Investing with Capital Portafolio: The Future of AI and Financial Literacy in the US

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Curious about the journey from a small-town bank to the heights of Wall Street? Join us for an insightful conversation with Mauricio Sanchez, a San Antonio native and founder of Portfolio Capital Management. Mauricio shares his compelling story of transitioning from fashion aspirations to becoming a prominent figure in the finance world. Discover how a single finance course redefined his career path, eventually leading him to the high-energy finance scene of Midtown Manhattan. Together, we explore the profound influence of AI technologies on investment banking, discussing both its promising potential and challenges, shaped by generational perspectives.

Gain a deeper understanding of investment strategies tailored to life's various stages as we dive into Mauricio’s investment philosophy. From the importance of diversifying portfolios to understanding the impact of Federal Reserve policies, Mauricio provides valuable insights into making informed financial decisions. Our conversation also touches on the critical role of financial literacy, emphasizing how early education can shape future economic success. We discuss the nuanced interplay between fiscal and monetary policies, highlighting the complexities of navigating market perceptions and economic stability.

Finally, discover why real estate remains a vital investment for achieving personal and family goals. Mauricio articulates the enduring value of owning a home, not just as an asset but as a stepping stone toward fulfilling dreams. We also consider the importance of financial education in schools, advocating for a curriculum that equips young minds with the skills they need to thrive in today’s economic landscape. Whether you're an experienced investor or just starting out, this episode offers a wealth of knowledge to guide you through the evolving worlds of finance and investment.

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Host: Mark Jones | Sr. Loan Officer | NMLS# 513437
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Episode Transcript

Speaker 1 (00:05):
I was just going to say that Finance when they don't
know finance it's true, youknow, that's where the tough
part comes in.

Speaker 3 (00:12):
Yeah, there's a big disconnection and also I think
in the past couple of years I'vegot to move this closer because
I feel there you go.
Yeah, more echo.
Oh yeah, I feel like parentsmaybe had there was a demand
factor for you know a goodamount of time, I think, george
bush's era good make me want tostart dressing up again.

(00:33):
I stopped, you know, and I'm int-shirt every day, dude.
I wore this because I knew Iwas coming to see you.
You look fantastic.

Speaker 2 (00:38):
Appreciate that you got that light pinks call yeah,
I love it, let's see.
I've got ChatGPT ready to go ifwe need it.

Speaker 1 (00:51):
Let me get rid of that.
That's good.
That's good.

Speaker 2 (00:55):
Does your company have a website?

Speaker 3 (00:57):
Yeah Company.
Website is fortofoliocapitalcom.

Speaker 1 (01:01):
Got it.
Yeah, we're up capitalcom Gotit.

Speaker 2 (01:07):
Yeah, and welcome back to another episode of Key
Factors Podcast Real Estate AF,where the AF stands for and
finance, and I'm your host, markJones, and we are powered by
ReviewMyMortgagecom, the largestindex of mortgage programs in
the nation, and today's topichas a lot to do with finance.
Guys, I want to continue tobring you all new experts in

(01:29):
different fields of not justreal estate, but also
investments and financial world.
Firm Portfolio CapitalManagement.
Portfolio Capital Management isan independent wealth and
capital management firm based inSan Antonio, texas, with over

(01:50):
12 years of combined investmentand macroeconomic analysis
experience.
Our goal is to instillconfidence in investing through
how we view markets and ourinvestment approach.
As a registered investmentadvisor, ria and fiduciary, we
are held to the highest standardwhen it comes to managing your

(02:13):
money and are bound by law toact solely in the best interest
of our clients.
So, without further ado, I'dlike to introduce my guest today
, mauricio Sanchez.
How are you, sir?
It's good, mark, I'm doing well.
Man, how are Sanchez?
How are you, sir?
It's good, mark, I'm doing wellman, how are you?
I'm doing well, man, it's been aminute.

Speaker 3 (02:28):
It's been a minute, man.
Thanks for having me,absolutely Thanks for inviting
me on.

Speaker 2 (02:31):
Yes.
So those of you that are tuningin as of right now, a little
background.
I started working with MaurSanchez at Wood Forest National
Bank inside the Walmarts.
We were both the mostgood-looking, best-smelling cats

(02:54):
you could ever find, but wewere also slinging banking
products before we even reallyknew what it was to be banking.
But now that we're in our bigboy skin, mauricio, if you could
tell us a little bit aboutyourself, um, where'd you grow
up?
Where'd you come from all thatgood stuff?

Speaker 3 (03:07):
yeah, so san antonio native um parents moved here
when I was probably about amonth old.
I grew up in alma heights until98.
If you're from the city youwould understand.
The flood of 98 washed a lot ofpeople out of the area so, my
family being one, we moved tothe north side, went to Clark,
graduated from Clark High Schooland eventually moved back, went

(03:28):
to UIW, got my bachelor's ineconomics there and spent a
little bit of time in New York,a little bit of time in Austin,
came back to town and now thisis forever home.
San Antonio's always been home,but we're back.
Come back.

Speaker 2 (03:43):
Where you hang.
I love it.

Speaker 3 (03:44):
Hang my hat man.

Speaker 2 (03:45):
I love it.
So, that being the case, let'sdive into how you got into the
field that you're in today,because, I mean, it's been a
while.
This is basically catching upwith you.

Speaker 3 (03:58):
Yeah, man, it's been years for sure.
So I originally started as afashion major.
Yeah, so I originally startedas a fashion major.
Yeah, so I started at UIW.
I heard UIW had a great programin fashion merchandising.
My idea was, hey, get my degreehere and try to get into.

(04:19):
I don't know if you've heard ofBrian Diesel, but Renzo Russo
was actually running the brandback then, a lot different from
what it is today.
I wouldn't want to work atDiesel today, but back then
Italian founder, big part of thebrand.
He was actually designingeverything and I was like, man,
it'd be great to get a positionhere.
So one semester in, I took afinance course because it's part
of the curriculum that you takeat UIW and I said, man, this
stuff is really like, this iswhere I kind of want to take my

(04:41):
field to.
So I ended up leaving fashionmerchandising and I went into
their school of business and Ichanged my major to economics
and finance.
They had a dual major then andI did that.
During my studies there I had aprofessor that had a profound
movement in what I was learningand I began to trade Forex
during my sophomore to senioryear.

Speaker 2 (05:04):
Would you mind and I don't want to break up your
story but uh explain to ourlisteners what forex is, because
there's a lot of folks thatunderstand it.
There's a lot people that hearthe word, throw it around and
and just have no clue yeah, yeah.

Speaker 3 (05:16):
So forex today?
I mean, if you, if you were togoogle forex today, it'd be a
lot different from what it wasthen yeah forex today, a lot of
people are just following tradepattern signals and then they're
taking positions.
But basically the industry offorex is foreign exchange
currency.
So what it is is forex is theshort term for foreign exchange.
Basically, it's brokerages thatare pairing different

(05:36):
currencies from different partsof the world and then from that
you are able to take a position.
So you're ideally betting onthe appreciation or the
depreciation of a currency basedon, you know, economic factors,
typically economic policy, somonetary policy, monetary
policies?

Speaker 2 (05:55):
what happens in the news?

Speaker 3 (05:57):
in many cases, yeah what happens in the Fed.
So a lot of what I was doing inthat Forex movement was really
paying attention to what theFederal Reserve was doing.
Here.
The European Central Bank, theBank of China, the Bank of
England so you have all of thesebanks that establish monetary
policy across the world.

(06:18):
Yeah, and every time thathappens you see currency pairs
go haywire, volatility builds upand that gives an opportunity
for Forex traders to make money.

Speaker 2 (06:27):
Basically speculation on that market.
That's exactly what it is.

Speaker 3 (06:30):
That's exactly what it is, man, but that's Forex in
short, wow.

Speaker 2 (06:33):
Okay, back to yours, because you brought up another
something that I want to kind ofpry onto, but not yet.
Please continue, Dan, yourjourney.

Speaker 3 (06:40):
Yeah, yeah, so profound experience with a
professor.
Continue down your journey.
Yeah, yeah, so, uh, profoundexperience with the professor.
Started trading Forex betweenmy sophomore and senior year.
Um years into it I said, hey,it would be awesome to actually
um, manage money, work for afirm and then try to build my
name and what I'm doing.
And I ended up working inprivate wealth.

(07:01):
It wasn't, uh, we weren'tmaking a market with the public,
but it was more of a privateoffice in Bernie.
I was there for about threeyears two years.

Speaker 2 (07:09):
What was the office?

Speaker 3 (07:11):
They're private.
I would disclose the name, buteveryone would probably know.
And then I wouldn't want to putthat position out there.
But long story short, I wasthere for a couple of years and
I caught wind of a couple ofdifferent firms hiring in New
York.
So my ultimate dream throughoutthis whole journey was to

(07:31):
actually be in New York andparticipate in finance at least
for a year.
How cool, and to see how it was.

Speaker 2 (07:36):
Yeah, I mean.
I remember visiting New Yorkmany times in the past and
walking down Wall Street andjust seeing all the action and
people moving and moving andthen all of a sudden, lunch is
done and there's nobody on thestreets.
Where are they?
They're back in their dugout.

Speaker 3 (07:51):
Yeah, man, trading Energy.
There is nuts there.
So, specifically downtown, Iworked in Midtown.
Midtown is more of the hedgefund world.
Yeah, downtown is where you seeall the brokerages, the market
makers, where you see all thebrokerages, the market makers,
but we're in an office with acouple of other hedge funds in
Midtown off of 55th and 6th.
If you've gone recently, you'veprobably seen the Love Statue.
So the Love Statue downtownused to be I mean not downtown,

(08:14):
midtown used to be on 55th and6th.
We work at the building rightnext to it.
Oh, wow, okay, wow, man.

Speaker 2 (08:20):
Yeah, yeah, new York is is a magical place.
Um, I will say that.
I am one that does like goingto New York in small doses.
There's no way I could livethere.
Um, it's just too much walking,too many people, too much
garbage on the streets, etcetera et cetera.

Speaker 3 (08:39):
It smells, it smells, man, it smells.
That's.
That's probably the I.
You know I didn't live in thecity specifically for that
reason right it was like it'stoo much, there's too much
people walking around that Idon't want to interact with.
And then two, it smells like itjust smells.
It does.
Yeah, and uh, being in brooklynwas just good it, it uh, kind
of puts things in perspective.

Speaker 2 (08:56):
Us being in texas now .
Everything's spread out.
We've got garbage men that comeacross every so often, etc.
Whereas new york they throweverything onto the streets and
then the garbage man comesaround like once a week and
picks up all their shit yep, andyou and you smell it.

Speaker 3 (09:10):
Man, you're walking anywhere and you could you see
piles.
What is it like?

Speaker 2 (09:13):
probably like a good ton, yes, of garbage that's
sitting on the corner right nextto your apartment, nuts yes,
it's a little bit better if yougo during the winter because the
the stench is not as pungent,so to speak.
So when you were in thistransition, kind of soul

(09:34):
searching, but still knew whatyour end goal wanted to be, were
you making any money at thattime?
I mean, what was that like?

Speaker 3 (09:37):
At first you don't.
At first you're a coffee fetchman and this is kind of what's
established my foundation on howI do my mentoring.
But but ideally you're fetchingcoffee, you're making $300 a
week.
Yeah, I believe it andbasically, if you don't want to
tell you, well cool, get thefuck out the door.

Speaker 1 (09:52):
Right.

Speaker 3 (09:53):
And that really establishes the um, the
precedence of what you'regetting into, right, and it's
really more of a respect thingthan anything because you know
you're crap money.
Yeah, and there's no questionabout it.
There's no way of living in newyork if you're making crap
money.
But the idea is get yourlicense, get on the phone and
begin to sell, make a market.

(10:13):
Sure, we're doing high yieldbonds back then gotcha, so we're
selling logan's roadhouse.
There's a company called dexmedia, a few others, but we were
basically pitching, we werepitching stock and we were
pitching bonds.
My team was ideally focused onpitching bonds but yeah, to
answer your question, you'remaking minimum money until you
get licensed.
Really, how it works is you'rea coffee fetcher.

(10:34):
The leader of the company,which is we're in an office, if
I could put this intoperspective, this is the Wolf of
Wall Street.
You're in an office with 100guys.

Speaker 1 (10:45):
I was just going to say it's like Wolf of Wall
Street.
Yeah, you're in an office with100 guys.
I was just going to say it'slike Wolf of Wall Street boiler
room.

Speaker 3 (10:47):
It's 100% boiler room .
Wow, yeah, there's a story thatgoes behind that and we'll talk
about that later.
But basically you're going intoan office with 100 guys.
There's six girls that are eachof the admins for the senior
brokers, gotcha.
So you go in there as a coffeefetcher, as a lunch fetcher and,
uh, ideally, one of the sixeither like you or don't like

(11:08):
you, and they, they did whatthey say.
It's like they adopt you, sure?
So I was adopted, fortunately,I think probably about a month
into my into my thing.
Some people don't get adoptedyeah, that's three months man
yeah, and basically when you getadopted, it's basically it was
your good looks and the greatsmell maybe the great smell man.
It was funny man, because Iwould.
I would into like we'd leavethe office or we'd get into the
office.

Speaker 2 (11:25):
It smells really good .
It smells great in our boothright now.
It smells really good.

Speaker 3 (11:30):
We'd get into the office man and I would run into
this guy.
I didn't know who he was, buthe would give me a hard ass.
Look, every day I'd run intohim in the elevator and then you
just look at me and you'd belike, and I'd be like what the
fuck am I doing?
Like, what am I doing somethingwrong?
So, like, a couple weeks go by,like I said, a month later, I

(11:50):
get called down to his officeand he's like hey, you're
joining my team.
You're not listening to anyone.
I'm paying for your licenses,which is like the big woo, right
, yeah, like now I'm not gonnamake shit money, yeah, um, but
yeah long story short, or youhope right yeah, but long story
short.
You.
You make crap money untilprobably with me.
I think it took me 40 days, 45days to actually get my license.

Speaker 2 (12:10):
The reason why I asked that to put it in
perspective for the listeners isthere's a lot of realtors and
lenders that watch and listen tothis podcast.
Yeah, and a lot of the expertsthat I have on here continually

(12:46):
bring up the concept of whenyou're new to the business, you
almost have to have the passionfor working for free or very,
but then when you run out allyour gas, you forget how to do
the basics, how to do this, howto talk to people, how to sell,
basically, and in your line ofwork, that spectrum it's almost
the same, but it's it's um,encouraged to have that in place
.
Not necessarily a hazing period, but hey, man, you got to earn

(13:07):
your stripes.
Oh, yeah.
Oh, yeah, it almost drives usinsane to where a brand new to
the business realtor or lenderis all of a sudden seen as equal
to somebody that's been doingit for years, and that's just
not the case.

Speaker 3 (13:19):
Right, so you're saying your industry, people
that get licensed and they go in, they're already on the level
of everyone else.

Speaker 2 (13:26):
Yeah, In perception wise.

Speaker 3 (13:28):
Okay.

Speaker 2 (13:28):
We know that they don't have the layers of ass
whoopings that we've taken RightAll the tragedies and landmines
that we've stepped onthroughout our career thus far.
But putting a social media postout saying that I'm now a
realtor is going to get youbusiness in some way, shape or

(13:50):
form over an experienced lenderthat can actually advise you,
understands the differentprograms, the ins and outs um
can see into the future of I'mlooking at a credit report.
That's going to be an issue.
Let me raise that question now.
Whereas newer to the business,they're not even going to know
it's going to go through theiroperations team is going to be
the one that goes hey, did yousee this type concept?

Speaker 3 (14:11):
Right, yeah, and I mean I think I think it's
important to have someone that'sexperienced.
I mean specifically in my worldtoo.
I'll give you an example.
But, like in my world, yes,you're a hundred percent correct
.
I think that it's important tohire someone with experience,
but that's not the only factor.
You've got to hire someonethat's really open to the
dynamic, because our industrieschange, yeah, and they change on
the daily.

Speaker 2 (14:29):
That's the only thing , that's constant.

Speaker 3 (14:30):
Right, right, and somebody who doesn't.
So, for instance, I'll give youI was in a panel speaking in
Austin about a month ago, okay,and I'm in the panel and I'm
with guys that are double my ageand they're talking about right
now, okay, interest rates.
The conversation of then wasinterest rates are coming down,
emerging markets look attractiveagain, and I'm like I'm sitting

(14:51):
there like emerging marketslook attractive again.
Look at all the geopoliticaltension that is happening across
the world.
And maybe they didn't come froma world where they experienced
much of that during their career, because we've been in a bull
market for 16 years and ideallythat's like all they see this.
It's been money, right, butpeople like myself that have
been like barely making a marketin this right.

(15:12):
I pay attention to everything.
I'm paying attention toeconomic policy, I'm taking
account geopolitical risk, andjamie diamond speaks about this
a lot.
Yeah, one of the biggestfactors in geopolitical risk is
that emerging markets aredepressed based on what's
happening.
And so you have on this.
You know, on this panel I'msitting with probably like four
other older guys and I'm like doyou not see this?
And sure enough, so I broughtit to point.

(15:33):
Sure enough, after theconversation, I had like 10
people come in and they're likeyou know, I've never thought
about these things, but you areso right, it's very important to
consider that.
And I'm like absolutely, yeah.

Speaker 2 (15:47):
So long story short, yeah, that's kind of how I see
it.
Well, I mean, it's one of thosethings that perspective is only
yours, right, until you gainoutside perspective that allows
you to increase that broad,narrow-minded view that you
currently have.
And I believe, in order to be agreat investment banker and a
great leader, a great manager,especially when it comes to

(16:09):
people's capital, you've got tobe able to see it all, for sure.
And know how these strings willaffect this over here.
Right, I can imagine that'spretty.
That's a lot of stress.

Speaker 3 (16:21):
maybe I mean it's stress, but it's also to me,
it's opportunity.
That stress to me is like, hey,it's great that, yeah, I'm
going through the learning andideally, when you think about it
, we're walking our.
I don't know if your parentsare still around, but I'm
walking my parents on how to useChatGPT and I would assume that
I meet a lot of other moneymanagers that are the same age

(16:42):
as my parents, that are like Idon't know necessarily what this
means.
So their perception of thistechnology is a lot different
from myself, absolutely andideally.
I see it as a bullish thing,they see it as a bearish thing
and I'm like, hey, this isideally, if we look at how the
markets are reacting to it, it'smaking people more productive
and we have seen a run up inpositions that are levered on AI

(17:02):
technology, and to me, I lookat other money managers that
aren't necessarily consideringthis and I'm like you are
missing an opportunity for yourclients to really establish a
portfolio that is, that ishedged against the risk of not
being in a productive cycle withAI technology, sure, so yeah.

Speaker 2 (17:21):
So, that being said, I mean, before we get into our
topics, how are you seeing AIaffect you guys's industry?
Because in our side of thetracks, we're seeing AI helping
us bridge gaps between thingsthat typically would take us a

(17:42):
while to do.
Done like that, between thingsthat typically would take us a
while to do.
Done like that.
And we're talking super simplethings from I need a script to
put onto social media to I needyou to calculate the property
taxes.
If the tax rate is this, thehomestead exemption is this, et
cetera, et cetera.

Speaker 3 (17:58):
Right.
So, in terms of markets and howit's affecting companies that
we buy, I'm looking across everyindustry that you could
possibly think of, Because whatAI is actually doing is it's
making one, it's making everyonemore productive, and then two
ideally, companies are reducingcost.

Speaker 1 (18:15):
Yeah.

Speaker 3 (18:16):
So when people get more productive, companies
reduce cost.
Bottom line for that is netincome goes up.
That's right, so ideally it'san opportunity.
That is net income goes up,that's right, so ideally it's an
opportunity.
As an analyst, from the analystperspective, we look at it as
hey, this is good for companies.
We need to pinpoint whichcompanies are actually levering
this technology.
Two, my industry, specificallywhen I'm looking at reports, the

(18:38):
way that I use AI technology isyou have your annual reports,
you have your quarterly reportsfrom companies, right, and
ideally this is 200 to 300 to400-page documents that you're
looking at on an annual basis,whether it's a company you're
invested in or a company thatyou're looking at what AI allows
us to do, specifically, likeChatGPT.
If you have the paid model,chatgpt allows you to upload a

(19:00):
300-page document and askChatGPT give me the points of
where this document is talkingabout, let's say, for example,
decentralized finance, yes.
Or where this document istalking about how annual numbers
have suffered for the past twoyears and that allows you to
build a baseline to analyze thecompanies faster.
Absolutely, I'm no longerhaving to sit down on a Sunday

(19:22):
reading a 300-page documenttimes 36 positions that we're
buying.

Speaker 2 (19:26):
Yeah.

Speaker 3 (19:27):
So now I'm able to do that in a much quicker manner.
Way more efficient as well,yeah, I mean I discovered that.

Speaker 2 (19:34):
I mean I'm one of the early adopters of ChatGPT, the
paid version.
We've been using it now sincelaunch and we'll throw PDFs of
guidelines that are thousands ofpages, say hey, instead of me
going through and hittingcontrol F to try and determine
where that is, and then now letme try and interpret it's more.

(19:54):
So let me just ask it thequestion with the scenario,
utilizing this guideline, thisPDF guideline, give me your
opinion and give me the sourcesin which you found it, so that I
can go back to those pages tomake my own conclusion for
whether or not we can do thisscenario.

Speaker 3 (20:13):
Right.

Speaker 2 (20:14):
Super, super fast.

Speaker 3 (20:16):
Yeah, yeah.
And that's the important pieceof it, right?
Everyone thinks that, oh, let'sjust plug it into chat, gpt,
and then it's going to give usall the answers.
Ideally no.
The human factor is veryimportant, especially as
fiduciaries, if we're managingmoney.
we're doing things for ourclients and we have to do it in
the right way.
We can't say we're a fiduciaryif we're not in tune with what's
actually happening.
That's right.
So ideally, yes.
Does it help us read thesereports quicker?

(20:36):
Does it help us make betterdecisions?
Yes, but absolutely does thefactor of I'm having to
contemplate After I read areport.
There's a lot of contemplationthat happens internally.

Speaker 1 (20:48):
Correct.

Speaker 3 (20:48):
In terms of making a position, either selling out of
a position, buying more, puttinga new position into a strategy.
So there's a human factor to AItechnology that a lot of people
tend to discount.

Speaker 1 (21:00):
Yeah.

Speaker 3 (21:01):
It's not necessarily the pill that's going to solve
everything, but it is going tomake us more productive.

Speaker 2 (21:07):
It's going to make us work quicker, and a lot of
folks would, when it was comingout, saying it's going to
replace humans.
I was the one saying it's notgoing to replace humans, but it
will leave you behind if youdon't utilize it 100%.
Yeah, I mean, it's not going toreplace you by all means, but
if you're not leveraging it,using it, incorporating it into
your day-to-day, if you're inbusiness matter of fact, in any

(21:30):
business, there's a way toutilize it to make your life
streamlined, et cetera You'rejust going to be left behind and
it's up to you to try and catchup to that.
But it won't replace you, so tospeak, because you're still
human.
You're thinking right, um, youjust don't have all the answers
right actually um at yourfingertips, it's true.
So, um, do I ask this questionnow?

(21:51):
I'll I'll hold, I'll hold on tothis one.
Uh, do you know anything aboutbricks?

Speaker 3 (21:58):
are you talking about um?

Speaker 2 (22:00):
the additional uh currency that uh basically is
about to be arabia russia.

Speaker 3 (22:06):
Yeah I forgot who else china china yeah, I know, I
know a little bit um, but yeah,I mean we'll come back, yeah,
yeah, we'll come back to thatone.

Speaker 2 (22:13):
so, um, the the next thing that we want to discuss
here and and I thought it was anan amazing topic here it says
many overlook the idea ofinvesting, and you know that you
did right when you were youngerI mean even as we got a little
bit older the concept of it, butthe power behind it and the

(22:34):
compounding.
Can you explain that to us?

Speaker 3 (22:37):
Yeah, so ideally, when you think of investing, you
know there's risk.
There's always risk that isinvolved, whether it's risk
within what asset allocationyou're putting in, what
companies you're buying.
Companies could go bankrupt,yeah.
Industries could go bust for aperiod of time right.

(22:59):
If an administration comes in,there's different risk factors
that exist within a portfolioRight, and when you compile a
portfolio, when you build aportfolio of assets, there are
measures of risk that you shouldprobably be in tune with.
How investing and compoundingworks is.

(23:20):
Ideally, you have a timeline,right.
So if I'm 75 years old and Iknow that I can't afford a down
period, could you imagine ifyou're 75 years old and you had
a 2008 and you were invested inall stocks, your portfolio would
take a hit.
Your life expectancy in theUnited States is probably like I
mean, for me it's like 83 orsomething like that.

(23:40):
Yeah for my family it's probablylike 70.
But so there's a position there, right In 2008, it hit and if
people were over allocated intostocks and they were at a higher
age bracket, then they didn'thave that buffer to make up
right.
And we did see, we saw, I thinkit was like a J curve up after,

(24:01):
I think, a year.
Oh yeah, so ideally, when youthink of investing, you have a
timeline right.
You're 75,.
You have a shorter timeline thanthe 20 year old, and this is
where I missed out right, as a20 year old, those perspectives
really didn't come into play.
It wasn't until later where Iwas like man.
If I invested when I was 20, bythe time I was 30, and if I

(24:23):
invested, let's say, $10,000 ayear, you would ideally have a
really nice nest egg after 10years, because I think it's like
a 10% to 12% S&P return andthen you compound that over a
span of time.
I don't have a calculator withme, but ideally that's huge,
absolutely.
So there is a, there's abenefit that the younger, that

(24:45):
the younger, that you getstarted investing Right, then
ideally you are able to build abigger nest egg with reduced
risk.

Speaker 2 (24:52):
And even that, that concept that you're talking
about here, it even applies ifyou don't have a ton to invest,
right, right, I think that'swhat a lot of folks tend to miss
or to overlook is oh, I don'thave enough money to become an
investor, guys, what extra doyou have?
Number one.
And if you don't have extra,it's time to look at what you're

(25:14):
doing every month, every day,to determine what excess are you
spending on that could beutilized to leverage, to
compound for your future.

Speaker 3 (25:24):
Yeah, this is true is true.
I mean, even if it, even ifit's a thousand dollars a year,
thousand dollars a year over aspan of 10 years, compounded at
10 to 12 percent every year thatyou're making on that is huge.
Absolutely it's huge.
I don't want to bore peoplewith like with uh, with it with
the uh actual calculation ofthat, but I mean they could do
that at home and you wouldideally be surprised.

Speaker 2 (25:46):
Well, I mean, this is kind of what I would imagine
you are doing a lot of today andJC if you can throw that
reference up here.

Speaker 3 (26:00):
So tell me about portfolio.
Yeah, so we have an investmentphilosophy and you can click on
this if the viewers are watchingthis but we have an investment
philosophy that domestic markets, basically, uh, markets within
the united states, are superior.
Okay, that's one kind of factorinto it.
Two, equities markets aresuperior than to any other
market.
Okay, so when you think of abond portfolio, uh, when you
think of a portfolio, back inthe day when you and I were

(26:21):
young, the, the status quo of abond allocation was always like
the 60-40.
You had a 60% equity position,40% bond.
So that way you're kind ofhedging that risk.
Our investment philosophy iscompletely different than that
and we could read the top fiveprinciples that kind of guide us
right.
So we believe domestic markets,equities markets, are superior

(26:43):
to any other segments of theUnited States economy in terms
of liquidity and long-termwealth generation.
Diversification, of course,allows us to minimize
unsystematic risk inherent inthe equities markets.
Specific sectors of the marketbehave differently in times of
expansion and contraction.
A well-positioned portfoliomaintains a long-term outlook

(27:03):
and keeps an open policy toshift in and out of positions
within the sectors of theeconomy.
And then the last one is, ofcourse I don't know if you've
heard the term don't fight theFed.

Speaker 1 (27:12):
Yeah.

Speaker 3 (27:13):
But basically Federal Reserve monetary policy affects
investment securities andshould be acknowledged.

Speaker 1 (27:17):
Absolutely.

Speaker 3 (27:18):
So that's kind of a huge factor in how we position
portfolios.
But these five principles arekind of the tenets that guide us
on how we invest into markets.

Speaker 2 (27:26):
And I am actually super thrilled that your last
one, which I believe is one ofthe most important ones, that
many don't even consider.
They want to give their twocents about it, but then they
don't take any actions based onwhat just took place.
Right, the Fed we know thatduring the pandemic, the Fed
dropped the rates to zero, sothere's free money, so to speak.

Speaker 3 (27:48):
Right, well, you also have those that may be new or
could see and were scared.

Speaker 2 (27:53):
Fear tends to get us to not do anything, but I can
tell you that the FederalReserve and their monetary

(28:16):
policies and what they drop andraise do affect the mortgage and
real estate markets 100%.
If you don't mind, could youtell us kind of how that works?

Speaker 3 (28:27):
Yeah, so basically we have what's called I'm not
going to say quarterly, becauseit happens more frequently than
not, but basically the FederalReserve publishes a calendar.
In that calendar they meet fortwo days and then the last day
that they meet, the FederalReserve chairman comes out,
speaks and says hey, our FOMC,which is a committee of all the
regional banks throughout theUnited States, they implement a

(28:49):
policy of either holding rates,raising rates, reducing rates,
based on economic data that'scoming out.
Typically it's jobs,unemployment rate, inflation
numbers, inflationary data.
So there's a list of a lot ofdata and we publish a lot of
that on our website.
But there's a list of a lot ofdata that the fomc looks at
whenever they establish monetarypolicy.
Yeah, but everything, in short,fed funds, everything is kind of

(29:13):
pegged in the united states.
Everything is kind of pegged onfed funds.
Yeah, right, the lower that fedfunds is, the more liquidity is
within certain aspects ofcertain sectors or certain, uh,
places in economy.
Yeah, and that allows people.
So you tend to see, when ratesare low, people are buying more
stocks.
There's a wealth effect to that.
When rates are high, stockmarkets are a little more
depressed.

(29:33):
And then ideally, I mean, whenyou think about it, what is the
true essence of what's happeningthere?
Rates are high.
It's harder for companies touse whatever capital or borrow
capital to infuse back intotheir business, so that slows
companies down.
This is why, during aninflationary period, the Federal
Reserve raised rates.

(29:54):
Right, because they're tryingto slow, they're trying to cool
the economy, correct?

Speaker 2 (29:59):
And that's actually what is still happening to this
day, and a lot of folks I getthis question 10 times a day is
when are rates going to comedown?
And my explanation and you cantell me if this is accurate or
if it needs a little fine tuningis guys, if they were to drop
rates down tomorrow tremendously, we would have a bigger issue

(30:20):
on our hands.
And the reason why I say thatis if I look at real estate, if
rates.
And the reason why I say thatis if I look at real estate, if
rates currently sitting, let'scall it 7% right now, prime rate
.
If they drop down to 5%tomorrow, meaning the Fed cut a
whole point everybody went whoa,all right, right, what it's
going to do is basically induceall the folks that are sitting

(30:41):
on the fence waiting to buy.
We're waiting for rates to drop.
They're going to jump in themarket.
What does that do to the priceof real estate?
Everything shoots up throughthe roof.
So it then would trigger evenmore of an inflationary period
for us.

Speaker 3 (30:56):
Yeah, you're not entirely wrong on that.
So, ideally, housing is anaspect of the inflationary data
that they're looking at.
They want to slow down markets.
Housing is one of them.
They want to make housing alittle bit cheaper because it's
crazy right now, right orwhatever it is.
So, yes, you are correct,housing is a component of what

(31:21):
they're establishing, settingpolicy to.

Speaker 2 (31:23):
Okay, what additionally could could I,
moving forward, add to that?
That would make it even more umvalid?
Uh, because I don't want to uh,pretend that I'm something that
I'm not.
Yeah, I'd rather just say, hey,you know what?
Just call him out, he's you,he's got miles got you look, I
think you're correct on it.

Speaker 3 (31:45):
I think you can add that not only does it affect
housing but, like here's thescary part If and the Fed has
established an interest ratereduction policy now going out
of I think it was two meetingsago, right Last week, they
dropped a quarter point.
We're at four point five tofour point seven five range
right now.
Before that, another 50 basispoint.

(32:05):
Correct 4.5 to 4.75 range rightnow.
Before that, another 50 basispoints.
So we are in a position ofwhere they're looking at it from
a what's called like a dovishperspective.
They're trying to, they'retrying to drop it, but they
don't want to.
What happens is, like you said,if they tend to drop too hard,
then and the issue of inflationuprising again.
That is.

(32:25):
That is again, that is a factorwhen you think about there's
like an untold.
I'm trying to make this easierto understand.
Take your time To someone that'snot finance oriented, basically
when the Fed speaks.
I'll just give you an exampleand this might make sense Alan

(32:45):
Greenspan back in.
I think it was 2001?
, yeah, 2001.
2000, 2001-ish Right rightSomewhere around there.
Alan Greenspan there's anunspoken nature to what, and
Alan Greenspan for those whodon't know who it is, it's the
chairman of the Federal Reserveback then, yeah.

Speaker 2 (33:03):
Was replaced by Jerome Powellome powell, you
guys right?

Speaker 3 (33:06):
well, actually it was .
It was bernanke, yellen andthen, uh, jerome powell now.
But um, basically, there's anunspoken nature to how people
view the chairman of the fed,right, and it doesn't
necessarily always have to be onabout what they say or what
they establish in policy, butmaybe about what they're doing.
Back then they would look atalan greenspan walking into the

(33:28):
Federal Reserve Bank rightbefore an FOMC meeting and they
said if his pamphlet, if hisnotebook is fat, then he's
getting in there ready to try toconvince his Federal Reserve
Regional Bank members thatinflationary pressures are high
and they probably need to reducerates.
Now, this is something that themarket just began to formulate

(33:49):
about Alan Greenspan.
This wasn't like set in nature,right?
It's just the markets maketheir own understanding about
what's happening, sure, and thenthe markets react.
This is why you hear the term.
The market is pricing in alower 30-year yield on the
federal treasury.

Speaker 2 (34:10):
That's exactly correct and kind of to help in
that regard.
On the mortgage side of things,guys, when we see Jerome Powell
walk out and give hisannouncement walk out and give
his announcement we as mortgagebankers have already priced in

(34:31):
what we anticipate him to do.
So it's not like, oh, jeromePowell just lowered rates a
quarter, guess what.
We already anticipated that andwe did it before him.
And it's not necessarily aquarter for quarter either.
Just want everybody to knowthat.

Speaker 3 (34:43):
Yeah, and I mean, even when you, even when you
look at it, interest rates havebeen reducing and I think, think
they're still at the six pointeight seven, seven, six, point
eight to seven, point one three.

Speaker 2 (34:52):
They've just been teeter tottering Right.

Speaker 3 (34:54):
And that's before they started implementing a
policy.
So in essence, yes, you'regoing back to your question is
you're 100 percent correct?
But there is a lot of more, alot of more information or data
that sits on the back end thatwe can look at and basically say
that if any of those pressuresreact negatively right to what

(35:15):
the federal reserve is doing,what the fomc is doing, then we
have a bigger issue all bets areoff right, all bets are off the
markets.
The markets are making their ownpresumption or assumption about
where markets are going, andthen the Fed loses faith or the
market loses faith in that theFed can establish a baseline,
and then we have bigger issues.
Yeah, Right.

(35:35):
The moment that the marketsbegin to say, hey, the Federal
Reserve is out of whack.
Yeah, like they don't know whatthe fuck they're doing.
Right, that is a moment thatmarkets we should be worried
about what's happening.
Yeah, when markets begin toprice something like that in and
and that's.

Speaker 2 (35:49):
That's kind of what um, I'm not going to say it
scares me, but it's somethingthat is concerning about this
bricks thing that's happening um, you're seeing the 10-year uh
bond go up, meaning we need morepeople, we need it to be more
attractive for people to investinto our 10 year bonds, and

(36:11):
typically it's outside marketsthat invest in those um, for the
most part, but it's notnecessarily affecting mortgage
rates, which is totallycontradictory to what we
normally are used to, and it'slike okay, is our value becoming
weaker?

Speaker 3 (36:28):
Ideally, I mean think about what we've been doing
fiscally right.
So we have two policies thathappen in the United States.
We have monetary policy, whichis established by the Federal
Reserve, and then we have fiscalpolicy that is established by
an administration or thelegislative branch the Senate,
passing laws to stimulate theeconomy.
Yeah, two very different Right,two very different things.

(36:50):
But ideally, what we've seen iswhenever you see for example,
in 2008, fiscal stimulus checkswent out.
Whenever was it Obama or GeorgeBush?

Speaker 2 (37:02):
It was that had to have been Bush, wasn't it?

Speaker 1 (37:07):
What year?
Yeah, I think it was that hadto have been bush, wasn't it?
Let's see right before, obamawas one of the first ones that
we what year was it?

Speaker 3 (37:13):
2000, let's say 2008, right when the uh 2008.

Speaker 1 (37:16):
Who was the president ?
I think that was let's find outboom.
Yeah, there you go.
When did obama come in?

Speaker 3 (37:25):
inaugurated the winning 2008 election.
Okay, there you go.
So.
So, whenever that, when,whenever the economy was being
hit by the 2000 crash in 2008,fiscal stimulus checks were
written and and sent out.
That's right, why?
Because they were trying tostimulate the economy because it
was getting, they knew,depressed.
Yeah, right, the economy wasgoing into a depression and they

(37:46):
were like we need to dosomething to fix this issue
before we have bread lines that,in addition to bailing out the
banks and we can, that's a wholenother story in itself.
But, um, that happened.
Yeah, that's what's calledfiscal stimulus.
Okay, fiscal fiscal policy, thatis that is induced into the
economy.
Right now, the economy's beendoing great.

(38:07):
We've had a 16-year bull run inmarkets, meaning that companies
have been doing well, makingearnings.
The stock market is great andwe still had fiscal policy that
has been putting money into thepockets of the citizens.
Money into the pockets of thecitizens, yeah, when, when you
write for it, you have tounderstand when you write fiscal

(38:28):
policy into play, you have tounderstand.
When you write fiscal policyinto play, it's not like
nobody's paying for that.
Our debt goes up as a nation,absolutely Right.
So US debt goes up during thecycle of that.

Speaker 2 (38:41):
Matter of fact, we had two episodes back to back
just discussing.
We had the national debtcalculator up on the screen and
we just dissected the shit outof it.
It was like mind-blowing to seehow all these figures stack up
and are relatable to what we doevery day and we go whoa, let's

(39:03):
put this in perspective for you.
Um, it's just nuts to to kindof bite off that.
You know how they say.
How do you eat an elephant?
One bite at a time.

Speaker 3 (39:11):
This is a big ass elephant it is, man it is, and
I'm trying not to go too financeon it because I know you have
people that are.

Speaker 2 (39:19):
I don't mind.

Speaker 3 (39:19):
So, ideally, when the debt is going up, ideally you
have other nations and this iswhy it goes back to the 10-year
bond.
Whenever you have auction,people are still buying it, but
people are beginning to look atother outlets, such as what
you're speaking of, the BRICS.
They're speaking of otheroutlets in terms of what can we
begin to look at outside of theUS dollar.

(39:41):
That is really the strength ofsomething we want to be either
pegged against or something wewant to rely on when they see
the debt goes up.
That is worrisome, maybe not inthe short term, but in the long
run, our generation,specifically, will definitely
pay for the price of that.
Yeah, your kids will pay forthe price of that, my nephew
will pay for the price of that,and then there are generations

(40:03):
going forward, unless we beginto ease off of the fiscal
stimulus factor in terms of whatthese administrations have been
doing Correct, correct, but,yeah, scary spot.

Speaker 2 (40:15):
No, it really is.
I mean, I've got a couple morethings that we can dig into here
, and one is is this one's kindof opinionated and there's no
wrong or right answer unlessthere's data to back it up?
Because we hear oftentimes thatand this may or may not even be

(40:37):
your sector, but I want to putit out into the ether we hear a
lot of times on the news, on themedia, that such and such is
giving tax cuts to the wealthy,and all the research and data
that I find that tends toactually benefit the layman, the

(40:58):
middle class, etc.
Due to the trickle-down effect,so to speak.
Why Business owner?
Let's say I'm a business owner.
I am, if I'm getting tax breaks, meaning I have more on my
bottom line.
I didn't get here by taking themoney and pocketing it.
I got here by reinvesting andbelieving in myself and

(41:21):
continuing to bet on myself andmy employees.
So what does that mean?
I'm going to give raises topeople.
We can incorporate moretechnology, we can incorporate
some things that we couldn'tbefore, didn't have the funds to
.
That's my theory on it.
But I want to get your take onthat, because you you've got
more of the financial side tokind of back it on yeah, I, I do

(41:43):
there.

Speaker 3 (41:44):
I mean, if you look at it, is there a trickle-down
effect to an easier policy oncorporations?
I would say yes.
However, there's a number ofother things that you have to
look at in terms of hey, are thenormal citizens that maybe
aren't necessarily entrepreneursor business individuals that

(42:06):
are owners of businessesbenefiting from it?
There's a lot of other factorsthat you would have to look at
to make that decisive decisionright.
Sure, but do I think that thereis a bullish signal, meaning
that is it good for markets?
Is it good for companies?
Is it good for entrepreneurship?
Is it good for businesses whoare hiring people?

(42:26):
Whenever you have policies thatare either hands-off or easier
in terms of being taxed too hard, I do think there's a benefit
in that, because we look at, atthe end of the day, we're
looking at our P&L right andwe're trying to figure out where
can we profit from, where canwe cut losses, and this comes

(42:48):
down to the productivity thing.
This comes down to all thefactors that establish our
bottom line in terms of abusiness right.
Net income is at the bottom,that's right.
What can we line in terms of abusiness right?
Net income is at the bottom.
That's right.
What can we reduce in terms ofcost of goods, in terms of
overhead, in terms of am I goingto hire the person who is
actually um educated in realestate, opposed to hiring

(43:08):
someone that's just coming intothe industry, that had left left
another industry and doesn'tknow what we've dealt with for
the past 10 years, right leftanother industry and doesn't
know what we've dealt with forthe past 10 years?
You look at all those thingsand those are the factors that
I'm speaking of.
But yeah, hands-off policy oreasier tax incentives for a
business, does it help aneconomy?
I wouldn't combat that at all,but there are a lot of factors

(43:30):
that exist.

Speaker 2 (43:31):
No, I think that's pretty dead on and accurate,
because most business owners andI don't know why we do this,
but in times of crunch we dotend to look at where we can cut
to save instead of looking athow do we make more revenue to
combat that.

Speaker 3 (43:48):
Right.

Speaker 2 (43:48):
Which is odd.

Speaker 3 (43:50):
Yeah, I mean we look at, okay, what can we, what can
we create?
Um, a bigger income stream bydoing what?
Right, like, we look at it, butwhat does it take for you to
look at?
It takes time.
It takes time where you'retaking out of running your
business to actually begin tostrategize to work on your

(44:12):
business, so the easiest thingto do is to cut cost.
That's right.
And then when you're slow andyou're like, okay, you have time
.
Now you have an opportunity tostrategize and build bigger
income streams.

Speaker 2 (44:22):
That was a fantastic observation and I didn't even
put that together, but I thinkyou're right.
As a business owner, you arecorrect we are constantly caught
up in the day-to-day of doingbusiness that it does take time
to work on the business, so youmight as well just do what's
easiest and quickest.
Cut some cost.

Speaker 3 (44:41):
Yeah, yeah, I mean, this is the same policy that I
look at whenever we're buyingcompanies.
Right, whenever you buy acompany and you'll see, like,
for instance, like the corporateraiders, like Carl Icahn, bill
Ackman, whenever they buy aposition into a company and they
revamp the board and they hirea new CEO, why are they doing
that?
You got to think of it.
Right, there is a strategyfactor, there is a mindset

(45:03):
factor that these companies,whatever they've been doing for
a certain amount of time,probably hasn't worked for a
reason, and there's no way tochange the mold of how somebody
has been running a company otherthan to get rid rid of right,
that's right, um, so we see thata lot.
So when you, when you, when youhear company news, um, typically
if a company's has been, if acompany has been depressed for

(45:24):
like, let's say, a cycle of likefour, four quarters, and you're
like what's going on?
And then suddenly you hear newscomes out on cnbc and they're
like, hey, the ceo just gotousted and you see, the stock
just jump.
Disney, for example, right,right.
So you see those thingshappening and that allows a
company to do better.
And then us, as investors, whenwe buy into an opportunity like

(45:52):
that.

Speaker 2 (45:52):
It gives us the opportunity to grow with that
change and and that that rightthere almost reminds me of um.
Uh, was it the big short?
No, it wasn't the big short, itwas um, oh gosh, what is the
other one?
Uh, a wolf of wall street forwall street where matthew
mcconaughey says it's a fugaziwhy it's basically propped up on

(46:24):
what people believe to be true,so much so that they're willing
to bet their dollar right to acertain extent yeah, yeah.
I mean like when you think ofcompanies, right, like companies
could be doing great I meanlook at, let's just talk about
warren buffett recently, warrenbuffett pulled all his money out

(46:45):
of the sucker and everybody'sgoing.
What the heck's?

Speaker 3 (46:48):
going on what he's a lot of.

Speaker 2 (46:49):
It was like amazon he sold out of it, I think.

Speaker 3 (46:52):
Let me see if I can find that um recently like this
week or last week, wasn't it?

Speaker 2 (46:58):
It was maybe a week ago.

Speaker 1 (46:59):
recently, warren Buffett liquidated his stake in
many companies.

Speaker 2 (47:16):
How much was it and did it move the market?
And that's kind of what I'mgetting to is how can somebody
have so much of a position inand an influence on the markets
that it moves the whole markets?
When they do something.
It's like, oh, he's breathingagain or he sneezed.

(47:37):
What are we gonna do now?

Speaker 3 (47:38):
yeah, I mean, when you think of it, I think the sec
makes everyone that's a fivepercent owner or above.
You have to file that you are amajority owner when you just
own five percent.
That's crazy.

Speaker 2 (47:50):
That's crazy, right, yeah so this says, uh, and it
gives us two answers because italways likes to know which one
we prefer but it says WarrenBuffett, Brookshire Hathaway has
significantly reduced itsholdings in several companies
over the past year.
Notably, the firm soldapproximately $127 billion worth

(48:10):
of stock in 2024.
And that was super recently,including a substantial
reduction in Apple's stake bynearly two-thirds, bringing it
down $69.9 billion.
Additionally, Brookshire sold$34.6 billion worth of stock in
the third quarter, notablyincluding significant sales of
Bank of America shares.
So I mean, yeah, that kind ofstuff that happens.

Speaker 3 (48:35):
Right, I'm seeing how much he sold in amazon this
happened.
I'm surprised they didn't tellus what happened last week how
much did warren buffett?

Speaker 1 (48:46):
recently sell of amazon stock stock boom.
Let's see this thing's prettysmart there it is boo boo, boo,
boo, boo 2023.

Speaker 2 (49:02):
Uh holdings by an additional.
Okay, let's see here the firmreduced its holdings by an
additional 551 000 shares, a 5.2decrease.
So they, they, that'll movethem.

Speaker 3 (49:15):
That'll move a market .
Yeah, and five point twodecrease.

Speaker 2 (49:18):
I don't know what the position was before, but yeah
that's going to move some stuffRight, and people are going to
go.
Well, what's going on Right,right, um, yeah, there's this.
This stuff fascinates the hellout of me because we can't see
it, we can't touch it, buttechnically you can if you do
the research.
Yeah, does that sound aboutright?

Speaker 3 (49:36):
yeah, you're saying you can't touch.
What company specifically?

Speaker 2 (49:39):
I mean you can't necessarily touch the um, the
bandwagon that you're jumping on, it it's.
It's like the concept of thedream.
Can you touch the dream?
No, you can't, but you believeit to be true, so therefore
you're going to act upon it.
You can't actually, matter offact, you don't actually make

(49:59):
money until you cash it out.

Speaker 1 (50:01):
Right, right.

Speaker 2 (50:02):
So it's like, yeah, I've made so much money in the
stock, okay, and tomorrow itfalls out of the bottom and
that's gone.
So did you really make money,or you're just seeing these
numbers on a screen moving?

Speaker 3 (50:13):
Right, yeah, I mean, that's the important piece of
like diversification.
I know a lot of peoplespecifically younger, younger
generations right now are big inthe day trading thing yeah, and
it comes down to to me, daytrading, because I used to do it
a lot.
Yeah, I learned that that is azero-sum game.
You're gonna have good days,you're gonna have bad days.
But if you look at it, whetheryou're a year out, whether
you're two years out, you'reprobably gonna be at zero, or

(50:35):
you're probably gonna be atnegative yeah, you're what do
they call it?

Speaker 2 (50:37):
you're better off doing that cost basis like every
week putting x amount uh.

Speaker 3 (50:42):
What is it?
Uh average cost?

Speaker 2 (50:43):
there you go.

Speaker 3 (50:44):
Average cost uh purchasing dollar cost averaging
there you go but yeah, ideally,that's the important factor of
diversification buying into, youknow, not just one or two or
three or different positionsthat you like, but buying into,
at least, let's say, 15 to 20positions that you like.
But buying into, at least,let's say, 15 to 20 positions
that you like, having aportfolio allocated and then
sitting back and if you believein those companies, then then

(51:05):
you should ideally have noproblem with the the tops and
the bottoms of that stock movingup over a span of a couple of
years.
Peaks and valleys, yeah, peaksand valleys.

Speaker 2 (51:15):
So, jc, what time are we at 56 minutes?

Speaker 1 (51:20):
I love it.

Speaker 2 (51:21):
This time for our last topic, because you
mentioned the younger generationdoing day trading and things of
that nature.
Um, and I I'd like to know yourthoughts on, because obviously
you're big on finance, you'rebig on financial literacy,
you're big on financialeducation.
I myself am, as much as Ipossibly can be, from a mortgage

(51:45):
real estate perspective.
You get to see a differentworld than I do, but I believe
that this day and age, ouryounger generation, because we
have so quick access to data, wehave a lack of attention span.
I mean it's like the max iseight seconds these days.

(52:06):
You've got teachers that areoverwhelmingly underpaid, in
addition to maybe overworked,maybe not overworked, but I
don't believe we are setting upour younger generation for
success.
In addition to maybe overworked, maybe not overworked, but I
don't believe we are setting upour younger generation for
success.
Yeah, I would agree with you onthat.
Yeah, tell me your thoughts onthat.

Speaker 3 (52:26):
I think I mean for one.
I think it comes down toparents also.
Parents have to and I'm not aparent yet, but just seeing
across the board, because I tendI meant I I love to mentor
younger minds and I like to toget into their heads to see what
are they experiencing thateither gives them hope or or
dwindles hope.

Speaker 2 (52:45):
Well, hey, that's our future, Right, right.

Speaker 3 (52:48):
So I spent a lot of time, you know, talking to kids,
talking to younger generations,whether they're in high school,
um or college, but reallytrying to understand.
Okay, where are you guyspositioned in terms of mindset?
For one, I think it comes downto parents.
I think parents have to set theprecedent that the world isn't
easy, and if your kid isgraduating high school and is

(53:10):
going into the real worldthinking that life is how it was
whenever they're living underyour household, thinking that
life is how it was wheneverthey're living under your
household, then they're going towalk into a rude awakening, so
one.
I think parents have to do abetter job of setting the
expectation for kids or youngerminds to walk into that field,
because it's a scary place to be, regardless whether you've been

(53:35):
molded or not.
But could you imagine nothaving the correct understanding
of what you're walking into?
Right?

Speaker 2 (53:42):
I mean, and just to break this conversation up just
briefly, I want to just ask thisthing, one more thing that may
put this into more of aperspective of what we're
discussing.
Yeah, how?
No, what percentage ofAmericans invest in the stock

(54:03):
market?
I think we're going to bethoroughly surprised.
Okay, approximately 62% of theUS adults.
Wow, it's breaking it down.

Speaker 3 (54:13):
Let's look at the lower income.
There you go.

Speaker 2 (54:15):
That's what I was trying to get to.
Yeah, that's right, 25's.
Look at the lower income.
There you go.
That's what I was trying to getto.
Yeah, it's right, 25, only inthe lower income.
Now, what do they considerlower income?

Speaker 1 (54:23):
I'll just ask it what do you consider lower income
house olds, let's see lower 52000.

Speaker 2 (54:37):
Okay, so that's most of americans, yeah, you know, um
, and only so.
Here it even breaks it down bydemographics, right, um, we're
gonna only focus on that lowerincome, which that, for san
antonio, is average income.
To be honest, yeah, uh, only25% of folks actually invest in

(54:58):
the stock market, and I would goas far as to say that most, if
not all, are simply doing itwith their 401k and not actually
individually picking stocks,managing their portfolio or have
a manager of their portfolio.
Right, and this says, in thelower stock ownership by race,
believe it or not, more blackpeople own stocks than Hispanics

(55:21):
.

Speaker 3 (55:21):
Yeah, I believe that.

Speaker 2 (55:22):
Let's see here no college education.
33% of non-college educatedpeople own stock.

Speaker 3 (55:31):
In comparison to what some college fits.
That's a big variance, rightthere.

Speaker 2 (55:35):
Absolutely what?
Some college?
That's a big variance rightthere.
Absolutely, uh, post-grad.
So it's like something aboutthe college that gets you to see
the light and go.

Speaker 3 (55:41):
Maybe I should start investing and I, and I, and I
think it's because I think highschools, high schools and maybe
generations or schools beforethe middle school, we'll say
middle school also um, I thinkthey fail to teach how
necessarily the economy isactually working great.

Speaker 2 (55:57):
Can you elaborate?

Speaker 3 (55:58):
right.
So when you, when you go in,and I have a nephew and he's
taking a finance something, buthe's like it's an electorate, I
might drop it and I'm likeyou're absolutely not gonna drop
it, I'm like why would you dothat right?
I'm like, I'm like you'retelling me this.
I was like, no, you're not,you're not dropping it, man.
So when you think of whatthey're teaching in schools and
and I would have to look at thecurriculum of every different

(56:18):
district he's in Northside, butI would have to look at the
curriculum and say, okay, butfrom what I've positioned and
from what I've seen is thatschools are not necessarily
teaching these younger minds howthe economy works, not even
just finance, basic knowledge ofhow the economy works right,
what makes the economy run theway that it does?
Right?

(56:38):
Why do companies?
Why are companies in the in thebusiness of making a profit?
What do they?
What do they do?
What, what, what good do theydo for the world?
Yeah, and I think that kids arefailing to understand that in
the in the most basic form.
Yeah, right, they think that,oh, just because, um, a company
is running that, oh, they'regoing to provide a job, and it's
like, no, in certain periodsthey're not hiring.

(56:59):
Right, and why aren't theyhiring?
Well, they're not hiringbecause there's no money in
their, in their balance sheet,or there's no money that is in
foresight of their pipeline.

Speaker 2 (57:07):
That's right and so a lot of insolvency right.
They're still running Right.

Speaker 3 (57:11):
And then you have a kid that's hoping.
You know, he's getting out ofhigh school and he sees his
company that he wants to workfor, just go under.
And then he's like, ok, now I'mlost.
Right, all of those perceptionscould be eased into the reality
of how our world works, right,if schools would just teach how
the economy truly functions.

Speaker 2 (57:32):
And a lot of folks would say well, they're too
young to even understand thatBullshit.
I say make it fun.

Speaker 1 (57:37):
Make it fun.

Speaker 2 (57:38):
I was having a conversation and this was
several months back with anotherloan officer in Idaho Falls
Shout out, deborah Criddle.
She had a genius idea.
She said why don't?
In elementary we start off withhaving the kids come in and
they pick from a hat orsomething with a bunch of

(57:58):
different professions.
Boom, you pick it out andfireman, okay, great.
So for this month or this year,this quarter, whatever the time
period is, you're going to get apaycheck based on that career
field and you've got to have abudget and you're going to pay
rent or you're going to paymortgage and you're going to pay
auto and your light bill, etcetera, et cetera.
And it doesn't have to be thatelaborate, but just getting them

(58:21):
to understand the concept ofmoney management and seeing oh
wow, this is how my parentsallow me to go to school.
The clothes that I wear, thefood that I buy, that kind of
stuff and that kind of makes itfun and also enlightening for
the kid, because by the end ofthe semester, what have you?
And they go man, I'm out ofmoney.

(58:42):
Chances are I don't need to bea fireman or a teacher or this
or that.
I need to go and take somerisks into this other profession
.
Then you've obviously gotprofessions that are commission
only, entrepreneurs, things ofthat nature.
But what I do think is apractice like that would get the
young minds to start thinkingthe way that would lead them to

(59:07):
open the doors or at least beintrigued by what does that mean
?
What does if I do this, what arethe repercussions of it mean?
What does if I do this, whatare the repercussions of it?
Um, that then kind of opens thedoor or leads it into them
asking their parents morequestions, because what I've
found is, more times than not,parents want to shield their

(59:29):
kids from any type of downfallsthat that are taking place
within the family, so they theyshield them from it.
Then, when that kid grows upand has their first windfall,
they don't know what the hell todo, right, and they think it's
the end of the world, kind oflike what we're seeing right now
, where participation medalsseem to be the buffer for

(59:52):
getting a good solid asswhooping type concept.
Yep, getting a good solid asswhooping type concept?
I don't know.
I firmly believe that thereneeds to be something
implemented within youngergenerations elementary, middle
school that I know that I didn'treceive.

Speaker 1 (01:00:08):
I received it from my parents straight up.

Speaker 2 (01:00:10):
They were very transparent.
I'm appreciative of it At thetime.
I'm like God man.
Why do I need to learn thisstuff?
But fast forward.
Many other peers had nofreaking clue what I'm talking
about, right?

Speaker 3 (01:00:22):
And the reality is that some families have it
harder than others and there'sno doubt about that, but it's
very, to me at least, it's veryimportant to and you could start
lower doses, like you said,lower doses in elementary school
.
By middle school, kids arealready feeling the pressure if
they have siblings, and it'sharder for mom and dad to pay

(01:00:42):
for one soccer league and otherJohnny's soccer league isn't
available because there's nomoney in the bank right now.
Kids begin to feel thepressures of that in middle
school, in middle school, and soit's important to talk about
the economic factors, in myopinion, of why is it harder for
you, why can you play soccerthis season and your brother

(01:01:03):
can't, yeah, or why can yourbrother not play this season and
you can, right, and then youform a gratitude for that and
you form more discipline interms of, hey, there's an
opportunity that I have on thetable right now and I can't take
this for granted.

Speaker 2 (01:01:18):
That's right.

Speaker 3 (01:01:18):
Right.
So there's a lot of I think, alot of benefits to smaller doses
and as you get older, speakingof the realities of what's
happening, and by the timeyou're in high school, hey, it's
full-blown picture, right?
For instance, we graduated 07,or I graduated 07 from high
school right before the crash,and then the crash happened.
Luckily, I was going into thefield of finance where I learned

(01:01:40):
a lot of those things, but Icouldn't imagine not studying
finance during that time whereI'm just watching like markets
are going haywire they'respeaking about we're about to
have bread lines If the it's theend of the world.

Speaker 1 (01:01:52):
Yeah dude.

Speaker 3 (01:01:53):
I mean, all these things aren't happening.
Like man, I'm lucky that I wasin finance classes during those
periods, because if not, I wouldhave been like you know
stressing out.
That's right, because I wasn'tprepared for that during high
school.

Speaker 2 (01:02:05):
And they say that anxiety is an all time high and
depression is an all time high.
It's like, well, I can see whywe're shielding the next
generation from real life.
Yeah, um, that's just, I don'tknow.
We can go on and on about thesetopics, but uh, mauricio, I
think this was a greatdiscussion.
I think the folks listening gota ton out of it.

(01:02:27):
I know I did.
I want to thank you for forenlightening me and educating me
on all the things that you didwithin this hour period.
Is there anything that youwould like to close us off with?

Speaker 3 (01:02:38):
No, just thanks for having me on, Mark.
I appreciate it.
It's always good catching up.
If anybody has any questions,they could find my contact on my
website, portsoffoliocapitalcom.

Speaker 2 (01:02:48):
And tell us exactly what you do real quick as we
close this out?

Speaker 3 (01:02:51):
Yeah, yeah, Basically a position Talk right there.
If you Basically basically aposition, if you have a great
there, if you have long termcapital, anything that's
exceeding three years, when youthink, when you think about
money, anything that's exceedingthree years, should not be

(01:03:12):
sitting in a bank accountbecause you have inflationary
pressure that lowers the valueof the dollar, and so ideally it
should be diversified within anasset class, whether that's
stocks, bonds.
Depending on your age,depending on your risk factors,
you invest that money and thenyou watch that money as you get
older.
Basically, my firm is in chargeof managing that capital.
So we're a long-term capitalmanager.
We're lawfully abided to act ina fiduciary capacity.
So know that if you're investingmoney with us, we're doing what

(01:03:35):
is in your best interest beforeanything.
We're not here to sell youanything.
We're not here to put you in aninsurance program.
We're basically diversifyingwhatever investments you have to
make sure that you are alignedwith your risk tolerance and for
the betterment of your futureand it's not our future, it's
not anyone else's other than theclients, and that's basically
what we do for our clients.

(01:03:55):
That's not anyone else's otherthan the clients and that's
basically what we do for our um,our clients.

Speaker 2 (01:03:58):
That's bad-ass, um, ladies and gentlemen out there
listening, if you made it thisfar in the discussion, um, I'm
hoping that you gained all theknowledge and education in this
short period of time that I justdid.
Um, if anything, it gives you alittle bit more to think about
and to consider when you getyour paycheck.
You as a realtor, you as alender, we know that if you

(01:04:22):
don't wake up tomorrow, start tosell real estate, there's no
residual in our line of work, soyou've got to continue to put
money in places that will breedand fruit down the road, and
that is a great way to put it.
Real estate is anothercompounding investment.
Why?
Because there are year overyear equity growths.

(01:04:44):
Typically, san Antonio is aboutfive to six percent.
In the last several years it'sbeen way higher, but definitely
something.
I don't necessarily look at realestate as an investment.
I look at it as, um, honestly,one of the biggest investments.
Why?
Because you got to livesomewhere, guys, um, and it's

(01:05:05):
pretty cool to be able to takeand tap into that uh, home that
you just paid into, to go andcomplete your dreams, to pay for
college, to help your family toget to the next level of
whatever it is that you'retrying to accomplish in this
life.
I want to thank you again forjoining me.
Likewise, mike Mark, Iappreciate it and like I, said,

(01:05:25):
guys, we will only bring expertsto you.
We will continue to bringexperts to you in the field in
which we're kind of goingthrough at the moment.
Hope you guys are gettingsomething out of this.
Make sure to like, subscribe,share with a friend.
You never know who could needsome of this info.
But until the next one, we willcatch you later and we out.

Speaker 3 (01:05:48):
Nice dude.