#74: Become an Investor, Not a Consumer

All right, welcome in everyone to our episode for the day. I have an awesome guest here with us coming straight from the, the hot and breezy city of Los Angeles. I have Ohan Khaikhan, AKA the Money Doctor. Welcome in, Ohan.

Hello, Lindsay, and hello, our listeners. Thank you very much for having me. I'm very much excited to share my story, to share my mission. Thank you very much for having me.

Yeah, absolutely. I was very intrigued whenever I received your inquiry to come onto the show. Just by the name, The Money Doctor, I think that that in itself, it's like, oh, oh, fix my money, fix that. Because, you know, we all have personal goals, financial goals, and they're also different for everyone. So I think that a lot of us could really benefit from this conversation and from normalizing talking about money. So I'm very excited for today's interview.

Likewise.

Awesome. All right, Ohan, so tell us a little bit about you, about what you do as The Money Doctor and how it is that you help people with their pursuit of financial freedom.

Hello again, my name is Ohan Kayikcian. I'm a Doctor of Economics, and that's the main reason I chose the Ohan the Money Doctor. It was a little bit to stand out, but I have the degree actually, Doctor of Economics, and also I'm certified financial planner professional with over 15 years of experience in financial industry. I started as a mortgage underwriter when it was like the mortgage crisis before it happened in 2008. Then little by little, like move towards personal finance area and helping individuals. I came to United States in 2009, which seems like yesterday, but it's 13 years ago. And I started in a major banking institution as a teller, as a cashier. And even my English was not enough at that moment. And still I'm learning every day, Alex, that I will mention like that. When my— I remember first customers come and they're like, can you break this $100 bill, I didn't know what means break a bill. I was thinking, like, yeah, you can break a glass, but how you break a bill? So it was hard for me to learn from the beginning, but when I started learning it, I did realize, like, even for people who born in, in America, sometimes it can be confusing. Like, imagine, like, someone whose parents never had 401k or IRA or investments, and you are learning everything from the beginning. So I dedicated my American life to learn about finance. And what the reason being to make it as simple as possible. And finally, I got a platform, I have my webpage, which is simple as it is on themoneydoctor.com. So I want to make the finance as simple as possible. Because it is, as Warren Buffett says, it is not me, but I will quote him and a little bit maybe paraphrasing, it is not easy, but it is simple. So we will make it simple and with the steps, which are something that we just need to take ownership in it, we, we can accomplish our financial independence or whatever goal you are looking for, as you mentioned.

Yeah, that's so— no, I think that's great. And I think that it is simple, but why does it keep so many of us stuck? If it's so simple, why aren't most of us doing it?

Lindsay, what I came to the conclusion, it is more of like beliefs, you know, like the way that we grow up, the way that in our families, and I'm mentioning like us, but it not necessarily apply only us, it applies to everyone. Like depending if your parents, if your loved ones, they have conversation about money over the, let's say, dinner table. Sometimes money considers as a taboo, as something that you don't talk about. Then we tell like money is the cause of all the evils, evils. But then we are working for money and we need money, and money can create like abundance. There is this thing, yes, like money. If you are a good person and you get money, it will bring more good in you. If you are someone, unfortunately, you are thinking all these crazy ideas and doing bad for people, then having lots of money, it will make bad things for you. But when I realized like money, uh, of course, like when you go back and check like the definition, it is a means of exchange. Like, okay, you are a barber and I need a haircut, which in my case I don't need it, but I need the haircut. I'm going to pay you money and I get a haircut. Because like, if versus like I was someone who is, let's say, I have tea and you are a barber, maybe we exchange tea and you cut my hair, but it doesn't happen that way. So money came in so it can exchange hands. But then what I realized, like money also is something people try to save value, but then they don't realize, like, if I tell you now, you will question me, but where people either save or spend money, which in my opinion both are wrong. And you can tell me, like, what do you mean? Like, how it is wrong to save money?

Yes, do tell me. Do tell me.

Yes. But when you save money, meaning like you are saving in the bank, it is losing value because, like, I'm sure you heard it's all over the news that inflation is so high. I'm sure if you are driving, you go to gas station, you will realize now you are paying almost double than the amount you were paying before for your gas. Or if you go to grocery store, if you could have just buy your groceries for a week, maybe let's say for $50, now it will cost $100. And money sitting in the bank earning only 0.5%, which is half a percent, or in the best scenario, earning 1%, it cannot fight that 7 or 8% inflation. So that's why That's why I'm more about investing versus saving. And when it comes— that's why it is not money like to either we spend or we save. But when the investment parts come in, that investment part will allow you to fight the inflation and to accomplish your goals. But let me just be very careful, and especially like I know lots of listeners we have in this podcast. So this is not a— whatsoever financial advice. Everything we are discussing here for educational purposes only. So you need to do your homework. I'm not telling you, you go ahead and without like learning what you are investing. You need to know what you are investing. Nowadays you can hear about NFTs, you can hear about cryptocurrencies. I'm not aware of that. I haven't done my research on that sphere yet, so I will not invest that. But if someone I know, let's say I'm index funds, which is a big fan of it. We can go a little bit over, we have enough time. Then with the meaning, like, you need to know what you are investing. And with investments, and that's the key, like, working in Santa Monica, to be exact, and seeing all these self-made millionaires, what I realize, they teach even their kids early on that investing is the way to do. And there is this very famous phrase, just pay yourself first. So we think like, oh, I don't have enough money. When I make enough money, then I will save. But you can start with $100, you can start with $50, $25, or $1,000. And when you see what that money can make for you, meaning like now your money works for you versus you are working for your money, then you are realizing like all I need to do just to get more income and to invest. Then you're like, 'Oh, $1,000 was fine, but now I want to do $2,000, I want to do $3,000.' So investing is the key. So saving and spending and saving is not enough. So these are like the main things, and we need to work on it. I was not like this when I first came to United States, and in America it is even more difficult to talk about money. It is not right to ask Lindsay, 'How much is your salary?' or, 'Oh, how much are making people like, oh, what question are you asking? And someone from outside culture comes and observes this, the money talk and money beliefs are very different. But in the meantime, we do have advantage of being in United States with all the opportunities and possibilities. And we are able to invest in American businesses and not only in American, internationally as well, because American financial system is the most developed so far that I know.

Yeah, yeah, I— that's such a good explanation of that. And I do think that whenever you are, like you said, you're not making the money that you want to make, that you get caught into the mindset of, oh, it's either saving or spending. And so, you know, we've all heard, oh, well, to grow your wealth, you just need to spend less than what you make. You need your outcomes to be lower than your income. And then of course, you know, math does the math, and then you're going to grow from there. But I think that you're right, that it doesn't matter if you're not making the money that you want to make yet. You can still take— okay, if you had $100 left over, well, let's take $75 of that and go and invest it. So I think, I think a question would be, you know, we— and I have worked— and I have been working very hard in my own finances over the last 2 years or so, and we have, um, you know, invested in different ways and in different methods and saved and done things like that. But it's very hard to find consistent information. Like it's very hard. You know, you've got all these different money teachers and gurus and stuff, and they all kind of tell you something a little bit different. What would you say is like a safe course of action? So if I'm listening to this podcast and I'm thinking, I really wanna get my money under control, I know I need to be investing, I probably also need to be getting my emergency savings fund up though, but I also have my bills. Like, what would you say is like a safe plan of action to get them where they want to go?

As you mentioned, to take control of your finance, the first thing I will mention, live below your means. Meaning like, I understand, and there is nothing wrong if I mention some high-end brands, you can buy that shirt and wear it, but Target shirt will do the same, you know, or Walmart shirt will do the same. When you come to that, I understand, and one thing I want to mention, instead of consumer, why you don't become an investor? So majority of people around us, we do have iPhone and every new iPhone comes out, it already start, your mind start thinking, oh, I need to get the new one. New MacBook comes out, you need to buy a new MacBook because like technology is growing so fast. Then I will ask you like, why are you not owning Apple? And people will say, tell me, what do you mean? It's so big, like trillion, million, more than couple trillion evaluated company. How I can own Apple? But there is something called in America S&P 500, which stands for Standard Poor's 500. And again, I'm not giving advice to anyone to go to buy. They do their own research. Of course, they can check some resources I put out and they can go my website and find out about all these questions they can have. And by the way, they will have access to me so I can answer them. But S&P 500 is top 500 companies in America. So if I mention a couple of the names, you will recognize, I'm sure. It will be Facebook, it will be Google, it will be Apple, it will be Costco, it will be Starbucks, and 500 of these major companies. Instead of investing— again, I'm not a believer of picking and choosing. So it's really hard to do. And the history and data shows that 80% of active managers who are picking and choosing cannot even beat the S&P 500 index. So someone who is average, and I'm sure you are more talented than lots of other people, or maybe I learn, I read more books than people around me, but in overall, we are average, you know, and for average, for middle class, we are not someone who will access to that fund manager, and it's hard to pick and choose like who is the next Warren Buffett, who will be able to beat the market. So for us, we need to be very much diversified, and why not to do like with the S&P 500 type of index. The most importantly, you need to make sure you are not paying lots of fees because some of the indexes there, or investments I will say, because index is usually less expensive, but they have so much expense ratio on them. So within 20 or 30 years, you can lose up to 40, 50% of your savings. So you need to be very careful what you are paying. So what is the expense that you are investing in? But again, like to answer your question, where to start, you live below your means and you make sure your investments are diversified. If you tell me, Noam, I heard about this NFT, I want to invest, or cryptocurrency, I like Lindsay, you know, this part, Just make sure you invest enough money that you are okay losing it because I can't tell you not to do it. Maybe that's a good investment that after some time it'll be double, triple, or quadruple, but you need to be okay with it. If you don't understand what you are investing, make sure you invest only enough money, let's say 5% of your holdings that you are okay to lose. And the first starting point is something called, and I'm not going to go very hard terminology or anything, but I'm sure our all listeners heard about net worth, and the net worth is your assets minus liabilities. Our assets are something that we own. So if we own a business, that's our asset. If we own a stock, we have piece of— let's say we have S&P 500, we have 500 different companies in S&P 500. So we have pieces of each of that 500 companies. So next time when you go to Apple, you have the feeling that you are the owner of the Apple. If you next time go to Starbucks, you buy your tea, you know that you are part owner of that company. If you go to Costco, you are part owner of that company. Now you are looking different. And these companies, when they get their profits, they have what is called dividends. So they will give the dividends to you. So you are getting part of the profit as well from the companies. So it's all about changing your mindset consumer to owner. And if you can make this change, that will help you to reach your—

This is so good. I feel better just listening to this. Like, I, I've never had someone explain it that way of like, you become the, the owner rather than the consumer. They're, they're marketing to you, selling to you all day. Well, what if I'm an owner of this company? That's such a huge mindset shift. I mean, it just feels better. Like whenever you said, imagine walking into the Apple Store and saying, I own a part of this company. You just have a different air about you. Or your bank.

Yeah. Or your bank or any of the major 500 companies. And it's approximately like a little bit over, it's always fluctuates. So somewhere from 3,500 to 4,500 around that range, publicly traded companies in America. So even if you go, further because like one day Tesla was not part of these 500 companies, but then the valuation, it came up. Then General Electric, which all the Americans know that, oh, this big company, they one moment on Universal Studios, Universal, and they dropped from the top 10 companies. But so, or you heard of Sears, I'm sure. Yes, there was a store called Sears. And where is Sears now? Unfortunately, they went to bankruptcy. But then Amazon is on the top. What if after 10 I'm not believing on that, but what if next Amazon comes and the existing Amazon goes out of the business? So it's really hard to pick and choose. And there is very famous saying that monkeys sometimes can choose better than the most educated investment advisor. And that's like blows my mind. Then that's why let's be careful instead of investing one company, why you don't go all 500 companies? And if new companies come in and then the poor ones Funds will go up, or there is an index called Total Stock Market Index, which is like the whole entire American publicly traded companies. There is a famous investor and founder of Vanguard, and I'm not doing any commercial, I don't have any deals with them, but there was a very famous— unfortunately, he passed away, that's why I talk in the past tense, but Jack Bogle, John Bogle, who created Vanguard, and he's considered the person who made index funds available to customers. So what he mentions, again, I will paraphrase him: American corporations baking this big American pie every year, 24/7. Why don't you get your fair share of that pie? While you are sleeping at home, McDonald's is working and their drive-through is open, and all these people go buy from McDonald's, they are making money for you. People can— I don't have anything, anything against any brands, but people, people can have their Gucci bags or their Louis Vuitton bags, and you're like, I wonder like what this person is doing. And nothing wrong with any profession, but they can be a nurse, they can be a driver, they can— I like, do you really afford that bag, or you just buy to show someone? Because I own Louis Vuitton and you are making me rich having it. So because I invested in that company, I know maybe one day, God willing, we sit here after some time and talk and Lindsay or Rohan, we have more shares of that company. But you need to start somewhere and just start with small amount, you know. Nowadays there is no excuse not to invest, but again, make sure you do your research so you have your risk tolerance. Let's say you are— again, it comes from Warren Buffett— but let's say you are someone who eats burgers, and I'm not whatsoever promoting burgers. They are not that healthy to eat unless you make it at home from some grass-fed beef or bison. But let's say you eat burgers, and if I ask you like, Lindsay, do you want the meat prices go up or down, subconsciously and consciously you will tell me that you want the meat prices go down so I can buy my burgers cheaper. Then why if I ask you as an investor, you want the stocks go up or down, automatically we tell I want to go it up. But if you stand back, step back, and you think about, no, I want the stocks go down so I can buy more because I'm an investor. And now because the stock market is down, really is the time for investors to buy it on discount versus human psychology tells you like to stress, to get worried, and the behavior should be you go ahead and you sell your stocks with that discounted price. And people who sell, they are the ones who lose because then that guy or the girl next to you buys it from you on discount. Discounted price. So all these I'm talking, trying to make it as simple as possible.

You do a great job at that because I specifically remember in 2020 whenever the pandemic like first hit, and it was in February or maybe the first part of March, I think it was February, and there was that day where everything just plummeted. And I remember specifically, I remember this moment, um, my family, my husband and our kids, we were all, um, on vacation and we were in the mountains, and I, and I I remember my husband like looking at his phone and looking at his 401(k) and saying, oh my goodness, like, we have, you know, what are we going to do? Like, look at this. And it just being like this moment of dread, like you said. So it was like, as, as the person who's saying, um, well, we want, like, we want the stocks to go up, we want them to go up, whenever it goes down, we do get dread and we do get worried. So you're saying let's flip it around and seize the opportunity and let's say, okay, well, maybe I lost some money here and this and this fund or this in this area. Maybe it's a good opportunity to go and buy my share, uh, in the S&P or with this, with this fund over here. And then that, that would in some ways even offset the loss that you've made in that, in that other fund, uh, if you're buying low. Even though you lost, you've lost temporarily over here, if you're buying low somewhere else, would that make sense?

It totally makes sense. And I, I don't like making any assumptions, but seeing you, I'm guessing— and again, I don't want to make any case— your husband is young, so he still has the time horizon to invest. For someone who is 60 or 65 and did the pandemic time, the market crashed, and unfortunately they are in their 60s and they are invested in S&P 500 or the stocks, it's something wrong because they are taking money out of their 401(k) versus for someone like your husband, he still has the time horizon. He will just go ahead and to put more money because he's— let's say he works for the company and it's W-2 and he invests 10% of his salary to his 401(k). Now that same 10% amount is able to buy more shares of S&P 500 or whatever stock is that. So it is good in his case. But if someone again approaching the retirement, they need to be very careful. Overall, there are two types of assets. One is called equities, which is stocks, stocks. And another is bonds, which usually considered more safe, the bonds. But again, there is no safe investment, every investment can lose the value. But when you—

but when—

and the rule of thumb is like, how old are you? Let's say you are 40, then you need to have 40% in bonds, and then 60% you can have in stocks. But when you are approaching like 80, you need to have 80% in bonds and 20% in stocks. So you know, you were that asset allocation, what I call, and not I made this, and this is, by the way, a rule of thumb. There are more research you can do, and you need to make sure that your assets are allocated according to your risk tolerance and the timeframe and what is your goal. Because for someone, you can tell he wants to retire at 40, then he needs to make sure that if he retires at 40, whatever investment he or she has, it is supporting his lifestyle And the losses that you are talking about during pandemic, they are just paper losses because I'm sure your husband didn't go and sold and cash out all his 401(k).

Right.

But when you have the time horizon and the stocks are going down, that's really good. You buy more shares. And there is this method system called dollar cost averaging. So what it means, you always put, let's say, $1,000 in the market regardless of stocks go up or down. Down. So today, if the stock's up, your $1,000 maybe will buy 20 shares. Tomorrow they are down, it will buy 30 shares. So it starts to balance it. So you always put the same amount. And I always advise my followers and my loved ones, family, and everyone to do it automatic so you don't even think about it. So that money is gone. Now whatever left, we live on this money, you know.

So that is so good, so good. Automatically, I like that. Just wherever you can automate it to have it's going to happen. So, and I think that that also takes the emotion out of it so that at the end of the month you're not sitting there looking at the, looking at the market before you make that withdrawal, before you make that transfer. It's like, no, it's going to happen automatically because I understand that this is for the long term. I understand that there's going to be a dollar cost average and maybe this month that it is down or it is up, etc. But every single month I'm doing this automatically. And that's going to set me up for success. This is so good, Ohan.

I know you are in marketing, so you know more than anyone else knows that people make their decisions on behavioral part more than in logical part. So, and there is the research done that even data shows that we will, on emotions, we sometimes make decisions, which is not sometimes make logical sense. And I know maybe for another time we can talk about this, but there are some people who have logic and start paying off their debt starting from the highest interest that they have on their, their any type of debt. And that's the logical way of doing it because like you are saving the most in regards when it comes to cost. But there are people who don't want to think about logic, and majority of the people, if I'm not mistaken, is like 80%, 20% like type of ratio. They want to go with their emotions. In their case, better they start what's called snowball, which is like with the smallest loan, smallest credit card, regardless of what interest they have on it, which is, I know it's different topic, but they feel satisfied. Okay, I'm done with this small debt, I'm gonna move to the next one. They don't care about like what is the—

away, the saving. Yeah, that makes so much sense. We buy from emotion or we spend from emotion, and then we're going to justify it with logic, maybe, but it's always going to come from emotion. Absolutely. This is so good, Ohan. I see now why you're the money doctor. So for our listeners, where can they learn from you more, or is there a specific place that you would like to point them in the direction of to continue their financial freedom journey?

I mentioned a little bit about network, but that's the place to start to see where you are standing. So do you have more assets than liabilities, or you have more liabilities than assets? So you need to start from somewhere. In my case, what I will direct our listeners, if they would like to learn more about me and be in my world, how to say, they can go to my website, which is www. Ohanthemoneydoctor.com. From there they can join me and I have a guide which is totally free download. They can download the wealth roadmap, I call it, but that will be their blueprint to build wealth where they can start from setting up their goals. Then I talk there about cash flow, like budgeting, what comes in and what goes out. Also I talk about about debt payoff ideas. Also, I get a little bit introduction to saving and investing, what is the main difference. Then of course, after, we can stay in touch with them, but ohanthemoneydoctor.com is the easiest way to get hold of me.

Awesome, thank you so much for sharing that. So ohanthemoneydoctor.com, grab the Wealth Roadmap, which is the blueprint to building wealth for you and your family. So we are definitely going to put that in our notes here so everyone can go and grab that. Thank you so much, Ohan, for coming on. This was very enjoyable. I feel inspired right now, so I, I hope that everyone does also. Thank you so much, Ohan.

Likewise, and for you as well. I feel very much inspired and keep the positive Thank you for all the questions. Keep the smile and you are doing a great job changing one life at a time.

That's it. One life at a time. Awesome. Thank you, Ohad. We will see you all in the next episode. Have an awesome day. Hey gang, it's Lindsey. If you enjoyed today's show, it would mean so much for you to take 1 to 2 minutes and leave us a review right here on your podcast platform.. You can click directly on the link to our podcast page, scroll to where it says reviews, and leave us a 1 to 5 star review, 5-star preferably. To really be the gold star student, you can share with us what episode or what episodes you've enjoyed most and what you'd want to hear more of. I personally read every single review, and I would love to be able to share your review on one of our next episodes. So thank you so much for listening, and I will see you in the next episode.