Nelrae Pasha Ali: How to Teach Teens About Money and Investing

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Hello and welcome to Barron's The Way Forward. I'm Greg Bartellis, and my special guest is Nelre Pasha-Ali. She's the managing principal, branch manager, and senior financial advisor at Array Private Investment Group of Wells Fargo Financial Network in Jacksonville, Florida. Today she will discuss how advisors and parents can help teens develop an interest in investing. Welcome to the podcast.

Thank you.

So we were just, in all seriousness, talking about All in the Family before we turned on the mic and didn't expect to talk about All in the Family. But tell the audience why you were talking about All in the Family.

Right. So, you know, in early '70s, mid-'70s, we were talking about Archie Bunker, where there was an episode where his— him and his employees were on strike. And then the episode, he was at the end, they won the strike and got maybe a 5% interest rate. And Meathead sat there and was explaining how he actually lost because of inflation. They technically got a negative 2% salary. And I was a little kid, but I remember that the music was just dark. So I don't know why that hit home for me, but I was just probably 5 or 6. And I guess that was my future.

That's amazing.

Yeah, that was— it was very powerful. But yes, inflation can erodes your purchasing power and you don't even realize it.

Yeah, yeah. So a lot of people, irrespective of age, don't quite understand that. Correct. They get excited by small raises, but the purchasing power of the dollar, as you well know, has plummeted over the past century. And one of the few ways to actually deal with this is in investing and the power of compounding in stocks. Let's talk about the subject of, you know, teens and investing. And I know you have some firsthand experience.

I do, a mother of 4. 4 boys. Wow. Be clear. Yeah, so, you know, the big thing is, particularly when they start summer jobs, I always, with clients, I always try to explain to them, if kids are working, one of the things that I've done for myself is set up a Roth IRA account for the kids and sitting down, having conversations with them about the power of compounding. And of course, they're probably going to roll their eyes, but my husband and I, when they were they were about, I want to say about 13, they started getting their summer jobs. They had W-2 income. We stopped giving them gifts and we would make deposits into a Roth account. And I remember this one holiday, I was telling my boys, "Hey, we did this for you." And my then son who was 15 at the time, he said, "This is the worst gift ever." He's like, "When will I be able to touch this money?" And as I was explaining to him that it was for his retirement, you know, when he's 59 and a half, and he thought, "This is horrible. This is a horrible gift." Now that child, My child is now married. He's got 2 kids of his own. He's 26-plus, and he actually now appreciates that now that he sees the purchasing power and understanding savings. But what's funny is that at the time, I didn't think he was listening, but, you know, kids are watching you. They're listening. So, kind of drilling some of those saving techniques. So, for him, he puts away— I always say you have to pay yourself first. So, you save. Your money goes in the account, have something that's automatically going into a savings account or an investment so that you're living slightly below your means automatically. And I do that for everyone regardless whether you're children or kids. So for me, I think starting, the younger you start, the greater the compounding is. So, you know, having that conversation with the kids, but also the parents to kind of instill that is good.

Yeah. Did you put that money, if I may ask, into like S&P 500 index?

I did.

Yeah, yeah. Kind of the easy no-brainer that'll do well.

Yeah, 'cause you're starting with smaller amounts, so you don't wanna complicate it, you know, Obviously, they'd love to buy kind of those hot stock picks and technology and things like that. But I kind of actually told them we're going to put them in a diversified S&P or an ETF or a mutual fund that's just purely focused on growth. And I will say that if you incorporate your kids and kind of get in that statement and having the conversations, some of those boring prospectuses that most people don't look at, I'll try to have those for them. They usually highlight those top 10 or 15 stock holdings. They actually start to look at that. And a lot of those top 10 companies we're mostly familiar with, you can see them. And so even though they're in an ETF or a mutual fund, I'm always like, you hold that stock, you know, you hold that stock.

You're an owner of these companies. Exactly.

So they, all 4 of them now. So my kids, which I should stop calling kids 'cause I've got adults as well, but I've got from 26 to 16. Wow. They, it's funny because the older children that now are adults are, our youngest is 16. They're like, you, you better save. So he doesn't touch his savings. So any money that goes into his savings account, he does that, but he'll spend every dime in his checking account. So he'll always have it just to a dollar. He goes, Mom, I didn't overdraw it. I didn't touch my savings. I'm like, but you spent your, so yeah. So he's following the rules, but right on the line.

Yeah. Well, you know what, but what you described about, shaving off a little of the top investing. So you have that savings reflex, if you will. I mean, that's really what will be there the rest of their life. The dollar amounts should be bigger. They'll have the 401(k) or whatnot. So just having that dynamic at work won't be a heavy lift when the dollar amounts get bigger.

It's muscle memory. It's easier. I'm noticing now that my older two are older, that they're having that. My oldest, like I said, he's married. He's having conversation with his spouse about saving and things of that nature. So, I'm starting to see the work, the fruits of my labor are starting to—

Yeah, so you're way ahead of the pack, I would say, based just on what I can seem to gather. So you're the perfect person to talk to about this. Where are we to the extent you can say in America with teens and money? And I'd want to throw in just a couple extra points. There's of course day trading, Robinhood, all this stuff is accessible to everyone. There was the meme stocks, there's crypto, there's— So there's all these good and bad that good in terms of awareness and perhaps some lessons learned, but also bad in a way, 'cause speculation and all that is not slow, boring investing. So just kind of open it up.

Well, I was gonna say my boys are just like all the other, you know, I don't think they're millennials there. I think whatever, what's underneath the millennial there, but they've done the, they've tried to invest in the Robinhoods and, My two older ones, they got burned on the crypto and things of that nature, but you gotta let, they had to learn their lessons too. Right.

I mean, that is one school of thought, right? Like if you're gonna make an accident, you know, better that you fall off a tricycle than slamming your car into another one. So, right. Like learn the mistakes.

Exactly. Put some safeguards. I mean, there's certain assets they can't actually touch. So I knew when they were doing certain things, I mean, it was money that they earned, but it was assets that weren't going to affect them. It was gonna affect them emotionally 'cause they saved up for the whole year and they saw that deplete quickly. But it was a lesson that now it's kind of etched in their memory versus me trying to tell them on there. So now the older two both went through that during the crypto, during COVID and all that stuff. So now they're back to kind of that sound investing, It's because they experienced it, not necessarily because their mom told them so.

Yes. Yes. So where in terms of like high school, to what extent is this taught or are people learning on their own?

Well, you know, I think that's a big thing. I think it should be taught more. I don't think at this time there is a curriculum for financial planning. And honestly, I think we need it just as a country. So you're getting out of school and I went to Georgia Tech and math and science was natural for me, but I didn't really understand real planning until I started to get into this industry. To be honest with you, I didn't have anyone just in school that could, you know, they taught you about accounting and things of that nature, but stocks and bonds always seemed like a step away. And so There's now, I guess, philanthropic avenues where people are trying to get education in those colleges, which I think are good. And I actually have joined one of those where we're going to put the financial planning right in the college campus and giving access to them. And so, they all have— matter of fact, they'll have access to the Barrons and things of that nature. And so, I'm really passionate about that because I think that'll also help the next generation, but also you're going to get, I think, a broader diversification of new advisors because they'll have that interest, particularly when you're in college, you're trying to figure out that career path. So yeah, there's a lot of pluses, I think, with this exposure.

100%. And I mean, certainly on a vocation level, it's a job, it's a career path so many are unaware of. So just that's alone great. But also just being aware of it. I mean, we're all We're all in a way managing our own assets, right? We're all investing. It's all— so obviously it's helpful to get that help.

Yeah.

When a light bulb goes off for these kids, when they really get it and are determined to actually go, wow, this is awesome, like, you know, to the extent you can tell, is there a common thing? Is it like the magic of compounding that they get? Or is it maybe they hear of a friend who made a lot of money and— or is it all over the place? I'm just trying to get a sense of that.

What—

because it's like, is there— that little key to unlock it?

Obviously, each person can be different in personalities, but what I find where they get it, even with clients, it takes about a year. The saying is, how do you create a habit? It takes about 21 days, 3 weeks. Well, I think it probably takes at least a good year of seeing those statements and saving. And so if you're able to save 10% or 15% of your salary and you're thinking those little numbers, they start to add up. On there. But so it's patience on there. And I also believe that you've got to separate the debit card and the online from that particular savings account. So it goes back to, I mean, even with kids, but with clients, I always say it's the 3 buckets of money. That first bucket, you know, money goes in, money goes out. That's the checking. You can have $5 or $5,000. That second bucket's the saving or emergency bucket. And depending on lifestyle and spending, there's a certain amount of months that you should have in there to The third bucket is really the investment piece. So what I do for kids is similar to what I do for clients. I mentor, I always tell them, I said, our goal is to get you the first two buckets, have your, obviously your checking account. You want to build up the second bucket. But I kind of talk to them about the compounding. I talk about the stocks that they like. And I say, but to get to that third bucket, we got to fill up that second bucket. And that requires them to really put pen to paper of how much do I need on a monthly basis? And so, I believe you can start in high school on there. You know, when they're little, you can control everything, but when they become teenagers, they have their own opinions. But once they start to see that bucket growing, you know, I think a lot of them take that ownership on there. And then they also realize, hey, you know what, I can live off of less. And by the time they're getting that quote unquote real job, that muscle's already built in. And so I see even with my own children, they're asking each other, hey, what's the 401(k)? What are they matching? Are my children having conversations about it?

That's a really nice question to overhear.

I know. I said, did I just hear that? So, and I get, like I said, I mentor a lot of children, teenagers and college kids and kids, I call them kids, but even out of, you know, 5 years out of college and I'll get calls about, I got my 401(k), will you help me, you know, look at this? So they're, I think they're getting it. It's just like with anything, it takes a little time. And so patience and repeating it. I think there's a saying, if you repeat it 3 times, it becomes Truth or something. I think that's if you repeat a lie 3 times, which is not a good habit.

It's the power of 3. It's also in writing. It's like, dun, dun, dun, dun. So one thing that's encouraging though is that Wells Fargo did a survey a couple of years ago and it said that 75% of the teens surveyed, age 13 to 17, were interested in investing. And then 93% said they believed they'd be financially better off if they learned how. So that's really interesting and eye-opening because if you just looked at the apparent evidence, that wouldn't be entirely clear, the disconnect between perceived reality and— So I don't know, tell me more about that.

[Speaker:JENNIFER_WRIGHT] You know, we live in this instant society, right? You got the Instagram, Facebooks and things, but I don't know if that's really the majority of people. You know, there's a debate on that, I think. So kids, if, you know, the earlier you start, I think they would be interested because, you know, I remember just being a child myself. I had these great parents, but I wanted to definitely get under their thumb. I wanted to be independent. So if I was taught early on how to save and what the impact of that would be, financial freedom, I would've been really curious about that. But you also have to acknowledge that sometimes adults don't know how to do that on there. So I do think that kids are interested and I've seen it personally. And it's just that know-how. And I will tell you, With clients, particularly the next generation, we have had a lot of success of— particularly clients would ask us, would you be willing to talk to our kid? He's getting ready to go off to school, or she's getting ready to go off to school. And I've done that. And I will literally bring them into the office without their parents. We make sure they get the royal treatment in the office. And we'll put their budget together for school. And what I have found over the years— and some of these kids are now adults in their 30s and such— we have a better financial relationship with them than their parents do. They will call us. I've had clients' children call me when one was saving for the ring for his now wife, and he wanted to make sure that, one, he was getting the right one, and he wanted to prepare to how to save it. And this is the same kid that would overdraw his account when he was in school. And I told him, I was like, put the debit card up. So it's really interesting because these are the kids that I would start with when they were 17, 18, going off to school, and they would start their little investments. And so now they're in their 30s and they have their savings and they're having life events. One is, I'll give you an example. One is a doctor and he's obviously making plenty of money, but he wanted to really save for a house. He needed some tax advice. We finally got him set up so he has his 401(k). He's got all these things now. Now he's calling me because he needs the mortgage, but he's also getting married. And it was funny because I met his parents parents a couple of months ago for a review. And the parents didn't know that he was getting ready to propose to his—

Borderline awkward for you?

Right, right. So I had almost spilled the beans. And the son had called me, he goes, "Hey, I heard you're getting ready to meet my parents today." I go, "Yeah." He goes, "They do not know." I was like, "Oh, glad you said that." Because I— So I thought that's kind of interesting. But kids are listening, you know, they are. So—

Yeah, that's great, by the way. It's very heartwarming that You were trusted so much and also just like, wow, I remember when you were here and now look how far you've come already.

Yeah, it means I'm getting old. I'm saying.

One way to frame it. And speaking of framing, you mentioned earlier financial freedom. And I think it kind of spurred something in my mind. I mean, if you look, if you try to, if you say, look, the holding's going up, holding up is going up. Okay. That's great. But more money to what end? You know, a kid might be like, that's cool. But I mean, if it's reframed more as a means to an end, that maybe there's something that they're dying to do or to get, like, "Oh, I wanna get tickets for this show or see a game across the country," or whatever it might be. If it's a little aspirational and again, a means to an end, it arguably could become much more tangible than just larger numbers on a screen.

I think this generation is not motivated by that. They're motivated by experiences, just in general. So you have to— what I find is you have to tie it to something greater than that where I think my generation was like, success, you need this, you need that. They're more about the experience and how they feel. And as I say to them, that's great, but poverty is a great motivator. So we need to figure out how to do it. So depending on what their goals are, one of my clients' son, he's 26 and he loves to buy cars and build them up. And so he was saving for these particular parts that were relatively really expensive, which I was kind of shocked about. And he also wanted to save to really put a down payment on the house. But with rates being so high right now, he was willing to wait. So we kind of put a plan together. I said, okay, these are, you know, we put the wants and the needs, but we put the 2-year plan and we put the 5-year plan. And I said, you have enough resources that you can actually save for both. And we looked at his budget. I mean, do you know how much people spend on coffee? So it's like, if you could skip coffee, you won't even notice.

Yeah, well, I know that every time I go to Starbucks and grab a venti, it costs me exactly $3.52. But thankfully, I'm not a teenager. But yeah.

I know, I told them, I was like, I don't know if you can afford this lifestyle as I'm getting my coffee. Yeah. Yeah. So it's funny. My son, who is now 20, he's a junior in college. When he was about— oh, goodness. I want to say he was in middle school and that I always mention middle school because those are the last years that I actually get to hang out with them. And every morning we would stop and I'd go to Starbucks and there was this bagel shop right next door and we would have these moments in middle school for me, for the kids was like the last moments of they still liked me. And so I was trying to capture that. And so one day we were going there and I went so much that it was like Norm from Cheers. Hey, you know, and so he turns to me and he says, Mom, You always said it's important to invest in things that, you know, and I was like, yeah, yeah. And he was like, do you own Starbucks? And I looked up, I was like, well, and I kept going. I remember thinking I was talking about the mutual funds and things like that. And he's like, you're in here a lot. I was like, yeah, I need to. So it's just really funny 'cause they're listening to you also.

Yeah. Yeah. And by the way, that's the second TV sitcom reference we got in the show. All in the Family. They get one more in here.

Yeah. I grew up watching a lot of TV. Yeah.

Well, I think all those shows from the '70s or '80s are like emblazoned in our minds and the jingles, the theme songs, all that.

Yes, the commercials.

All of that. Yeah, yeah.

We didn't have all the things these kids had.

Yeah, well, we all watched the same things at the same time. There were far fewer options, so.

Exactly. 3 channels.

Yeah, right? So what, you know, I was curious about something with compounding. Albert Einstein famously said it's the 8th wonder of the world. And he said, he who understands it earns it. He who doesn't pays it. Awesome quote.

Yeah.

And there are different ways for it to click. I remember when I was growing up, there was a book about the rice on the chessboard, and there was like, oh, you can double the number of rice on each, and then it's like, sure, and then boom, it went to like a gazillion. And most people understand and appreciate the power of compounding by dint of simply the numbers exploding over time higher, the percentage gains. But I think there's another interesting way to approach it. So for example, you could take a given amount of money. So let's say $500,000 and look at the percentage that is required to make additional increments of the same amount. So let's go through it. So if you have $500,000 to get to $1 million, you need to 100% gain to double the $500,000. And then to get from $1 million to $1.5 million for that next $500,000, you only need a 50% gain.

Right.

And to get from $1.5 million to $2 million, 33%. And then we go to 25%, then 20%, 6%. I won't go on too long.

Right.

16%, 6%, 14%, 3%, 12%, 5%, 11%, 1%. Then when you get to $5 million, you only need 5%. I'm sorry, 10%. To get to that $5.5 million. So, you know, it's like, I don't know, it's pretty wild. And then I think like there's stats like most of Warren Buffett's wealth was created in like the last 10 years or some such, you know, thing like that. But I don't know to what extent this idea works. And of course you could use $50 for teens. Of course, these are big numbers, but I don't know.

Well, I would put that into real-world terms. So a client has X amount of dollars and they need a certain percentage to live off of. And the majority of my clients have been living their life far better than they did when they retired, just because things cost and every day is Saturday. So you're thinking about all these wonderful travels, but they actually have never tapped into their principal. But the ones that have been the best performers were the ones, assuming that you're allocated properly, that just stayed the course. They went through the storm. They weren't trying to time the market. They, you know, we didn't get overly emotional. And, you know, life is happening and there's always going to be a crisis. I'm convinced of that now after 20-some years. There's always going to be a crisis on there. And there's probably the best time to invest when there's crisis. So I was talking to a couple of their advisors in the last couple of days and I said, I actually prefer I prefer when the market's correcting. I'm comfortable in that. I like that. Those are the opportunities. And my clients, a majority of my clients have been with me for so long that they understand that cost. So I don't, you know, once you've gone through a storm and you survived it, you get a little less afraid each time. So I think the compounding is also powerful, but also the fear, the longer you've invested and you've experienced things and survived it, the less fearful you are as the next crisis is happening. I just, I'm probably going off a point, but I learned that during the crisis in 2007 and 2009, it was my older clients that were less fearful. My younger clients who never experienced that, they were in panic mode. So I was learning actually from my older clients at the time, 'cause I was like, I wanna call you first. And I realized that, wait, let's—

[Speaker:BRANDON] They're like, it's okay, don't worry about it.

[Speaker:JANELLE] Yeah, oh, we've been through this before. And interesting enough, they were not necessarily— they weren't a bond. They were dividend stocks. They were quality companies. They weren't concerned about they were going to go out of business. So that actually helped me. And interesting enough, my business grows when the market goes down.

Interesting. Interesting.

But yeah, the compounding is— the best way to fight inflation is to be invested in those things that cause inflation. Companies.

Yeah.

Yeah.

Well, it's interesting. You mentioned the older investors who've been in different market cycles who get better and they don't sweat it so much. And what's interesting, even though let's say there's a 10% decline and they have a really big portfolio. So on an absolute basis, there's a larger dollar drop. However, they still have a lot more money in their portfolio so they can sleep well at night. Like, all right, I lost 10%, but I got a lot more than when I was 20 years younger. And they've been through it as well. Younger people don't have much and they're gonna like covet that and then they get scared and they don't know. So yeah. Yeah.

It's, I love to, when particularly if we've got at least 10 years or more of investing, when we're going through crisis, I love to show them, okay, here's what you originally put into the portfolio. But what happens is it's, you know, it's perception is 90% of reality. They reset their brain. They're like, well, it's doubled. So now this is the new number and this, you know, so just reminding them that it's a marathon, not a sprint. And here's where we were and, Even with the market, you know, oh, market's down. Oh, it's, you know, maybe we should be into cash. And I'm like, well, let's see what we've done if we were in cash all this time. You would've just been taking out of your principal. And so it's just reminding them that, you know, the world's probably not coming to an end. You know, we can never guarantee.

Right. So what are some advice you'd have for in terms of discussions that advisors should have with parents on this issue and also maybe just directly to parents who are listening about conducive ways ways to, I don't know, work with their teens to try to cultivate an interest in this? And I know everyone's different.

Just sitting down with them. It's different. I'm a parent. So as much degrees and experience that I have, it's still, I could say the same thing and a friend of mine could say it that they're like, "Yeah, that sounds brilliant." So using the village, but I think the important is really having that conversation and explaining them the value and everyone's values and what they value is different. So I'll give you an For example, just in my family, my oldest son, he really, from the time he came out of that womb, he wanted to be independent. So it was more of the more you save, the less I have to put, the more control you have. Whoever holds the gold rules. So that was a motivator for him. My youngest son, he loves the online with his friends playing games. And his whole thing is trying to get the— he uses his debit card to pay for the I don't know if it's a streaming app, but to have the games there. So I said, listen, the more you save, you know, you'll have X amount of dollars for your games and then X amount of dollars over here. So he's great at saving. He won't touch his savings on there. He knows he needs to put a certain percentage over there. And so for him, that makes him happy. He puts his money or he does that and he knows the rest of that is his to spend. But it's just, you know, each child is motivated differently. I'm sure any And I think any parent that's listening right now can totally agree with that. And I believe mothers know their kids. So, I've got 4 of them and there are 4 different ways that they're motivated. So, what I did with one kid, I found out very early on, "Oh, that didn't work with this one. I gotta change it up." So, I'm still doing that. I'm still trying. I am, knock on wood, I've got one that's now on my team and he was the one that used to, we used to butt heads more than anyone and he seems to be, It's funny. It's like, wow, he drew a line. He goes, "You know, Mom, you're pretty cool. I think I wanna do that." So, it just depends on, you know, what— figuring out what motivates them. And I learned this from my mother who manipulated all of us into doing exactly what we were supposed to do. Her favorite phrase was like, "I'd like to see you raise your children without manipulation." But just figuring out what they want and kind of working backwards. To getting them to do what they need to do. And saving itself, I think, would empower them because they're, you know, I always say the statement, but they can go online and view it. And like with my kids, they have an account at a credit union that we don't really use. We just put money over there and save. And this was money that we saved when they were much younger so that they didn't necessarily weren't involved with that. And so when they became teenagers, And we show them, here's the money we've been saving for you and here's what you could do. Here's what you can do. That's actually a little bit powerful as well. And also, I will tell you this, one of the tricks we learned was, they go into a store and they're like, I want to buy this, I want to buy that. Give them X amount of dollars and tell them, okay, whatever you save, you keep. They'll come out and buy a 99 cents pencil. It is real. I'm like, you don't mind spending my money, but try to spend theirs. Oh no.

Right, right, right.

I love that.

That's great. So I have a question now, but more specifically in terms of investment choices for teens, when it comes to presumably when you still have input, I guess. So here's a question. So you could do, one approach would be like the personal portfolio. Your kid buys stuff on Amazon, Apple, and Starbucks. Let's say that would be like a common teen or Nike, whatever. Right? Another approach might be simply buy an index fund. Done. Another approach could be 90% in an index fund, 10% play money, which the teen can go crazy with, do whatever the heck they want. But then you're getting, you're almost a guaranteed good return, but there's, you know, in that—

Probably a guaranteed loss on whatever.

Right, whatever. But the idea is you're pulling them into the ecosystem. Any thoughts on that?

You know, I like that 90/10. You know, my immediate thought is put it in an index or a mutual fund and leave it alone. But, To get them to buy in, I think, and it also depends on personalities, but what I've found in general, and this is with clients as well, stock market, no one understands. They don't understand S&P, but they know what Starbucks is and IBM and Coca-Cola, Apple, and all the hot things out there. So if you're putting it, keeping a diverse portfolio, maybe getting an index fund or a mutual fund, particularly because they're starting with a smaller amount. So buying individual stocks, it's going to be hard to diversify. So I really, I still want to manage risk properly. So I would lean towards a mutual fund or an index fund. And then if, you know, to keep them engaged for that particular personality, allowing them to be a little bit more involved in ideally, hopefully still doing a fund or an index or, you know, the UITs, those where you can hold a group of stocks on there. I will, and I've actually utilized this for younger people where they want to be involved. So, you know, finding something that gives them a basket of holdings that doesn't cost a whole lot to get in, but it's, you know, it's still actively diversified so they're not doing harm. That helps them and they like that. So, and as that grows, they can, you know, I have some clients that like to participate. You know, go back to my kids. I have two that interested in the stock, so they would actually pick the stocks for the other, for all four of them. And then I would, you know, I don't want to censor it, but on there, but what I was wanting them to do was just getting excited about it. And so I think that's, you know, the first thing is just getting them engaged and realizing, you know, they can actually own their future. So, you know, I think there's commercials about you talking to your future self, but thinking about what you're doing today will have a big impact on where you are tomorrow. And again, I've got kids, you know, my oldest, he wanted to be independent from coming out of the womb, and others are just— they're motivated by playing computer games. So you just figure out what motivates them and, you know, kind of work backwards.

I remember the beginning of my career, I made Precious Little. I read a book by Jane Bryant Quinn. It was a really fat book and it was great. And I just thought she did a fantastic job with demystifying finance, laying out— it was great. And My first full-time job paid me $13,400. And I still put a little into the 401(k). And I remember, yeah, it was just like a sliver, but there was enough.

It matters.

Yeah, it mattered. And then around that time, I don't know if it was before or after, there were like when DRIP programs, dividend reinvestment programs, they're more of a thing. And I bought, I think Aflac was my first stock back in the day. Yeah. I was like, I think, I don't think the duck was born yet.

Oh, okay.

Or maybe it's great-grandparents or I don't know, but I don't think it I don't think it was a thing yet.

I mean, the actor that made it famous, his voice. I forget the actor name.

Yeah, I don't know who it is. So one more question here on this. What are your thoughts, pros and cons, on stock picking contests?

Oh my gosh. I'm not a speculator.

Because look, the winner is always going to be picking some microcap or some—

No, I am— I always highlight as an advisor, I am not the hot stock pick person. I purposely make sure people know this is a marathon. It's, you know, I like quality. I, you know, I like boring things that you can, you know, you can tangibly see. I think it helps people when markets are going sideways. You can see the company. You know, we talked about a few before we went on air and, you know, there's companies out there that I'll give an example without, you know, I don't wanna mention names, but Chick-fil-A, which is a privately held company. And my son, we're in the drive-thru and Chick-fil-A's very busy. And my son's like, "How are these other, you know, big name companies, how are they in business? Like Chick-fil-A's kicking their butt." And I said, "Well, there's the regional." He goes, "What do you mean?" I said, "Well, you can go to any place on the planet and you're gonna get, you can see that bag, you know, or you can see that bottle." And so they have a larger client base on there. But if you look at Chick-fil-A, even though it's privately held, a lot of what they sell is publicly traded. The ketchup, it is. I like a diversified portfolio because you're investing. I always try to tell people, where'd you spend your money today? 99% of it probably is a publicly traded company. And depending on what the year is, I mean, tech stocks have done amazing. And they were the leader that pulled the market down, what is it, in 2022 on there. And they, you know, they were great last year in those boring dividend stocks. They only did single-digit returns, but they were only down single digits the year before. And so you put the two years together, they all pretty much got the same return itself. So when you're trying to pick just a stock or a company, I kind of equate it to the, traffic, and it seems like every time this lane is going faster, you move into it, and then it slows down. It's like, I should stay there.

Exactly.

So I, you know, I have companies that I like, but I try to take the emotion out of it and utilize the, you know, the education to make sure it's still diversified. And I mean, even my own money, I still have separate fund managers that manage it because there's, you know, I ride a bike that goes nowhere and I love it, but apparently I just don't understand why they're—

but I get like a $4 stock now.

Yeah, I mean, so if I, you know, I'm just like, this is the best thing since sliced bread. I mean, I get up every morning and I love it, but apparently I'm in the minority.

Maybe I should try it.

It's great, just great for your health, you know. So, you know, you've got to take your emotions out of it and just look at the I remember I have a son that's computer science, technology, he's a coder. And he mentioned NVIDIA to me a couple of years ago. He goes, "Mom, you should really look into NVIDIA." And we liked it. We held it in our trust account. And then of course it went down. And he said, he goes, "Oh my God, I'm so sorry. I should have never." I said, "No, no, this is a long-term." I said, "These are things you need to, it's a long-term play." And then of course, And he's like, "I couldn't do your job. It's so stressful." And I said, "Well, it wasn't that I bought it because it was emotional. I just looked at the facts and it made sense." I said, "Now, a company can go away, but it was a piece of a larger piece of the pie." So even though it was down for that period of time, there was other things that were up. And again, these are assets that we did not need for many years. So we've got time for that. He's like, oh, I get it. So those are interesting things. But, and again, I try to involve them in just kind of thinking through their thought process. But I would say stock picking, try to take emotion out of that and make sure you stick to the sound things. Because I've heard of individuals, depending on how they feel about the election, they're going to do XYZ. And it goes the exact opposite of what they think. And so they're selling when they should have bought. And it's just like, what are you doing? You're blowing up people's portfolios based off of your views versus what the analysts have said.

Yeah. I mean, I think a key is keeping the long view. Investing is a marathon. We go through market cycles. There's going to be leadership change, value or growth that goes back and forth. And It's pretty impossible to, basically impossible to predict. So it's the old saying, time in the market is better than timing the market. And I think that there's a lot of wisdom in that statement.

That is a big deal. It's not timing otherwise, it's the time in the market. And so, I mean, you have those things where you get lucky and then that reinforces, you're like, oh, I can do it again. It's, you know.

Right, and hope springs eternal. That's why everyone, yeah.

You know, so it's, you know, I find the, you know, I've got a few things that, oh, they were great, but most of my portfolio is very well diversified and those have been the best performers.

Yeah, and it also— a benefit of that is you're not going to be as compulsively looking at your portfolio, like when you have a big position in individual stock. And then for a younger person, if it blows up, then they might be really discouraged and be like, "Oh, screw this." "I lost my shirt!" Right, right. "I'm never touching stocks again!" You hear that from adults.

They're like, "I lost my shirt!" And it's like, "What did you do?" And usually it's, "I sold everything at the lowest point ever, and then I just waited." What did you wait for? For the market to come back. Oh, so you waited 60% of the market? Oh, okay, great. So you, yeah, you—

Right. And then they'll ride it down and then sell again at the wrong time. Yeah.

What I have found is that individuals make huge mistakes. But if you, you know, if you focus on the plan and it's actively managed, it's well diversified, tends to get through the storm. And You see your money doubling. And then, you know, I have a lot of clients that, like I said, knock on wood, none have actually tapped into their principal, but they have spent more money than what we originally planned 20 years ago or 10 years ago. And if we did not, you know, if we did not put the planning in place and have equities and things of that nature that were going to grow, their lifestyle would have been far different. I mean, I've got clients who have, you know, when they first retired, they were just going to get an RV and, they were gonna camp and now they're on, you know, world cruises for 6 months out of the year, which is awesome. But that wasn't in the plan, you know, 10 years ago.

I think it's great that you can have such palpable proof of adding value, right? I mean, it's like, yeah, there it is. You see it. That's gotta be nice. Yeah. So I wanna ask, you know, before we wrap up, in terms of adding value, You have some exciting news in terms of your career. Yeah. You know, tell us what happened.

Yeah, I actually moved into the independent channel. And so I actually went from being a managing director to a managing partner and ownership of my company. And I actually teamed up with two additional individuals. So all of our staff that worked for Wells Fargo now works for me and We've got a very happy company. So I went from— let's see, we now have, I think, 10. We have 3 advisors. We have 3 registered CAs. We have 2 marketing, just for marketing. Then we have a next-gen that's currently in training to help with the planning and will be a future financial advisor.

That's great. And so you have a lot more, I guess, more autonomy. And tell me what else.

Absolutely. So, I mean, I think the biggest thing, what what really attracted me to the independent channel was actually being able to control the culture. And to really— I have a very big passion of giving back and mentoring. And so I, you know, when I looked at it and did a lot, I did a lot of due diligence for probably 18 months. It wasn't just the autonomy, but it was the ability that I could control the culture. And with the right individual, I could actually, you know, help other other people grow in this, in this business. So it's exciting, and I wanted to make sure that, you know, others had opportunities to grow. But what I found is that it has allowed me to give back to my team. So, I mean, some of the things that I realized as I was going through this is that a lot of our support staff, they weren't, they weren't getting out much. They were working at their desk. They, you know, I realized that the way the office was structured, they didn't— there wasn't a lot of light coming into their room. So when we looked at real estate, I wanted to make sure we had big windows. I wanted to make sure there was greenery. I wanted to make sure that they had a lot of healthy options to eat. You know, you can't tell people how to live their life, but I wanted to eliminate some of the reasons on why they couldn't. So my staff have access, some of their healthcare benefits, as they have a gym membership that's covered. And the reason I did that, I'm a big proponent about health, and I think health and wealth come hand in hand. And so I wanted to make sure that all of our tides lifted together because some of the people I have, CA and I, we've been together almost the entire time. And so I wanted to, you know, if I'm able to retire, but my staff is not, then I must have done something wrong. And so I wanted to make sure that they had the same opportunities on there. And so as I was going through the due diligence, I was talking to the team and giving them my pros and cons and what they thought. And I was pretty honored because they, you know, you've gotta trust me and say, hey, I want you to cross the street. And they were like, yeah, we'll go through the fire with you. I'm like, there's no fire, there's no fire.

It's a flicker, that's all.

Yeah, so they're excited, they're happy and everyone, you know, got, you know.

I think that's such an interesting thing because presumably it's almost a conversation and collaborative. I mean, you're the boss, but it's like, hey, what do you think? And you can get in real-time feedback.

Right. I mean, it was, it was a big deal. And, you know, some of the things were unknown factors to cross. But now that I'm across and it's been a little over 6 months, what I uncovered is that a lot of I was already doing. So that was kind of cool. But also I've got staff that operationally they knew a lot of the other things that, you know, I'm great at being an advisor, but now I'm in a managerial role and I've got HR and I've got all these reports that we need to do. And, you know, we run a very clean book. So that was great. But I found that, you know, we already had the team members that had some of that expertise. And so I'm leaning on them for some of those things. But also I'm finding that I now get to know probably more than I need to know about my staff. They'll come in and they're not complaining about the quality of life. It's just little things.

I'm like, "Huh?" So I guess it gives them, they feel so comfortable with you, they can let their hair down and kind of— Yeah, it's like, right.

It's little things like, "Well, you know, such and such is, you know." It's little things. It's funny because they're all about the solution, but it's like if I pay one person attention more than the other, it's like, I feel like my kids. So we're learning each other, but it's all good stuff. It's just everything. Everyone wanting to make sure they're doing the right thing. And so my personality, I have to, you know, someone, I've got folks that know me and so I can be very blunt and direct and others that are newer, I have to realize, oh, you know, there's like, they're like, I'm like, don't take me too, I'm very sarcastic, I'm so sorry, you know? So I have to adjust and then, you know, I always say, I'm like, are you, you know, it's okay, so.

Yeah, yeah, that's great. Well, kind of like an extended family in a way.

Yeah, so it's a great opportunity, but ownership is definitely, it's a big deal. So yeah, I have my own firm. Oh, that's kind of cool.

Very exciting.

But I have two partners. Let me put that out there. We should say that collectively. So, and that's the other thing. I have great, these are two people that I've known for at least a decade or more. So our relationship happened very organically. And so it was just, you know, the moon, you know, everything was aligned properly and it's nice. It's great.

Feel free to mention their names.

Yes. Katrina Everett and Anthony Branch are the two other FAs and owners of of Array Private Investment Advisory Group with Wells Fargo Financial Network.

Awesome. All right. Well, I think this is a great way to wrap it up.

Great. Well, thank you for having me.

Oh, my pleasure. It's been great chatting. My guest has been Nelre Pasha-Ali. For more podcasts and the latest wealth management news, visit barons.com/advisor. For The Way Forward, I'm Greg Bartalus.

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