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Payne Points of Wealth Podcast

You know things are getting crazy when… Ep#149

By February 19, 2024No Comments

Microsoft now is worth $3.1 trillion

Microsoft is worth double the entire energy sector of the S&P 500. However, if you look at free cash flow it’s around 67 billion versus the entire energy sector’s free cash flow of 135 billion.

I don't know about you but I'd like to own the entire energy sector as opposed to one tech stock..

Ryan Payne

Going from fear to greed

Last year fear made it hard to keep people in the market. Now we’re getting closer to irrational exuberance as FOMO is happening. Investors who are sitting in cash at 5% suddenly want to not miss out on the AI trend.

..you're thinking what am I missing? That's when you see companies like Nvidia suddenly become worth more than the entire Chinese stock market.

Bob Payne

Almost 7 trillion in cash

The Fed will cut rates at some point this year at least a few times and that money has to funnel somewhere. Many investors will choose to blindly buy the S&P 500 where 5 stocks make up 25% of the index.

..but you just don't know when the party's going to stop. And that's the problem with that trade.

Ryan Payne

The Tipping Point

The financial red zone 

When someone’s within 5 to 10 years of retirement they’re in what we call the financial red zone. It’s important for anyone trying to be financially independent to have their plan in place before that.

The paycheck will stop someday

By age 50 you want to start thinking about what’s it going to look like to live off your portfolio.

the sooner you start thinking about it, the planning becomes much easier because then you're just tweaking things along the way.

Ryan Payne

Determine what you spend and what you will need in retirement

taking a hard look at.. every dollar in, every dollar out. I find that's the biggest risk with my clients.

Chris Payne

Peak earning years tend to coincide with the financial red zone

Typically when you’re in your late 40s, or early 50s you’re making some of the most money you’re going to make in your career. But you’re also starting to enter the financial red zone.

.. your peak financial earning years, that's where you have to be the most diligent about saving because you don't have that much time left.

Ryan Payne

Hidden Facts of Finance

American federal, state, and local borrowing will hit 127% of GDP this year, according to the IMF forecasts, or 100% when debt owned by parts of government are netted out compared to the eurozone that had a debt meltdown about a decade ago, 

New construction in the US is currently running at about 1.4 million units and an annual rate close to growth in underlying demographic demand, but still far short of what’s needed to reduce the shortfall. That’s why housing construction stopped falling in 2023 even with high interest rates.

Microsoft has 53,000 Azure AI customers and over a third of them are new to Azure. Over the past 12 months, according to CEO Satya Nadella, more than half of the Fortune 500 use Azure Open AI, including Ally Financial, Coca-Cola, and Rockwell Automation.