Sharing Stories: When Emotions Impact Your Planning

Our 2 Cents – Episode #116

Sharing Stories: When Emotions Impact Your Planning

The gross national debt is inching close to an important statutory ceiling and Steve and Gabriel are here to break down what that all means on this new episode of Our 2 Cents.

They’re also sharing real experiences when their clients’ emotions took over the the driver’s seat in their financial planning.

  1. $31,000,000,000,000 and Counting:
    • Congress has placed a “cap” on how much the government can borrow, and at the start of the fiscal year the debt has reached $31 trillion, and $31.4 trillion is the borrowing limit.
    • However, this year’s deficit will decline by an estimated $1.7 trillion.
    • So, what’s the difference between the deficit and the debt?
    • What is the impact of all this on consumers and possible future tax ramifications?
  2. Sharing Stories: When Emotions Impact Your Planning:
    • It’s no secret that your emotions can play into your decisions and reactions across all areas of life.
    • We’re sharing stories about some of the more common emotions with regards to investing:
      • Greed
      • Fear
      • Hope
      • Pride
      • Joy

Tune in now to join us for this discussion!

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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 in financial news, trends, strategies, and more.

Gabriel Lewit: Good morning, everybody. Welcome to Our 2 Cents. Well, good morning, good afternoon, good evening, I should say, because I don’t know what time of day it is for you, but for us here, good morning. A hardy-

Steve Lewit: And a beautiful morning.

Gabriel Lewit: It is. It’s nice. It’s been warm for October. I’m loving it. But it does still mean that November is around the corner. Winter is around the corner. You got any winter plans on the horizon, Mr. Lew?

Steve Lewit: Yes, yes. I go on my annual retreat. First week in January, up in Ojai, California. I’m there in the woods and the mountains and the sun and the sky, and without nothing else.

Gabriel Lewit: Very cool.

Steve Lewit: Yeah, it’s nice.

Gabriel Lewit: It’s something to look forward to.

Steve Lewit: I am looking forward to it.

Gabriel Lewit: They say, well, if you’re working, or even I guess if you’re retired, if you set yourself a vacation goal or something that you’re looking forward to, then you feel better every day, because you’ve got that on the horizon.

Steve Lewit: Every day, we go to work, we all do. And you might be working at home or in the garage or at play, playing pickle ball, whatever it happens to be. And the days, it takes energy and thought and sometimes you just got to let that go. I think, I think.

Gabriel Lewit: Correct. Especially when you’re playing pickle ball.

Steve Lewit: Yes. Especially, Well, some people take vacations and they’ll go traveling in Europe and they’ll see a city a day or a city every two days and they’re running here and running there. And I’ve done that, and that doesn’t float my boat.

Gabriel Lewit: You prefer the resting here and resting there?

Steve Lewit: I prefer the sitting. It’s almost like you’re comatose for a week. It’s like you’re in a coma.

Gabriel Lewit: That still sounds nice, I don’t know. Well, I hear it’s pretty out there.

Steve Lewit: It’s beautiful. Right now, there’s a lack of water, so there’s a dry thing going on, but up in the mountains in Ojai, Ojai is in a valley surrounded by these beautiful mountains. And there are just terrific hikes and places to go, and quiet spaces. Great food in Ojai, and it’s 45 minutes from Santa Barbara, which is one of my favorite places. So I go up there, have a good time.

Gabriel Lewit: Very cool.

Steve Lewit: Yeah, it’s cool. What about you?

Gabriel Lewit: What’s up, folks? Well, folks-

Steve Lewit: What about you?

Gabriel Lewit: Nothing yet. Planning Thanksgiving. So if you haven’t planned out your holidays and your food and all your other stuff, just a reminder that the holidays are coming up. So you got to get planning. I’ve got to fly my mom in, I’m realizing. Oops, I got to buy plane tickets before they get expensive. Whoops.

Steve Lewit: Yeah, you better do it. Yeah.

Gabriel Lewit: Well, anyways, we’ve got a good show lined up for you here.

Steve Lewit: I saw lights getting put up.

Gabriel Lewit: Yeah, some people are there early.

Steve Lewit: It’s October, what? 11th? And they’re putting up Christmas lights? It’s like, wait a minute.

Gabriel Lewit: Well, producer Katie was putting up Halloween decorations I think in April or something like that.

Steve Lewit: She loves Halloween, don’t you Katie?

Gabriel Lewit: Well, I got the pumpkins. I put the hairspray on the pumpkin so the squirrels don’t get them. I’ve got some gnarly squirrels because they literally will chew through my entire garbage cans. I just got little chips of plastic all over the garage, it’s crazy.

Steve Lewit: You got to lock it up.

Gabriel Lewit: Well, I’m saying they chew through the plastic top.

Steve Lewit: Oh, through the top?

Gabriel Lewit: Yeah. And I have these scatters of green plastic all over the concrete.

Steve Lewit: What have you been feeding your squirrels, man?

Gabriel Lewit: I don’t know. This is the second time they’ve done this.

Steve Lewit: Super squirrel.

Gabriel Lewit: Yeah. Okay. Well, we got a good show-

Steve Lewit: We do have a show this morning, folks.

Gabriel Lewit: Yeah, well, we were going to start off with about the polar opposite of super strong teeth squirrels, which is the fiscal debt of the United States reaching a record $31 trillion.

Steve Lewit: The super strong [inaudible 00:04:14] fiscal debt.

Gabriel Lewit: Yeah. So basically, if you hadn’t heard, last week on October 4th, a report came out that the US GDP has surpassed… Sorry, not GDP, GND, gross national debt. I was reading that the wrong way.

Steve Lewit: Yeah, that’s a big difference.

Gabriel Lewit: Has surpassed $31 trillion. This is a huge number, Dad.

Steve Lewit: Yeah, it is. Hey, Katie. How many zeros? Look up how many zeros in 31 trillion. I think there are 12.

Gabriel Lewit: One, two, tree, four, five, six, seven, eight, nine. Yeah, I think it’s 12. Yeah. So lots of zeros there, lots of debt. Now this is actually close to the statutory ceiling of $31.4 trillion, which is the current cap that Congress has placed on the ability for them to borrow. So this is a big milestone, but not necessarily in a good way. And you and I have been talking about it for quite some time about the rising national debt. In fact, it’s a talking point in just about every single presentation, workshop, training event that we do.

Steve Lewit: Well, Gabriel, I started talking about the national debt when it was 22. I think I was-

Gabriel Lewit: I remember this.

Steve Lewit: Oh, was it 19 or 21 trillion? Somewhere around there.

Gabriel Lewit: Yeah. Yeah. So what’s interesting is certainly it ebbs and flows, but it seems to be flowing higher and higher. And the question is, what kind of impact is this going to have on you? And sometimes when the number is, let’s say the 30.65 trillion, people start to forget about it. But when it hits another key number, like 31 trillion, all of a sudden there’s a renewed interest in the ramifications and the impact of what hitting that next rounded milestone might be. So with debt here, I mean, there’s some issues also with the inflation and the interest rates that are being risen to combat inflation too.

Steve Lewit: Absolutely. Everything ties together in the economy. Interest rates go up, the debt goes up, the interest on the debt goes up. So interest rates are not really healthy for the national debt. It gets harder to pay back. Actually, what’s interesting, and the article that you picked out this morning says this, So I’m not quoting, it says nothing to celebrate, but we actually have more revenue this year than normally. And we’re actually going to cut the deficit. We’re still in a deficit by almost 1.7-

Gabriel Lewit: Yeah, and deficit is different than debt, if you want to explain the difference.

Steve Lewit: Yeah. Deficit, it’s like your annual budget. It’s like, “I spend this much and I got this much revenue coming in,” like our personal budget. So that would be your deficit. So there’s a deficit which adds to the debt.

Gabriel Lewit: It’d be like if you had a HELOC and every single month you were running a $1,000 a month deficit and you just borrowed that from your HELOC, your HELOC debt balance would keep rising.

Steve Lewit: Well done. Well done. So I forgot the point I was going to make.

Gabriel Lewit: You were talking about the difference between deficit and debt.

Steve Lewit: But there was a point behind that. Do you remember what the point was? Oh-

Gabriel Lewit: Oh, it was being reduced. It’s being reduced, the deficit.

Steve Lewit: That all the pieces fit together, so inflation, interest rates, the market, spending power, all of that fits together and it’s quite a puzzle that’s really very difficult to figure out.

Gabriel Lewit: Well, and in supposedly positive news this year, the deficit will decline by 1.7 trillion. Not the debt, but the deficit, annual deficit, which would be if it continues that way, the single largest decline in the federal deficit in American history according to the OMB, Office of Management & Budget. So that’s positive, but of course the debt’s still increasing and then it’s always the interest on the debt that causes it to compound. So what’s the impact on you and I and a normal consumer when you hear a number like this, $31 trillion in national debt?

Steve Lewit: Well, it’s a simple question. When does it get paid back and can you keep increasing it forever? Now, old economists like me, I shouldn’t use the word old, more seasoned economists-

Gabriel Lewit: Weathered.

Steve Lewit: Weathered, slightly wrinkled economists like me, we grew up-

Gabriel Lewit: Grizzled? Grizzled and-

Steve Lewit: Grizzled and hard-

Gabriel Lewit: … and hardened?

Steve Lewit: And hardened. Yeah.

Gabriel Lewit: Veterans.

Steve Lewit: Veteran economists like me, we always… Look, you don’t have debt, you pay off your debt because it eventually comes back to haunt you that you can’t afford it. Now the younger, more current economists, not all of them by the way, but some are claiming you could have debt forever. It doesn’t hurt you, you just print money and manage it. And if inflation gets out of hand, you raise interest rates. But it’s okay to have debt.

Steve Lewit: So pick your poison, I guess is the way I would put it. I’m still of the thinking that you shouldn’t have debt, there’s no reason to have debt. It took our country 200 years to accumulate its first trillion dollars of debt and now we’re at 31 trillion. And it’s like, you just can’t keep printing money. Something will break down in that system.

Gabriel Lewit: Well, so the guy being quoted in the article here, Owen Zidar, he’s a Princeton economist, at Princeton, and he says, this is quote from the article, “Rising interest rates will exacerbate the nation’s growing debt issues.”

Steve Lewit: Absolutely.

Gabriel Lewit: “And make the debt itself more costly,” and of course the Federal Reserve has raised rates several times this year in an effort to combat inflation, which is what you just said. And then he also said that the debt should encourage us to consider some tax policies that almost passed through legislative process, didn’t get enough support, like imposing higher taxes on the wealthy and closing the carried interest loophole, which allows money managers to treat their income as capital gains.

Steve Lewit: Which is code for, “Let’s raise taxes because we need the money.”

Gabriel Lewit: Right, right. So I think that’s where we’re circling back to here, guys and gals out there listening, is you’ve been beating this drum, as you say a lot. We’ve been on this kick about being really tax efficient and tax-free for your retirement. So the national debt here, from one perspective I should say, you wouldn’t worry about on how the tax impacts will hit you down the road. If all your money is tax-free, then you’re a little less worried about the ramifications of rising tax rates as a result of the spiraling national debt.

Steve Lewit: Except most people build their retirement funds not in tax-free or taxable, they build it in tax deferred. And tax deferred means I didn’t pay the taxes now because somebody told me to defer the taxes to the future when I’ll be in a lower tax bracket. And unfortunately, I don’t know, your clients are just like my clients. A lot of my clients spend more in retirement because they’re finally free to do whatever they want to do.

Gabriel Lewit: So lots to think about there, guys. And if you’re worried about taxes impacting you in the future, as you hear more news about the national debt, give us a call. We can always review that as part of your overall plan, your tax efficiency options that you may have. But there are options, focusing on being more tax free, making tax smart moves. All those things are things you can control, whereas you can’t individually control the national debt.

Steve Lewit: I’m going to say it this way, Gabriel, which I apologize for this, but it’s going to be a little more direct. But if you’re sitting with IRA funds or 401(k) funds, you have to take a look at doing something about that and getting them into the tax-free bucket. If taxes go up in the future, you’re going to pay through the nose, that’s less money out of your pocket, then it’s going to go to your kids.

Steve Lewit: They’re going to be in their peak earning years, they’re going to pay through their nose. And I could see you giving away 50% of your savings because of tax consequences in the future. So come on in, and talk to us. And Gabriel will give you the phone number again.

Gabriel Lewit: It is (847) 499-3330.

Steve Lewit: Good job.

Gabriel Lewit: Yes. Thank you so much. So let’s talk about a little bit different topic here. Debt of course is not the most fun thing to talk about. So let’s talk about your emotions instead.

Steve Lewit: That’s a lot of fun.

Gabriel Lewit: I know you would like that because you were telling me earlier, Steve, before we started the show, he’s like, “Can we talk about something non-financial?” I’m like, “What are you thinking about?” And he’s like, “I don’t know, the universe, the meaning of life. Something more interesting.”

Steve Lewit: Yeah, yeah. Something that-

Gabriel Lewit: Because we talk about money on the show every single time.

Steve Lewit: What’s-

Gabriel Lewit: We are a financial show, but-

Steve Lewit: What could be more interesting than talking about something that has no answer?

Gabriel Lewit: I think of a lot of things. But yeah, so we’re not going to do that. But we’re going to talk about emotions. We want to go through stories with you here about a couple of emotions, switch up the approach that we take here and try to give you some examples of clients we’ve encountered that we’ve seen where emotions have played an impact on their planning, sometimes in positive or negative ways.

Gabriel Lewit: Okay. So let’s talk about the first emotion on the list, we just jotted down some down here from our stories. The first emotion we’re talking about is greed. So Mr. Lewit?

Steve Lewit: Yes.

Gabriel Lewit: Have you a story, sir, about any clients that have allowed greed to get the better of them to the detriment of their planning?

Steve Lewit: Yes. So I had a potential client in the other day and we’re talking, and these folks have done a wonderful job of saving. They’re spending within their budget. And what I basically said is I said, “Look, you have the game won. You’ve got the champagne out and the bubbles are flying and you should go home and celebrate because you’re set for life unless you do something silly.”

Steve Lewit: I didn’t say silly, I said another word, but if I’m your advisor, you’re not going to do that. And they came back to me and said, “Well, we want to invest really aggressively.” And it was like, “Well, why do you want to do that?” “Well, we want to make a lot of money.” And it was like, “But you understand, all that can do is hurt you? It can’t help you, because you already won the game. So you can’t more put more runs on the scorecard. All it can do is hurt you and or hurt your kids, leaving money behind.”

Steve Lewit: And there was no answer other than that, “We want to make more money.” And that’s greed. I mean, that is not being objective, that’s just following a desire. Now, what’s behind that desire? I don’t know, maybe it makes them feel better. Maybe it proves they’re better than other people. Maybe they want to catch up to the neighbor or keep up with the Joneses. But that’s how greed works. It just drives you to get more when you don’t need it.

Gabriel Lewit: Yeah. Well, it’s interesting. I had a potential client, didn’t end up actually choosing to work with us. Well, I’ll tell you the story here. I think it was last year, and I think he had around eight or $900,000 that in his story to me originally, he told me that I think it was 15, 20 years ago, he had lost a lot of money and he had finally recovered from that and now had eight or 900,000, thinking about retiring in two years.

Gabriel Lewit: Last when I talked to him was before the current this year market crash. Everything was really high and doing well. And he almost sounded like he had two sides of his brain. He’s like, “I know I should protect this money because I made bad decisions in the past.” And we went through two or three introductory meetings talking about options we would have to protect his money, focus a little bit more on safety first.

Gabriel Lewit: And we had a final conversation where he said, “You know what? I really think I should do this and I think I’m going to talk to you next year about doing this, but I just can’t envision taking my money off the table right now with how the market’s doing.” Now, this was I think November of last year and I haven’t talked to him since, because I haven’t heard from him. But I sure hope he’s doing better than I would imagine, because-

Steve Lewit: He’s not.

Gabriel Lewit: … he was very aggressive and he could have been hit very hard this year. And I hope he’s not back in the boat he was in 15, 20 years ago where he lost a big chunk.

Steve Lewit: Of course not. Of course not.

Gabriel Lewit: Because this time around, he doesn’t have the time to save it back up.

Steve Lewit: You see, the way greed works is you’re at the casino and you got big winnings on the table and you say, “Well, I want more,” instead of taking your winnings off the table and playing with the-

Gabriel Lewit: Yeah, you keep riding with it.

Steve Lewit: You keep riding with it and then eventually, you get hurt and then you kick yourself and feel guilty or like-

Gabriel Lewit: “Yeah, I shouldn’t have done that.”

Steve Lewit: … “How stupid am I? Man! Oh, I’ll never do that again.” And what do you do again? The same thing.

Gabriel Lewit: Well, if a long enough time goes by, you forget even for yourself.

Steve Lewit: Right.

Gabriel Lewit: So that’s a big one, guys. And you want to be careful of that emotion in particular. Obviously, the other ones we’re going to talk about here because they can really play into how you choose to invest your money and what you do. So number one was greed. Keep an eye out on that, tricky one.

Steve Lewit: Yeah. And folks, we’re really nonjudgmental about this. Part of our job is to identify what’s moving people and the emotions and where they’re headed and what they want and their desires and their makeup and how they react to different things. So we meet people and we get ideas, and when we see greed, we’re not saying, “Oh, that’s bad.” And we’re not saying that’s good, we’re just saying that that’s what’s working inside of a person and we need to work with that as their advisor.

Gabriel Lewit: Yep, yep. So let’s talk about emotion number two on our list here today, which is… Well, they say two of the strongest emotions are greed and then followed by what, Mr. Lewit?

Steve Lewit: Oh, I think fear is the number one.

Gabriel Lewit: Fear is-

Steve Lewit: I think fear is behind, what?

Gabriel Lewit: Fear and greed, or greed and fear. Both collectively known as probably the strongest two emotions when it comes to investing. So let’s talk about fear. Give us an example from your side. I’ve got one too, with clients, a client’s story where you’ve seen fear detrimentally hurt their financial planning.

Steve Lewit: Well, the story that comes up is one I tell all the time of a client that has $3 million and won’t spend more than 27,000 or $30,000 a year. Now, as much as I talk with this person, I say, “You can spend a lot more than $30,000 a year, you have $3 million.” And the answer is always the same thing, is “I’m afraid I will run out of money.”

Steve Lewit: And that’s irrational. Fear sometimes is rational, and oftentimes is irrational. It’s just something we’ve learned from the past or we had a bad experience like Gabriel had a client three weeks ago that just came on board and with trepidation, and saying, “Gee, I hope I can really trust you because the last advisor I had really did not do the job. In fact, did badly for us.” So they put a lot of trust in us, and me. But behind all of that is this fear that they’re going to get burned again.

Gabriel Lewit: Yeah. Well, I shared one I think it was maybe last week, which I’ll use again here, which was only one client, because everybody else I’ve talked to really understands our planning process, really understands how we invest, understands the markets. They may not love the fact that the markets are up and down, mostly down so far this year, but they get it.

Gabriel Lewit: It’s the price of admission, so to speak, of the stock market, to earn those higher returns longer term, you’ve got to be… You can’t do it without any ups and downs along the way. But I had one client that just said, “Hey, I’m too worried about my long term performance here. I can’t see this account being down right now any further. I’d like to sell it and move it to cash.” Even after discussing it, continued with that approach. But what’s interesting is I tried to show them in their plan that, “Hey, this is money in our plan. Assuming our plan is correct, we aren’t going to touch for 15 years, we don’t need it.”

Gabriel Lewit: And they couldn’t get that out. And part of why we build these plans is to help offset emotions, to show people with data and logic and numbers, you don’t have to worry about this account right now. We’re not using it. It’s 15 years away in your plan before we’re going to touch this. And that can help to mitigate that fear that you have by staying invested, which we all know is really good for us long term.

Gabriel Lewit: So that was an example where he succumbed to that fear and it’ll be likely to hurt him in long term I think, just because he’s going to leave that money on the sideline until the markets have recovered. Nobody knows how long that’s going to be and you might miss the recovery by that point.

Steve Lewit: Yeah, I remember you and I talking about your client and fear is one of those things. Fear, what is fear? It’s I don’t know what’s going to happen.

Gabriel Lewit: Worried he’s not going to be okay in the future. Yeah.

Steve Lewit: The unknown scares the daylights out of me and a plan gives you some clue or gives you a direction in the unknown. It may not work it out exactly like that, but it’s a roadmap to get through the mountains. But look, fear is its own thing. When you got it, you got it. And it’s hard to get rid of it.

Gabriel Lewit: Yeah. Well, I’ve got a few others on here and this is very actually interesting to hear your stories and share mine. So I don’t want to run out of time here. And we’ve got a couple other emotional words here to talk about. How about number three on our list here for today, Mr. Lewit, hope? There’s a better word for hope that’s also four letters, which we call plan, P-L-A-N instead of hope. But a lot of people don’t have a plan and instead have hope. And what’s the problem with that when it comes to planning?

Steve Lewit: Well, I had a potential client say to me yesterday, “I know hope’s not a plan.” I said, “I agree with you on that.” Yeah, yeah. Well, what is hope? Hope means I don’t know what’s going to happen in the future and I’d like to work it out a certain way, but I don’t have a plan. I’m not confident.

Steve Lewit: So if you’re not confident in what you’re doing, you have to hope. When I do a plan, I know you too, Gabriel, we don’t hope the plan is going to work. We have built into it all of the reasons why it should work, All the dangers, all the hurdles. I’d hate to give a client a plan and say, “Hey, Sam and Evelyn, here’s your plan. Gee, I hope it works.”

Gabriel Lewit: Well, I don’t want to pick on a Monte Carlo too much, but I sometimes pick on them. But some Monte Carlos, which is where they run hundreds of simulations of market returns in your plan will give out an 80% chance of success. So that’s almost like looking at your client saying, “here, I hope this works.”

Steve Lewit: Yeah, right.

Gabriel Lewit: “20% chance it won’t, but hopefully we get the 80% where it does.”

Steve Lewit: Yeah, you’re in great shape. You got an 80% chance of winning.

Gabriel Lewit: So, I mean, it’s better than 50%. I’ll give it that, but not as good as a guaranteed thing.

Steve Lewit: Yeah, that’s like going in for surgery and they say, “You only have a 3% chance of dying, so you’re in great shape.” Well, what if it’s me? What if I’m the 3%?

Gabriel Lewit: Right. So hope is an interesting one because it’s more you can do something about it. And it’s surprising to me how people don’t, So I had a client, this is a potential client. We talk to a lot of people. Most people come on board as clients. A lot of people don’t, here and there for whatever reason. But they were saying, “I’m thinking about retiring next year and I’d like to run a plan so that I know if I have enough money to retire next year.” Oh, sorry. No, it was this year. They want to retire later this year.

Gabriel Lewit: This was earlier this year I talked to them. And then about three months later, they said, “Well, we’ve decided we’re going to work another year, so we don’t need to meet to build out our plan anymore. We think we’ll be okay.”

Steve Lewit: Right. “We hope we’ll be okay.”

Gabriel Lewit: They said think, but I’m thinking hope in my head here with my story.

Steve Lewit: That’s the same as hoping.

Gabriel Lewit: Right. So what’s interesting about this and I see this with other people too, there are a lot of folks out there that if they’re not retiring now, think that they should wait to do their plan until they retire. And I tried to talk to them briefly, I said, “Hey, the best time to do…”

Gabriel Lewit: And the problem is people think we’re trying to sell them on something. It’s like, “No, the best time to do a plan is absolutely not right before you retire.” It’s well before you retire.

Steve Lewit: So your… Oh, I’m sorry.

Gabriel Lewit: Sorry. So she hopes that she’ll be okay when she gets to retirement, but she’s waiting until retirement to figure that out, which is maybe not a good thing.

Steve Lewit: So again, I’m talking about potential clients today a lot, but I had a client, a couple in yesterday and they’ve done really, really well for themselves and they’re losing a lot of money in the market. And their question to me is, “If we had been here three years ago, what would we look like?” And I said, “Well, we would’ve known you have an income shortfall and we have to prepare for that. So all your money probably wouldn’t be in the market for exactly this reason, that the market’s down, you’re going to retire January, and if you keep going the way you’re going, you’re going to have to pull out your money when the market’s down.” And they understood that. So the earlier you plan in retirement, the less you need hope that things are going to work out. Time is very important.

Gabriel Lewit: Yeah. So very interesting one there. Hope, joining greed and fear. How about let’s do one or two more here and then we’ll probably have to wrap here for today, but how about pride? Have you ever seen pride impacting somebody’s financial planning?

Steve Lewit: Well, pride, all the time. So we have world class money managers, this is a fount of wealth. They manage 15 billion or something like that, been around 25 years. They have a methodology that is well proven based on Nobel prize winning research. They do pretty good. They have better years and worse years like everybody, but they’re really good. Very, very sophisticated portfolios with 22 different asset classes, 47,000 different securities, national, international, emerging markets, everything.

Steve Lewit: And I have people come in and say, “Oh, I can do that.” Now, maybe they can’t. It’s highly unlikely, and that’s pride. It’s saying that I think I know more than equal to them. And there’s no logical reason why you should think that, because they are pros and you’re an amateur. Any way you slice it, you’re an amateur. And usually, pros know more than amateurs.

Steve Lewit: I talk about that in my tennis career all the time. When I played the number one guys in tennis clubs, they were great amateurs, but they hit 1,000 balls a week. I hit 10,000 balls a week and they couldn’t compete. Why? Because I was a pro and they were amateurs. Not that they weren’t very good.

Gabriel Lewit: Yeah, well, look, there’s data that says individual investors and big data research companies have tracked this have average, I think it’s like 2% returns historically compared to even just sitting in an index fund would get you 7% depending on which funds and things like that.

Gabriel Lewit: And that’s because typically individual traders and investors that are buying and selling stocks, what are they doing? Their pride is saying, “Hey, I can beat the market,” or “I can do better, and I can do this, that and the other.”

Steve Lewit: “I can time it.”

Gabriel Lewit: “I can time it.” All very, very much based on, “Hey, I think I don’t need to hire somebody. I can figure this out on my own.” Which some people do, but most people don’t. And that’s where you’ve got to be careful of pride getting in the way of smart decision making because it very often can blind you.

Steve Lewit: Well, some people do here and there, but they don’t do it consistently. So you can hit it once right, and then think, “Well, I’m going to get it right the next 10 times,” and strike out.

Gabriel Lewit: Yeah. Well, how about one last one, Dad, because we’ve got a minute left here. How about joy and happiness and maybe satisfaction? Maybe somebody, I’m thinking example of clients where after we’ve helped them have told us, “Wow, this was a game changer for me.”

Steve Lewit: I have clients in Florida that were here, retired to Florida, and when we do our annual quarterly reviews, and this… I mean, it’s such a good feeling for me is they’re always saying, “Thank goodness we met you, Steve. Our life is so easy. We don’t worry about our spending. We know we’re in good hands. We hang out with people, and they’re worried about their money, if they’re going to have enough. We want to go out for dinner with them. They say, “Well, that restaurant’s a little too much. We don’t know if we can afford that.” And we don’t have any of that going on in our lives.” And when I get a thank you like that, well, Gabriel, that’s why we do this. I mean, that is exactly why we do this.

Gabriel Lewit: Well, and not just for us, for them.

Steve Lewit: For them.

Gabriel Lewit: For you.

Steve Lewit: But it’s good for us too.

Gabriel Lewit: Yeah, and I had a client just two weeks ago on a review just say, “Thank you, husband and I,” won’t say names. “We are just really happy we have you here to talk to about this kind of stuff.” We were talking about withdrawals and allowing them to take some income this year that they needed as part of their plan, even though the market’s down and their money is a little tight, this couple. They have good money, but they’re a little tight. But they were very appreciative. They said, “We don’t know how we would navigate through all this stuff without you.” And I was like, “Thank you, appreciate that. That’s what we’re here for, and anything else we can do, let us know.”

Steve Lewit: And that’s really sincere. I mean, we are your team. We are our clients’ team. And what I love about our business, Gabriel, if I can tell you what I love about our business, is that we know our clients, we know their stories, we get involved with them. We know more about their money, certainly about all about their money, but we know about their personal lives, if someone’s ill or they’re having a problem with a child. They share that stuff with us, and money is a big reason that they don’t worry about that, that helps them get through life and builds those times of happiness and joy into them.

Gabriel Lewit: Yeah. Well, and that’s why I wanted to end with that because there’s of course negative emotions we’ve covered, greed, fear, hope, pride. There’s others that we could talk about too, but I like to end with that positive one there, because that’s the goal of planning. That’s the goal of what we do. It’s what we aim to achieve with every one of you out there, every one of our clients listening is the peace of mind and satisfaction and joy and happiness, fuel, money is fuel for the journey. And we want to make it last you forever, long time.

Steve Lewit: High octane.

Gabriel Lewit: High octane gas. Yeah. So enjoy the ride and the road trip. Well, if we can help in any way to that end, give us a call, (847) 499-3330. Go to, click Contact Us, or you can email us and let us know what we can do.

Steve Lewit: Good job today, Gabriel.

Gabriel Lewit: Hey, you too as well, Mister.

Steve Lewit: Well, thank you, man.

Gabriel Lewit: All right, guys and gals, well, thanks so much for tuning in. We’ll see you on the next show.

Steve Lewit: Stay 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 and be sure to subscribe to join us on next week’s episode.

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