How to Get Into Investing With Special Guest Giovanni

♪ Crown coins to C.O. ♪ Winning never sounded so good. What would you do if you won big? At Crown Coins Casino, real people win real prizes every single day. Hi, this is Michael from Dallas, and I won 40K and finally renovated my home. Visit crowncoins.com, sign up in seconds, enter code Crown and get a free lucky wheel bonus. You may win up to 10,000 sweeps coins. Crowncoins.com, that's C-R-O-W and coins.com. No purchase needed. Code Val for new users on Void were prohibited by law. 18+ terms and conditions apply. Crown coins to C-R-O. Welcome to another edition of the Meccanulti Method, where we try to help young adults live better financial lives. Join denied as always by financial expert Frank Meccanulti. Frank, how you doing? - Great job. - How are you? - I'm good and excited because tonight we have a special guest, Giovanni, who has some personal finance questions for Frank and for usual, when we have a guest, I just turn it over to him. Giovanni, how you doing? - I'm doing great. - I'm really excited, very honored to be on the podcast. I appreciate you guys inviting me. - No way, and Frank, you can tell him, but we're excited to have you because this was really the goal when we set out to do this. - Right, we'd like to have a student every time. It was really, you know, a young person every time because so we can answer what you want to know, not what we think you want to know. - So Giovanni, I'll just let you go and ask Frank whatever questions you have and go for it. - All right, well, I'll start off with just, what made you get into finance? Like what stood out like in finance compared to all the other industries? Well, there was like a county or marketing. - Well, I've always been a numbers person. Numbers came very natural to me. And, quite honestly, in the beginning, everybody told me I should be an accountant. And I think I've mentioned, may have mentioned this before, but I went through the first three years of college, almost had all the classes done for accounting. I don't know if I want to be an accountant, but I only got one accounting class left. So I'll finish that, but I think I'll get finance too. And so it's really, and the difference between the two is accounting is, I refer to it as concrete. It's what happened. You're recording what happened. It is what it is for the most part. Whereas finance is squishy. It's more of the future. What are we, how are we going to project for the future? How are we gonna organize things for the future? And I sort of like that better. It's like, okay, what to, I guess I like being squishy. What it comes to the numbers, what are we projecting all of it? Now, and there's also investment finance, but I'm not on that side. I've learned my lesson. That's another, that's another complete thing. Too much economics. No, I think you need more discipline. We're just quite honestly for investments because you're, you're an analyzing things. You're, you're playing with people's, other people's money. And that, not a good fit for me. - Yeah, I actually started off in computer science. And then I figured I was like, same, same thing. I got into that because of numbers. And then I was like, I'm not gonna do this. I don't like it. So then I switched to accounting as you know. But I, I thought about being like, like going the route of being like a financial advisor, like just getting my securities license and stuff. And then I kind of just swayed more towards accounting. But I kind of want to talk to you more about like, I guess my personal finances. Like how could I invest for myself rather than for a client? - Absolutely. Well, let me, let me make a comment about the, you know, financial advisor role. For the most part, those are sales jobs. If you work for a Merrill Lynch Bank of America, any financial, bigger financial services firm and you're a financial advisor, you're not doing analysis of stocks and investments. You're analyzing individual's situation. And then you're placing their money in the buckets that the firm has determined or the best place to put them. So that's the difference. If you wanted to truly do financial analysis and you'd work in the back room, and you'd help pick the stocks and create the investments. But yeah, so there's a thousand, just like in accounting, there's a thousand different jobs you can do in accounting and finance. - Yeah, I know I asked you this before, but I guess like in this day and age, like in our economy, I'm 21, if I have like a couple thousand to invest, what would you recommend as far as just to get me started out? - Well, I would recommend, part of it is, it's hard to just make an initial recommendation and what your goals are in that. But part of it is, if it's sitting in the bank, you're 21, you don't have any immediate use for the money. You need to get it earning more for you. The bank's paying what the bank pays, yeah, it's not much. I think I have like a two, I do have a high yields, but it's only like I think 2.5%. - Yeah, it's like not that much. - High yield to 1/2%, there's just like the old military intelligence, there's actually more on there. - Yeah. - High yield to 1/2%. No, high yields, you know, seven or eight. - Yeah. - But so I would suggest you do two things. One, open up a regular investment account. And two, open up a Roth IRA investment account. And get that money in there, earning for you sooner rather than later. That's funny, in a class earlier today. I, we were doing future values of money. And we're doing, we were answering questions and I said, okay, now for fun, here's what we're gonna do. You're gonna put $7,500 in that same thing. Now classes, they're all like, I said okay, let's assume you're 25. I don't wanna think too hard. And I said, you're gonna work to your 70. Now we say that nowadays because your generation is gonna live to be 100. It's true, medical advances and everything. Odds are, you're all gonna live to be 100. They even say some of you're gonna live to be 120. Yeah, well, so think about it, even if you retire at 70, you're just gonna have 30 years of retirement up to 50. So, it's a long time. So I said, okay, now here's what I want you to do. I want you to put $7,500 away a year from 25 to 70. So four, 45 years and we're gonna earn interest at 10%. And we're just gonna put it in a large, mutual fund, and let it go. And so, okay, now, put the numbers in your calculator, and let's go. It came back at $5.2 million. Which, a lot of money, granted, people gonna eat well. Money's not gonna be worth a second. No, it's not. But it allows you to show how it, and I said, okay, let's change it. 'Cause they're saying, oh, you know, what if we don't have the money? I said, let's start investing. Let's only invest for 35 years. It was half that amount, less than half because that extra compounding didn't happen. So the most important thing for you is time. You have time on your side. I don't have time on my side, okay? So, we haven't, and Giovanni is in one of my classes. So, you know, we're gonna do this next class. In chapter four, this is what we're gonna do this. You know, start doing time value of money, future value. But there's a simple way to do this. There's something called the rule of 72. It basically says, if you divide 72 by the interest rate, that tells you how often something will double, okay? So, let's do 10% which is what long-term rates of mutual funds, some of the good ones I've seen have done for the last 20 years. 10%, so that means your money's gonna double, how many years you're gonna take for your money to double? 72 divided by 10 is 72 divided by 10, every seven years about. Basically, every seven years, okay, so let's say you're 22, you're gonna graduate next year. Let's, I wanna, somebody gives you a graduation, give to $10,000 next year, okay? So, you go and put it in this fund, in an IRA. So, you don't have to worry about paying taxes on the infact, okay? So, you're 22, at 29, that 10,000 is gonna be worth 20. At 36, it's gonna be worth 40, 43, you're gonna be up to, $1,800, $2,800, $2,800, $2,800, $2,800, $2,800, $2,800, $2,800, $2,800 Basically, in a year and leave it there, you're going to have a million to open for one investment. And that's why it's so important for crown coins to see. Winning never sounded so good. What would you do if you weren't big? Hi, this is Michael from Dallas and I won 40K and finally renovated my home. Visit crowncoins.com, sign up at seconds Intercode Crown and get a free lucky wheel bonus. You may win up to 10,000 sweepscoins. Crowncoins.com that's C-R-O-W-N coins.com. No purchase needed. Code Val for new users only. We're prohibited by law. 18 plus terms and conditions apply. Crown Coins Casino. You're a poor college student, right? My family still supports me. I guess, yeah, but I couldn't support myself on that. I'm going to take a look probably at least speaking. You don't have a bunch of money. You're not out, you know, eating dinner every night. You know what, a stront's not. Yeah, definitely not. So, so my thing is always stay poor for a couple, for a few years after you graduate. Get the job, start earning real money, but just sock away as much as you can. That's the best thing. And at two and a half percent in the bank, it's not going to do it. Let's just, let's just look at this. I happen to have this here. So, well, I know this is great for radio. I'm showing charts, which I'll describe. Okay, we've got we're putting away $10,000. Where's my 40? Okay. Yeah, for 40 years, it ends up being a half million dollars, the 10 percent. We, so we went 49 years or whatever. Yeah, so that, that would double that again. Oh, okay. So, million dollars. That's your two and a half percent. So, let's just compare half a million at two and a half percent. The same amount of time, we have $27,500. You know, it's very drastic. That's, that's, I'm seemingly dressed. Yeah, I'm not going to say. And so, it just shows you've got to take the risk. You can afford to take the risk. You're, you don't care. If you put the money in tomorrow and the market drops by 20 percent, okay, it happens. It happens. You don't need the money. You can, what, what happens is that you can, you can buy, you can put more money in the market when you start getting paid at a lower rate. And it just, but it just keeps building. You know, it's not like you're pushing 70 and you, you have to live off this money and the market drops by 20 percent. That's, that's what, that's the horror stories that people freak out about. But even then, I'm not talking about that. I'm not talking about me. I'm talking about you. That's why a greater rate of interest compounded over all this time. It's such a good term. I mean, what it, what it, so we went from, basically, it's 20 times more. Money you end up with. Yeah. It's a lot. It's, it's, it's a tremendous amount. And it's actually seven and a half percent. And it's, it's all because, yeah, you took a little more risk. Yes, the bank money, they kind of, you know, there's no risk. Actually, there is. You lose the value of that money. You only get two and a half percent. Well, inflation's three. You lose the money every year. And it's like, I guess this is more like economics terms, but it's like big opportunity cost on that huge opportunity. Yeah, your opportunity cost was, you know, four, four hundred and seventy five thousand dollars. Well, like that. So, so that's, that's why you need to, you need to get that money, put it into, like I said, to invest money. And the reason I'm saying too, is because you don't know what you're going to need with some of that money. You know, you can say, I'm going to put it all in my, in my Roth IRA. But it's sort of locked up. And it's going to pay that penalty, right? Unless you want to pay that penalty and you don't want to do that. If it's in there, you want to leave it in there. So have both accounts. Yeah, actually, you need three accounts. You need a bank account. That's some money in there. You need your investment account. And you got your Roth IRA account. Those are three accounts you need to start with right now. And then I know this is like, I feel like a lot of finance people say this, like the best time to invest was yesterday. So what's your opinion on like time in the market? I know you kind of already answered it. And your last couple of sentences, like, you know, if it goes down 20 and you just invested yesterday, oh, so be it. Yeah, just what's your opinion on time in the market? Should I try to do that at all or just go into it? No, because are you an expert on the market? No, definitely not, definitely not. So even even the experts can't time the market. What you want to do is say, every, I don't know why we always picked the 15th of the month, Colin, or I've always picked every 15th of the month, I'm putting X number of dollars in. It can be up. It can be down, doesn't matter, I'm putting that much money into the market every 15th of the month. Because as soon as you start, here's what happens when you try to time the market. Like the market keeps going up right now, right? And say, okay, well, it's not a good time to invest. I'll wait till it goes down. Then you wait, then it goes down and you're like, okay, it's not done going down yet. I'll wait some more. Then it goes back up. And you go, oh, okay, I'll get in. Where did you have all this time where, you know, if you reinvest the dividends, you get the dividends on the markets down or out, then you buy more stock when it's down. So the compound, once again, at your age, it really doesn't matter. As long as you believe that the economy of the United States is going to continue to be strong. And regardless of who's who's running our government, we're still, we're still the capitalist country in the world. We're going to have a stronger economy. There'll be, yeah, downturns, there'll be upturns. Look, I've been through the 2000, 2000 tech crack or 2000 dot com crash dot com crash, the 2008 financial debacle that almost took the world down. There, there's so many things in place now to prevent a great repression like the world had in the 30s. It's, I'm not going to say it can't happen because, you know, as soon as you say something can't happen, but there's so many things to make it not happen that you don't have to worry about that. And you've got 50 years. I mean, hopefully, hopefully, and we just saw, you know, the difference between 10% return over those 50s on one investment, one 10,000 investment is $470,000 difference in the ending balance between a two and a half percent of the banks paying you and the 10% that the large cap growth fund that I always reference is going to pay it or has has paid in the past. So, you know, we have, you know, always say go past past results are not indicative of the future results. But they've been doing it for 20 some years. They've got that average. They're smart people. It's what they do for living. It's probably going to be okay. And since we are talking about the banks, what's your opinion on like CDs? Because I guess like from like, you know, I don't have too much knowledge. I just have a couple of years like schooling in the county. But I guess I look at CDs. And like if I just put in like a couple thousand into that, it's like they're really not giving me that much more. And it's like they're they're restricting my liquidity by my assets. And it's like, yeah, it's for what? Like an extra $20 a month. There's absolutely no reason for you to do it. What if I had like a lot of money? Like let's say like 10 years from now, I have like a couple hundred thousand. Then a CD might be worth it. Okay. Okay. So let's say the CD pays you 5%. Okay. So we're going from 10% to 5% and you're now getting 1/7 of the same amount of money. 1/7 by cutting the interest right in half. It's compounding is there's a rumor that all the I'm blanking with equals MC square going I'm not I know the cool. I know that compound interest is the greatest force in the universe. Because look, look what happened. Going from a 5% CD to a 10% investment in the market, you got you ended up with seven times as much money. Yeah, there is absolutely no reason for you to have CDs absolutely not. If you, you know, you can have you can have your if you want to have CDs by utility stocks. Yeah, utility stocks are extremely safe usually because they provide power. Addison and, you know, PG&E have had problems here because of the wildfires. But investment utility company somewhere else where they don't have a lot of wildfire. And those those will pay CD like rates. Yeah, they might go up and down with the market, but as the market expands and maybe their business expands a little bit, you get some growth. And it's and the money's yours whenever you want it. If you needed to buy a house, you sell the stock and buy a house. But every percentage means such a difference over the long period of time that you want to have you want to earn what you can. And then I guess this kind of goes back to like time or timing the market, I should say. What's your opinion on options because isn't options kind of based off like, okay, I'm betting that it's going to go the low or above this strike price. I could make some quick quick money off that. Yeah, you can make quick money, but not not like this. And you can lose with me. So here's the deal, we're going to get into my B boring speech. Okay, my options, Bockel story. Yeah, well, it's called got an option is the Bockel story. I've sold covered calls on my stock. I've never done naked puts naked calls. There's all sorts of things once again, this is something you don't know anything about. You shouldn't do it. Okay. So options give somebody the right. So say you sell a call to generate income. And you sell a call on a stock at $100 and stocks currently at 95. Okay, so you get paid for that option. And then the stock goes to 102. Well, they're going to buy the stock. They're going to take the stock from you 100. So you now lost that stock. Maybe that was your plan. Hey, I got a good return. I'm fine with it. But that's an income generating thing. That's something you can do when you're in your 70s. You can spend the next 50 years learning about options, learning about option ETFs. Which I've just been reading up on for generating cash flow. Because they're mainly about generating cash flow. Getting more cash flow. Here's what I want you to do. You will bonus you may win up to 10,000 sweeps coins crown coins dot com that CRO W and coins dot com. You're going to have your other investment account. Maybe you could have another investment account. So you're going to put the money that you're doing for long term. You're going to be boring. You're going to give it to the people who know what they're doing. That's straight into the Roth. You're going to put it into the Roth. There's nothing saying you can't do this stuff in a Roth. But you're going to you're going to put your money in the Roth and you're going to put it into one or two or three. Big neutral funds or ETFs with low costs. You just leave it alone. Put it in that mutual fund that I have in the back of my mind. That Vangard has that Ellie has them Swab has them other companies have them that's been in business since 2000. That's got an average return of 11%. That's got a cost on it. It's like 0.04%. So the cost is almost non-existent. You're going to leave it alone. You're just going to put money in there every month. Just keep adding to it, adding to it, adding to it. And then the money you're saving say like you're you're putting money away to buy a house or another piece of real estate stuff. Okay, that goes into a regular investment of fund. You can also buy these mutual funds and let them do it. Okay, then so I can see it in your eyes because you want you got these ideas you're going to you want to play with some of this money, right? I do I do want to get me so do me a favor to yourself a favor you take for every thousand dollars you put into these boring investments. You can take a hundred bucks and put it in the Giovanni goes wild fund. Okay, you put the money in there and you buy you buy the penny stock that you heard about. Okay, then when it goes to zero, you can write it off your taxes. Okay, you want to play covered calls. That's in the Giovanni goes wild fund. So you learn with a little bit of money, not a lot of money. And there's nothing saying you can't get really good at these things, but it takes a while. The people that do this on Wall Street, this is all they've done for the years for like years. And so they're really there by definition better than you were I are at it. Yeah, we can get lucky now and then. Now. But trust me when I say this, we get unlucky a lot more than we get lucky. At least I have. So yes, if somebody I wish somebody would have this conversation with me when I was your age, I wouldn't have done a lot of the dumb things I did. But. So yeah, you can do all that. I mean, there's, you know, Rob, you've heard of Robin Hood. Yes, I have. I've heard like I've heard different views a lot of some people like Bouch for it, like pretty heavily and some people don't like it and recommend others. There's nothing wrong with Robin Hood. I think they're probably a buying company. The difference between Robin Hood and say a swab that Ellie bang yard is Robin Hood says you're an adult, you're money. You can do whatever you want. You want to sell naked calls, go ahead. You want to sell naked puts go ahead. You want to do you want to margin your account. You want to do all the exotic financial weirdness that's available in the market. Go ahead. Where's swab if you have a swab account and you say, I want to do cover calls. Even cover calls are going to say, how long have you been investing? What do you know about this? They want to try to protect you from yourself. In the end, they can't. But they want to try. And so, yeah, that's why that's why you know my new one of my new mantras is be boring and be rich. It's because it's true. You know, they talk about all these 401k millionaires who are nowadays. And you don't know why because they just put money away in their 401k every month. Put it in a cup to spread it across two or three funds that they can invest in through their 401k work. And it just keeps going up. Yeah, could they have more money if they tried to do this that the other thing? Possibly that's not what they do for living. They're an engineer. Yeah, you know, or doctor or you know, just an accountant. You know, the accounts are smart people, but. It's a lot different from like it's not what they do. I mean, I don't want somebody operating me who's not a doctor, even if the person, even if I know somebody who's a lot smarter. But wait, you don't know how to do this. Yeah. So that's, that's really it. And I guess like, so the only way that I guess accounting and finance kind of overlap is just like analyzing those statements and like the patterns and stuff like that. Accounting accounting and finance overlap a lot when it comes to investments because yeah, you do have to be able to analyze the financial statements, which is. You know, in some ways more accounting than finance. the finance you have to be able to say, okay, how is this company going to do in the future? How is it going to grow? You know, whether there's what's going to happen with their sales and things like that. So yeah, that's, I've never been, I've never been unhappy that I got both in accounting and finance degree. They've worked very well together and it's probably the fact that I, you know, always told myself, I don't want to do accounting, I do accounting every day. It's because they're just, it's just there. Yeah, I think one of my other accounting professors is like accounting's just the language of business. Like if you understand that, you could understand the business. That's true. Yeah, if you can, if you can really read financial statements, do the comparisons, like we were talking about in class today, you know, what's happening with the balance sheet and income statement over time. How does it compare to other companies? Yeah, you will understand the company quite well. And we haven't even gotten into the cash flow statements. We're not going to do the cash flow statements. So don't worry. I was more complicated. But yeah, if you understand those things, you can, you can literally go to work anywhere. Now every industry is different. You know, the medical industry is different. Oil and gas is different. But the fundamental is we're making any money. Yeah, I've been, I've been getting really into cost accounting. I really like that. But I know that's not really much to do with finance. But I've been taking a cost accounting course and I've been, I've been a lot. Well, cost accounting is probably more finance leaning the regular accounting. Because now you're, you know, trying to determine how much things cost. And let me tell you, if you, if you like cost accounting, and you get good at it, you'll, you can have a great career because I bet everybody in that class hates cost accounting. Yeah, a lot of people are rolling their eyes and stuff, but I love it. Right. So what, how do you have a good career is do the things that other people don't want to do. I said, people don't want to do cost accounting. You get really good at it. You're, you know, have a lot less competition and looking for jobs. I've been, and then I'll be in, I'll be in high demand. Yeah, higher demand. Yeah, you're, you're doing something that other people don't want to do. You know, it's, they, they could do it, but they don't watch it. It's too much work. Make some thing too hard, whatever. But so that's, that's always a good opportunity. And like, if I was to, because yeah, I'll graduate next year. And I'm hoping that like start off getting a job like 70 80 K year. I think that's what starting rates are. And then like you said, if I just start every month, they're only in the raw, they're only in my mutual funds. And then I'll have just a little bit for my plan for your, for your play money. I'll be, I'll be set in like 20, 30 years from now. Yeah, you'll be fine. Now, with the counting firms and the counting jobs, it's, we're going to go off on a little career advice here. They care deeply about your grade point average. Okay. The big, the big four. I don't know the exact number, but they want the 3.8 grade point averages. Okay. Then the next tier of firms go that, you know, it's a 3, 5 to 3, 8. Then everybody else is below that or something. I don't, I'm just picking numbers. But they're very picky. And yes, if you're going to do this, you want to go to work for the big four. Yeah, but I'm looking at Deloitte. Yeah, but I possibly, I worked for them a very long time ago. I worked for Tusha, which is now, which became Deloitte Tush or Tusha, no, it's Deloitte Tusha and other just Deloitte. No, great firms. Great people. Great personalities. Well, I haven't hung around with them recently, but here's what they, well, here's what you can get out of them. At Crown Coins Casino, real people win real prices every single day. Hi, this is Michael from Georgia, I won 40k and finally renovated my home. CrownCoins.com, that's C-R-O-W-N Coins.com, no purchase needed. Code Val for new users only, we're prohibited by law. CrownCoins Casino. Well, first, you know, you're going to have to go five years to school to get to be able to take the CPA exam. Or they just passed a state, a state law that I'm like very happy about. I think it's only, they passed it down to 120 units. So now I can graduate with a bachelor's and then go for my CPA. Oh, 120 is normal. Yeah, that's just a normal degree. Yeah, but for 120, you could get your CPA now. I think it used to be 150. Right. They just changed it. Well, you want to know why? Because people weren't becoming accountants because they're, oh, I got to get it. I got to go next year here. They didn't want to do the master's. Right. They didn't want to do the masters. But even so. So you do that, you get your CPA, start taking the exam as soon as you can, because you start to forget stuff. And I think you can pass parts of the exam almost immediately after school if you've been a good student. Yeah, work for hopefully you get that job with Delight. Are you in the, are you part of beta off the side or the accounting society? Yes, I'm in the accounting society. I'm all RSVP for meet the firm. Yes, and you gotta, you gotta do that. You gotta do that. And then when you're working for Delight, if they're, when they're looking for people to do jobs, no one else wants to do. They get you some visibility. Do those jobs. Yeah, take on the travel. Go to the clients on the office, show up in the office. Build a network, talk to people, meet people. That's what you're there for. And yeah, you can have a really good career. I mean, they're paying some people now $100,000 to start. Yeah, I talked to this guy. I think he's a year older than me. And I think he's starting off at 90K. I don't think it's at Deloitte. I think it's at KPMG. Yeah. But yeah, 90K started. That's a lot. That's a lot of money, even for Southern California. And he's like 24 or 23. He's young. That's a lot of money. And so, and especially if you have a specialty in cost accounting, because then you can go to work in their consulting arm where they go out and do, you know, set up costing programs in that for companies, because companies have a problem hiring people, they can do cost accounting. Those people don't want to do it. So no, that's a, that's a good plan. Gotta get into that. The only, the only thing that I guess I'm skeptical about is I heard like out of audit tax and like risk advisory. When they're laying off people, it's the first year advisors, like risk advisors that they lay off first. So I guess it's kind of like I have to just gamble it a little bit. Well, what, what, you don't, don't go to work in the risk advisory part. I mean, yeah, they're going to lay those off because the audits recurring work. That's just normal refurming work. It happens every year. You know, advisory, they make big money off that. That's where the cost accounting could come in handy though, because they need people that know how to do things. So I guess if I get good enough at cost accounting and then I get into the risk advisory, they won't fire me. They'll fire other people. If you show up and people know who you are, then they like you. No, they'll keep you versus the employee that does a good job. Does everything there's asked of them, but no one's ever really met them. They never show up at the office because they want to work virtual. And then it's like, okay, who should we fire? Should we fire Colin here? I don't know who Colin is. He does his work, but, but, or Giovanni who shows up to work. He's a nice guy. We like working with him. Sorry, Colin. That's okay. You're out. I haven't fired a couple of times on this podcast. Yeah, you get fired all the time. But, yeah, look, it's not, it was the old saying, it's not what you know, it's who you know. That is so, so, so true. Now you start to know what you know, but to get in and stay in and move up, it's who you know. Yeah. More than what you know. Yeah, I told you right now, I'm like an admin assistant to a financial advisor. And exactly what you just said, I got it because my mom and dad, they've known the advisor for like 30 years. They met her when she was working at a bank and then she went independent. So now I'm working for her. But yeah, it is crazy. Other jobs too that I've got like freelance work. It's all from my mom. Right. So we eventually got to move your build your network beyond my mom. Yeah. But we all, that's where we all start somewhere. You know, whether it's neighbors or whatever, you start with one person you build from there. Yeah. Yeah, that's why I'm like I'm excited for the accounting society this semester like I'm trying my best to network and I'm happy I'm happy I met you and and call in today and yeah I have a couple other good good professors I know I told you Miss Jones she's great yeah she's really awesome she's cool yeah just trying to do that. Okay you got I know you got more questions on there. Yes I do back to back to like starting off my investments and you're talking about Robinhood right what do you I think you told me this before but do you like Vanguard swabs fidelity like what would you recommend for me to start off? Well most most of my accounts are at swab just because they're there okay I don't see a reason to change because I can buy all of Vanguard's products into my account at swab I can buy almost all the fidelity products into my account at swab so really wherever you just you look on their websites that will go okay this this is easy to do I'll do it I'm very I'm very comfortable with swab there's there's no reason for me to say you know okay I'm gonna move all my money to Vanguard no reason to it's it's more you're you're looking more at their products I mean I think any of the big companies you want to you want to feel like your money's gonna be safe yes and so the bigger companies you know fidelity's been around forever Vanguard has been around forever swabs been around they're they've all been around forever they're all huge they're not going anywhere and now you don't even have to worry about the difference in costs because everything's free you know I think Robin had ever did for for finance yeah Robin Robin had basically made the whole industry free oh well because until they came along that you traded a stock you got charged a commission coming in going oh well Robin says oh we don't need charged commissions we'll do this for free so we also says okay I guess we're doing it for free so obviously they make a lot of money doing things for free yeah it's all the financial manipulation that goes on behind what seems that sounds bad manipulation sounds bad but it's you know if you keep money at swab in your account you're earning basically nothing they're lending it out they're acting as a bank now a swab has a bank and so they make it they make it work so yeah like the investment companies they're kind of doing similar to what the banks do but just had a way higher return probably for the consumer right well hopefully yeah depends on the account so I'm not I'm not gonna say open an account at any home I talk about Vanguard because they're their websites to me easier to maneuver which yeah I'm at swab but if I need to go look look up a Vanguard fund they go to Vanguard's website look up the fund there because I'm familiar with it it's really easy to read everything honestly if I if I want to look up more information about a stock I actually go to Yahoo Finance because I like the way it's laid out to me it makes sense but I'm not moving my account it's still at swap and somebody's like well that's that's really dumb maybe but yeah they're definitely then oh I'll probably end up yeah I get in that an account at Schwab's we're wherever I don't I don't get any money out for any of them so I'm not making money out for any any financial company out there so and then this is I guess a question going like it still has to do with finance winning never sound it so good what would you do if you want big had crown coins casino real people win real prizes every single day hi this is Chelsea from Dallas I just hit the jackpot one over 1,500 came visit crowncoins.com sign up in seconds intercode crown and get a free lucky wheel bonus you may win up to 10,000 sweeps coins crowncoins.com that's C-R-O-W-N coins.com no purchase needed code valid for new users on void were repeated by law 18 plus terms and conditions plasha but what's your opinion on I'm just real estate like investing in real estate instead of the market or a combination of both are well real estate is wonderful I'm a big big promoter promoter promoter get people getting into real estate here's the problem I have a lot more money to get into real estate you could fund your IRA with 75 underbox your Roth IRA with 75 underbox but even to do a cheap piece of real estate somewhere say an Idaho Poca-Tello Idaho I just got a bunch of listings there they you're looking at 70 300,000 dollars to buy a reasonable house the smaller older house okay well 300,000 you need to put 25% down as an investor so you're talking 75,000 dollars down payment you probably need about 5,000 in closing costs there's 80,000 dollars and it's good just to have a spare 10 grand because things can go so you need 90,000 dollars okay trying to do it by yourself that's probably gonna take a while you can put together some friends and do it sure but I love real estate the tax laws and the structure of the real estate market is such that or real estate and investments is such that they're designed to make you wealthy with the and we could do we could do a whole we could do a whole episode of real estate in fact that might be a good episode we talk about we just find a piece of property and we start talking about it and work through the numbers and how it works and how it would how it benefits people and how long-term you can turn it you can keep the property that still take money out and buy more property and everything else without ever paying taxes so your eyes lit up how does that kind of how paying taxes say but yeah we can do that because I've got a whole group of students here that want to get into real estate and so let's now it's hard to get me over real estate isn't it calling so so here's the end so we just so we we we have the salary 90,000 let's say we need a hundred thousand dollars to feel comfortable okay so the difference between your generation and my generation is you all have a whole lot more money your jobs pay so much more and especially if you're still living at home yeah it's pretty easy for you to say it when I was going to school I think I think by the time I graduated from here if I was making two bucks an hour I know I started as a freshman I was making a dollar and I got offered a job at a dollar ten oh I'm moving ten percent of raise you know so it's hard to save up real money but so say we need a hundred thousand dollars so now we could say okay Frank could put up 50,000 he could put up half the money now I need ten students put up five thousand dollars each and we have buy a piece of property get people in the property and the thing think about property by definition it's a long-term asset we're not talking about buying a run-down house and remodeling it and flipping it we're talking about buying a house holding it for long-term growth and appreciation not even per cash flow in the VA because it's almost impossible to make a property cash flow now unless you put instead of 25% down you put 50% out then it'll cash flow but we can talk about that about why that's not a good idea because it ruins your leverage real estate so one asset where leverage is good so if I if I if I was to buy a property and want to have tenants and stuff like that I should be at like the 25% down payment I shouldn't go on to the 50 no in my opinion no because you want to get the leverage of the growth and I know we're running out of time here you got you got ten minutes okay okay so now I'm gonna I'm gonna change the numbers again just keep the math real simple Okay, we buy a four hundred thousand dollar house, okay, but 25% down ignore the rest so we've got a hundred thousand dollars into this house Okay, so we put a hundred thousand and we borrowed three hundred thousand And let's say it's breaking dead even we don't make any money. We don't put any money yet For the most part Okay, so that house goes up in value How much you wanted to go open value a year Five ten percent. Well, let's go with five tens a little crazy. Yeah, that's in a booming market. Okay, let's go But let's let's let's let's I can do that. Let's go three percent Three percent Okay, the house only goes up three percent a year. Okay, so what how much is your how much is a house going to go open value at three percent Three percent and it's four four hundred thousand like fifteen twelve twelve thousand dollars So you're gonna you're you're gonna your value is gonna increase twelve thousand dollars. How much money do you have in that house? 100 So how much did you earn on your hundred thousand you're in 12,000 on a hundred thousand You got 12% You got 12% return and the mortgage got paid down a little For a few years doesn't it paid out much? Okay, so next year goes up another three percent I mean another 12% on your money Eventually, it will just cover the down payment eventually no eventually Okay, so how how long do you have to how long do you have to go to make the double your money at 12 percent? But 72 divided by 12 Six six so in six years You base because it's that 12 percent that's compounding as well So six years you're basically gonna have two hundred thousand an equity in that house And then the tendons are paying off their ass and the tenants keep paying the mortgage they keep paying for the house They now it's just now Not saying there's not downsides because you eventually the house will need a roof Eventually the house will need to pay an edge you gotta redo the carpet or something But here's the deal Let's say let's say it goes 12 years now you got you have a hundred thousand you put a hundred thousand dollars down Well, let's say it goes to six years now the house is worth five hundred thousand dollars Okay Well, it started with a three hundred thousand dollar mortgage. Okay, it's probably only down to 280 So it doesn't pay down much in the beginning But you got a five hundred thousand dollar house you got two hundred thousand dollar mortgage. Oh wait There's two hundred and twenty thousand dollars of equity in there So you go back to the bank and you say mr. Bank? I want to put us I want to put a seventy percent loan on this house there got a loan So you bank goes okay seventy percent of five hundred thousand will give you a three hundred fifty thousand dollar law You pay out the two hundred and eighty thousand dollar loan You walk away with seventy thousand dollars That you can then use to buy help buy another piece of property or Re-root the house re-carpet whatever Or both Okay, you don't pay any tax on that money You see why I say Real estate's a wonderful way to build wealth But it's a long term We're not we're not taking we didn't take a dime out of that house for six years Well, suddenly we can take seventy thousand out Would you rather have a hundred bucks a month for six years or seventy thousand Yes, I'm pretty sure I'm sure to sure the numbers work. Yeah, so no real estate and And there's all sorts of other real estate rules That make it so that you can just keep growing your portfolio and Building wealth Without having to pay a bunch of taxes At it, oh, sorry, and yeah one more point and so Say say you do nothing you get a thirty-year mortgage You put it on the house. You collect rents. You never refinance. It just goes up in value What else is going up every year Property tax well probably now what's a good thing that's going up every year the amount of rent so In 30 years when the house is paid off you basically now have a pension plan Part of a pension plan everything you got a house that 30 years or now is now paying you Wow ten thousand dollars a month and rent and all you have is property taxes and insurance and some other expenses now and then Just pass an income at that right so you get you get a you get a dozen houses over your lifetime And do that if you never have to care about retirement all that all that money you've been putting in your IRA That's just gravy. You can travel the world. You can do whatever you want you're living off the houses I have a friend that I Think he owns like 2022 units between departments and houses He works five days a month when he collects a rent That's it and he probably makes 40 to 50 thousand dollars a month off of those 20 units Wow, because he's owned them a long time. They're all paid for He's pretty relaxed Has a lot of time for family everything that's got a lot of time to do whatever he wants and he's got a lot of money to do whatever he wants and You know, we're not talking Elon Musk money or things like that but who cares if you got Elon Musk money you work to the day you die anyways because you're worried about your money Like said, the guy says I work five days a week five days a month Just when I'm in town to make sure I collect my rents And that's it and what like you said whatever maintenance he has to do or every occasionally You know, he's got 22 units got a plumber on speed dial, you know a handyman on speed dial just fix it It's Yeah, so that I think I you know, you want to become comfortable It's not about being rich Rich is a job Comfortable is you have enough where you don't have to worry You want to do something you can do it without going. Oh, yeah, we're gonna have enough money to pay the rent or you're gonna have them up money now We want to take a trip. We can take a trip We need a new we need a new car need a new car. I want a new car. We can get a new car You know without okay, well, we're gonna have to cut back on this for after Yeah, just So you can just relax and do what you want That that's the key That's the key. All right Frank now, do you have any things for coming on asking the question you did? I know if you have more questions, Frank would love to have you back and talk more about it I think love to do an episode on real estate. I think that's a great idea Frank. That'd be That'd be really good. So thanks to your Bonnie for coming on and Frank Thanks as always for sharing your insights and for those listening out there if you want to learn more about Personal finance you can check us out wherever you get your podcasts or at the mech and ulti method on YouTube Frank any last words or No, I as you tell me I get real excited about real estate I wish I would have gotten more involved earlier in my life than I did because it's it's even starting in my 50s buying rental properties It's done tremendously good things for me And so but if I would have done it and I know it's a well by real estate But if we can put together a group to do this I think that's the way Yeah, okay, sure you don't have a hundred thousand to put to buy a piece but you have five thousand to buy a part of the piece of Property you still get the same benefits you can still you'd still earn 12% on your 5,000 with the appreciation It's still that's a pretty strong fairly safe return And I know I can hear people in the background screaming, but there's maintenance costs. There's this. There's that there you're right There are but that's why you buy a piece of property in the beginning that has a newer roof that has all the newer systems So you're not gonna have to do it for 10 12 15 years and one of the then that you can use the appreciation fix all those things Thanks Frank. Thanks. Thanks, Giovanni. Thank you guys for having me. Oh, it was an honor. It's great. I love having People come on and ask questions. We'll have to be back. Okay, so we'll see everyone next time on the McNulty method Winning never sounded so good. What would you do if you want big had crown coins casino real people win real prices every single day Hi, this is Michael from Georgia I-140K and finally renovated my home. You may win at the 10,000 sweeps coins. Crowncoins.com, that's C-R-O-W-N coins.com. No purchase needed. Code valve for new users only. 18 plus terms and conditions applied.