We keep hearing that we’ve been through the worst already with the recession, but is that true? If you’ve listened to past episodes, you know the news and government reporting for the economy is always behind and we have to take what we hear with a grain of salt.
With this in mind, I invited financial expert, Ted Oakley, on the podcast to talk about his thoughts on interest rates rising, unemployment, the state of the economy, and where he thinks we are headed as a country.
This episode is a must-listen, Ted’s insights are unlike any you’ve heard in the mainstream media recently.
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Speaker 1 (00:00):
Hello, my fellow Ripples. This is Chris Miles, your cashflow expert and anti financianal advisor.
Speaker 2 (00:07):
Chris Miles was able to retire twice by the time he was 39 years old, but he’s not content to just enjoy his own financial freedom and peace of mind. Chris wants you to have your own ripple effect so you can live free today. He’s not the financial advisor you expected. He’s the non-financial advisor you deserve. He’s jumping behind the mic right now, ready to make waves. Here’s Chris Miles.
Speaker 1 (00:37):
Guys, this show is for you. Those that work so hard for your money and you’re now ready for your money working harder for you today. You want that freedom of cashflow now, not 30 or 40 years from now, but you want it today so that you can live that life that you love with those that you love. But most importantly guys, it’s not just about getting rich, it’s about living a rich life because as you are blessed financially, you have a greater capacity to bless the lives of others. And that is a ripple effect. I’m here to create. Thank you for allowing me to do so through you. Thank you for tuning in, binging and sharing these episodes and applying these things so that you can prosper yourself and create a greater ripple effect. All right guys, if you haven’t done so already, be sure to go check out our website, money ripples.com.
There’s lots of great information there. And of course we even got these as done as blogs transcribed, so if you’re a reader rather than a watcher, that’s not me. But if it’s you, wonderful, you can go on there and check that out as well. Alright guys, I’m really excited about this episode today because I wasn’t able to witness this live. Usually I go to this conference with Dennis that is incredible and I got to watch the recording instead after the fact because I was helping my wife get nurse back to health. And I’m telling you, this guy is brilliant. So I brought on Ted Oakley on our show here today. Ted is really not just, I mean not only been in the industry for 40 years, he’s actually the owner of Oxbow Advisors. We’ll talk about that here in a little bit as well. Not to mention a big giver’s Servant’s Heart, the guy has actually started two charities, the Foster Angels of South Texas as well as for central Texas, which has literally helped tens of thousands of foster kids across Texas. Now, we’ll probably ask more about that, but the one thing that’s great about this, yes, I’m bringing on an advisor. I know this might shock you, but this guy is no normal advisor. This is not your typical run of the mill financial salesperson in a suit trying to sell you on mutual funds. This guy knows his stuff and I can really attest to that. Not to mention man, his background, we got to get into it a little bit. So Ted, welcome to our show today.
Speaker 3 (02:31):
Thanks a lot Chris.
Speaker 1 (02:33):
So the first thing I got to ask you, I saw in your bio here that you’re raising a home with no indoor plumbing or running water, and you even started basically saving for college at age six with your first job. Tell us more about that. Well,
Speaker 3 (02:45):
I don’t think, Chris, that I’m so unusual. I know a lot of people that watch your show probably too came from tough backgrounds and so I don’t try to stand out in that respect. But I’ll tell you, it was on the North Carolina Georgia line and we were basically what they call hillbillies at the time, and it was just a shack. I mean, it was my grandmother’s two bedroom house. So what happened is you’re in a small house and you’ve got a lot of people and we didn’t have any money. I mean, my father was a Pentecostal minister, and if you don’t know anything about, that’s extremely strict religion. And so I spent most of my time by myself really working even as a little kid, and I started a job at six years old and I never did not have a job the rest of my life, even till now. And that’s okay too, but it was, you learn a lot like that, you get a lot of adversity. But I will tell you, it creates a lot of resilience, which I think people need to be resilient in order to be successful in life, as I’m sure a lot of your followers on this show are. And so my hats off to them
Speaker 1 (03:54):
Now you’re in Austin area, correct? With owning Oxbow advisors, right?
Speaker 3 (03:57):
I do, yeah. I’ve had different investments over time. I’ve invested in private businesses, real estate, part of a really good community bank as well. And so I sort of know the landscape as far as that goes, and I’ve sold companies so I know how people feel about that too.
Speaker 1 (04:12):
Yeah, that was one thing that intrigued me too, is that you actually own a bank or I have ownership in a bank, correct.
Speaker 3 (04:18):
Right. I’m not the majority owner, but I’m certainly one of the owners. I’m on the holding company, so we’re in the decision making process for sure.
Speaker 1 (04:28):
That’s incredible. Well, what even got you into this downest path to where you are today? I mean obviously you’ve been working, but what got you interested in the money game specifically?
Speaker 3 (04:38):
Well, what got me interested was I was working for a food company called Anderson Clayton Foods in Dallas, and if you know anything about the food business, your readers or your watchers, I’m sure they know that it’s a very low margin business unless you own it. And I had taken this one line had, it was a shortening line and I had doubled the sales and actually dropped one person salesman, so should have been really profitable, which it was. And they called me in, gave me a 2% raise, and I said, well, that won’t work. I’ve had enough things go wrong in my life where I’m not particularly fearful of anything. So I mean, not that I don’t have any fear, but I’ve button up against the wall a lot. So I said, no, that won’t work for me. And I just got lucky. I’ve been helping so much in my life with people. One of my good friends said, Hey, I think if you go down and talk to this guy Merrill Lynch, he’ll send you to New York. And sure enough, I tested out and I went up, started on Wall Street and came back to Dallas and went with a private company later on too. But that’s how it all cranked up. And I liked the business. It’s a lot like sports. You have to be with it every day and know what you’re doing.
Speaker 1 (05:48):
Well, and now you’re kind of in this game right now and you hear a lot of conflicting things in the media right now, right? Because we hear a lot of people saying, you know what? We avoid a recession. That soft lending was so soft, we didn’t even feel it. We’re just taking off again, 2024 could be great. You’ll hear a few people say, even just recently we heard from, I believe it was Goldman Sachs, CEO Diamond, right? That said, Hey, I’m seeing something more dangerous on the horizon, but we got everybody else saying, no, we’re good. What’s your viewpoint? What are you watching right now to really sift between what’s fluff and what’s real?
Speaker 3 (06:23):
Well, there’s two camps on it, Chris, and some people are talking about we’re in the early cycle of something going the other way going up. And some people think, no, we’re in the late cycle. I don’t see how people get to early cycle. Lemme tell you why. Here we are with very low unemployment, so it’s not going to go any lower or very little, that’s for sure because full on right now also you have very tight money. You have everything breaking down. We’re seeing, I’m starting to see a lot of things the last two months where buildings are given back to the lenders. I’m seeing people with cash calls, all sorts of things going on. That’s not early cycle, that’s late cycle. That’s where you’re getting ready to have more trouble. And I think that’s where we are right now. And they keep talking about the consumer being really whole and in great shape. Well, the consumer’s not in great shape. I can show the numbers, but if you look at their borrowings and where they are and what they’re making, I think they’re spending the money they have sort of in a last hoorah, but I’m thinking the next three quarters will be pretty tough.
Speaker 1 (07:30):
And you have different data on this too, because just recently we had consumer spending coming out, retail sales were up beyond what people expected. And that sounds like everything’s booming and people can interpret that as good news or bad news depending on which side, right? Either, like you said, it’s either early cycle or late cycle. Some are looking at it as bad because the feds might raise rates again, which they’re probably going to do anyways. But still, I know you have a slide right here. It says the consumer still strong and you’re showing evidence that saying maybe prices are going up or retail sales are up, but is the consumer really able to keep up with this?
Speaker 3 (08:04):
Well, and that was just for the month of August and I think September actually when we run everything down, it’ll be worse. But I think what people forget about is that of all the things that are sort of coming at them and the fact that we’re probably running out of any of the free money that was left over, but what happens with the consumer right now is that, and I’ve just noticed this, just listing I guess living all three socioeconomic levels, I can really converse with anybody. One of the things I’ve found about the lower income right now is that whatever money they did have, they couldn’t buy a house, couldn’t buy a car, didn’t have enough. So they said, what, I’m going to take a trip, I’m going to do something fun and I’ll worry about it tomorrow. Well, that’s okay, but the problem is that’s the end of the line. And I think when you look at auto sales, home sales, just so many different things. If you look at retail, sales are down and you see people like Dollar General who they lower earnings estimates, then that, and that’s at the lower end by the way. Then you know have trouble.
Speaker 1 (09:10):
Well, I know you pull up something I thought was really interesting too, is looking at utility shutoff rate, that looks like it’s going up as well, isn’t it?
Speaker 3 (09:18):
Well, it gives you an idea of what’s happening. One of my research sources gave that to me and one of the things that people don’t think about is they don’t think about that sort of thing. I’ve always said if you get behind in your taxes, that’s one thing. There’ll be two or three years before a county or a city comes after you, but if you get behind on your water sewer, you’ve got about a month, they’re going to cut you off. And I just think it goes to show what’s going on out there that people are just, they’re just barely getting along week to week. And once you get down to that point where you’re really not getting week to week, then you really have to start tightening the screws. And I think that’s where we are right now.
Speaker 1 (10:01):
I remember in 2020 when a lot of the money supply was starting to just be flooded by the trillions in the market. I remember some people that were more down on their luck, they were suffering of course already paycheck to paycheck. And then with this, of course the government came swooping in to save the day and pump money into them. And I remember I even said on the show three years ago, I said, well, all they’re doing is it’s kind of like the whole take from the rich and give to the poor. If you look at a pool with different depths, you got the deep end, the rich, the shallow end, the poor. If you take out from the deep end of the pool, you scoop it out, dump into the shallow end, it’s still going to flow right back to the deep end again. And lo and behold, the one tax that people weren’t talking about was inflation, which hurts the lower class much worse than it does the upper class.
Speaker 3 (10:49):
That’s a fact. Yeah, I think people don’t realize, but we’ve had for the last really 25 years, we’ve had a completely irresponsible federal reserve and I blame them and fiscal policy by the way, during that 2021 period, the same way in that they’ve just basically ruined the monetary system. I’ll put it that way, because they made things really set sort of a fake market and that’s how we ended up with all those things that don’t mean anything.
Speaker 1 (11:17):
I know you’ve even mentioned too that the feds tend to lie whatever they say often they’ll do the opposite. Can you give us some examples of that from before?
Speaker 3 (11:25):
Well, there’s a lot of ’em really, but if you look at, I’ll go all the way back to Bernanke Bernanke talking before the housing crisis. I’ve got him quoted saying, it doesn’t look like the housing crisis is going to throw us into a recession. That was prior to the big supper on meltdown. And then you go forward and Janet Yellen who would always talk about both sides of her mouth and she would say something but do the opposite. Then you went on to Jay Powell and Powell in 18 said, we’re going to normalize, we’re going to normalize interest rates. I’m coming in new and we’re going to go back to, it should be back in the eighties and nineties like the Fed should do it. But sure enough, market fell in December and he flipped on a nickel and he was within a month and a half he was in there lowering rates again. And then you remember all of this, but he was talking about transitory inflation and inflation is always transitory, but it can be four or five years. Transitory, he A made it sound like it was only going to be a quarter, and so they’re always saying one thing, doing another, but let’s face it, they’re all academics and most academics don’t have an idea really what’s happening on Main Street. True.
Speaker 1 (12:46):
And they’re very wealthy academics at that. They’re bankers, aren’t they?
Speaker 3 (12:50):
Well, yeah, I think there’s, I don’t know. My friend Lacey Hunt tells me there’s I think 350 plus PhDs in the Federal Reserve. I mean why, I guess my question so that goes on, but it’s always been the last Federal Reserve chairman that I really could believe and thought he had it together was Paul Volcker, but that’s been a long time ago and ever since then it’s just been up and down, up and down trying to control the stock market and control the economy and that’s not their job, but that’s what they’ve been doing.
Speaker 1 (13:24):
Well, and one thing you hear people talk about in the news often they’ll say that the consumer is resilient right now that they just don’t slow down, they just keep spending. What do you think it really contributes to that? Because most people I think are expecting if the consumers are in a bad place, they’re just going to be broke, they don’t have any more savings left. Maybe they’re running credit card balances up, but last report they’re saying, well, credit card balances, they’re still well below the limits overall. What are your thoughts on that?
Speaker 3 (13:51):
Well, they just started this, but if you look at balances, they’ve been going up now a lot for the past six months and now you’ve gotten the average, average credit card rate up to about 22.2%, which is obviously no matter what they want to tell you in Washington, they’re not thinking about the little people. That’s for sure not with 22%. And I threw in on that slide, you have my own, I just happened to look at my American Express, which I don’t have any balances, but I wanted to see what they did charge, and I said this in the talk was it was 29.99%, which is they didn’t have the guts to write 30. And you think about that, it’s atrocious. I mean, there’s no way a consumer can wade through that and it’ll just keep driving them in the hole.
Speaker 1 (14:41):
And I know you have another chart after you showed that personal interest payment showing that interest rate and the balance has definitely gone up, then you also have the savings rates going down too.
Speaker 3 (14:50):
Well, what’s happening with savings is they got a blast of money from various things, from unemployment, from stay at home childcare. There’s all so many credits that everybody got and all of a sudden they had extra money that they never had before, but now they spent it. Really, if you look at the numbers there, by the time you get to the fourth quarter 23, they pretty much spend all the money. And so now they’re pushing over into credit and credit only lasts so long and then delinquents are going up as well. So we’ll just have to see how it plays out.
Speaker 1 (15:25):
And what do you think will happen as a result of this?
Speaker 3 (15:28):
Oh, I think it will break the consumer and when it does, it will break the profit cycle for companies. They’re already starting to see it. They don’t want to, I just saw the number this morning. We’re expecting fourth quarter earnings to be down for the market in general, 1.7, 1.8%. It’s probably going to be more than that. Nobody wants to admit it and they can run the numbers around and sort of fool you any way they want to, but the bottom line is they’re not doing as much business.
Speaker 1 (15:58):
And that kind of leads to really investment options because people say, okay, if we’re moving to recession now, and I know traditionally you have the financial professionals will tell you, you got stocks, you got bonds. There’s always the traditional 60 40, which people have been questioning and debunking for quite a while now already, but I think not many people realize that even if you’re in stocks and even if you have bonds, you’re not really diversified, are you?
Speaker 3 (16:25):
Not really. I think people, what’s happened is you have a whole set of people, not only in the industry, but people that gave advice to people that have only been around since 2009. And so all they’ve ever seen is very, very low interest rates and a robust stock market. Nothing could ever go wrong because the Fed would come in lower rates if it did. That’s the backdrop of all these people. If my advice to person is don’t necessarily believe all of that, you need to start looking out for yourself. Because what happens in here is that we’re probably leaving the 60 40 look more than likely, especially with a five and a 5% 90 day treasury bill. That’s hard to beat. Make sure you can weather the storm. I always have something we use in the firm called base capital and investment capital. I don’t have the slide in here I think, but what it means is we always have a certain amount of money. No matter how much money you have, you should have a certain amount of money we call base capital and it’s bulletproof. In other words, you’re not going to make a ton of money on it now. You make good money on it still even now. But normally it’s not going to be your biggest returner. However, it’s the one that allows you to not get caught up in emotions on ups and downs and allows you to stay steady.
I think people, they don’t have that today unfortunately, but they need it. They need some of that base capital there. It may be sort of rocky here the next year or two.
Speaker 1 (17:55):
Yeah, it is fascinating because you’ve heard of course Buffett’s type of philosophy as well as several others. They’ll say whenever there are crowds running one direction, you run the opposite. And so when I started hearing in early 2022, don’t you dare hold the cash because you’ll lose to inflation, you got to invest all of it. I thought maybe this is the time to start holding cash. And obviously I don’t just hold it in a bank earning point, nothing percent, but I mean, for example, we talk a lot about infinite banking and especially having cash rich whole life policies and things like that. And so I started moving more of my money over there and of course as interest rates rise, so do our dividends, it’s kind nice to watch that benefit as well. I mean, what are your thoughts about good places to hold base capital?
Speaker 3 (18:39):
Well, I might add that Warren Buffett, they talk about Buffett, but if you look at when he has a lot of cash, he’ll tell you it’s not a market timer, but he’s a value timer and that tells you where he is. And right now in the last, since that time you talked about he has more cash than he’s ever had and yeah,
Speaker 1 (18:58):
47 billion as a few months ago.
Speaker 3 (19:00):
I’m using a ton of it. See, so what I recommend to people is depending on what you want to do, but if you really, really want to make sure it’s really safe, you’re going to have to go with a CD or a treasury bill, a bill, one of the two, and you can go out a year or two because then your downsize is, I have to hold it a year or I have to hold it two years. It’s not a bad idea, but for that money, it has to be where you can get your hands on it without it changing in value very much that base capital can’t fluctuate much on you. And so now is a great time for it because it’s five and a half percent on the 90 day and people forget. But on the treasury, you don’t pay any state income tax. Now, you might not pay state if it’s a CD out of a bank in your state, but most people don’t buy ’em like that and they end up with a CD somewhere else maybe, and they end up, they see that has state tax on it, but the treasury, it’s clean. It’s just federal tax.
Speaker 1 (19:57):
And you think people can still trust the treasury?
Speaker 3 (20:00):
Well, we have to trust what we have. If you get into a situation where the treasury bill and the bonds are not any good, then there’s a lot worse things going on at that point that you’ll have to be worried about. Probably food as much as anything because that’s a medium of exchange for us. It is a problem. I don’t know where it ends. I mean, we have too much debt obviously in this country and we’re piling it on. If you go to a site called debt clock.org, you’ll see it’s automatic. You’ve probably seen it, Chris. It updates by the second and it’ll blow your mind on how much debt you pile on in a 12 hour period. I mean, blow your mind. We’re down that road and really we don’t have anybody worried about it up in Washington, so you got to worry about yourself. So don’t go long on the paper, maybe own a little gold, have some income, produce some real estate, try to have some cashflow that’ll get you through everything.
Speaker 1 (20:55):
Yeah, you don’t want to trust the Richmond north of Richmond, right?
Speaker 3 (21:01):
You know what? It’s a great song. I actually agree with the guy. I know it made him really popular, but I think it did. Anyway. I’ve listened to his song a number of times. I think people feel that way. Actually, I don’t care. I think they just feel like, Hey, nobody listens. Nobody cares. You’re not worried about us. You’re lining your own pockets. I think people generally look at that, and if you look at most of these reps and senators when they come out of being there for 12 years, 16 years, whatever, they’ve made a lot of money how people don’t trust, and they’re probably as low as I’ve ever seen it. They don’t trust the government. And rightly so. Actually,
Speaker 1 (21:42):
I know you have had a slide here, and you were talking about this already, about the proper allocation of what you can do with stocks. Obviously there’s still a lot of speculation. I know you actually had a chart on there about stock options paying eight or 10% a month, which every time people have asked me about that, I said, watch, even if it doesn’t, it doesn’t fail, which they usually do. SEC will shut it down, so people are trying to look for place to put it. You have your own, like you say, your 30, 30, 30 10. Tell us a little bit more in depth about that.
Speaker 3 (22:13):
Well, what I’ve thought is after this great four decades of lower interest rates, and let’s face it, they bottomed in 20 April or May, whatever it was, when we had the 10 year down around 40 basis points or so. And I think that probably was the bottom, all time bottom for interest rates. And so what happens from here is that I’m thinking, and everybody on the street and all these advisors are going to want to tell you, just put your 60% in stocks and the 40% in bonds and 20 years later you’re going to be just fine. Well, I can give you periods, by the way, from 1929 to 1948, I can give you periods of 1966 to 1983 from 2000 to through 2012, you made no money in the market. Zero I’m talking about, and I think people always forget about that. And so I think this decade is going to be more of where you’ll have 30% probably and more of a value type stock.
If you look at Wall Street, what they’ve flung on people this last five years has been SPACs and NFTs and crypto coins and so many companies that don’t make any money. Nonprofits high yield, just all the junk you want to talk about. Okay, so what’s thrown out there? So what I think is that’ll go away and you’ll have 30% in what a truly valuable company, and then you’ll have 30% in short-term bonds, I mean less than 60 months. And then I think you’ll have 30% in some sort of commodity type, doesn’t have to be a metal or something like that, but it can be some, it can be some metals, it can be real estate, it can be farmland, something that offset offsets inflation. I think that’ll be really important for me. I have oil and gas minerals, I have private companies, I have real estate.
I look at all that as a mix of a hedge and inflation, and then just 10% in cash. And I think between the 10% in cash and the 30 and the value stocks, you’ll have to learn when trade. In other words, there’s times when you put a lot of money in the market and there’ll be times when you take a lot of money off because we’ll be in that kind of timeframe where, I’ll give you a really good example. My first nine years in the business, the Dow Jones just went from seven 50 to 1,050, and it did it about every 18 months. If you didn’t know when to really deploy cash, then you never made any money. And I think we have raised up a whole group of people of so-called advisors in our business that won’t have a clue as to how that works. And that’s what I see over the rest of the decade.
Speaker 1 (24:57):
And that’s one thing I was going to ask you about the market in general and the s and p, I know the SP is hard to use. It’s not like using the Russell or the value index or something like that because skewed 33% with the top 10 stocks out of the 500, right. But I noticed with the trend line of the s and p, if you draw it from the last, really since the 1920s till now, it really, if it were to come back, bounce off that trend line, it did back in 2008, it would have to hit 1900 way lower than it is now. I mean, do you think it might even come back down again, or do you think it might just stay flat and just keep really, just be non-return for us? Do you think there’s anything like that might happen?
Speaker 3 (25:36):
Well, Chris, I don’t know if it’s 2000, but I think you have to come back to at least 3000. Just this idea of returning to the mean is a good point. But the main point is that if you look over time, the s and p, it moves around, it’ll move up into the high twenties on the multiple of earnings to 12 on the low side, maybe 10. I saw it at single digits a couple times in my career too. So you have a time span in there. And what you have to do is, I think at least I think, see we’ve been stuck up here. If you look at forward earnings right now, it’s 21 times. I mean, that’s not a cheap market by any stretch. And you’ve got a competition with five and a half percent money with doing nothing. So it gives you an idea, and I don’t know if I have this in there, but I say to people, look, the market today is exactly where it was two years ago. Exactly. No change. So this idea that we’ve been in some sort of bull market, it just doesn’t fly. We’re not in there. We’re in a cycle market down that peaked in December of 21, and that’s still the peak. And so that’s where we are right now.
Speaker 1 (26:48):
Some people are like, oh, it’s just a little bounce. No, that’s kind of more of a bearish move right now from the looks of it.
Speaker 3 (26:55):
Well, I caution people against this. If you take a million dollars and you lose 25% of it, and then in the next year, let’s say the next year that you make 25%, by the way, you’re still underwater. So I think they don’t realize that they still lose money. And I think they think they just look at this year, I’m up X. Okay, yeah, I know, but you’re still down actually. And so they’ve got to stop and look at that.
Speaker 1 (27:24):
Yeah, you lose 20%, you need 25% to get back to zero, you lose 25, you need 33, right?
Speaker 3 (27:30):
Yeah, yeah, that’s true.
Speaker 1 (27:31):
Exactly. Well, and one more thing. Well, I want to ask you one more question too to go along with this, but before I do kind a quick break here. So Al advisors, tell us what you do with that firm.
Speaker 3 (27:43):
Well, I’m one, we don’t have just a single chief investment officer, but particularly I have another person chance that is a chief investment officer. And he and I pretty much, we set the roadmap for the firm of where we want to be. We don’t run a lot of, I think returns will be lower for stocks over the decade, and people need to try to adjust to that and get their cash balances up strategies. We only have three really. I know it sounds simple, but for us, simple is this one strategy is bulletproof, one strategy is all stocks, and one in the middle is all cashflow. And so we think that covers the spectrum of what people want or need, and depending on their level of what they can stand with volatility, we slot them toward that. We have a lot of people who don’t have much stock at all who they are, and we don’t try to change that. We try to listen out and see what people are saying. And I always tell all the portfolio managers, if somebody tells you something, usually you need to believe it. They’re probably telling you the truth. So that’s what we try to do. And we don’t try to push something unknown or something that we think is different from what they’re thinking. You have to match those two things up. And that’s the worst thing people do. They either overestimate or they underestimate their risk tolerance, and that’s a bad thing.
Speaker 1 (29:07):
Very true. Good point. Yeah, we’ll be sure to put that in the show notes with you at the link to your site and everything too. Alright. I want to also have you talk about your charity for a little bit. Tell us about this.
Speaker 3 (29:20):
Well, I was neglected quite a bit as a child, and so I understand neglect. I was loved. I’m not saying that, but I was certainly neglected. And one of the things I started doing, we started really, oh, it’s been 27 or 28 years ago, and the first foundation is I just went to one of the regions for foster kids and the head of the region said, Hey, I think I’d like to spend the same amount of money I spent on the country club on foster children. Well, that didn’t last long because the requests I got that were so meaningful to me and I started spending so much money, I said, we’re going to have to have a foundation. I filed it with IRS, and I know to this day that agent was a foster child. She said, if you’ll switch this from a private foundation to a public foundation, you can help a lot more kids. So that’s what we did. So today we helped about 10,000 kids a year between the two foundations. You don’t turn ’em all around. I mean, but what you try to do, our motto has been, if you can change your thinking, you can change their life. And we certainly changed some lives. And hey, you know what, that’s about as rewarding as anything you can do. That’s
Speaker 1 (30:33):
Exactly the ripple effect we talk about here. I love that. And we also, I’ll get the information from you as well to put that in the show notes for anybody who wants to check out that charity. I know we have a lot of Texans that follow us here, but even if somebody’s outside of Texas, I’m sure they can be involved as well, correct?
Speaker 3 (30:47):
Oh yeah. We get involved. In fact, we help. If we get a request for a foster child out of state, we help that child too. We’re not just germane to those regions. And I personally help a lot of kids just if I see one in need, they don’t even have to be a foster child. I think even when I didn’t have a lot of money, I gave back, and I think that’s, people always said, well, I don’t have enough money. But it’s funny, when you give back, it comes back to you. I don’t give back to do that, just that I never miss it. And so I always tell everybody, the feeling you get from helping people is worth everything. And I think that’s what you sort of owe the world to be a person like that. And that’s what we try to do.
Speaker 1 (31:35):
It’s true. It’s kind of like tithing. Whenever we’ve seen tithing on people’s cashflow numbers, it’s like, great. That’s the best investment you can make. It might look like an expense, but I know my situation’s always been, the more you give, the more you end up receiving too.
Speaker 3 (31:48):
Well, I’ll give you an example. I, I’m in Episcopal church now, but I gave a stewardship speech. Oh, this has been probably a dozen years ago now, maybe a little longer. But I said, when you’re giving today, you’re not giving so that you can paint the walls or redo the building or what you’re giving for are those kinds of people that come in here and they may be getting a divorce, they may have cancer, they may be real sad, somebody died. Whatever it is, what you’re doing is you’re creating some legacy to go forward. And so when you think about it, you want to give for legacy and a hundred years from now, they’re not going to know who you are. But if you changed a lot of lives from that going forward, you really made a difference. And that’s how I look at giving.
Speaker 1 (32:36):
I love that. A great perspective. Well, so I’ll come to the last question here. This show is all about cashflow and you mentioned having investments that cashflow, when you say that, what do you mean by that?
Speaker 3 (32:48):
Well, I think people have to understand that any investment that turns out to be great cash flows, you can say that it cashflows that. I put it all back into the business, that’s okay. But it’s still cashflows. Cashflow to me is the mother of what makes everything go. And I think that’s what happened so much the last five years. We got completely away from cashflow. All these companies that didn’t make any money and NFTs and all the coins, all the SPACs, all that sort of stuff. But cashflow is what makes it happen. You look at all great investors, they get cashflow. I mean, they either get dividends or they get interest or they, in real estate, they get rents and businesses, they get dividends and making the business work. That’s the point. And I don’t think, I try to tell people this all the time, you are never going to get, if you want to call it rich, you’ll never get rich by having non cashflow investments because you’re never going to get there and you’re going to have to have things that cashflow one way or the other.
Speaker 1 (33:52):
Amen to that. Well, Ted, I really appreciate your time today. You’ve been very generous, lots of great information. Again, we’ll put your contact in the show notes. Any final words of wisdom or inspiration or anything for our listeners here today?
Speaker 3 (34:06):
I would say this, and I do have a soft spot really for people that don’t have a lot of money that meet minimums for firms like mine, that sort of thing. I certainly don’t mind sitting my revenue worth thinking, but I think it’s very hard for people today that have less than say, 500,000, $600,000 to get any good advice. And so you’re going to have to read more and you’re going to have to look out for yourself more. That’s all the money you have, and you can’t afford to lose that money. So you have to really work at it to make sure you don’t do something wrong. And if my advice would be during these kinds of times to look out for yourself, and if you need to keep more money, liquid, maybe somebody bought the hottest stock of the year, but you know what? It’s like the tortoise and the hare. You’ll get there, but you make sure that you take care of that money because Wall Street will try to sell you everything in the book. And it may many cases it’s not good for you. So you need to watch out for yourself and just be careful in here. I’d say to people,
Speaker 1 (35:13):
Yeah, I always say it’s more important to get a return of your money than a return on your money, even though I like both. But there’s got to be a priority of make sure you protect what you have and then make more with it.
Speaker 3 (35:23):
That’s true. Yeah.
Speaker 1 (35:25):
Great counsel, thank you so much, Ted. Again, everybody, you heard it here. I say this just about every week, right? It’s one thing, and Ted just said this, right? It’s one thing to be a hear of the word. It’s another thing to be a doer of the word. And in this case, doer means you got to keep learning. You got to start building on that knowledge. And as you can do that, you can start to venture out and start to do things. But yeah, don’t ever get caught up in the hype. Don’t get caught in the fomo, the fear of messing out. Those are the things that cost people money, and that’s why people never create wealth. They never get that freedom that we talk about in the show so often. So guys, make sure that when you hear this stuff, you are wise with it. Go and make it a wonderful and prosperous week. We’ll see you later.