Payne Points of Wealth Podcast

Positioning Today For Tomorrow & Preparing For The Red Zone, Ep #25

By February 17, 2021No Comments

The government has announced another stimulus plan and another $1.9 trillion. Keep in mind last year we had $2.2 trillion bestowed upon the economy, along with another $900 billion at the end of the year. It’s almost like pouring rocket fuel on rocket fuel. What this means is the second half of the year is going to be a huge economic boom.

We’re going to talk about what that means for you, how to position your portfolio. If you’re getting into that financial red zone, maybe you’re five years out from retirement or you’re five years into retirement there are things you need to be doing proactively with your financial plan to make sure you’re on track. We’re going to give you our playbook to make sure you’re making all the best decisions when it comes to your finances in episode 25 of Payne Points of Wealth, so don’t miss it!

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

  • Why is everything going up? [1:22]
  • The misconception [3:26]
  • The hidden rotation of profits [6:26]
  • Positioning for tomorrow today [9:10]
  • The Tipping Point [11:40]
  • From wealth accumulation to wealth distribution [13:57]
  • Having interest and dividends so you aren’t dependant on market growth [17:22]
  • Hidden Facts of Finance [20:34]

Be where the action’s going not where it is

The day is coming when we can go out and actually live life again. We talk about this in almost every episode, but I don’t think people realize the magnitude of just how great those animal spirits are going to be six months from now. You’ve got to position your portfolio for that today. As in right now. We’d rather own hotel stock than the hottest biotech stock because in reality, that’s where the action’s going to be. As an investor, you always want to be investing where the action’s going to be not where it is right now.

The proof is in the pudding. Earnings are coming out showing Amazon and Apple both had over $125 billion revenue quarters. Record quarters! Nothing like that has ever been seen in the history of the country… but their stock is barely moving. That’s because the time to buy that stock was a year or two years ago when the economy was shutting down and there was nowhere else to go for growth.

This week on the tipping point: The financial RED ZONE

We talk with our clients all the time about being in the financial red zone. That’s roughly the 10 years before retirement and those first 5-10 years in retirement. We’ve found there’s a lot of adjustments you have to make to your financial life to make sure you’re going to be secure throughout retirement.

The most important thing to figure out in that red zone is what you spend. A lot of you out there have no clue how much money you’re actually spending. If you’re not putting in good spending numbers, that’s going to throw off your entire projection. It’s in that first five years of retirement where you find out if you calculated that budget correctly.

If you think you’ll spend less in retirement, think again. The reality is you’re probably going to spend more in the first five years of retirement because your spending habits don’t change that much but the time you have to spend it increases. You should always plan for more, not less. We’re Americans. We love to spend money. Let’s not kid ourselves!

This week’s hidden facts of finance

Only 55% of global market capitalization is composed of US stocks. Yet, US investors tend to put 75% of their stock holdings in US stocks. This statistic completely blows us away considering how many of the products we use on a day-to-day basis are made overseas. Emerging markets and international markets are relatively cheap right now, combined with the fact that we have a weakening dollar, we’d say the opportunity is overseas. It’s kind of like being anti-China, but having an iPhone.

Resources & People Mentioned

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