, like you said.
It's not, it's not a set it and
forget it, it's not a point in time.
This is something that moves and
ebbs and flows on a constant basis.
I mean, you know, uh,
leading our trading team.
Something you guys, we all look at, you
look at on a daily basis, is the portfolio
updated to reflect changes in a client's
life that, uh, that, that we're gleaning
from conversations with, with you all?
Um, you know, if you
happen to not be a client.
A WM and you're listening to
this, I really would try to le
leave you with this question.
You know, ask yourself what is the
real purpose behind your investment
portfolio, and are you using your
money as a tool to achieve it?
I mean, that's a simple question,
and if, if you're not, um, uh,
able to answer that, you know, it's
something we'd love to talk about.
Uh, so with that.
Uh, we will wrap today.
Uh, next episode is gonna be the final
episode of this, uh, this series.
And it's really about implementing kind
of, we, we've touched on high level
construction, but what are the actual
investments, the building blocks, the
term you used, um, uh, earlier Mina.
But what are the investments
that we should actually utilize
to, to construct this portfolio?
Um, and that would.
Give us a, a, a really solid framework
over the, the what will be four episodes,
um, in this series of how we think
about this, how we think about building
portfolios, some different takes on it,
some reframing like we've talked about,
and then actual implementation thereof.
So hopefully this has been helpful.
Please listen to, to the next one
and, uh, and we'll wrap this up.
But until then, own your wealth,
make an impact, and always be a pro.