Investing When Risk Is Rising: Rates, Leverage, and Protecting Your Capital - Ep33 Anna Kelley

Great.

I think you very succinctly said what was at the top of my mind.

So you're tracking well and reading my mind here, David.

And really, when I put on my former private banking hat, which was, you know, I was in private banking in the late 1990s, the first thing that we would tell to new clients is you've got to know your own financial goals and your own risk tolerance.

You know, those are the main things.

And people basically at any point in their lives have one of three primary financial goals, and it's either growth, income, or asset preservation, depending on where you are.

And so in the early years, most people need income.

So you're looking for ways to create income, and most people go for, you know, high-paying jobs.

And then they invest for the long term into things that are going to grow and appreciate so that one day when they're 65, you with a million bucks and live on 4% and all that that we used to say that I don't necessarily believe anymore.

But, you know, the point being, young people invest for growth and then, you know, eventually you want to replace your income at a certain point.

So then you're more income driven.

And then you get to a place where you've got your nest egg, you've grown it appropriately, you've got the sufficient income that you need.

And then you really need to think about putting most of your investments into the asset preservation bucket.

And so I look at those three things as kind of the buckets in which you place your money.

And what I would say, my recommendations to people, although I am no longer licensed in any way, so this is not investment advice, but just general principles are you're going to put most of your money in the bucket that you would say is your priority number one.

So for you and I, because we're semi-retired, right, we're no longer relying on another company and a payroll to provide our needs.

We've developed, you know, income streams that are coming in.

We are not as reliable on needing more income.

And we've gotten a little bit older.

And because we do live on our nest egg and our own businesses and investments, we really want to preserve capital more than then we want to put more money at risk just to create more income or more growth and appreciation when reality is at some point we have to ask ourselves how much is enough, right? And so I am in that later bucket where because I am in an asset preservation mode, I'm investing much, much, much more conservatively than maybe my son will or does at the age of 23 or my daughter at the age of 20 because they have decades for this stuff to work itself out.

And what I've learned really in real time through the last several years, I would say from COVID on, is that the economy really does have what economists say are long and variable lags.

And I'm learning that in this real time, the six years period, that this seems like it's been going on forever.

And the reality is it could go on a lot longer, this stagnation and this uncertainty.

And so I think we have to be real with what is our number one investment goal.

We put most of our money in that bucket.

Great.

I think you very succinctly said what was at the top of my mind.

So you're tracking well and reading my mind here, David.

And really, when I put on my former private banking hat, which was, you know, I was in private banking in the late 1990s, the first thing that we would tell to new clients is you've got to know your own financial goals and your own risk tolerance.

You know, those are the main things.

And people basically at any point in their lives have one of three primary financial goals, and it's either growth, income, or asset preservation, depending on where you are.

And so in the early years, most people need income.

So you're looking for ways to create income, and most people go for, you know, high-paying jobs.

And then they invest for the long term into things that are going to grow and appreciate so that one day when they're 65, you with a million bucks and live on 4% and all that that we used to say that I don't necessarily believe anymore.

But, you know, the point being, young people invest for growth and then, you know, eventually you want to replace your income at a certain point.

So then you're more income driven.

And then you get to a place where you've got your nest egg, you've grown it appropriately, you've got the sufficient income that you need.

And then you really need to think about putting most of your investments into the asset preservation bucket.

And so I look at those three things as kind of the buckets in which you place your money.

And what I would say, my recommendations to people, although I am no longer licensed in any way, so this is not investment advice, but just general principles are you're going to put most of your money in the bucket that you would say is your priority number one.

So for you and I, because we're semi-retired, right, we're no longer relying on another company and a payroll to provide our needs.

We've developed, you know, income streams that are coming in.

We are not as reliable on needing more income.

And we've gotten a little bit older.

And because we do live on our nest egg and our own businesses and investments, we really want to preserve capital more than then we want to put more money at risk just to create more income or more growth and appreciation when reality is at some point we have to ask ourselves how much is enough, right? And so I am in that later bucket where because I am in an asset preservation mode, I'm investing much, much, much more conservatively than maybe my son will or does at the age of 23 or my daughter at the age of 20 because they have decades for this stuff to work itself out.

And what I've learned really in real time through the last several years, I would say from COVID on, is that the economy really does have what economists say are long and variable lags.

And I'm learning that in this real time, the six years period, that this seems like it's been going on forever.

And the reality is it could go on a lot longer, this stagnation and this uncertainty.

And so I think we have to be real with what is our number one investment goal.

We put most of our money in that bucket.