Stocks vs Bonds: What Actually Builds Wealth | Buy Your Kids a House | Concept Deep Dive 12

📈 Stocks vs Bonds — Same Conversation, VERY Different Jobs 💸

Stocks and bonds are often lumped together… but they play completely different roles in your portfolio 🧩
In this chapter deep dive, we break down how each works, when they make sense, and why your age, income, and risk tolerance should shape how you invest — not hype or headlines.

Whether you’re just starting out or trying to protect what you’ve built, this episode helps you make smarter, more intentional portfolio decisions 🧠💪

👇 Watch now and stop guessing with your money.

#PersonalFinance #InvestingBasics #StocksVsBonds #WealthBuilding
#FinancialLiteracy #MoneyMindset #LongTermInvesting #RiskManagement
#PortfolioStrategy #BeginnerInvesting #InvestSmart #MoneyTalks
#BuyYourKidsAHouse 🏠💰

Transcript

SPEAKER_02 0:00

So last episode we talked about opening your retirement accounts. Yeah, but once you're in, you're staring at things like you know stocks versus bonds. You don't actually know what they really mean. Yeah, and today we're going to be breaking down the differences between the stocks and the bonds. Yeah, let's go ahead and dive in. Let's go.

SPEAKER_01 0:20

Hey, welcome back to the Buy Your Kids a House podcast series. Again, I'm Matt. This is Andrew. And uh this is our deep dive section where we go into the different concepts that go into the book Buy Your Kids a House. And in uh last week's deep dive, we went into the different types of retirement accounts, you know, whether it's your 401k, your uh traditional IRA, your Roth IRA. Uh, but those are just kind of the concepts of what you can invest into. We're gonna go to what you actually can put into those types of accounts.

SPEAKER_02 0:42

Yeah, and those accounts are really just the container.

SPEAKER_01 0:45

Yeah, and but basically by containers we're talking about you can invest in whatever you want into, whether it's uh real estate, gold, and silver, but also a lot of times when people hear it, they think of stocks and bonds. And a lot of times they hear stocks and bonds, they don't know what the difference of those are. And we're gonna kind of help clarify that for you.

SPEAKER_02 0:59

Yeah, and one of the problems is most people are told what to own, but never explained why.

SPEAKER_01 1:04

Yeah, so let's go ahead and break that down. So, first off, we're gonna kind of dive into what stocks actually are. And a lot of times when people you know see stocks, they think they're just buying like the little ticker symbol on there, like, you know, okay, I own a little bit of whatever, you know, you know, company then everything, but you don't realize you actually are owning a piece of that company, you know, meaning you're uh you know, have some ownership rights, there's even some voting rights that usually even come into play, you help pick out things on their board. Now, obviously, your voting rights are in proportion to the percentage you own. So for most of us, we're talking a fraction of a percent and everything, but it is still owning a piece of that company. But with that, you know, you're also gonna have the uh the option of you know how the stock actually performs with the company. If it grows, you know, gains interest, you know, gains uh you know new contracts and everything. And that's where again the possibility of uh growth and everything comes from with the stock.

SPEAKER_02 1:48

Yeah, and that's the upside because when the company grows, you also your stocks grow too. So looking at that over long time, long period of time of growth, it's going to go up and down, obviously. But that is such a huge upside to it.

SPEAKER_01 2:02

Yeah. But with that, you also have the option of it definitely being more volatile and everything. Like I'm sure most of us remember the crash in 2008. Uh, obviously it was you know the big uh stock market crash, you know, back in the 1920s, like there's been several crashes and booms throughout the year, uh, you know, the decades and everything, and that's where you know that volatility comes into play and everything, and then that's where the risk of stocks come in. So while you can have uh the biggest boom, whether you find the next you know tech giant or you know the next uh you know internet uh wonder and everything, uh it also comes with the possibility that the entire market could take a little correction or crash and everything, and then you could lose a whole bunch really, really quickly.

SPEAKER_02 2:35

Yeah, and that's you know, tying into that a little bit, it like the short-term investments in stocks and stuff like that are a lot more risky because of those reasons. But long-term investing in the stocks is where you're really gonna see that wealth build.

SPEAKER_01 2:49

Yeah. So again, you know, that short-term aspect, and we're not trying to find again the next internet gem and everything, but the idea is we want that that long-term growth and long-term what so far, historically speaking, stocks have outperformed bonds uh and everything. So you kind of take the risk with the reward and everything. And so for time being, it does appear that stocks have that better uh reward over the long term and everything, even if uh you know you have those little hiccups like you did in 2008.

SPEAKER_02 3:12

Yeah, and I mean one of the keys is to not panic at swell when you see it go up and down, but stay in it for the long haul.

SPEAKER_01 3:18

Well, and then and again, that's also like you'll you hear terms like buy the dip and things like that. So, like, you know, like what if we're consistently putting money in each month and everything, you know, when it things do drop down, maybe not say the you know the whole boom in 2008, uh, but you know, even these smaller dips you see along the way, if you're buying when the stock's down that you'll hear other people say the term, you know, the stocks on discount because they know that the price should and will probably come back up, and you're now getting it at a cheaper price. So long term that actually can be beneficial into how you're taking advantage of when these little market corrections happen. Now, there are times when stocks are over-evaluated and everything, uh, you know, uh in that sometimes it's done illegally and everything, or even sometimes it becomes an internet meme. Uh, we all know GameStop a few years ago, you know. What a time to the moon for all the you know, those iron fists were gonna hold on to this. But at the end of the day, GameStop was never worth that much money. Yeah, it just became like an internet pump and dump, which is a legal thing to do, but people found a loophole because it's hard to have a pump and dump when people are just making online threads on Reddit and everything. So uh, and even like people like Elon Musk get in trouble and everything when he tweets on there, like you know, buy this or do that and everything, and then people all put their money into it, and then the big whales and everything take their money out. Like, that's you know, not the way to invest in stocks long term. And again, another company, you know, and then we're not recommending necessarily specifically to buy specific companies, but I'm just using examples of what to look forward to and everything. Uh, but one of them might be a company like how Nvidia's been a little bit of an internet darling lately because you know they're one of the forefronts of computer uh processing and uh the the chips and uh everything that they develop, and as a growth of AI and data centers and everything grow, like they're a company you might look at like, hmm, there I see the potential for them to grow, so I want a piece of that now, in the hopes that they will grow in that that aspect. Now, conversely, if you were back in early 2000s and you thought, oh, this is this great company called Blockbuster, and and you know, like, oh, like I really like uh taking my kids there on Saturday nights and renting a video and everything, so I want a piece of that, and then they didn't pivot and didn't buy Netflix when they had the opportunity to and everything, and they made every mistake along the way, uh, that might be something where unfortunately you make that wrong decision. So again, that's where the the risk and reward, not just with the uh you know, the stocks going up and down as a whole market and everything, it could just be individual companies that unfortunately become a little bit of a dinosaur in their own uh time because they aren't able to pivot or someone comes along with a better product, uh like Netflix, as we mentioned earlier.

SPEAKER_02 5:34

Right, no, exactly. So, like just looking at the long-term versus short term and and having a company that you believe in, I think, is also important too, because even if they do make some wrong choices along the way, you still believe in what they're selling or what the product is and what they're doing. And that helps take the sting away just slightly.

SPEAKER_01 5:52

And that's also where you hear a lot of times, also like diversification, because you know, as I mentioned in NVIDIA, I'm not saying put all your money into that one stock. Right. Even in the other episode you saw where we talked about the different methods of different things, you know, whether it is a an index fund that has it in a bunch of different companies, or even the Magnificent Seven where it has in seven companies, you know, or even more than that, you're not putting it all into just one. Because if that one goes bad, you got no money. Then you're done there. Yeah. So I think that kind of breaks down what a stock is and uh, you know, the the potential reward from it, but also definitely the risk aspect of it.

SPEAKER_02 6:23

All right, let's look at some of the bond stuff too and dive into that. Absolutely. All right, so let's now talk about what bonds actually do. The bonds are opposite of stocks. You're not owning the business, but you're buying the debt.

SPEAKER_01 6:37

Yeah. So you're basically saying, like, you know, hey, here's my money up front now, and you just pay it back to me with interest. Uh now, sometimes maybe wonder why, you know, companies or businesses or municipalities might do that. You gotta think about it, like if a company, like let's say Disney, for instance, is wanting to build a new theme park, they don't, you know, as a company, they don't want to just take a whole bunch of money and just build a theme park. It's a lot better to have you know people buy a bond from them, raise that money from a debt aspect and everything, and then build a theme park, and then they're not taking a hit on their stock side of things. Uh, a city might do that if they're building a new stadium for like a football team or anything. Because again, the city doesn't want to come out all that money to build a stadium, they'll take out bonds in the area and everything, and they'll help uh set that up. You know, larger governments might do it for like uh water treatment facilities or maybe having to expand something into national parks and everything. But again, the idea is you're they're not coming out with all this money out front because also it looks like all of our cash reserves dwindled. They're having the aspect of it like, hey, you give us some money to do this and we'll pay it back to you with interest because you know Disney knows when they open a new theme park, they're gonna make a lot more money on that theme park. So again, paying a little bit of interest on that on that bond isn't gonna hurt them once they're raking in the money from people buying uh the tickets go there.

SPEAKER_02 7:44

No, exactly. And having that predictability is the point of a bond. It's not supposed to be exciting like stocks, you know, how like you can get caught up seeing it go up and then the depression of it going down and then get real excited when it goes up and stuff. It's not supposed to be exciting like that. It's supposed to have that predictability to it.

SPEAKER_01 7:59

Yeah, so in essence, for most times you go into it knowing what your rate of return will be and everything. Now, again, that rate of return kind of is inverse to the risk of what you take from that. And uh, what I mean by that is uh, you know, the higher the returns, the probably more risky the company or something you're taking the uh the loan from from buying that debt. So a lot of times you'll see the biggest uh risk will be something maybe you've seen on Kickstarter. You'll see these companies on there like, hey, you know, you know, help buy my uh trinket that I made on there, uh, and I will give it to you at a discount because you're trying to launch this company and everything. But how many times do you hear the horror stories of like, well, I gave them a thousand bucks for this, and I never saw her from the game because they never actually got started? So you have that aspect, uh, you know, or you may have like a larger company, like as I mentioned, Disney earlier, a company that's been established for a while. You might still get a decent return on that money because you know, but you're expecting Disney to still stick around, but there is still a risk of uh, you know, even something like Disney shutting down, then you kind of go into differences of uh government bonds and everything. Now you have your municipal bonds, which I hinted at earlier about the idea of building a stadium, or maybe even at the state level, and then you know, as at the federal level, but the higher up that ladder you go, the less of a return you're gonna get. But you're you're under the guise of the aspect of you're pretty sure that the United States company is gonna go bankrupt. Fingers crossed. We're hoping that's not gonna be a big thing. We're hoping not, you know. So but again, the higher up the ladder goes, the less of a return you're gonna get. But you know, the idea is maybe at the lower level, maybe you get like a six or eight percent of return, but again, you're having that risk of like you don't know if that company's gonna be here. Or at the federal level, it might even just be a two or three percent rate of return. Uh, you know, some of which I'm sure you know a lot of them, especially those older uh people who got as kids was uh little savings bonds from a uh grandma will give you that savings bond, and like, hey, in 20 years you can turn this in for 50 bucks. Like you're like, yay, thanks, grandma. That's what you know, that's what it was a bond at the federal level, which had a very, very small, slow, low rate of return, but it at the as maturity, then you would uh be able to turn that in for a certain amount of money, um, with the idea that Uncle Sam and uh the national government still be here. No, exactly. So you know again, that's you know, you're doing it because you want that predictable rate of return without the pop potential because you know if a stock market crashes, that doesn't impact the bond market.

SPEAKER_02 10:07

Right, no, exactly. So that stays a lot more consistent, like we were talking about the predictability of it for sure. And then we're not using it to get rich. You know, a lot of people use a stock, use stocks to get rich over bonds for sure. Bonds are just there to help keep your wealth going.

SPEAKER_01 10:22

Yeah. And again, like I'm sure many people right now are looking at like, well, you're mentioned two or three percent rate of return. Like, why the heck would I invest in something with such a low rate of return uh compared to a stock that you know may boom overnight or even consistently you know get 10, 15, 20% of the rate of return? Uh, why the heck would I choose that two or three percent over the 10, 15, or 20%? Uh, you know, or even just your consistent 10% or so every year, like why would I exchange those different rates? Right. And there that's where kind of your age and everything comes comes into play, uh, you know, of where where the risk versus reward comes in and everything. And I think we're gonna kind of break down at what age should you be looking at these and where maybe maybe they're better fit for you at your investment journey.

SPEAKER_02 11:01

Yeah, all right. So that kind of covers the bonds and stocks and just the very basics of what each are. We haven't gotten deep into either of them because there's a lot more to it for sure. But like you said, the age has a lot to do with it. So I think we're gonna talk about that next.

SPEAKER_01 11:17

Yeah, absolutely. Okay, so now that we kind of cover the uh uh different aspects of stocks and bonds and everything, you might be wondering, you know, well, how does this apply to me and everything? And then that's where the difference of your age really comes into play. Um, so whether you're in your 20s investing or in your 50s or 60s investing, that's where the difference of like almost like a CSAC kind of comes into play. Uh the younger you are, the more risk you can absorb. Because yes, the 2008 bubble crash uh was terrible, but if you're in your 20s and you're now you know 30s and 40s past that and everything, you still have time to catch up from that, and the market has corrected and grown past that point. Uh, but if in 2008 you're already in retirement age and that that market takes a big dip, well now your retirement just disappeared. Uh so you can't absorb a loss like that because you don't have the time for it to catch back up. So then the thought is that in your younger years, you know, you're a little more stock heavy, and then your later years you're a little more bond heavy with that.

SPEAKER_02 12:07

Yeah, and more things contribute to that too, because that's not the only factor in this. You got to take into consideration like stable income, your finances, your emotional and vet like health and where that's at too. All of those things do contribute to this as well. So you got to look at that when you're going into it as well, looking at the different stocks options or the different bond options as well, making sure that it fits within your budget also fits in with what you want to accomplish and see long term.

SPEAKER_01 12:35

Yeah, absolutely. And like, so again, as you meant, you know, if you're already in retirement age and let's say you have enough uh you're making from your retirement investments, let's say $100,000 a year, just make a nice round number. Um, you want to protect against living too long from that. So like $100,000 today in 20 years might seem like $75,000 because of uh of inflation over time. Right. So you want to protect against inflation. That's where maybe a bond might come in for that. So you know, inflation is usually two and a half to three percent a year. Well, if you have a bond that matches that two and a half to three percent right there, the 100,000 now will still seem like 100,000 in 20, 20 years from now because you've you know had a bond to help you know hedge against that inflation aspect of things. Okay. So you still get the same level of comfort of of living off of you know the the same time period of actually you know being through the uh your your retirement years from that.

SPEAKER_02 13:19

So what we're looking at is using them to complement each other instead of work against each other in that way, then is what we're looking at. And also, like you, like you said, the age is huge because if something did go wrong or something offsets the other, you had the time to recover from that.

SPEAKER_01 13:34

Yeah. Now again, I'm not saying that when you're older to not buy or invest in stocks at all. I I still definitely like the idea of a growth aspect, but you might have more like maybe a 60-40 split, like 60% in bonds, 40% in stocks, something along those lines where you have that balance. Uh, so you can still have the growth and maybe even grow beyond maybe leaving more of a legacy to your family and everything afterwards. Uh, but if something wasn't happy, you saw that that steady bond return and everything to help uh hedge against you know that that volatility. Whereas if you're younger, you might only have you know maybe five or 10% bonds and your other you know 90-95% in stocks because you can ride that that roller coaster ride a lot longer.

SPEAKER_02 14:08

Right. And I mean, since we're talking about the age and everything like that, like we had mentioned already, like having that time is a huge contributor to that because we're not talking about getting rich quick. We're talking about the longevity of it too, and like what's going to create that generational wealth instead of you know something like maybe day trading, which I still like that. I could never I don't I don't think I could ever get into it. I know a lot of people that that's like that's their slot machine where they're you know like in and out constantly. Like we work with someone that likes to do day trades all the time, and some success, some not, but that's immediate. We're not we're not looking at like the instant gratification of like getting a little bit of money here and there or that instant wealth. It's over time.

SPEAKER_01 14:52

Absolutely, and and again, I'm not trying to knock you if you like day trading, especially if it's a hobby. But if you're putting all your money into day trading, then that can get a little too scary. Like I I very much remember back when uh COVID happened and everything. Uh, you know, a lot of us were furloughed or lot lost our jobs entirely and things on those lines. And I had people contacting me, like, hey Matt, how do I replace our income uh with the day trading aspect of you know, where should I invest in? And you know, they're talking about having a thousand dollars and trying to make a thousand dollars a day. I'm like, like that, you know, it's just not gonna happen that way. Uh, you know, in order to make a thousand dollars, you need you need a million dollars. You know, you need a lot more money to make make that little bit, and even from there, it's definitely still risky and everything. And uh, so you know, the person unfortunately got you know a little upset with that, you know, the idea of investing just a little bit to get that quick return. It just doesn't work that way, otherwise, a lot more people would be rich. Yeah, yeah, and and again, if you like day training and and there's it's fun to look at the knowledge. You're on there, you're you know, you're looking at the different you know, different reports and quarterly statements and everything, and that that can be very interesting to some people, and uh and you have fun enjoying that, sure. But I definitely recommend reading a book called Around Walk Down Wall Street, and it basically goes over from the dawn of the stock market all the way now all the ebbs and flows over time, and it basically shows just investing in a normal uh you know uh uh index fund outperforms all the gurus that have ever had those short-term gains. And you know, might have had you know the oil booms uh in the in the you know the 70s and 80s and everything, the tech boom in the early 2000s. You know, those booms were great, quick high, but then it quickly levels off. Yeah. And again, we can never predict the future, but we can look backwards, and that's where even just a simple index fund in the Fortune 500 companies uh usually produces around 11% rate of return over over you know the past 40 years, and that includes the fall in 2008 and you know the fall after after September 11th, 2001. So, I mean, we're talking, you know, over those time periods you've had two big dips, and it's still averaged 11.5% uh over the over that time frame. And that you know, that volatility and everything still outperforms what a bond would do and everything. But uh again, the idea of quick day trading just isn't there.

SPEAKER_02 16:55

Yeah, we need we need to start moving out of that idea of quick gratification, of that quick money to be able to set up the long term, like we, you know, the everything that this is about, you know, setting up the generational wealth, buying your kids a house, you know, like having that goal. And like you were saying, there's nothing wrong if you enjoy it and you have that little bit of extra money to put toward that on the side and you like going up and down, that's awesome. Like, and it's your entertainment, if you will, but don't put it all into day trading, you know.

SPEAKER_01 17:25

Like, and the thing is with with day trading, you know, if you're doing it based off just watching the little uh tracker numbers on there and everything, it's a video game, you know. Yeah, yes, you may get lucky every now and again, but it doesn't have the hard facts of what you're doing there. If you're doing it based off of reports that are coming out, I promise you there are big whales again, those reports before you get them.

SPEAKER_02 17:44

Uh-huh.

SPEAKER_01 17:44

Like uh there there was an investor that I like to follow online that he talks about uh back when he was more so in a Chicago hub of actually like on Wall Street, you know, with the tickers like back in the day. And he talked about that they actually he actually tunneled out and was one of the first ones to put fiber optic cable in his line just so he can get information a few seconds faster than anyone else on the floor, just to give him that little bit of an edge. Yeah, and that was someone that eats, sleep, and breathe stocks. Yeah. And he's like, none of us have access to that. So again, like you know, the idea of like him in the hub in Chicago, you know, with all the whole wall panel of everything going, and he's you know, tunneling it out to get special fiber optic cable just so we can get information that little bit faster. Yeah, by the time you're seeing it come across on uh MSNBC News or CNN or Fox News, whatever whatever, whatever money thing you're watching to get the news on and everything from the financial side of things, it's already well known amongst the whales.

SPEAKER_02 18:36

I was gonna say they've they've known for a lot longer. Yeah.

SPEAKER_01 18:40

So again, like you know, you're not all so gonna be like, oh, now I need to buy this thing and then get in, because I promise you all the money's already been put into it, and you're just icing on the cake, and then if it doesn't turn out, then you've you know you've lost some money, or the uh best case scenario, save the same amount of money and everything. Right. So yeah, so definitely stocks, definitely in our opinion, more so for long term, you know, buying now, waiting a while. You know, even when it dips, you're gonna keep holding on to it. I think if you do believe still in the company. Now, if you have news come out and like you need to you know sell a stock because you hear you know, like a Blockbuster again, you know, coming out like, hey, uh, I see a Netflix coming in and taking too much of that market share, and I realize that Blockbuster isn't the company that meant to be, absolutely sell that stock. Uh you know, so we're not saying hold on to the bitter end, uh, but don't don't do you know, if there's a dip just because overall market corrects, don't panic sell.

SPEAKER_02 19:32

Yeah. So and then the last thing I wanted to mention as well, since we're talking about age and how like that does help benefit you having that time, but it isn't too late to start. No, absolutely you can start at any stage, just because it gives you an advantage, if you know, like these kids, if they start doing it in their teens, 20s, 30s, you know, doesn't mean that you know, 40s, 50s, 60s, you can't start. You can start any time and still see like improvement from it.

SPEAKER_01 19:59

No, absolutely. There is no time better than the present. Um, and again, you know, and then I you know, I know we mentioned earlier, if you're older, you may want to go more bond heavy. If you haven't started your little later game, you still might want to go stock heavy initially because you definitely want to have that potential for better growth in a more rapid time frame because unfortunately time is against you on that side. So if you're in your 40s, 50s, or even 60s and you're just starting out and everything, it might be worth it still to do stock heavy on that aspect because you're trying to catch up for time. Um, but definitely don't do nothing because you know inflation is happening no matter what. I know right now we're in an age where inflation is even higher than what normally is, but even on an old basis, two and a half to three percent, if you stuff that money in a mattress, next year that mattress is now three percent less than what than what it was last year. So doing nothing is not good. And I, you know, we I have co-workers of ours and things that have come to me and they're a little bit older and they're like, hey, I haven't even started doing this. Like, should I even bother? Absolutely. Yeah, you know, putting in for something, even if you're gonna gain just a little bit, is better than nothing. Uh, you know, so again, you know, yes, you may start to work a little longer into your golden years and you may have to, but like at least it's earning something on the on the side and making those golden years at least a little bit offset, even if you start to work uh in your retirement part-time and everything, uh, you know, like become you know Walmart greeter or something on those lines, you know, something something you can enjoy in your retirement years uh that helps supplement investing uh as soon as you can, whether you less in your 40s, 50s, or 60s is still better than not doing anything at all.

SPEAKER_02 21:22

No, exactly. And I think that kind of covers the basics as for this as well, having that age work for you or like what to look at if you're starting a little bit later, like you just you know, let us all know. The best option in your opinion of how to go about that is super important, I think.

SPEAKER_01 21:40

Yeah, yeah. So again, no time like the present. You know, like you know, if you if you're listening to this night right now and you haven't done it, uh go ahead and uh click uh open an account on whatever brokerage uh that you want to and uh and and throw something in there, you know, even if it's a hundred bucks or whatever, you know, you know, doing something and start consistently putting that money aside, uh, get in that habit of paying yourself first and everything, because you know, if you don't start doing that. Next thing you know, it'll be next year. Next thing you know it'll be the year after, and then all of a sudden you blink an eye, and all of a sudden, you know, your kids are growing up, you're in retirement age, and you're like, I did nothing.

SPEAKER_02 22:08

Yeah, no, it can sneak up on you real fast for sure. I remember this wasn't great. I was gonna say, we're both still relatively young, and I still got a lot of grades now, too.

SPEAKER_01 22:18

Uh yeah, uh, you you may you may are young. I I don't feel young anymore.

SPEAKER_02 22:23

Well, that's I think a different episode. Yeah, yeah.

SPEAKER_01 22:26

Okay, but I think that kind of covers again stocks versus bonds versus what your age aspect is and everything. And again, if you have kind of questions on this, please, you know, feel free to throw in some comments on this because we're doing general organizations. But if you have a specific to your case, we'd be happy to you know dive into it of where you're at and your stage in life and you know what you look at, like, hey, like what you know, mix of it that I should look at. You know, should I go like an 80-20 split? Should I go, you know, 70-30? You know, what are we looking at in today? Uh we'll cover that. You know, we'll try to help you out in that specific aspect of what we feel uh where that fits with your age and your your life situation and everything. So yeah, absolutely. All right, well, on to the next. Yeah, so we'll kind of cover and uh how that fits into the whole uh model and what we're looking at, and uh and then we'll wrap things up. All right. Yeah. Okay, so I guess now we're gonna kind of pull it all together of how it fits into you know the buy your kids a house model and everything. And in essence, you know, the uh if we haven't gathered so far, we're talking about in your early years, your early years prioritize growth, and then your late years may want to have that more stability uh to make sure your income's protected in that aspect.

SPEAKER_02 23:27

Yeah, and bonds are a tool. They're not necessarily a requirement, they're there for us to use.

SPEAKER_01 23:32

Yeah, and like understanding the difference and you know how it impacts you and impacts your finances is really what it boils down to what matters in this aspect, not necessarily what stocks or what bonds. You know, again, it's just kind of the idea of what you need to use for the time frame you're at and what your priority is, whether it's growth or the income stability.

SPEAKER_02 23:49

No, exactly. And also it is important to know what's inside your retirement count. So that is kind of like a homework, if you will. Look into that and see what you have in there in that account.

SPEAKER_01 24:00

Yeah, and like and some people are like, oh, what do you mean you're gonna be homework in this? I didn't know I was gonna do research on this. I've been out of school for 45 years. I'm done. I'm I'm done with the homework. I don't need to take any tests. Uh, a lot of times you'll have people, and I have people come to me a lot of times with 401ks not even knowing what they've invested in because it's just what their employer gave them, and they're just told, like, hey, sign up for your 401k, invest this, that's what's it's done. Well, look into actually seeing what they're actually investing in. A lot of times they're age-banded, so they'll give a predetermined mix based off your current age of stocks versus bonds. And a lot of times you'll see it'd be like, you know, uh investment account, retirement age, you know, 2045, meaning that the company is expecting you to maybe retire in the year 2045. So based off that age frame, it'll give you that predetermined mix of stocks and bonds. Well, maybe you decide, well, maybe I'm willing to take a little more risk, so you might turn it into a retirement account 2065. Yeah. Because then the later you retire on, odds are that account will have a more stock heavy focus in that mix uh versus bonds. Or conversely, let's say you know, you're like, hey, like I've already got a pretty good amount there, I'm happy. You might tone it down and make it more bond heavy. But you can play around with it in there, but now you can actually look into that 401 account and actually know what that mix and everything is looking like and uh what how that impacts you. And a lot of times you might just blindly click and uh and just invest, you know, see what your money's actually doing in there.

SPEAKER_02 25:17

Oh no, exactly. And that is important to be able to see where your money is going and how it's doing because of such the fluctuation that we have constantly. I think it's important to have that knowledge to be able to stay on top of all of it.

SPEAKER_01 25:29

Yeah, absolutely. And again, I might be a little uh more willing to take risks and everything. So I I know, for instance, uh, you know, my wife's uh 401k, I've uh I've fudged it where it appears like that we're more or less stock uh heavy on hers and everything, because again, I'm willing to take that risk and everything, knowing that in a long term that these uh funds and everything do bounce back, and I still feel we have a long enough of our of our lifespan ahead of us that we can uh you know handle another if there's another dip and everything on those lines. Uh now I'm not saying for you to go do that, you know. I'm just saying that that's how my situation where I where I did it with hers, but not knowing is uh not good. So please go in there looking to see uh what it is and you know what you can do, and then to see if uh there's something you want to tweak or change with that, and then see how the uh the performance of it has been over over the years. Uh, because again, you might be surprised at what you find and everything there.

SPEAKER_02 26:15

Yeah, and it's it's a lot more of an individual thing too, because like we were talking about taking into consideration where you're at in your life, your emotions, things like that, it becomes a lot more of an individual than just like a mess. And so having that knowledge to be able to tailor it to yourself is super important. And we want to know where you're at with it too. Like, like, comment, subscribe. We want to hear like what you've invested in. If you've had you're just doing your 401k blindly, and you're like, oh, maybe I should find out what how much is in there, where it's going, what was my money doing for me, and to take a step back and look at the bigger picture instead of just pushing it off to the side and just letting it sit. We still let it sit. Yeah, but having that knowledge is a huge tool for sure.

SPEAKER_01 26:58

Yeah, and again, you know, put it on there if you were shocked and surprised by something that was uh revealing to you in this and everything, because yeah, I I've had people that when they looked at their 401ks and they'll yell at me saying, Oh, investing in a stock market is terrible. I've been putting my money in 401k for all for years, and it's only gotten me four or five percent. And then we've looked at it and saw that it was very bond heavy. I'm like, well, you actually have been investing in stocks. It's all been bonds and everything. So again, that's what they realize and adjust it uh to what what you know had more potential for growth and everything. So again, you know, like look at it, see, tell us if there's something was revealing. Uh, again, we're still a new and up and coming show in this. Uh help us out, like, share, subscribe. Uh, you know, next episode, we're gonna be kind of going over a little bit of uh also having the travel loyalty. Yeah, that you know, again, we you know you want to invest hard to play hard, but yeah, we want to have the idea of having that loyalty going to the companies to then maybe they reward you in the aspect of uh you know free nights at hotels or perks or upgrade uh and how to work with that because again, we're not just trying to invest and uh and die with Scrooge McDuck with all of our money. We want to enjoy the money, and uh traveling to me is a big part of that.

SPEAKER_02 28:01

So oh no, absolutely. Experiences is huge, yeah.

SPEAKER_01 28:03

So please join us on this journey and uh let's all uh build to a great retirement together in this in this process. Till next time.