Wealth Strategy with Bryan Rigg – Weekly Radio Show

Sunday, March 12, 2017 – Wealth Strategy with Bryan Rigg
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Transcript – Segment 1 

Host:  “RIGG Wealth Management offers securities to Broker Dealer Financial Services, Member SIPC and advisory services through Investment Advisors Corp and SCC registered investment advisor. RIGG Wealth Management is not a subsidy area of Broker Dealer Financial Services. Neither RIGG Wealth Management nor Broker Dealer Financial Services offer legal advice. Client should consult their attorney of choice on all legal matters.”

“Opinions expressed on this program do not necessarily reflect those of Broker Dealer Financial Services. The topics discussed and opinions given are not intended to address the specific needs of any listener.”

“Diversification does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk. Examples mentioned are for illustrative purposes only, individual results may vary. Past performance is no guarantee of future results. Investing involves risk including loss of principle.”

“Rebalancing can entail transaction costs and tax consequences that should be considered when determining a rebalancing strategy.”

“Investing internationally carries additional risks such as differences in financial reporting, currency exchange risk, as well as economic and political risk unique to the specific country. This may result in greater share price volatility. Shares, when sold, may be worth more or less than their original cost.”

“Investments in emerging markets may be more volatile and less liquid than investing in developed markets and may involve exposure to economic structures that are generally less diverse and mature and to political systems which have less stability than those of more developed countries.

[background music]

Host:  Welcome to “Wealth Strategy” with Bryan Rigg for every Sunday at one o’clock on KLIF. Bryan is a celebrated Yale graduate, adding a PhD from Cambridge, a former officer in the Marine Corps, a man of profound integrity and honor, and your wealth professor. Please, welcome your host for the next hour, Mr. Bryan Rigg.

Bryan:  Thank you so much, ladies and gentlemen for joining us this weekend. My name is Bryan Rigg with Rigg Wealth Management.

I’m here with my two partners, David Rigg and Gary Bilyeu. We are all former Marine Corps officers, and we’ve been working together for several years. I joined Wall Street 11 years ago, started out at Credit Suisse, and I’ve been independent since 2008.

Today, we will be talking about what an investor is. We’ve talked an awful lot about investing, markets, opportunities out there to build out your portfolios, but we haven’t really talked about what is an investor, and what makes a good investor.

We will also be discussing the landscape of investing, what opportunities are out there with different firms that allows you to invest your money. We will end the show talking about some current events, and also, possibly exploring emerging markets and overseas opportunities, if there are any out there.

Without further ado, we’ll go into discussing what an investor is. My partner, David Rigg, has put together a lot of thoughts on this, and so I’ll turn it over to him.

David Rigg:  Thank you, Bryan. I appreciate it. We’ve had a couple of shows where we’ve discussed financial subjects 101. We’ve talked about risk.

We’ve talked about what’s an investment. I was thinking today, “What makes an investor?” We’ve got many different levels. We’ve got many different amounts of intensity that people will do. I wanted to give, once again, as Gary says, “a wave‑top view” of the different classes of investors, and what they’re trying to do.

Number one, for somebody to be an investor, they’re trying to change their financial status. They’re unhappy with their situation. Here’s a newsflash or a rocket science statement. In order to change your situation, you have to change your situation. Doing the same thing will accomplish nothing.

Bryan:  On that point, very quickly, when you look at the historical data out there, 50 percent of all people who retire today have 50 percent less than what they need. Not than what they want.

On this point that David is making, I think it’s very important for people to look at their situation very critically and see that most people out there really need to change their investing habit, and even get it started, like you’re talking about.

David:  Absolutely. The way you do that is you’re going to have to change your financial intelligence, your financial understanding, your grasp of a financial situation, however you want to describe it. Most people work for their money. We all do.

The basic change you have to make is you have to figure out how to make your money work for you, instead of the other way around. The two biggest expenses we have in life, pretty much, are taxes and debt, and you have to manage both of those to become a competent investor.

When you make money, when somebody gives you a paycheck, you have to understand, that’s the most heavily taxed section of money that you will ever have. You’re going to have income tax right off of it. You’re going to have your social security tax right off of that.

Then you’re going to take that money home, and you’re paying property taxes, you’re paying gas taxes at the pump, you’re paying sales tax out of that. Most people are probably lucky if they keep half, if they keep half of what they’re actually bringing home.

Taxes are a necessity. We need firemen, we need police, we need roads, we need all of that. How do you manage that from a financial status in order to get the least amount of damage from that? There’s ways we can do that when we invest.

For example, long‑term capital gains on your investments, about 20 percent. For people that are in a higher income bracket, tax‑free municipals. They’re not taxed. The yield’s a little bit lower, and you really have to evaluate that and see what’s suitable and what’s appropriate for everybody, but that is a way to keep more of your money without being taxed.

Bryan:  Just on a quick note, a lot of people have asked me, “What is the difference between short‑term capital gains and long‑term capital gains?” This is one thing at Rigg Wealth Management we can help many people do, is learn about how to be more efficient with your tax burdens.

By way of illustration, if you have a stock and it’s gone up dramatically, if you wait 12 months and then sell it, then that becomes long‑term capital gains, and you’re paying around 20 percent. If you sell it before then, let’s say you sell it at 11 months and 20 days, then you’re going to have short‑term capital gains, and that’s less efficient tax‑wise, because you’ll be paying 35‑39 percent on that.

That’s one thing you want to be very cognizant of as you’re dealing with different assets of taxes. Like Benjamin Franklin said, “There’s two guarantees in life, death and taxes.” Most people, I think, to your point, don’t manage that well, or don’t think about it.

David:  Don’t think about it.


Bryan:  They should.

David:  Absolutely. We’re not advocating, “Don’t pay taxes,” by any stretch. If you owe them, you need to pay them. We’re trying to figure out a strategy that reduces that burden.

Bryan:  We see what happens when countries don’t pay taxes, like Greece.


David:  Also, I want people to understand that money alone doesn’t create security. I have a very good friend of mine. He’s one of the best business owners that I know. He owns car dealerships. He owns metal recycling yards. He owns a video production company. He owns pawn shops. Everything he does, he does extremely well with it.

The problem is it’s the cult of personality. If something happens to him, that whole house of cards comes down. The structure is he’s working for all that money. The money is not yet working. He’ll take it, and he’ll reinvest it in other business, which could possibly be a very big investment return for him. However, it’s still dependent on him. It’s still dependent on him showing up and running that business.

The way you become secure is you have to get passive income that it doesn’t matter if you’re there or not. Then, you’ve got something to fall back on.

Bryan:  The one thing that I like to tell clients quite often is when you get a good portfolio up and running, whether you’re sleeping, whether you’re on vacation, whether you’re taking time to spend time with your kids on the weekend, it’s working for you.

As you build out that portion of your portfolio, that is always there, which I think is very important for an investor to look at. “What does that portfolio need to be to help secure my lifestyle?” I always like to say, “People want to look for their sacred cow.” You want to build out a portfolio, like as an example, that with your friend who’s this good businessman.

What I would be encouraging him is say, “OK, what maintains your lifestyle? Let’s make sure we get a portfolio that maintains that lifestyle, whether that be 1,000, 10,000, $20,000 a month, whatever it be, let’s get a portfolio that’s managing that, and then it doesn’t matter what you do over here, you’ve secured your sacred cow.” A lot of people don’t do this. It looks like he has not done that yet.

David:  No, he has not. He had a dealership that he sold recently, and he took that, and he rolled that right into his other businesses. He’s doing fantastic with it, but like I said, he’s got nothing to fall back on if something does happen.

People need to understand, if you have a great job, but you don’t do any investment, that’s not going to work long term. Eventually, you’re going to have to quit the job, or you can’t do the job any more.

If you win the lottery, and you don’t invest, same thing. Eventually, that money will be gone. If you get an inheritance or a settlement, or any of these sorts of things, and you don’t manage what you have, it’s not going to work for you long term.

Bryan:  It’s interesting. I was talking to a lawyer recently, looking at behavioral finance, if you will. Most people who get a lump sum do a very poor job of managing that, and the courts know this, this lawyer told me.

He says, usually, when there’s a settlement, quite often, the judges will get together, and they will appoint financial advisors to help the people who got the settlement, and they will usually only put it in an annuity that pays out on a monthly basis so the people don’t get access to the money, because they do such a poor job.

With the example of the lottery winners, like you were mentioning earlier, most people who win the lottery, their money’s gone. This is something I think is…


David:  They never learned how to manage their money before. Why should you expect them to know how to manage it now?

Bryan:  Or get a plan. That’s, I think, the most important thing for an investor to do, is to start looking at a plan, start asking these very important questions. How am I going to retire? When am I going to retire? What do I need to do in order to get there? What’s the time frame?

These are the issues that we’ll be discussing today, looking at what makes a good investor, what is an investor, where can you invest. Here again, we’ll be talking about the landscape of investing, where you can go to put your money, and then, again, we’ll probably end on talking about overseas opportunities.

Thank you so much for joining us here today. We have much more to come. Please feel free to visit us at our website at riggwealthmanagement.com. That’s Rigg with two Gs, riggwealthmanagement.com.

Also, please call us at 972‑383‑1210. Again, that’s 972‑383‑1210. We’d love to hear from you and get some feedback of what you think about the show. Please stay tuned. We’ll be right back with you.

Transcript – Segment 2

Bryan:  Welcome back to the show, ladies and gentlemen. My name is Bryan Rigg with Rigg Wealth Management. I’m here with my partners, Gary Bilyeu and David Rigg.

We’ve been talking about what makes a good investor, what opportunities are out there for investing, and what is an investor. My partner, David Rigg, has put together a lot of notes. I’ll turn it back over to him to continue exploring these topics.

David:  Thank you, Bryan. I’d like now at this part of the show to talk about the different types of investors that are out there. I want people out there that are listening to understand they will fall into one of these groups.

When we talked about earlier, if you want to change your situation, you need to take a hard look at yourself and say, “I’m really in this group. I want to be in another group. How do I get there?” Hopefully give us a call at Rigg Wealth Management. We can help you do that.

To start off with, we all know investors that do nothing. They live paycheck to paycheck. It’s all they can do to get through the week until Friday’s paycheck. That’s your first or bottom level. There is none. [laughs] There is no investment going on. A lot of people fall into that category.

Gary brought up a good point a couple of shows ago, talking about when he was a brand new officer in the Marine Corps, that he decided he was going to pay himself first. This is how you start to get out of that.

Gary, it was what, 50 bucks?

Gary:  $50 a month. For me, my plan was every time I got a raise, I would take half that raise and apply it towards my investments. In three short years, I was putting away $450 a month. You know what, that plan worked for me.

It may not be for all of our listeners, but it was a plan that worked for me, and I simply implemented it.

David:  It’s a plan to get out of that category.

Bryan:  You brought up an example, that you had a navy chief that talked to you, that for 30 years, he took a portion every month of his paycheck and bought a stock in Coca‑Cola. After 30 years, he was close to a million dollars.

It’s all the whole proverbial story of the tortoise and the hare.

Gary:  That was a plan that worked for him. We all have our plan. We’ve said it before, there is no perfect plan.

We find a plan, we start implementing it, and our life situation changes. When we were all young officers in the Marine Corps, we had more money to spend freely.

Once we settled down, and started a family, and had kids, our situation changed. Our investing approach changed as well.

David:  People, as we talk about these different levels, I can look at myself. There has been portions of my life where I have fit into these different categories. I can definitely say, Second Lieutenant Rigg, he was the first category. If I got it, it was getting spent.

It wasn’t until I got a little bit older that I realized, maybe that’s not the right plan.

Bryan:  On that note, if we can raise our children and educate our society that you start investing early on because one of the greatest commodities an investor can have is time.

Two things we usually don’t study enough in high school and college about is how to have good relationships, when you look at the divorce rate at 50 percent, and how you put away for retirement, when 50 percent of the people don’t have what they need when they retire.

Time is critical to think about when you’re looking at a plan.

David:  We talked about this earlier. Our business has two components. It’s got time, and it has money. If you don’t have much of one, you need a whole lot of the other. That’s really as basic as it gets on this thing.

Gary, you were going to say something?

Gary:  I really believe that a good investor is, first and foremost, one that’s willing to get started. You have to take the first step. You do.

Remember, we can talk to our listeners and try to motivate them and identify some of the shortfalls that we see with our potential clients and current clients, but until they take ownership of that and understand that retirement is important, social security was never intended to be the sole source of income in retirement.

Focus on the retirement. It’s when you stop working, but there’s a lot of time from the moment you retire until that next big event that we’ve talked about, which is death. When we focus on that, and get people to really focus their retirement, what their goals are, it’s our job to help them develop a plan to meet those goals.

Bryan:  You’re mentioning Second Lieutenant Rigg spending all his money at the very beginning, no cares in the world. I would say people in that stage need to have a plan. A lot of times, people think when you get older, a lot of people have plans.

What I want to reiterate, a lot of times when people are looking around, they’re seeing people driving their Mercedes and their Maseratis and so on. Quite often, a lot of those people don’t have a plan. They are also spending paycheck to paycheck.

I always like to say, if people look like they have an awful lot of wealth, most often, it’s all show. They’re not saving.

Gary:  Can I jump in here? I heard Dave say the word “paycheck”, and I heard you just now say paycheck. It doesn’t necessarily have to be a big paycheck. It’s what you do with that paycheck.

Dave, you mentioned in the first segment about how you manage your household expenses and taxes. You’re working within your means. That’s the earned income, the paycheck. Some of our best clients, they don’t have big paychecks, but they made a commitment to take a portion of that and get in the habit of putting that money aside and investing.

They’re taking concrete action. I believe it’s going to be beneficial for them in the long run.

David:  When we’re really talking here about the class of people that they invest in their own debt. They borrow whatever they need to have a lifestyle, or the belongings, or the possessions, or whatever that they want.

A perfect example would be you want the fancy car. You want the Mercedes. You want the Bentley. You want whatever it is.

Instead of going in there and getting it on a shorter note, you’ll take the seven-year note. Whatever it takes to saddle up to that thing and have it. That’s really what we’re talking about with that class.

They’re living strictly on debt.

Gary:  To dovetail on that. I think we all want nice things. We want things. I’m sure our listening audience wants things. The people you’re talking about, they want them now, right now. They don’t pay themselves.

We’ve heard that as far as I can remember. Pay yourself first ‑‑ very simple concept. The problem is, how many people hear it.

They’re not listening, and they don’t apply it. When that light bulb comes on and people actually start paying themselves, they start getting excited, and focused, and start learning more and educating themselves.

We’re not born with a high financial IQ. It’s developed over time. That investor, the best investor, is one that’s willing to take action and get started because they start their process. Then it’s a journey.

We’re there to help you along the way.

David:  We’ve seen people get excited about it. The next group, I would say, would be your savers. This is the people, they have CDs. They’ve got large savings accounts. Maybe they’ve got an IRA. Maybe they’ve got something else going.

They’re really concerned with keeping it, and making it safe, and having access to it. What they don’t really understand is after inflation and taxes, they’re probably negative. Their returns are probably negative. It’s almost as bad as the coffee can in the backyard with money in it type‑of‑thing.

You said you ran into this with the insurance business, that a lot of times, your two main things that you would deal with would be insurance settlements and CDs that somebody had that you would have to help the family with.

Gary:  You’re exactly right, and I’ll elaborate on that. When you said coffee can in the backyard, it reminded me of my great grandparents. They grew up in the Depression. They wanted to stockpile money, their savings. That’s a start. It is.

I think it’s our job to try and communicate to people that that money is there. It’s in the purchasing power. We’ve talked about risk. You’re losing that, but by investing, you’re trying to get a return on that, some passive income.

The day you stop working or retire, where would you be? If I asked somebody right now, if you stop working today, would you maintain your current lifestyle? 99 out of 100 times, people say no.

Think of your retirement or what you’re investing as the passive income. When you get to the point that if you stopped working, your passive income from your retirement will allow you to maintain your lifestyle, then in my mind, you’ve achieved your goals.

Bryan:  We’re going to have to break away here in a few moments for a commercial. But we still have several more sections to go into and discuss the concepts that we’re talking about.

The main thing to take away from this segment is that, you know, get a plan. Get a strategy in place. Today is the day you need to start thinking about how you’re going to do that if you haven’t done so already.

We’d love to help you in that pursuit here at Rigg Wealth Management. Please feel free to visit us at our web page at riggwealthmanagement.com. That’s R‑I‑G‑Gwealthmanagement.com.

Also, feel free to give us a call at 972‑383‑1210. Again, that’s 972‑383‑1210. We love to hear your feedback, or if you want to have help getting a plan in place, we’d love to sit down and strategize with you, and help you explore your financial goals and your fears, and see how we can help you in pursuing a good portfolio.

Transcript – Segment 3

Bryan Rigg:  Welcome back to the show, ladies and gentlemen. You’re with Bryan Rigg, at Rigg Wealth Management. I’m here with my two partners, Gary Bilyeu and David Rigg. We’ve been talking about investing, what makes a good investor, what type of investors are out there.

We have talked a little bit about debt. I wanted to come back to that very quickly. Debt is not necessarily a bad thing. The way Americans have usually dealt with debt has been a bad thing, but there is a good way of managing debt to get a home, to get a car.

Usually what I like to tell clients and prospects, a general rule of thumb is that if you can have your money earning over three percent, and you can keep your debt obligations, interest rates, below four or three percent, then that’s probably very good debt.

Once you start getting into debt that’s 7, 10, or 12 percent ‑‑ a lot of these credit cards are horrible with the interest rates that they charge ‑‑ then you’ve got a serious problem with debt. Before the implosion in 2008, with the mortgage debacle that caused another market crash, people were saving at a negative rate. They were going into debt.

Now one good byproduct of what happened with that crash is that a few years later, people are saving at a positive rate here in America. But one thing that we see quite often is when there is plenty to be had, people go more into debt than putting away.

It’s kind of like, I know we come from a Judeo‑Christian tradition here in America, and the following examples that I will give, many people will understand. In the Old Testament, in the Tanakh, the Jewish Bible, we have Joseph. You have seven years of famine, and seven years of plenty.

Well, if you don’t put away during the times when you have a lot, you’re going to have a hard time when that famine hits. A lot of people are shocked by this. When I was a professor at SMU, and I was teaching a course on the history of God, that the topic that’s most discussed in the Bible ‑‑ more than anything else ‑‑ is money and how you deal with it.

I want to leave our listeners with a parable that was mentioned in the New Testament, the parable of the talents, that I think speaks volumes about what we’re talking about today.

You have these three servants with a king. One’s given 1 talent, one’s given 5 talents, one’s given 10 talents, and the king tells them to make it work.

One, with the 1 talent buries it, and the other two, with the 5 and 10, they put it to work. When the king comes back, the one who had 10 talents is now at 20, and the one who had 5 talents is now at 10, and then the one that just buried the 1 just comes back with the 1.

He is punished for not putting his money to work, and investing it, and the other two are rewarded. I think this is something that when you’re looking at your portfolio, this is an enduring legacy of humanity ‑‑ how you take your money and make it grow, how you take it and you put away for tomorrow, and manage your debt as well, manage your assets, manage your paycheck. I think that’s something very important for you to look at.

In this pursuit of looking at investors, and what makes a good investment strategy, I’ll turn it over very quickly to Gary. Gary has a few thoughts that he wants to share on this topic.

Gary Bilyeu:  I think that parable applies today, because I would think that the one that buried the one, he could not overcome the fear of losing. I don’t think anyone out there, anyone in our listening audience, wants to lose money. In fact, I don’t have a single client that has as their objective they want to lose money.

Nobody has that, but that fear of losing ‑‑ and there’s risk. There’s risk in everything we do. We’ve talked about that week after week about risk, but at some point, you need to overcome that fear and start taking charge and investing your money. No one knows what the stock market’s going to do. They don’t.

We’ve seen ups and downs, and the volatility, the movement up and down of the market is constant. It’s always going to happen, but at some point, you need to get involved. People want to wait. They see the market going up, or they see it going down. There’s opportunities every day. Every day.

Bryan:  In investing, it’s all about balancing greed and fear and logic, and a lot of times, we do a bad job of managing those three balls as we’re juggling them. I think the ultimate theme to get across here, especially what David has been mentioning, doing nothing is the worst thing for an investor. So, without further ado, David has several more thoughts he wants to share about investors and the classes that they represent.

David Rigg:  We’ve got a few more classes to talk about. The next group of people I want to discuss are people that are starting to understand they need to get involved. The clue bird has landed, so to speak.

They’re realizing that they’ve got to change their situation. These are people, they may have an IRA, they may have a SEP, they may be involved in a pension plan, they may have a 401(k) at work, that they’re starting to realize that, “Hey, I’ve got to start getting my money working for me.”

Gary:  They have some amount of money working, up and running.

David:  Something running. This is where firms like Rigg Wealth Management can really help. Because we can take somebody who realizes that he’s got to do something, and we can then roll them into the next class, which is a long‑term investor, that they’ve got a plan.

They realize they’ve had to get control of their investment and their spending habits. They’ve minimized their debt. They’ve got a timeline that they’re working with, and they don’t get real fancy, but they realize they’ve got to use insurance. They’re not striving for a home run. They’re looking for a lot of base hits. They’re looking for getting their money to start producing.

They understand there’s risk involved. They understand how to manage some of that risk. We sit down and discuss ways to manage that risk. They’re conservative. They’re diversified, and they’re looking to start growing their portfolios.

Gary:  David, many of those people have reached a culmination point in their financial IQ. They just have. Most of our listeners have jobs, and they’re working. They’re focused on their family, their careers, things like that, and they look at their investments one time a month or each quarter when they get a statement.

It’s our job, here at Rigg Wealth Management, to manage that money, to manage it to help you pursue your goals. It’s a plan, but we can take it to the next level as far as providing additional opportunities, to explain what’s happening in current events and how that affects their portfolio. I think we do a very good job of that.

Now, instead of you looking at your investments once a month or once a quarter, our team is looking at it on a daily basis.

David:  Absolutely, and this is the level where you can start to really have some success. You can start to see things happening. A lot of people, this is as far as they go. They don’t become a sophisticated investor.

When we say sophisticated investor, it’s not somebody that drinks tea with their pinky out. That’s not what we’re talking about here. We’re talking about somebody that they’ve got a solid foundation. They understand the risk and the benefits of being in the market. They’ve got a sacred cow probably already put back.

They’ve got the time to manage their stuff. It’s really more of an understanding of the financial world, and how it works. They use things like corporations, trusts, partnerships. You can consider this group the varsity level. This is the varsity level of financial world investors.

Bryan:  On that note, the varsity level also has patience. As you were just mentioning, Gary, the market goes up and down, and there’s a lot of volatility. The worst type of investor is a reactive investor, a lot of times. When they look at the market, they think everything’s going to hell in a handbasket, and they pull out.

If you have the historical perspective ‑‑ and hopefully, that’s one thing we are good at giving people ‑‑ historically, if you’re diversified, and you’re managing your risk through that diversification, you’re in the long run, always going to win when we look at what has happened so far in America, with a good rule of law, good markets, good productivity, and so on.

A bad investor’s one that doesn’t realize that historical truism, that we’ve done extremely well. We’ve had 23 major pullbacks, or crises, in our markets, but we’ve recovered. We’ve come back, and we’ve had good productivity.

Gary:  Just to back up one step, David, you mentioned something. Those people that do have money up and working for them, most likely with an employer‑sponsored plan, they’re investing, typically, each time they’re paid. A certain amount comes out of their paycheck, and that’s when that money goes to the market, at that time.

If you’re paid every week, it’s weekly. If it’s semimonthly, that’s twice a month, or bi‑weekly, every two weeks. The market, when the market is open, it’s updated every 15 seconds. Every 15 seconds, there are opportunities to look and see what the market’s doing.

But if you’re only investing in your retirement plan through your employer, you’re only investing that day, once a month. You’re not taking advantage. That might be when the market’s at its high. As contrarians, we’re not necessarily looking when it’s at its high. We want to take advantage of those opportunities when it dips. We can do that in real time.

Bryan:  By way of illustration, one of my favorite catch phrases, right now, looking at the market at historical highs, it’s not necessarily the prudent thing to put all your chips on large caps right now.

A bull market, which we’ve had for over eight years, historically, it’s only averaged about three and a half years. History seems to be telling us that we need to be careful for a pullback, and that’s one thing of managing risk, of knowing this, and how you diversify. As you were saying, Gary, as being contrarians, trying to find areas in the market that are at a discount, and then investing there. That’s one thing we do an awful lot here at Rigg Wealth Management. That’s another way of managing risk.

David:  I would also like to say, the people that are in those employee‑sponsored plans, one of the things that does work to their benefit, when you have a routine, periodic investment schedule is you do get the dollar‑cost averaging.

A lot of these plans ‑‑ let’s be honest ‑‑ in an employee‑sponsored plans, a lot of those plans don’t have a lot of options. At least that is something that is beneficial, is having a steady, routine deposit into your retirement account, all the time.

Bryan:  On that note, David, I think it’s so important, here again, for our listeners to realize that just doing something little ‑‑ if you haven’t done anything, especially ‑‑ just doing something little every month, every quarter, every year, is getting a plan in place and at least doing something.

Doing nothing is not a good idea. The research tells us that most people are not doing a plan. That’s, hopefully, where you can look at us as financial doctors, or financial coaches, if you will, of helping you get a plan.

Whether you have only $5,000 to invest or $100,000 to invest, we can help you. We want to help you. Please reach out and get in touch with us. Our telephone number is 972‑383‑1210. Again, that’s 972‑383‑1210. We love to hear your feedback. We’d love to meet you. Please feel free to call us.

Also feel free to visit us at our Web page at riggwealthmanagement.com. That’s Rigg with two Gs, riggwealthmanagement.com. Please stay tuned. We’re going to be talking more about investing opportunities and the investing landscape, and how we might be of help with you exploring those areas. Thank you so much for listening, and we’ll be right back with you.

Transcript – Segment 4

Bryan Rigg:  Welcome back, ladies and gentlemen. My name is Bryan Rigg with Rigg Wealth Management. You’re here with my partners Gary Bilyeu and David Rigg. We’ve been talking about what makes a good investor, what type of investors are there, how you manage risk, and how you manage debt.

Beginning risk, I want to bring to the attention of our listeners that it was 72 years ago that we had one of the biggest battles that America ever fought ‑‑ Iwo Jima. We lost one‑third of all Marines that died in World War II, died in that battle.

It was the first time that a foreign flag had flown over Japanese soil in 4,000 years, and it was a huge stepping stone in bringing the empire of Japan to its knees and securing a peace for Asia, especially getting Kojo, Japan, Hiroito, Japan away from the brutal dictatorship over 600 million people.

When we talk about risk, the reason why I bring this battle up is to think of the men that gave the ultimate sacrifice for America 72 years ago, and bring this historical event to the forefront of people’s minds right now. Also, you’re looking at how a nation manages risk back then.

What’s the greatest asset that a nation has? It’s its people. We were willing, as a nation, to fight for democracy, to put our people in harm’s way ‑‑ many of them ‑‑ sacrificing them for victory. That secured an incredible nation. It protected our freedoms. It preserved markets, international markets. Now, one of our greatest trading partners is Japan.

When you look at risk, there’s many layers of risk out there, and we benefited from taking incredible risk. All of us, being former Marine Corps officers, we appreciate dramatically what our brothers in arms did in Iwo Jima, and the risk that our nation was willing to take in order to secure that freedom.

When we look at risk, we benefit from it all the time. What our country has done for us to provide an incredible foundation that we can invest, that we have freedoms out there that we can speak our minds, is remarkable.

Now, getting to the investing realm, I think the story of Iwo Jima gives us many lessons. That if you do not take the risk, you will not benefit from the rewards of taking that risk. You have to take risk. One of the risks is just getting involved with the stock market.

That’s very important to look at, especially when interest rates are very low. That’s why a lot of the times in the last couple of years, people are flooding into the stock market, because they’re trying to get returns.

This is something here at Rigg Wealth Management that we like to explore, we like to explain, we like to go into the historical foundations for the decisions that we make. That is something that I think a lot of people fail to realize. That in order to have a healthy portfolio, they have to take on risk.

There’s a correlated relationship with risk and patience. Once you get a plan going, you take on that risk, you’ve got to take time. Getting back to the Iwo Jima example, if you just look at it in the first couple of days, it wasn’t worth it, but if you look at it after looking at the whole war, and when we had peace, it was definitely worth it.

Same thing with a portfolio. You want to look at a portfolio, managing the risk, and give it time and let it mature and realize that we take risk in so many ways in life, and we benefit from it. Quite often, when it comes to a personal level of investing, a lot of people are risk‑averse, and that’s not necessarily the right way to look at your portfolios.

Gary Bilyeu:  I would agree with that, Bryan. You were talking about Japan and foreign markets, and it made me think about it. I had a potential client who was very concerned about the US economy and what’s going on with our politics and thought that maybe…Emerging markets was essentially what he was getting at, and should he explore there?

Me, personally, I think the US is a great market to be investing in. Think about this. If you’re driving down the road right now, think about whatever turmoil that we have in the US, whatever the hot topic of the day is, and there’s concerns, and we’re worried about our markets, but we live here.

Most of us grew up here, spent our entire lives and many generations. We have a very good understanding of our current political scene and current events, but think about investing in some of the foreign countries where you may not have ever been, ever traveled to ‑‑ that’s not a criteria to invest.

If you don’t know the political situation or the current events, there could be something there that you’re just simply unaware of.

Bryan:  When I was at Credit Suisse, there was a big push to get people in 2006, 2007, to put a lot of money into Asia ‑‑ primarily China ‑‑ and Russia. We have seen that those two economic plays were not the wisest choices.

Especially in Russia right now, it’s ruled by a dictator, a KGB goon, a lot of people say ‑‑ Putin. You don’t have the rule of law. You have a lot of problems there. Russia’s not a place, as far as an “emerging market,” that you want to be looking at.

China has had serious problems with their political climate. A communist nation. Doesn’t always promote the rule of law. They’ve had a lot of human right violations. What we see quite often, when people are looking at emerging markets, what we see as far as investing is that usually you want to go to markets where the rule of law is the strongest.

Asia, if you’re going to look into a market, probably the strongest market there is Japan. One of our worst enemies now is one of our best trading partners. They have a wonderful government structure, thanks a large part to General MacArthur, but they’ve also had problems.

The last three decades basically, they’ve had zero growth, really. It’s been a stagnant economy. You know how to manage your risk within that country more efficiently than you do with countries like China, that doesn’t have a lot of transparency.

Gary:  Yeah. What I told this potential client is I’m not against investing outside the US, but I want you to understand as the investor, that’s your money and the associated risk. If you have a low tolerance for risk, you may not want to invest in an emerging market.

Bryan:  Yeah, but if you do, there are opportunities. Franklin Square brought out a stat recently that in China, the average person is consuming about three barrels of oil per year. Now, you’re looking at that’s going to go up to around nine barrels per person per year.

Gary:  Per Chinese?

Bryan:  Per Chinese. Per person in China. There’s incredible opportunities right there just in the energy market that China represents. We don’t have enough OPECs to support that. There’s opportunities. One of the other stats that I saw recently, that in developing regions, talking about China and Vietnam and India, they represent 82 percent of the world’s population.

We would be fairly arrogant just to focus strictly on our markets and our small little population. You’ve got to look at those emerging markets with a skeptical eye and really ask the hard questions of, how can you secure your money, how can you make sure the reports you’re getting are legit, and so on.

Quite often in America, the reports we are getting are legit. When they’re not, like with the recent Volkswagen scandal in Germany, it becomes public. This is a good thing, that the democracy is working, that we’re actually seeing where there is problems and be able to react to it.

Gary:  Bryan, I would encourage our listening audience to ask those type of questions of us. They can go to our website at riggwealthmanagement.com, and on the home page, there’s a Contact Us. It’s no obligation. If you have a question, or something you would like for us to explore, or you have a question and you don’t feel comfortable asking anyone, ask us. We’ll address it and discuss it over the air.

Bryan:  A lot of our investors talk about India and China and emerging market opportunities. We enjoy exploring these opportunities, so we would like you to do that if that’s something that you find interesting.

Thank you so much for listening, and we’d love to hear from you. Our number is 972‑383‑1210. Again, that’s 972‑383‑1210. Thanks so much for staying tuned.

Transcript – Segment 5

Bryan Rigg:  Welcome back, ladies and gentlemen. This is Bryan Rigg with Rigg Wealth Management, here with my partners Gary Bilyeu and David Rigg. We’ll be exploring more about emerging markets and where there’s opportunities.

Quite often, there’s a risk‑reward balance here that you’ve got to have with emerging markets. A lot of times, people think that investing in something is a recent phenomenon, but it has been part and parcel of the human fabric of history since we began.

If you were involved with the Greek empire before Pericles became the ruler of Greece, you had a lot of opportunities there. Now, you necessarily wouldn’t want to invest in Greece today, but back then, there was great opportunities.

The Roman empire. If you got involved with it before Caesar Augustus and the golden age of Rome, you had a lot of opportunities. Some economists have looked at the Roman empire, and if you were there during the time of Caesar Augustus, your money market was earning seven percent, and you only had to work one week to pay your taxes.

There’s many opportunities in emerging markets that we see throughout time, and as we see now. But you wouldn’t necessarily want to invest now in Italy, in the remnant of the Roman empire if you will, because it’s not a great country to look for investing opportunities in general. Although, in particular, there might be some areas that you might want to focus on.

When you go down this road of looking at emerging markets and opportunities out there, you’ve got to really be skeptical, put on your thinking cap about why, where, when, and how, and make sure that when you deploy cash in emerging markets, that you’re doing it with as much information as you possibly can.

A lot of people look at India and China as emerging markets. There’s incredible opportunity when 25 to 30 percent of the world’s population is in China.

Now, they’re building more cars than America, and their oil consumption is going to surpass the world in total here soon at the rate that they’re going. There’s a lot of opportunity out there. But it is a communist nation. It has a horrible human right record. It doesn’t have a lot of transparency.

When you go into these areas, you’ve got to practice a lot of wisdom, and you’ve got to get a lot of knowledge. And here at Rigg Wealth Management, we would hope to help people exploring that area and what is best for them when they do start investing in emerging markets. David?

David Rigg:  I think it’s important for people to understand with emerging markets that you have all of the risk that you have here, all of the market risk. There’s so many examples out there.

You can look at Spain, for example, with all the overbuilt apartments and houses that were never sold after 2008, when the collapse came. Or, you can look at Russia and when the oil dropped through the bottom, how that affected their economy as well.

You have every risk that we have here, plus you have government you may or may not be able to depend on. People have to be very skeptical and careful about how they’re doing their overseas investments.

Bryan:  Russia is an example. It’s a commodity economy, and it’s basically based on one commodity. This is an example of diversification they don’t have in their economy. That’s the beautiful thing about America, is just our diversity ‑‑ with our high‑tech sector, with our energy.

We’re now exporting energy for the first time in a long time in the last couple years. And then, we have a lot of productivity with different types of industries out there.

I think that’s important to look at an emerging market, if you’re going to go into one, that you look at either where they’re very strong, or you look at trying to diversify in that market and benefit as it grows up into a more modern society.

History shows us that one of the strongest areas to be in in the stock market is small caps. Those are usually companies that are earning between $500 million to $5 billion. But it’s also one of the most volatile ones.

If you’re going to go into that, then you need to realize that you’ve going to have a long time frame, and you’ve got to make sure you’re diversified in balance. But you’re also going to have to weather a lot of ups and downs. Down 30, 40 percent, it may be up 30, 40 percent, but it’s going to be very volatile.

Same thing with emerging markets. You’re going to have a lot of volatility in those emerging markets, but if you diversify and you focus on the rule of law, focus on the government structure, focus on the free trade that a country has, then you can start making wise decisions. There’s always a very good opportunity there.

If people have gotten involved with Germany and Japan after World War II ‑‑ both these economies were emerging markets ‑‑ they would be extremely wealthy today if they put a lot of their cards there. But if they invested in other countries, like Russia after World War II or China after World War II, they’d be in a world of hurt right now. Gary, you have something to add?

Gary Bilyeu:  I think we do a very good job here at Rigg Wealth Management to explore the spectrum. We don’t come in with blinders on, just looking at one strategy fits all. We sit down and visit with the clients. We understand.

In many cases, we help them refine their goals and then help them define the strategy that they pursue to achieve those goals. Understanding that we don’t just look at one index, or just a couple of indices in the US. The market is much bigger and much stronger, and it’s outside our borders, as well.

Bryan:  A lot of you might be thinking, “Hey, I’m just starting out. I only have a couple hundred thousand. I don’t necessarily want to look at emerging markets.”

The problem with our world today, quoting Friedman, is that our world is flat economically. We’re having so much interchange with the world that you have to really study this in some respects to make good decisions in just investing in which companies you want to look at in America.

A lot of companies on the S&P 500 are not based in America anymore. A lot of people don’t know that. Studying this one tranche of the market, of emerging markets, will help illuminate a lot of your investments in general, and where best to put your money.

I think that’s something important to know. Quite often, when you do go into the market, and you do take that step and take on the risk of investing in the market, you are engaged in some respects with emerging markets. You want to make sure you’re knowledgeable about that.

David:  I just want to bring up the fact that you may be invested in emerging markets right now and have no idea. If you have some oil stock, or own stock in a tire company, or whatever, they may have a lot of exposure to emerging markets that you are totally unaware of.

Bryan:  Absolutely. A lot of people that have invested in the energy sector with me say, “I want to go into that sector, but I want to make sure my money doesn’t go to Saudi Arabia.” I agree with them, but unfortunately in that world, all the world oil goes basically into one pot. And that’s what you’re investing in as it goes around.

It’s hard to pull your money out of some sectors. But this is one thing that we can talk about as far as investing opportunities, learning about the emerging markets, learning how international markets work.

Thank you so much for listening to us today. These are the things that we like to explore with our clients and portfolios. We’ll be right back after the break, please stay with us to explore these topics and go over opportunities in the portfolio.

Please feel free to visit us at our web page at riggwealthmanagement.com. That’s Rigg with two G’s, R‑I‑G‑G, wealth management dot com.

Also, feel free to call us at 972‑383‑1210. Again, that’s 972‑383‑1210. We love to hear from you, get some feedback, and hopefully, set up an appointment to come in and meet us.