Let’s Play Financial Jeopardy, Ep #52

2021-09-15

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Welcome back for episode 52 of Payne Points of Wealth. That’s one full year of musings from the Payne boys! We’re glad you’ve stuck around! Well, Labor Day is over and we are officially in the fall season! Cryptocurrency is apparently one of the primary currencies in El Salvador now. The world is getting crazy as always. We're starting to see a little bit of a slowdown in the economy. If you looked at the employment numbers that came out (while we're recording this), they came in weaker than expected. There's a lot of economists, a lot of strategists right now that believe we're going to an economic slowdown. We're going to give you the truth today. We're going to tell you what's really going on with the economy, and how to invest your money. On the tipping point today, we're going to play a little bit of financial jeopardy. We're going to talk about some financial terms you need to understand if you're going to get on your path to financial independence.

You will want to hear this episode if you are interested in...

Does the market have to go down just because it’s September? [2:07]
Big bubbles [5:20]
The Tipping Point [9:03]
What’s known for high fees, lack of liquidity, and misleading promises? [9:43]
What requires an advisor to put a client's best interests first? [11:34]
What phenomenon is eminent but no denying that it will be back eventually? [13:20]
What forces retirees to drain their retirement accounts [15:38]
Hidden Facts of Finance [18:56]

The most powerful force of monetary and fiscal policy we've ever seen

There's been $32 trillion of fiscal and monetary stimulus created since the pandemic started. $32 trillion! All the global GDP in the world, every year, is something like $93 trillion. Think about how supercharged the entire global economy is right now. It's basically on steroids. It's almost laughable that any economists or strategists would think we're going to get some sort of real sell-off because you're fighting the most powerful force of monetary and fiscal policy we've ever seen. Literally ever! That's why we're going to have big bubbles in certain areas of the economy. We have big bubbles going on right now. You just don't know when they're going to burst.

This week on the tipping point: Financial Jeopardy

In this episode, we play our own little game of Financial Jeopardy and talk about some critical financial terms that all our listeners really need to understand. In the spirit of Jeopardy, we're going to give you the answer and you're going to follow up with the question. Check out the episode to see if you got it right and to hear what the Payne men have to say about it.

#1 It's known by many for its high fees, lack of liquidity, and misleading promises. This financial product gives the financial services world a bad name.

#2 This requires a financial advisor to put his client's best interests before his/her own. Unfortunately, not all financial professionals are governed by it.

#3 This financial phenomenon is thought by some to the eminent and by others to be far off in the distance, but there's no denying that it will be back eventually.

This week’s hidden facts of finance

As of early August, global equity funds have seen 605 billion of inflows year to date. Now to put that in perspective, global equity funds have seen 727 billion of cumulated inflows over the last 25 years. Therefore in 2021 alone, there have been 40% higher inflows than the last 25 years combined. That's insane. If that's not a melt-up, I don't know what is.

The US population increased 0.4% in 2020 to 329 million Americans marking the slowest growth rate since 1901. A falling birth rate and an aging population could portend major implications for our economy long term. You've got an aging population then fewer people going into the workforce means fewer taxes and more people for the government to have to support. Maybe people should probably start having more kids.

Resources & People Mentioned

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