Rebalance The News

When the news has the potential to affect your portfolio we need to look at your options to rebalance. And after the most recent Presidential debate, hosts John and Giuseppe are doing just that. Plus, GIFT U - Gas, Insurance, Food, Tax, and Utilities, and Alternative Strategies to save for retirement. The Wise Money Guys. 

Episode Transcript

(00:00):
The Wise Money Guys Radio Show isbrought to you by One Source of Wealth
Management SEC licensed three one nine zeroseven eight. For disclosures and more information,
visit our website One Source WM dotcom or call nine one six nine
six seven thirty five hundred. Welcometo the Wise Money Guys Radio Show.

(00:24):
I'm John Scambray and I'm here withmy partner Giuseppe Vesconti, and we are
certified portfolio managers out of Granite Bay, California that absolutely thrive and love helping
people who are retired are about toretire manage their money. And boy,
what a week it has been formanaging money, mainly because I can't think

(00:45):
of a time to sppe that's beenmore interesting and more The week before that
was pretty interesting. Well, youknow, it's funny. I'm going to
be a broken record and probably saythis a lot, but this, I
mean, how do we do aradio show that involves investments in planning and
not talk about you know, theelection and the debate and an inflation.

(01:11):
First we have to fire up first, we have to fire up some popcorn.
Yeah. So, if you likethis show or just like us,
but want to come in and seehow we can help you navigate all this
stuff. We're going to talk aboutcall us at nine one six nine six
seven thirty five hundred. Getting thatnumber is nine one six nine six seven
thirty five hundred. There's no obligation, you know, our consultation with you

(01:37):
is free of charge, and there'snever any pressure uh to join us and
hire us to manage your money.So called nine one six ninety six seven
thirty five hundred. But how didyou? I mean, again, we
got to talk about the date debate, and we're not going to approach it
from a Democrat or Republican, butjust as Americans, more importantly Americans that

(02:00):
are concerned about their country, theirwealth, their investments, you know,
the future, how all these thingsimpact us and our clients. That's why
we've got to talk about it.I mean, I can't help but say,
I mean, I just I wasworried a couple of things. First,

(02:23):
even though you know, there's somuch mounting evidence that's being investigated of
you know, the crimes that potentiallythe Biden family has committed in money laundering
and racketeering and the twenty one Shellcompanies and all this stuff, which even

(02:44):
despite that, I couldn't help butfeel sorry when I was watching for Joe
Biden. I don't know how itstruck you, but it just seemed like,
my goodness, why are we Here'sa guy eighty one or eighty two
years old? I forget eighty one, and I mean that's what That's the

(03:06):
main thing that struck me. Butthen the fear thing that came over me
is what is what is like Putinor Jijing Ping or she in China or
the Ayatola in Iran? I mean, what about what about them? Well?
How you know they must see thisas an opportunity to take advantage of

(03:29):
the US. I don't think wehave to guess about that. We're already
seeing what's going on. Well thatit's true. I mean, if if
you didn't, if you didn't,if you took the commentating away from watching
news and opinions and from journalists fromwhatever paper or media source, and you
just looked at what was going onin the world, you can kind of
tell what's going on. Yeah,the the US is not policing the world

(03:53):
anymore. We stopped the freedom patrolsin the Vietnam and South Asia there and
that's been under Biden the first timewe've stopped those patrols since since after World
War Two. You see obviously,you know Russia now not back and down
on you know, spreading there,uh, taking back some of the former

(04:17):
Soviet Union. Obviously, the terroristshesbala Hamas attacking you know, the only
democracy in the Middle East Israel.All of that is under a week.
But but again, will China nowtake this as potential to go Look,
there's nothing this president is doing.He's not capable of making, you know,

(04:43):
decisions, And and why don't wejust now taking back just like they
took back Hong Kong. What what'sto stop him from taking back Taiwan?
This will find this government is notgoing to do it. Are our climate
change focused uh, you know lG B t Q focused military isn't going

(05:06):
to prevent China from taking back Taiwan. So that's why when I was watching
this debate, I was both sadand scared for you know, the future.
And then how does that and andand it will impact you know,
investments, Uh in the US,I mean, investments are very volatile based

(05:30):
on uncertainty. It's as simple asthat. And when you have uncertainty about
the strength of the number one,you know, GDP producing economic superpower,
maybe former superpower as the United States, that'll that'll start trickling down as mich
maybe maybe not. I get everythingthat you're saying and what's worrying and concerning,

(05:56):
and I'm I'm there with you.My take on it was, how
did we get back to these twono matter which side you're on, if
you if you're for Trump, ifyou're for Biden or whatever, how do
we how did we get in?How did we get well, well,
you know who I'm for, wecould already kind of tell based on but

(06:19):
but here's the thing agnostically, Butbut here's the sad thing is how did
we get to a point where's justthese two guys that we're that we're voting
for. We're just left with thesetwo and they're at each other's throat.
It's like it's like high school Republic. I feel like I feel like when
when I when I was in highschool, and there was a guy,

(06:41):
a bully that I just hated,you know, and I knew he was
out to get me and I andI was like, I had my eyes
open, like anything this guy does, I'm onto him, right And I
feel like these are this is whatAmerica's left with with the election. Well,
let me let me say that Republicansdid put up a field of what

(07:02):
sixteen seventeen because they just know whatand how the country did under just the
one Trump and they know how thecountry is doing now under the Biden administration.
But here's what I think is unfairto Democrats is they didn't, you

(07:25):
know, put up any challengers toto Biden, which normally you don't do
to the incumbent. You know,I guess you could say but the Kennedy.
But the concern dedent is a isa challenge to Biden. But they're
doing everything they can to block in. Now do we see the Newsome Obama
Michelle Obama ticket come going to apotential conspiracy. Who knows if that's gonna

(07:48):
you know, come come to fruitionor not. But the thing is is
right after the debate, as Iwas talking to you this morning, is
right after the debate, I flippedthrough different because I like to hear different
sides. I have my side,right, but you know, so I
was flipping through Fox, CNN,ABC and going every like minute or so

(08:11):
to see what the commentating was onwhat their feedback of the debate was.
Fox, you can already kind oftell what they're going to say, But
CNN and ABC kind of threw mefor a loop because they were all about
how concerned they were. You know, there's a lot of rhetoric coming out
of how concerned they were, howweak he sounded, he looked old.

(08:33):
They were questioning is he still upfor the job? Wasn't the usual,
you know, both sides going weabsolutely won and crushed the other, and
you know, right, and soI was Fox was typical, but CNN,
ABC saying was atypical exactly. Butback to your point, you know,
what's going to happen with the country, and then how's that going to

(08:54):
filter down? You know, moreto our client's concerns, which is going
to be how is this going toaffect are an impact to our portfolio.
There's been these concerns all year long, and I think part of the resilience
is more of the belief in theAmerican people itself. Not right, not
the present, because look at howresilient we the economy has been so far.

(09:18):
It's not the best. We definitelyhave a lot of headwinds, but
surprisingly to me, and you anda lot of economists last year and so
far this year it has been veryresilient. Yeah, despite you know,
the interest rate environment that we're in. However, we've got to consider and
we do. And so one ofthe things that JUSEPPI and I are doing

(09:39):
is really focus. We're really focusedon rebalancing our current clients and new clients
portfolios. Because here we have anS and P five hundred that's hit all
time new highs what thirty one,thirty two, thirty three times, over
thirty times this year. In previousrecord years where the S and P five

(10:01):
hundred was hitting all time new highs, it was around fifteen, seventeen,
seventeen times records. But the averageif you look at the average of how
many times the S and P fivehundred hits an all time high, right,
the average is seventeen so far we'vedone it over thirty year today.
Right. So then you also couplethat with the valuation of the S and

(10:26):
P five hundred, which is aroundtwenty eight times earnings, and you know,
you got to start considering should Ibe locking in profits on stocks and
rebalancing to bonds and alternatives. Wethink you should to arrange a sit down
with us for a no obligation consultationcalled nine one six nine six seven thirty

(10:48):
five hundred. We think the timingis crucial to do that based on our
conversation this morning, this beautiful Saturdaymorning, soon before or the fourth of
July, happy fourth of July nextweek, by the way, and the
heat wave that's ten degree heat wavethat's coming up. There's never been a

(11:09):
more crucial time to be thinking aboutthe rest of your years in retirement.
You got to look at what we'recalling gift you gas interest, food,
taxes, and utilities. So weare the first to coin that. By

(11:33):
the way, gift you, giftto you if you want is what drives
every economy, what drives every consumer, whether they're you know, house poor,
have excess money to spend on discretionaryitems. Just whether we're doing good

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or bad, it all boils downto the cost of gas insurance. I
said interest earlier insurance is what Imeant. But it could be inflation too,
because that's huge. It could bewhich is the trigger of gas insurance,
foods, taxes, and utilities.And right now with all this uncertainty,

(12:18):
uncertainty around the election uncertainty, howour enemies Russia, China, North
Korea, Iran, so on andso forth, and the treaties they're now
making, the packs that they're makingto bring down the dollar and bring down
the United States. Will that eventuallyimpact you know, GDP profits of companies

(12:41):
and eventually the stock prices of thosecompanies, especially considering what we were just
talking about that the S and Pfive hundred has hit thirty one or thirty
two new highs this year, plusis trading at over twenty eight times earnings,
which is traditionally you know, potentiallyoverbought and overvalued when you look at

(13:05):
the S and P five hundred,which typically trades thirteen fourteen, fifteen times
earnings. And then you couple thatwith the fact that while interest rates are
high, if they stay high,bond prices are low, it's a phenomenal
time to lock in gains on stocksand move some money and allocate to bonds,

(13:26):
which would then reduce your risk plusincrease your interest that you make you
know, monthly, quarterly, annually, as well as focusing on total return
and making sure that the equities thatyou do stay in you know, pay
you a good and fair amount ofmoney for the time that you're invested in

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those And what I'm talking about isthe dividends. So we believe it's a
fantastic time to focus on finding undervaluedstocks that pay a good dividend and have
it long term track record of payingout that divid in and increasing that divid
in, and then buying a fixedincome guaranteed investments that pay you interest while

(14:11):
you own that investment because the pricesof those are low relatively speaking. And
then a big piece for us Juseppiis alternatives, and alternatives can mean many
different things. It might be buyinggold, it might be buying crypto,
It might be buying the private creditproducts and the private structured notes that we

(14:33):
like that we negotiate with partners toget our clients higher than normal interest rates
on a fixed basis with downside buffers. And explain what a downside buffer is.
Yeah, just a down downside bufferis if it's tied to a certain
stock in depth and P five hundred, you know, and if you are

(14:56):
concerned that, hey the s andP five hundred is per high, is
it gonna calm down? Is therecorrection? Is their recession? So on?
And so forth, the downside bufferhelps to protect that. So it's
just one of the parameters that youknow, if these structured investments what John's
talking about, as long as itindicy does not go down by let's say,
if the downside buffer it's actually downsidebarrier twenty percent or thirty percent more

(15:22):
conservatively, there's some that are fortypercent downside barrier. We can you know,
construct and design them any which waymore aggressive or more conservative. But
if it doesn't go down by higherinterest rates or lower interest rates, as
long as this isn't you know thatindusy does not go down by that downside
barrier, and it stays within it, then you get paid up and you
get your principle back once at maturity, right at attorney. So here's where

(15:48):
we're at. If you're sitting ona you know, an eighty percent,
seventy percent, ninety percent stock portfolio, and you're about to retire or are
retired, we absolutely think that youshould take a look at that and have
professionals like us who specialize in portfolioconstruction and portfolio management for retired clients take

(16:11):
a look at that and then helpyou establish the goals that you'll have and
update those goals throughout your retirement andmake sure that you're achieving the number that
those goals will that will quantify,help you to quantify so that you have

(16:33):
a measurement of success. And ifyou don't have your goals written down and
quantified in the form of a plan, you absolutely should and call nine one,
six ninety six, seven thirty fivehundred. But again, right now,
with all the things going on aroundthe world and here in this country,

(16:56):
you absolutely should be rebalancing your portfolioand you should be prepared to move
your investments on a moment's notice.Now, we're always trying and making sure
that to the best of our combinedfifty years of experience and the abilities that
we've been able to create from thatcombined fifty years of experience, are ahead

(17:22):
of the curve. So we knowinterest rates are high, we're starting to
see indications of recession. We knowthere's uncertainty and geopolitical concerns and headwinds.
As Joseppi said earlier that in ablink, there could be an article that
literally comes out today tomorrow, Monday, and all of a sudden, the

(17:45):
market, the stock market goes downten percent, and that week it goes
down fifteen You know, that monthgoes down twenty thirty percent. We saw
it with Nike. Nike came outand they decreased their four year outlook by
ten percent. In the stock immediatelywent down by seventeen percent plus. So
these types of the situation that we'rein, it doesn't give you warning.

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You've got to get ahead of thecurve, and it's better to have this
regret. Yeah, I wish Iwould have got out a little bit later
because I would have locked in moreprofit versus this regret. Gosh, I
wish I would have got out soonerand listened or met with guys like John
and Giuseppe. Because I gave upall my profit, all my returns that

(18:37):
I made on paper it in twentytwenty four or even half of it or
whatever the percentage is. Don't letthat regret be the one that you have
where you go, Man, Ishould have rebalanced sooner. So if you're
in your sixties, even your latefifties or seventies or eighties, and you're

(18:59):
managing your own own money based onwhat's coming and the the challenges that investments
will face, the challenges that companiesthat make up your investments will face to
make the same amount of profits.Knowing that gas, that insurance, in
insurance, that food, that taxes, utilities which all businesses pay, are

(19:26):
all going through the roof, whichall consumers pay, are all going through
the roof, or have gone throughthe roof. There's no going backwards.
We're not going to go all ofa sudden. Now, gas maybe,
utilities maybe, but insurance doesn't allof a sudden go Oh, your premiums,
you know, for your homeowner's insurancewas you know, two thousand,

(19:49):
Now it's four thousand. Guess whatas your insurance company, We're going to
go back to two thousand. Well, the bigger, the bigger thing is
how much wages of increased. Andwe're seeing that right here in California with
the mandate that took place in Aprilto have a minimum wage for fast food
restaurants of twenty dollars, and howthat's impacting that whole industry and business owners

(20:14):
and not only business owners of justfast food chain restaurants, but other small
businesses too, Because if I'm workingat XYZ company that's not a fast food
company down the street, and I'mgetting paid sixteen dollars an hour, and
I hear the fast food chain restaurantright down the street is now hiring at
twenty dollars an hour. I'm going, I want twenty dollars an hour.

(20:36):
I'm leaving exactly well, and whatis that really doing. It's increasing,
it's passing well, or it's passingon those costs to us because the businesses
have to they have to go oneway or the other. They say,
Okay, it's going to squeeze ourmargins and we're still going to be able
to be fine and survive. Orguess what, we have to raise our
prices. Yeah, but you alsosee the big names going, we're we're

(21:02):
just we're closing in California. Imean, we're pulling out of this particular
area, you know, because it'sjust it doesn't make any sense. We
make way more money or in thelong term, technology somewhere else. Kiosks
Right, Well, yeah, replacereplacing replacing the human for a for a
machine. But but again you youyou see companies and a mass exodus of

(21:26):
companies leaving California. That's that's thenet the net net result, or like
you said, companies will try toraise their prices and hope that you know,
they still get the amount of youknow, customers. But but again
people cut back. Yeah, we'rejust talking the other week about Arby's,
the original Arby's down in southern California, I mean, one of the original

(21:48):
franchises, you know, fifty fiveyears I believe, in in la and
in the in the same owner andto finally just went, you know,
heck, I'm in my eighties andwe just ninety was he in as a
ninety think? Oh yeah, sohis family runs it. Yeah, but
he was the original and he waslike ninety, and yeah they had to
close shop. Well look at youand I I mean, we do pretty

(22:11):
good. And we're now going we'renow eating trying to eat more in the
office leftovers, you know, versuspaying forty for a sandwich. Yeah,
I mean, come on, wewent We've told this story before. We
went to a local, small delicatessenand two sandwiches, two drinks, two

(22:32):
bags of chips, et cetera wasfifty eight dollars. So all we're going
to do is not go to thatrestaurant anymore. I mean, it's as
simple as that. So we're goingto talk more about the economy and how
that impacts your investments, more specifically, how that impacts your retirement. We're
certified portfolio managers, and what thatmeans is based on experience, but based

(22:53):
on also long term studies and passingvery difficult, a very difficult curriculum in
portfolio construction, in the management ofthose models and portfolios. We are investment
experts, and our gift is beingactive money managers versus passive money managers like

(23:18):
maybe the investments or the advisors thatyou have. So it's crucial to work
with folks like Giuseppe and I rightnow, especially if you're going at it
alone called nine one six, ninesix, seven thirty five hundred, come
in, let's have a chat.We'll show you how we do things and

(23:40):
how that might help you, youknow, accomplish all these new found you
know, costs to your life andthey're increasing costs, and how will help
you not run out of money duringyou know, what's supposed to be your
golden years. Right, So we'vegot to talk about, you know,

(24:02):
the inflation data that still keeps comingout, But more importantly this is this
I don't know if it's alarming,because there's been a period in our history
where we were as bad. ButI don't think we're going to go where.
I don't think we're going to see. Maybe we will, but I
don't see the the the future whereour politicians have the stomach to do what's

(24:30):
necessary to reverse course on our budgeoningUH I should say exploding debt and the
cost of that, and then thetaxes that will have to be increased to
help, you know, offset thethe exploded UH interest cost on our debt.

(24:51):
So explain what I'm what I'm talkingabout, because this, like I
said, is it alarming. It'salarming that we're here again and and learn
from the seventies and that it's gettingworse. Yeah, it's two sides against
each other. It's the spending whichhas caused inflation, right, too many
dollars out there and too few goods. And then they were blaming it all

(25:15):
on the supply chain, which didhave an impact, but it wasn't just
a supply chain. It was allthese dollars out there. And so now
you have all these dollars and orrowed dollars out there on top of the
way, right, and if they'recontinuing to have these you know, bills

(25:37):
that they pass where it's more andmore spending. It's just creating a bigger
problem. And federal Jerme Powell isscratching his head. They only have so
many tools that they have within theirtoolbox, and they're running out of it.
And they've done what they can doright by raising interest rates as fast
as possible during twenty twenty two.Now we're at a juncture. So where

(26:03):
do we go. They've kept interestrates high for a long period of time.
It's been twelve months. It's actuallylonger than average it's been The average
is eight months. And previous timeswhen they've left interest rates high for too
long, something ends up breaking.Right. Yeah, well, you look

(26:26):
at the seventies and this is really, you know, probably the closest in
comparison or in similarity to use asa comparison. In the seventies, our
national debt and our high interest ratesin the seventies led to interest on our
debt became eighteen point four percent offederal revenues by the nineties, and now

(26:53):
we're seventeen something percent. Now weare projected to be at seventeen point five
percent of just interest on the debt. What seventeen point five percent of federal
revenue. So, like I said, you would think we would have learned
our lesson from the seventies, butnot only did we not learn our lesson

(27:17):
in the seventies. Now you knowit, it's going to be much harder
on a much larger amount of moneybecause the debt, as as far as
percent of GDP is also as largeor not larger than than the seventies.

(27:37):
And as I said, there's noappetite, not not left side or right
side to actually reform entitlements. Theytaught. Everybody talks a big game,
oh you know, we gotta wegotta balance this budget and start reining in
and paying down our debt, butnobody actually does it, does it.
They just keep proposing an increase toevery line item, you know, each

(28:00):
year in the next year's budget.Yeah, and if you're refinancing at higher
and higher aids, I mean,it's just a snowball. And here's my
favorite part, and this is bothDemocrats and Republicans, and I kind of
find myself as a middle of theroad. Really, I'm becoming an independent,
you know, because I get sodisappointed and people saying that's that's very

(28:25):
true. And by the way,that's important because being independent of a massive
publicly traded financial services for it,we don't have to tow the company's line,
you know, as as our firstpriority. Our first priority is our
clients period, end of story.We're not publicly traded, so we don't

(28:48):
have to worry about shareholders. Wedon't have to worry about some executive over
us as bonus and if we're notselling you know, whatever they want to
help them achieve their bonus, youknow, our jobs in jeopardy. No,
that's what's important about being independent,and and we have the liberty of
choice, which unlimited choice right whichwe have a few broker dealers that we're

(29:11):
tied with, the largest of thethree being Schwab, But it doesn't stop
us from who we can continue toalign ourselves with. Always offer choice to
clients, focus on getting so afterwe create or revise your financial plan or
your goals or objectives, we havethe liberty, as Joseppi said, of

(29:34):
shopping it and to find the investmentsthat are the best that we could possibly
find at any company because we're notbeholden to any company. That's really what
independent means. Now all they do, by the way, when they're working
on budgets is going back to thisinteresting right They'll go, okay, we're

(29:56):
going to cut next year's a budgetfor whatever. That's what amount. And
let's say that in twenty twenty fourthat line item was one billion dollars,
and in twenty twenty five they proposespending one billion, one hundred million dollars

(30:22):
on that line item, which isa ten percent increase. Right, then
what they do is they go,okay, we're going to cut yep,
we're going to cut spending. We'regoing to cut that line item to one
billion, fifty million dollars. Andthey go, see, we cut five
percent from the budget. No,a little more than yeah you didn't.

(30:44):
You still increased that line item andthe budget by five percent. A cut
would mean that you go from theone billion from that line item to nine
hundred million. That's a cut.But both Republicans and Democrats lie to our
faces and use that increase to thebudget and cutting the increase to the budget

(31:07):
as savings that see there, they'rethey're saving for saving you money, for
saving you money. And it's justgot to come to an end because of
what we're talking about didn't didn't anothergas tax just hit? Are about to
hit? Yeah in Califlifornia. Yes, right, yes, because if part
of the bills that were passed,not by this voter, was that there's

(31:32):
automatic increases crazy to those taxes forgas. And it's we already pay the
highest gas taxes nation like like overa dollar twenty thirty forty per gallon.
Right, it's just it's it's it'scriminal. I see the other thing that
I that I sent you the otherday, they're now in California is now
imposing effective I believe July first,for anything dealing with firearms or AMMO eleven

(31:59):
percent xcess tax. Well again,listen, we need the only thing that
that that gives me some hope isthe Second Amendment rights. But if they
don't, if they don't raise incometaxes, this is just an example of
other ways that things are going toincrease. We're going to raise a portion

(32:22):
of your gas tax for gases.We're going to raise a portion of this
and this certain sector of area ofconsumer discretion area whatever. Yeah. Right,
things are just getting more and moreexpensive and they're taxing on top of
it. I mean again, itall boils back down to how are you
going to how are you adjusting yourplan and your portfolio for the gift you

(32:44):
the acronym gift you. The increasein gas prices, the increase in insurance
prices, the increase in food prices, the increase in taxes, and the
increase in utility prices, how areyou going to pay for that? And
not? You know, there's twoways to pay for it. Just pay
for it, and then the moneyyou have in retirement, you know,

(33:07):
will last as long as it lasts. Now, if you have the you
know, the ability that you know, these massive run up and prices for
the main things that make the worldgo round, anything after those are just
you know, discretionary costs. Butif you have the you know, the

(33:27):
luxury, that's fantastic. But ifyour legacy was important to you, well
then you're still going to see yourlegacy decrease because of the increase in spending
for the main things that you haveto spend money on. So either way,
if you're concerned about your legacy andthe wealth that you created, and
you know your desire to pass thaton to whether it's your family or charity

(33:52):
or whatever is important to you,and you're concerned about that shriveling, you
know, call us at nine onesix nine thirty five hundred. More importantly,
if you're concerned about, you know, running out of money in retirement
because your retirement plan was based oncosts and inflation being one two percent,

(34:14):
you know, called nine one sixninety six seven thirty five hundred. If
you liked this show, or anyshow for that matter, and want to
come in for a no obligation consultation, which we highly recommend you do based
on everything that's going on, weare here to help. Called nine six
nine six seven thirty five hundred.Leave a message for Kathy and get on

(34:36):
our calendar and let's, uh,let's finish the conversation. You know,
since things are at a high pointright now, and we have all time
high, all time high, alltime high, right and some people have
run up, maybe they've had somesome of these great positions in video,
Microsoft, Google, Tesla's been goingup. How do you protect yourself or

(34:59):
maybe generate an income with some ofthese positions that maybe you're not wanting to
part with yet, but you're worried, Hey, has things got a little
bit too lofty or these things aren'tpaying me a dividend. It's a it's
a super important question, you know, based on as you said, things
are high, especially many of thesegreat companies that people work for, albeit

(35:22):
a Microsoft or we have a Googleemployee. We have many employees of publicly
traded companies and they might still beworking for them or they've retired from them,
but the point is they've amassed someamazing shares and amazing wealth in the
company's stock that they work for.And even we even have some clients that

(35:45):
haven't worked for a company and havea mass but they've just and they've just
accumulated. Yeah, like in Vidiafor example, in video or Visa or
Yeah, there's a number of them, number of them. So what Juseppi
is talking about and what and oneof the strategies that we are experts in
and have been doing this for along time is how you can increase your

(36:06):
income from holdings that you don't wantto liquidate for for many different reasons.
It could just be as simple asyou don't want to pay the tax on
the appreciated shares. That's usually thefirst that's yeah. Actually people were like,
oh I want to sell, Ohno, I got to pick couple

(36:27):
of games stocks and and you havea very low cost base or free you
know, maybe they were grants whereyou got the shares at no cost,
or it was part of an ESOPplan where you got the shares at a
strike price and then you know,you bought the shares again below the current
price and you have now unrealized games. However you got the shares, or

(36:52):
you just accumulated them in like inNvidia for example, where you've seen those
shares over the last couple of yearsgo from two hundred dollars a share to
you know, currently around twelve hundredand fifty dollars a share post pre split.
Whatever the case may be. It'soften and I'll give you an example

(37:12):
of one that does pay a dividend, but many of these companies that are
highly appreciated that our clients have don'tpay a dividend or pay very little dividend.
And you're looking at that and itmight be a significant part of your
wealth. So one new client,it's probably somewhere in the neighborhood of seventy
five percent of his and his wife'swealth the shares that they've accumulated in the

(37:38):
company that they work for and thecompany pays zero dividend. And so here
we're looking at that and going,wow, you know, cost base is
six bucks in a lot of theseshares. The shares are trading at currently,
you know, fifty bucks, andif you sold those shares, you're

(38:01):
going to forty two dollars. Excuseme, forty four forty think said there'd
be no math on this show.Forty four dollars. We should get a
white we should get a whiteboard rightin the recording studios weekends. Just draw
it out. Forty four dollars ofthose shares are taxable, now long term

(38:24):
gain taxable. But still, let'ssay you have you know, three million
dollars in these shares and you're going, you know, ninety percent of it
is taxable. That's a big pillto swallow. So what do you do.
You want to retire or you areretired, you don't want to sell

(38:44):
those shares because you don't want to, you know, hand over hundreds of
thousands of dollars in taxes. Well, this is where a very long time
I think it's vanilla. It isvanilla. Alternative strategy can get more complex,
it can get a lot more complex, but the use of options,
a derivative strategy using call options uhin that stock, which can be sold

(39:12):
against that stock to create an income. It's as simple as that. So
let's use an example. So let'ssay it's in Nvidia, and let's say
you have a thousand shares of Nvidiawhen it was twelve hundred and fifty bucks.
That'd be one million, two hundredand fifty thousand in. Nvidia pays

(39:34):
zero point zero one percent dividend youknow a year, right, and you're
going well on my one million,two hundred and fifty thousand dollars. That
is one hundred and twenty five dollarsin annual income from that million, two
hundred and fifty thousand dollars investment.That pays for two of our lunches.
That yeah, you're right, thatpays for about two sandwiches at this you

(39:59):
know, two different combo deals.You're right, to be fair, it
was combo deals. But where I'mgoing with that is Nvidia. Now you've
got this thousand shares, which meansyou can sell somebody the option to buy
Nvidia off of you at a higherprice than it currently is each week in
exchange for money. And what thatmoney is for is that at any time

(40:23):
during that week or prior to expirationor even if the contract expires, if
it's if if Nvidia goes above theoption price that you sold on the open
market. So let's say in videosat twelve fifty or one twenty five that

(40:44):
it is now post split, andyou sold somebody, you know, a
thirteen hundred dollars option or one hundredand thirty dollars strike price option, and
say you got two bucks per sharefor that, which is about what we
just closed out today on Nvidia sharesfor for several clients was about two bucks.

(41:07):
It just depends on your your youryour you know, risk return,
uh, you know goal, youknow, how much risk you want to
potentially have to sell those shares versushow much income you take in the closer,
you know, the the strike priceof the options that we sold are

(41:28):
to the current price, the higherthe risk is that those shares of yours
are going to get called away.But the higher the premium that you received
for that week, we like totake a conservative approach and go a good
clip out of the money, andwe'll look at our research reports and tools
and we'll run analysis on the onthe the company that we're doing this on

(41:52):
in this case in Vidia and thisexample in Vidia, and choose a price
that we believe isn't going to callaway your stock, which means that you're
going to keep the premium that youreceive. So again, two thousand bucks
two thousand bucks per week in thiscase. So if you have a million,

(42:12):
two hundred and fifty thousand dollars investmentin Invidia and you're making two thousand
dollars a week. Albeit this isnot guaranteed, but neither is the stock
to begin with. And the riskis that you have to sell in Vidia,
although there's strategies to prevent that,to sell in Vidia at a price

(42:32):
higher than it currently is and youdon't want to, that's the risk.
It's no more risky than already owningthe stock. The risk is really a
tax risk selling it. But ifit's in an IRA, it might not
even be an a tax risk.It just could be that I miss out
on some of the upside because Iset a price for selling my shares above

(42:57):
the current price in exchange for money. Now, again, as I said,
we turn around and we create astrategy where we believe that you're going
to keep the whole option premium eachweek. Now to learn more about that.
If that sounds like you, whereyou have a mass thousands of shares

(43:17):
in a company and you're unsure ofwhether or not there's some good option premiums
and great potential annual income to bederived from the shares that you've amassed,
come in for a no obligation consultationby calling nine one six nine six seven
thirty five hundred. I hope youenjoyed listening to the wise moighty guys John

(43:38):
Scambray and Joseeppe Visconti. Come backand give us a list to next week.
By all, Happy fourth of July