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Speaker 1: Behind every VP Phillip. Thousands of people across America go

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Speaker 1: to work every day. People producing energy, all shore, people

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Speaker 1: turning it into products at our refineries, people doing R

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Speaker 1: and D to make products that are better for your engine.

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Speaker 1: People trading and shipping fuels to their destinations. And the

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Speaker 1: people who help you at one of VP's growing family

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Speaker 1: of retail stations. They're part of almost three hundred thousand

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Speaker 1: jobs VP supports across the country. Learn more at VP

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Speaker 1: dot com. Slash Investing in America.

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Speaker 2: Four one K right, this this is the beginning of

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Speaker 2: the year. The four one K is a lot of

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Speaker 2: people's first way to start investing in the stock market. Right,

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Speaker 2: most people actually the majority of their stock investment, or

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Speaker 2: if they only they only have one stock investment, and

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Speaker 2: that is the four one K. Right. A lot of

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Speaker 2: people don't have outside stock investments outside of a retirement plan.

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Speaker 2: So what is your suggestion for people, young people or

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Speaker 2: old people whatever that you know might have just signed

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Speaker 2: up for the four one K or are in a

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Speaker 2: four one K. What's your thoughts on allocation and things

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Speaker 2: of that nature.

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Speaker 3: No, I think that that's a really good question. I

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Speaker 3: did want to address what you all said about the

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Speaker 3: tax deductions before we move forward, because I think that

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Speaker 3: that's important and significant when you live your life like

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Speaker 3: a business, the expenses that you incur as an individual,

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Speaker 3: you can, like you said right off, as a business.

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Speaker 3: So like the Internet that you're using on a regular basis,

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Speaker 3: you already know you was gonna be scrolling through Insagram,

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Speaker 3: following uy L following, following for Shot, following, Troy following,

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Speaker 3: like y'all said, black up. Sorry, but you also use

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Speaker 3: your Internet to run your business. Your cell phone, you

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Speaker 3: gonna call your girlfriend, You gonna gossip about that guy

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Speaker 3: you swipe right on and he showed up at the

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Speaker 3: day a whole catfish. But guess what else? You gonna

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Speaker 3: use your cell phone to call? Make business calls in

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Speaker 3: order to generate business. Like when I started looking at

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Speaker 3: the number of tax deductions that are available for your business,

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Speaker 3: those number over four hundred deductions. If you're going on

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Speaker 3: vacation but you're doing business for a certain percentage of time,

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Speaker 3: that's no longer a business. I mean, that's no longer

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Speaker 3: a vacation. That's now business travel. So when I started

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Speaker 3: to reorient my mind into thinking about what are the

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Speaker 3: things that I'm going to do anyway, you know, just

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Speaker 3: as an individual, how can I reclassify that as my business?

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Speaker 3: I was able to see how I can reduce the

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Speaker 3: taxable income because you all talked about taxes being expensive.

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Speaker 3: Taxes are expensive the more income that you earn, because

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Speaker 3: the percentage that they charge in taxes increases along with

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Speaker 3: your income. With deductions, you're able to reduce that tax liability.

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Speaker 3: And that's what deductions really afford to you. So that

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Speaker 3: was I really like how you all talked about that.

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Speaker 3: In regard to the four oh one K, four O

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Speaker 3: three B if you're working with a nonprofit organization four

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Speaker 3: one K four or three B TSP. If you're self employed,

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Speaker 3: it's the IRIS traditional and WROTH and we can talk

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Speaker 3: about that as well. The first thing that you want

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Speaker 3: to do is you want to ask your employer, because

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Speaker 3: the four to oh one K is an employer sponsor program,

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Speaker 3: if they can your contribution and how much they match

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Speaker 3: per dollar. So one of my employers match up to

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Speaker 3: six percent of the salary that I was earning, so

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Speaker 3: every single year, just like you said, Rishot, they're going

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Speaker 3: to ask for those individuals who want to contribute to

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Speaker 3: the four all one K. They're gonna ask how much

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Speaker 3: you want to contribute and how frequently, So you want

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Speaker 3: to make sure that you ask those critical questions. The

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Speaker 3: second thing is the biggest mistake that I made, is

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Speaker 3: I did listen to my mama because she told me,

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Speaker 3: listen at twenty years old, you were going to be

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Speaker 3: investing in your four o one K, and I will

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Speaker 3: tell her at twenty years old, I'm not thinking about retirement.

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Speaker 3: I'm not thinking about retirement. But we know the benefits

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Speaker 3: of compound interest. The earlier you get started, the more

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Speaker 3: your money can go to work with you or work

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Speaker 3: for you over the years. So my mom started investing

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Speaker 3: in retirement at thirty one. She thought if I could

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Speaker 3: start eleven years ahead of her, then perhaps I could

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Speaker 3: retire early. But for four one ks, you want to

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Speaker 3: look inside whatever you are our employer has set you

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Speaker 3: up with Initially. For me, one of the biggest mistakes

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Speaker 3: I made is I looked inside of my four one

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Speaker 3: K late and I saw that nearly one hundred percent

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Speaker 3: of my money was invested in money markets. So I

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Speaker 3: think I heard maybe Ian talking about it earlier. I

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Speaker 3: came in maybe about ten minutes towards the end of

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Speaker 3: the conversations. But money markets are not going to return

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Speaker 3: as much as equities. So like my money is returning

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Speaker 3: one or two percent a year, it took me like

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Speaker 3: two years to check it. One or two percent a year.

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Speaker 3: That's equivalent to your money be invested in a savings account.

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Speaker 3: Think about a four one K. If you are actively

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Speaker 3: managing your funds, or you're critically thinking about what mutual

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Speaker 3: funds you want to select, then you should be returning

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Speaker 3: at least in my opinion, at least that what the

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Speaker 3: S and P five hundred is returning. So one to

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Speaker 3: two percent was too low for me. So I had

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Speaker 3: to go inside of my four one k, look at

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Speaker 3: the mutual funds that my employer has selected for me,

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Speaker 3: and then get smart, just like you all said informations

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Speaker 3: on the other side of your fingertips, get smart about

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Speaker 3: what mutual funds I thought we could perform better for

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Speaker 3: me versus what my employer selected. What are some of

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Speaker 3: the things that I look for. The first thing is

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Speaker 3: rule of thumb. You take one hundred and ten, you

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Speaker 3: subtracted by however old you are right now, and whatever

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Speaker 3: that resulting number is is the percentage of equities in

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Speaker 3: which your mutual funds should be invested.

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Speaker 4: So you said it one more time because I know

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Speaker 4: people missed it. But it's a good formula.

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Speaker 3: Yes, So you take one D and you subtract your age,

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Speaker 3: and whatever that resulting number is is the percentage of

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Speaker 3: equities in which you should be invested. Equities is synonymous

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Speaker 3: to stocks. You can have US equities, which is US companies.

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Speaker 3: You can have non US equities, which means that that's

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Speaker 3: foreign investments as foreign businesses it are being traded on

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Speaker 3: their stock markets. So whatever that number is, equity should

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Speaker 3: be represented there.

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Speaker 2: Ho hold, I just want to just because that was

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Speaker 2: that was actually a very very good, useful formula. So

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Speaker 2: if you're thirty years old, that's roughly eighty percent. Eighty

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Speaker 2: percent of your money should be in stocks. Yep, that's

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Speaker 2: extremely I agree.

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Speaker 3: You guys are sleeping on it.

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Speaker 4: Write that down, crit it down, and they can play

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Speaker 4: in three weeks.

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Speaker 3: Like, what was the formula? Write it down? Now, write

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Speaker 3: it down, Come on down, think we should have one.

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Speaker 3: Come on, let's go.

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Speaker 4: You should be at money markets until you're like seventy

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Speaker 4: or eighty. I can't believe that.

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Speaker 3: So that is the thing about it is listen, y'all

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Speaker 3: give away a lot of free games. So you want

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Speaker 3: to look at the percentage of equities. You want to

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Speaker 3: get familiar with the different asset classes that are available

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Speaker 3: to you. So I heard Ian talking about bonds. You

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Speaker 3: can do real estate, you can do a mixed fund.

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Speaker 3: So like you want to take a look at what's

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Speaker 3: inside of that fun Next, you want to take a

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Speaker 3: look at your mutual fund. What is the expense ratio?

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Speaker 3: Because over time, the higher the expense ratio is, the

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Speaker 3: more expensive it is to keep that particular mutual fund.

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Speaker 3: I recommend that the expense ratio you'll be one percent

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Speaker 3: or fewer. Okay. Expense ratio is what fund managers charge

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Speaker 3: you to pay them to actively manage the investments within

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Speaker 3: your mutual fund portfolio. Okay, so that's one percent. You

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Speaker 3: take that one percent and you multiply it by the

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Speaker 3: money that you have invested in that account. It's important

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Speaker 3: that you understand what type of equities are in there.

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Speaker 3: So you may look at what is the type of

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Speaker 3: fund and may say things like large cap, mid cap,

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Speaker 3: small cap. I believe Ian was talking about this earlier too,

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Speaker 3: so large cap those are the large companies that you

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Speaker 3: definitely recognize their names. That's the Amazons, the Facebook's, the Microsoft's,

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Speaker 3: the Googles. But then during the pandemic, some of the

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Speaker 3: high performers have been the MidCap companies. So one particular

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Speaker 3: MidCap mutual fund that I owned, two companies that were

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Speaker 3: on there that were turned in triple digits. Tesla was

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Speaker 3: in there, Teledoc was in there. Those were two companies

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Speaker 3: that you absolutely know their name, and they returned it significantly. Why, because,

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Speaker 3: of course, we had a black swan event. No one

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Speaker 3: could have predicted that we would be in the middle

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Speaker 3: of a health pandemic, right, a health pandemic that nobody

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Speaker 3: could have anticipated. And those companies that were able to

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Speaker 3: serve our needs while we stayed at home, which is

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Speaker 3: why they call it stay at home stocks, were able

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Speaker 3: to experience tremendous growth. Okay, so MidCap MidCap, and then

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Speaker 3: you have small cap companies and so those are small

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Speaker 3: capitalized that's what that cap stands capitalized companies. Okay, so

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Speaker 3: you want to take a look at that. Now.

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Speaker 3: Did I take a look at When I'm looking at

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Speaker 3: mutual funds, I'm looking at the sectors, so we know

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Speaker 3: there's eleven sectors in the stock market, Like, what are

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Speaker 3: the top three to four sectors within that fund? Again,

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Speaker 3: one of the things that I love about with Ian said,

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Speaker 3: he said, Hey, these were the top three performing sectors

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Speaker 3: for twenty twenty Technology? Was it communications? Consumer discretionary? Get

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Speaker 3: comfortable in figuring out what exactly does that mean? And

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Speaker 3: guess what Google is your friend on the other side

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Speaker 3: of your fingertips again, is information. Don't swim in the

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Speaker 3: ocean of knowledge and drowning ignorance. When we talk about technology,

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Speaker 3: that's an Apple, that's a Microsoft, that's a Google. When

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Speaker 3: we talk about consumer discretionary. That's home depot. Y'all was

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Speaker 3: in y'all house, fixing your closets, painting your walls, making

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Speaker 3: your house look pretty. That's McDonald's. Were not going to

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Speaker 3: negotiate if you should be eating them chicken nuggets. But

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Speaker 3: let me tell you, some people got tired of cooking.

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Speaker 3: They went right on in, not drive through. That's a

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Speaker 3: consumer discretionary category. Communications. Everybody was watching Netflix, Disney plus

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Speaker 3: the introduction of five G's, So that's Sprint. I ain't

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Speaker 3: gonna talk about y'all Sprint, folks, but the call always

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Speaker 3: drops rising communications sectors. Be smart about the sectors. What

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Speaker 3: are the companies that you're patronizing that you're spending your

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Speaker 3: hard earned dollars at during the pandemic after the pandemic

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Speaker 3: pre pandemic. Be smart about the sectors. What are the

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Speaker 3: sectors that underperform? Energy? Why? That's oil, right, that's oil.

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Speaker 4: You can't love Tesla and be pro energy too.

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Speaker 3: I mean that's clean energy, you know it, So that

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Speaker 3: you're looking at energy. You know, you say the planes

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Speaker 3: have been grounded, what do they require fuel? Right? When

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Speaker 3: we're talking about cars, some of you aren't commuting to

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Speaker 3: your nine to five. You're nine to five. You're not

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Speaker 3: driving from your house to your job. You walking from

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Speaker 3: your bedroom to your living room. Okay, so you're not

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Speaker 3: putting as much fuel in your car. Energy sector underperform, right,

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Speaker 3: So like that's ranking low. So you want to take

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Speaker 3: a look at those sectors and you want to see

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Speaker 3: if that makes sense, what are some companies that are

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Speaker 3: part of those sectors. And then I look at the

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Speaker 3: top ten holdings within that mutual fund, because I think

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Speaker 3: it's important you know, what are those top ten holdings,

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Speaker 3: how are they performing? And then the last thing that

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Speaker 3: I'll say is that, yes, I read the prospectives. That's important.

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Speaker 3: You should always read the prospectus. Yes, for some of

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Speaker 3: you all that's loan. But if you can sit and

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Speaker 3: you can watch Netflix and binge, watch it for three

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Speaker 3: consecutive days and text your boot, you can read the prospectus.

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Speaker 3: But I also look at the benchmark because the benchmark

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Speaker 3: is what the fund manager said that they were going

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Speaker 3: to this particular benchmark. I'm going to perform at or

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Speaker 3: better than this benchmark. What is a benchmark? The guys

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Speaker 3: talked about it on EYL. That's why y'all in here, right,

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Speaker 3: So like that might be the SMP five hundred, five

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Speaker 3: hundred publicly traded companies. That might be the Wrestle two thousand.

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Speaker 3: You know, is it a Wrestle two thousand growth? Is

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Speaker 3: it a Wrestle two thousand value? It might be the

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Speaker 3: Wressele twenty five hundred, It might be the Russell one thousand.

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Speaker 3: This benchmark if you look at and this is a

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Speaker 3: key that I do when I'm teaching my classes, I

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Speaker 3: go to markets ft dot com, or if you have

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Speaker 3: a trying to account with Fidelity or you know whatever,

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Speaker 3: wherever your four oh one k exists, going there, maybe

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Speaker 3: they have some resource tool. But I go to marketsft

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Speaker 3: dot com, I type in the stock symbol and I

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Speaker 3: click performance, And when you click performance, it will show

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Speaker 3: what was the benchmark for that particular mutual fund and

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Speaker 3: at what percentage did it return five years ago, three

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Speaker 3: years ago, one year ago, six months ago, three months

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Speaker 3: ago today if the stock market was open that day, Okay,

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Speaker 3: it might be fifteen percent, twenty percent. Right, Let's say

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Speaker 3: five years ago was fifteen percent, three years ago was

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Speaker 3: ten percent. Then you're gonna look at your mutual fund

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Speaker 3: and you want to see how well those fund managers

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Speaker 3: put the expense ratio. Did they charge you that one

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Speaker 3: percent that points zero five percent to work? If their

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Speaker 3: benchmark was fifteen percent. If Russell one thousand return fifteen

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Speaker 3: percent and your mutual fund returned six percent, they didn't

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Speaker 3: even meet their benchmark. That means they set a goal

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Speaker 3: that they couldn't even meet. And if they couldn't meet

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Speaker 3: their goal five years, three years, two years, one years,

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Speaker 3: what makes you think they're gonna meet the goal today.

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Speaker 3: So when I look at the mutual fund, I always

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Speaker 3: look at that benchmark, and I'm always looking at the

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Speaker 3: mutual fund and seeing if that percentage is higher than

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Speaker 3: the goal that the fund set for itself. And that's

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Speaker 3: important to look at performance long term because, like Eyl said,

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Speaker 3: twenty twenty was an amazing year for those people who

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Speaker 3: got small and got active in the market. If you

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Speaker 3: could afford to invest right those returns. Some of these

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Speaker 3: mutual funds were returning twenty thirty, forty fifty. We probably

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Speaker 3: cannot anticipate that that's gonna happen in twenty twenty one

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Speaker 3: with the introduction of the vaccine. But if you look

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Speaker 3: five years, three years, two years ago, pre pandemic. You

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Speaker 3: can see how those fund managers were managing that account

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Speaker 3: apps ince COVID, and that could be a future indicator

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Speaker 3: for their performance moving forward.

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Speaker 4: Well, what's now to cut you off? What's up? Mutual

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Speaker 4: fund or top two that you like, because I know

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Speaker 4: they're gonna kill us if we don't ask.

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Speaker 3: I like the Fidelity blue Chip Growth, so I believe

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Speaker 3: that that is write down to stick to stop tible

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Speaker 3: for that. But that's Fidelity blue Chip Growth. And then

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Speaker 3: I also like B and Y Melon small MiGCAP, so

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Speaker 3: that's dB max, so dB m a x dB max. Okay,

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Speaker 3: So those are the two that I have.

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Speaker 2: The Fidelity, I'm definitely familiar with the Fideliti make have

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Speaker 2: growth one as that's a that's a very good one.

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Speaker 2: That was a whole that like, and that the information

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Speaker 2: is not just for a four one ks like, that's

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Speaker 2: just broad range investment information. Like she just talked about

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Speaker 2: make cap large, cab small, cave, pe ratio looking benchmarks,

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Speaker 2: a lot of stuff that I don't think we even

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Speaker 2: spoke about before. So yeah, man, that was that was great.

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Speaker 2: I just I just want people to fully appreciate the

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Speaker 2: level of education because that was a lot, a lot

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Speaker 2: of gyms. Sometimes that you give people so many gyms,

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Speaker 2: it's just like they don't fully understand what's what's being

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Speaker 2: given to them. That was like a full blueprint of

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Speaker 2: actually how to break down fun.

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Speaker 5: Yeah, it's the crazy part is like to me when

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Speaker 5: I was listening to it, I'm like, Yo, this is crazy.

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Speaker 5: This sounds pretty similar to how we will research our ETFs.

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Speaker 2: Well, once you, like I said, learned about process, right,

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Speaker 2: once you learned one, it's like learning the language. Like

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Speaker 2: once you learn one thing, whether it's a mutual fund,

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Speaker 2: whether it's an ETF, whether it's an individual stock, it's

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Speaker 2: all it's also anonymous with each other, and that this

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Speaker 2: is what helps you. Like, once you start to learn

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Speaker 2: about the investment language, they're all very similar, so you

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Speaker 2: can use the same the same thing in individuals stocks,

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Speaker 2: with your brokerage, investing for your kid, doing the I

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Speaker 2: RA four one K. It's all very similar.

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Speaker 5: But then you know what the beautiful part is and

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Speaker 5: I give you a whole lot of credit. It's like,

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Speaker 5: think about all of what she just told you, Like

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Speaker 5: that's the homework, you know what I'm saying. People like Yo, well,

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Speaker 5: y'all y'all saying, like, do your homework for what she

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Speaker 5: just gave you a whole lesson of how to do

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Speaker 5: the homework when it comes to investment in mutual funds

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Speaker 5: and shout everybody. I see people putting up that we

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Speaker 5: went into death about expense ratios in the book club,

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Speaker 5: but you just laid it out.

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Speaker 2: We got we got the keys. You gotta get you

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Speaker 2: the teacher class, key, professor, professor key, you gotta get you,

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Speaker 2: gotta get your teacher class.

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Speaker 3: And I would love to join. I do want to

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Speaker 3: add that the one I just wanted to my Fidelity account.

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Speaker 3: That's why I keep Traditional IRA and we were talking

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Speaker 3: about four one ks. But like I said, this information

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Speaker 3: is transferable and that's f b g r X. That's

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Speaker 3: the stock tickers, so that's f b g r X

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Speaker 3: and that's Fidelity blue Chip.

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Speaker 2: They give it. It's a whole lot of game. My

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Speaker 2: graduates from my school being forced bad drop bag drop, Mike,

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Speaker 2: dropadrop drop.

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