Harnessing Fear to Build Wealth

Our 2 Cents – Episode #166

Harnessing Fear to Build Wealth

The focus of today’s episode of Our 2 Cents is using fear as an opportunity. Steve and Gabriel start out the show by giving a brief recap of our recent 2024 Market and Economic Update client event. Then, they dig into the idea that you can make fear a valuable tool in investing.

  1. Market & Economic Update Recap:
    • Notable market events from 2023 that are shaping the landscape in early 2024.
    • The ‘Magnificent 7’ driving most of the market growth.
    • Some thoughts on what lies ahead for us for the remainder of this year.
  2. Harnessing Fear to Build Wealth:
    • The importance of facing fears head-on and finding ways to alleviate them.
    • How stress-testing your portfolio or exploring alternative options can help create investment opportunities.
    • Common investor fears and how they can impact your decision making.

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Podcast Transcript

Announcer: You’re listening to Our 2 Cents, with the team from SGL Financial, building wealth for life. Steve Lewit is the president of SGL Financial, and Gabriel Lewit is the CEO. They’re here to discuss all the latest and financial news, trends, strategies, and more.

Gabriel Lewit: Well, welcome to the show here today. We are excited to be here with you. You’ve got Gabriel and Steve.

Steve Lewit: You’re a riot. Folks, here’s what’s happening here. I just want you to know what’s happening.

Gabriel Lewit: [inaudible 00:00:40].

Steve Lewit: So, Gabriel now calls me Steve, and I want him to call me Dad.

Gabriel Lewit: As you know, I’m his son. I think.

Steve Lewit: Because he is my son, so it sounds so weird-

Gabriel Lewit: I think he knows.

Steve Lewit: … to my ear that he says, “Well, Steve, what do you think?” It’s, “Well, Dad, what do you think?”

Gabriel Lewit: Okay. I’ve got a perfect analogy for this, do you sometimes call me son or do you call me Gabriel, or sometimes both?

Steve Lewit: No, I 99%-

Gabriel Lewit: Do you only call me son? “Hey, son.”

Steve Lewit: I don’t do that that often.

Gabriel Lewit: I’m saying, you would use both. You say, “Son, come over here.”

Steve Lewit: No, no, no. No.

Gabriel Lewit: “Gabriel, come over here.”

Steve Lewit: No. It’s different.

Gabriel Lewit: I say Steve, sometimes I say Dad.

Steve Lewit: Folks, you’re going to support me on this. It is different father to son than son to father. So I am your Dad, and I would like you to reaffirm that, because Steve sounds so weird when you call me-

Gabriel Lewit: All right. All right, Dad. No worries.

Steve Lewit: You spent your life calling me Dad. All of a sudden, “Well, Steve here…”

Gabriel Lewit: Well, is that not your name?

Steve Lewit: Hello, folks. Good morning, good afternoon. And I’m not going to say good night because I really want to talk to you all today.

Gabriel Lewit: Okay. It’s Gabriel and Dad Lewit here, ready to talk about the show.

Steve Lewit: Son and dad.

Gabriel Lewit: Okay, all right. Well, we’ve got some good topics here lined up for you today, after our little introduction skit. We didn’t practice that, but it seemed like a skit.

Well, first and foremost, okay, so last night we held for our clients a 2024 market outlook and economic update event. And so what I thought we would do today is just talk about some of the key takeaways from that.

And especially since that’s exclusively for our clients, so not everybody that listens to our podcast is currently a client of ours. So we thought here would be that we’re going to have some information that might be helpful for you to take away, based on what we were talking about to our clients last night.

Steve Lewit: I just want to add, Gabriel, tell me if this is true, if someone is not a client and they would like a copy of the podcast, can they get that?

Gabriel Lewit: You mean the recording of the webinar last night?

Steve Lewit: The recording of the webinar. Sorry, I’m…

Gabriel Lewit: Yeah. If you really would like a copy, please email us, info@SGLfinancial.com. We’d be happy to get you… An individually requested copy, that’d be no problem.

Steve Lewit: Sure.

Gabriel Lewit: Yeah. So we covered a lot of ground, I think that was really the key takeaway was 2023, last year was quite an interesting year, right? There was a lot of unexpected things that occurred, there was a lot of recession that never happened, there was a lot of changes in the market. And so-

Steve Lewit: A lot of incorrect predictions.

Gabriel Lewit: A lot of incorrect predictions. And so, Dad, what would you say, Steve, is your number one takeaway that you would want to share with our listeners here today based on what we were talking about last night?

Steve Lewit: That’s a great question, because I was thinking actually about that last night. We covered so much, there was so much data. It’s a data kind of a presentation.

Gabriel Lewit: As I said at the start, I was kind of nerding out a little bit.

Steve Lewit: Yeah, it really was. And not everybody loves data. But I think, for me, the big takeaway is kind of what we do is there’s so much uncertainty, we really don’t know what’s going on. The markets go up and down, life goes up and down, the economies go up and down.

Everything returns to the mean, to the average. If you look long-term, you’re going to be okay. And it all boils down to having a plan to go through all of that. I don’t know how people get through all of that stuff without having a plan.

Gabriel Lewit: Yes, I would agree with that.

Steve Lewit: I hope so.

Gabriel Lewit: Well, it was just I’m fumbling a little bit. We didn’t actually talk about that much-

Steve Lewit: We didn’t. I mentioned it-

Gabriel Lewit: … on the webinar last

Steve Lewit: I did mention it once, we can throw the red flag and check that out, but I did mention it once.

Gabriel Lewit: So, I was also referencing off the things we spent a lot of time talking about, what would be the top takeaway you’d want to share for our listeners?

Steve Lewit: Well, that’s it, it’s the uncertainty. It’s really the uncertainty of the future and how we can’t really predict what the future is.

Gabriel Lewit: May I clarify?

Steve Lewit: Yes.

Gabriel Lewit: Okay. For our listeners that are maybe looking for some tidbits of the market commentary that they can get, some of the factoids, do you-

Steve Lewit: You’re really going to put me in a corner. So here-

Gabriel Lewit: I can give you some hints.

Steve Lewit: So, we focus generally on the S&P 500 as a measure of the market.

Gabriel Lewit: We do.

Steve Lewit: Okay? As people say, “The market is up.” The market isn’t up, the S&P 500 is up. And what we were talking about last night, folks, is that the S&P 500 is driven by the magnificent seven stocks.

Gabriel Lewit: Mm-hmm. Apple, Nvidia right now, Tesla, Amazon, Google, Meta. What’s one more? Hold on, what’s the other one? I can’t think of it.

Steve Lewit: I can’t either.

Gabriel Lewit: Well, anyways, yeah, that’s a close listing.

Steve Lewit: Yeah. And that when you really look at the S&P, those seven stocks account for most of the growth. And if you look at the balance of the S&P, it’s been okay, but the S&P was up 26%, was it, Gabriel?

Gabriel Lewit: Yeah, 26% in 2023. Yep.

Steve Lewit: And those seven stocks were responsible for 15% of that 26%.

Gabriel Lewit: Well, and what was also interesting, there was some data we had shared, where if you expanded that to even the top 10 market weighted, market cap companies in the S&P 500, they made up 17% of the 26% return in the S&P 500. Which is a whopping share of the return of that S&P in last year.

Steve Lewit: Yeah, it’s 75%.

Gabriel Lewit: Well, yes. Actually the one data point on that slide said the S&P was up 24, so 17 out of 24. But there was a mix match, one I think had dividends reinvested, one didn’t.

But yeah, point is the lion’s share, 70%, 75% of the return of the S&P 500 was as a result directly of the top 10 holdings inside that S&P index.

Steve Lewit: Yeah. So what that drives is those 15 stocks were up an average of, I believe the number was 110.

Gabriel Lewit: Five. Are you talking about the magnificent seven?

Steve Lewit: The magnificent seven was up 105%.

Gabriel Lewit: Yeah. And that’s because we talked about the starting point, where you measure returns from is very important. If you take a starting point that’s at the low point of 2023 essentially started at a low point, because in 2022 some of those same stocks were down, what, almost 50% or greater.

Steve Lewit: That’s right.

Gabriel Lewit: Meta, I think was down 60%, 70% somewhere in that range. And so when you have a starting point that’s so low, you’re going to see some pretty eye-popping numbers if you use that low point as your starting point going forward, and you have a big recovery year like we had in 2023.

And so what was interesting, I think, about that is if you look historically, the percentage of the return last year made up by those magnificent seven was substantially higher than what they’ve contributed in prior years to the overall return of the S&P.

Steve Lewit: Yeah. And I thought the other data point that we had that was really interesting, it said when these really popular growth stocks get into the top 10 after they’ve been there a while they really show a lag in growth going forward.

Gabriel Lewit: Yeah. So, other words, they’re valuations which we looked at, some of their numerical valuations are sky-high. And what that does is it present headwinds, meaning their growth when you’re starting at such a high starting point for valuations is hard to come by.

Steve Lewit: That’s correct.

Gabriel Lewit: Yeah. And that’s going to really put a damper on their long-term growth perspectives. And hence why diversifying into things like smaller stocks, international stocks, value stocks, some of those things are so important to your long-term performance. Because you can’t just, well, for some, the S&P 500, which really is like buying 10 stocks. Essentially.

Steve Lewit: Well, we also talked about, Gabriel, some of our clients or people we meet say, “Well, why don’t I just buy those stocks?” And you could.

Gabriel Lewit: And you’d have to be okay with losing 40%, 50%, 60%.

Steve Lewit: Or 70.

Gabriel Lewit: In a given calendar year.

Steve Lewit: That’s right. Exactly.

Gabriel Lewit: Okay. With no guarantee that you’re going to see the growth from them now going forward that you’ve seen from them in the past.

Steve Lewit: Exactly. Exactly.

Gabriel Lewit: Now, so that was a lot about the predominant story in 2023, which was the S&P 500 and the magnificent seven. However, generally speaking, equities across the board in various asset classes were all pretty positive. We had internationals were up there 17%, 18%. Some small stocks did pretty good.

Steve Lewit: Even emerging markets was up 10%.

Gabriel Lewit: REITs were up. Bonds had a little boost at the end of the year, actually ended up positive. Although bonds are still down on a trailing three-year basis, and very, very low on a trailing five and trailing ten-year basis.

Steve Lewit: Trying to recover.

Gabriel Lewit: Trying to recover. And so that really led into some of the discussion points about, where’s the economy going to go this year? And what do we have in store for us? And we brought out the trusty crystal ball.

Steve Lewit: Yeah. I put batteries in your crystal ball and it still didn’t work.

Gabriel Lewit: It’s a fake crystal ball, folks. It doesn’t actually exist, it doesn’t work. But we like to make fun of the people that really stick to their guns and claim that they have a crystal ball.

Because we looked back at some predictions for 2022, for example, that we had on a 2022 market outlook event, and everybody was projecting the S&P was going to end that year at 4,900. And it started around 4,800. And of course it ended out the year at 3,800. Vastly different than what people had been projecting it to.

And it just goes to show, the more we show how wrong projections are, the more it solidifies, at least in my mind, in our minds here, that nobody, and you all know this, nobody can really predict or project what the market’s going to do on such a short-term basis.

Steve Lewit: Yeah. But it’s hard, Gabriel, as we talked about also, it’s hard to turn off the noise. Every time you turn on a program they’re saying, “Buy this, buy that.” Or they’re saying, “The sky is falling,” or, “The dollar’s not going to be worth…” It’s hard not to pay attention to that stuff and react to it.

And I think part of having a plan, I’m going to go back to that, is it takes this reactive mode away. It says, “Okay, instead of reacting, let’s look at the plan.” Because all of that stuff is planned into the plan.

Gabriel Lewit: Mm-hmm, yeah. And one of the other things we had talked about, and I’m just taking some of the quick hits here, I think is really important. It’s the idea of you, and we help you with this, but the idea that you should have your own investment philosophy that you really understand and believe in, that helps determine and drive how you invest and what you pick and choose.

Now, you might end up, what’s the word, copying or cloning or absorbing our investment philosophy that we recommend for you. And what is the core of that? We’ve got time horizon based planning, meaning you choose your investments based on time horizon.

So as a perfect example to that, if you’re 75 years old, maybe you have a 85, 86 year life expectancy, do you really want to be buying high-flying tech and growth stocks that can drop 60% or 70%, with absolutely no guarantee that they’ll recover or make money over say a ten-year time horizon? It may not be the right fit for you. So that’s a key thing.

Diversification is a really key tenet of our investment philosophy. So the S&P 500, for everybody that was on the webinar, or just some of you might already know this, some of you may not, had a 13-year stretch from 2000 to 2013 where it didn’t make any money.

Steve Lewit: Two major market crashes during that 13 years.

Gabriel Lewit: Years. Meaning, now, if you were dollar cost averaging in while you were saving, you would’ve seen your balances go up. But if you had $100,000 in early 2000, very likely 13 years later, assuming you hadn’t bought and sold and traded and done other stuff, that probably would’ve made you even less money-

Steve Lewit: Same 100 grand.

Gabriel Lewit: … you would’ve had that $100,000. And that’s very hard if you’re a retiree to say, “Okay, I’m 70 years old. By the time I’m 83, I’m going to have the same amount of money.” 13 years is a very long time.

Steve Lewit: And 13 years of inflation in between.

Gabriel Lewit: And one of the things you can do there is diversify. Okay? So that’s one of our other key tenets.

And what else did we talk about on the webinar last night? We talked about recession watch.

Steve Lewit: Oh, before you go there, I just want to add, these key tenants are based on independent research. In fact, they’re based on Nobel Prize winning research that started in 1965.

So if you have a belief in the market, ask yourself, where did that belief come from? What is it based on? Is it based on your imagination or your ego? Or is it based on real live information and data that was independently put together that makes sense?

Gabriel Lewit: Yeah. You just reminded me, the other thing we talked about was starting valuations and returns following, say, five or 10 years after based on where starting valuations are.

And we looked at how international valuations are starting at a much lower point than US. And that’s likely a tailwind, meaning more growth ahead. And that was reiterated by multiple data points across many investment research firms. There was a very clear consensus, international should be a component of your investment plan.

Steve Lewit: A larger component.

Gabriel Lewit: Going forward, yes.

Steve Lewit: Definitely. Yeah, good. Good stuff.

Gabriel Lewit: Good stuff, indeed.

Steve Lewit: I’m glad you got me out of just the, “Hey, let’s make a plan,” mode.

Gabriel Lewit: I was trying to… I didn’t want to kick you under the table.

Steve Lewit: Yeah, you could have.

Gabriel Lewit: But I wanted you to get some more meat on that bone there.

Steve Lewit: But I would’ve kicked you back.

Gabriel Lewit: Yes.

Steve Lewit: I just want you to know that.

Gabriel Lewit: And we talked a bit about recession. Is there going to be a recession? What does an inverted yield curve mean? Because we’re in what we call an inverted yield curve environment.

So a lot that we uncovered there. It was a whole hour, so we can’t give the entire recap here today. But I did want to give just enough so that if you’d like a copy of that, you can email us, info@SGLfinancial.com, we’d be happy to send you a recording for you to peruse and listen to at your leisure.

Steve Lewit: You bet.

Gabriel Lewit: Okay.

Steve Lewit: Yeah, man.

Gabriel Lewit: All right. By the way, I was laughing at you just a little bit, because I thought you said tenants of our investment philosophy versus tenets.

Steve Lewit: Tenants?

Gabriel Lewit: Tenets or tenants.

Steve Lewit: I think I did say tenants. I’m going to throw the red flag on that one too. Yeah, I think I said tenants.

Gabriel Lewit: They live with your investment philosophy.

Steve Lewit: Could you look up tenant?

Gabriel Lewit: I think it’s tenets.

Steve Lewit: Tenets?

Gabriel Lewit: Tenets.

Steve Lewit: I’m just, I have an idea in my head, folks. Pardon us while we do an English lesson here, but I think-

Gabriel Lewit: You always do it to me, so I had to-

Steve Lewit: But I think you can have a tenant.

Gabriel Lewit: A tenet is a principle or belief, especially one of the main principles of a religion or a philosophy.

Steve Lewit: Oh my God, he’s right.

Gabriel Lewit: Oh my gosh.

Steve Lewit: Oh my God, my son is correct.

Gabriel Lewit: I just had to give you some grief, Dad.

Steve Lewit: I’m grieved. I am so corrected.

Gabriel Lewit: Oh, if we can’t have a little fun on the show, what can we have, right?

Steve Lewit: Oh yeah. I like it. I hope you folks enjoy it.

Gabriel Lewit: We try not to be too serious here.

Okay, now onto a different topic.

Steve Lewit: A more serious topic. Actually, no.

Gabriel Lewit: Well, we’re going to talk a little bit about fear.

Steve Lewit: Actually, yes.

Gabriel Lewit: Yes.

Steve Lewit: Okay.

Gabriel Lewit: Well, I had two paths I could have taken here, because I had a couple… I always have a couple options for what we can talk about, and then sometimes we get to them all and sometimes we don’t. So I thought we’d talk today a little bit about fear.

Steve Lewit: Okay.

Gabriel Lewit: Okay. And how does fear impact us as investors, as human beings?

Steve Lewit: Yes.

Gabriel Lewit: Okay. And as you may have heard in the world, there are two main drivers of investment returns, both good or bad returns in the world. Those two drivers are fear and greed. So people often make emotional decisions based on either fear or based on greed.

Steve Lewit: I think it’s important to recognize here, I’m going to get a little philosophical.

Gabriel Lewit: Sure, of course.

Steve Lewit: That fear is always about the future. It’s always about us imagining what we think the future is going to be. It’s not based on any real data, it’s an imagination or it’s a feeling or it’s a belief, but it’s not based on anything other than how we feel.

Gabriel Lewit: Yeah. Fear is an interesting thing. And not everybody has full-blown fear, I would say-

Steve Lewit: Well, fear could be agitation.

Gabriel Lewit: … there is fear-lite.

Steve Lewit: Well, it could be agitation, or it could be concern, it could be annoyance, it could be a lot of things.

Gabriel Lewit: It presents itself as different things. Uncertainty… Even if you would say to yourself, “Well, I’m not scared of that,” or, “I don’t have a fear of that,” you might have a light fear or a worry or a concern, but it tends to be based on that same idea of fear.

And greed sounds equally bad on the other side, right, “Oh, I’m not a greedy person,” but, hey, we all want to make more money on our returns, right?

Steve Lewit: Yeah. And greed is a matter of us saying to ourselves, “We don’t feel like we have enough. Got to have more.”

Gabriel Lewit: Yeah. So these are two underlying currents that tend to impact investors of all shapes and sizes and amounts. And what we want to talk about is how to control fear in a way to make it not a negative per se, but something that you can harness to make better decisions and not let it run amok in your investment and retirement plan.

Steve Lewit: Yeah. I don’t think our feelings are ever a negative, I think they are what they are. And if you’re afraid of the future, you’re afraid the market might go down, you’re afraid that I might run out of money in retirement, or I’m afraid that we can’t live the lifestyle… Those are very, very real fears. And what do we do about it, Gabriel?

Gabriel Lewit: Yeah. So the article that spurred this thought for our show here is referencing a book written by a personal finance person named Farnoosh Torabi. I hope I didn’t say that incorrectly. And they wrote a book called A Healthy State of Panic. Okay? So I didn’t read the book yet, full disclosure.

Steve Lewit: I love the title, by the way.

Gabriel Lewit: But basically, Farnoosh is… Actually, is it a girl or a guy? I should know this.

Steve Lewit: Farnoosh…

Gabriel Lewit: She, it’s a she.

Steve Lewit: I was going to say, I think that’s a she.

Gabriel Lewit: Yeah. Sorry, I should have known that. I apologize. Well, so she said that fear is oftentimes misunderstood because people are encouraged to be fearless. We’re always, “You don’t need to be scared about that,” or, “Don’t worry about that.” It’s always minimized.

Steve Lewit: Or, “You shouldn’t be afraid of that.”

Gabriel Lewit: Right, it’s minimized a lot. And she’s saying, “You can lean into that, listen to that, and then address or face that fear. And if you do so successfully, you can come out on the other side healthier, happier, more secure, than if you just kind of tucked it into the back of your backpack and never looked at it again.”

Steve Lewit: Yeah. It’s that which you avoid actually stays longer. It’s like ignoring a problem, you think, “Well, if I ignore it long enough, it’ll just go away.”

Gabriel Lewit: It’s like you’re scared of heights, so we should take you to the top of the Empire State Building and lean over the edge of the tower, right?

Steve Lewit: I’ve been there and done that. And guess what? I’m still afraid of heights.

Gabriel Lewit: You came out stronger on the other side.

Steve Lewit: No, I didn’t come out stronger on the other… I came out like, “Why the hell did I do that?”

Gabriel Lewit: Yeah.

Steve Lewit: Scared the daylights out of me.

Gabriel Lewit: Oh, gosh.

Steve Lewit: But I did do it, didn’t change nothing.

But there’s something in fear. What she’s saying, and I love what she’s saying, is that there’s something in fear in all emotions actually, that if we get to know it and we get to see it and feel it for what it is, somehow it’s going to relieve itself a little bit or entirely. But until you know it, you can’t get rid of it.

Gabriel Lewit: Well, I would argue for you, with your example of heights and, say, the Empire State Building, you did it.

Steve Lewit: I did do it.

Gabriel Lewit: You came out the other side.

Steve Lewit: And I think-

Gabriel Lewit: You survived.

Steve Lewit: … if I did it a lot, I think my fear would go away.

Gabriel Lewit: Yeah. And hopefully some of that logic says, “Oh, I’m okay,” right?

Steve Lewit: Yes.

Gabriel Lewit: “That wasn’t as bad as I thought it was.”

Steve Lewit: It was worse than I thought it would be, actually. But I still was okay.

Gabriel Lewit: Oh, gosh. Okay, so let’s talk about what are some of the fears? And then we’ll talk a little bit about what we should do about that. One of the ones that’s very common is the fear of losing money by investing in the stock market. I would say that’s one of the biggest.

Steve Lewit: Yes. And then you ask yourself, “If I lose money, why am I afraid of that?” Because that’s what the stock market… It’s like I go on a roller coaster and it’s going to go up and down, right?

Gabriel Lewit: Yeah.

Steve Lewit: That’s what it does. And that’s what the stock market does.

Gabriel Lewit: Well, I just talked to a client the other day, and they’ve got some money that is in a 457 plan, that’s in the most ultra conservative investment choice in that 457, earning around 3% with no risk.

And it’s a pretty substantial amount of money. And we were exploring options because, quite frankly, we can get… Excuse me, my voice keeps getting a little froggy today. We can get more than 3% with very little or no risk, even if you had to take a little bit of risk we can get substantially more than that.

And this is money… This fellow’s actually not super old yet, they’ve got a long life expectancy ahead of them. We’re talking about leaving hundreds of thousands of dollars on the table due to this fear. Because when we were talking, he said, “I cannot lose this money. This is really important to me. I’ve worked my whole life for this money, I need it to be safe and secure.”

Steve Lewit: For sure.

Gabriel Lewit: But that same decision and that fear was causing them to lose in the future, I believe, hundreds and hundreds of thousands of dollars.

Steve Lewit: So, if you look at fear, Gabriel, if you look at fear always has this quality of stopping things. It’s like if you’re walking down the street late at night and you see somebody coming the other way with a hood on or a hoodie, you stop. You stop and think about it maybe or you hesitate.

But fear stops people from doing things. So it might protect you in one sense, “Maybe I should be afraid of that person.” But in another sense that fear says, “I don’t do things that are good for me as well because I’m afraid to do them.”

Gabriel Lewit: Mm-hmm, yeah. So ultimately what we started talking about is we were dealing with this client of mine, for example, we were digging into that fear. We started talking about it. And we were looking at safer options that can give them higher returns.

And then the fear turned into, “Well, what if it’s not insured or guaranteed ?or what if the business goes under or the company goes under? Or the X, Y or Z bank goes under.” So there’s a lot of fear wrapped up into this, but I think the way we were working through that that ultimately was successful is talking about those.

Steve Lewit: And bringing it to-

Gabriel Lewit: And being open with communication and identifying those fears, working through them. Talking about safety mechanisms and backups and reserves and all sorts of things, that gave him much more peace of mind.

Steve Lewit: Yeah. But some people, like I had a person in, a woman, and she likes having cash in the bank. And she’s got a lot of cash in the bank doing the same thing, underperforming.

And I said, can we talk about that a little bit? And she said, “No. No, we cannot talk about it.” I said, “Are you open to least considering something else?” And she said, “No, the money is staying there. It’s not moving. It’s not going anyplace because I won’t do it.” She’s afraid. And that, you can’t do anything. And then it’s up to her to find out why she’s so afraid.

Gabriel Lewit: Yeah. And you have to be at a place in your life, whenever you are looking to address a fear, you have to be ready to have that conversation. And not everybody is ready at the same time to look at those things. Like you may not be ready to go back up the Empire State Building.

Steve Lewit: Yeah, I might not.

Gabriel Lewit: Maybe we go down to Chicago this weekend up to the Willis… Is it the Willis Tower? No, it’s something else now. Is it still Willis?

Steve Lewit: Who the heck knows?

Gabriel Lewit: Used to be the Sears Tower.

Steve Lewit: Yeah.

Gabriel Lewit: But the Willis Tower, and you could go over the ledge.

Steve Lewit: And you can take me out on the glass platform that goes down.

Gabriel Lewit: Yeah, let’s do it. Are you ready?

Steve Lewit: I’m ready. I’m so ready that I’m going to disappear for the next week.

Gabriel Lewit: Gotcha, gotcha. Okay.

Steve Lewit: So, you can’t find me.

Gabriel Lewit: Well, what are some of the other common fears that we hear most often? So, of course, losing money in the market.

Now, let’s say you are in a market-based portfolio and you still have that fear. One of the things that we can do is a stress test. We are facing that fear and saying, “Okay, let’s assume that that happened. What does your plan look like?” And we can model that, and you can look at that and say, “Oh, I’m still okay,” or maybe you’re not okay. And we would want to know that in advance because it might alter our investment recommendations for you.

Steve Lewit: Mm-hmm, definitely.

Gabriel Lewit: So, a stress test or something where you face that fear can be very real. Even other fears like losing a job if you’re still working. I have a lot of clients, there’s a lot of layoffs right now happening, and people in my reviews have been coming and saying-

Steve Lewit: “What if…?”

Gabriel Lewit: “What if I lose my job?”

Steve Lewit: Or, “What if I have to retire next year?”

Gabriel Lewit: I just had a review last night, he said, “30 of my team members have been laid off. I’m still here, but I’m getting a little concerned. What happens? I’m in a niche role, what if I can’t find another job?”

Steve Lewit: Yeah, yeah.

Gabriel Lewit: And what’s interesting is I’ll present things like, “Hey, do you want to model that? We could model that.” And a lot of times people are afraid to see what that would look like.

Steve Lewit: Well, it’s like going to the doctor. I have a pain in my chest, but I won’t go to the doctor.

Gabriel Lewit: Should we get the scan? Let’s put off the scan until later.

Steve Lewit: Yeah. Because I don’t want to know the truth.

Gabriel Lewit: “I don’t know, if there’s something bad hiding in there..”

Steve Lewit: Yeah. There might be something going wrong in there.

Gabriel Lewit: So, it’s an interesting human nature reaction to avoid the conversation about that fear. But keep in mind, one of the best things you can do to alleviate that fear is actually to address it head on or face that fear.

Steve Lewit: I’m starting to feel, Gabriel, like this is a pitch for our upcoming therapy business that we’re starting.

Gabriel Lewit: Well, actually, like Elon Musk, we’ve invented a brain chip that we can sell to you to install in your head. And you’ll never be-

Steve Lewit: You can move the market.

Gabriel Lewit: You will never be scared ever again.

Steve Lewit: Right.

Gabriel Lewit: Yes. It’s only $100 million per chip.

Steve Lewit: Yeah. And this guy can’t wait to get another one.

Gabriel Lewit: I’m talking about Elon Musk’s company implanted successfully, supposedly successfully, the first Neuralink brain chip. And the fellow, I think it’s a gentleman, I think it’s a guy.

Steve Lewit: It was a guy.

Gabriel Lewit: Can now control a mouse on a screen with his brain, supposedly. I keep saying supposedly, because I haven’t seen it in real life [inaudible 00:28:57].

Steve Lewit: Power over a mouse is very, very important. I’ve always wanted power over a mouse.

Gabriel Lewit: I think it’s pretty cool, honestly.

Steve Lewit: It is pretty cool.

Gabriel Lewit: Gosh, preview of the future, right?

Steve Lewit: Mm-hmm.

Gabriel Lewit: You could probably type something…. I mean, if you can control a mouse, just think the letter A in your head, and it types an A or a word, and it just types the word. That’d be weird.

Steve Lewit: Look, I’m sure people do not want to know everything that I think in my head.

Gabriel Lewit: No, you can control whether it types it or not.

Steve Lewit: Oh, I see.

Gabriel Lewit: It’s not going to be spitting it out, nobody wants that for anybody.

Steve Lewit: No, for sure. I don’t want to know what you’re really thinking.

Gabriel Lewit: Oh, gosh. So what are some of the other things that we hear a lot? Job loss, recession, a lot of people are worried about recession right now.

Steve Lewit: Fraud. I mean, people worry, “Will my money get stolen?”

Gabriel Lewit: Yep. Not as common to be verbally expressed. But I do think from conversations I’ve had, “What if I get divorced? How will that impact me?” It’s a huge financial-

Steve Lewit: Or my husband passes, or my wife passes.

Gabriel Lewit: Yeah. Huge financial change. “What if my husband passes away before me and I lose their pension?”

But all of these things are very rational concerns, they have the impact of really hurting your financial lifestyle, which can have ripple effects on your security, on your peace of mind, on your comfort, on your lifestyle, your habits. And I think that’s why we get scared of them.

Steve Lewit: Definitely. Definitely.

Gabriel Lewit: So, if you’ve got fears, or maybe you’re not admitting that they’re fears yet, but you’ve got questions or concerns or thoughts or-

Steve Lewit: Even just concerns, or I get nervous, or-

Gabriel Lewit: Or what ifs in your head that you’d like to explore, that’s exactly what we’re here for. And you can reach out to us anytime. We can schedule a conversation or a checkup or a tune up, or whatever you’d like to call it. Just give us a call here at SGL… Well, that’s our website. Give us a call at our phone number, (847) 499-3330. Or you can go to our website, SGLfinancial.com, click contact us. Or email us at info@SGLfinancial.com.

Steve Lewit: And by the way, April 15th is coming along, so hope you’re getting your taxes in line.

Gabriel Lewit: Yes, yes. Another reminder, we do taxes. If you need help with those taxes, let us know, preferably before April 15th.

Steve Lewit: Yeah.

Gabriel Lewit: Actually, before April 1st.

Steve Lewit: Definitely.

Gabriel Lewit: Yes. So we have enough time to help you with those taxes.

Well, that’s our show for today. Steve…

Steve Lewit: Yes, son.

Gabriel Lewit: Dad, great job.

Steve Lewit: Yes, Gabriel.

Gabriel Lewit: And we are very happy to have you on the show, everybody. Thanks for tuning in, and we will see you on the next one.

Steve Lewit: Thank you all. Be well, everybody.

Gabriel Lewit: Bye now.

Steve Lewit: Bye.

Announcer: Thanks for listening to Our 2 Cents with Steve and Gabriel Lewit. For any questions about your finances, give SGL a call at (847) 499-3330. Or visit us on the web at SGLfinancial.com and be sure to subscribe to join us on next week’s episode.

Prerecorded Voice: Investment Advisory Services are offered through SGL Financial, LLC, an SEC-Registered Investment Advisor. Insurance and other financial products are offered separately through individually licensed and appointed agents.