December 27, 2021 • 14 mins
John Burnett is a financial services executive with over 20 years of experience at some of the world’s top financial services and business information companies. He is the managing director and founder of 1 Empire Group, a business consulting and communications firm. In addition, John is an adjunct assistant professor at NYU, teaching business management and strategy, and he regularly appears on Fox Business and international stations to discuss topics related to business, investments, the economy, and policy.
In this episode, John shares the significance of knowing who you are before investing. His unique perspective of treating your money as a relationship, figuring out your risk factor, and a brief overview of the bull and bear market.
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Guest IG: @iamjohnburnett
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Guest Website: 1 Empire Group
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Hey, Money Movers, Welcome back to Money Moves, the daily
podcast determined to give you the keys to the kingdom
of financial stability, wealth and abundance. I'm here for this
journey with you. I'm here to learn and gain financial
wisdom alongside you, guys, and the goal is financial greatness.
Some names and faces you may know and some you
may not, But one thing I promise you here at
(00:22):
Money Moves, everybody we bring to talk to you will
have something that can help you learn how to make
your money move and take it to the next level.
That being said, let's get right to it. This week.
We're going to be talking about investing, and I'm not
just talking about stocks and bonds, but how we can
really go about investing in ourselves, in our futures and
in our bank account. So we all know that investing
(00:53):
can be risky, but the real risk is sitting out
on the ride that could potentially lead you to greater
well creation that you could ever have imagined. And we
at the Money Moves Podcasts are here to give you
all the tools to make you comfortable with getting involved
with investing, understanding that small investments made today can be
our biggest wealth generators in the future, both on an
(01:15):
individual basis and as a community. We have to start
thinking about ways in which we can use our money
to leverage our power. But here's the thing. I may
know a few things, but I certainly cannot pretend to
know at all. I'm on this journey with you, and
like I promised you earlier, what I don't know, I
will always find someone who does. So to help us
(01:36):
get this investment week started, let's welcome someone much smarter
than me who can really help us learn the A
b c's of investing and more. John Burnett, the managing
director and founder of Empire Group. John, it is such
a pleasure to have you on Money Moves today. Welcome,
Welcome to the show. I'm excited to hear all the
wealth of knowledge and gems that you'll be sharing with
us today. Welcome John, Great, thanks for having me. It
(02:00):
is absolutely my pleasure. I am going to throw you
a very very easy question. What is investing and how
do I get involved? Well, investing is actually taking your
money earned and deploying it to various investment options, hopefully
according to your risk tolerance and your investment objectives. It's
(02:21):
really that simple. I love that it all starts with
the relationship. Right. People need to have a relationship with money. Yes,
that involves a certain mindset, like having a child, right,
whether you already have one or you want one, Right,
(02:42):
how you treat that child oftentimes determines the outcome. Right,
So so you have to learn how to protect money right,
safeguard money. Right. You wouldn't let a child play in
a dangerous street, so neither should your money play in
(03:03):
areas that it shouldn't play. This is the question that
I think you know. I'm so glad to have you here.
It's like, how do you know? And this again speaks
to the bigger question of what is your risk profile
for your money? And I love this analogy that you
used of your children, because you know you always want
to protect your children, but you also want your children
(03:23):
to go out in the world and grow up. So
so it all starts with first understanding right, the environment,
but also understanding what money is and how money works.
See see see. The thing is is that many people
in the black community, they understand debt, they understand the
(03:46):
interest charged, but we don't understand the other side of
the equation. Interest works for you if you do the
right thing with money. That's like interest works, get excu
if you don't do the right thing right. So my
father always said, boy, money will treat you like you
(04:08):
treat it. That's why I say it's a relationship. Understand
learn money right, stack chips as as you say, in
terms of learning how to budget, learning how to take
that disposable income and not and not put it in
the streets zoe to speak, but actually put it into
a bank account, right. And as you learn how to invest,
(04:32):
then you could take the step forward. So just like
just like regular relationships, right, you have to know who
you are before you go into a relationship. So what
do I mean by learn who you are? What is
your risk tolerance? How much money can you part with? Right? Exactly?
People think just because you have a lot of money
(04:54):
means that you can assume risk. I know billionaires that
don't touch stocks. They only touch fixed income like paid
bonds and so forth. Why because even though that person
is a billionaire multi billionaire, they don't like stocks. The
only stocks that they would touch is preferred stocks that
pay a dividend. This is where I feel like for
(05:16):
a lot of people who are looking to getting into investing.
Your advice is great and it sounds very high level,
like no yourself. But this is this is the gateway, folks.
This is how you get in. You have to do
the research and understand where you'd like to put your money,
where you're comfortable, what you're interested in, because there's tons
of ways that you can invest your money. We will
talk about cryptocurrencies, will talk about stocks. But I think
(05:39):
one thing that you said, just from the very beginning
is put your money in a bank account and understand
that you can earn interest in your bank account. You
said something that actually was very simple but incredibly profound.
We all know about credit and how we lose money
paying you know, to creditors, paying off interest, but you
can actually gain money in high gross savings accounts. So
(05:59):
here's the thing, right, nothing is guaranteed. I knew you
were going to say that. I remember a couple of
years ago one of my aunts she said, Hey, John,
I have a few hundred dollars I want to I
want to get into the market. I said, is little
late in the game, but you for you to take
aggressive risk, right because you know time horizon. You want
(06:20):
to be able to leave you know, um, will live,
you know, comfortably and possibly live off the amount of
investment that you've made. But at the same time, you
want to make sure that that investment is protected so
that way you can pass wealth on. Right. So so
you know, I recommended a couple of couple of things
to her that is not as that are not as risky, right,
(06:40):
like maybe some preferred stocks and things of that nature.
But if you, if you have a reasonable risk tolerance
and a reasonable level of risk capacity where you don't
need that that amount of money right now, they generally speaking,
based upon your profile, you can take on a little
bit more risk if you have an Android. I tell people,
(07:03):
if you like the products that you use, why just
be a consumer actually put your money. Well, your confidence
is as a consumer. So John, I'll give you a
perfect example of this. I have always been into athletics, spinning, running, etcetera.
And you know, I've been a huge fan of spin classes.
(07:23):
And when the Peloton bike came out, I was like,
I need this, bought it, loved it, fell in love,
I drank the kool aid, and I mean I was
just talking about it all the time. And when the
pandemic came by, I was like well, I'm already set up.
I've got my bike in the basement, and I was like,
you know what, I'm gonna buy some stock. So it's
early days. I put some money in there. Great investment
(07:44):
because it actually has done really, really well. Right now,
the market's a little funny. They just had some troubles.
Let me stop you right there. Yeah, last year, what
type of return that you have on that stock? At
least at least at least at least I don't know
you've very well. But but but I'll just say I
think you got a little greedy. No, I didn't get
(08:05):
greedy enough. I should have put more money in hold
a seconds. See here's the thing, right, So again, money
in investing in a relationship. But you don't have to
stay married forever. Okay, Now this is the part I
haven't gotten into in my investment strategy because I want
to hold it. You should never marry an investment. You
(08:27):
should go steady for a while, right, long term, possibly
short term. You never want to get too greedy. You
got a thirty percent return. Thirty percent return is huge.
So bulls make money, Bears make money. Pigs get slaughtered,
right Why because pigs are greedy. Don't don't worry. You're
not alone. I've been there too. I've been a pig.
(08:49):
I got some grand I got some greedy. Right. But
here's the thing. You don't have to necessarily sell that investment,
but take some chips off the table. Don't have I
do want to pause you there and ask you a
question because you you said bulls make money, bears make money,
pigs get slaughtered. And that's also a reference to a
(09:10):
bull market a bear market. Can you give me two
definitions on what those mean. Bull market means that you're
buying hoping stock goes up. A bear market, you can
sell a stock short, so when it goes down, you
make money, but if that stock goes up, you lose money. So,
depending upon market dynamics, bulls make money, bears can make money,
(09:34):
but when you get too greedy and you hold onto
it for too long, you can lose money. So we
call that having discipline, understanding what your exit strategy will be,
even when you're going into an investment. In other words,
you know what, if this stock goes up, it gets
(09:56):
to be a return. I sell all it or sell half. Wow,
especially if that investment you've held onto it for more
than a year because capital gains tax if you're in
the let's say tax bracket, if you sell that stock
(10:19):
a year or more after you bought it, then it
comes down to capital gains percentage, which is usually somewhere
let's just say, but if you sell it within a year,
then you're going to be taxed at your ordinary tax rate,
which in that example is So that's why we have
to understand money. We have to understand investments, and we
(10:41):
also have to understand the tax game. I feel like
I've really changed my mindset with money. I am embracing
it and I feel like, you know, I don't have
fear over money anymore. Now. The tax thing is still
it's still up there. So we'll work on that for
a for another segment, as the saying go scared money
don't make right. So we have to get rid of
fair because guess what, when you again, going back to
(11:05):
the relationship, not taking risk is the biggest risk of all.
Why because you're you're not giving your your money a
chance to succeed. And let me really explain that, right,
I'll always tell people if you're paying on your credit card,
if you own a home or a condo and you're
(11:27):
paying let's say four or five six percent on that.
If you own a car and you're paying a car
note six seven, eight percent, and so that's the cost
of money. And if you only have your money in
a bank account that's earning a half of a percent
or one percent, and even at half of one percent
(11:48):
you have to pay federal, state, and local taxes on
that one percent or less. That means your money is
not outpacing the cost of money. So that's why understanding
money and understanding the relationship you should have with money
is key. Because again, if you're paying ten on the
(12:12):
cost of money in other words, the interest that you're
paying out the door, but yet you're earning one percent
or less on your money, how your money is not
outpacing the cost of money. So in an example, if
if you're paying if you're paying for a credit card,
but yet you bought Peloton and and experience a thirty
(12:34):
percent gain that money. Just just talking about the interest rates, right,
We're not talking about the values of how much debt
you have on how much you invested in the stock
just conceptually, right, your your mental approach to money and
investing relationship in that example, you outpaced the cost of
(12:55):
money by twofold brilliance. I love this, and you know,
this is why I feel like conversations like this have
to be had. We're like really spreading a gospel to
people to have them become more comfortable and just sort
of shed you know, these erroneous mistruths that we've kind
of grown up with. Especially, I feel like in our communities.
(13:15):
Can you see things on sale? There are stocks that
are on sale. That's perfect. Oh, John, this is great.
Thank you so much for joining us today, and we'll
see you again soon. Okay, we'll do. Thank you. Thank
you so much for tuning in Money Moves audience. If
you want more or a recap of this episode, please
go to Bank Greenwood dot com and check out the
(13:37):
Money Moves podcast blogs. Stay tuned tomorrow and every day
this week. From very special Money Versus Moves, Dear Money Moves,
I'm wondering if I should just budge the budget a
little bit, take some money from this pot and start investing.
If I lose it, he won't know there's a lot better, right, Okay,
more from our expert. If you bond in state, bonn
(14:00):
ones don't have to pay is triple tax free, and
a celebrity guest you won't want to miss. The name
is Killer Mike and the list of accomplishments is endless.
Let's take all the information from the mistakes that we
may and let's be honest with them so that when
we say, now, this is what we're gonna do, they
understand you're speaking on Listen. Experiencing Money Moves is an
(14:23):
i heeart radio podcast powered by Greenwood Executive produced by
Sunwise Media, Inc. For more podcast on iHeart radio, visit
the i Heart Radio app, Apple Podcasts, or wherever you
get your podcasts from
Hey, Money Movers, Welcome back to Money Moves, the daily
podcast determined to give you the keys to the kingdom
of financial stability, wealth and abundance. I'm here for this
journey with you. I'm here to learn and gain financial
wisdom alongside you, guys, and the goal is financial greatness.
Some names and faces you may know and some you
may not, But one thing I promise you here at
(00:22):
Money Moves, everybody we bring to talk to you will
have something that can help you learn how to make
your money move and take it to the next level.
That being said, let's get right to it. This week.
We're going to be talking about investing, and I'm not
just talking about stocks and bonds, but how we can
really go about investing in ourselves, in our futures and
in our bank account. So we all know that investing
(00:53):
can be risky, but the real risk is sitting out
on the ride that could potentially lead you to greater
well creation that you could ever have imagined. And we
at the Money Moves Podcasts are here to give you
all the tools to make you comfortable with getting involved
with investing, understanding that small investments made today can be
our biggest wealth generators in the future, both on an
(01:15):
individual basis and as a community. We have to start
thinking about ways in which we can use our money
to leverage our power. But here's the thing. I may
know a few things, but I certainly cannot pretend to
know at all. I'm on this journey with you, and
like I promised you earlier, what I don't know, I
will always find someone who does. So to help us
(01:36):
get this investment week started, let's welcome someone much smarter
than me who can really help us learn the A
b c's of investing and more. John Burnett, the managing
director and founder of Empire Group. John, it is such
a pleasure to have you on Money Moves today. Welcome,
Welcome to the show. I'm excited to hear all the
wealth of knowledge and gems that you'll be sharing with
us today. Welcome John, Great, thanks for having me. It
(02:00):
is absolutely my pleasure. I am going to throw you
a very very easy question. What is investing and how
do I get involved? Well, investing is actually taking your
money earned and deploying it to various investment options, hopefully
according to your risk tolerance and your investment objectives. It's
(02:21):
really that simple. I love that it all starts with
the relationship. Right. People need to have a relationship with money. Yes,
that involves a certain mindset, like having a child, right,
whether you already have one or you want one, Right,
(02:42):
how you treat that child oftentimes determines the outcome. Right,
So so you have to learn how to protect money right,
safeguard money. Right. You wouldn't let a child play in
a dangerous street, so neither should your money play in
(03:03):
areas that it shouldn't play. This is the question that
I think you know. I'm so glad to have you here.
It's like, how do you know? And this again speaks
to the bigger question of what is your risk profile
for your money? And I love this analogy that you
used of your children, because you know you always want
to protect your children, but you also want your children
(03:23):
to go out in the world and grow up. So
so it all starts with first understanding right, the environment,
but also understanding what money is and how money works.
See see see. The thing is is that many people
in the black community, they understand debt, they understand the
(03:46):
interest charged, but we don't understand the other side of
the equation. Interest works for you if you do the
right thing with money. That's like interest works, get excu
if you don't do the right thing right. So my
father always said, boy, money will treat you like you
(04:08):
treat it. That's why I say it's a relationship. Understand
learn money right, stack chips as as you say, in
terms of learning how to budget, learning how to take
that disposable income and not and not put it in
the streets zoe to speak, but actually put it into
a bank account, right. And as you learn how to invest,
(04:32):
then you could take the step forward. So just like
just like regular relationships, right, you have to know who
you are before you go into a relationship. So what
do I mean by learn who you are? What is
your risk tolerance? How much money can you part with? Right? Exactly?
People think just because you have a lot of money
(04:54):
means that you can assume risk. I know billionaires that
don't touch stocks. They only touch fixed income like paid
bonds and so forth. Why because even though that person
is a billionaire multi billionaire, they don't like stocks. The
only stocks that they would touch is preferred stocks that
pay a dividend. This is where I feel like for
(05:16):
a lot of people who are looking to getting into investing.
Your advice is great and it sounds very high level,
like no yourself. But this is this is the gateway, folks.
This is how you get in. You have to do
the research and understand where you'd like to put your money,
where you're comfortable, what you're interested in, because there's tons
of ways that you can invest your money. We will
talk about cryptocurrencies, will talk about stocks. But I think
(05:39):
one thing that you said, just from the very beginning
is put your money in a bank account and understand
that you can earn interest in your bank account. You
said something that actually was very simple but incredibly profound.
We all know about credit and how we lose money
paying you know, to creditors, paying off interest, but you
can actually gain money in high gross savings accounts. So
(05:59):
here's the thing, right, nothing is guaranteed. I knew you
were going to say that. I remember a couple of
years ago one of my aunts she said, Hey, John,
I have a few hundred dollars I want to I
want to get into the market. I said, is little
late in the game, but you for you to take
aggressive risk, right because you know time horizon. You want
(06:20):
to be able to leave you know, um, will live,
you know, comfortably and possibly live off the amount of
investment that you've made. But at the same time, you
want to make sure that that investment is protected so
that way you can pass wealth on. Right. So so
you know, I recommended a couple of couple of things
to her that is not as that are not as risky, right,
(06:40):
like maybe some preferred stocks and things of that nature.
But if you, if you have a reasonable risk tolerance
and a reasonable level of risk capacity where you don't
need that that amount of money right now, they generally speaking,
based upon your profile, you can take on a little
bit more risk if you have an Android. I tell people,
(07:03):
if you like the products that you use, why just
be a consumer actually put your money. Well, your confidence
is as a consumer. So John, I'll give you a
perfect example of this. I have always been into athletics, spinning, running, etcetera.
And you know, I've been a huge fan of spin classes.
(07:23):
And when the Peloton bike came out, I was like,
I need this, bought it, loved it, fell in love,
I drank the kool aid, and I mean I was
just talking about it all the time. And when the
pandemic came by, I was like well, I'm already set up.
I've got my bike in the basement, and I was like,
you know what, I'm gonna buy some stock. So it's
early days. I put some money in there. Great investment
(07:44):
because it actually has done really, really well. Right now,
the market's a little funny. They just had some troubles.
Let me stop you right there. Yeah, last year, what
type of return that you have on that stock? At
least at least at least at least I don't know
you've very well. But but but I'll just say I
think you got a little greedy. No, I didn't get
(08:05):
greedy enough. I should have put more money in hold
a seconds. See here's the thing, right, So again, money
in investing in a relationship. But you don't have to
stay married forever. Okay, Now this is the part I
haven't gotten into in my investment strategy because I want
to hold it. You should never marry an investment. You
(08:27):
should go steady for a while, right, long term, possibly
short term. You never want to get too greedy. You
got a thirty percent return. Thirty percent return is huge.
So bulls make money, Bears make money. Pigs get slaughtered,
right Why because pigs are greedy. Don't don't worry. You're
not alone. I've been there too. I've been a pig.
(08:49):
I got some grand I got some greedy. Right. But
here's the thing. You don't have to necessarily sell that investment,
but take some chips off the table. Don't have I
do want to pause you there and ask you a
question because you you said bulls make money, bears make money,
pigs get slaughtered. And that's also a reference to a
(09:10):
bull market a bear market. Can you give me two
definitions on what those mean. Bull market means that you're
buying hoping stock goes up. A bear market, you can
sell a stock short, so when it goes down, you
make money, but if that stock goes up, you lose money. So,
depending upon market dynamics, bulls make money, bears can make money,
(09:34):
but when you get too greedy and you hold onto
it for too long, you can lose money. So we
call that having discipline, understanding what your exit strategy will be,
even when you're going into an investment. In other words,
you know what, if this stock goes up, it gets
(09:56):
to be a return. I sell all it or sell half. Wow,
especially if that investment you've held onto it for more
than a year because capital gains tax if you're in
the let's say tax bracket, if you sell that stock
(10:19):
a year or more after you bought it, then it
comes down to capital gains percentage, which is usually somewhere
let's just say, but if you sell it within a year,
then you're going to be taxed at your ordinary tax rate,
which in that example is So that's why we have
to understand money. We have to understand investments, and we
(10:41):
also have to understand the tax game. I feel like
I've really changed my mindset with money. I am embracing
it and I feel like, you know, I don't have
fear over money anymore. Now. The tax thing is still
it's still up there. So we'll work on that for
a for another segment, as the saying go scared money
don't make right. So we have to get rid of
fair because guess what, when you again, going back to
(11:05):
the relationship, not taking risk is the biggest risk of all.
Why because you're you're not giving your your money a
chance to succeed. And let me really explain that, right,
I'll always tell people if you're paying on your credit card,
if you own a home or a condo and you're
(11:27):
paying let's say four or five six percent on that.
If you own a car and you're paying a car
note six seven, eight percent, and so that's the cost
of money. And if you only have your money in
a bank account that's earning a half of a percent
or one percent, and even at half of one percent
(11:48):
you have to pay federal, state, and local taxes on
that one percent or less. That means your money is
not outpacing the cost of money. So that's why understanding
money and understanding the relationship you should have with money
is key. Because again, if you're paying ten on the
(12:12):
cost of money in other words, the interest that you're
paying out the door, but yet you're earning one percent
or less on your money, how your money is not
outpacing the cost of money. So in an example, if
if you're paying if you're paying for a credit card,
but yet you bought Peloton and and experience a thirty
(12:34):
percent gain that money. Just just talking about the interest rates, right,
We're not talking about the values of how much debt
you have on how much you invested in the stock
just conceptually, right, your your mental approach to money and
investing relationship in that example, you outpaced the cost of
(12:55):
money by twofold brilliance. I love this, and you know,
this is why I feel like conversations like this have
to be had. We're like really spreading a gospel to
people to have them become more comfortable and just sort
of shed you know, these erroneous mistruths that we've kind
of grown up with. Especially, I feel like in our communities.
(13:15):
Can you see things on sale? There are stocks that
are on sale. That's perfect. Oh, John, this is great.
Thank you so much for joining us today, and we'll
see you again soon. Okay, we'll do. Thank you. Thank
you so much for tuning in Money Moves audience. If
you want more or a recap of this episode, please
go to Bank Greenwood dot com and check out the
(13:37):
Money Moves podcast blogs. Stay tuned tomorrow and every day
this week. From very special Money Versus Moves, Dear Money Moves,
I'm wondering if I should just budge the budget a
little bit, take some money from this pot and start investing.
If I lose it, he won't know there's a lot better, right, Okay,
more from our expert. If you bond in state, bonn
(14:00):
ones don't have to pay is triple tax free, and
a celebrity guest you won't want to miss. The name
is Killer Mike and the list of accomplishments is endless.
Let's take all the information from the mistakes that we
may and let's be honest with them so that when
we say, now, this is what we're gonna do, they
understand you're speaking on Listen. Experiencing Money Moves is an
(14:23):
i heeart radio podcast powered by Greenwood Executive produced by
Sunwise Media, Inc. For more podcast on iHeart radio, visit
the i Heart Radio app, Apple Podcasts, or wherever you
get your podcasts from
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