E9: How to Accumulate Wealth

Transcript

Machine-generated (Whisper). Download: VTT · SRT

0:00 All right. Hello, and welcome to another episode of Frankly Speaking. Today, we'll be talking about finance stuff just in general. I'm joined again by my lovely wife. Hello. How are you? So for some reason, there's been a ton of mosquitoes this year in Vancouver. Last year, there weren't too many, but just in the past day, we've each gotten like several mosquito bites. It's been very annoying. I feel like this year in general, we've just had a lot more bugs. Yeah. All sorts of bugs. All sorts of bugs, which is interesting because I read how a lot of bugs are disappearing because of pollution, climate change, other manmade factors.

0:44 So when we were growing up, if you do like a cross country trip in your car, or even just a 40 minute drive on the highway, your windshield would be filled with like splattered bugs. But nowadays you drive and just anecdotal experience, like there's not as many bugs that you've hit. And then so I kind of looked this up and apparently there are less bugs around. But now again, we're seeing a resurgence of bugs. Yeah. And they come in waves. So like earlier in the summer, I got a whole like 20 bug bites and they just kind of went away. And then now it's coming back.

1:21 So I think that might be more seasonal. But there's also the thing about how honeybees and bumblebees were going extinct and that was going to be a huge crisis. But apparently a lot of agencies and governments and just I guess honeybee enthusiasts came together and that the honeybee population has made a resurgence that's no longer an issue from what I can tell. So good job beekeepers and other other people. Yeah. So I guess we can kind of transition now into talking about just growing up being poor, essentially.

1:53 So it's kind of funny because a lot of immigrants have a really similar story when it comes to what it was like growing up here. So usually when you immigrate over, our families were not wealthy. And even though we grew up in different countries, it is pretty similar story in terms of like how we didn't have money, essentially. Yeah, I feel like my dad always thought that he had a really hard like, oh, you know, look at us until he went to visit one of his friends in the States. And his friend kind of went the same route as your dad, like he came over here for college and then like, you know, made a life for himself.

2:34 And they're doing really well now. But he listened to his story and was like, holy crap, like this is so much harder than what I had it. Yeah. So for context, Annie's parents came over when she was 11 and then my parents came over when I was one. And our parents are roughly the same age. So. Almost 10 years earlier. Yeah. So like my parents, when they came over, they basically barely had enough food for just like survival. Because for context, PhD students get a grant of roughly like 10 to 15 K per year and they have subsidized housing, which is how they're able to even pay rent, essentially.

3:13 And I stayed with my grandparents for the first four years of my life because there wasn't enough money to support a kid as well. And then Annie's family, like her parents already had a job in China for a while. They came over with some savings. They had a business in China too, which like they converted one of my grandparents like basement for like a little hotel or motel or something. So it didn't make a lot of money because I don't think my dad's actual job gave him a lot of money. So he was like, we have two kids got to like find a way to make money somehow.

3:46 So yeah, I know like growing up, it didn't feel like we were super poor. Like we lived in not so great neighborhoods. Definitely like we bought a lot of used stuff. So I remember going to like garage sales and thrift stores like Goodwill, bought a lot of secondhand things. And I don't know, as a kid, it just seemed kind of normal because like the other people around you are also poor. So it's not like you're comparing your own situation to people who are so wealthy. And like back then the internet and social media, all that wasn't really a thing.

4:19 We had like our basic five free channels where I would just watch like PBS. And so it's, you wouldn't really see much opulence in your daily life. It was just normal. Yeah. I mean, I don't really, I think I was just more oblivious. Like I didn't really compare myself to other kids. Like I didn't really have friends that I would like always go to their house and like look at their things. But now, now that I'm older thinking back, I'm like, oh, okay, we were poor because like, you know, when we first came here, we bought all used stuff.

4:50 And like, I think that was by choice again, because like we had savings in the bank, but my dad just like, he's like a very risk averse person. And he would rather know that like, if anything happened to him, we were going to get, be taken care of basically. And to fast forward a little bit, both of our families became less and less poor as time went on. Um, my dad got a more stable job, you know, obviously graduated, got his PhD, um, made very little money in the beginning. And which is also why he cautioned me against majoring in biology.

5:26 So you don't make that much coming out of school, even with a PhD. I think he was making like, I don't know, 40, 50 K tops. So supporting a family of five at that point, because then at that point, my two little brothers were born as well. And so, um, for Annie's family, I think their business started to take off, right? Um, well, so my dad wanted to go into computer engineering, like he was an electrical engineer. He came here, wanted to do computer science, but his English was just terrible. So then he transitioned into construction.

5:58 So he worked kind of like manual labor for the last like 20, 30 years, 20 years. Um, but I think because the real estate market in Vancouver was like just continuously going up, people in construction made a lot of money. I think like real estate, it's like, if you were in a city, it kind of blew up, regardless of which city, whether it's like Vancouver, Seattle, SF. But like in Iowa, where I grew up, our house is not really worth that much more. And real estate prices, like they don't have a whole lot to climb.

6:28 There's like, there's so much room. There's so much room to build. There's not a ton of demand. Um, yeah. I mean, I feel like a lot of it is like, it's like luck, but then also hard work. Cause I remember my dad working like 12 hours days. Like they didn't have time to like send us off to college. Yeah. My dad also worked a lot, but then he would also study a lot after work. So he would, he got his MBA while he was working. Like he would work and then he'd come home. He'd like read books, take his classes and he got his MBA eventually.

6:58 I'm not really sure if that helped or not. Um, but then yeah, we each went off to college. Um, in college was the first time I really had like actual money to spend on random stuff to buy. Because in, when I was in high school, I had like the part-time job, um, detasseling corn in the fields in the summer. But like, it wasn't many hours. It was like two to three hours per day. And you wouldn't, you would only do it for a couple of weeks. So I remember my first paycheck that I ever got was only like a couple hundred dollars.

7:30 And I was thinking like, wow, what a rip off. Like I spent my summer doing this garbage and I got like no money for it. Wait, what's detasseling corn? Like you, like the little like fibers, is that what it is? Okay. I just say detasseling corn, but my actual job is we would measure the length and width of the leaf. And then also like count a bunch of statistics and put it into a computer. Um, I just say detasseling corn because that was the more typical job. I didn't actually do that. Okay. I feel like that's kind of the difference between us because like you were like, oh, I do this job.

8:03 It was such a waste of my time. I remember like I got a job at American Eagle when I was like kind of in the summers between college. And I would take a two hour bus to and from work. So that's four hours a day where I just like commuted. I thought that was completely fine. Like I would get home at like 12:00 AM. Like I would, you know, start my shift at 1:00 PM. So I leave my house at like 12:00 PM. And then like, I wouldn't get home and there are sometimes no buses. So then I have to call my parents to like pick you up.

8:33 I mean, even when I was younger, I still made random amounts of money. Like I would sell some of my Yu-Gi-Oh cards or something for money. That's actually how I got my first GameCube is I sold some of my trading cards for money. And then I use that money to buy myself that GameCube. And also I would basically download music from the Internet and then make CDs out of it for my friends at school. And I would sell them those CDs. And back then it would take like an entire day, two days or several days to download one song.

9:01 It was very annoying. But yeah, in college, I finally got an internship. I had a full scholarship for college. So I didn't really have any expenses besides if I wanted to go out eat food or I didn't really buy clothing or anything back then. I was very frugal and maybe buy games. But how much did you save after like your internships? I didn't really save much because I was always trying to make money with that money. So I think for my first internship after tax, I had probably 10 to 15 K. But I would spend most of that money on stuff.

9:35 So the laptop I was given by my parents when I went to school was this really, really cheap gateway laptop that barely worked. So I bought myself a new computer. That's probably one to two K. And then I bought and resold a ton of electronics and video games. So I was always trying to get my money to make more money with it. So I bought a bunch of that stuff. I mean, towards the end of college, I had two, three internships. I don't remember, but I had probably 20 to 30 K after tax and like a bunch of stuff.

10:09 So monitors, games, game consoles, like I bought everything that I was denied as a kid. So I bought like every video game console and all the games I never had. I don't, I didn't really buy clothes or anything back then. But then I also tried to invest it, but I don't really. Oh, I put like 4K into Bitcoin, but then I sold it at a loss the next year because it dropped by like 50%. I bought it when I was at like 800 and I sold when I was 400. Even though I told myself I was never going to sell. I like couldn't, couldn't hold on to it.

10:46 I feel like my spending phase came like way earlier than that. So we had a paper route when we were in high school and we would spend every single penny we will have. So like, I mean, it wasn't a lot of money, like maybe 30, $40 per month. And we would just go to the gas station and buy snacks every day after school. And I remember going to, we went abroad to Europe during high school. And then I would spend, like we spent $300 on gelato over the course of like 10 days. We bought every single souvenir that we've ever seen.

11:18 And we literally like took back a luggage full of just garbage. And my parents were really pissed because again, we weren't rich. And I think at that point it didn't occur to me like how, like what money is worth and whatnot. So we were just spending a lot of money out. Like my parents got super pissed. And it was after that, that I started to realize, okay, like you need to save money. You shouldn't be just buying all this junk. So that I didn't actually like spend any money buying stuff in college. Like I bought all used furniture.

11:50 I like, I flipped those furniture at the end of my school year to make even more money. So like I would buy a desk for like $10, use it for a year, sell it for like $20. And then I bought textbooks from this one guy. He was just like, he didn't really care about how much he was selling his textbook. So I bought all my textbooks from him. He sold me this like thick math book for $40, but everyone else was selling it for $120. And then, so I flipped it the next year. Like after I used it for a year, I sold it for $100.

12:21 Yeah. So it's, it's hilarious. Cause it's like looking back, most of this was essentially a waste of time. Um, and like I took the reselling to an even bigger level. So I would browse deal sites. And if there was like a mispriced thing, I would basically spend all the money I had, all the capital I had to try and then flip that. So one time there was like a brand new game, uh, some sort of Pokemon or fire emblem game that was mispriced for like half off. It was just came out. So I bought like a hundred of them or something, however many I could at the time.

12:50 And then I would resell on eBay, but it's like that, that takes time. You have to then list all this on eBay. You have to package and ship all this crap out. Uh, it was just like, and I felt really good about myself back then. Um, but it's like, I could have used that time to do anything else. No, well, I mean, it's worth your time because I remember like my cousin was kind of doing this. My cousin's younger than me. So she was also doing this in college, like years after I had already, already graduated.

13:16 And my mom was like, Oh, look at her cousin. Like, look at her being so like, you know, savvy and whatnot, like reselling all these things. And I was like, like, why don't I do that anymore? Like I used to do that too. And then it occurred to me that it's no longer worth my time. So like at one point you got to start somewhere. I also think it's like, it's way easier to learn things these days. Cause back then I feel like Amazon drop shipping and all these things were already like in their infancy, but I just didn't really know about it.

13:44 I didn't have a network of people who knew about it. I didn't know how to research, how to do things more effectively. I just did things through trial and error. And there was even like, I remember one interview where I was like, Oh yeah, I buy and resell stuff. And he's like, Oh, like how much revenue do you have? And I was thinking like, what revenue? Like I don't have a business. It's just me doing this on my own. And it's because someone else he was interviewing basically did this at scale. Like he would import from China and sell a bunch of stuff.

14:09 And I was making like a hundred K while in school. And I was thinking like, wow, like I am really not on that other guy's level. I'm pretty sure I didn't get that inter internship either. Yeah. But it's like, I guess nowadays you can find all this information super easily. There's tons of people who give out the information for free. But yeah. I feel like when I, when you treat something like a business, it takes the fun out of it almost. Like, so when I did bodybuilding, I saw opportunity to make bikinis and just like out of curiosity, I went online to like Taobao Alibaba and just like looked for all the materials.

14:45 And I like sourced the fabric from the States and all the raw, the other materials from China. And that was interesting to me because I was like, oh, I want to like make my own like bikini for a competition. I ended up like selling a bunch of them and like maybe six thousand dollars per month kind of thing. But if you were to tell me to be like, hey, Annie, like design this thing, source the materials. Here are all the resources to like learn how to do that. I'd be like, I do not want to do that. Too much work.

15:15 Yeah, way too much work. Yeah. That's what people don't really tell you. It's like, it's always more work than you think. Surprisingly, like there's a bunch of small details that are annoying, especially customer service. It's an annoying aspect. But I guess like after graduating school, we both got jobs, both started making more money. And this is where I've made a series of mistakes. Like I kind of knew I should invest in the S&P 500. I don't know how I found that out. Probably just random online forums or Reddit or something.

15:47 But me being really young, really reckless, I thought, OK, well, I'll kind of become really rich really quickly. And so I at first I invested in like tech stocks. But after six months, none of my stocks moved. I thought, OK, this is taking too long. And at that time, I thought six months was a long time. Right. And so I just sold all my tech stocks, which would probably be worth like 10X whatever I put in. I think I only put in like 11 to 15K, but I'd still be like over 100K a day easily. So that was just the S&P or you?

16:18 No, no, no. I picked random individual stocks like Facebook, Google, Nvidia. Some of that stuff has like 10X or more since then. But I only put like 10 to 15K in. But I sold all those stocks. And then I put a bunch of money into penny stocks and which I doubled in like a week or two. But then I lost it the next like in one day, essentially. And then I also dabbled in more penny stocks, got some of my friends to invest in penny stocks. We all got wiped out, essentially. And you can't even sell it. So it's in your brokerage.

16:51 It's like it's so there's zero demand for it. And it's like point zero zero zero one per share. Do you still have it now? Probably, yeah. I think it still might be in my account and my friends accounts because you can't even sell it really. It's worth nothing. And essentially, it's crazy because even though you have these organizations that are designed to protect people, there are so many scams going on. Like all the companies that we invested were essentially scams. Like they were even run by serial scammers.

17:21 So entrepreneurs who would start a company, they know it's fake. They like try to drive up hype in marketing for it. It fails. And then they do it again with a different company. And if you look into their backgrounds and do your research, you find out like, oh, yeah, these companies are all garbage. They're all worth nothing. So it's basically there are also these series of like gurus who teach you like, oh, here's how to make money shorting these like garbage companies. But then sometimes they get burned because it goes higher than what they can withstand.

17:48 So they're actually making money by selling you these courses rather than like doing the trading themselves. It's but yeah, we also like went on a gambling trip during college, which we won a couple hundred dollars. But then we keep on going on more gambling trips and we had more money. So we would lose a lot of money, like thousands of dollars instead. And so it's like, but I think it's good that we did this early because we lost the money before we actually had a significant amount of it. So if we did, if I learned these lessons later on and then I would lose money again through trading options, I lose money again trading crypto.

18:25 I did like all the risky things you're not supposed to do. Lose your money several times to learn all your lessons. It helped a lot because if I had done that now, like while we have a lot of money, like that would be devastating. And also have a family. Yeah, have a family, like have a life. Right. But back then, it still sucked a lot. I was still really unhappy about it. But I think for the long term, like it's better to screw up early in life because you have a lot more time. You don't really have much assets.

18:55 So, yeah. If you think about it, like the higher you climb, the fall is going to hurt. Right, right, right. But yeah, so Frank and I went to Vegas at one point and then we start like we were like, let's just go play like $20 each or something. And like we play until we lose it. So we were like, okay, just $40 total. And then we go and I feel like one of us lost it really quickly. The other person actually made, I think I made some money. So I like, I ended up making like $25. And we were, you make us for like a total of what, two days.

19:32 And so from that point on, I was like, ooh, this is fun. Let's do more. And we, and we proceeded to lose like all of our money. And then we kept on putting in money, even like as we were trying to get on the flight out of Vegas. I was like, let me put in $60 more just to see if we can like make any more money. And so we were out like $300 by the end of that trip. Something like that. But it's like, yeah, I mean that one, we still kind of capped it. Wasn't too bad. And then like one of the, in hindsight, one of the best financial decisions that we made.

20:06 So we're a bit older. We have been together for a couple of years as Annie was really into real estate. Even though she's really into it, she like doesn't know a whole lot about it. Yeah. Like the specifics. So I went into this pre-construction like gallery, like in 2018 or something. And I was like fully prepared to go in. And my sister and I were going to like invest on it, like in it together. And I walked into the like gallery. I was like, no, I don't think this is a good project. So I left. That project, it was on hold for like, it was 2018.

20:41 It was like 2016. That project was on hold for two years and then they canceled it. So people that put money into that project didn't make any money. And for this project, I walked in with no intention of buying. I came out. I was like, I need to buy it. And then, so like, I went home to Frank. I was like, we need to buy this project. I don't know why I didn't look at the financials, but we need to buy it. Yeah. And I was so like upset because I would ask her all these like normal questions and she wouldn't be able to answer any of them.

21:09 Like I just asked her even basic stuff like, Oh, like what are the comparable prices? Or like, what's the, I don't know. I don't remember what questions I asked, but they were like a checklist. I just like found online or something. Yeah. So like very anecdotal experience is like, so back when I was growing up in Vancouver and my parents bought real estate, like they just bought a house when everything was like going up and all of their friends were waiting. So they were kept waiting. They kept waiting. And for the 20, for the last 20 years, the prices just kept on going up.

21:41 And so like looking back, it's like waiting is never good. And when we bought the Toronto condo, it was the prices at the highest it's ever been. So we were thinking like, there's no way that it's going to go higher. Right. But if you look at the prices now, it just, it keeps on going up. So, but again, like that's my anecdotal experience. It probably doesn't work for everyone. It's somehow has to happen to like work out for us this time. But well, if you, um, so I actually looked at studies on this. If you look at the comparison between like stocks, bonds and real estate bonds, basically underperform.

22:18 You should never really buy bonds until you're nearing retirements. And you really need that for us this time. But well, if you, um, so I actually looked at studies on this. If you look at the comparison between like stocks, bonds and real estate bonds, basically underperform. You should never really buy bonds until you're nearing retirements and you really need that stable income. And even then there's like different types of bonds. It gets pretty complex because bond prices can go up and down. Companies can go bankrupt and that's built into the price.

22:46 Um, but essentially, uh, bonds are safer depending on if you know what you're doing. Essentially, there are different types of bonds. Some are safer than others. Uh, but the returns are never as high compared to real estate or stock. And then stock, whenever people mention stock, it's usually indexed against S and P 500. That's what you look at for stock performance. Uh, and so stocks have much greater fluctuations than real estate. Um, but they actually perform relatively the same. Uh, so for real estate, the performance is a lot more steady.

23:18 So it goes up kind of steadily where a stock has kind of greater fluctuations. Uh, but then there's also other things to consider like, well, for stocks, you have to reinvest your stock. Um, and then also there's, there's really good liquidity. So you can take your money out whenever you want for real estate. Obviously you're typically leveraged. Like you do like a down payment of 20%. Um, and then you have your interest rates, which you can do fixed or variable. And then with like interest rates going crazy right now, a lot of people who had fixed rates are pretty happy.

23:45 Um, either beginning of this year or last year. And I guess, fun fact about that. If you took out a 30 year mortgage last year at like two to 3%, um, because you can actually make money on that now because interest rates are so high. So you can borrow against your house. You're basically getting free money, like free guaranteed money. Cause, um, but not a lot of people are able to do that. Uh, but also it's like the same house, like a $600,000 house, uh, is going to be the same mortgage payment as like a $400,000 house now because of how high interest rates have gone up.

24:21 Uh, I don't know the exact numbers, but it's like the interest rates are still going up. Like they haven't stopped yet. Yeah. I think a lot of the mistake that people make in terms of like real estate or when they're buying their first house, it's like, they look at all the calculations there. They're like, Oh, let's wait, let's wait. But typically for your first home, you shouldn't look at the cost of like, it's not your first home should never be an investment and you shouldn't think of it as an investment.

24:47 And I see a lot of people on TikTok making that comparison, like doing calculations. Like, no, your first home is a home. Like you living it, whatever the cost is, that's for you to live in. Now, if you're buying a second home for an investment property, yes, you have to do all the calculation on that and treat it like an investment. And like, there's a saying that, um, my dad has always said it's called, which is like, you need a home to be able to like, as like your foundation as a base. If you don't have that base, if you're renting, like, it's almost like, like, I don't want to say it's like more like feng shui stuff.

25:22 But just like, if you don't have that base and foundation, you're not going to be able to build upon it. So a home base is really, really important. Yeah, I think there's other considerations to like if you're still planning to move around, you're still like early in your career. Like for us, we moved to so many different cities. And if we had a home, it would have been really annoying to like, rent it out or sell it or do whatever. Um, like we actually were considering buying in Chicago and luckily we didn't because Chicago winners are absolutely brutal.

25:51 Uh, and also we wouldn't have made nearly as much money living there. Um, I mean, I think things work out for a reason. Like we thought at the time that like, Oh no, like it's not going to work out. Like we actually found a house that I really liked and I was going to buy it, but Frank just wasn't into it. And I was like so sad, but in hindsight, it was like, it worked out for the best. Yeah. So Annie's always really been into real estate. Uh, I've always been more into stocks and crypto and back then the first couple of brokerages had terrible UIs.

26:23 I remember E-Trade was huge growing up and I remember logging into E-Trade thinking like, wow, this is trash. Like I don't want to use this at all. But yeah, like nowadays it's way easier to invest. Um, so like recently we both got Moo Moo. We got a bunch of free stocks from that. And so I never invested before meeting Frank. And I remember like going to the States for the first time. And we got into a relationship and you were like, do you have a Roth IRA? And I was like, what the heck is a Roth IRA? Um, and then, so he set me up with a brokerage and I remember just being so confused.

26:53 It was so hard to sign up that I had to have Frank sign up for me because it was like all the like little fine prints was so little. I'm, I'm just like, I'm going to like sign my life away. I like, I'm going to lose all this money. I don't know anything. I don't even know how to get started. So I have Frank do it for me. But now I feel like, so we signed up for Moo Moo recently and the UI was just really clear. They only ask you for a few like questions, your social insurance number name, full name, blah, blah, blah.

27:21 You have to be a U.S. citizen. I think that was a lot easier to get started with than some of the older brokerages. Yeah, I think a lot of this, they're trying to streamline it nowadays, like before they'd ask you so many questions, but they also had no incentive to make the UI better. Whereas like now there's way more competition. Not only do they make it easier, you also get a bunch of free money for signing up, which was never a thing before. You can get up to 15 free stocks by signing up for Moo Moo with the link in my description.

27:49 I'm surprised that other brokerages aren't doing it as well to like give more lucrative sign up bonuses. Because right now inflation is like insane. I've never seen inflation this high in my life. And like not only is inflation bad in like U.S. and Canada, but around the world. Like the British pound is at its lowest point in its entire history. I feel like this is actually the best time to get in. That's debatable because it's like it's you can't really time these things. Yeah. And so like everyone's kind of fleeing to the U.S. dollar.

28:17 U.S. dollar values continually going up. Everything else is continually going down. Like if you look at all the other currencies, I don't know about the Chinese RMB though. I think they're actually doing decent. They're doing good. And they're taking over a lot of like the reserved currency in a lot of developing nations. And this is really funny. I'm going to get hate for this because like my dad consumes a lot of Chinese media to the point where like Frank and I are like, that's weird. And like, you know, Chinese propaganda.

28:48 But in the beginning of this year, I made my dad make predictions for what is going to happen in 2022. And the things that he said, I was like, there is no way that any of those things are going to come true. But now that I looked at his predictions and like almost all of them have come true. Or joking, like we should make my dad make predictions for like what stocks to invest in the future. Yeah, so I think that like the interesting part. So we mostly consume like Western media. And then Annie's dad, he'll consume all media.

29:20 He'll consume like Western media, Chinese media, just try to get different sources. And I think that's like, you have to realize that each side has its propaganda, like everything's propaganda. But then if you get both sides, then you can kind of make your own decision on like what's real or not. In terms of like what people should do, it's really, we're in unprecedented times like that. I feel like that word gets thrown around a lot. But people think that there might be a collapse in Europe. So a lot of the British pensions and retirement funds, they're actually tied up in these kind of speculative investments.

29:56 So like how these things work and how they get leveraged and how people get liquidated, essentially, is let's say I sell Annie some debt. Like she wants to get a mortgage or not even a mortgage, just say a small loan, I give her $5. But then what ends up happening is then I package up her debts with a bunch of other people's debts and then sell it as a security. And then people can then make bets on whether Annie and all these other people will pay back their debt or not. And then other people can then make debts on that.

30:30 And it's like a daisy chain of people betting on certain outcomes. It becomes very convoluted. There's a bunch of like ratings that go into it as well, which is also kind of sketchy because you can package a bunch of bad debt. Let's say like Annie's actually a homeless person who doesn't have a job. And there's no, realistically, she's not going to be able to pay back the debt. And, but they'll package all this garbage and say like, oh, this is triple A rated. Super sick. Very diversified. Yeah, like you're super diversified.

30:54 All this garbage somehow makes like a good investment. And this is a very simplified version of what happened during the 2008 housing crash. So they packaged a bunch of bad home loans. And I hear nowadays the same thing has happened with car loans, even though car loans, that market is much, much smaller than the housing market ever was. But this kind of thing is still going on. Like there are more regulations. There's more scrutiny. There's more laws surrounding it. But people are always greedy. They haven't really learned their lessons.

31:27 A lot of people don't know what they're actually putting their money into. Even these like large sovereign funds, people's pension funds. Like there's, it seems like Britain is not having a good time because they also don't know how to make correct policies. So they're doing tax cuts for the rich, which is exactly what you're not supposed to do. Like they're basically getting less money into the government. So they're going to have to print more money, which will make inflation even worse. And instead of cutting back on spending and, you know, unpopular, but they're supposed to raise taxes to bring in more money.

31:58 And they're supposed to really cut down on their spending. But instead they're expanding it because that's usually what conservative governments do. They do tax cuts for the rich because they're rich people's like blackies essentially. Yeah. Which like, okay, if you're a rich person, fiscally it makes more sense for you to be Republican or conservative or whatever right-leaning party because they benefit you more. They just straight up just help you out more. That's the reason why older people are typically more conservative because people vote in their self-interest.

32:29 It makes sense. And typically younger people are more democratic or left-leaning because they don't have that wealth yet. They don't, they're still building up to it. And they actually did a study on this as well. Whereas the older you get, the more conservative you'll be because it also correlates with you becoming wealthier. But that trend is actually reversing or not reversing, but it's not happening anymore because young people are not getting wealthy. They're not making as much money. Yeah. They're not able to, so they're still left-leaning because they're still trying to vote in their own self-interest of being poor essentially.

33:00 Right. So like if you are poor, it makes more sense to be left-leaning because left-leaning means more like you're more socialist essentially. Right. You want policies to benefit more of like everyone. Whereas like if you're more right-leaning, you just want policies to benefit rich people. So it's like from a basic like financial, economic standpoint, that's disregarding all of like the political, humanitarian, all that other stuff. From a purely like money perspective, that's what makes sense. And yet so many people like don't, you know, they care, people say they care about a lot of things, but like- At the core, it's just about money.

33:35 Yeah. It's mostly money. Like if you even look at how people vote, a lot of it hinges on the economy. It's like 60 to 70% of public perception of the current administration is based on like how the stock market is doing, how your 401ks are doing. Do you have enough money to pay for rents, like pay for groceries, live? Like a lot of people, I think, especially in developed nations that where there's a lot of wealth going on, people tend to argue about a lot of social policies more or like they focus really deep on fringe issues that are kind of, I think, manufactured to a certain extent to like drive divisiveness to kind of pit us against each other.

34:17 But like, I think a lot of people assume that Republicans are like the far right parties or either side. It's like when things are going bad, people look to really authoritarian or like strong leaders to like fix things, even though they kind of just make it worse a lot of the time. So it's, I don't know, it's hard to say like where everything is going, but it definitely seems like a lot of nations are in the decline. And like the U.S. I thought has been in decline for like the past couple of years.

34:46 But again, when you compare it to these other nations, like they're all, they're doing a lot worse. And Japan actually never recovered from the 2008 crash. I don't think they ever hit their peak again. So Japan has actually been in a decline also because of like population. They have too many old people, not enough young people. Yeah, I mean, I think the U.S. is actually headed towards that point where there's going past it. I forget what exact year, but the projections are like, oh, there's actually going to be more people passing away or retiring than there are new people entering the workforce.

35:18 And so that's why they predict like pensions are going to run out. Yeah. Didn't Elon Musk say that like the declining of like population is going to be a more of a threat than like global warming? I mean, no, he's wrong. That's only true for nations that are already on top. So like countries like the U.S. that have already developed and are kind of on the decline. But for countries like India and Africa, where a lot of their population are actually still young, like they're going to be on the rise. So that's why a lot of nations are trying to like kind of insert themselves into those countries and continents.

35:54 So it's it's more he's wrong in the sense that like it's not everyone. For Western countries, for developed nations, that is going to be a problem because there's not going to be enough workers to replace that tax income and support all these older people. But for countries like Africa, that's great because most of their population is still young, like their curve. They have a lot of people, potential workers, and they have a lot of industrialization that can still happen. A lot of modernization in a lot of African countries.

36:26 And then India is kind of, you know, they have the most people and they're I'm not sure exactly how far into the rise they are, but it still seems like they're going up. And now like China is actually getting too expensive for a lot of manufacturing. So India is now taking, I think, one to 10 percent of iPhone manufacturing, which is like the first time it's ever happened. And so India is now like cheaper than China for a lot of even high end tech goods. I hear that the medicine is also industry is also really good as well, like especially compared to the U.S. where our health care is all messed up.

37:00 Do you see in like the next 50 to like 100 years that like, let's say, U.S. falls, China becomes number one and then eventually China will be overtaken by like India or like Africa at some point in the future? I would say Africa is still really far out. Like I don't see that happening very quickly, but I definitely think that the U.S. is going to fall from number one. China is going to be on top for a while. It's hard to say who's going to overtake China because like. Basically, when you rise, you're guaranteed to fall. No one remains number one forever, like within your lifetime, maybe because it takes a long time for countries to kind of lose that top spot.

37:40 Like when you're the reserve currency, which is the U.S. currency is right now, you'll see that everyone going fleeing towards it, which is why the U.S. dollar is still going up. Other countries currencies are going down. So you're able to print more debts and you basically have a ton of advantages. So and you're able to kind of snowball that into more advantages until like the decline, which is kind of what we're seeing. But as far as like who will overtake China, I can't even begin to imagine because I think there's going to be a really large global shakeup when that happens.

38:14 I think their current standing of like a lot of countries now, it's hard to say where they will be after the conflict. I do think there will be some sort of conflict, but it's kind of crazy because like it feels like there's a lot of things coming together that are all really bad for just the stock market in general these days. Because like really high inflation, really high interest rates, all of these global disasters happening now, like there's a hurricane that's sweeping through the southeast right now.

38:44 I feel like there's a natural disaster that happens to like Texas and Florida like every single year. And they're getting worse, right? It's not just hurricanes, but there's also more forest fires. There's more floods. There's more tornadoes like there's earthquakes, mountain or volcanoes erupting, like all sorts of stuff is happening. And then combine that with kind of increased global tensions. So obviously the tensions between Russia and Ukraine haven't really simmered down. If anything, they've continued to escalate where now there's talk about like Russia maybe using nukes like who knows like what's going on there.

39:23 So it seems like there's a lot of things that could make the future seems less certain than it does before. I'm not sure if it's actually that way or we're just getting a lot of bad stuff like the pandemic that happened in the past couple of years as well. Yeah. I mean, I think the thing that I feel like is kind of alarming is just like how quickly the rich people are accumulating wealth and like how quickly the gap is happening in the states. I'm not sure about the rest of the rest of the rest of the world, but it just like really sucks.

39:56 And I feel like that's going to like cause a lot of issues in the states. Yeah. And it only accelerates because if you think of capitalism, the best way to make money is to already have it. And they like people have done very rigorous analysis of this as well. Like there's a book where a guy basically makes like, hey, you know, let's let's see how wages keep up with just compared to having money. And essentially wages do not keep up because of inflation. Like wages very rarely match inflation unless you're a CEO, in which case you're already super wealthy and connected anyway.

40:28 So it doesn't matter really. But essentially having capital will always beat like income because of the way it's taxed, because of just math, how you can snowball your wealth into more wealth. And during the pandemic, like billionaires got way more wealthy than everyone else. Like rich people made out like a killing. And it's it's strange. Well, I guess it's not strange because this is how the system works. But when you're already wealthy, regardless if the market is going down or up, you kind of benefit because if it's going down, you're able to scoop up assets at a cheap price.

41:03 When it's going up, you have more assets. So your net worth is that much higher. And a lot of people, even billionaires, have come out to say that wealth inequality is the most debilitating or most disastrous thing that can happen to everyone. Because I think a lot of rich people think that like, oh, who cares if the environment gets destroyed or who cares if there's nuclear war? Like I have my bunker or whatever. I think that's a very just dumb way to think about it, because you can't just you can't just abandon everyone.

41:35 It's like, what was that? Don't look up where all the rich people escape in this spaceship. And then they just get killed by these aliens. It's like, no, it's not how things work. Yeah. And Frank was looking into like what like, oh, to prep for like a nuclear winter. And he like sent me this article. I was like, oh, we should like buy all this food. And I looked at the article and I was like, you need to have enough food for like one to four years. And I looked at the food. It cost like $70. Oh, no, $250 for a seven day supply, which means it's going to cost like $200,000 to like prep for four years.

42:12 I'm like, might as well just give up at that point and just be like, yeah, if there's a nuclear winter, we're just all going to die. Yeah, I mean, it's like realistically, you won't be able to survive it. Even if you have the food, it's like, well, other people are going to come and steal your food. They're going to fight you for it. And so I was like, not only do you need the food, you also need munitions. And then you also need an air filtration system. And then you also need a way to like recycle your water and grow crops and like do all this stuff.

42:38 It's an entire endeavor. And even if you're extremely wealthy and you have all these things, like it's, is that even a life worth living? It's just no sunlight, just kind of stuck in a bunker for who knows how many years. Yeah. That's like assuming that you live long enough to like see sunlight again, like otherwise it's not even worth it. Yeah. Um, but all in all kind of to wrap up this episode, things look kind of grim now, but you will want to stay the course. You'll want to continue dollar cost averaging into your investments.

43:11 You want to hold for as long as possible. So if you invested and pretty much any 10 year stretch of the entire existence of the S and P 500, there's like a 10% chance that you would have actually lost money. It's like very unlikely, uh, basically to lose money over the longterm and that's 10 years. So your investment horizon should be 20 years, 30 years, as long as possible, basically until you retire, uh, not only for the tax benefits, but also because the longer you hold, typically the higher it'll go up.

43:41 People always say like past performance doesn't indicate future performance. Uh, and that is true. Like we don't know what's going to happen in the future. Um, Ukraine actually just is applying for NATO acceptance or ascendancy. Uh, I don't know what the correct term for, but basically trying to get into NATO and NATO has a defense clause. If any of our countries are attacked, we have to provide military supports. Uh, I think a lot of the European countries are actually against it because they don't want to fight a war against Russia.

44:11 People don't want to escalate. And even in the U S Biden, whenever Biden makes a statement saying like, Oh, Russia can't do X, Y, Z, or China can't do X, Y, Z. The white house immediately walks it back because they don't want to increase tensions. And it's kind of interesting cause I see a lot of people, a lot of nations really kind of turtling up. They're saying like, well, stop giving foreign aid. Like what about people at home? What about like, even in this case, the hurricane victims, like stop giving aid to Ukraine.

44:39 Like we need to help people in Florida or in the, these states that are affected by the hurricane. Um, but as an individual, all you can really do is continue dollar cost averaging, continue to hold. And there's, there's not a whole lot more you can do. You can try to have other income streams. Um, you can continue to increase your skills. I think there's really, there's several aspects to investing or just having a good financial status. And like one of them obviously is to improve yourself as much as you can.

45:15 Uh, job hop, gain skills, make as much money as possible, negotiate, have leverage there. Uh, the second one is to live below your means. So don't go buying stuff you don't need. Don't spend all of your money wastefully. It doesn't mean you can't take vacations. It doesn't mean you can't buy nice things or go out once in a while, but don't just spend all of your paycheck. Like we did when we were kids on chocolate. Yeah. I mean, I feel like I started saving like much earlier than you. And like, by the time I met you, I had like 60 K saved up already.

45:45 But I think my life lesson is that I wish I had invested earlier. I wish I had like, that was what, uh, 10 years ago. If I had taken that money and put it into like, if I hadn't even known what SMP 500 was back then, I don't even know. I can't even imagine how much money that would be right now. Yeah. And then which kind of leads to the third point, which Annie already mentioned is you need to invest your money. Like just saving money and having it gain interest or savings at a bank, even if it's like 1%, that's nothing.

46:16 And inflation will eat away your money or actually have less money in the future, even if the amount is higher because your money is worth less. And so you do need to invest it into productive assets or productive might not be the right word, but essentially assets that will be able to match or beat inflation. So like real estate has historically done really well. The stock market has historically done really well and bonds are typically not good. Uh, but if you're a bit older, they can be good. So it gets a bit more complex, but it's really like living a good life and being financially stable really comes down to those three steps.

46:52 It's people make it seem way more complex than it actually is. Uh, and that's, that's really the gist of it. Yeah. So like to summarize one, make a lot of money to save your money and three, invest. Yeah. Yeah. And if you don't have a brokerage yet, you should sign up for me. All right. Thanks for watching everyone. I hope you enjoyed this episode of Frankly Speaking and we'll talk to you later. Bye.