We EXPOSE What Teens AREN’T Learning About Money

Welcome to another edition of the Chicks on the Right podcast. We are here with Zach Abraham, who is the chief investment officer for Boer Capital and Financial Guy Extraordinary. This week, I have an assignment from my fifteen year old daughter. She is nothing like me, dak Like when I was fifteen, I was thinking about blue eyeshadow and Duran, Duran and like all things nineteen eighty six. You know, my daughter.

So she does that.

So she has her little chase, you know, checking cout. She's got her little app, and she does all of her things, and she learns how to manage money. And no one ever has to balance like a checkbook anymore. But at least that's how kids are learning how to manage their money.

Right.

But when it comes to this stock stuff, I'm not very well versed on stock, like I use you to help me with that kind of stuff, right, right, But Gwen is very interested. She's like, I want to know how this works. I want to see it. I want to do it myself. It's kind of like a game, and you know, kids are really into games. So Fidelity has a little I guess it's like a it's like

So I love it. I love it.

So first of all, funny, I've got a fifteen year old working in the office right now.

He's a he's a kid of one of our friends.

Yeah, that's got an interest in finance, and I I, well, I don't think it's a surprise to most people that I love what I do, that I'm.

Getting into it.

But I also love explaining it to kids, and I love explaining it to us, like because it's not.

You know I and I totally get it.

I think it's one of those things that's really intimidating from the outside looking in, like, oh, I don't know how it works.

And the one thing I.

Tell people all the time, yeah.

Well, and part of it is part of it is the ecosystem built around it, which is so much of that. And now this will sound like I'm selling against myself because I do this for a living, but so much of it, I am convinced is vernacular that's been put in place to make Wall Street people sound smart and to make the average person sound like they, you know, think that they've got no idea what they're doing right, right, And I always tell my clients, I go, you understand this more than you think you do.

You're just not up on the words and the catch phrases.

Right. It's like a different end of that makes me feel a little bit better, but it's still it's scary, Like it's really scary. There's a lot of suff You're like, I don't know what that isn't like I don't this fun? That fun like that kind of account like it's it is hard to navigate, and like where to get started? How do you get started on it? What should you invet?

Yeah, yes, so right out of the gate, now we've looked there's a bunch of different tools out there. The one that I have found that I think has been the best. Fidelity's got a good way to do it. But the one that was even easier for younger kids. Was this green Light that my wife and I use.

Yeah, we'd use green Light for a while with Gwen.

Yeah yeah, And it's really easy to move money back and forth. I also like their trading platform because you don't have to put a quote unquote enough money, because the trading platform lets you buy partial shares. Okay, So like, let's say the kids want to buy a share of you know, let's say the kids have one hundred and fifty bucks in their account, right, right, and they want

They can buy twenty dollars worth of Google stuff.

Okay.

So I really love that my kids use that. My youngest is the most interested in it. He's the one that will most often bring me a portfolio and go, hey, dad, let's move some things around with picture stock.

Shay is Zach.

I had no idea that they had an investment part of it. I used Dream simply as like a checking account before I moved her over in Chase. I had no idea. So this is news to me. I'm an idiot, so this is news to me and maybe news to other people. Maybe I'm not the only idiot. So it so it has an investment part of it that you can actually give kids like two hundred bucks and stay here, go play in the market.

Yeah, and then and then you can do stuff. So we've looked at the kids a couple of times been like, okay, now you've made some we've made some nice returns here, right, so what are we going to do? And they're like, oh, well, I want to buy this or you know, and just teaching them like okay, you know, letting them watch that account grow and be like, oh now I started with fifty, but now there's fifty and I can go buy something.

Because we live in the Internet world where we've.

Got all of this right, We've got access to more information than we've ever had and human beings I've ever had, right, and yet financial literacy, I think it's just as bad, if not the worst, as I've ever seen it, especially among young kids, right, Yeah, and they all are aware of nicer things like, for instance, when I was a kid, I didn't know what a my Bock Mercedes was.

Kids today do, right, So.

There's an awareness of more expensive things, but the idea of what they can afford, how that works, it's just as alien to them as it's ever been. Right, And the one thing I love about walking through stocks and explaining it to the kids is I think it provides a really good understanding of just the way money works. For instance, Dad, what kind of stocks are you investing in?

We believe the intrinsic value of that investment to be.

Warren Buffett's got a great line, which I think it's a miss way too often investing which is the number one most important factor that will decide the success or failure of an investment, or how much the success or failure of an investment. There's nothing more important than what price you paid, right, And so keeping that idea kind.

Of a weird thing.

We all sit there and go really and then you start thinking about it. Yes, right, the less you pay for any investment, that's where the win is made. It's not when you sell it, it's when you buy it, right, Yeah, and so and so getting them to understand that, getting them to understand the way that money floats around. Why is this stock at this price? And then do it, well, this is how much profit it made. You know, here's interest rates, and you know, just showing them how these

And people are like, well, what should I let them by?

And I'm like, you know what, Honestly, some of the best ways to learn how to do this. Don't be too worried about them winning or losing. Some of the best ways to teach people, it's like anything else. The best way to get somebody how to manage money is we have a joke around here. Thank god, I've never done it with a client account. But I you know, I don't think that you're a good money manager until you've blown an account up, right.

I think it takes more than that athlete until you've failed, or good anything until you've fallen on your face really right?

Yeah? Right? And you know it's it. And it's funny because you learn over time.

There's so many little things where they'll be like, well what about that, And I'm like, oh no, no, we're not going to do that, and they're like why and I'm going, well, because that's bit me before, right, Can.

I learn because I learned by falling down?

Exactly?

Right?

Do you think already your kids interested in finance because of this stuff or do you think just intrinsically they're like maybe one or two of them are interested just because dad does it.

I think that I think that the one my youngest is interesting, he got it. Yeah, he's got an interest in it. I think my middle yeah, he does, and he's just he's just kind of he's kind of bent that way. I you know, we'll see the way it plays out. Like early on, we didn't have yeah, but we didn't have act like there was you know, there was no way for me to trade stocks or do anything like that.

I mean, I remember, I.

Remember, I think I shorted my first stock at like seventeen years old.

Oh my gosh. See that's still like I wouldn't have known. I wouldn't at seventeen. I didn't care about any of that stuff.

I had no.

But I but my dad.

So I've grown up in the business. Like literally, yeah, my dad had a brokerage firm. I've got pictures of me being like in a crib in a brokerage firm.

Oh gosh, yeah.

So yeah, and.

And but it but it was always there was something about, especially value investing, and I can't really explain why, but there was something as a kid that was so intriguing to me about the idea of buying something that everybody else is thrown away and doesn't think it's worth anything, and that you know that it is, and then turning back around later and going, see we were you know, there was just something that was so exciting about that.

I don't know why.

It sounds weird to say it's exciting, but no, I mean it's really cool.

But you're either going to do it and you were going to grab onto it and you're going to do it yourself, or you're going to go the complete op the direction and become like an underwater basket weaver or something.

Right, which, by the way, I'm sure you can get a degree for these days.

Yea, absolutely you can.

Yeah, you can spend two hundred and fifty grand learning how to be an underwater basket we Yeah.

It's probably like lesbian underwater basket.

Yeah, you know the other the other thing that and this. This sounds kind of crazy, but I'm probably gonna do with my kids too, And I think it's another great lesson I would have if my kids are running a trading account, I would have them buy a little bit.

Of crypto currency, a little bit of crypto.

Yeah, that's what a lot of like this fidelities is that they don't do, which I think is interesting.

Yeah, and here's why I think the vast majority of things in the crypto world.

And I always get pushed.

Back when I say this, I don't really understand why, but I think the vast majority of the things in the crypto world are completely worthless.

Okay, okay, And.

This sounds bizarre, but one of the best ways to teach somebody about investing and about money is to have them lose it. Yeah, right, And I think that that is such an important thing for them to see something lose substantial value and realize this isn't just a game.

And you think that generation, that generation thinks that crypto is like the shiny object right now.

Oh and look, I know people.

I was listening to a previously what a guy that's considered very well respected in the industry and very conservative. I heard an interview recently where he was saying that people should own twenty five to forty percent of their portfolio crypto. Oh, I'm got no, and I and I'm watching him say this, and I'm like, you're out of your mind.

You're out of your mind. And here's why.

Here's why you don't know what it is. Right, this is their retirement portfolio.

You can't.

This isn't black box time, This isn't hey, let's throw three hundred grand in this and see if it pans out.

Oh my right god, yeah no.

And there's and look, the problem is that so many people are anesthetized to the risks and crypto, and the one way they justify it is they go, well, it's gone up, and you're like, yeah, That's what people were saying about tulips in sixteen hundred until they quit going up right the other people, and I've had that conversation, they go, tulips, what are you talking about? And You're like, dude, hey, do yourself favor and go home and read about tulipmania.

Hey, this is not a new thing that you're doing. Right, There is nothing new under the sun.

One of my favorite Bible verses, right, Solomon talking about there is nothing new under the sun.

You have not invented anything. Right. We have seen it before.

It's happened with tulips, It's happened with sardines, It's happened with all kinds of weird stuff.

Right.

When I was a kid coming up, it wasn't crypto, but it was dot com. Any company that ipoed with the name dot com and their title, the ipo up on one hundred and fifty to two hundred percent every single time, first day of action, sometimes more right, everybody thought, hey, we found a way of investing where you can't lose. Then, minute you hear that, grab your chips and head for the door. Right, And just teaching the kids that right, understanding that money is a fluid thing, and you're gonna

Right? Your life should look ideally, it should look.

Like you make thirty or forty percent of what you make, right, buffer.

Quality of life? Yeah, all those kinds of things.

And you know, I just think that one of the best ways to teach your kids that is through you know, running through that investing. And then when really big shocks happen, like coronavirus or like a great recession or whatever, the kids have something you know, palatable, They've got something tangible that they can actually see, and they're like, wow, people have lost you know what I mean.

I think it helps them put context to Yeah.

I just think in general, like I know that Gwen, my daughter, I know that the youngest are older ones, are older ones, and are younger youngest is they're just way smarter than we.

Ever were, which is a good thing. And I think that's big boiames.

Because a lot of times we hear that this generation is dumb or they're they're dumbed down, or they're being dumb down because they're not. I think that they actually are way more astute than we ever were, which is a good thing, because they do have some of these fo and I hope that they're using them in the best way possible.

Parents can use these tools like green light. I'm going to start using them. I think that one is.

Probably the one that we're going to use to do the investing stuff to try to navigate those waters with her, because I remember the interface with the checking and all that, and I like that. I like that the greenlight, and so we'll try that and see what happens and she can play around a little bit in that.

I think that's great.

And it gives them little cards, right, like little debit cards that they can actually use places and do things. Yes, and so it's just that, you know, it's it's that practical. You know, Now we're mixing and balancing a checkbook and balancing a debit card and payments with investing, right and just like anything else, the more you see those things interact, the more you see those those things whirling around and working together, the better idea it's going to give you of the world around you.

And you know, you got all.

Like I said, the kids are smarter these days. Yeah, But at the same time, on the financial side of it, like I said, so much of it is geared toward the material side of money as opposed to the working side of it. And you know, teaching them to understand.

And you know, just all these things that we learn, and we learn either because we.

Listen to somebody that's a really good example, or we learn the old fashioned way because we do it wrong.

And it's usually the old fast it's usually the old fashion way. I mean, it's real, and it's gonna that will.

Be learned probably in the next five to fifteen years when they learn it.

The old fact.

Yes, Now, if you could actually do seminars with kids I think that would be amazing. You probably should think about doing that, Zach, But I know you have one coming up on July twenty fourth with adults.

Yes, can your kids if they wanted to.

Yeah. Yeah.

So we're doing our same as the road shows we do before, but this one we're really tailoring it toward the environment we're living in, talking about like, you know, how urgently we really need There's another.

One we saw today. Okay.

So it's the what we call the Warren Buffett valuation Indicator, and Warren Buffett has always looked at the value of the US stock market as a percentage of the amount of economic activity that we put out. Okay, that metric just the other day, I believe it was just yesterday, hit a new high, a new all time high. And again, it doesn't say that there's panic you need to sell everything and get out. What it does mean, though, is the composition of the portfolios that have worked from US

At all they're not at all. They're all loaded up. So we're going to walk through that.

We're going to walk through the opportunities that we see in dollar alternatives like precious metals, the opportunities that we see in international markets, lifetime hype opportunities, and international markets because they've never been cheaper in comparison to US stocks. So just walking through that, showing everybody, hey, here's how we do things. Here's how we manage risk. This is how we you know, try to prevent against the big losses.

So that's a lot of good stuff.

And that's July twenty fourth at three thirty pacific. Right. You got to where can they go sign up for that?

Wellworkcapitalmanagement dot Com. We'll have a dialogue box that'll pop up. You can sign up for it. There's no cost, there's no obligation. We're not calling you on Saturday afternoons trying to and truthfully, one of the reasons we do this is because it's an interface people can get kind of like a halfway into the firm and understand how we do things, how we think without having to make a commitment financially right. And the reason we like to do

We got to know, you know, how each other thinks. And I think this is a great opportunity for day.

Don't have a copy day? Was that there?

We go?

Yeah, curiously, just check out you guys, exactly check out you guys.

Definitely do that exactly.

You bet, you bet, thank you.

It was always Investment Advisory services offered through TREK Financial loc and SEC Registered Investment advisor. The opinions expressed in this programmer for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. Any references to performance of security so it thought to be materially accurate, and actual performance may different.

Investments involved risk and or not guaranteed. Past performance doesn't guarantee future results. Check twenty four three zero