Money Rehab with Nicole Lapin - “How Do I Become a Boring Investor?” (Listener Intervention)
Episode Date: February 16, 2022Today’s Money Rehabber has had some major wins and huge losses by making risky investments. Now he just wants to know: can I (and should I) be more boring with my investing choices? Today, Nicole fo...cuses on helping this listener make his financial rollercoaster a little less bumpy.
Transcript
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Hey guys, are you ready for some money rehab?
Wall Street has been completely upended by an unlikely player, GameStop. Are you ready for some money rehab? Wasting our time. I will take a check. Like an old school check.
You recognize her from anchoring on CNN, CNBC, and Bloomberg.
The only financial expert you don't need a dictionary to understand.
Nicole Lappin.
Today, one of our producers is instigating a money rehab intervention for a friend.
rehab intervention for a friend. So Mike, producer Mike, why did you think your pal Mike,
let's call him intervention-y Mike, not sure if that's a word, but we're going with it,
needed said intervention? So my friend Mike McLaughlin, otherwise known as McLaugh,
we've joked on this show before about the uh the real wall street bets which is the group chat that exists amongst my friends oh hold on it's bets with a z
bets with a z right just because it's fun okay yeah right so when i when i first started working
on the show that was my extent of like financial knowledge it was it was me talking to my friends about what we knew
about finance and the stock market and all that stuff. And as it turns out, after working with
you for almost a year now, we were wrong about a lot of things. And Mike McLaugh has been
kind of the ringleader on on that because Mike is uh he's sort of the the senior of our friend
group and he has had sort of the most life experience and i would also argue he's taken
the most chances with his money we're very tight i know a lot about mike's life and i think mike
is really like just like a lot of our friends is sort of a home run hitter with his finances. And he takes a lot of chances. And I think that a lot of our friends try to
make 50 cents into a million dollars. I just think overall, Mike is in a place right now where
finding a real level of stability and consistency is super important, as opposed to like,
hey, Nicole, help me make a million dollars like
right now. I think that like teaching people and starting with somebody like Mike, who
obviously has a level of financial literacy. I've done it before.
I know. And that's the thing. So it ebbs and flows. And have I said anything wrong?
No. Everything's probably been correct.
No. Everything's probably been correct.
So, Mike, producer Mike, you want me to money rehab the real Wall Street bets with a Z.
Yeah, I think I think Mike is in a place where he finally, you know, he has he has some ideas of what he wants to do with sort of like the money that he has right now. And I think that,
do with sort of like the money that he has right now and i think that you know i just want my friends to sort of think through some of their and mike does i don't want to make it sound like
mike is like not smart or like that he's thoughtless or anything like that no it's cool
keep going can i clarify this group chat how it happened yeah so this is what this is what happened
pandemic hit right i'd worked in finance before as an executive assistant.
But when I was there for like three years.
Counts.
So I had a little bit of like, you know, literacy with it.
They gave us all this free money.
The government, you know, and I didn't need it.
The stimulus check.
The stimulus check.
Yep.
And then I got my job.
I got furloughed from my position in Manhattan.
So I got a nice something from them and then something from the government. And then I decided like, well, the market sounds and almost all of them hit in that first year.
At the peak of it, my friends caught wind of it because I was telling them. So they started a group chat and had about five of us on there. The moment that group chat started,
dude, I knew it was over. Yeah.
Everyone's like sending in this and that. I was like, it's over.
Okay.
But how much money are we talking about?
To us working class?
Not that much.
You know, we're talking like around just under six figures.
But in, you know, a few months from going where we're from, it was like, it was pretty
intense.
But then I ended up losing at least half of it the next year.
So how?
Well, I took out a bunch and I paid off a bunch of debts and then i bought
a car and then i traveled around the country and then and then i just kept letting it ride with
these guys and then every every single thing we did we just kept losing and losing and losing
and just losing and losing worse and then i just took took out the measly you know 10 15 grand at
the end like all right well you know we did it we
i made well more than what i make it a year in stock options and i took that and then i had to
pay the government that was nice so you know okay so you guys have created kind of a knock off
the reddit group pretty much very much so yeah yeah and your name has to be mike in order to join and you have to
and you have to in the end you have to lose money got it
so you guys have a group chat you throw out wild sort of get rich quick trading tips to each other and some of you partake and some of you
don't and these tips or these ideas don't need to be verified you could have heard them like
verified from who verified mike like through actual fundamentals of companies i don't know yeah yeah we just do
that nicole i i hit on macy's i'll tell you that so there's an addiction it sounds like to
getting rich quick to somehow you're gonna find lightning in a stock call option bottle and you are going to have all of your dreams come true in one fell
swoop that's the goal i guess that yeah that sounds kind of ridiculous when you say it like
that but because the goal really isn't like i i know like that you're not going to be any happier
even if that were to happen but it will i don't know alleviate the misery that like you know
having no money has so i don't really alleviate the misery that like you know having no money has
so i don't really yeah i guess that it kind of sounds ridiculous when you when you say it like
that that i'm just trying to shoot a bet to make a ton of money um yeah it's not it's not well
thought out i don't think well there's an old adage in wall street jokes, that goes something like the easiest, fastest way to double your money is to fold it in half.
And barring that, you have a lot of too good to be true, get rich quick books and tips and perhaps even group threads that go on, hope and promising
something that, you know, requires some sort of luck or the insider knowledge that's gonna,
you know, turn 50 cents into a million dollars. First time I've ever heard that.
It's just not possible. It's just, and even if it is possible, like you heard an anecdote for
somebody who somehow did turn 50 cents into a million dollars, or even if you turned your stimulus check into
some money that you then lost and paid taxes on, and you want that to happen again,
it's really, really unlikely. And I know you guys aren't big fans of like actual fundamentals and charts and things,
but if you do look at the probabilities, it's just not on your side. That's the reality. It's like,
you know, going to Vegas. And I hate the gambling analogies with Wall Street because I think there's actually a
way to be a long term investor that has no analogy or no similarity to Vegas and crazy gambling,
because it is well thought out. There's a difference, though, between trading and investing.
So what you guys seem to be into is trading,
day trading even.
Yes.
Yeah.
To piggyback what you just said about the gambling analogy,
I mean, this group text long ago stopped with the finance stuff
and now we just make fun of each other.
But in the last three weeks, it's become sports betting
because it's all got legal in New York
and everyone's putting up their bets and stuff like that.
So the gambling, that's exactly the emotion we're doing.
We are just trying to have fun and gamble, but with money that we probably should be looking to build wealth with.
Hold on to your wallets, boys and girls.
Money Rehab will be right back.
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Now for some more money rehab. Okay, so I am not the fun police at all.
I really am not.
And if you do want to have fun and have a group thread that is all about gambling and all about risky stuff, whatever, cool.
But make sure that that is with fun money and that's not with your rent money, right?
Because growing long-term wealth is actually not super fun and sexy.
And like, if you want fun and sexy, go on Tinder.
Otherwise, your wealth and growing it, I think really it's boring.
And I kind of like it boring because it means that my money is still there and it means that I can sleep. Now, if you want to take one percent of your net worth, if you get to a place where, well, first of all, do you have an emergency fund?
No.
Do you know what an emergency fund is?
Not really. No. Do you know what a number currency fund is? Not really, no. So like three to six months, six to nine months of savings in the bank.
So like if you have a job now?
Yes.
Yeah.
I do have that.
I do have that, but like it would be probably five months would be as much as I could make it.
Okay.
And then after that, are there tax advantage accounts that you have?
I have a 401k that I could take stuff out of.
No, no, no, no, no.
We're not taking stuff out of it.
I'm just like trying to get an overall picture of what's happening.
Yeah, I would say.
So your assets beyond that are what?
I'd say I need to be here.
Cool.
You're in the right place.
First step to any recovery is admitting you have a problem we're only as sick as our secrets mics um so you have
a 401k you have five ish months of savings in the bank or in the market uh in the market but off
like not in play just in cash and then like in your schwab account or
something yeah yeah chilling yeah and then some in checking and savings i see and then beyond that
there's no ira there's no like no i own a car portfolio of mutual funds and index funds no are you guys allergic to index funds
i mean i used to have like vanguard and that was nice and it would grow like some sort of like you
know there's like a mutual fund that would grow all the time and uh i got i sold that during
during this to play uh with it Options trade. That became Macy's options.
So when you were looking at your Vanguard slow and steady, but growing mutual funds that included S&P 500 index funds that track the market, you were like.
Boring.
Okay.
I see. you were like boring okay i see but it was still growing at a you know inflation adjusted seven
trusty percent probably even more than that yeah okay so you lost the five grand and then you put
you know what five more grand in no i never added in after that i everything had gone off that initial investment
from um into the robin hood account that i had from from the uh including your checks and my
little severance package and all that went in there and then during the next years when i sold
out i had um uh fidelity so i sold that and then moved it to Robinhood and lost some there.
That's what I want to do.
I want to move more to like more stable, growing.
And I'll have my fun stuff on the side.
If I want to sports gamble or if I want to run options, here's a few, you know, here's $500 a month I get to have fun with.
Yes.
So you know what to do.
You just don't want to do it.
Yeah.
Yeah.
Yeah. I see. And why do you You just don't want to do it. Yeah. Yeah. Yeah.
Yeah. I see. And why do you think you don't want to do it?
Honestly, I think what I'm suffering from this 2021 is because I lost so much. And I'm like,
damn, I want to catch up. And you want to get back.
I want to get back. I feel like it's the end of the night and I'm playing blackjack and I'm down
three grand. I'm like, I want to get this. So like the whole second half of the night i'm playing blackjack and i'm down three grand i'm like i want to get this so like the whole second half of the year i was like i'll buy this option i'll buy trying to get
back those losses so and now i've sort of realized that it's kind of just i got lucky to be honest i
just got lucky and i have to realize that i really don't have like an exceptional talent for choosing different options.
It's I kind of just got lucky and I need to like curb it and go with more like sound stuff and have my fun like on the side.
So hold on.
When you are trying to get the money back and the losses back, you mean paper losses?
Yeah.
I see.
So this is your morning, your paper losses.
Yeah. You didn't So this is your morning, your paper losses. Yeah.
You didn't even realize these losses.
No.
You just saw your options or whatever go up on the screen.
And that's what you're trying to get back.
You're not trying to get back like the gold bars that you actually saw in your own personal vault that are now missing.
Yeah, there was no like labor that got, I didn't like work for this money and then lose it, you know.
And you didn't even materialize it.
Well, I did take, I did still take out, I think I ended up net profit like $38,000, something like that.
Right.
So that's actually the only days that matter when you're investing or trading in this case, the day you bought and the day you sold and all the and refreshing nonstop. But that's not real. There's no I mean, there's no
real Wall Street bets in the non-reality of paper losses. There's nothing there's nothing real about
that. So I was trying to do a pun and I was like, I'm not working right now. So there's something
there. We'll figure it out. We'll fix it in post um but there's there's nothing real that you're actually mourning you
actually made money mike yeah intervention mike thank you so can we let it go yeah like you're
not a guy who walked into on to the blackjack tables and put down 100 bucks and lost that 100 bucks you're a guy who went
to the tables and put down 100 bucks and left with 150 bucks even though at one point in the
night you're up to a thousand bucks and you're upset exactly so i think i can let it go and
the thing is now it's like it's a year later since the high point.
I have a nice job.
I'm happier now.
Even though a year ago I was up.
Mazel tov.
60, 70.
So I'm sort of realizing I don't need to keep chasing it.
But I bought options this morning because I'm afraid.
All right, Mike.
I bought some options this morning. Just nothing. couple hundred bucks fun money right and i because i don't want to miss
because i have fomo if i miss on the ones that i've been thinking are going to return
and um you know you don't want to miss out on the party and in a way like i don't want all that
stock i was going to buy at six dollars and then in
two months it's seventeen dollars and i'm like oh i could have uh got in there so you know maybe
yeah i maybe i just gotta like let it all go full stop yes yes yes you do uh because what is your
normal job uh right now i had a job in the city but i lost that during the pandemic so now i'm
actually like managing a restaurant right now and bartending.
So when you're watching these stocks, you're not doing this full time, right?
No.
You're not like a, you know, quant, high frequency trader in his basement, whatever, watching like little baby blips and try to find some
arbitrage there no exactly i watch their youtube clips that's like so i watch those guys youtube
clips and then i go off of that kind of thing gotcha it is so freaking hard guys to beat the
market it's hard.com it's it is. We know we we lose a lot.
Actually getting more returns than what you're going to see in the market. And when people talk
about the market, you know, this Mike intervention, Mike, from being the executive assistant on Wall
Street, the market is basically, you know, the S&P 500. So just, you know, we can have that grow.
We love some compound interest.
So just, you know, the money that you're saving now, the $1,400, $1,500, that is my suggestion
for where you do it.
And my suggestion is also to participate in the real Wall Street bets.
Like, I don't want to be Debbie Downer.
I don't want, like, my photo to go up on the real Wall Street Bets thread with, like, an arrow in my head or, like, an X across my face.
Like, this is not my goal.
But can you take, like, a nominal amount, like, a hundred bucks a week even, and put it in your Robinhood account and play with it?
Yes. Yeah.
Mess around.
But I think you need to change your mindset from a place of this is where I'm going to
grow wealth to a place of like, this is where I have fun.
And if it does well, cool.
But also if it doesn't, I can afford to lose this money.
Yeah.
I mean, that's kind of what I want to do.
But what I tend to do, and I'm not doing it now, but I like, do, but what I tend to do,
and I'm not doing it now, but I like, oh man, I could be like,
I hit on that.
What if I had, instead of putting 100, I put 2,000.
I think I just got to fight that mental, that idea.
If it does hit, oh, I could have made so much more.
And this weird feeling of not being a part,
not making as much as i possibly
could it's like it's a greed i guess i'm definitely not saying this in a um patronizing way i am a
huge huge fan obviously all my books are 12-step plans do you feel like there is something more
here like an addiction to yeah there is a gamblers anonymous by the way yeah i mean i wouldn't say i'm like i don't i
don't know i did i did play poker for years like throughout the world like in europe and australia
i made a living at that for a while i did forget i was in my early mid-20s i mean gambling and
not having a total respect for money is definitely a part of me and but i've never thought i've ever
had an issue with it like that ever affected my life ever negatively it just holds me back maybe
from actually gaining more like real wealth you know because every time i have a bunch of kind of
think oh let's go to vegas let's go here let's go have fun so yeah maybe there is there could be
something aligned there but i never i
there's always like i always know like 10 15 other people that are just a mess with it and
i i always know when to like cut it off you know i've never been you know yeah i think that's like
in shambles or anything well that's like sometimes the misconception um that you have to get your life to a place of homelessness to have a problem.
And I think that oftentimes there is an excuse that you can afford it, so it's not a problem.
I mean, that is not true. And I think that there's actually, it sounds to me like there is a fixation around,
uh, this FOMO that, you know, like could actually, uh, benefit from getting to the source and like
working through some of that and sort of letting it go so that you can focus on
some of those other things. Like truly there, my suggestion, and again, this is not, this is
intended from the kindest place, is to check out one of my favorite apps. And I've talked about
this before is called In the Rooms, which is just something you can download and you
can look at like different meetings i like going to meetings when i feel like i'm having a shitty
time and it's just a bunch of people talking about stuff like this you don't you know investigate it
if you'd like take it the interest in in the the risk taking the excitement of it is there so you
have a point about the thing looking at meetings.
I think actually that wouldn't be a bad thing.
I don't actually think I have an issue
because many times I've just not gambled
or done any of this for years,
like three, four years ago by I don't even go.
It's just, but when I get into it,
I kind of get into it.
And that's the truth.
Yeah, it is.
For today's tip, you can take straight to the bank.
A friend that you talk to about money isn't automatically an accountability buddy.
Like intervention, Mike says.
Even though he's found a group of friends he's comfortable talking to money about,
which is a good thing, those friends also give him validation when he makes
risky investment decisions, which is not so good. You need to
make sure that you have an actual accountability buddy like Producer Mike, someone who will raise
their hand when they feel like you're doing something that's going to hurt your financial
life in the long run and get your ass on Money Rehab when you need it.
on Money Rehab when you need it.
Money Rehab is a production of iHeartRadio.
I'm your host, Nicole Lappin.
Our producers are Morgan Lavoie and Mike Coscarelli.
Executive producers are Nikki Etor and Will Pearson. Our mascots are Penny and Mimsy.
Huge thanks to OG Money Rehab team,
Michelle Lanz for her development work,
Catherine Law for her production and writing magic, and Brandon Dickert for his editing,
engineering, and sound design. And as always, thanks to you for finally investing in yourself
so that you can get it together and get it all.