Garret (00:00.086)

yourselves.

Garret (00:05.29)

Welcome James to my podcast.

James Alexander (00:07.832)

Thanks for having me, Garrett. It's an absolute pleasure to be on.

Garret (00:10.964)

Yeah, no, I'm excited about the topic. As I said in pre show, my episodes, my downloads seem to go up way up when we're talking finances and trying to save money for certain things. So why don't you start off by introducing yourself to our audience?

James Alexander (00:27.662)

Sure thing. So I work for a company here in Chicagoland, Illinois, that we are a registered investment advisory firm. And I'm a financial advisor and partner with the firm. Also a certified financial planner. All that fancy way of saying my job is to help educate people around all facets of their financial life. And so I absolutely love doing that. A little bit of background on myself. I am a very big numbers guy.

absolutely love working with numbers and probabilities, statistics, risk, all of that. But what I learned very early on in my teenage years, I've been doing this about 15 years, I'm in my mid thirties, but in my teenage years, I learned I didn't want to be a number cruncher behind a computer because I enjoy talking to people and educating so much. And so ended up falling in love with finance in college.

And when I originally went to college at Loyola University, downtown Chicago, the original intent was to be a math professor due to my love for logic. And so I majored in math and I realized, okay, there's really no fallback option on this. And so I started exploring finance. If, you know, if there's so many options within finance and just fell in love with the idea of using money as fuel for our lives and

all the different strategies you can do that. that's a little bit about how I came to be in the role I am today. and love to talk to you more about what that might look like and how I can perhaps help others.

Garret (02:05.108)

Yeah, so you you've basically been on this path for a very long time, like no no other pivots. It's not like you were, I don't know, in car sales and then just pivoted that that's really cool.

James Alexander (02:16.076)

Yeah, no, I appreciate that. You know, I've been with a couple of companies before this firm I've been with now a little over five years. I worked at a company called ScotTrade, which was privately held firm. Many of you listening would know ScotTrade by those helicopter commercials way back when they would advertise the $7 online trades, which is a big deal in the early 2000s. You know, most brokerage firms were charging hundreds of dollars.

Roger Reini, charge seven. So I worked for them for a little bit and then TD Ameritrade once, Scott trade was acquired and I feel very fortunate despite staying in that path. I've seen a lot, in short order. so, it helps me gain additional perspective.

Garret (03:01.11)

Okay, so you mentioned Scott Trade and trades and certified financial planning. Can you kind of expand a little bit about your kind of wheelhouse and what you like to advise on?

James Alexander (03:12.598)

Yes. And in today's world, I want the clients that I work with to see me as their financial quarterback. What does that mean? Certainly we help with how to invest money for them. It's a very big, important topic, but that is not our only bread and butter. In fact, that is one of many. So what is financial planning in a nutshell is we help with investing. We help with taxes.

Now we don't, we're not accountants, so we don't prepare taxes, but planning around taxes, what things might look like. And I know that's big in the real estate world. It's also big in the stock market economic world with all the regulations and changes and how do we plan for that? So taxes are a big deal. Estate planning. We tend to overlook that because we don't like talking about it. That's a big deal. Insurance planning.

Retirement planning, all these areas of our financial world is where I want people, the minute they have any angst about their financial life, I highly encourage them pick up the phone. Let's have that conversation. This isn't what's the stock pick today, James. If I knew what the next stock would be, I'd be on the beach having a Corona right now. I don't, but I know a lot of the other facets that can help holistically to put herself at peace financially.

Garret (04:39.158)

Okay, so the trade in itself or what you're choosing to invest in is kind of secondary. You're kind of looking at everything from a 10,000 foot view.

James Alexander (04:49.002)

Exactly right. Yeah, we start in the very high level. What are we trying to accomplish with all of our money? And we're then we lay the cards out. What? Where are our assets? What do they look like? What am I going for in the next five years? 10 years? How much do I need them to grow? How much do I want them to grow? And then it turns into this is another game that I love, Garrett. It turns into a chess game for me.

which pieces of the puzzle do we need to move around to optimize what my client wants? And, you know, there's a lot of moving parts to that and that's where over people become incredibly overwhelmed. And I fully understand that. But, you know, with the right strategies, you can really put yourself in a good position much more than you might've originally thought years ago. It's pretty powerful.

Garret (05:41.472)

Okay, you kind of set a segue piece there. I was gonna ask you that in your bio, it says that you played chess competitively. Can you tell us a little bit about that? Cause I think it does play into your whole mindset and numbers.

James Alexander (05:54.816)

It does. Yeah. I, probably started at eight, nine years old playing and, I, I fell in love with it in high school. Like played competitively in high school. we, were, we had a good team. you know, the chess is a game of patience. Chess is a game of planning, course, planning and thinking ahead. And it's also a game of.

piece and that sounds counter-tuitive because it seems overwhelming you're just seeing all these pieces and how they all move but you

And especially when we talk about entrepreneurship, entrepreneurship, you know, if you shift from being in work mode to building something, when you're in work mode, you're, there's a lot of doing I have tasks, I'm task oriented versus entrepreneurship. got to shift that mindset to now thinking ahead and pausing and reflecting before you make that next move. So

Anyways, I competed in chess and all throughout college as well. I played some hedge fund companies way back when and learned a lot from them. And that's how I kind of fell into this finance world. you know, chess is a fun game. My son is five years old as well, Garrett, and he's already starting chess. I did not push him, but he's I think the apple doesn't fall far from the tree there.

Garret (07:19.924)

Yeah, no, the, well, think chess was popularized a few years ago with, the, Queen's Gambit coming out, the Netflix special. think everybody, it'd be interesting to track, you know, chess boards on Amazon or something like that and chess sets after that. But, no, I, I find that really interesting as well. Cause I mean, I, I, I play chess, but I mean, certainly not to your level, but when I'm training my staff, even on how to have a conversation with the client, I'm trying to

I call it word chess, right? Cause like just planning out how you want that conversation to go, whether you're trying to, you know, just take a tenant off of that ledge, so to speak, because they're upset about a no heat call, or maybe you have an investor that's upset because the tenant is complaining about the no heat call and just trying to see where you're going to go. How do you apply chess tactics, if you will, to finance?

James Alexander (07:51.63)

Hmm

James Alexander (08:16.566)

Yeah, great question. So first and foremost, one of the aspects when it comes to educating around finance, keeping it simple first and foremost is absolutely critical for myself. So I, my job in college was I taught afterschool chess programs to kids all in the downtown Chicagoland area. And I started with very

profound topics and I quickly realized these are kids. They want to keep it fun. They want to keep it engaging, but they also want it simple. So that's the number one is I need to keep it simple when I talk about these financial aspects. But when you dig a little deeper, it's so easy, especially in today's society with finance to think about this year in my financial situation this year, and I'll worry about next year, next year.

And so on and so forth. we just live in an instant moment at a time. What chess forces us to do is to think seven, eight, nine, 10 moves ahead potentially. And how do I position myself now to be in a very good spot many moves later? And, and so that is planning in a nutshell. That is, you know, we're not playing the short game. We're playing somewhat of the long game and that wins consistently.

Despite recessions, despite everything else, that financial game of life will win if we have that mindset. And probably the final point on chess is you got to look at the whole board in order to know where you're at and where am I being attacked? Where am I in a good spot? It's the same thing with financial life. Where are my weaknesses? Where are my strengths on my financial? What do I need to leverage? What do I need to be careful about?

It's that holistic approach. Well, sometimes not always fun to do. It really, really can be profound later and exciting later for people.

Garret (10:19.252)

You know, I, myself as well, being, you know, approaching my mid fifties, talking about retirement, thinking about retirement. I get a sense with Americans and Canadians that that the big R word is kind of so out of reach. Most people don't even think about it. Do you find that experience?

James Alexander (10:36.846)

1000 % my gosh. Especially I would say people start getting angst about retirement in their late 50s typically that what I've seen but before then they don't think about it generally speaking because picture yourself 10 years from now. It's hard to do. I don't know what I'm gonna be doing let alone when I'm in my 20s and 30s that's just ages away so I'm just going to

Garret (10:48.26)

well.

James Alexander (11:04.536)

follow a couple of basic steps and not think about it. You my parents told me to save for retirement and that's all I'm doing, right? And that's a start. We want to celebrate that. But we don't think about retirement because it's hard to envision ourselves in retirement when our whole life has been dedicated to a career or our family or both. And so that next chapter, I actually don't like the word retirement, primarily because there's a preconceived notion of that's what people do when they get old.

Garret (11:34.144)

Mm-hmm.

James Alexander (11:35.136)

And so I typically like to shift it to what's next or the next chapter for us. So anyways, my two cents on that.

Garret (11:44.616)

No, I like that because again, what is re I was going to ask, what is the definition of retirement? Like truly, what is it? It does it mean you're going to save up? I mean, from what I was taught, like you said, you save up, maybe you pay off your house and then you decide when you're able to, maybe you're with a company that you can retire with or whatever's going to happen. And you kind of back calculate morbidly, how long do I think I'm going to live and how long is my money going to last? And at

You know, but I don't, for me, because I'm an entrepreneur, I don't have that luxury. What would you suggest is advice for those next steps, like you say?

James Alexander (12:24.608)

Next step's around thinking a little deeper about retirement.

Garret (12:28.127)

Well, what is retirement again? Like let's explore that a little bit. Let's, let's do a deeper dive.

James Alexander (12:29.959)

sure.

Yeah. Yeah. So a couple of questions I'll ask my clients, and this will tie to not just retirement, but a couple other aspects about how we think about our financial world and what that means for our life. primarily because I believe money is just fuel to accomplish what we want to accomplish in life. but a couple of questions I'll ask is I'll say, look, don't shoot the messenger. I'm going to ask you some potentially anxiety provoking questions, painting some scenarios that you may or may not like.

Garret (12:49.974)

100%.

James Alexander (13:02.488)

But if you had, you went to the doctor yesterday and he told you you had exactly 10 years to live and nothing more, what would you be doing? Would it change from today? And then I'll listen and ask some follow up questions and then I'll shift it to five years to live. Shift it to one years to live. What am I getting at with those questions? I wanna understand what brings them joy and value.

and allowing them to think, if I could do anything I want, when I want, how I want it, what would it be? And to me, that's retirement. That is the ability to have certainly freedom and financial flexibility and independence and everything that all those buzzwords that are talked about, but it allows me to, I have time now potentially. What I'm very, very surprised about Garrett is how many people would still work in some capacity.

And I love hearing that because that's a purpose for them. That's an identity. And I think that's really powerful. I've worked with people who they go from, you know, working 100 % to zero in a, a dime, stopping on a dime like that. And they've lost that purpose. And now they actually become depressed or line depressed because they haven't found that new chapter for them.

Garret (14:26.932)

You hear it all the time.

James Alexander (14:28.768)

Yeah. So, really digging deep into those questions of if I just had a short period of time, what would I be doing and why, that helps define, you know, what really retirement looks like.

Garret (14:41.226)

Yeah, I really, really like that because for me, and it's not my statement, but I ask this a lot of people my age, even younger, what does retirement mean? Are you going to be sitting on a beach somewhere and doing nothing, going for coffee with the guys every morning? And I think the most popular answer is doing what I want, when I want, with who I want, but still working, right? So it almost seems like it's a lifestyle of freedom, but still...

working and having fun. Would you agree with that?

James Alexander (15:14.798)

I would even add in another word there that ties it all together is connection. You know, as humans, we crave connection. And so part of work is connection and making that impact around what our skill sets are. But then you added in something that's so beautiful with who I want, with whom I want. You know, people want to interact with other people more often than not. And the minute we feel like, my gosh, I'm the only one retired and nobody else is.

Garret (15:21.024)

Okay.

James Alexander (15:44.91)

It's not a fun place to be because we're going to lose that connection. So being careful about it, I think is important.

Garret (15:52.584)

Okay, so let's listeners now are going, okay, Garrett and James, that's great. Okay, we know we want to retire or do all these things and have some freedom. How do we get there? So no matter what age you are, is it just a financial calculation? How do you, where do you start?

James Alexander (15:57.772)

Yeah.

James Alexander (16:10.294)

Yes. Well, it is no, it is not in a financial calculation because life is not linear. And we have to understand that financial calculations are great, as a starting point, but in terms of practical tips, we'll call it is I always start with everything non financial related. Tell me about yourself. Tell me about your kids. Tell me about where you live, what you do, et cetera, et cetera, et cetera. then talk to me about what.

what you're missing, what you're striving to accomplish, what are those next five years, 10 years look like for you as we talked about. And I write it all down. And that's step one. If we start with money first, anxiety can hit, can step in. people think, my gosh, does he think I don't haven't saved enough? Does this advisor think I'm too frugal?

All these preconceived notions. and I absolutely, I understand why they think that, but I absolutely don't like, don't want anyone feeling that way. So we start with the non-financial topics and then I want to lay out all the financial pieces to the puzzle, no matter how good or bad it may seem. we, want to analyze them and I tell them, I'm going to analyze this separate from this conversation today because it is a deep dive. There are a lot of moving parts.

to our financial world. But what I have to do and what I would encourage listeners that want to do this themselves to do is do not keep it so logic driven, so mathematical oriented. I'm the math guy. I've learned over 15 years, only math tells us one topic. That's the means to the end. That's 20 % of the battle. We have to feel motivated. We have to feel passionate about what we're trying to get to.

Example, right, let's talk about an example. 401k contributions. People realize, all right, if I contribute 10 % of my paycheck and I earn this amount of return and it's over this time, Monte Carlo simulation will say I'll have this much money. That's, again, 20 years from now, that doesn't excite them. And so what we try to do with those is automate everything we can, think about what's left, and especially those that become overwhelmed by this topic of

James Alexander (18:33.41)

all these planning areas, start with one thing for the next three months and get good at it. Don't worry about anything else. Then the next three months, do another thing. And by the way, within each three months, celebrate the win. I think too many people don't celebrate the baby steps along the way. We can't boil the ocean in a year. We just can't. So take it one step at a time. think that's a...

that's really important to do.

Garret (19:06.406)

You know, my wife and I, so my wife, and she's probably gonna kill me for mentioning her on the podcast, but she hardly ever listens, so it's all good. She's been a nurse for over 30 years. Next year is her chance at early retirement. And I think for somebody who's been in a career, and similar to you, like I've pivoted three times. I I started off in science, then worked as a scientist, and now I'm in real estate, right?

James Alexander (19:14.79)

Sure.

Garret (19:34.122)

But for somebody who's done the one thing maybe for their entire career, how do you counsel them to look at the next step? Because in your early 50s, you're not necessarily ready to sit on a beach, maybe financially you can't. What's next? do you get into that mindset?

James Alexander (19:52.246)

Yeah. Yeah. So that is probably my largest challenge to be brutally honest with you is a lot of clients I work with, they've been incredibly good at their, their one career, but it's typically not finance related. And, I have to use analogies to allow them to understand that just because you're good at being a doctor.

Just because you're strong at whatever your job is does not mean that this financial, this financial planning area of your life is easy. You know, you're very good at, surgeries, but when it comes to calculating taxes, you just can't figure it out and no fault of your own. They don't teach us this stuff. And so what I talk about is when you're in growth mode, when we're in our mid twenties, all the way until our sixties, typically.

We're playing chat checkers. We're just building and building and building and everything kind of flows together. All the pieces kind of flow together. The minute we need to shift to living on our money. And hopefully for entrepreneurs, it's much sooner than that because of the opportunities. But with the minute we shift in that, now we're playing chess and piece, different pieces to the puzzle. And so do not mistake the two different games you're playing. And sometimes what I have to do is I have to explain some

horror stories I've seen from my past for self-directed people that thought they could retire in a year, got a little greedy and 08 09 happened. And now they're working seven years later. And so what I've learned in the, on the emotional side, and it's becoming more and more powerful, unfortunately right now with news and media and all that is, you know, on the emotional side of things and people are looking at my neighbor and what he's doing.

and I want to copy this person and I'm afraid of this is the loose sight of discipline and what I need to be accomplishing. so anyways, long winded answer to your question, but I have to use some fear and some examples of people who couldn't retire when they originally thought because of mistakes they made right before that retirement.

Garret (22:09.406)

If somebody doesn't have enough money, I mean, you say it's not a financial calculation, but I might challenge you a little bit because to a large extent it is because whatever that person has coming in through a pension 401k, whatever, or maybe they don't, they're an entrepreneur like myself, you have to earn income and there has to be an amount of money that's coming in for you to sustain some kind of whatever chosen lifestyle. What happens if

that person doesn't have that, like you're looking further into the future and the roadmap and they just don't have that income coming in. do you do?

James Alexander (22:46.826)

Yeah. Yeah. No, you're right. And to your point, that financial calculation, you're right, Gary. That's a foundation. That's an important mathematical equation. The problem that I've seen is it doesn't motivate most people. just seeing those numbers because it's a number on a screen, you know, what we do instead is we get, have to get creative. So if somebody, if the numbers don't add up and somebody says, I want to accomplish.

I want to be retired by 65. Let's use that example. And I want to, you know, be able to live on a hundred thousand dollars a year as an example. And I'm just running every number I possibly can. And it's, it's not adding up. You know, the other part of my job is I need to tell them that first and foremost, I need to create the awareness, but we need to have the non-financial conversation of do we, how important is that to you? Because if it's incredibly important that 65 is

big and the 100,000 is big, maybe we need to find another job now and sacrifice now. And here's how that looks. And what I found is that impact actually can be pretty big depending on how long I have. Or you know what, 100,000, I really important to retire at 65, but maybe I can live on 80 grand a year adjusted for inflation, all those things, right? And so here's what that looks like.

Or, you know, that life insurance that I had, I don't need that anymore. Maybe I can take those premiums and instead of paying life insurance, I can put it in my 401k. There's so many different ways to skin the cat, but it comes back to what's important to me. Number one, number two, and all the way down. And how do we adjust along the way? Because again, this is, these are living, breathing things that are constantly being adjusted due to, due to life changes, life circumstances.

Garret (24:42.196)

Yeah, I love that. I'm a big proponent of goal setting. And I think that's kind of what you're alluding to there. Speak to me about mindset for success. Cause I know that's a lot. read it in your bio. I know it's something that you're very passionate about. Speak to the audience about that.

James Alexander (24:57.152)

Yeah, sure. So I'm going to steal this from, I think it was Goldman Sachs who had discussed this years and years ago. And I thought it was so, so powerful as most of us fall into one of three mindsets for, we're going to regards to their money. One of them is what I call a commitment money mind. Commitment money mind is are people who find a lot of joy giving. They're committed to others.

these are typically mothers, certainly. but also fathers for their supporting their family and all of that, but they just find so much more joy in giving than spending on themselves or saving for the future or what have you. That's one. The other one is, the other second of third is happiness. Moneymind happiness. Moneymind people are people who love spending money today and they're living it up and they're enjoying.

And typically these happiness money, mind people, something happened early on in their life. Maybe a parent passed too early or, you know, something where they decided I don't want to have to worry about tomorrow because I don't want to have any regrets. and then the third person is a protection money, mind protection, money, mind people. There are a lot of them in the great depression that were born right before the great depression where money's scarce and I need to save, save, save, save, save.

There are pros and cons to each of these money mines, but what I do is I go through an exercise with my clients to discuss their type of money mine through questions and I share it with them and I tell them, okay, does this sound like you? When you receive $1,000, you're not buying the next iPhone, you're thinking, where can I pay off my debt? Or, know, variety of examples. And so due to that,

because there are pros and cons of each one, creating the awarenesses is super important, but then I need to overcome, speaking of strengths and weaknesses in chess, I need to overcome the strengths and weaknesses in my mind. I'm a protection money mind. I need to encourage them to enjoy in their early phases of retirement because you can have $5 million when you're 88 years old. It probably won't matter.

James Alexander (27:18.552)

There's not a lot you can do with that money. I ask the people the question, would you trade places with Warren Buffett today? He's the third richest man in the world. I don't know what the new status, but most people say no because he has a short time frame. And so that applies very well to people who are incredibly frugal. The happiness one, of course, is, hey, if you were 70 years old looking upon your 50 year old self today, how happy

or disappointed would you be with that 50 year old self and why? And so having us talk about that and then the commitment money mind is the hardest because it's very noble, but regret can sink in there because people who want to spend on others, they typically never think about themselves. And that's where I encourage them to be selfish. And there's ways to do that as well. So that money mindset typically stems from where we grew up, how we grew up.

and it shapes the way we think about money. And that is what drives passion and motivation towards those financial calculators. And I need to tap into that.

Garret (28:29.686)

Okay, so if you were to summarize the last 15, 20 minutes and some bullet points for the audience, picture somebody who's maybe your age, 35, 40 years old, they're inspired, they want a life of freedom, they don't want to work until they're 65, or if they're going to be working at that point, they're doing it for fun. What are the, I don't know, five or 10 steps that you would recommend?

James Alexander (28:54.51)

Yeah, no great question. So, step number one is I want to get very goal-driven, write it down, be very specific with your timelines, with your money at your assets, your, your income sources, write it all down before you look at any of your financial situation. You're going to be biased if you do. So write it all down, then come back and look at your financial situation. Where am I today?

What behaviors am I exhibiting on those financial assets today is probably step number three. So here's my layout and then what am I doing to increase that? Am I buying assets? Am I buying liabilities? How am I actually increasing this pot to accomplish what I want? So that's step three. Step four would be have a conversation with your spouse. I mean, typically you want to do all this with your spouse right away. What I've learned is it's

One spouse is typically more motivated than the other. And so if you bring to your spouse, for example, for me, I did steps one, two, and three without her. And then I brought her back in and made sure she was on the same page with all these. Now the goals are important to do with your spouse, but the nuts and bolts, it can be hard. So anyways, step one, two, and three, and then step four is to be on the same page with your spouse with it all.

And then the backend is automate as much as you can. That's something we probably didn't talk about because when you automated it's out of sight, out of mind, we know how the brain works there. Let's do those out of sight, out of mind things in an encouraging fashion. and probably step number six, this is a nuanced piece, but accounting for room for error is really, really important. I've learned that if we get too.

Garret (30:44.884)

Okay.

James Alexander (30:49.27)

tactical and mathematical about it all, it can all go awry if something happens like the housing market crashes. It can all go awry if, you know, I got too greedy on something or I bought something. so accounting for room for what does that mean? That means have enough reserves. Certainly that means have a backup job for one of you. If you're an entrepreneur and things don't go well.

so you have that piece where worst case scenario isn't so bad for me. I think that's key.

Garret (31:25.652)

Okay, no, I love that. I'm gonna back up a couple seconds there because you were talking about having goal conversations with your spouse, your partner. I read, I believe it was Elena Cardone's book. She has this exercise where you sit down with your spouse or partner and you like picture a piece of paper with not two columns, but three columns. In one column, those are your goals. Whatever those goals are.

personal, professional, financial goals and your spouse's or partner's goals is in the third column. And then in the second column, it's your goals as a couple, right? And what that does is it allows you to, cause your goals might not be the same as your partner's goals and vice versa. allows you to really see what they want to do with their long-term life and support them in getting there. At the same time, you can still as a couple,

achieve your goals together.

James Alexander (32:22.694)

gosh, I absolutely love that. The Venn diagram of you on the left, her on the right, what overlaps? I love that. And it's simple too, right? We talk to some of our spouses who are retired and we say, make sure you spend enough time together, certainly. But again, we always use a little caveat so they don't get mad at us, but make sure you find some time to spend apart too, to find your own individual piece.

Garret (32:29.812)

Yeah, exactly.

James Alexander (32:51.864)

And I think that's what that alludes to. That's wonderful.

Garret (32:54.58)

Yeah, no, I love it too. In terms of mindset and success, let's talk about trades for a little bit because I read something in your bio about self-directed trades and not to say that that's a bad thing, but can you speak to what you've seen in your career?

James Alexander (33:09.07)

Hmm.

James Alexander (33:15.662)

Certainly, yeah. It is not a bad thing. I think we've come a long way with that and I'll couch it by saying it's not bad if we're educated. And if we're trading a lot, make sure it's money that we can afford to make a mistake on versus money we can't and that's where we have to be honest with ourself. But I'll share a couple stories, what I've seen. I was an intern in 2008 at Scotrade.

And I had made this false assumption that people with millions of dollars or even hundreds of thousands of dollars knew more than I did until I started seeing what they did. A case in point example is, know, Fannie Mae stock was a big thing in 2005, 2006, 2007. And I had a gentleman who, I don't know, he owned $300,000 if I remember correctly of that stock. And

He was case in point where this is money that I learned he couldn't make a mistake on, but he was very bullish. He had the fear of missing out and all that. And so the stock ended up going down very quickly in 07, 08, 09. In 2009, he had, he was very stubborn. He had this idea of this is coming back. They're too big to fail in all these capacities. And so he ended up putting more money in thinking I'm dollar cost averaging. And

he quickly lost, I think it was $600,000 at the end of the day from that one decision, all of his hard earned money, because he got greedy and he started thinking, okay, I'm gonna make up for this by adding more money and that is just the worst thing we can do in those times. So trading, individual trading, I think there's a statistic of if you're truly day trading, 3 % of the people are profitable.

Garret (34:40.374)

Wow.

James Alexander (35:05.24)

There's a common saying of let's not mistake the bull market for brilliance. Doesn't mean we can't enjoy that trading and become educated and learn things, but make sure if it's individual stocks, we're doing it with money we can't afford to make a mistake on. mean, if you look at the nineties, what were the top five stocks in the nineties compared to today? They're very different. There was GE, Yahoo, you know, all that.

Garret (35:31.39)

Right.

James Alexander (35:33.816)

compared to today. I would argue Apple stock is wonderful as it is. I own an iPhone. In 25 years, they're not gonna be what they are today. It's just the nature of cycles. So being careful with trading I think is important.

Garret (35:49.918)

Okay, what about diversity though, diversification of a portfolio? A lot of my listeners are budding real estate entrepreneurs or very accomplished ones. We've been speaking about trades. What's your opinion on diversifying?

James Alexander (36:04.728)

I think it's obviously very, very important. The one case you can make for not being as incredibly diversified as others is if you're heavily involved in your highest asset piece, which entrepreneurs can be, so you're in the know of everything. But diversification, it's the buzzword, we all hear about it. It is so powerful to force discipline.

What I mean by that is if I'm diversified and let's use 2022 as the most recent example. If I'm diversified, yes, my portfolio was down that year, but I was down half of what the stock market was. If I'm truly diversified, I have enough have enough US stocks, international stocks, fixed income, et cetera, et cetera. The question I would ask people to determine, should I be diversified or not is

Do I care more about the game I'm playing or do I care more about the end result, my goals? And they have to be honest. If I care more about the goals, then diversification will get you there with the right mathematical formulas. It just will. And you know, if Armageddon happens, I think you and me are in the same boat as long with all the other listeners. But if Armageddon doesn't happen and the world operates the way it has for the last 150 years,

that will get you there. If you care more about the game, question is why, and then take action accordingly. that's a very, I think we can record a whole podcast about that, but I think it's big.

Garret (37:46.686)

Okay, that's perfect. You know, I wanted to speak a little bit about, I mean, there's a lot of, with everything that's been happening in the last few years, people living paycheck to paycheck, I think grosses have gone up by like 22 or 25%. I mean, it's just crazy out there. A lot of futility. What would you say, I know that you said, okay, here's our top five, six things that you would do, but how would you coach somebody through that financial?

Just hopelessness.

James Alexander (38:16.842)

Yeah. Yeah. It's a mindset thing to the boil. The ocean is so important. Being aware that we want to take baby steps. mean, budgeting still become that becomes critical for those people. I tend to take it one step further around budgeting of when we do a budget, we typically will say, OK, here's my mortgage or my rent and here's this and measure my grocery bill. And we just we don't think about where the money is actually going. And can I?

Can I do some things differently with that? For example, if I have a sense of helplessness and I'm still shopping at Whole Foods, maybe I don't anymore. I'm not encouraging people not to be healthy. I'm saying, depending on what our values are with that money or that cable bill that kept creeping up, you know, do I need the movie channels? I know this sounds very petty, but look at where your money's actually going. And does that...

Is that what you value? I didn't realize I never watched TV anymore. I had high speed internet that I don't gain. So I don't need that. You know, they don't dig under the surface. They just write down all the numbers and say, it's not adding up. Well, let's rework the numbers towards what you value, what you care about, what you're doing. And you'd be surprised at the impact it can make. Now, if it still doesn't add up there, then we have to have the conversation around the job itself. Is there a way to obtain more income that way?

You know, do I have a, do I obtain a part-time job, et cetera? But I think people would be surprised when you look under the hood of the budget, there's some, some ways to optimize.

Garret (39:57.226)

You know, there's two really close friends, separate couples that have inspired me. And this is going back like 20, 30 years ago, I had some really good friends out of high school who we talk about sacrifice, right? Newly married, decided to live in one of the parents' basements for a year in order to save up and build a house. I don't know that I could have done that as a newlywed, right? Like how many people are willing to do that? So that's sacrifice. And then more recently, last five, 10 years,

I had some good friends who basically gave up TV, cable, all that type of thing in order to realize their dreams for, know, and now they're kind of just used to not having it. It's quite interesting, right? Just how much money you really can save when you really like you to your words, James, get under the hood a little bit.

James Alexander (40:48.216)

So true. my gosh. Those examples, I had a widow. Bless her heart. She was the most wonderful person on the face of the planet. She had just recently passed, but her husband had passed six years prior and left her with a small amount of money. And she had to go into assisted living and care. And we had to do it.

deep analysis around her budget and what type of care she needs and what that might look like. And it was absolutely amazing to me after she did this, this fine, after we did this financial analysis, she said, you mean I actually can go ahead and do this? And I said, yes, here's what it looked like. We're not eating out anymore. That's the sacrifice you're have to make. We're not eating out the car. You don't need it. Your sisters are right there. Let's sell the car to gain more assets to be able to afford these pieces. You know,

We just get overwhelmed and think this isn't going to work without getting creative. And you're right. Sacrifice is key.

Garret (41:53.238)

So on the flip side of things, just before we end off here, you also foster a mindset of generosity. Speak to the audience about that. What are you talking about there?

James Alexander (42:05.952)

Yeah, yeah, generosity is, I stem it back to a little bit of purpose for those that feel generous or feel inclined to be generous. I'll tap into generosity by asking a question of another morbid related question, but you're no longer here on earth and people are talking at your funeral. What do you want them to say?

And that to me is a form of generosity because it's not, people think of generosity of gifting or charitable giving or things of that nature. Generosity comes in a variety of forms. It can be helping educate people. It can be, you know, providing support and being there on the phone all the time with somebody and always being there for them. And so, that's what I mean by generosity. Now on the financial side.

that's fuel, there are ways to do that. And there are significant tax advantages for those listening that are chairbly inclined to make sure you take advantage of donor-advised funds and combining it with other aspects. But to me, that's generosity is what do want people to say about me and the impact, the legacy I leave when I'm no longer here on earth. People get excited talking about that.

Garret (43:28.502)

Yeah, one exercise that I've done myself and I would really encourage the listeners to do as hard as it might be is to sit down, go to a coffee shop for an hour and write out your obituary, right? Or sorry, not your obituary, your eulogy, right? And you know, if you're writing your eulogy, that is truly what people are going to be saying about you, but in a more formal sense and it's hard. It's very, very difficult, emotional.

James Alexander (43:42.999)

Love that.

Yeah. Yeah.

Garret (43:58.442)

but so profound and that's why I'm doing what I'm doing and giving back so much with what I do.

James Alexander (44:04.578)

I very much applaud you for that. You're giving so much education around, again, things that aren't being taught in schools today, and especially when it comes to entrepreneurship, that is, that's a challenge. So I applaud all the listeners for that. Yeah.

Garret (44:18.026)

It truly is. All right, well, thank you. All right, so to wrap up, I always ask this one question to every single guest and I wanna hear what you have to say. So James, this is the Investing to Win podcast. How do you define success and what does winning look like for you?

James Alexander (44:36.588)

Yes. How I define success is allowing us to feel at peace with our financial world and having the freedom and the ability to accomplish what you want, give back what we want and be able to live with whom we want, how we want, like you said earlier. Now winning, winning is, playing the game your way, playing the game your way and ignoring the noise.

Stop listening to your neighbor, please. Listen to your spouse and what the two of you want. The minute you're on the same page and you start playing that game your way and accomplishing your goals, you're winning. Celebrate that.

Garret (45:19.388)

I love that one. I love that one. Yeah. I have, I've had, you know, lots of guests on, but I haven't had it framed in quite that way. think I'm going to use that if you don't mind.

James Alexander (45:28.61)

You bet, you bet. Sounds great.

Garret (45:31.562)

All right, well, thanks so much for hanging out with me here. It's been awesome. I hope the listeners got out of it as much as I did and we'll put your contact information, the show notes in case anybody wants to reach out and have a further conversation with you.

James Alexander (45:45.922)

Thanks so much for having me, Garrett. It's been a pleasure.

Garret (45:48.383)

All right, take care.

Garret (45:53.98)

Just give me a second here, shut this off.