Ignite your path to financial freedom and retirement with Mick Heyman, CFA, as he shares game-changing elements to help you make strategic moves and seize lucrative opportunities in stock market investing. Hit play now and learn all you need to know to shape your long-term success in the stock market!
Key takeaways to listen for
Resources mentioned in this episode
About Mick Heyman, CFA
Mick is an author and a finance professional with a diverse journey shaped by education, experience, and a keen understanding of human nature's role in the markets. His career began in Cincinnati, where exposure to all aspects of the business set the tone for his trajectory. Despite an economics degree, Mick's interest in psychology and philosophy proved instrumental, highlighting the influence of human nature on market dynamics.
Mick emphasizes the importance of recognizing individual risk thresholds for rational decision-making. His career highlights include education in technical analysis and success in managing institutional portfolios in Louisville during the 1990s. Mick returned to working with individual investors, finding satisfaction in achieving long-term goals conservatively when he relocated to San Diego.
Connect with Mick
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To learn more about growing your wealth through multifamily investment opportunities, visit Monument Real Estate Capital and schedule a call!
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Ignite your path to financial freedom and retirement with Mick Heyman, CFA, as he shares game-changing elements to help you make strategic moves and seize lucrative opportunities in stock market investing. Hit play now and learn all you need to know to shape your long-term success in the stock market!
Key takeaways to listen for
Resources mentioned in this episode
About Mick Heyman, CFA
Mick is an author and a finance professional with a diverse journey shaped by education, experience, and a keen understanding of human nature's role in the markets. His career began in Cincinnati, where exposure to all aspects of the business set the tone for his trajectory. Despite an economics degree, Mick's interest in psychology and philosophy proved instrumental, highlighting the influence of human nature on market dynamics.
Mick emphasizes the importance of recognizing individual risk thresholds for rational decision-making. His career highlights include education in technical analysis and success in managing institutional portfolios in Louisville during the 1990s. Mick returned to working with individual investors, finding satisfaction in achieving long-term goals conservatively when he relocated to San Diego.
Connect with Mick
Connect with Us
To learn more about growing your wealth through multifamily investment opportunities, visit Monument Real Estate Capital and schedule a call!
Follow our social media pages!
Facebook: Monument Real Estate Capital
LinkedIn: Monument Real Estate Capital
[00:00:00] Mick Heyman
In trading, there's small losses, big losses, small gains, and big gain. Eliminate the big losses, but be willing to take innumerable small losses for that one or two times where things just take off, and you found the one that really hits hard.
[00:00:16] Podcast Intro
You are working professional but struggling to balance the workload of your career, family obligations, and preparing for your financial future. If so, this podcast is for you. You've spent years learning your craft, and now it's time to focus on your financial future. This podcast will teach you what you need to retire wealthy and happy. Let's dive in.
[00:00:42] Roger Jacobsen
Good morning and welcome to the Retire Wealthy and Happy podcast. We're thankful for Monument Real Estate to sponsor our show today. Monument real estate helping you shorten your working period and bring retirement five to 10 years closer. Monument real estate. Hello and welcome to the Retire Wealthy and Happy podcast today. Anthony Esparza and I are interviewing Mick Heyman. Mick Heyman is a really interesting guy. That's a financial advisor out of San Diego. He almost retired in Kentucky and then he decided to start a boutique financial investment boutique. Stock advising company in San Diego. Good morning, Mick. How are you? Good morning, Roger and Anthony. I'm thrilled to be on the podcast. Thank you for the opportunity.
[00:01:22] Anthony Esparza
Good morning, Mick. If you could tell us a little bit about how you got started in the industry and talk about your story a little bit, how you got started and how you got to where you are now.
[00:01:31] Mick Heyman
Sure. I had an intern job kind of in my junior year of college and. I found this little investment firm and thought that sounded kind of interesting though back then. I don't think I knew what a stock was. It's just, you know, a kid looking for something to do and. I became fascinated with the whole business of investing and such, but it's a funny thing back then. Stocks were like a bad word. It was the end of the 70s. Inflation and interest rates were at 15 percent real estate. You talk about real estate now, but real estate in the late 70s was a roaring and that was the place to be or gold and heavy metals. You know, they were skyrocketing. So I told people I was, you know, I wanted to work in the stock business and they thought you're nuts. Go dig ditches or something, you know, it's a ridiculously terrible business, but randomly, like a gun went off the stock market took off in 1982 and it became this great rally that we've seen. Really go on, you know, since then, but what really attracted me to the business wasn't just the market and all the craziness that went on there was, was working with individuals. And we worked with a lot of wealthy individuals in Cincinnati, Ohio. And getting to know them and their issues and problems and the fact that you could step into their lives and help them out.
[00:02:59]
Became a real fascination for me. I did take a little bit of a detour. My first couple of stock picks were horrible, and so I had to learn humility, which is a great thing to learn early on. I always think the first thing you did was buy Bitcoin back 8 or 10 years ago. You would think that you're a genius, and that's not a good thing in this business. You really want to learn humility. And so I got a dose of that with my first stocks, but it sent me on an education tour to figure out how to buy stocks that not everything's going to work out, but that you could find a balance that could over time help at least give you more successes than failures. And so that education took me all over the country meeting with different technical analysts and different analysts and kind of set the stage for how I wanted to manage stocks, which is looking at the 3 pillars. I'd say the fundamentals, the valuation, the technicals. And so through the 80s, I kind of worked on that style.
[00:04:03]
I joined this institutional firm in 1993, and that led me on a different path. There we were working for institutions with sometimes hundreds of millions of dollars. One client had a billion dollars. And so the theory of what to buy was the same, but you were doing it for a lot bigger amounts of money. That was fun and exciting, but I've circled back with having the opportunity to move to San Diego. Also go back to working with individuals, which is what I'm doing now. It's really the fun I have. I have a couple of clients that I've worked for for over 30 years. And seeing them develop from their work life to a retired life to having this financial freedom that I know you guys talk about. It's been a really fun part of my career. And then during the pandemic, most of the lessons I learned were through my experiences. And so I thought it'd be fun to write a book because now I've got a little firm, I can't take on new clients, but at least I could pass on some of the lessons I've learned. And so I just published this book called Mellow Your Money. It's a book of stories. It's not a textbook on investing, and I don't know how successful that will be, but It was a fun way to get a couple of my fun stories out there and I don't have to keep telling them to everybody.
[00:05:21] Anthony Esparza
So that's awesome. Hopefully you booked as well.
[00:05:23] Mick Heyman
That's pretty cool. Do you have it on audible or actually it is on audible. I decided it's probably the only book I'll ever write. And I wanted the whole experience. There's a studio near me in San Diego and I found it fascinating that you think, Oh, you're just reading a book and you've written the book. It should be easy. But gosh, after about an hour of talking nonstop, I'd look at the guy and say, I'm done. I've got to come back tomorrow. He was telling me there was a guy he worked with that read for six hours straight. And I thought, well, that's the difference. That's a professional.
[00:05:57] Anthony Esparza
You know, that's awesome. Everybody go check out Mick's book on Audible. Mellow your money. That's pretty cool. I'll have to check it out.
[00:06:06] Mick Heyman
So now, we talked a little bit earlier, you've got, I think you said your youngest client has been with you for 7 years? Yes, the last client I got was about 7 or 8 years ago. And at some point I just decided It's a lifestyle firm, and the more clients you have, the more at some point you reach a law of diminishing returns where you can't help everybody. And I really want to be able to focus on the clients I've got, and so I, you know, there's no marketing, there's no plug in your podcast that come work with Mick. I don't mind if you buy the book, though, but I'm not looking for new clients. I'm really looking to service the people I've got and. If you look at the average age of some of my clientele, you'd say that's not a good long term business plan, but you know, you work for the kids and over time it can kind of grow on its own, but no, it's a steady, wonderful group of clients that I've got, and I'm kind of just working to keep them happy.
[00:07:04] Anthony Esparza
Awesome. For your everyday investor or just your regular person who maybe thinks and wants to escape the rat race and have that financial freedom and be set up for retirement, what simple strategies do you have? I mean, do you advise to go get a financial advisor, or is there something the everyday person can invest in? Maybe it's index funds, or maybe there's some new hot stocks right now with the whole technology stuff and How does that look for just an average person? What can they do?
[00:07:34] Mick Heyman
Yeah, I think there are a couple of things. And one thing is the probably the most important thing is to actually start. It's so easy to think, uh, maybe next year I'll start saving money. But one of my long-term clients, I mean, she literally was rolling quarters with her mom when she was a kid. I mean, she learned how to save. I have a client, he always said, pay yourself first. In other words, take some money out of that paycheck, whatever it is. And put it in savings. And so that would be the first thing I'd recommend to everybody is know that we need to have savings and investment for the long term. And the first thing you want to do is probably not buy a stock. You want to have money that if the car breaks down or the window is crashing in your house, like Roger is going through right now, you can pay for that. And so even as an investor, I would say the first thing you want to do is take care of yourself.
[00:08:28]
And so then after that, I believe you can do it on your own, given index funds that we have in today's world, you could, you know, you only probably buy two or three of them, one and S S and P 500 fund. And if you like technology, or if you like international or small cap, you could do it on your own, or you could go to 1 of these financial services companies. I don't work for Schwab or fidelity, but they give you fairly solid advice. On how to get started, but along that way, I think the other important thing I would really stress to people is to know what you own and know the risk that what you own has imagine it's your first thousand dollars. And you throw it in some tech fund or some S and P 500 index fund. And it's the beginning of 2022 and the market dropped 20 percent that year. So at the end of the year, your thousand dollars is 800. And you're thinking, well, this was stupid and you don't continue on. And so the key is to know, okay, if I put this amount of money in, this is the risk I could have. And gosh, and then at the end of the year, you say, good 800. Well, now I'll throw it. I can buy more. I'll buy another. It's actually at the beginning of your investing career. It's actually better if the market goes down, not up because you're looking if you're. 25 or 30 years old, you're looking at worrying about it when you're 50 or 60, not at 32. And so you'd be better off if the market went down for 10 years and then goes up, but that's not the way most of us think it's not human nature.
[00:10:07]
And so. We have to deal with our own fears and our own risk tolerance. Some people can take that risk. They're happy when things go volatile and they can handle it. And some people can't. And so know who you are before you get on this roller coaster. And so that's the other thing I would stress to people is don't just blindly step in. Think about it. Think how much risk you could take that would cause you to keep going even when times are bad. And not be bailing out and then know what you own. I think it helps, you know, people here. Oh, I'm going to own the market index fund and they blindly get into it, but they don't know what's in there. So, when it does go down 20%, they're going like, well, what is this thing and what the heck do I have? And so there's a website called morning star. And I think it's for no fee, you can look inside and at least look at the top 30 stocks that are in any fund 20 or 30. I'm not sure how many, but it's worth looking at that because then if you look down the list and you said, Oh, what I own is Microsoft and Apple and Procter and Gamble and Johnson and Johnson.
[00:11:14]
That's not that bad. They might go down in price, but long term, they're going to be okay. And so that's the other thing I would stress to people is know what you own. Okay. No, your risk tolerance and then keep doing it have a plan that you're going to keep getting in there. Bite off the fear of missing out emotion. We're all going to have friends that will tell us in no uncertain terms how to get rich and what they just did and they bought the Bitcoin or the. Whatever it is, the next thing that comes out, the meme stock or back in the 90s, it was beanie babies of all things. Yeah, there's always going to be a next thing that someone will tell you how to get rich. And you might get on one of those bandwagons for a little bit, but if you choose to do it, do it in a small dose. Don't take all the risk on those ones.
[00:12:04] Anthony Esparza
I've had a few experiences actually making some crazy profits with like meme crypto. I did it once I was never ever able to replicate it again, but for the most part crypto I just don't have the best understanding on it It's easy to watch the charts and stuff and be like wow, you know, but looking great for the past six months but yeah that.
[00:12:25] Mick Heyman
Um, I don't understand it either and believe me, you can't be in the business and not dabbling things, right? I tend to be fantastic at picking the top, so somebody should watch what I'm doing and do the opposite on those kind of things. But the other thing I would say, though, is occasionally when you take that flyer, you'll get lucky and you'll make a lot of money on it. But remember to take a little off the table because no one will ring a bell when the top comes. And even if you have a one that goes for a long term, imagine, you know, Apple, and if you got into Apple and 20 years ago or 10 years ago, you made fantastic profits. It still doesn't hurt to take a little off the table every once in a while and spread it to something else. I mean, maybe that's something else will not be as good as Apple.
[00:13:14]
Maybe it'll be NVIDIA, but you don't want to have your portfolio dominated by the risky thing that you bought at the beginning. And I've seen too many times people, whether it's crypto or whether back in the old days, it was some small energy stock that tripled and quadrupled and then quadrupled again, and the people thought they were brilliant. And we actually, as an advisor tried to get them to sell some of it. No, this is crazy. This is the best thing in the world. And when it starts going down, you have the opposite thing going on. You have the hope. Well, I don't want to sell it at 50. You know, that's where it was last week. I'll wait till it bounces. Well, then it goes down again. And I've seen 100 percent round trips on some of those things. Wow. So, so for the average person, if you get this crazy thing, take a little off the table, enjoy it.
[00:14:06] Anthony Esparza
I like that. That's good advice. Because I've definitely been there. You mentioned the video. I actually own the video. I think that has good potential.
[00:14:15] Mick Heyman
It has fantastic potential. I mean, we saw the video make huge gains. Of course, during the pandemic, everybody's playing, you know, games and the video is crazy. And then in 2022, you would have thought they killed somebody or something. The stock was a complete trash. And then now, of course, it's AI and the video is off to the races again. And so I don't mean to be, I don't want to pick on the video because I own some too, but That's one. Occasionally, you want to take a little off the table. It does get volatile, but if you look at the future of technology, I love technology, and NVIDIA is certainly a leader there. And I'm not allowed to recommend anything, but I commend you on your purchase there. And it's part of the S&P 500. It's something that, at least in a small part, that I could see everybody owning a little bit. Nice.
[00:15:08] Anthony Esparza
Very cool. And Mick, do you live in Utah or San Diego now?
[00:15:11] Mick Heyman
I'm in San Diego. San Diego. So I, uh, that's a dream. Are both of you in Utah? Both in Utah? Yeah. Okay. So I love getting out there. Usually once a year we'll get out the Park City or so for a weekend, but I have two boys in their twenties and a daughter who's 14. You can't get them far away from the ocean. I mean, I'm a Midwest guy. There wasn't much surfing in Ohio where I was growing up. But out here, it's like, I guess it's like skiing or snowboarding out where you are. Once you've gotten hooked, you can't get away from it.
[00:15:44] Anthony Esparza
Yeah, actually never snowboarded or skied. I've lived in Utah my whole life, so I'm one of those people,
[00:15:52] Mick Heyman
unfortunately, well, there are people that don't get in the ocean out here either. It's a little cold, but it is a fun thing. And it's funny. I, in my book, I drew some analogies from surfing to investing that there are times when you feel you're on the perfect ride and everything is perfect. And then there are the other times where you feel. Like you're absolutely drowning and that is the same feeling you can get in investing, whether it's a particular stock or, or the market. And, you know, in March of 2020, believe me, whether you're in the business or out of it, you felt like you were drowning
[00:16:28] Anthony Esparza
Crazy. So, in March of 2018, correct, or was it. I'm sorry.
[00:16:34] Mick Heyman
Oh, and that we were just talking about. Yeah. Oh, I was thinking of the, when the shutdown happened, the pandemic, there were literally the market dropped 35 percent in three weeks.
[00:16:46] Anthony Esparza
And in moments like that, I mean, are you selling stocks? Are you just like, hang on for the ride? You have faith. It's going to come back.
[00:16:54] Mick Heyman
First of all, emotion-wise, I'm as scared as everybody else. I'm fighting the old people next to me trying to get some toilet paper. No, you feel like jumping. I mean, you feel like the world is coming to an end, but I think there, for me, What I kept telling people and telling myself, by the way, because I certainly wasn't immune to the emotions of the moment, you have to look back in history and feel comfort there that we were not alone. Yes, the pandemic, the actual situation was a little different than anything, but the shock and the surprise and the panic. Has happened so many times before in history and actually what I think about it when we're talking about how I got started one of my first assignments was to get some data for our new computer that we got the first portable computer that was probably ever made and I think I had to go to the library because there was no internet to get the data and I had to read the headlines and then look at the back and get this data.
[00:17:55]
And what I found was from the 1920s forward every week there seemed to be some issue or problem or some 1929 happened or Pearl Harbor happened and that feeling of panic is we were not alone and each time you were better off. I hate to say stick your head in the sand but sometimes doing nothing is the best thing you could do. Now, of course, you could look back and say, well, Mick, why weren't you piling into stocks and that kind of thing? And at some point later on, I was able to do that. I was able to have the conviction that the thing had stopped going down, but I'm not saying that the average person needs to be the courageous one to jump in when panic is happening, but doing nothing. Sitting is actually an active decision that's worthwhile and saying this too shall pass. And when it passes, when the emotion is less, then I can decide whether I have too many stocks or whether I can add back in. And I would have said it wasn't in March, but it was more like an April, May, June kind of timeframe where I saw things stabilize.
[00:19:02]
And I thought, okay, they're not down 35 percent anymore, but these are still values here and there's still opportunities to make money. And that was the time that I think the average person would be past the panic and be willing to take a little step in there. But most of the time, what we should do is actually look back and say, it feels like it's different, but it's not. It's the human emotion of to realize that when we're scared, it's not necessarily the time to take action.
[00:19:33] Anthony Esparza
I mean, what's that saying from Warren Buffett?
[00:19:36] Roger Jacobsen
when there's blood in the streets buy real estate
[00:19:39] Anthony Esparza
Yeah, so it's like do the opposite of what's really going on. He, that was always like a famous thing that stuck to me, but.
[00:19:45] Mick Heyman
And I imagine in 2008, when talk about blood in the streets with real estate, if you could borrow every Mickel that you could, and bought everything that you could. Imagine, you know, that that's the opportunity you had and, and stocks would have provided the same thing if you bought Apple back in 2008 versus buying a house or something. But I think the benefits sometimes with real estate, and I'm not a real estate investor necessarily, but I certainly work with people who've done it, and it's a great way to also diversify your holdings. But there's an example where you know what you own, you can see it, you can touch it, you can rent it. And so that does kind of gets to that example of in the stock market, don't forget that you can't see and touch NVIDIA or Microsoft, but at least know you own it.
[00:20:34] Anthony Esparza
Yeah, and that's the lot of value knowing that stuff. I mean, I've been one and when I've been younger, and I'm sure you've. Already had learned this lesson early on in your career, but you know I just dabble around in different stocks and it always seemed like I'd lose a hundred bucks and I'd sell it and then it'd be Up, you know, I would have made 300 if I just waited and it always seems like the whole overnight success thing is a hoax You know, everybody wants it. You see people advertising stuff about it, but it's all long term With my experience in life, and I'm young, I'm only 24, but it seems like everything's a buy-and-hold game.
[00:21:10] Mick Heyman
Right. There are ways of trading that I think can be successful. But it's a full time job. I mean, we can all get lucky on something. That's like we just talked about. But to actually be a trader, I remember I was at a seminar one time. This is back in the 80s. And I too, I was just like you. I wanted to be the guy, you know, and anyway, I went to this seminar and this guy had this is 1980s dollars, but I think he had made like 30 million dollars trading on the Chicago board of trade, which I think what made him one of the top traders that year, whether it was 1985, whatever year it was. Anyway, he was leading this seminar and he says to us, I'm going to give you exactly my theory and my methodology of trading, but I guarantee it, none of you guys in a year will come back to me and tell me you did it. And we're all looking at him like, okay, challenge accepted, you know, what is this thing and without going into great detail, which I don't probably remember everything. Anyway, the key was. He lost on 90 percent of his trades is what he said. So in other words, he put stop losses in that were so tight that he never took a big loss, but he took a lot of them.
[00:22:28]
And so imagine you could potentially lose 25, 30 trades in a row. But his theory was. In trading, there's small losses, big losses, small gains, and big gain. Eliminate the big losses, but be willing to take innumerable small losses for that one or two times where things just take off and you found the one that really hits hard. Well, 20 or 30 losses. I don't think I made it that far. I said, Oh, maybe this one I'll hold on to. And of course that turns into the big loss. And it taught me the great lesson of my way to financial freedom was working and long term investing. But those people that do it, they're working 10, 12 hours a day. They have trouble taking vacations. Like everything else, we see the money they make, but we don't see the life they lead. And I don't think I'd want that life either.
[00:23:20] Anthony Esparza
I got another question for you for your average investor or somebody who wants to become like yourself or Just start getting into stocks and stuff like and this is even a question for me But what's a good way to dissect a stock say i'm thinking about nvidia What's a good analytical approach to take before you buy a stock?
[00:23:41] Mick Heyman
So what I like to do is really divide it into three categories and the names would be the fundamentals first. So what does NVIDIA do? What's the theory behind NVIDIA? What do the earnings look like? What's the growth? I mean, is it growing at 10 percent or 30 percent or 50%? And so, you know, know what you own from a earning standpoint and from a story. What do they make? Is this something that can be replaced or their competitors on the horizon? So knowing what the different aspects of Nvidia as an example would be the first thing. But, and a lot of times people stop there. Oh, they love Nvidia. And again, we can come up with all these positives, AI and everything else. And so immediately you jump in without looking at how it's valued in the market. What's the valuation based on those earnings? That's called the price-earnings ratio. What's the price versus those earnings? And how does that compare with the rest of the market? Let's say NVIDIA is growing at 30 percent as an example.
[00:24:42]
I'm not sure what their growth rate is right now, but it's selling at 100 times those earnings. And the average stock is selling at 20 or 18, you're going, well, gosh, is that valuation? Is that okay? Now, we might like it enough to buy a little bit, but be aware of how it's valued in the market versus its competitors versus its own history versus the rest of the market. So that's the second leg. Now, some people stop there or they only focus on the valuation. They only want to buy cheap stocks. If all you want to buy is low value values that are very attractive, that's what you're going to end up with Verizon and AT& T and a bunch of stocks that don't look like NVIDIA. And so that's why I think it's important to blend because sometimes you want to own those cheap stocks. That was the Warren Buffett theory by value, but Charlie Munger comes in and says, wait a second. We're skipping half the world here. And so let's buy some growth. And so combining the fundamentals in the valuation is an important thing.
[00:25:45]
And then to me, there's the third leg and that's the technicals and that's literally the price trend. And so you can look at a stock price trend and this could be a science that could take your whole career studying, but the average person can at least look at. Is this stock really high versus its long term average, or is it breaking down? The old quote of don't catch a falling knife. I think that's something it's worth thinking about. It doesn't mean we don't buy stocks that are cheap, or that example of blood in the streets. Yeah, I mean that's true, but I hate to catch things as they're just collapsing. I'd rather at least see some stabilization occurring. And so, there's certainly more to technicals than I just described, but Thank you. I'd like to have things check each box and even if, say, you've got a gross stock, it's growing like crazy, you love the fundamentals, you love the story. Maybe the valuation isn't perfect and maybe that causes you to buy less of it than more of it.
[00:26:44]
But at least know what the valuation is and say on the technical trend, it's a little above where you'd like to buy it. Maybe that causes you to wait a little bit, be a little patient, or you say, okay, I'll buy a little bit. But it's worth looking at each of those types of analysis before you buy a stock. And then that served me. Well, it's kept me out of some things that were I fell in love with, but I thought, let's be a little patient on or it finally got me into a stock where I said, you know. The fundamentals aren't perfect. Maybe you hear on TV. Oh, my gosh, they missed an earnings report or whatever. But you say, you know, long term, the fundamentals are okay. And look at the valuation and the technicals aren't falling apart. Each of those analysis could tell a story. One last thing on that is on the technicals. I remember in 2009, you had the terrible market in 2008, 2009, the market collapsed again, and they were making new lows.
[00:27:42]
And yet there were certain technology stocks. They were actually well above their old loads. And what was that telling me? I mean, the fundamentals were still bad. Everyone was thinking, Oh, my gosh, the economy is terrible and whatever. But the valuation was good. These stocks were down and look like good values. And the other thing it was telling me was. If the market is making a new low, but the technology stocks aren't making a new low, how bad can it get? They must be tired of going down. It didn't tell me that the market was going to turn around for the next 10 years. I didn't know that, but I knew they were a decent place to step in a little bit. And so that's where each of these types of analysis are worth doing. The average person just starting, it's going to take a little time to get comfortable with. But if you're interested, that to me is the way I get started.
[00:28:34] Anthony Esparza
Yeah, that's extremely helpful.
[00:28:35] Roger Jacobsen
Circling back to your book, what are some examples you can give us for mellowing your money? What does that mean?
[00:28:42] Mick Heyman
Well, I think, of course, we've looked at some of the things I kind of was emphasizing in the book. One was, you know, I start off actually talking about history and be aware that We're not alone. We've had generations and generations of investors that have gone through good times and bad times. And so realize that history can be a great lesson and can keep us invested over the long term. The other thing I've started off with in that story was my first client. She was in her 80s and yet she had financial freedom and she also had stocks that were so high at that point. You couldn't take gains because at that point, the capital gain tax would have been huge.
[00:29:23]
So here you have a woman that's living off dividend income. She has everything she needs and she has about 100 percent of her money in stocks. And you're thinking, is that crazy? And yet that was her objective. Her objective was income, and we were providing the income. And then the oddest thing that I found out was year after year, we were moving in and out of stocks and moving in and out of the market. And you look at the end of the year, just who was the outperformer? It was Eloise. Who is doing nothing and we were joking this other young guy and I would joke like this is our theory of benign neglect. In other words, don't neglect the client, but sometimes with your holdings, get on a good stock and just. Let it go. Don't worry about the 100 up or 100 down and buy some good stocks or buy some good funds and let it go. And so that's another important part that I've tried to work through. I also tried to do this with stories because there's plenty of how to books out there. But the problem is when you get into the emotional part of things, you throw the how to things out the window.
[00:30:32]
And so that was the other thing I've tried to stress in the book is that know your risk tolerance. Because if you don't, you're going to get scared and going to make decisions that you don't want to make, which I gave some great examples of me making those poor decisions back in my early career. And so you know what your risk tolerance is and also know what a relative victory is. I give an example in the book where as a basketball team in high school, I was on and we were losing the game like 92 to 20 or something. It was terrible. And the coach wanted to walk off the court and we talked him into staying there, but trying to keep the other team to under 100. Well, of course we went into the stall and the final score was 99 to 28.
[00:31:18]
And we charged off the court. Like we had won the super bowl, their fans are throwing crap at us and everything. And I think that was a relative victory and don't be afraid of that. Don't be afraid of while other people are bragging about Bitcoin or whatever it is. Most of our goal is to achieve financial freedom over the longterm. And so be willing to say, I'll take the small gains. I'll take the relative victory because in this day and age, everyone stresses, be the best and win for the gold and, but in investing, it's sometimes better to take the small gains. And so anyway, it was a lot of those kinds of stories that taught me lessons that bring it back to the tried and true lessons that you can read about, but I think trying to bring it to life so that we all can identify in our own lives. What were the lessons that we learned growing up? Or, you know, I had a grandpa and an uncle that were in some ways crazy, but they taught me great lessons that eventually about life and about the market. Awesome.
[00:32:21] Roger Jacobsen
This has been a lot of great information. We really appreciate you being on the podcast today for everybody. This is Mick Heyman. He's a certified financial advisor out of San Diego. We really liked the. Book recommendation. And now I think it's time for us to hit the final four. Anthony, why don't you take it away?
[00:32:40] Anthony Esparza
Excuse me, guys. Final four. I'm going to add one more at the end, if that's okay. Absolutely. For the viewers who stuck around, so. First question. What is your favorite business book?
[00:32:50] Mick Heyman
My favorite business book. Well, I don't know if you allow me to, but I'm going to pick one very few people have read. It's called Reminiscences of a Stock Operator. Ironically, exactly 100 years ago, 1923. The author is on the book is Edwin Lefebvre, but that was a name that Jesse Livermore was using. And Jesse Livermore was a great trader back in the early 1920s. Actually, the early 1900s. And filled with pearls of wisdom and even though the markets changed over time, those pearls of wisdom are as true today as they were 100 years ago or 200 years ago. And so it's written again. I tried to mimic it probably failed, but it's written with his stories and his successes and many failures. But they are filled with examples of the emotions that we can tackle as we become investors.
[00:33:46] Anthony Esparza
Nice. Sounds like a staple of, uh, stock books.
[00:33:50] Mick Heyman
We were promised two bucks. Did I miss? Okay. Okay. The other one, the other one isn't a secret to anybody. It's the How to Win Friends and Influence People. I love Dale Carnegie. I mean, besides everything you do in your career, I don't care what it is. I don't care if it's Plumbing or electrical or investing or engineering, communication is so important. I was running from it as a kid and reading and taking some Dale Carnegie classes and reading that book turned my life around. It is so important to learn how to communicate with people and that's a great, great book. And again, an old one, probably 50 or 70 years old or something.
[00:34:32] Anthony Esparza
An awesome book. I really like the never heard of the first one, but I'll add that to the list.
[00:34:38] Mick Heyman
Maybe I figured the second one is not a secret.
[00:34:41] Anthony Esparza
So yeah, second one's awesome. All right, Mick, what brings you happiness?
[00:34:45] Mick Heyman
For me, it's the relationships with people, whether it's my close relationships, my family or my clients. Being with people that I love and care for, you can have great experiences, but without sharing them with the loved ones around you, I think it's not as meaningful.
[00:35:03] Anthony Esparza
Awesome. Great answer. And future retirement, what would that look like for you? Or will you even have a future retirement?
[00:35:09] Mick Heyman
Well, my model is my dad. He's working at 92 years old. Not hard. I mean, he swims in the morning and naps in the afternoon. And spends a couple of hours a day. He's a lawyer. And so he helps a few people along the way and loves to check on the market. And I could see that as a model for me. I love the markets and I love talking to people about the markets. And so I could consider that, but I could also consider that being less of a full day job, too. And this is a business where I could imagine that happening if I can follow my own advice. And most of what you're doing is sitting and letting your investment in your markets run.
[00:35:53] Anthony Esparza
You don't have to be that busy. But the market do it for you, right? Exactly. Hey, question number 4. What is the best way to get back again?
[00:35:59] Mick Heyman
I think it's through your relationships. A lot of times we want to do too much and you forget that whether it's the checkout person at the grocery store or you're the loved ones that you live with or working on ourselves to me is the best way to give back to the community. And of course, maybe that leads to helping build houses for underprivileged people or or other things. And so that can always, I'm not saying don't do greater things, but what we should all to me is start with ourselves and with the people we're relating to every day. And if we get that right. Then we can reach out and do bigger charitable things. I'm not a serve on a committee guy. I think there's a place for that. And if you're that kind of person, know yourself, know how you can give back. To me, I'm more on the individual level and trying to help people one by one, I guess.
[00:36:54] Anthony Esparza
Nice. Very cool. And bonus question. Number five. I don't know if you can even speak on this, but I'm going to try anyways. So for the viewers who stuck around until the end, hopefully this is useful for you guys. So top three stocks right now, again, I don't know if you can speak on it too much, but. If you had a top three stocks as of today, what would they be?
[00:37:15] Mick Heyman
You know, I'm probably listening to my lawyer yell at me. And so I'm probably not allowed to give you exact stocks. But if I can do this, I could say there's a couple of ETFs that are dominated with technology. And I don't think that that's a unique, I could see them being down 20%. As soon as, you know, we get off this call, but I love the QQQ is a ETF that is dominated by the NASDAQ stocks. And there's an XLK that has a lot of technology stocks in there. It's dominated with technology. And so if I'm looking long term 5, 10 years from now, I would want to. Spice up my portfolio with, let's say I had the index funds and I had the S and P 500. I'd want to dabble with a little extra of the QQQ.
[00:38:05]
And again, I know this happens, you know, if it goes down 20%, buy a little bit more, you know, but over the longterm, I love the ETFs that have a little more spice to them. Assuming you're young and you're looking for the longterm.
[00:38:20] Roger Jacobsen
We want to remind our listeners that as per always, this podcast is for educational purposes and is not financial or tax or any advice. Please seek professionals to help you out in your way.
[00:38:33] Mick Heyman
Thank you, Roger. I know how much risk you could take. And I know that I'm going over, but when you look for those professionals, make sure that they're listening to you, that they're looking at your own objectives.
[00:38:46] Anthony Esparza
Beautiful. Thank you so much. That is some great insight is what we'll call it.
[00:38:51] Roger Jacobsen
We want to thank everybody for joining us today on the Retire Wealthy and Happy Podcast. Thanks, Mick Heyman. And thank you, Anthony, for co-hosting.
[00:39:00] Mick Heyman
And thank you, you guys. You do a great thing for people. And I wish they'd spend more time listening to your podcast and listening to the news. Much more helpful. Awesome. Thank you, Mick. That's a great compliment. Thank you much. Have a good one guys.
[00:39:16] Podcast Outro
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