Labor, Inflation, Shortages, Earnings, and Goals! Ep #45

2021-07-21

It's episode 45 of Payne Points of Wealth. As I'm recording this right now, inflation numbers are through the roof! We’ve been warning you about it. Everyone's saying inflation has been transitory, but apparently not. Inflation numbers came in way higher than expected. We're in the midst of earning season. Companies are crushing their earnings right now. So that coupled with inflation, what does it mean for you? What does it mean for your portfolio? What's our view of the economy? We're going to break it down for you today. On the tipping point, we're going to talk about your financial independence roadmap. How do you map out financial independence? We're going to give you our viewpoint—having been doing this for a collective 75 years—on how to get yourself in a position to be financially free.

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

The BIG news this week [1:18]
Will earnings call surprises be about labor costs and shortages? [4:37]
Is the market going to crash? [7:32]
The Tipping Point [9:36]
Is making money a goal? [10:32]
Risk is the key, only take the risk that you need [13:21]
Hidden Facts of Finance [17:44]

What we expect to hear from earnings calls over the next couple of weeks

We're in earnings season. It's no secret earnings are going to be absolutely phenomenal. Earnings are going to blow the doors off. We expect that to happen and of course, the markets are forward-looking so it's not exactly a surprise. What the surprises are going to be— when you hear these earnings calls over the course of the next couple of weeks— is how much are their labor costs are going up? How much of the raw material costs go up and how much of those costs are going to pass on to you and me, the consumer, I'm going to guess a lot of it is going to get passed on to us. And that is simply inflationary.

This week on the tipping point: Preparing more effectively and minimize the hazards on your way to becoming financially independent

Over the years we have found that becoming financially independent is a journey, not the destination. So join us in this episode to hear us discuss how to prepare more effectively and minimize the hazards along the way to becoming financially independent.

Financial planning is what it's about investing with the end in mind. You would think this is only for new investors or somebody who's got a little bit of money, but it applies to everybody.

When someone comes in with money and asks "How do I invest it?" We ask "What are your goals?" But “I want to make money” is not a goal. At the end of the day, what does that mean? There's nothing tangible about it. When you invest your money without any sort of purpose to it, it's hard to stick to a strategy. Why do you need your money to grow? So that you can retire or be financially independent?

Having enough money so that you don't have to work again (unless you want to) is definitely a goal to shoot for! Check out the episode for more!

This week’s hidden facts of finance

A randomly selected stock in a randomly selected month is more likely to lose money than make money based on statistical evidence. In short, picking single stocks and holding a concentrated portfolio tends to be a losing strategy. That's why over the last 10 years, 85% of all large-cap fund managers have underperformed their underlying index and these are supposed to be the pros on Wall Street. I can't imagine that an individual investor would be all that successful trying to pick stocks if the fund managers can't even do it. All the odds and probabilities are against you yet we love to pick individual stocks. Why not just own an index and win?

Resources & People Mentioned

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