99 episodes

A podcast designed to empower you to take control of your financial future.
We'll talk about money, investments, and strategies that actually work to make financial planning easy, so easy, you'll feel like an insider.

Wise Money Tools's Podcast Dan Thompson

    • Investing

A podcast designed to empower you to take control of your financial future.
We'll talk about money, investments, and strategies that actually work to make financial planning easy, so easy, you'll feel like an insider.

    Episode 130 - You Have A Golden Goose - Making Golden Eggs! (You just might not know it)

    Episode 130 - You Have A Golden Goose - Making Golden Eggs! (You just might not know it)

    • 12 min
    Episode 129 - Leverage Made Easy

    Episode 129 - Leverage Made Easy

    • 14 min
    Episode 128 - 5 Keys To Wealth Next Step

    Episode 128 - 5 Keys To Wealth Next Step

    • 12 min
    Episode 127 - 5 Key Elements To Wealth Part 5

    Episode 127 - 5 Key Elements To Wealth Part 5

    • 18 min
    Episode 126 - 5 Keys Elements To Wealth (Simple and Easy) Episode 4b

    Episode 126 - 5 Keys Elements To Wealth (Simple and Easy) Episode 4b

    Hi everyone, this is Dan Thompson with wise money tools. Welcome to this video we are in part two of compounding. Now if you didn't watch part one, I need you to go back and watch that because it's gonna make a lot more sense if you watch that first. Trying to keep these videos short because I want you to stay tuned and not go away because this is good stuff. So in our compounding discussion that went just a little bit longer, I wanted you to get some of this really good stuff because this is gonna dovetail into you being your best financial advisor. Now, most advisors won't tell you this and sadly, I don't know how many of them really get it either. Okay, so we know that compounding is the eighth wonder of the world and we talked about how How compounding can just be huge if we take advantage of it. Well, part of the compounding equation is time. Okay? We need time for money to percolate and to grow.


    And this is where financial advisors fall off the rails, they put money at risk, and they typically throw it into mutual funds. And then everyone just crosses their fingers and hope it's gonna do well. What they don't consider is last time. Now what is last time, it actually equals just losses. So it's those years where you lose money, because you don't just lose money, you lose the time it takes to get back to where you work. Alright, so again, most advisors simply sit it out, they say take the hit, ride the roller coaster, and markets are always gonna rebound over time. So just sit there and be quiet. We know the market went down, we know you lost 20, 30, 40, 50%. But don't worry about it because it's all gonna come back, but they miss out on years of compounding. Now, you may have heard the comment that losses have a much greater impact on your wealth. Negative impact then gains do on the positive side. So what does that mean?


    Well, let's go back to 2008. If you had your money in mutual funds, a 401k, or just about any stock or real estate investment. It was not uncommon to lose 40, 50, maybe even 100% of your money depending on where it was. Well, if you've lost 50% of your money in a mutual fund or the 401k, we affectionately called the 401k the 201K. And 2009 because people lost half their money. It took years in fact, it took a lot of people somewhere between 10 and 13 years just to recover to get back where they were in 2007. It's often referred to as the Lost Decade. And for many, that's a compounding period or two to get back to where they were. Remember in our last video, we talked about compounding periods, and at a 10% rate of return a compounding periods about 7 years. We don't get many of those in our lifetime. So when you miss out on two compounding periods, that can mean a lot of time wasted, that you're not compounding.


    So in 2007, if you had $160,000 and we go back to our compounding table of the 31 compounding periods in our last video, that puts you right at about day 25 you have $160,000. Now over the next 10 years, had you kept on going You would be on day 26 or 27. Okay, somewhere between $330,000 to $600,000 you would have in your account, if you were able to keep on going. However, you lost 50% that took you back to day 24 then it took you 10 years to get back to your $160,000 or back to day 25. You see, time lost is a killer. Losses are a killer. So what we've got to do is find ways predictable ways to avoid those losses. Another way to look at it is this. If you have $100,000 and lose 50%, you now have $50,000 right? Well, the next year let's suppose the market came back and gained 50%. Well, how much do you have? You only have $75000. You see, if you lose 50%, your gains have to be 100% just to get back to where you were.


    So everyone sat around and waited for a decade or more to get back on track to get back to where they were in 2007. So it's last time, and the time is needed for

    • 10 min
    Episode 125 - Spending And Dept Tips To (Avoid Disaster)

    Episode 125 - Spending And Dept Tips To (Avoid Disaster)

    Hi everyone, this is Dan Thompson with wise money tools. Welcome to this video or podcast. You know today I want to talk about debt and credit some of the pitfalls that people fall into, and they don't even do it necessarily on purpose. But we live in a world today with really easy credit, which means easy debt. We got bank and finance companies are always out to look to grab another family, shackle them down with debt the rest of their lives if they possibly can. If you have bad credit, even that's not a big problem anymore. There's plenty of payday loan locations, willing to kind of gouge you with extremely high interest rates for just a few bucks in their loans. Sadly, payday loan shops. They loan for things that really people should never be borrowing money for but they get themselves in these really dire circumstances and they can't have help it.


    For instance, you don't want to take a payday loan for an electric bill or a phone bill or groceries or for maybe some car payments that you missed. payday loan shops can charge as much as 30%, and sometimes even higher for these short term loans. What you may not know and what you may think, is that these companies are just all crazy profitable. But you know, they're not as profitable as you might think. Now I'm sure some of them do fine. But the amount of losses they have, because they write off these bad loans almost equals many of their profits. I saw one company that basically made .75% when it was all said and done because of all the losses they had to write off. So it can sometimes justify the high interest because a lot of people don't pay those loans back. Well, in a payday loans trap, it's almost impossible to get out once you get started.


    If you're struggling to make a, let's say $100 cell phone payment, and then you have to go borrow that hundred dollars. And now based on their rates and their fees, maybe you've got to pay $120 or $130 back later, I don't see how that's gonna help you start to get into this whirlpool, you're spinning downward. You're trying to keep your head above water, but the interest rate just keeps piling on interest on interest. And it makes it almost a monumental task to finally swim out of that Whirlpool. Well, you know, I've been doing this financial advisor stuff for pushing into 35 years now and I've seen just about everything. You know I've run into several situations over the years. And I remember thinking, wow! you know if these people just changed a few of their habits they might be able to improve their situation. I remember this one couple they were in there, oh, just getting into their 30s.


    They never really had saved any money. But yet they both had some pretty good jobs over the years. But because of the debt that they had, and just letting their you know, money go through their fingers, the spending it overtaken their finances. They've made some horrible decisions when it came to buying cars to instead of just getting a car that was, you know, very, very affordable. They always bought the nicer, more expensive car, and they strapped themselves to these payments, and they would just stretch their finances to the brink of disaster. What sad is they just felt like they deserved it. I always ask, what does that mean? I see so many commercials that say you deserve it. And I always asked myself, why do I deserve a new car or whiter teeth or a big TV or main other things that I'm supposed to at least supposed to be deserving of. Well, you deserve to be in debt the rest of your life if you think by buying these things you deserve is gonna help you out in life.


    Well, this couple they needed to borrow money to make ends meet way too often. You know, their cars were always on the edge of being repossessed, they'd have to go to payday loan places. They have to get money to make just their car payment that they were suppos

    • 12 min

Customer Reviews

WB member ,

Great podcast

This is a great listen. Clear and concise info!

bball3975 ,

great info

i have learned a lot from this podcast, so much good information on a subject that seems to be increasingly ignored by too many in this day and age. highly recommended!!

idthekid ,

One of my favorite podcasts!

This is a great podcast! I have been working with Dan for years and he has never steered me wrong! Great to have a podcast that helps me with my financial life in a simple and direct way!

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