The Chris Voss Show - The Chris Voss Show Podcast – John Grace, Founder & President Investors’ Advantage Corp

Episode Date: June 30, 2022

John Grace, Founder & President Investors' Advantage Corp Westlakefinancialadvisors.com

You wanted the best. You've got the best podcast, the hottest podcast in the world. The Chris Voss Show, the preeminent podcast with guests so smart you may experience serious brain bleed. Get ready, get ready, strap yourself in. Keep your hands, arms and legs inside the vehicle at all times. Because you're about to go on a monster education roller coaster with your brain now here's your host chris voss hi folks this is voss here from the chris voss show.com the chris voss show.com hey we certainly appreciate you guys tuning in thanks for being here for another great podcast we certainly appreciate you guys doing it be sure to sure to, you know, wrap your arm around a neighbor, friend, or whatever. Just make sure it's consensual and say, Hey, have you subscribed to the Chris Voss show podcast? We don't

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He's going to be talking about all the things he does. He's been in the business for over 43 years and six months, and he looks very young considering he must have started when he was two. He's going to be talking to us about some of his experience, knowledge, and things on business that will expand your mind. John Grace is on the show with us today. He is a registered principal with LPL Financial. He is the founder and president of Investors Advantage Corp.

He's a professional with over a ton of experience. As we said, what is it, 43 years? He is an Eagle Scout first. He attended Carleton College in Minnesota. Due to his knowledge and experience, John is a frequent lecturer on financial matters and has been retained to conduct workshops for colleagues and corporations and various colleges, universities, and adult education programs. In addition to participating as a

regular keynote speaker for junior achievement events around Southern California. Welcome to the show, John. How are you? I'm good, Chris. Good to be with you. It's good to have you with us, too. Give us your plugs, your dot coms, so people can find you on the interwebs to learn more about you. Sure thing. Easy one is YBPOR, and it's just that easy.

Three words, Y-W-H-Y-B-E-P-O-R, P-O-O-R dot com. There you go. There you go. So, YBPOR. No, I'm just kidding. Y-B-E-P-O-R-P-O-R.com. There you go. There you go. So why be poor? No, I'm just kidding. So give us an overview of your company and what you guys do. Sure. Well, right now we're looking at a lot of volatility as far as the market is concerned.

And a lot of the securities professionals, my peers, I often find myself, Chris, apologizing professionals my peers i often find myself chris apologizing for my fears because about the only thing we've had to say is buy low sell high hold and hope sit and take it and buy the dips all right we're always advocating now is the best time to load up on no load mutual funds this exchange traded fund that annuity whatever product we might have the hierarchy tells us this is what you should be putting all of your money in. And if you have any money left, you should be adding to those positions. So my problem with that is it makes sense when you don't care about the money or you're young enough, you can enjoy all the volatility. It actually can become your friend

where you can buy chairs at depressed prices. But the folks that have the money for the most part are baby boomers born 1946, 1964, 76 million Americans. And you just can't afford to have another one or two times where there's a 50% loss. And remember, there were two 50% losses in the same decade, 00 and then again in 08. And if you're taking withdrawals, just a modest 3%, 4%, 5% withdrawal rate after a 50% loss could be, well, a little disturbing, hard to have a nice day, but also maybe very difficult to recover. So we want to look to see how we can help people avoid allowing themselves to be kicked in the assets. Kicked in the assets. I know some people that are getting kicked in the assets right now. Yeah. Yeah. So you guys do financial planning, investment

management and insurance services? Yes, sir. Our trademark is the proof is in the planning. So we like talking about and doing planning because, you know, you put the money on X, Y, or Z and it goes up. You feel like you were smart right like it had something to do with intelligence and when it goes down you feel not so intelligent to kind of feel a little beak and maybe a little stupid so what we like to do is let's before we figure out or discover or decide or even look at what kind of options where the money might go what's your target what what do you want this money to do? When do you want to make work optional? How much money are you going to need to reproduce the same kind of lifestyle you had as though you were working? And then we also want to make sure we really address

what kind of loss can you accept? I mean, again, the industry has said, Chris, are you conservative, moderate, or aggressive? I'm asking the questions. I don't understand. You don't understand the answers. So why are we going down that rabbit hole? So as far as we're concerned, what is a stark improvement is to sit with investors after, as we're doing the planning process, and discover probably for the first time, what kind of loss can you live with? I mean, an example, we were working with a referral. This lady has been to 78 countries. She's in her 70s. I'm like, I want to follow you. I want to travel like you travel. I love the way you roll.

And the portfolio that she has currently, if the portfolio had been the same in 2008 as it is constructed today, the market was off 37%. Many of the large no-load funds were off over 3% stock funds. That portfolio would have been off 70%. So when do you want to know this? And for her, it was a great aha moment because of course she's saying, oh, well, I survived that. I've come back from it, but I don't want to go down that road again. And that's where the rubber meets the road to really discover what kind of loss you look at it in terms of percentages, dollar amounts, But is it possible that the portfolio might be situated in such a way where when losses occur, you can see that the portfolio might be withstanding those losses

better because it's been better positioned, there are active management strategies, we could talk about more of that and diversification. But the real point, for example, is in 08, again, when the market was off 37 and many funds were off more than that, if your account had been off, let's say 20% or less, that's substantially better because the math is if we're off 20, we only need 25 net to get back even to the extent that we're getting north of 50. Well, now it's more than 100%. We need to get back to even. And that just means a Hail Mary pass just to get back in the game. Yeah. You guys also do corporate planning, education workshops, and professional collaboration.

I should mention that as well. You know, right now, probably a lot of people are wondering what to do with their portfolios. I know a lot of people have already taken a massive hit to their 401ks and everything. My friends in the Bitcoin space, I'm not sure massive hit is the correct analogy. The crazy part about them, and when I was 18, I studied to be a stockbroker. And we went with a new agency instead of the old training one. We went with a new setup agency. And I missed it the second time by like seven questions.

Of course, I was a young kid, and I didn't understand all the double negatives and games they play. One, you know, later got into real estate. I learned how to answer, you know, the three double negative questions or whatever the, you know, the trick question they put in there. But I learned how to be a stockbroker basically without passing the test. And then later I became a day trader. And you know, one of the principles they always taught you is you never bet more than you can lose. And there were people in the Bitcoin industry, and hopefully there was no one in the investment industry, that were telling people to – and these weren't brokers. These were these guys who would just run around and think they were gurus.

But they would tell people to mortgage their home, mortgage their business, and put it all into Bitcoin. And right now, I fear what those people are up against. Yeah, I mean, I don't think there's margin calls in Bitcoin. But if you leveraged your house or property, there were people that were crazy enough to do that. And they put 100% of their whole life savings into and all their money into Bitcoin. And that's just crazy. What should people be looking at right now? I mean, what should people be doing?

Because I know, you know, even if you're a normal person who has a 401k, should you be, I don't know, I don't know how it works where you can shove a lot of it into gold or what should, or what should you be doing and how can companies like you help them advise? Well, great question. And to your point, I love Warren Buffett statement. He says, so risk is not knowing what you're doing. He nailed that one.

All right. And that's what happens when, particularly with some of the vehicles since 2020, you know, it's always, it's just been straight up. It's been a very nice rocket all the way to the moon. But it's that it's when that rocket turns around that most people aren't prepared for. And that's what we like to help people see that maybe there is a way to prepare for an environment you do not foresee.

So what we what we do, think of it this way. All the things that you studied for the most part were mutual funds and exchange traded funds and whatnot. And they're all passive investment options. So what that means is the portfolio is going to be 5 percent cash, 95 percent invested, whether it's 95 percent bonds or 95 percent stocks. It's going to be pretty fully invested. Now, that was terrible in 08. That was great in 09. But that combination often repeated what the market was doing off 37% or more. So what we like to use to keep clients from trying to throw that Hail Mary pass, keep them at the table and not pat them on the head with pablum like, well, Chris, that's what the market does. Do you have any more money? And look at me like i'm sorry you have all my money

what are you talking about so we look at we prefer using strategies for clients who want more active management so think of it like this we're talking about most portfolios being passive professionally managed they all are but what that means means is if you have a deck chair with a bond on that chair or a stock on that chair, and the portfolio manager moves from this stock to that stock or that bond to that to the other bond, the deck chairs are still on the Titanic, and the Titanic went down, never see light at the end of the day again. So what active management looks like to try to keep it as simple as possible is taking your cash off the boat, putting it on the sand. That means you don't see gains, but you also don't participate in losses.

So instead of being 5% cash, 95% invested, depending on that answer to the question about how much loss you can live with, many of our clients saw their accounts automatically go from 5% cash in some cases to 40% cash, to some cases to 100% cash. Automatically throughout the year, it's not market timing, it's reacting or looking at the market daily, asking and answering the question, is it risk on or risk off? Do we want fuel on this fire or water? In 08, you wanted water. You might have wanted to end the year with as much as 100% cash in your portfolio. That would be like a money market account five, 6% cash, fully invested in the bonds or the stock portfolio that

makes sense. Because as I say, on the one hand, we want to limit the losses. I look at it, Chris, is it possible to win by losing less? I think the answer is yes. So let's limit the losses and then participate in as much of all the gains as we possibly can, because it's certainly nice to see black ink, green money, anything other than red. Everybody loves to see those gains. Yeah. And a lot of people don't understand the ebbs and tides. I don't think maybe, I imagine a lot of older investors have seen bear markets like 2008 stuff. But, you know, I've been talking about a bear market coming here and us entering into a recession. And people are just kind of their eyes lost over like, what's that?

Especially the Bitcoin crowd. You're like, you need to know what a bear market is. Well, you need to know what one is and you need to know where your exit strategy is in advance, right? You don't go to a theater anymore without looking for the emergency exits before whatever's supposed to start starts. So, you know, that's, hey, look, whoever you're with, see that one, see that one, those are the doors we're going out of, but we can't go out of the entrance. And most investors don't do that. And unfortunately, most advisors don't help people see how that's something that they could do. But to our way of thinking, that's crucial. Let's set the emergency exits in advance so that if the market's off, let's say 15%,

and your account is off half of that, and your ratio of loss was, let's say, 10%, just to use some hypothetical numbers, you can see, well, the market's going to peck or worse, but my account isn't. That's what we want. And by the way, one of the things that we do, Chris, unlike most financial advisors, wealth managers, whatever the term might be, is we pay for independent research. Let me just say to you what that research is saying to us right here, right now. And by the way, we've been paying several thousand dollars for several years, starting in 1999, for this independent research. And the distinction, of course, is these folks do not have any product. They're not telling you where to put all your life savings.

They don't have an ax to grind with where the money might be invested. But what we're looking at right now is suggesting that the market could right now be in a bear market rally. We're seeing some gains. There could be a significant bounce here. But from peak to trough when it comes to the stock market, the research team, this is research, suggesting that it could be the crash of a lifetime. It could be unlike anything any investor has seen, right? Yeah. Loss of maybe 80% in the stock market. 80% followed in a year or so by a significant loss to real estate. And for those of us on the best coast, they're suggesting that that loss could very well be more than 50%. Cleveland, maybe only 13%. California, probably more than 50%. And here

are the two pieces of the puzzle that are irrefutable that nobody's looking at. First, the age at which most Americans die these days has come down to 76.6 years old, okay, according to the Census Bureau. So let's call it 77. But let's also notice that Canada, the UK, and Japan, all north of 80. They keep moving north, and we have been moving south. So 77 is the average age. And then the other thing that you have to be watchful for, for instance, people will say, well, my parents lived to whatever. And I'm like, that's great. But don't look at your parents, you, your parents, and all your friends, your family. You are called outliers.

What does that mean? That means you have more education, you have a better job, you have more resources, you have health care. Homer and Marge Simpson making all of $65,000 a year. That's all. That's the average household income in America. Do you know anybody making $65,000 a year? I bet you don't. But you need to look at the average investor, average consumer in America first, and then your family second. So 77 is the

average age. The second thing that's so fascinating, again, that nobody's identifying, and we're not that smart, but I can read. So sometimes I have to get up at three o'clock to read it again, because it's just vastly different. They're recognizing that when it comes to real estate, we've all been taught, what is this supposed to be? Location, inventory, interest rates. And when boomers were standing in line to buy a house, interest rates were 16%. So why is that not an impediment? Well, guess what? The research team says what we don't look at is the buying and selling behavior of ordinary consumers based on age. Huh? That's right.

Okay. 31 is the age at which most Americans buy a house. So 60% interest rates didn't matter. The bell was ringing in boomers' heads. You got to buy a house. Period. End of story. Doesn't matter what you buy.

You have to buy something. That's the first house. The biggest house, period, end of story. Doesn't matter what you buy. You have to buy something. That's the first house. The biggest house tends to happen at age 41. Boomers can check box one, check box two. Got to have a 5,000 square foot McMansion with the crown molding and the two acres. A lot of us know what that was exactly like. That happens at 41. We like to think we're unique and we're different, Chris.

And it turns out we're kind of like cows. We're herding. We're part of the herd. Okay, we're all doing pretty much the same thing at the same time. So box one, 31, first house. Box two, 41, biggest house. What's next? What are we hearing now?

Oh, it's about inventory. Oh, we need more inventory. We're just running out of places. And the research team says, hold the phone. 78 happens to be the age at which most Americans sell. Really? That's right. It just seems to happen.

Just like you bought it, you get rid of it. And make it kind of simple. It's probably the case that people dying will outpace people buying. I mean, if 78 is the age at which most people sell and 76 million people, again, boomers now, what, 58 to 76? Here comes 77. Here comes 78. It's going to be a whole new ballgame. And you tell me, because people will say, well, I've seen everything. No, what you've seen is the best of times.

You've seen and enjoyed 76 million people coming into these United States of America. Now you tell me how often you've seen 24% of the population evaporate. You haven't. So it might take 10, 20 years for 76 million people to go to heaven. I'm going to be optimistic, but the inventory of residential homes are going to be what? The same. So where do you think prices and rents are headed? Oh, I am not hearing you. Something happened, Chris. I do not hear you. I'm sorry. My mic is muted. There was a sneeze there that I had. I didn't pay attention to the fact that I need to come back on. But I was doing my mime impression where I was like, anyway, whatever. People on the podcast like on the audio part are like, he's doing a mime thing on audio?

He's really lost it. He's really gone over this time after 12 years. So, yeah, I agree with you. So if the inventory for homes stays the same, but you lose 24% of the population, yeah, that's going to be a depressive thing to home prices. Am I correct there in understanding what you're saying? Probably. I don't know how we're going to avoid this. Okay. I mean, people say, well, well, something will change or, you know, I've seen everything. And I'm like, no, no, no, no. You've not seen this. You only see the beauty of all these people, as I say, coming into the equation.

You have not seen that many people just disappear. But it makes sense to me that on the one hand, as I say, the people are going to heaven, but the prices are going well, well south of heaven. Right. So and we understand when it comes to Bitcoin or stocks or whatever it might be. Right. We can buy low and sell high when it comes to real estate. The research team shows us that typically it takes folks two years to process selling a house. Just it takes two years with so many emotional attachments to a house. Right. But the point is that I like to make is I can't see the future, but we know people are going to look to 100. I still can't see the

future. The point, of course, is if you and I go fishing and I come back talking about the fish that got away, what you want to observe is did we catch the fish? Did we eat the fish? Nobody wants to hear the story about the fish that got away. So if you have a lot of equity in the home and you are thoughtful that that equity could be crushed by 50%, let's just make up a number. This is what the research team has really got made up, but we can say it is. The point is either you got the cash or you're going to tell the story. You choose. And for young people who are saying, hey, we've got the income, we want to buy a house, we've got the down payment, what do you suggest?

My answer is, well, I see two options for you. If it's okay for you to pay a million, whatever it might be for whatever it is you buy, and two years after you get the curtains in and the shutters and the floor, everything's perfect. And the price drops 50%. If that's okay with you, buy away. If that's not okay with you, you might want to keep your powder dry. See how this thing unfolds because it may be that prices are coming your way and you can pick up a bargain, right? Particularly when nobody is moving.

So this is the point. It's about collecting your cash to be prepared for the next wave that you may or may not see. But what do they say about equity? Crickets. What do they say about cash? Cash is king. So it might be a good time to collect cash so that opportunities can come your way, that you can strike and, as I say, catch the next wave. There are going to be more ways. But I think first, I think the research team is right. We've got some pain in the equation. And I mean, worldwide, it's not going to be fun. You know, the interesting thing about housing, and correct me if I'm wrong, but the interesting thing about housing is they haven't been building new single family homes and

expanding the inventory very well. And that's for a lot of reasons, but it seems like a lot of reasons is because millennials aren't buying homes. So they're buying, they seem to be building more multifamily apartment sort of things for single people because people have been staying single longer than ever before. In fact, we have the largest in the UK, they have the largest group of people that are, they have the largest group of women that are single over 30 than they do than aren't. And we're heading towards the same way here. And so the inventory hasn't been expanding like it needs to to do the market. And that's what was driving home prices up. And a lot of my friends that in the last year or so that were investing in real estate, especially portfolios for real estate investment properties, I was like, you really want to take

a look because we're going to be in a risk correction here in a recession. And I see a correction. And like you mentioned, people have been living at the bull market for probably one of the longest periods ever. And we had the great market crash and the depression after the roaring twenties of, you know, after the pandemic, it was the pandemic a hundred years ago for the Spanish flu or whatever it was, Spanish flu. I've got coronavirus for so long. I can't tell. Yeah. And so we're, we're in for correction. So I think a lot of people that are in real estate, I think there is going to be a correction. So I think a lot of people that are in real estate, I think there is going to be a hard correction. I think a lot of people, you know, coronavirus,

a lot of people moved home with their parents to whether that, I know a lot of single parent families that are struggling right now, especially with gas prices. I'm seeing a lot of that on complaining on TikTok and social media. But yeah, you bring up an interesting point. How soon does that 24% of baby boomers that you said within the next 20 years they'll be leaving the market? It might take 20 years, but if longevity is 77 and boomers are topping out at 76,

here we go. It's the next 12 months. And I mean, there's just, and let's understand not only is longevity coming shorter and shorter for Americans. We're not replicating ourselves to your point about, you know, yeah, we're not generally boomers certainly had two kids and their children aren't interested and they're not interested in buying a house. They want experiences. But to your point about, like, I like to say to folks that Americans are really awful at learning from history because we're too darn busy repeating it. So, you know, when we talk about, well, we just don't foresee a crash because it keeps going up. Let's understand all bubbles burst. Every seven-year-old on the planet knows that and it's 100 of the time in fact the bigger the bubble the bigger the burst and maybe the first thing we can look at in terms of learning from history is the tulip bubble the tulip experience back in the netherlands it's in the 1600 1634 if i'm not mistaken where with a box of tulips you could buy an estate uh-huh so when it gets stupid it gets way stupid it's very Right? So if we go back to learn

from what we can with the Great Depression, the three points I see is that stocks dropped about 80%. So that means a million dollar portfolio dropped to about 108,000 in less than two years. That's pretty darn quick. And then the securities industry says, oh, it always comes back. Yes. In about 20 years, assuming you didn't do what? You didn't sell a share and you didn't spend a dollar for it to come back. New York real estate, as far as I find, shows that a year later, guess what? Real estate prices in New York dropped 70%.

And the real estate industry likes to say, well, it'll always come back. Yes, it did in about 40 years. That's right, four decades. But wait, there's more. Point three is the average life expectancy for adults in the 1900s was about 57. So if you were an adult with a million dollars in real estate and a million dollars in the stock market, neither came back in your lifetime. That sounds like fun, doesn't it? That sounds like good fun. Good fun. So we call that an L-shaped recovery because you didn't see it. But you know what's even more interesting, Chris? That exact same occurrence is happening in Japan right now.

All right. The Japan Nikkei 225 peak 1229.89, real close to 40,000. As of this morning, it was at 26,000. Wow. So it's still more than 30% below where it was. Was that 32 years ago? 33 years ago now. A year later, their real estate market, residential real estate prices dropped 70%. So it's now 30 years or more for pretty significant losses in the Japanese stock market, the Japanese real estate market, neither have come back to even. Yeah. And they won't

because they're going through what you, they've been going through for a while, what you've talked about, the gentrification. I don't know if that's the right word but the loss of their baby boomers and the younger people aren't getting married they're having kids they're they're they haven't been expanding population so they're not a growing population america has the same thing we're a dying population i think we we've been declining on population growth, birth growth for a while. We saw a little bit of a bump recently, but not significant enough to make a real difference. Well, to your point, globally, this is 2019. It was a World Health Organization that revealed for the first time we have more people 65 and older than five and younger. Huh?

Wow. So we can look at Japan, but what's happening in Japan is happening worldwide. And we're following their lead, if you will. We did have a baby boom. We did allow for immigration. All of that has come to a complete stop. And for the most part, I mean, I had some friends from Argentina that went to Italy for a wedding with their one-year-old. And guess what they could not buy?

Diapers for their baby. They didn't need diapers for young kids in Italy because they don't have any young kids in Italy. Ha! That kind of explains it. That's what's really going on here. Yeah. It's, you know, we had. I forget the name of the gentleman. He wrote a book on a billion, one billion Americans and how one of our biggest problems is the country's

not growing and expanding. And in China, they are. And I don't know, China's always up and down with their GDP fluffing and all the games they play with their economy. But it's projected by at least, I think it's now 2035. My last check was supposed to be somewhere around 20 and 25, but now I think it's 30 and 36 with the coronavirus. They're projected to have more issues. And their China birth policy has failed miserably. Even though they've expanded to, I think, two to children, people can have now people aren't having children. So they've got older.

Who wants them when you're older? Exactly. Yeah, that's true too. I certainly wouldn't want to have kids when I'm at my age, but it's, it's a failure because they're going through kind of what we are too, where the young people really aren't interested in it.

But, but even then they're going to, they're going to pace us sometime by being a larger marketplace. And that's a lot of Americans don't realize. That's what, you know, if we had any brain, we should be. And I'm just, this is the math and economics of it. We should be opening up the door and flooding us with immigrants because we need more people in this country to do more stuff. Because what you're talking about is the baby boomers leaving the investment market. But what we're seeing right now, and the inflation is part of this in our market, is the baby boomers early left into retirement.

Even a lot of my friends who are in their 50s retired early technically where they pulled out of their 401ks and went into retirement. I'm not sure that was a smart plan on their part, but that's what they did. And now we're seeing the problems in our market where we don't have enough workers because we're a dying society. We're a society in decline with population. And so we don't have enough workers to support what's going on. And we were warned about this. I mean, I've seen this warning since I was, since the eighties, when I was a kid, where people like, there's gonna be a large amount of people that are going to retire and leave the market, and we're all going to be screwed because the smaller market's going to have to try and support them.

And yeah, you see what's going on in Japan. So this makes a lot of sense. Let's talk about some of the other things you do. You do planning for corporations, and you help people with their portfolios. What have we touched on? Because I want to make sure we get all your different advisory services in the bag. Yeah, well, everything you're talking about, as I say, our trademark is planning. It requires planning. And a lot of people just kind of throw the dart and make a decision and sail off without really looking at what this might be later on

down the line. I mean, one of the things that we like to do, for example, is assume that clients are going to live to 100. And then we test the portfolio to see, will it continue to provide the income despite the market upheavals for each of them to age 100? So we were working with one couple and they said, look, we need $45,000 for our pool. And I go, oh, you mean the pool in the backyard you don't use? Yeah, we got to redo the pool. So we said, all right, let's look to see what that does to your odds of success. And we showed them that at this point they were over 90%. The odds were favorable that each of them could live to be 100.

And their lifestyle doesn't look like it would be changed. And, you know, a lot of iterations to look at the different possibilities. Now let's look at it if we were to take out 45,000 and I, and I think the, the odds of success dropped to 74%. It was, it was beautiful because we could watch them look at each other, go,

no, no, we, we don't like that. Okay. So what are we going to, and they actually had a conversation in real time, right?

We're, we're now observers where they're going, you know, we've got like 30, $35,000 sitting in cash. We don't really need that cash. Let's do this, sweetheart. Let's tell the pool guy, here's your budget. That's all you're going to get. We want to keep those odds higher than where they were. If we were to take the money out, you wouldn't, you know, final $2 million portfolio portfolio one would think that it could withstand a 45 000 withdrawal okay and it would but their odds of success gets reduced too low for them so they're making a decision with their eyes wide

open as opposed to well let's just take and redo the pool right and they're like wait a minute this doesn't make a whole lot of sense we don't't use it. And it's going to get improved. It's going to be improved enough for us, particularly when we don't use it. So that's the fun in doing the planning. And that's what we like to do, like in the group workshops, when we work with companies in the 401ks, not just hold a group meeting that nobody understands what the heck we're talking about, meet with the individual workers, the employees individually, invite their spouses in live or on Zoom or however we can do it, so we can do the plan to see what

are you going to need if you live too long? What are you going to need if you die too soon? And you've got three kids. How are we going to make sure you don't go crazy? In fact, what we want to do is make sure we're all at the graduation ceremony crying because they graduated and nobody owns and owes any money. That's what we want to do. So let's do the planning now so that you can see what it takes to achieve the level of success relative to college planning that makes sense to you. And that way you can see that we can do this. Yeah. I mean, the college planning is important. You know, I see so many people that they're not planning for their kid's college, and college is expensive. Geez.

I mean, the whole reason I didn't have kids was I didn't want to pay for their college. Some of the prices. I'm just kidding. It was everything, actually. It's a racket. I mean, let's just be honest. It's as expensive as all get out. But, you know, it's like health care.

Health care in this country is expensive. The two have no competition. Cars are better today thanks to the competition. Yeah. The competition is everything. But, you know, people don't plan for this. The other thing I think people need to start planning for is, and I saw this when the baby boomers started retiring, instead of keeping in the investments that the baby boomers started retiring, instead of keeping in the investments that the baby boomers were in, like a lot of them were in real estate, you know, and a lot of them were in a lot of different things, their kids would get a hold of their retirement or not retirement, but you know, when they pass away, their inheritance is what I'm looking for. And they would literally liquidate it. And I don't know, they'd go buy

RIMS and Land Rover. And they'd put into stupid stuff. They wouldn't reinvest it into long-term earning stuff. And so that was another issue that, I don't know, imagine a lot of these baby boomers pass away in the next 20 years, as you mentioned. People got to be smart with that money. Otherwise, you're just going to blow it on like, I don't know, they're going to buy a lot of tickets at the 7-Eleven or something, you know, or put in Bitcoin. We do a really bad job here in helping people understand this is your responsibility. Yeah. And math is probably the only four-letter word Americans are afraid to use. But we need to be a little more interested in embracing math and

running the numbers. I mean, here's an example. This is a young couple, mid-30s. We were doing for free financial planning for healthcare workers as a way to say, thank you, we appreciate you. And they're making about $100,000. So it turns out that we figured out what was the optimal time looking at Social Security for them to set their goals for not working, for making work optional. We don't call it retirement. That sounds boring. Making work optional, we all want that. And I think it became for them 70, right? But it also, we were able to put the plan in place so they could see they needed $2.6 million. Okay, that's the goal. And then it became, what do we do to get from here to there? And I think it was a contribution of about $1,300 a month at 6% for the next 25, 30 years,

you're on track. And then we'll check this every year to see, do we need to make changes? But now they know if we do this and we get that return and there are no guarantees, then our odds are pretty good that we're going to have what we need to have the equivalent in those dollars at that time of what $100,000 buys us today. Now we have some real peace of mind. We've taken some of the guesswork out of the equation. As I say, this is not set on autopilot. We have to review these things. Markets go up, markets go down. So there may be some adjustments. Income can fluctuate. So there may be some adjustments. And then we looked at it from the standpoint of, okay, heaven forbid something happened to either of you as a breadwinner. The way it goes, you've been in the business where people say, well, we have insurance. We've got $500,000 each. And then they grant,

see, we're good. And you go, well, hang on a second. Let's see. 4% of 500,000, if you're going to use a 4% withdrawal rule, 4% of 500,000 is what's that? $20,000 a year. And that's about what? $1,600 a month. Is that enough? Oh, heck no. So the point is for the person, for the husband, who's accustomed to spending the wife wife $60,000 a year, it may look like, you know, $2 million on her. And if she's accustomed to spending his $40,000 a year, it may look like using the 4% withdrawal rule as a guideline, a million dollars on him. Well, now each of them know, heaven forbid you die. I'm going to miss you, but I'm not going to miss your money. That's the point. Let's figure out what has to happen so that you can survive and

thrive as opposed to go, oh, my goose is cooked. Yeah. Very, very true. It's something people need to do. So as you wrap up, anything more you want to touch on about what you guys do and how you guys do it? Well, let me just take this opportunity to say thank you for having me on. And let me encourage folks to look at things from the worst case scenario. We work a lot with engineers and that's how they think. They don't like sales data. They are not afraid of math. They do like good arguments, but they want to be thorough.

And the way they look at things is if we are going to be in the business of putting a man or a woman on the moon, we want to get them there and get them back. Mars, same story. So let's look at all the things that could possibly happen that could be a deterrent to the results that we're trying to achieve and then see if we can mitigate those or we can live with them. If we can live with them, we're good. If we can mitigate them, we're better off. But let's start with the worst case scenario. And right now, as I say, the research team is saying this is what we're in for is the crash of a lifetime. The good news is everybody will be in it together. Also, the good news is the faster we go through it, the better we'll come.

Well, we will be on the other side of it. But it makes sense to, like you're saying, people who invest in something that did really well, I mean, copper did really well until four months ago, it was at an all-time high. Now it's in bear market territory. We need copper for industrial machines, advanced electronics. We need copper. Copper, we think, is also a bellwether. So if you're looking at something,

if you're looking for something to see how it's doing, copper may be one of those things that you can use as an indicator. And also that this was in January, the research team in terms of indicators said in mid-January, look at the S&P, look for 4,600. That day, the S&P closed below 4,600. They said, OK, if it had closed at 4,600, we'd probably hit 4,800. If it doesn't close at 4,600, again, this is mid-January, it may look like Wiley E. Coyote

and the Roadrunner. How low can we go? There'll be some bounces in here. It might be bear market rallies. They can fool you. They lure people in. And then the market turns around and just cuts and chase.

How low can we go? Again, like Wiley E. Coyote and the Road and chase. How low can we go? Again, like Wiley E. Coyote in The Roadrunner. We want people to be able to survive and thrive no matter what the markets might do. In general, it doesn't mean, as I say, that you have to allow yourself to be kicked in the assets. Yeah, you don't want to be kicked in the assets. So that's always bad. But yeah, it's going to be an interesting ride. So would you say that, I mean, you're seeing a huge drop. Do you think worse than 2008 then? Yes.

Wow. Wow. Yes. That's sobering. Well, we went through it. You know, everyone was talking for several years that we're in the know about, you know, are we with, you know, replicating, everyone was locked down with the Spanish flu 100 years ago. And then we had the roaring 20s.

And then we had the crash because we were just partying a little too hard. And that lasted for a long time. So this will be kind of interesting. I know we're going to be stuck with inflation for a while. And we didn't have inflation in 2008 when people were crashing. Or a major war. Yeah, or a war. Good point. Or a major war. Yeah, or a war. Good point.

Or manufacturing issues, supply chain issues. There are a lot of clouds on the horizon. I think J.P. Diamond, J.P. Morgan Chase, Jamie Diamond, he put it real well. He said, I said there were clouds on the horizon. Let me correct myself. It's a hurricane coming, folks. Wow.

Save your money. Save your money. All right. Well, thank you very much for coming on the show, John. We really appreciate it. Give us your.com so we can find you on the interwebs. Sure. It's YB4, W-H-Y-B-E-P-O-O-R.

John Grace, founder and president of Investors Advantage in Westlake Village, California. And great being on the show. Chris, love to come back and we can pick up where we left off. There you go. And hopefully we'll still be wearing our shirts. We won't have lost their shirts. Thank you very much, John. Thanks to my audience for tuning in. Go to Goodreads.com,

Fortuness Chris Voss, YouTube.com, Fortuness Chris Voss, all the places we are on the LinkedIn, LinkedIn, Twitter, Instagram, all those crazy places the cool kids are. Thanks for tuning in. Be good to each other. Stay safe. And we'll see you guys next time.