Mike Andes opens a Labor Day livestream, mentioning plans for a public live video and then answers audience questions from a form. In this chunk he describes his process for deciding on investments: comparing risk versus return, choosing lower-risk/lower-return options when seeking security, and higher-risk/higher-return options when seeking growth. He gives numeric examples: savings accounts (~1–2% interest), stock market historical averages (~8–10% annually) and notes higher variance for stocks; real estate and business investments can offer much larger upside (e.g., 10x) but also risk total loss.
Questions this video answers
About 1–2% interest.
About 8–10% per year.
Hello, Augusta Nation. Hope you're all doing super well. Happy Labor Day. Let's go and hop in. I was gonna do a live video for the public because I haven't made videos for a couple days, but I figured I would hop in here because there's a few questions that were asked on the form. So we'll jump into those and. Yeah. All right, let me see if I can pull these up. I looked through a couple of these. Let me see. Share my screen.
All right.
Zoom in here.
Kyle, what is your process you go through to see if an investment is a wise one?
You're comparing risk against ROI in basically every investment, right? So the higher the risk, the greater the ROI should be, but you're balancing that out. So if two. Two investment options have similar returns, but one is more risky, that's probably the one I'm not going to take. Right. So you're always comparing risk versus return on investment and seeing which one is the one you prefer. And it's really just a matter of at that given stage of your life and your business and your financials, what, what you're preferring more, whether it be risk, you're wanting to get better roi, or if you are looking for more security and safety and you're willing to take a less of an ROI in exchange for a lower return. And so, like, the least, you know, the lowest return, lowest risk you can have is like a savings account and get like 1 2% of an interest rate. If you put your money in a savings account, as long as the FDIC and the federal government still backs all the money, you're gonna get 1 or 2% low risk, low return. You know, the stock market, on average 8 to 10% a year, but again, there's higher risk there because it could go down 20 or 30% in a given year, but it could go up 20 or 30%. When you start talking about real estate, when you start talking about investments into businesses that could 10x but could also go to 0, could. So there's just more and more risk, and it usually comes down to return on investment versus your tolerance for risk.
The other day I had a question about putting 200 bucks into my Roth IRA. Since then, I've been doing a little bit more research on what the best ROI is in the long term. I'm seeing that some financial advisors say that your money is better invested elsewhere if you know how long. If you know long term, you will have multiple businesses and source of cash flow to take care of you when you are older. I know that my end goal is to own my own businesses and start to diversify into rental properties within the next five to 10 years. In your opinion, should I even worry about putting money into my IRA or just stack that cash to put into my second location and snowball into a third location down the road? Every person is different. Like personally I would probably say the latter and that is focus on forms of investment that are going to do a of lot a lot more than 5, 10, 15% a year, which is what your IRA is going to like, max out up. Now the thing is you're going to save on taxes. So the reason you do a Roth IRA is more from a tax perspective. And you do it, it's a tax advantage way to put money into the market. But again, if you're going to take the money out early and you're going to tax on it anyways, that's when it's just like, well, you might want to just put into the businesses and snowball that money before you start thinking about doing more passive forms of investing like a Roth ira. And so I, until literally last year, I only ever put money into my ira. And I only did the IRA because like the last day of the year and I was like, oh, there's going to be a tax bill. Goodness gracious. Because I had made quite a bit of money in the stock market last year. And so that's when I was like, oh, I should go start a Roth ira. Went into Fidelity Investments, started an account, threw, threw six grand into there just for the tax benefit. But I, I would focus on like you're not going to become, it just depends on your goal, right? If you're wanting to retire with a million dollars and you know, you probably good idea just like keep stacking money into an IRA over the course of the next 50 years if your goal is to have multiple businesses and bunch of rental property and like a whole portfolio, probably not going to happen. Putting $200 a month aside into your IRA. When will you be sending out the logins for Dashboard for the new franchisees? I was wanting to do the Zooper training before coming out to this week's training. You should have got an email on Friday from Lonnie. If you did not email Lonnie L O N I@augusta longerservices.com and she'll get that to you tomorrow. It was funny yesterday I got back home from church and some one of the franchisees had got their dates crossed up, was at my studio. So they're gonna have to spend a couple days figuring out what to do in Bellingham, so. All right. I think that's all I got in terms of questions. Hope you all have a fantastic Labor Day. I'm gonna go ahead and hop on, do a live stream on the public channel. Haven't done one for almost a month now. So hope you all have a great day, and we'll see you guys tomorrow. Make sure if you have questions, fill out the form, and we'll get to it tomorrow.
