April 22, 2025 • 19 mins
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Welcome to the Fiscal Physical Podcast.
Join us each week as we sitdown with the founder of Alchemy
Wealth Management and author ofyour Fiscal Physical, Ryan
Nelson.
Tune in to gain valuableinsights and practical tips as
we simplify complex financialconcepts into digestible lessons
(00:22):
.
From budgeting to retirementplanning, this podcast is your
go-to resource for masteringfinancial literacy.
Aaron Hoisington (00:33):
Welcome everybody to this week's episode
of the Fiscal Physical Podcast.
My name is Aaron.
I am joined by Ryan Nelson.
Ryan, what is up?
Ryan Nelson (00:42):
with you today, my man.
Aaron Hoisington (00:44):
Not too much.
What's up with you?
You know just surviving.
You know staying alive, keepingthings moving and, as always,
enjoying being here, learningsome physical tips.
It gets harder to say everytime.
I feel, like maybe we shouldlook at changing the name of
this podcast.
Once again, I want to shout out, as I do with every episode or
(01:06):
I try to at least thank you somuch for everybody who tunes in,
listens, throws out questions,comments, whatever it might be.
We really appreciate it.
Wherever you might be joiningus in the United States,
internationally, however youmight be getting us, please
continue to like, subscribe,give us feedback.
We'd love it all for sure.
But today, ryan, we are goingto dive into your book.
(01:27):
I've plugged it many a time onthis here, so I feel like that's
beating a dead horse.
But there is an awesome sectionon this that I was reading the
other night, and it's just alittle blurb.
I almost feel like it couldhave been more expansive in here
.
Maybe part two you'll dive intothat, but it's called Focus on
what Matters, and in thissection you give some pretty
logical information that when wetalk about it, people are going
(01:49):
to be like oh yeah, of course,that makes complete sense as far
as that goes.
But you mentioned controllingwhat you can control, and you
talk about common distractionsand such too.
So I'm curious if you couldgive a little bit of a breakdown
to the listeners about thistopic and what the best way you
can kind of explain this and howto achieve this goal on
focusing on what matters.
Ryan Nelson (02:10):
Yeah, absolutely so .
Yeah, like you said, I mean,it's maybe semi self-explanatory
or it feels obvious when youhear it, but it's one of those
things that, while obvious whenyou hear it, sometimes we don't
always think about it, right,that, while obvious when you
hear it, sometimes we don'talways think about it, right,
right?
And so the way in the book Ihave that little image of the
Venn diagram that I love.
(02:31):
But so if you can picture this,if you're listening, if you can
picture this, it's a Venndiagram, which maybe half of our
listeners know what that means.
Speaker 1 (02:40):
No, our listeners are incredibly smart.
Ryan Nelson (02:43):
But so a Venn diagram is that thing where you
have the two circles overlappingand so in one circle is like
things that you can control, andin the other circle is things
that are important, right, andthen so where the overlap is
would be both things that areboth important and are in our
control right, are in ourcontrol right, and really the
(03:05):
idea of this is what we want tospend our time focusing on is
the things that are importantand the things that we can
control.
And you know, I, I, I like drawthis Venn diagram, probably
like every single day and likebring this up to client.
Yeah, Like like almost everymeeting, I feel like Excellent.
Aaron Hoisington (03:20):
Do you hand draw it?
Ryan Nelson (03:21):
Do you have?
Like, okay, cool, I had to justrip off the top sheet of top
sheet of my little notepad.
It's got it in my desk.
That's awesome, yeah.
So again, it's just aboutfocusing on things that are
important and things that youcan control.
Again, on the surface,everybody's probably like, yeah,
obviously.
Speaker 1 (03:38):
Yeah, duh.
Ryan Nelson (03:39):
Yeah, but what's interesting?
It's like what about marketreturns you?
But what's interesting?
It's like what about marketreturns?
You can't control marketreturns, sure.
So, that's one thing thatprobably everybody cares about
and spends a lot of time.
That's probably the number onething people focus on is what
are my returns?
It's like that's something wecan't control.
Do we really want to spend ourtime together talking about
returns?
That's completely out of ourcontrol.
(04:01):
One example of something we cancontrol is return.
I mean sorry.
Aaron Hoisington (04:04):
Whoa, that's completely out of our control.
One example of something we cancontrol is return.
I mean sorry Is risk.
Ryan Nelson (04:08):
Sorry, right, so something that's important.
The way I think about this is ifwe were to prioritize
everything that's both importantand that we can control.
Risk is probably nearer at thetop of that list, and so we can
figure out what the right amountof risk to take in our
portfolio is, and the returnsare a function of the amount of
risk we take right.
So we want to focus on risk,not returns.
(04:29):
We'd be focusing on risk andthen again the returns are a
function of the risk.
So the returns are something wecan't control, but is a
function of something we cancontrol.
So we want to spend as muchtime and energy focusing on what
we can control right.
And also another example ofthis is when it comes to
portfolio construction.
So when we're building ourportfolio, we're deciding what
(04:49):
to invest in.
You'll remember we talked inepisode 53 about modern
portfolio theory.
So, modern portfolio theory.
I recommend anybody go back andlisten to that one.
It's probably one of myfavorite episodes.
That's episode number 53.
It talks about how to build aportfolio and how the
diversification of thatportfolio basically how you
(05:10):
could partner two or moreinvestments together increase
expected return and reduceexpected risk.
It sounds like that would beimpossible to do.
It's not.
If you use non-correlatedassets, you can reduce the
overall risk of a portfolio.
Yeah, it's kind of like.
Aaron Hoisington (05:28):
I remember that episode.
I was like this is like aglitch or this is like a hack.
If executed correctly andthings go right, obviously
things out of the.
But you're like, wait a minute,this seems like a great idea,
Feels counterintuitive.
Ryan Nelson (05:41):
It's just a basic mathematical principle, so it's
nothing weird, but it'scounterintuitive, which is what
makes it feel like that hack,right.
So it's nothing weird or out ofthe ordinary.
Again, it's justcounterintuitive.
But so, again, modern portfoliotheory, that's something
building and constructing ourportfolio.
If we're building andconstructing our portfolio, we
can adequately apply theprinciples of modern portfolio
(06:04):
theory.
That's something that'simportant and we can adequately
apply the principles of modernportfolio theory.
That's something that'simportant and we can control.
Then, or you could focus on hey, I want to buy this hot AI
stock, or I want to buy Bitcoin,or I want to buy whatever sexy
stock I heard about in themarket or on the news yesterday.
Right, I would tell you thatyou can control that.
You can control what individualstock you buy, but I would
(06:28):
argue it's not important.
Constructing a diversified,well-put-together portfolio that
complies with modern portfoliotheory is that's what's
important.
Individual security selectionlike trying to catch the next
cool thing that is not important, right.
And so again, even though,again, it's probably obvious to
everybody that we want to focuson things that are important and
(06:50):
that are in our control,sometimes what's not so obvious
is what are the things that areimportant, what are the things
that are in our control?
Most people might think returnsare in our control, but no, we
just learned they're not.
Risk is in our control.
Returns are a function of thatrisk.
We might think that it'simportant to pick the right
stocks.
I would argue it's notimportant to pick the individual
security selection, it'simportant to compose a portfolio
(07:13):
basically the right way.
So again, it can kind of be alittle bit counterintuitive, but
again, at the end of the day, Ithink we just want to be
focusing on those things thatare important and that we can
control.
Aaron Hoisington (07:25):
Yeah, no, I think we just want to be
focusing on those things thatare important and that we can
control yeah, no.
I think that that's a fabulousbreakdown of that and you hit on
it.
It's like sometimes, thesethings that maybe are obvious
until you're like, oh, yeah, ofcourse.
Then you're like people arelike, oh, drink more water.
You're like, oh, of course, ofcourse, of course.
Sure, it's like Maybe Iactually should drink more water
, and actually implementing it,I think is a big piece of it.
And I'm so excited that youused that Venn diagram, because
(07:47):
when I came across it, I waslike, wow, this is awesome, and
I think that, like, I use it atmy work as well too, because I
think it's very applicable.
Speaker 1 (07:55):
Oh, it's applicable to all of life, Everything just
in general.
Aaron Hoisington (07:58):
You're just like, and I just have a little
thing I found on Google that Ijust pull up and I'm like, here
it is.
I don't actually draw it, soI'm glad that you high and draw
it.
That's awesome.
I think that it's reallyimportant to, because I'm sure
you get that question all thetime of like cool, what are your
returns?
Or like, how do I get myreturns more, what can I do to
increase this?
And you're like I'm sure it'sprobably just robotic now that
(08:20):
you just have like, to somedegree, you have like your
answer of this.
But once people start tounderstand that, I'm sure it's a
lot easier for them to kind ofaccept, you know, not get so
worried about when things go upand down and up and down or
whatever it might be withreturns or the market in general
.
Because, like, if you're notchasing that next hot thing and
(08:41):
you're just focused on stayingthe course, if you will Like.
I feel like it just makes thingsoverall easier.
Ryan Nelson (08:47):
One interesting I'm just thinking of this on the
spot, so the example probablywon't be that good, maybe even
not that relevant Perfect youcan cut it out.
Speaker 1 (08:54):
Yeah, I'll cut it out .
Yeah, yeah, yeah, I won't.
Ryan Nelson (08:56):
But yeah, but so imagine.
Aaron Hoisington (09:04):
so let me just ask you a question Sure, you
know, should you contribute toyour?
Ryan Nelson (09:08):
401k.
I would say yes, yeah, I'msetting you up for failure.
Aaron Hoisington (09:10):
Yes, definitely yeah, I would say yes
, I would say like, yes, Ishould contribute to my 401k.
But I also think is there anemployer match to it?
Ryan Nelson (09:16):
Sure, Like these different things, that kind of
go into it, I guess.
So let's pretend we havesomebody sitting across the desk
from us, whatever.
Sure, hypothetical client AShould hypothetical client A
contribute to their 401k, Iwould say yes, that would be my
guess.
Aaron Hoisington (09:32):
as far as this , goes.
Ryan Nelson (09:34):
So what I think is interesting, if we apply the
same topic, we think aboutwhat's important and what you
can control.
One of the most importantthings that I would say we would
want to do is figure out whattheir goals are.
So if we talk to them and theysay, yeah, I want to retire at
age 65.
I'm okay saving 15% of myincome, I want to retire at age
(09:56):
65.
And I don't expect anyinheritance or anything, you
might say, yeah, this person's aperfect candidate for a 401k,
let's get you contributed Right.
And we're using informationthat, like.
One of the most importantthings is what is their goal,
right?
So if we were to again toprioritize what's important and
what can we control, we can.
What's important is that whattheir goal is?
And we can control basicallyhow we react to that.
(10:19):
Now you can sit with anotherclient and if another client
says, hey, you know, I come froma really wealthy family.
I have a trust set up.
I'm going to inherit $10million at age 65, basically as
my retirement savings, but Idon't want to retire at age 65.
I want to retire at age 45.
And now, all of a sudden, ifthey were saving into a 401k,
(10:43):
well, they don't have access toany of their family's funds
until 65.
They don't have access.
Really, for purposes of thisconversation, we'll say they
don't have there's someexceptions to this but they
don't have access to their now401k funds until 59 and a half.
If they said they want toretire at 45, what are they
doing between 45 and?
59 and a half so that'd beanother example of a client
where it's the same question,but what's important is their
(11:05):
goals and where they're atcurrently financially.
And so once we determine that,we can say, okay for this person
, maybe they shouldn't put anymoney into a 401k and they
should be saving it all in likea brokerage account so they can
access that money before age 59and a half without penalty and
then they can transitionsmoothly into receiving their
basically family wealth.
So it's just interesting how,figuring out Again, focusing on
(11:30):
what's important, some of themost important things would be
your goals, building adiversified portfolio, so
applying modern portfolio theory, whereas some unimportant.
Focusing on your risk, whereassome unimportant things would be
yeah, are you investing in Cokeversus Pepsi?
Are you investing in Fordversus Tesla?
In the grand scheme of things,that probably actually isn't
(11:51):
going to matter nearly as much.
That individual, if he hadinvested all his money in
whatever Tesla and Tesla ends upbeing the better choice, but he
put it all into a 401k.
That's not going to help himretire.
Speaker 1 (12:04):
Right, right.
Ryan Nelson (12:04):
So he was focusing on something that wasn't
important, and so yeah.
Aaron Hoisington (12:09):
I think it's super well said and a super
great breakdown.
It's really good to hear andwe've mentioned it multiple
times on this that Alchemy,wealth Management yourself is a
fiduciary to do what's best forthe client and to ask those
questions and to figure out whatthose goals are.
Versus like you never want tothrow any companies under the
bus, but like what the companygoals are specifically and
(12:31):
trying to balance those and likefigure out, cool, what works
best for you and how can we makethat happen, is not the most
common.
Speaker 1 (12:39):
I would say it happens?
Aaron Hoisington (12:41):
Obviously you have, but I feel like there's
instances where there's moreincentives for something to
happen and you get someone intoan account.
Maybe they don't need.
But being a fiduciarian likeyourself, thinking of starting
at square one of what are yourgoals, what can we control and
how do we get there, I think isa big piece of what Alchemy,
wealth Management is all about,and hopefully you guys, if
you're doing something like that, you at least even if you're
(13:03):
doing it on your own stop andask those questions overall
before you really start divinginto investing all your money
into one thing or whatever itmight be.
Sure and thanks, I appreciatethat.
Cool, absolutely Awesome.
Well, that's all we had forthis side of the podcast.
We'll go ahead and pause hereand be back on the other side.
Speaker 1 (13:19):
And now to put the personal in personal finance.
Aaron Hoisington (13:26):
Welcome back to this side of the Fiscal
Physical Podcast.
We are getting into some musictoday, ryan, so I am really
curious, because you're kind ofan enigma with music.
I'm not really sure what youlike, like just in general, I
feel like you just findsomething that you're like, like
just in general, like, uh, Ifeel like you just find
something that you're like, Ilike that and that's.
It can be really whateveroverall.
So my question to you is what'sthe first concert you ever
(13:49):
attended?
I?
Ryan Nelson (13:50):
like it, I'm an enigma, me and Aaron Rogers.
Yes, exactly.
Yes, Um yeah, I, I well, I don'tlisten to much music again.
It's I like almost entirelyjust listen to podcasts.
I mean listen to much music.
Again it's I, I like almostentirely just listen to podcasts
.
I mean listen to podcasts,listen to audiobooks.
Um, as I walk my dog now, Ilisten to, like, the spanish
training or whatever.
(14:10):
Um, yeah, so I, there's justnot a lot of time then, I guess,
left over for music, um, and soI've never been a huge music
guy myself.
Uh, I was trying to think ofwhat my first concert I ever
went to is, and I honestly can'tremember.
Um, it was, I'm almost positiveit was with my sister, and I
think it was either backstreetboys or in sync.
(14:32):
Who was one of those?
Like one of those two, thoseboy, those boy bands.
Um, there's a huge rift betweenthose two, so that's funny
you're like that's one of thesetwo like I thought they were
like parallels, aren't they like?
Aaron Hoisington (14:42):
uh, super similar it's funny they're very
similar in their like kind ofmusic.
But like they're the followingbetween like you're either an
n-sync fan oh, you can't be,both yeah, generally you choose
one of the others.
Ryan Nelson (14:52):
So that's funny, yeah, so I don't care, but like
yeah, yeah we're gonna lose somelisteners yeah, yeah, yeah.
So I I honestly I don'tremember which one was.
I'm pretty sure it was one ofthem.
It was one of those bands.
Yeah, it was something similarto that, and I don't even
remember the concert at all.
It was just a long time ago.
Aaron Hoisington (15:12):
Yeah, that's funny because when I wrote this
I was like, oh, of course I'msuper excited and I was like
shoot what was mine, because I'malso not a big music guy in
general.
It's caused many a riff betweenmy wife and I when I'm like.
Speaker 1 (15:24):
I've never heard this song.
Aaron Hoisington (15:25):
She's like you've never heard this song.
I feel like that's like daily Iget that she hops in the car
she turns on either the radio orSpotify, whatever, and listens
to music.
I'll turn it on and eitherlisten to sports talk radio or a
podcast or something like that,and that's just kind of where,
and I'll maybe hear a song orsomething.
I'm like, oh, that's kind ofcatchy, like oh, yeah, maybe
listen to that, like.
Ryan Nelson (15:46):
But I just usually listen to the physical, physical
, on, on, on, repeat.
Try to drive those listenernumbers up.
Is that where we got all thoselistens from?
Aaron Hoisington (15:53):
interesting yeah, but I was, I was thinking
about this and I remembered whatmy first one was is, um, in
like I come from a pretty smalltown in idaho but uh, the next
town up does like this uh summerfestival where they get like a
decent amount of people there.
Every once in a while you getlike a big name that comes out,
and one of the names that I Iwent, I think I was like a
(16:14):
little maybe 12 or 13, and no, Iyeah, I was 12 or 13, something
like that and uh, I I the barenaked ladies.
Okay, we were playing there andI didn't know anything about
them whatsoever.
Speaker 1 (16:25):
You were intrigued though.
Aaron Hoisington (16:26):
I was very intrigued at 13.
Speaker 1 (16:28):
You can imagine that that piqued my interest to say
the least.
Aaron Hoisington (16:32):
And I remember them just starting, just
playing, and then they worecostumes of naked ladies.
Oh, really yeah like people inbikinis and I was like well,
this is, this is crazy, theseare dudes like, oh, that's
interesting.
Ryan Nelson (16:46):
And so it was just like this oh so, bare naked
ladies is it's a guy, it's boy?
Yeah, yeah, oh, that'sinteresting and so it was.
Aaron Hoisington (16:52):
It was very interesting to me overall, like
I was like I would have assumed.
Oh, interesting, like.
But and then later they cameback, like six or seven years
later, to this thing and I wentagain it's a summer concert or
whatever.
And they're the ones fun fact,they're the ones that if you've
ever seen the show the Big BangTheory, they do the intro.
Our whole universe was in a hotand they played that like
(17:15):
acoustically or whatever, and itjust brought the house down
then.
Yeah, I bet, but when I was 12or 13, that show wasn't out, so
it didn't really.
But then later when they cameback, they were such had evena
bigger following just for thatspecific thing.
So I'll just never forget myworld was opened.
Speaker 1 (17:33):
That's awesome so.
Aaron Hoisington (17:35):
I might have gone to one before that I heard
a musician play or whatever, butthat's the one that stands out
in my mind there for sure.
So anyway, awesome, appreciateit.
Hope everybody's now thinkingabout what their first concert
was and appreciate everybodylistening in tuning in and Ryan
any any last words.
Ryan Nelson (17:51):
As always, stay the course.
Speaker 1 (17:54):
Thank you for joining us for the fiscal physical
podcast.
Until next time, happylistening and, as always, stay
the course.
If you have a question or topicsuggestions, please email us at
podcast at alchemywealthcom.
If you enjoyed today'sdiscussion, subscribe to the
(18:15):
podcast to ensure you never missan episode, and consider
leaving us a rating and reviewon your favorite platform.
This helps other listeners likeyou find the show.
For more resources, you canvisit Alchemy Wealth
Management's website atwwwalchemywealthcom or find your
fiscal physical the Book onAmazon.
We'd be remiss if we didn'tmention that personal finance is
(18:35):
just that personal.
Please don't take anything wesay as advice.
The preceding content is forinformational and entertainment
purposes only.
It's not an offer or asolicitation, nor should it be
construed or relied upon for tax, legal or investment advice.
It doesn't consider yourpersonal financial situation or
objectives and may not besuitable for you.
Welcome to the Fiscal Physical Podcast.
Join us each week as we sitdown with the founder of Alchemy
Wealth Management and author ofyour Fiscal Physical, Ryan
Nelson.
Tune in to gain valuableinsights and practical tips as
we simplify complex financialconcepts into digestible lessons
(00:22):
.
From budgeting to retirementplanning, this podcast is your
go-to resource for masteringfinancial literacy.
Aaron Hoisington (00:33):
Welcome everybody to this week's episode
of the Fiscal Physical Podcast.
My name is Aaron.
I am joined by Ryan Nelson.
Ryan, what is up?
Ryan Nelson (00:42):
with you today, my man.
Aaron Hoisington (00:44):
Not too much.
What's up with you?
You know just surviving.
You know staying alive, keepingthings moving and, as always,
enjoying being here, learningsome physical tips.
It gets harder to say everytime.
I feel, like maybe we shouldlook at changing the name of
this podcast.
Once again, I want to shout out, as I do with every episode or
(01:06):
I try to at least thank you somuch for everybody who tunes in,
listens, throws out questions,comments, whatever it might be.
We really appreciate it.
Wherever you might be joiningus in the United States,
internationally, however youmight be getting us, please
continue to like, subscribe,give us feedback.
We'd love it all for sure.
But today, ryan, we are goingto dive into your book.
(01:27):
I've plugged it many a time onthis here, so I feel like that's
beating a dead horse.
But there is an awesome sectionon this that I was reading the
other night, and it's just alittle blurb.
I almost feel like it couldhave been more expansive in here
.
Maybe part two you'll dive intothat, but it's called Focus on
what Matters, and in thissection you give some pretty
logical information that when wetalk about it, people are going
(01:49):
to be like oh yeah, of course,that makes complete sense as far
as that goes.
But you mentioned controllingwhat you can control, and you
talk about common distractionsand such too.
So I'm curious if you couldgive a little bit of a breakdown
to the listeners about thistopic and what the best way you
can kind of explain this and howto achieve this goal on
focusing on what matters.
Ryan Nelson (02:10):
Yeah, absolutely so .
Yeah, like you said, I mean,it's maybe semi self-explanatory
or it feels obvious when youhear it, but it's one of those
things that, while obvious whenyou hear it, sometimes we don't
always think about it, right,that, while obvious when you
hear it, sometimes we don'talways think about it, right,
right?
And so the way in the book Ihave that little image of the
Venn diagram that I love.
(02:31):
But so if you can picture this,if you're listening, if you can
picture this, it's a Venndiagram, which maybe half of our
listeners know what that means.
Speaker 1 (02:40):
No, our listeners are incredibly smart.
Ryan Nelson (02:43):
But so a Venn diagram is that thing where you
have the two circles overlappingand so in one circle is like
things that you can control, andin the other circle is things
that are important, right, andthen so where the overlap is
would be both things that areboth important and are in our
control right, are in ourcontrol right, and really the
(03:05):
idea of this is what we want tospend our time focusing on is
the things that are importantand the things that we can
control.
And you know, I, I, I like drawthis Venn diagram, probably
like every single day and likebring this up to client.
Yeah, Like like almost everymeeting, I feel like Excellent.
Aaron Hoisington (03:20):
Do you hand draw it?
Ryan Nelson (03:21):
Do you have?
Like, okay, cool, I had to justrip off the top sheet of top
sheet of my little notepad.
It's got it in my desk.
That's awesome, yeah.
So again, it's just aboutfocusing on things that are
important and things that youcan control.
Again, on the surface,everybody's probably like, yeah,
obviously.
Speaker 1 (03:38):
Yeah, duh.
Ryan Nelson (03:39):
Yeah, but what's interesting?
It's like what about marketreturns you?
But what's interesting?
It's like what about marketreturns?
You can't control marketreturns, sure.
So, that's one thing thatprobably everybody cares about
and spends a lot of time.
That's probably the number onething people focus on is what
are my returns?
It's like that's something wecan't control.
Do we really want to spend ourtime together talking about
returns?
That's completely out of ourcontrol.
(04:01):
One example of something we cancontrol is return.
I mean sorry.
Aaron Hoisington (04:04):
Whoa, that's completely out of our control.
One example of something we cancontrol is return.
I mean sorry Is risk.
Ryan Nelson (04:08):
Sorry, right, so something that's important.
The way I think about this is ifwe were to prioritize
everything that's both importantand that we can control.
Risk is probably nearer at thetop of that list, and so we can
figure out what the right amountof risk to take in our
portfolio is, and the returnsare a function of the amount of
risk we take right.
So we want to focus on risk,not returns.
(04:29):
We'd be focusing on risk andthen again the returns are a
function of the risk.
So the returns are something wecan't control, but is a
function of something we cancontrol.
So we want to spend as muchtime and energy focusing on what
we can control right.
And also another example ofthis is when it comes to
portfolio construction.
So when we're building ourportfolio, we're deciding what
(04:49):
to invest in.
You'll remember we talked inepisode 53 about modern
portfolio theory.
So, modern portfolio theory.
I recommend anybody go back andlisten to that one.
It's probably one of myfavorite episodes.
That's episode number 53.
It talks about how to build aportfolio and how the
diversification of thatportfolio basically how you
(05:10):
could partner two or moreinvestments together increase
expected return and reduceexpected risk.
It sounds like that would beimpossible to do.
It's not.
If you use non-correlatedassets, you can reduce the
overall risk of a portfolio.
Yeah, it's kind of like.
Aaron Hoisington (05:28):
I remember that episode.
I was like this is like aglitch or this is like a hack.
If executed correctly andthings go right, obviously
things out of the.
But you're like, wait a minute,this seems like a great idea,
Feels counterintuitive.
Ryan Nelson (05:41):
It's just a basic mathematical principle, so it's
nothing weird, but it'scounterintuitive, which is what
makes it feel like that hack,right.
So it's nothing weird or out ofthe ordinary.
Again, it's justcounterintuitive.
But so, again, modern portfoliotheory, that's something
building and constructing ourportfolio.
If we're building andconstructing our portfolio, we
can adequately apply theprinciples of modern portfolio
(06:04):
theory.
That's something that'simportant and we can adequately
apply the principles of modernportfolio theory.
That's something that'simportant and we can control.
Then, or you could focus on hey, I want to buy this hot AI
stock, or I want to buy Bitcoin,or I want to buy whatever sexy
stock I heard about in themarket or on the news yesterday.
Right, I would tell you thatyou can control that.
You can control what individualstock you buy, but I would
(06:28):
argue it's not important.
Constructing a diversified,well-put-together portfolio that
complies with modern portfoliotheory is that's what's
important.
Individual security selectionlike trying to catch the next
cool thing that is not important, right.
And so again, even though,again, it's probably obvious to
everybody that we want to focuson things that are important and
(06:50):
that are in our control,sometimes what's not so obvious
is what are the things that areimportant, what are the things
that are in our control?
Most people might think returnsare in our control, but no, we
just learned they're not.
Risk is in our control.
Returns are a function of thatrisk.
We might think that it'simportant to pick the right
stocks.
I would argue it's notimportant to pick the individual
security selection, it'simportant to compose a portfolio
(07:13):
basically the right way.
So again, it can kind of be alittle bit counterintuitive, but
again, at the end of the day, Ithink we just want to be
focusing on those things thatare important and that we can
control.
Aaron Hoisington (07:25):
Yeah, no, I think we just want to be
focusing on those things thatare important and that we can
control yeah, no.
I think that that's a fabulousbreakdown of that and you hit on
it.
It's like sometimes, thesethings that maybe are obvious
until you're like, oh, yeah, ofcourse.
Then you're like people arelike, oh, drink more water.
You're like, oh, of course, ofcourse, of course.
Sure, it's like Maybe Iactually should drink more water
, and actually implementing it,I think is a big piece of it.
And I'm so excited that youused that Venn diagram, because
(07:47):
when I came across it, I waslike, wow, this is awesome, and
I think that, like, I use it atmy work as well too, because I
think it's very applicable.
Speaker 1 (07:55):
Oh, it's applicable to all of life, Everything just
in general.
Aaron Hoisington (07:58):
You're just like, and I just have a little
thing I found on Google that Ijust pull up and I'm like, here
it is.
I don't actually draw it, soI'm glad that you high and draw
it.
That's awesome.
I think that it's reallyimportant to, because I'm sure
you get that question all thetime of like cool, what are your
returns?
Or like, how do I get myreturns more, what can I do to
increase this?
And you're like I'm sure it'sprobably just robotic now that
(08:20):
you just have like, to somedegree, you have like your
answer of this.
But once people start tounderstand that, I'm sure it's a
lot easier for them to kind ofaccept, you know, not get so
worried about when things go upand down and up and down or
whatever it might be withreturns or the market in general
.
Because, like, if you're notchasing that next hot thing and
(08:41):
you're just focused on stayingthe course, if you will Like.
I feel like it just makes thingsoverall easier.
Ryan Nelson (08:47):
One interesting I'm just thinking of this on the
spot, so the example probablywon't be that good, maybe even
not that relevant Perfect youcan cut it out.
Speaker 1 (08:54):
Yeah, I'll cut it out .
Yeah, yeah, yeah, I won't.
Ryan Nelson (08:56):
But yeah, but so imagine.
Aaron Hoisington (09:04):
so let me just ask you a question Sure, you
know, should you contribute toyour?
Ryan Nelson (09:08):
401k.
I would say yes, yeah, I'msetting you up for failure.
Aaron Hoisington (09:10):
Yes, definitely yeah, I would say yes
, I would say like, yes, Ishould contribute to my 401k.
But I also think is there anemployer match to it?
Ryan Nelson (09:16):
Sure, Like these different things, that kind of
go into it, I guess.
So let's pretend we havesomebody sitting across the desk
from us, whatever.
Sure, hypothetical client AShould hypothetical client A
contribute to their 401k, Iwould say yes, that would be my
guess.
Aaron Hoisington (09:32):
as far as this , goes.
Ryan Nelson (09:34):
So what I think is interesting, if we apply the
same topic, we think aboutwhat's important and what you
can control.
One of the most importantthings that I would say we would
want to do is figure out whattheir goals are.
So if we talk to them and theysay, yeah, I want to retire at
age 65.
I'm okay saving 15% of myincome, I want to retire at age
(09:56):
65.
And I don't expect anyinheritance or anything, you
might say, yeah, this person's aperfect candidate for a 401k,
let's get you contributed Right.
And we're using informationthat, like.
One of the most importantthings is what is their goal,
right?
So if we were to again toprioritize what's important and
what can we control, we can.
What's important is that whattheir goal is?
And we can control basicallyhow we react to that.
(10:19):
Now you can sit with anotherclient and if another client
says, hey, you know, I come froma really wealthy family.
I have a trust set up.
I'm going to inherit $10million at age 65, basically as
my retirement savings, but Idon't want to retire at age 65.
I want to retire at age 45.
And now, all of a sudden, ifthey were saving into a 401k,
(10:43):
well, they don't have access toany of their family's funds
until 65.
They don't have access.
Really, for purposes of thisconversation, we'll say they
don't have there's someexceptions to this but they
don't have access to their now401k funds until 59 and a half.
If they said they want toretire at 45, what are they
doing between 45 and?
59 and a half so that'd beanother example of a client
where it's the same question,but what's important is their
(11:05):
goals and where they're atcurrently financially.
And so once we determine that,we can say, okay for this person
, maybe they shouldn't put anymoney into a 401k and they
should be saving it all in likea brokerage account so they can
access that money before age 59and a half without penalty and
then they can transitionsmoothly into receiving their
basically family wealth.
So it's just interesting how,figuring out Again, focusing on
(11:30):
what's important, some of themost important things would be
your goals, building adiversified portfolio, so
applying modern portfolio theory, whereas some unimportant.
Focusing on your risk, whereassome unimportant things would be
yeah, are you investing in Cokeversus Pepsi?
Are you investing in Fordversus Tesla?
In the grand scheme of things,that probably actually isn't
(11:51):
going to matter nearly as much.
That individual, if he hadinvested all his money in
whatever Tesla and Tesla ends upbeing the better choice, but he
put it all into a 401k.
That's not going to help himretire.
Speaker 1 (12:04):
Right, right.
Ryan Nelson (12:04):
So he was focusing on something that wasn't
important, and so yeah.
Aaron Hoisington (12:09):
I think it's super well said and a super
great breakdown.
It's really good to hear andwe've mentioned it multiple
times on this that Alchemy,wealth Management yourself is a
fiduciary to do what's best forthe client and to ask those
questions and to figure out whatthose goals are.
Versus like you never want tothrow any companies under the
bus, but like what the companygoals are specifically and
(12:31):
trying to balance those and likefigure out, cool, what works
best for you and how can we makethat happen, is not the most
common.
Speaker 1 (12:39):
I would say it happens?
Aaron Hoisington (12:41):
Obviously you have, but I feel like there's
instances where there's moreincentives for something to
happen and you get someone intoan account.
Maybe they don't need.
But being a fiduciarian likeyourself, thinking of starting
at square one of what are yourgoals, what can we control and
how do we get there, I think isa big piece of what Alchemy,
wealth Management is all about,and hopefully you guys, if
you're doing something like that, you at least even if you're
(13:03):
doing it on your own stop andask those questions overall
before you really start divinginto investing all your money
into one thing or whatever itmight be.
Sure and thanks, I appreciatethat.
Cool, absolutely Awesome.
Well, that's all we had forthis side of the podcast.
We'll go ahead and pause hereand be back on the other side.
Speaker 1 (13:19):
And now to put the personal in personal finance.
Aaron Hoisington (13:26):
Welcome back to this side of the Fiscal
Physical Podcast.
We are getting into some musictoday, ryan, so I am really
curious, because you're kind ofan enigma with music.
I'm not really sure what youlike, like just in general, I
feel like you just findsomething that you're like, like
just in general, like, uh, Ifeel like you just find
something that you're like, Ilike that and that's.
It can be really whateveroverall.
So my question to you is what'sthe first concert you ever
(13:49):
attended?
I?
Ryan Nelson (13:50):
like it, I'm an enigma, me and Aaron Rogers.
Yes, exactly.
Yes, Um yeah, I, I well, I don'tlisten to much music again.
It's I like almost entirelyjust listen to podcasts.
I mean listen to much music.
Again it's I, I like almostentirely just listen to podcasts
.
I mean listen to podcasts,listen to audiobooks.
Um, as I walk my dog now, Ilisten to, like, the spanish
training or whatever.
(14:10):
Um, yeah, so I, there's justnot a lot of time then, I guess,
left over for music, um, and soI've never been a huge music
guy myself.
Uh, I was trying to think ofwhat my first concert I ever
went to is, and I honestly can'tremember.
Um, it was, I'm almost positiveit was with my sister, and I
think it was either backstreetboys or in sync.
(14:32):
Who was one of those?
Like one of those two, thoseboy, those boy bands.
Um, there's a huge rift betweenthose two, so that's funny
you're like that's one of thesetwo like I thought they were
like parallels, aren't they like?
Aaron Hoisington (14:42):
uh, super similar it's funny they're very
similar in their like kind ofmusic.
But like they're the followingbetween like you're either an
n-sync fan oh, you can't be,both yeah, generally you choose
one of the others.
Ryan Nelson (14:52):
So that's funny, yeah, so I don't care, but like
yeah, yeah we're gonna lose somelisteners yeah, yeah, yeah.
So I I honestly I don'tremember which one was.
I'm pretty sure it was one ofthem.
It was one of those bands.
Yeah, it was something similarto that, and I don't even
remember the concert at all.
It was just a long time ago.
Aaron Hoisington (15:12):
Yeah, that's funny because when I wrote this
I was like, oh, of course I'msuper excited and I was like
shoot what was mine, because I'malso not a big music guy in
general.
It's caused many a riff betweenmy wife and I when I'm like.
Speaker 1 (15:24):
I've never heard this song.
Aaron Hoisington (15:25):
She's like you've never heard this song.
I feel like that's like daily Iget that she hops in the car
she turns on either the radio orSpotify, whatever, and listens
to music.
I'll turn it on and eitherlisten to sports talk radio or a
podcast or something like that,and that's just kind of where,
and I'll maybe hear a song orsomething.
I'm like, oh, that's kind ofcatchy, like oh, yeah, maybe
listen to that, like.
Ryan Nelson (15:46):
But I just usually listen to the physical, physical
, on, on, on, repeat.
Try to drive those listenernumbers up.
Is that where we got all thoselistens from?
Aaron Hoisington (15:53):
interesting yeah, but I was, I was thinking
about this and I remembered whatmy first one was is, um, in
like I come from a pretty smalltown in idaho but uh, the next
town up does like this uh summerfestival where they get like a
decent amount of people there.
Every once in a while you getlike a big name that comes out,
and one of the names that I Iwent, I think I was like a
(16:14):
little maybe 12 or 13, and no, Iyeah, I was 12 or 13, something
like that and uh, I I the barenaked ladies.
Okay, we were playing there andI didn't know anything about
them whatsoever.
Speaker 1 (16:25):
You were intrigued though.
Aaron Hoisington (16:26):
I was very intrigued at 13.
Speaker 1 (16:28):
You can imagine that that piqued my interest to say
the least.
Aaron Hoisington (16:32):
And I remember them just starting, just
playing, and then they worecostumes of naked ladies.
Oh, really yeah like people inbikinis and I was like well,
this is, this is crazy, theseare dudes like, oh, that's
interesting.
Ryan Nelson (16:46):
And so it was just like this oh so, bare naked
ladies is it's a guy, it's boy?
Yeah, yeah, oh, that'sinteresting and so it was.
Aaron Hoisington (16:52):
It was very interesting to me overall, like
I was like I would have assumed.
Oh, interesting, like.
But and then later they cameback, like six or seven years
later, to this thing and I wentagain it's a summer concert or
whatever.
And they're the ones fun fact,they're the ones that if you've
ever seen the show the Big BangTheory, they do the intro.
Our whole universe was in a hotand they played that like
(17:15):
acoustically or whatever, and itjust brought the house down
then.
Yeah, I bet, but when I was 12or 13, that show wasn't out, so
it didn't really.
But then later when they cameback, they were such had evena
bigger following just for thatspecific thing.
So I'll just never forget myworld was opened.
Speaker 1 (17:33):
That's awesome so.
Aaron Hoisington (17:35):
I might have gone to one before that I heard
a musician play or whatever, butthat's the one that stands out
in my mind there for sure.
So anyway, awesome, appreciateit.
Hope everybody's now thinkingabout what their first concert
was and appreciate everybodylistening in tuning in and Ryan
any any last words.
Ryan Nelson (17:51):
As always, stay the course.
Speaker 1 (17:54):
Thank you for joining us for the fiscal physical
podcast.
Until next time, happylistening and, as always, stay
the course.
If you have a question or topicsuggestions, please email us at
podcast at alchemywealthcom.
If you enjoyed today'sdiscussion, subscribe to the
(18:15):
podcast to ensure you never missan episode, and consider
leaving us a rating and reviewon your favorite platform.
This helps other listeners likeyou find the show.
For more resources, you canvisit Alchemy Wealth
Management's website atwwwalchemywealthcom or find your
fiscal physical the Book onAmazon.
We'd be remiss if we didn'tmention that personal finance is
(18:35):
just that personal.
Please don't take anything wesay as advice.
The preceding content is forinformational and entertainment
purposes only.
It's not an offer or asolicitation, nor should it be
construed or relied upon for tax, legal or investment advice.
It doesn't consider yourpersonal financial situation or
objectives and may not besuitable for you.
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