Our host Omar Akhil is interviewed by social media strategist McKenna Kinder. Omar originally hails from Albuquerque, New Mexico, but moved to San Antonio after receiving a college scholarship from Trinity University. Although he started out as a pre-med student, Omar's passion for business led him to switch his major. Fast forward two decades, and he is now the owner of Vaulkshire Investment Advisors, a thriving investment firm that focuses on crafting customized portfolios for individuals to help them grow their wealth. During their conversation, McKenna and Omar delve into a variety of topics, including asset classes, disruptive technology, trading versus investing, and the capabilities of language models such as GPT-3.
Growing Wealth.
Our host Omar Akhil is interviewed by social media strategist McKenna Kinder. Omar originally hails from Albuquerque, New Mexico, but moved to San Antonio after receiving a college scholarship from Trinity University. Although he started out as a pre-med student, Omar's passion for business led him to switch his major. Fast forward two decades, and he is now the owner of Vaulkshire Investment Advisors, a thriving investment firm that focuses on crafting customized portfolios for individuals to help them grow their wealth. During their conversation, McKenna and Omar delve into a variety of topics, including asset classes, disruptive technology, trading versus investing, and the capabilities of language models such as GPT-3.
Growing Wealth.
[00:00:00] McKenna: You're listening to VaulkTalk. On today's episode Social Media strategist McKenna Kinder, sits down with our host Omar Akhil and turns the tables by asking him the questions. Omar is from Albuquerque, New Mexico and moved to San Antonio when he received a college scholarship from Trinity University. At first, Omar was a pre-med major, but his love and passion for business persuaded him to switch his degree. 20 years later. Omar owns Shire Investment Advisors. A thriving investment firm aimed at customizing individual portfolios to grow their. Omar and McKenna sit down and discuss asset classes, disruptive technology trading versus investing chat G P T and more. Stay with us.
[00:01:21] McKenna: Hi, I'm McKenna Kinder and we're on VaulkTalk today with. And we're switching the tables. Omar typically talks to his interviewees, but we're gonna be interviewing him. Yay. So Omar, thank you for sitting down with us. And let's just get to know you a little
[00:01:39] Omar: bit. Sure. Well, McKenna, before we get started, let's talk about how we met.
[00:01:43] Omar: So what have you recently done with your career that has brought us together? Cause I didn't really know you that well till recently. Till recently? Yeah.
[00:01:52] McKenna: So I started a digital marketing social media business when the pandemic hit. And you know, one client led to [00:02:00] another client and it just grew and I've learned a lot along the way.
[00:02:04] McKenna: Had some failures and some successes, and that's, And your company is called? It's
[00:02:09] Omar: called The Kinder Influence. How awesome. It's almost like the kinder influence. It's almost like your last name is spelled the same way as kinder. Mm-hmm. And so you can even think of it as the kinder experience for your social media.
[00:02:21] McKenna: It is, yeah. Yes. Taking a kinder approach to social media.
[00:02:23] Omar: Perfect. I love it. Well, I am so happy to be working with you, and this is really new for me. Never really done social media, especially to this level of engagement, so I'm so happy that we've been able to pair up. Yes. I'm so excited. So I know that you have a lot of questions for me. Kind of just get to know me and what it is that I do. So I'll let you shoot. You're, you're, you're leading the show here. Go for it. Okay.
[00:02:45] McKenna: First question, Omar, this is a very difficult one. Yes. Coffee or tea?
[00:02:50] Omar: Definitely Tea. McKenna. I am a tea person. I love my morning tea. I wake up and the first thing I do is go [00:03:00] downstairs and I will put on my boiling water and I'm, I'm old fashioned, so I still use like a tea kettle.
[00:03:06] Omar: I don't use any of like the instant, like you don't do the microwave, not the microwave. It, it's a, it's a real, I'll bring it in one day. We'll do like, I'll, I'll show it to our audience, but I've got this fantastic tea kettle and I will, Start by boiling water in the morning, and then I kind of like loose leaf tea and so I'll make my loose leaf tea.
[00:03:23] Omar: And today I'm actually drinking this tea from Amed Tea Company and it is one of my favorites. It's Mango Magic, and so it's a black. Mango flavored tea and I like to, you know, add a little bit of milk to it and kind of, you know, that Indian tradition of like chai, so you have a little bit of milk and a little bit of honey, and, and that's pretty much my morning routine.
[00:03:44] Omar: Love a good black tea. Yeah, this is a fantastic one. Delicious. Yeah, it is really good. And this, this one's actually in tea bags, so it's not loose leaf, but it's already bags, so it's easy, easy to take on the go.
[00:03:55] McKenna: Awesome. Well that's great. So Omar, where are you from?
[00:03:59] Omar: Great [00:04:00] question. So originally I was born and raised in Albuquerque, New Mexico.
[00:04:04] Omar: And I came to San Antonio through through college, and so it was kind of the college experience and my dad gave me some of the best advice, financial advice, even for our, our audience. He said, you know, go to school where they're paying you to go. And so I got a great scholarship package. I like that. Yeah, I like that.
[00:04:22] Omar: Amazing advice. I'm glad I listened to him. I was really torn between the West Coast versus Texas. There's a lot of appeal here. There's a lot of appeal to the West Coast.
[00:04:29] McKenna: Absolutely. But you know, after those four years, if you're not in debt, it
[00:04:34] Omar: kinda, well it may, you know, he, he ended up being right in the long run and so I think I probably would've just surfed and played ultimate Frisbee and never studied had I gone to the West Coast.
[00:04:44] Omar: But also the scholarship package for the other university was not as good as what Trinity was providing. And so Trinity essentially allowed me to go through my under. Completely debt free, and so that was a significant boost when I graduated to not [00:05:00] have that overhang. Yeah. Having
[00:05:02] McKenna: zero debt, I think is one of the biggest gifts parents can give their children.
[00:05:06] McKenna: Absolutely. Honestly, yeah. My mom did Texas Tomorrow Fund for both my brother and I. Yes. And Texas Tomorrow Fund is a, it's an investment package, I think is what it
[00:05:16] Omar: is. It's an investment fund, I believe. Yep, that sounds right. And so you're. Investing for your child's when the
[00:05:21] McKenna: child's born and you pay that rate.
[00:05:24] McKenna: So when I was born in 96, my mom bought four years of Texas State tuition at the 1996 price. Even though I went to college in 2014, I don't know if they still do it because they realized it was such a good deal.
[00:05:35] Omar: You know, I don't know if they still do it either, but,
[00:05:38] McKenna: Like I said, the greatest gift a parent can give is
[00:05:41] Omar: zero debt.
[00:05:42] Omar: Yeah, that's right. And and so you kind of beat the inflationary costs by locking in those prices back then, and now they have more like the 5 29 plans and, and other child saving plans that you can use to invest for your children's education, education, education.
[00:05:55] McKenna: Yep. Exactly. So what inspired you to get involved [00:06:00] investments?
[00:06:01] Omar: Great question. So originally when I came to Trinity University, I was looking to go into the, the traditional Indian or East Indian route, which is, or follow that path, which is either you're gonna like be a complete success and end up as a doctor or if you've. Fail, then you're gonna end up as an engineer or, you know, I have some family members who are successful attorneys or lawyer, but I love how being a failure is becoming an engineer.
[00:06:24] Omar: That, that's in my family. You know, like if, if you didn't make the doctor route, then you at least had to like, you know, you know, finish as an engineer or an attorney. And so, you know, I I, I ended up being a, a black sheep in that regard because I was one of the. First in my family to actually pursue business.
[00:06:39] Omar: And so I was, you know, taking my, my pre-med classes and I fell into an econ class and that I just absolutely loved. And the economics, the kind of macroeconomics, microeconomics, thinking about the world a little bit more from a, uh, economic framework really changed my life. And that professor, I believe it.
[00:06:58] Omar: Professor Salvucci at that [00:07:00] time that just changed the course of my life entirely. He was a, a great mentor for me. Encouraged me to switch into business cuz I was, I was enjoying the econ class so much. And during that time it coincided with the, the rise of the, the tech industry. Yeah. And so, you know, there was um, was this 2000 early two thousands, late nineties, late nineties, early two thousands.
[00:07:21] Omar: And, and so I just happened to get into day trading at that time too, cuz my father was doing some day trading. And, and so I, I started day trading and I got the bu and you know, you kind of hit one or two successful trades and you're like, you know, this is easy. I can do it, I can do this, I want more. More.
[00:07:37] Omar: Right? But, but at that, Everything is going up. Like you could literally just like throw a dart, you know, and like a name on, like a, a bulletin board and like you'd hit it and it'd go up like, you know, 10, 20% in a day or two. You
[00:07:47] McKenna: had no idea there were gonna be peaks and you know,
[00:07:50] everything.
[00:07:50] Omar: No, not at all.
[00:07:51] Omar: Never. Like no experience trading. Like Yeah, I was just like, all right, this looks like a good company. I didn't even know what it does. I just know that it's like going up 5% daily. You know, add [00:08:00] money to this. So yeah, I was sitting there. Were you having a GameStop moment? Y y you know, it really was eerily like what we experienced with some of the meme stocks.
[00:08:07] Omar: Absolutely. It was like, you know, there, there's no justification for these stocks going up, you know, 150% in a week, and you're like, yet here they were just like skyrocketing, skyrocketing. So it was, it was well before the meme, stock phenomena kind of like took off, but it had the same level of a adrenaline rush and just kind of like, wow, this is actually like fun and you know, relatively easy.
[00:08:28] Omar: You still have to watch it, you still have to monitor it. So I'd be in between classes. Trading stock or like, you know, lead for a class after putting on a trade and coming back and like checking the trade. So completely addicted to it. But that was my initial foray into investments and just learning about the investment world.
[00:08:43] Omar: And then as I started taking classes and courses and investments, it just kind of clicked with my mind. So I kind of readily understood how to calculate. Fundamentals on companies and you know, just different models. Evaluation just all started making sense. I took a number [00:09:00] of MAP classes geared towards investments and just started learning about the different investment types or asset classes and, you know, it just kind of clicked.
[00:09:08] Omar: It just all made sense and I, I found that I was reading the Wall Street Journal more frequently than I was my own textbooks, like the biology book, et cetera, chemistry books. So I think that was kind of, this
[00:09:17] McKenna: is a question, did you learn more from the Wall Street Journal or from your
[00:09:20] Omar: text? Well, when it comes to the actual do, do you mean in regards to business or just in, in just general?
[00:09:27] McKenna: In business in
[00:09:28] Omar: general, you know, so absolutely. The, the Wall Street Journal, at that time, you, you could go to a page and you could see what each stock was doing relative to kind of how it performed the day before. So you, you had like, you know, it was up 3% right from the day before you had like, lists of stocks and so you could start following momentum.
[00:09:43] Omar: So I started learning. The basics of trading from the Wall Street Journals. Right. You know, the textbooks are all very academics. So like when it came to the actual investment world, the textbooks really taught me how to assess companies based on their cash flow [00:10:00] or on their dividends. Or, for example, it taught me how to evaluate bonds.
[00:10:04] Omar: So it was the ver, it was like the academia, the actual how to, how, how to put that to use and what that looks like in the real world actually came from. Reading the Wall Street Journal from Reading the Street Journal. There's nothing like doing it when you do it, you know, no matter how much preparation you've had reading about it in, in textbooks, there's nothing like application.
[00:10:22] Omar: That's right. Like, and, and there's a lot of on the job learning when it comes to trading or investing and so exactly the same with social media. Yeah. I just don't think you can, you can learn it in a book.
[00:10:32] McKenna: Yeah. We say the algorithm is always changing. Stocks are always going up.
[00:10:36] Omar: Yes. Or going down Or going down last year.
[00:10:39] Omar: Exactly. Or going down the last year was a down year. So what
[00:10:43] McKenna: are some challenges you've faced in your career?
[00:10:46] Omar: Oh wow. That's a really good question. It's a very general question. It is. It's
[00:10:50] McKenna: very broad. Maybe just one
[00:10:52] Omar: instance. So the industry is quite challenging, which is what I love about it. I think you always have to be on your toes.
[00:10:59] Omar: [00:11:00] You're always thinking, one of the challenges that I find as a wealth manager is coming up with a thesis. So for example, you know, I think this particular sector is gonna do well and here's why I think it's gonna do well, and here's kind of the macro formulation of that idea, and then going and expressing it through the companies that I buy, and then having the.
[00:11:20] Omar: Say no. Your thesis at the moment isn't really valuable to what the markets find appealing.
[00:11:25] McKenna: Now, when you say thesis, what exactly do you mean? You don't mean like a, like a college thesis.
[00:11:30] Omar: You mean a thesis or a paradigm on, on a sector or an allocation for, for my client's monies. So I'll give you a great, a great example of that would be last year I felt that energy was gonna continue to be a real focal point for investments, meaning that I wanted to.
[00:11:48] Omar: A big allocation or a lot of my client monies allocated towards energy, the energy sector. And why did I think that? Well, I, I think, you know, you had the, you had [00:12:00] Russia's invasion of Ukraine. Mm-hmm. Putting pressure on energy prices and so, I felt that energy prices were gonna continue to stay high because of the regional, the geographical, regional uncertainty taking place overseas and, and what that was doing to the global energy markets.
[00:12:16] Omar: So energy prices were going to remain elevated, go up and remain elevated. And so for that reason I wanted exposure to energy stocks. And so these could be some of the big companies as well as maybe some of the midstream. So exploration refinery. Pipeline. Those were all companies that I wanted to have exposure to.
[00:12:35] Omar: And so that's a thesis. So kind of coming up with this idea that I need energy exposure in some of my portfolios would be a thesis. And then I go out and I implement that thesis, that idea by looking at companies and deciding which companies to own and how much of them I should own. And so, you know, Panned out really well.
[00:12:53] Omar: Last year, energy was one of the best performing sectors while the rest of the market, or vast majority of the market really lagged or fell [00:13:00] last year. And so that, that helped those portfolios because they had the right allocation to energy at the right time. And this year, you know, energy has sold off a little bit since the beginning of the year, and there's.
[00:13:12] Omar: You know, possibly a number of reasons why that is occurring. You know, some of it could just be that there's companies take, or companies, when I say companies mean like big institutions, institutions, retail investors, taking some of those gains they had last year. Mm-hmm. And relocating them into different parts of the economy.
[00:13:28] Omar: And so the big thing right now is kind of tech has been favorable, especially around artificial intelligence. Oh yes. It's
[00:13:36] McKenna: especially, so in social media there's a new thing called chat, G p T. And what it is is that it's an AI simulator, I guess is what you would Software. Software. Software. Yep. Software.
[00:13:48] McKenna: And so what you can do is you can go and you can type in what you need. So for example,
[00:13:52] Omar: well, you don't even have to type it, right? Like you can just say it. You can say
[00:13:56] McKenna: it if you're on your phone. Yeah. I use it from desktop because I'm, I'm always. [00:14:00] Desktop, but, so for example, in social media, let's say, okay, I need a social media caption that talks about a burger special for 5 95 on Wednesdays, and then they'll give you something and let's say you want it shorter or longer, or more descriptions.
[00:14:17] McKenna: It'll come up with 1, 2, 3 A, as many examples as you need. And then if I, since I said social media, it'll give me hashtags. And so a big thing with educators is that they're concerned that their students will go and use that to write their papers. So they will say, the students will go and type, you know, what is a summary of the Battle of the Bulge.
[00:14:37] McKenna: And you know, then say, okay, write it with, you know, past partisan, or write
[00:14:42] Omar: in a haiku with 500 words. 500 words or
[00:14:45] McKenna: less, right? Make it 800 words, whatever. The guidelines were for that project. Yes. And so that's been a really big, I don't wanna. Scare for teachers, but what would you
[00:14:55] Omar: describe it as? Yeah, so that, that's a great question to kinda like what you're really describing [00:15:00] is what in the industry we call like a disruptive technology, something that kind of changes the way that we fundamentally operate like DA Daily and.
[00:15:09] Omar: So yeah, when we think of past disruptive technologies, it can just start with the one that comes to mind right away is like the smartphone. Yes. Right? Like apple coming up with this, the entire smartphone concept go. Going from the point of like we're combining our like music. Module with the phone module and we're creating like this, like, you know, new, this new module right.
[00:15:30] Omar: Of this smartphone. And, and after
[00:15:33] McKenna: a model, it comes out with something new, right? And you know, it's
[00:15:36] Omar: wholly disruptive. Like has Complet completely changed the way like we all operate on a daily basis. So similarly chat, G P T, which you are now talking about to me falls under that disruptive category. And, and it's a good example of a.
[00:15:49] Omar: So, for example, right now, you know, I'm seeing kind of a, a, a pullback in some of the sectors that performed quite well last year. So for example, like [00:16:00] healthcare, there's money leaving some of these stock names in healthcare and energy. And potentially being reallocated. So money is going into, you know, like technology that's based on artificial intelligence because that's kind of becoming this emergent disruptive theme now.
[00:16:16] Omar: Like chat, G p T has shown us, you know, kind of the application of artificial intelligence and a lot of people hear it, but they don't really understand, you know, what the application of that. Oftentimes it happens behind the scenes. You mentioned it with social media algorithms, et cetera, and so social media was one of the forefronts for kind of pioneering the applications of artificial intelligence in terms of how targeted it gets to what you are seeing on your social media and, and how they market directly to you.
[00:16:45] Omar: It. But now you're kind of seeing this ree emergent trend back into technology because there's excitement around this theme of artificial intelligence. And so you're seeing money kind of go into these companies that have some form of artificial [00:17:00] intelligence software that they're incorporating into their business model or into their products.
[00:17:04] Omar: And so for example, Microsoft Buying Chat, G P T was a big indication of where Microsoft is seeing the future. Artificial intelligence. And, and so you had similarly kind of Google sell off because now Microsoft is becoming the winner in this race. And Google, you know, is seen as, you know, much lower in its tier of application for ai.
[00:17:29] Omar: But, you know, I, I think over time all of them are gonna be, you know,
[00:17:32] McKenna: so do you think other major companies are gonna come out with their version of chat, G p t, like Apple and, and obviously Microsoft has.
[00:17:40] Omar: Well, that's what happened with Google. So, so Google kind of quickly released a, a similar product. Oh, okay.
[00:17:47] Omar: And, and it wasn't as good, let's say as chat g p T. And so you kind of have this sell off then of the, oh, you know, like Google rushed it and Yeah. It's not quite at the level that, you know, chat, g p t is, and, and, and [00:18:00] so you kind initially, I think you'll see that. But to your point, yes, though, over time you're gonna start seeing a lot more.
[00:18:08] Omar: Headline news. Mm-hmm. About companies, gosh, there was one just the other day in their earnings report. Palantir, so Palantir's company as well, that based kind of aim more towards algorithmic and artificial intelligence simulations more for defense applications. And so Palantir, which was also a meme stock name kind of, you know, just on the mention of, oh, like we have AI and da, da, da, da.
[00:18:32] Omar: Boom. Like just went up, took like, went up like massively, like up like 30 some percent in a day, right? Like, is AI the
[00:18:38] McKenna: hot thing? Right. Hot ticket. Do you think it'll go away? Or I guess cool down after
[00:18:42] Omar: a while. Yeah, that's a really good question. So that, that's a, it's a theme, right? And so I think it, it. Is really the hot sector or the hot theme at the moment.
[00:18:52] Omar: So technology is the sector where you're getting to express that ai, but you know, it, it's not really new. So, for [00:19:00] example, I really think of companies that have already been utilizing ai. Google has already been utilizing AI in terms of like how it, how the hit. For what you query about, like what you search, like how it focuses, those hits, targeted ads.
[00:19:13] Omar: All of that's actually kind of done with algorithmic, you know, self-learning software, so to speak. And so there's, there's a lot of that already there. A big one I think that we all kind of take for granted is this whole idea of like self-driving vehicles. Like, so Tesla's already been working on that software and For a long time.
[00:19:29] Omar: For a long time, right? Yeah. So, you know, the applications have already been there. I think there tend to be more behind the scenes, whereas the chat g p t really brought it to, to the surface. The surface. Right. Because you, it was much more interactive so people could really kind of understand, oh, this is an application.
[00:19:44] Omar: I get it. Like Yeah. You know, and, and interact with it. And, and all of a sudden it just started, I think blowing down. Yeah. Blowing up, bringing just a lot more people focused to ai and, and it's been there, it'll continue to be there, but certainly it's not going away. Oh. I definitely do not think it's going away.
[00:19:58] Omar: It will continue to [00:20:00] be a. Sector in technology, kind of this whole artificial intelligence and, and what the applications of that, you know, will be in, in can be. I, I think it's just, it's gonna be, uh, quite disruptive. Yeah. I think it's really neat to think about.
[00:20:13] McKenna: So what advice would you give someone who is just starting out in their field and just becoming an investor and, you know, what would you tell.
[00:20:22] McKenna: 21 year old self
[00:20:23] Omar: almost. Yeah, that's a great, great question. One, it's even better to start earlier if you can. It's never too late to start investing, and there's really a difference between investing and trading. And so you know, if you're going to be investing, you really want to think of it for the long run.
[00:20:39] Omar: So owning really good quality companies, there's different reasons as to why you should invest in a company, but owning good quality companies, owning them for, you know, some periods of time. So in other words, you're not just buying them and getting out in the next day. You know, you, there's a, a theme or a thesis to why you want to own that particular company.
[00:20:56] Omar: You're really kind of starting early in. The whole idea is that you are grow. [00:21:00] Ending your growth so that a hundred dollars, you know, 10% becomes like 110, and then now you're gonna be growing the money that you made on your money. And that's really like the benefit of investing. So starting early because you allows you for longer periods.
[00:21:15] Omar: Of of time for your investments to continue growing. To grow. That's right. And you know, just getting in and participating I think is real important. Over time, it's been proven that kind of just being in the market over long periods of time, your growth in your money has well outperformed just. Sitting in cash.
[00:21:32] Omar: And so that's the idea. So I say start early, start, you know, building up investments at an early age, letting the compounding do the work for you. The l, the longer the period of time and the greater the percentage of compounding. That's really kind of what you're. So
[00:21:46] McKenna: instead of having your money sent underneath your bed, you know, like grandma used to have invested in something.
[00:21:52] Omar: Right? Right. I, I'm a big advocate for investing in something. In, in those some things, you, you can kind of create like an entire portfolio that [00:22:00] has different asset classes. Okay. And so asset classes are things like stocks would be an asset class, equities. You can then split them further. You can say, Domestic, like just companies that are really based in the United States or even just kind of like provide products or services regionally to international companies.
[00:22:17] Omar: You can get really specific, you know, I just want exposure to this part of the world, but you know, kind of your asset class stocks is one asset class, and so those represent the companies or the equities and those companies that you might want to invest in. Then you have fixed income and in fixed income you can have everything.
[00:22:32] Omar: There's so many. Different areas and fixed income to invest in. But you know, just a simple one is, you know, buying some US bonds or US treasuries and then you can even go out and buy corporate bonds. You know, you can buy corporate debt.
[00:22:46] McKenna: Buy. And what's the benefit of buying a bond? Because you know, you Yeah.
[00:22:49] McKenna: Hear of your grandparents buying bonds or Like When I was born, I bought. I think I was given, no, I was given one share of Coca-Cola stock. Yeah. And I found the certificate Certifi. [00:23:00] Right. The
[00:23:00] Omar: certificate right. That's right. So back then you actually had to go, um, receive, and, and the owner wanted the actual certificate.
[00:23:09] Omar: You had to paper deliver a certificate saying like, you own this one share in back in the nineties, you know? Well, I think it was a little bit before the, was it before the nineties? I think we were probably doing. Settlement by then. Certainly. But no, it is. It was before then, but you, you're after, right?
[00:23:24] Omar: Your question was about bonds and so. Generally, like, let's, let's just take kinda like a US treasury. So you acquire US Treasury, so you're buying a, a note that promises to pay you back, let's say a dollar. And you are buying it for, let's say, 95 cents and you're holding it for a certain amount of time, whether that's like a month or two months, three months or a year.
[00:23:47] Omar: And then you get even longer duration like, you know, Five year, 10 year, 2030. Um, and so the idea is that it's less volatile than a stock. So it's not gonna really go up and [00:24:00] down. It's dependent. It's dependent, and you're kind of gonna receive, if you hold it till that set amount of time, you're gonna get back your $1 because you believe that the United States is gonna honor that.
[00:24:10] Omar: Agreement and pay you back a dollar for the 95 cents that they took from you to use for, you know, whatever investments or growth that are needed in, in the country. And so that's kind of the, the idea behind a bond. It's, it, it tends to be less volatile and tends to provide a form of income in the past few years, not even few.
[00:24:31] Omar: Gosh. In, in, let's say like as we were heading into the pandemic and during the pandemic, we were in what is referred to as a zero interest rate environ. Meaning that there was real, really no incentive to hold cash. Cash was returning next to nothing, and at that time, our t our bonds were very low, like the bond return was very low.
[00:24:55] Omar: And so you were incentivized to take your cash and, and look for growth or [00:25:00] returns elsewhere, predominantly in the market. But now that environment has changed. So holding, for example, a, a three month TBI right now can get you just about under 5%. On an annualized basis, which we didn't have that in the last year even.
[00:25:14] Omar: I mean, the, the Fed has raised rates so quickly and so it's made holding cash much more viable as an asset in your portfolio. So before cash really wasn't a viable asset class and last few years to hold in your portfolio, now all of a sudden it's becoming a viable asset class because you can get a better return for your cash than you were able to before.
[00:25:35] Omar: And then other things that are also asset classes that can go into a portfolio can be like real estate, you know, the other assets as well as some people will consider art, for example, to be an asset class, to invest in asset class. Yes. Some people might consider like birken bags, for example, or other real asset.
[00:25:52] Omar: That hold value over time or can even appreciate automobiles or certain, you know, rare cars that can increase in [00:26:00] value. And so one of my mentors always says to take money and invest it and diversify your assets. So, you know, he,
[00:26:08] McKenna: so you'd put it in stock. And in a Birkin
[00:26:10] Omar: bag, you're saying you, you could put it in stocks, you could put in a Birkin bag.
[00:26:14] Omar: I, I'm not as familiar with the Birkin bag secondary market, but I understand that it's, many of them can appreciate and go for more than what you acquired them for. So to me that could be an investment. Yeah. And you know, it's appreciating over time and some people do really kind, kind of, there's high end wines, for example.
[00:26:30] Omar: Mm-hmm. That will appreciate over time. You know, you let them age 20 plus years, and all of a sudden that bottle that you bought. Back, you know, in the two thousands and now it's like 2000, 25, 2000.
[00:26:42] McKenna: We have, yeah. Yeah. We had a friend who did that. He, he went to Burgundy in, yeah, 85 or 86, and that was one of the best years in history and I think.
[00:26:50] McKenna: His dad said, buy 15 or 20 cases of whatever. So we did, and he let it sit and that's what paid for his son's
[00:26:58] Omar: freshman year of college. [00:27:00] Can you believe that? Right. And so, and, and
[00:27:02] McKenna: so he wouldn't drink any of it. He never opened a bottle or maybe he opened one for his
[00:27:06] Omar: son's graduation. I hope enjoyed, I hope he enjoyed if he, if he had some good ones.
[00:27:11] McKenna: I looked at my chat and I said, well, you're a wine guy. Why can't
[00:27:15] Omar: we do this? There, there are some fantastic burgundies that the, uh, the domains are, are known to appre appreciate significantly. Yeah. And, and because of also the rarity and the limited production of them and just the quality. But that's a great example.
[00:27:29] Omar: So in
[00:27:29] McKenna: France, they don't make wine by the acreage people own it by the vine. So maybe someone owns two vines over here. And then half a mile, they might own another vine. So the soil might be a little bit different. The climate's a little bit different. You never know. That's why it's so
[00:27:48] Omar: rare. There. There, there is a whole.
[00:27:50] Omar: Awesome world. Yeah. About wines, cultivating wines, growing wines, investing in wines. It, it is not my area of expertise, so I do enjoy, you [00:28:00] know, there's some great burgundies and I hope one day to go and visit the area. I haven't been myself, but it's high on my list to do and, and yeah, I mean, but that's just an example of an asset class.
[00:28:11] Omar: I mean, you can look at that and say, yep, I'm diversifying my portfolio by investing and there's investment. The idea, like as you mentioned, isn't necess. Necessarily to drink it. It's not for consumption, it's really for investment. Investment. Yep. And oftentimes you'll see some of the big auction houses auction off for significant amounts of money, wine, you know, that will be part of an estate or someone, and it's just to have, they'll,
[00:28:35] McKenna: they'll never open it.
[00:28:35] McKenna: They'll just
[00:28:36] Omar: have it, oh, a at some point. Don't know at what point that is. I imagine the, it, it ends up breaking down enough where. Start tasting like vinegar. So like vinegar. Yeah. So I, I, I would expect that there's probably some life to these where you will wanna consume it. I, I don't know what that is.
[00:28:51] Omar: I, I think I just saw a headline recently about like, some trove of like great burgundies or, or Bordeauxs or something found like deep undersea [00:29:00] recently, you know, like, yeah, like just, uh, I just kind of saw this headline maybe like a week or two ago. So, yeah, I, it's crazy. Crazy. So it's, it, you know, people invest in metals.
[00:29:11] Omar: Silver, you know, even some people might consider like cryp, cryptocurrencies to be an asset
[00:29:16] McKenna: class. Now what about a bad investment, a asset class? So, so people always say like, cars lose three forces or value or something once they drive off the lot. And you know, jewelry people think, oh, this is the best thing to invest in.
[00:29:30] McKenna: But jewelry never really say. SA sells, thank You. Sells at the same price are higher than what you've bought it at. Typically. What, what do you think is, is a asset class that people should
[00:29:42] Omar: avoid? For, for investments. If you're gonna invest then, then you really have to be, you have to do your research. So even for me, so starting with like on an investment, if I'm looking at a company that I want to buy, I'm gonna first do the fundamental analysis on that company.
[00:29:56] Omar: I'm gonna understand what that company is, what it does, you know, who are its competitors, [00:30:00] just a number of different things. Understand it's balance. It's financial health, et cetera. Similarly, I, I would expect that for an investment, even a vehicle, for example, can be a good investment. There are some vehicles, some luxury cars that come to mind that are highly sought after because of their rarity or desirability, and matter of fact, Just through last year, um, with the shortage of computer chips in the auto manufacturing industry.
[00:30:29] Omar: Yeah, that was a big thing. You, you saw used car prices like going skyrocket. Right. Exactly. Skyrocket. So, you know, you wouldn't normally think of your vehicle as soon as you drive it off the lot yet starts depreciating or it's depreciating kind of immediately. But in this particular case, you have economic circumstances that are making the, the demand is just much greater than the supply.
[00:30:49] Omar: No supply. And so you. Seeing the, the rise in those asset classes or the rise in the price of those asset classes. So, you know, a, a poor investment generally, I don't think. Of [00:31:00] buying or investing in a automobile. I mean, unless it's a real specialty case, there's like Ferrari for example, or certain Porsches or certain BMWs, more of those luxury cars that are highly sought after.
[00:31:10] Omar: But you know, just a regular mass produced car, you really don't think of that as an investment. Right. That that's really not an investment that, that's more utilitarian to me. You're, it's a necessity. For example, especially if you live here in Texas and you're going great distance, you're going great distances.
[00:31:24] Omar: You know, I wish you had better public transportation. I totally understand. Yeah. So, you know that that's, that's different than an investment. But you know, I. I can't really say if there's a really good or bad, bad one investment because I, I think it really, you have to decide is it an investment? Is this something that is gonna appreciate over time, at least hold its value and, and go up?
[00:31:45] Omar: And oftentimes, you know, it's, there's cycles in the economy too. So when the housing market like burst, or I should say bust. Bust, yeah, yeah. You know, you, you had price inflation to the point where it just, So over the top, so [00:32:00] inflated that when you have the housing market bust, you have a quick fall in these prices and all of a sudden there were people who thought my home, which you know, is generally considered like an investment, you can build equity and, and get a better return over the years from owning a home.
[00:32:13] Omar: All of a sudden that wasn't the case. They got in when prices were high. And all of a sudden now they owe more on like the mortgage, for example, than the house is worth. And so that would be a poor investment, right? All of a sudden, you now are what we consider over under, you're, you owe more than the value, than the value of your house, right?
[00:32:30] Omar: Of the asset. And so timing can play a, a timing can play as a criteria for that. And there's a lot that goes into it. But normally I think. Investments. When I speak of investments as a investment manager, I'm usually directly in the market. So I'm talking about stocks and stocks and yes.
[00:32:47] McKenna: So how can I make money off of my investments right now?
[00:32:51] McKenna: I am not a patient person. How can I make it money
[00:32:55] Omar: right now? Yeah, so, so investments to me require patient. [00:33:00] Okay. Uh, so there's, and if you're gonna try to make money right now, that to me, that's trading. Trading, right. Okay. So that's, that's the difference. To me, that's the difference. Trading is much more, in many ways, much more speculative.
[00:33:11] Omar: And so investments is you're, you're trying to make money over time. And the idea being that even if you just have market exposure, meaning that you're not particularly buying any one particular company or two or three or building. Fol of companies, you're just in the market. You're just buying a index fund.
[00:33:28] Omar: So let's just say like a really lowcost ETF exchange traded fund, like a Vanguard fund. You know, SN the s and p 500 has an, has one that you can kind of just model through the spider etf, S P y. There, it's just. Passive, you're just gonna go with the market, you're gonna go up with the market, you're gonna go down with the market.
[00:33:47] Omar: But over time, the market tends to trend up. And so the idea is that over time you're compounding and growing. Your investment in investment, right? Different than trading. Trading is like, I'm gonna go and kind of like look for an opportunity. [00:34:00] It's very opportunistic. So I think this doc, just for right now, where this company right now is really hot.
[00:34:05] Omar: So we were talking about chat, G P T. Yes. So there is a company out there. You know, is in the AI space. I think right now it's gonna be fueled by this excitement over this AI focus and, and emphasis and this trend. And so I'm just gonna kind of get in there and generally it's about trend following. Okay?
[00:34:22] Omar: So like, if you want to kind of get in on that trend, follow the momentum, make some money, and then get out before Got it. The momentum completely kind of falls apart and then it goes against you. Paul great example of this. You, I'm, you know, the, the meme stocks are just like a fantastic example of, of just kind of like when, when
[00:34:39] McKenna: he says meme stops, stocks stop.
[00:34:41] McKenna: He, he means the games stocks.
[00:34:45] Omar: GameStop, thank you. Yep. Yep. GameStop phenomenon. AMC phenomenon, kind of where the, the retail crowd or there's like a lot of momentum in some of these names and that pushed the price. Well beyond what the [00:35:00] realistic valuation should be of that company. And so that's what I mean, and that's very much like a, a momentum.
[00:35:05] Omar: There's a lot of momentum behind those names. There's a lot of money kind of piling in, pushing it in certain direction. And conver kind of on the opposite side of that, there's money that has bet against. Those companies doing well that has to go back and cover their position. It's a short position. And so they have to buy back those shares that they've kind of borrowed to short against the market.
[00:35:29] Omar: And, and so that also helped create this like massive like jump in prices, like where you wake up one day and I think like game stops up like a hundred percent. You know? It was crazy. Crazy. It's crazy. That's trading that, that's not investment, that's trading, that's that that's trading really for people with no patience.
[00:35:47] Omar: Sure. Excellent. For people with no patience. Excellent For people that have a real high risk tolerance, that are willing to take a lot of risk. It's not something that you're gonna build necessarily your, your nest egg from. Of course, a lot of people have done quite [00:36:00] well in trading those names. A lot of people have become celebrities.
[00:36:03] Omar: I know names of a number of them that have made their names. Making a fortune, you know, kind of in that, in that period. But, you know, they, they're bubbles that they're, they're asset bubbles. They're price bubbles. The price has really kind of become untethered from the reality of the underlying company from the actual, you
[00:36:21] McKenna: can take your money out of your trading and you can go spend it.
[00:36:24] McKenna: Later that day.
[00:36:25] Omar: Oh yeah. Trading is like, exactly. And, and if you lose it, you lose it big sometimes on trading. Right? I mean, it goes both ways. So, you know, if I, if I'm thinking of a trading account, I'm thinking of something that if I lose all of it, it's not gonna materially or significantly change my lifestyle.
[00:36:41] Omar: Like trading should just be like something that you can, it should just be like what you would take to Vegas to to Vegas. That's a great. Like I, I'm gonna take this to Vegas. If I lose it, you know, I lose it. And if I, if I win, I win. And, and that's it. And, and ideally, like some of the, the best traders exercise discipline, they exercise a process and [00:37:00] they, they have their kind, they, they know when.
[00:37:03] Omar: To place their trades and they know, they give themselves like stop limit losses. So they'll limit their loss. They'll say, if I enter this trade here and it drops to this point, I'm just gonna get out. Have a, you know, they have their own trading philosophy. They say, if it gets to this price, even if it's running against me, I still think this is a good trade.
[00:37:19] Omar: You know, the for what? Like my technical say, stay in there. I'll hang in there. I may even double down. So it just depends. Each trader has kind of a different philosophy and a different methodology of how to put those trades. A lot of them follow technicals. Okay. Um, and technicals are just really kind of the price movement, determining everything about that stock you need to know at that given point in time.
[00:37:40] Omar: And so you're really just interested in what the price is doing, the volume that's being traded. And then there's a number of technical indicators, which. Goodness there. There, there's a lot of credence to many of them. Like moving averages. Standard deviations, mean reversion models, oscillators. I mean, I can go on and on.
[00:37:59] Omar: [00:38:00] There's like gotta be a thousand of them, or plus who knows how many these days, but lots of terminology. There's lots of ways to try to skin the cat. So to speak. Got it. So yes, there are a number of tools that can be deployed to try to develop your own trading, trading style. And to be honest with, you know, trade trading's very different than investing.
[00:38:16] Omar: And so you kind of have to have two different mindsets when you're doing them. Trading is a trading mindset. You're generally in and out. You're not holding anything for a long period of time. And investing is, you're holding for generally longer periods of time. Longer periods of time,
[00:38:27] McKenna: absolutely. Okay. So switching mindsets from trading to investing.
[00:38:31] McKenna: Yes. So let's say a lot of people my age wanna. Okay,
[00:38:36] Omar: because we're, I, I'd ask why,
[00:38:38] McKenna: because, you know, we're, we're at this age, I'm 27, so lots of my friends are, you know, starting families buying cars. Yes. You know, it's, it's that, that seed and houses make a great investment. You know, you talk about diversifying your investment,
[00:38:54] Omar: can't make a good
[00:38:54] McKenna: investment, can make a good investment, but I don't [00:39:00] know how to start investing for a house.
[00:39:02] McKenna: You know, they, they say the market right now isn't, For buying a house, which is, which is good. I guess for me, I mean, what, what advice would you give to a 20 something who wants to buy a house but has no clue how
[00:39:16] Omar: y Yeah, that's a really good question. Every 20 something is gonna have kind of a different financial picture and, and, and one, I'm, I'm actually not a financial planner and I'm really not even a financial advisor in the sense that I don't really offer.
[00:39:32] Omar: Kind in, in these sorts of terms. But what I like to always think of is what are the current rates for a mortgage? And so right now, uh, mortgage rates, From recent history are high, but relative history or actually not that high. Okay. Um, so you kind of think of, you know, his relative historical mortgage rates.
[00:39:55] Omar: Probably somewhere, I'm gonna just guess I, I don't know. I'm just guessing [00:40:00] 7%, you know, maybe somewhere between six 8%. So I'm just gonna take the middle, let's say 7%. Yeah. Um, you know, and that's maybe I'm just thinking over the last 30 to 50 years and, and you know, I think of times when my parents were talking about mortgage.
[00:40:12] Omar: In excess of 15%. Gosh. You know, like, right. Oh my gosh. So there, you're paying a lot more on the interest, right. For the loan you've taken to pay for your house. So you, you like low rate environments, right? Because low rate environments allow you to build equity in your property and your asset more quickly.
[00:40:31] Omar: And so what exactly does equity mean? Great. Great question. So, oftentimes when people, if you can't buy a house, Cash. Then the traditional method is to take a mortgage. And a mortgage is a bank lending institution that is lending you money to pay for the purchase of your property. And, and so equity is kind of, think of it as the difference between what you have that you owe on the property versus what the [00:41:00] property's market.
[00:41:01] Omar: Is Okay. And so you can build equity in your property by paying down your mortgage. As long as your market price of your asset, your house stays the same or increases, you're, you're building equity. So you wanna see that gap between the market price and your mortgage go down the, the bigger that gap, the more equity you have, equity you have in poverty, right?
[00:41:21] Omar: Yeah. Sell your property, you're gonna pay back the note. So whatever's left on that mortgage uhhuh, and you get to kind of keep the difference, so to speak, less transaction fees, et cetera, et cetera, to keep the difference between the market price versus what you owe on that note. Okay. And so that's kind, that's building equity.
[00:41:38] Omar: So you, you've built equity in your home. So, you know, kind of going back to your original question about, you know, like what should a person your age be thinking about buying a house? That's a, that's a really good question because, you know, I, I still. It kind of depends on where you think rates are gonna go.
[00:41:53] Omar: Right? So I, I still think that rates are potentially gonna go, you know, a little bit higher. And I think that because the [00:42:00] Fed so far has come out, the Federal Reserve has come out and j Powell has said, We are planning on increasing rates in order to keep inflation low, and we plan on keeping rates, you know, high for long, right?
[00:42:13] Omar: For a longer period of time. And so if you believe that, then you can say, all right, maybe now is a good time to go ahead and lock in this rate. So it's a good rate, and I've got cash. I, I like to tell people if you can get a property, at least try to put down your 20% of the purchase price so that way you're not paying an additional insurance cost.
[00:42:32] Omar: It's. It's a mortgage protection insurance. I think it's pmi, and again, I don't off the top of my head remember what the acronym stands for, but you pay an additional fee. That doesn't build you equity in your property. You're just paying it because you didn't have at least that amount to put forward into the property.
[00:42:49] Omar: The property when you bought it, right? Because banks wanted to know that you have a certain. Skin in the game, so to speak. Right. That makes sense. And so I like to say, at least come in with about 20% of cash so you don't have to pay that [00:43:00] additional fee. That's not gonna really build you equity and then, you know, get it while the rate's low.
[00:43:04] Omar: You, you, you can also, you know, and again, with property, so much of it's gonna be like location, location percent. Yeah. That's a lot. There's so many
[00:43:12] McKenna: different, there's so many different details that go into it, but it's
[00:43:14] Omar: for sure it's, it's a complicated process and you know, you can. Then look to look to refinance it.
[00:43:21] Omar: If rates come down. There's usually a good rule of thumb, you know, if like rates are at least a point and a half generally, I, I can't remember, uh, my mother was actually in real estate. She'd be able to remember all these rules, but there's like a good point at which it's, it's worthwhile refinancing, getting, getting your house at a lower rate because it's very likely that, you know, if we get to a peak fed fund rate and we pause there and the economy.
[00:43:44] Omar: Stops slowing down or goes into recession, that there could be an argument for lowering rates, again, to stimulate the economy. Got it. In which case you'd expect mortgage rates to start kind of going down again. Going down. Right. But we we're kind of in a really interesting point in the, in the real [00:44:00] estate world right now because there is a supply demand imbalance.
[00:44:04] Omar: For homes in the United States, but even though rates have gotten high relative to where they were in the last few years, you know, there, there's still, you, you can generate a significant amount more just in sitting in cash than you could before. So it's not interesting necessary that you, you go out and start thinking, I need to invest in a home,
[00:44:22] McKenna: invest in a home.
[00:44:23] McKenna: That's
[00:44:24] Omar: interesting. So you can like, okay, you, you can, for example, get CDs. Not, not that I encourage you to get a cd, but there there's other investments that are now generating, you know, 4% or better on an annualized basis with your cash than before. And so if you don't have that 20% yet, let's say for down payment of a home, now's a good time to actually be saving cash and just investing your cash and making at least a minimum of.
[00:44:49] Omar: This amount, that amount, right? While you build up your kind of cash egg and then, then you can kind of decide how you wanna do it, decide how you want to do it, deploy that cash, right? So
[00:44:59] McKenna: [00:45:00] how do I get started in
[00:45:02] Omar: investing? Yeah, that's a great question too. Investing is actually really easy. You can go and open an account with a number of institutions, golly.
[00:45:13] Omar: Most banks will have some form of an investment arm. So for example, you know, like Merrill Lynch, bank of America, and so you know, there's, chase Bank has their wealth management arm, and so you can even go to independent companies like Schwab, fidelity, and you can just open an account. And there's different types of accounts, so there's different investment vehicles.
[00:45:35] Omar: The most simple is just an individual brokerage account. You're just going and you're opening just a general investment account. And there it's not a retirement type of account, which are gonna be like your traditional IRAs where you're using pre-tax dollars to invest for the. For the future, or your Roth ira, which is using after tax dollars to invest for the future.
[00:45:57] Omar: This is just going and saying, all right, [00:46:00] I just wanna put this money to invest it in stocks, bonds, you know, et cetera, et cetera. And, and yep. And I'm just gonna open a general account. And that's like the easiest way. It's really simple. It probably takes. 10, 15 minutes max to open an account. You fund it with cash and then you're, you're basically, you're good to go.
[00:46:16] Omar: You're, you're good to go. You can, okay. You can, there's services where you can hire an investment advisor like you, like me, who will then say, all right, I will build out a portfolio for you and d kind of determine what I think you should be holding. That's. Suitable for you, for me. And in, when we talk about suitability, I'm thinking about your age, your level of risk, appetite, you know, how risky are you willing to be, et cetera.
[00:46:39] Omar: And then we'll kind of build out a specific portfolio that's, you know, tailored to you and, and you can also do it passively. And so passively is just like, I'm gonna go in there and I'm just gonna buy an exchange traded fund that just follows the market. The market. Yeah. Yeah. Whatever the market does, I'm just gonna come.
[00:46:53] Omar: You're just gonna go with it. You're gonna go with the flow. Yeah. And there, that's, you're very passive. It's very easy to do these days. And the [00:47:00] beauty is that they're very low cost exchange traded funds that allow you to do that. So you're, you're minimizing your fees. So what are
[00:47:06] McKenna: some smart investing goals
[00:47:08] Omar: that you suggest?
[00:47:09] Omar: Generally, smart investing goals for me are looking for growth over periods of long periods of time. I tend to be an active manager, so I really like finding what I think are gonna be the right companies at the right time. And that's what I was talking about earlier about the thesis, like following a thesis, right?
[00:47:26] Omar: And so then looking for in that thesis, which companies do I specifically wanna own to express that, that thesis. But the idea. To me, the idea's always like if you can not time it perfectly, but time it where you get in at the right time for a certain asset class or a certain company. It's all about timing.
[00:47:43] Omar: And to me, to me, because the, the market generally, if you think about it, kind of like it's, it's ups and down, it's like valleys and mountain Peaks and Valley Mountain peaks, right? With real
[00:47:50] McKenna: estate, it's location, location, location. With investing, it's
[00:47:53] Omar: timing. Timing, timing can, can be, but a lot of people will tell you no, like, it, it's actually really nothing about timing.
[00:47:58] Omar: It's just about getting in and, [00:48:00] and being in it for the long haul. I personally like to. Believe, and it's been my experience that holding concentrated portfolios of good quality companies and kind of mon, like closely watching them. So when you see certain levels, you buy them and when you see certain levels, you know, you kind of trim them or sell them, and then you just give yourself time to get back into them, tend to outperform just being in the market.
[00:48:24] Omar: So to me, I'm, I'm an advocate. Some level of timing does matter. I will tell you that I have had the wonderful experience of saying, now is the time to buy this company, right? When it falls, like, you know, 10% the next day, or I need to sell this company. And it gets, it goes up another, you know, 10, 15% from there before it peaks and comes back down.
[00:48:43] Omar: So I'm, I'm never gonna get the timing right, but generally the idea is that if I get in around the right time in, in this window of time, in that window, and I exit, uh, in this window of time, I can. Outperform the market because essentially what I'm trying to do is not just follow the ups and [00:49:00] downs Yeah.
[00:49:00] Omar: But really pick it up at opportune times and sell it at when I think the valuations become too, too rich, too, too much and and, and I'm expecting the market to pull back. Got it. The market doesn't always act rational, and so that is where the psychology and the fun of happens. As I kind of mentioned you, like sometimes your thesis just isn't working because the market just doesn't care about that.
[00:49:21] Omar: It just doesn't care. No, it's okay. No, we're not really interested in that. We're interested in chat g pt right now, we're gonna do this, you know, so forget about your energy exposure or you know, like your. Exposure or your healthcare exposure or whatever, like this is where we see growth and this is where the money's going.
[00:49:37] Omar: So sector rotation, money rotation is also really important. I look at all of that stuff. There's, there's like a million different inputs it feels like on a daily basis that can just go into formulating how the markets are moving, what's kind of hot, what's not. But over time the idea is that picking good companies and holding onto them until you recognize that your thesis kind of play out.[00:50:00]
[00:50:00] Omar: Tends to work. And for me a year, like it's always worth evaluating. Every year regimes change. So for example, right now we're in a regime where the Fed is raising rates. So it's gonna be very different than a regime where the Fed was keeping rates real low at a zero interest rate environment. And so you wanna be owning a different asset classes.
[00:50:17] Omar: Got it. Now that's how you're gonna diversify and. And, and just kind of what to own and when to own it, right? So what
[00:50:23] McKenna: fees will I be charged for investing? Because, you know, everything comes at a
[00:50:28] Omar: cost. Yeah, that's a great question. So normally if you're doing it yourself, you're ideally looking for market exposure with.
[00:50:35] Omar: Low fees. You wanna minimize your fees because fees are gonna take away from the compounded growth year over year, right? So you want, you want low fees. And so there's plenty of great ETFs and even mutual funds that you can buy to be passive investor with low fees. But what you really wanna look for in a private wealth manager is someone who's delivering returns and is earning his or her fee from the investments that they're managing for you.
[00:50:58] Omar: They're managing, right. And on [00:51:00] average, a, I'm a registered investment advisor, so. Set up to earn it from a percentage of the assets that I manage. Got it. And oftentimes, just as a rule of thumb, standard industry practice tends to be around 1% for RIAs. Okay. So if an investment advisor is, you know, charging about 1% of the assets under management or a u m then that he or she's managing, then that's generally the.
[00:51:25] Omar: Practice or standard. And I think it's worth every penny. Yes, it certainly can be. It can be it and and I and I hope that's the value I provide for my clients. Yes. Yeah. So, which these days shouldn't be too difficult cuz even if you were just to take your cash and just park it into treasuries, they should be able to at least earn that 1% pair up.
[00:51:42] Omar: Yeah.
[00:51:43] McKenna: Well Omar, it's been so, so great having you on the other side of the table where I get to interview you.
[00:51:47] Omar: Cool, thanks McKenna.
[00:51:49] McKenna: So yeah, thanks for listening to VaulkTalk and we'll be back. Thanks.[00:52:00]