Your Money Resolutions for 2024
by SGL Financial
Our 2 Cents – Episode #162
Your Money Resolutions for 2024
On today’s podcast episode, Steve and Gabriel are talking about their New Year’s resolutions and the importance of aligning money with one’s values and goals. They then shift gears to discuss the risks of investing in individual companies, highlighting several big companies that went bankrupt in 2023. Click a link below to listen in now!
- Your Money Resolutions for 2024:
- Figure out what financial wellbeing means to you.
- Determine what the purpose of your money is.
- Spend in ways that are true to who you are, not what others expect of you.
- Buy yourself time.
- Focus on what drives your values and your happiness.
- Well-Known Bankrupt Companies from 2023:
- Although filing for bankruptcy doesn’t necessarily mean these business went bust, it does highlight the potential risks in investing in individual companies.
- We’ll share seven household-name US retailers and businesses who faced a laundry list of problems in 2023.
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Announcer: You are 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: Well, hello. Welcome to Our 2 Cents. You’ve got Gabriel, Steven, Katelyn, producer Katelyn, I should say. She’s not on the show, but she’s here in the room.
Steve Lewit: We’re going to get her on the show this year. That’s my New Year’s resolution.
Gabriel Lewit: She’ll just say hello.
Steve Lewit: Just one word, hello.
Gabriel Lewit: Well, we hope you’re doing great today. We hope you’re having a wonderful morning, evening, afternoon, whatever day-
Steve Lewit: And staying warm.
Gabriel Lewit: And staying warm. Right now it feels, in the room we’re in, like minus one, but that’s outside. It’s probably 60 degrees inside, which is still cold. But yeah, we’re in the middle of this cold spell here. It’s a frozen wonderland out there. We saw some guy out our window cross country skiing on the golf course yesterday in minus four degree weather with a minus 20 degree windchill factor.
Steve Lewit: Wind chill. Right. Exactly.
Gabriel Lewit: And I just looked at you and I said, why?
Steve Lewit: Yeah, and I didn’t have an answer. There was no answer. It’s like, why? I don’t know.
Gabriel Lewit: I was actually surprised I didn’t see somebody jogging. I usually see someone jogging in that weather. I’m like, why?
Steve Lewit: No, why? Stay home, relax. Go to a gym.
Gabriel Lewit: Yeah. I just thought maybe there are people that like to push themselves. It doesn’t sound fun to me.
Steve Lewit: Well, last night I had to stop and get gas. The worst time to run out of gas is when the temperature is minus six degrees.
Gabriel Lewit: Well, you have to go fill up, because if you don’t, you’re gas tank could freeze.
Steve Lewit: Exactly.
Gabriel Lewit: So you’re forced to.
Steve Lewit: So I get out of my car, I push through and I get my card in there and my fingers are freezing, and I start pushing the button for the gas, when you select your grade, and it doesn’t work. I’m pushing. I’m pushing. So I had to go inside and the guy came out and I got into my car, I was frozen. Frozen.
Gabriel Lewit: Well, you picked the wrong gas stall.
Steve Lewit: The wrong pump.
Gabriel Lewit: You picked the wrong one. You picked the wrong pump, man. You should have known.
Steve Lewit: I’m not a good pump picker folks. I need pump picking help.
Gabriel Lewit: Well, you don’t go to the one with the giant bag on the handle, Steve.
Steve Lewit: I was wondering what that was. Who put a bag on the handle?
Gabriel Lewit: Oh, gosh. All right. Well, let’s jump into our show here for you today. Obviously, we’ve got financial topics to talk about here, not just pumping gas and jogging in the cold. We’ll go ahead and get into gear here. Well, last show of course, was our first show of the new year. We talked a little about economy predictions for the year, stock market predictions for the year. We talked about some popular quotes, I think, right? Yeah.
Steve Lewit: Yeah, we did. We did.
Gabriel Lewit: Yeah. It’s coming back to me now. This year is obviously a year of change. We got the election coming up.
Steve Lewit: Yes.
Gabriel Lewit: But with any new year, it’s also a year of change for you yourself individually. I think it’s a tradition at this point that in one of these shows in January of every new year, we talk about some resolutions, and money resolutions in particular here. In this year’s perspective, I want to talk about, we have a tagline or a philosophy here at SGL Financial called, “It’s not just about your money, it’s about your life.” It really does mean something to how we think. Would you say, Steve?
Steve Lewit: Well, it’s our whole philosophy. Money is just money, if you don’t use it or you don’t enjoy it, or you worry about it or you don’t have it, that’s your life.
Gabriel Lewit: Yeah. Imagine you came to us, we’re your financial advisors. You sit down for a meeting and you say, “Hey, what’s your philosophy on money?” And we say, “Well, money is money and we want to make more money for you.” That would be a philosophy.
Steve Lewit: That’s nice. That is a philosophy for many folks.
Gabriel Lewit: Ours, however, is how do we make your money really create value, meaning, and purpose within the context of your life, fuel for your financial life journey. Okay. And that’s the theme I want to take into this conversation here as we talk about New year resolution.
Steve Lewit: Gas for the car, since we were on a gas.
Gabriel Lewit: There you go.
Steve Lewit: Gas.
Gabriel Lewit: Gas for the car.
Steve Lewit: Gas for the
Gabriel Lewit: Okay. We’re going to talk about, and there’s an article here that we’re going to riff off of here that is from CNN. And it says, “Forget, spend less or save more. Make this your number one financial resolution for 2024.”
Steve Lewit: Now what does that mean? Forget, spend less and save more.
Gabriel Lewit: Well, many people’s financial resolutions when you talk resolutions for the year that are money-related tend to be things like, “I’m going to spend less on cafe lattes this year.”
Steve Lewit: “I’m going to tighten my budget.”
Gabriel Lewit: “I’m going to go through my credit card and cut out all the extraneous expenses.” Which by the way, I did do that just this weekend. I cut away a couple extraneous expenses that I wasn’t using regularly.
Steve Lewit: And you didn’t buy the car that you wanted to buy?
Gabriel Lewit: Well, I’m currently looking for new cars, and being the financial advisor that I am, I just can’t justify 8.5% interest rates. My goodness.
Steve Lewit: Yeah, that’s true.
Gabriel Lewit: I might just have to keep my current one longer. We’ll see. But typical resolutions would be, spend less, save more, put more away in your 401k as a form of saving more.
Steve Lewit: How do we approach this, Gabriel?
Gabriel Lewit: What we want to talk about here are not those traditional resolutions, but making resolutions for your money this year that really align money with the core values and benefits that you can get from that in your life.
Steve Lewit: To make your life better.
Gabriel Lewit: To improve your life.
Steve Lewit: To improve your life.
Gabriel Lewit: Your quality of life. Yeah.
Steve Lewit: Okay.
Gabriel Lewit: All right. Now this article here interviews a financial therapist. Interestingly enough. It’s a thing.
Steve Lewit: It’s a new job for me.
Gabriel Lewit: Well, we joke. We feel like we’re financial therapists.
Steve Lewit: We do. We do.
Gabriel Lewit: The idea here is, you want to be open-minded about what money means to you. You want to think bigger picture. Obviously, when you ask somebody, what’s the goal of this money? What do people typically say when you say, “Hey, what’s the purpose of this money?” I ask this question sometimes and I always get the same response.
Steve Lewit: To spend it.
Gabriel Lewit: No.
Steve Lewit: To save it.
Gabriel Lewit: Well, people are like, “Oh, I just want it to grow.”
Steve Lewit: Yes.
Gabriel Lewit: That’s the answer I get most common.
Steve Lewit: Yes. That’s the first thing a lot of folks come in and talk to us and they say, “Well, how did your portfolios grow last year?” Well, that’s an important question, but that’s not the primary question.
Gabriel Lewit: I’ll say, “What’s the goal of this money for you?” “Well, I want to see it grow.” Then I ask the follow-up to that, which is, “Well, let’s say it grows double, your money grew from a hundred thousand to 200,000. What would your goal with that 200,000 then be?”
Steve Lewit: To make it grow more.
Gabriel Lewit: To make it… Then if you do this two or three times, they start to see the point. So you say eventually, “Ma’am, sir. This money grows from a hundred to 200, from 200 to 400, maybe even grows from 400 to 800.”
Steve Lewit: So how does that-
Gabriel Lewit: What do you ever do with this pot of money?
Steve Lewit: How does that serve you?
Gabriel Lewit: What does it do for you?
Steve Lewit: Other than making you feel better that it grew or didn’t grow? How does that serve you? What does that do to the quality of your life?
Gabriel Lewit: Yeah. Well, one of the things that the money therapist says here on the article, which I would agree with is, which is hard for some people to quantify, “There is a main goal of having your money grow.” Which to most people is just the answer is, well, I want to see it grow. But what they’re really sensing here is, they want to create greater peace of mind by just having money.
Steve Lewit: That’s behind having it grow.
Gabriel Lewit: That’s the true meaning for many who say, “I just want to see it grow,” is they’re looking for greater peace of mind because they know if I have more money, less things will happen to me problematically, and I’ll feel better about myself and my stability if I have greater dollars in the bank account.
Steve Lewit: What you’re saying is that people will say one thing on the surface, but really means something.
Gabriel Lewit: Sometimes, yeah. Some people just haven’t thought about it. But what this is saying here, and which I would agree with, I think many people, more money equals more stability. That’s part of why they want to see their money just grow. But it’s a little bit of a surface-level answer, because we’re going to dig deeper into this. One of the questions, as you start thinking through this, even on the fly while we’re talking, is does that resonate to me? If I say, “Hey, I want my money to grow.” Why do I want it to grow? Is number one option relevant to me where I want to just feel more secure and stable by having greater dollars and assets. Even if you never spend it, you just know it’s there in case you did.
Steve Lewit: Yeah. I’m sorry, I didn’t really space out, I was just thinking, because I have a lot of thoughts about this. If I’m going to spend less… A lot of folks that have wealth don’t feel they’re wealthy. They’re kind of in a bind because they don’t feel their wealth and they say, “I’ve got to spend less or I can’t spend that.” Yet that affects their quality of life. What this person is suggesting, which I agree with, is that you’ve got to really look below the surface and say, “Why do I feel I need to spend less?” What is the driving emotion behind that? It’s usually, as you said, Gabriel, it’s usually some kind of fear. I fear I’m going to run out of money. I fear the market’s going to go down. I fear the dollar is going to go under. I fear all of these things, but they don’t surface as fears, they surface as actions, which say, “I want my money to grow.” Does that make sense?
Gabriel Lewit: And unlike the, I think it’s a hip-hop song or a movie, “Mo Money, Mo Problems.” Our version is-
Steve Lewit: Or I got plenty of nothing and nothing’s plenty for me.
Gabriel Lewit: … more money, more security, is the name of the game here.
Steve Lewit: That same song, “I got to pray all the day. They don’t take my money away.” Oh, that’s from Porgy and Bess, “Them’s got plenty of money. Plenty… Them’s got plenty of money. Money’s… They got to pray all the day and they’ll come-”
Gabriel Lewit: I have no idea what you’re talking about.
Steve Lewit: “And take their money away.” Like the US government, taxes.
Gabriel Lewit: I don’t even know what you’re doing right now. What are you singing?
Steve Lewit: I’m having a good-
Gabriel Lewit: What is this from?
Steve Lewit: That’s from Porgy and Bess.
Gabriel Lewit: Who is Porgy and Bess?
Steve Lewit: Oh my gosh. One of the greatest operettas ever.
Gabriel Lewit: So, you’re singing an operetta right now?
Steve Lewit: Yeah.
Gabriel Lewit: Can you Google this producer, Katie? We got a big TV here. I don’t know. I think I’ve said this before.
Steve Lewit: Porgy and Bess. I think it was Bernstein-
Gabriel Lewit: Like a Corgi dog?
Steve Lewit: Porgy and Bess. It’s the story of plantation life back in the day. It’s the most beautiful, beautiful Opera and with wonderful songs.
Gabriel Lewit: Porgy and Bess, not best.
Steve Lewit: I said Bess.
Gabriel Lewit: I thought you said best.
Steve Lewit: Well, that’s a problem you have to work on.
Gabriel Lewit: Wikipedia folks here. Because you’re probably… I’m assuming many of you are on my camp, who don’t know what this was.
Steve Lewit: No, no, no. They know. I bet 90% of the people listening to us know what Porgy and Bess are.
Gabriel Lewit: 1959 American musical drama film.
Steve Lewit: Yes.
Gabriel Lewit: Well, that was a few years before my time.
Steve Lewit: Well, it was actually a play. It was actually an operetta first.
Gabriel Lewit: Okay. All right.
Steve Lewit: Oh, it’s got more magnificent… You should make a resolution this year to get culturally up to speed.
Gabriel Lewit: I think I’m okay without Porgy and Bess in my life.
Steve Lewit: You’d rather listen to Eminem.
Gabriel Lewit: Eminem was 30 years ago, man. I don’t even know if people listen to Eminem anymore.
Steve Lewit: Eminem is great.
Gabriel Lewit: Producer Katie’s nodding her head, yes.
Steve Lewit: Has a whole channel.
Gabriel Lewit: Well, everyone’s got channels these days.
Steve Lewit: Shade 45
Gabriel Lewit: Let’s get back to focus here.
Steve Lewit: Yes.
Gabriel Lewit: Mr. Porgy and Bess. Okay, so you’ve got money to spend is where we left this off. But you’re feeling guilty about spending it because you’ve got all these concerns or fears that you’ve got.
Steve Lewit: But behind the guilt, Gabriel, is there’s a fear behind all of this. I think that’s the point I’m trying to make in a long-winded way, is that we are fear-driven and we don’t get in touch with that. I’m being the therapist now. We don’t get in touch with that, but it drives our actions like, I need to save money, rather than, what’s the quality of my life?
Gabriel Lewit: Well, where I’m trying to turn this to is resolutions for the year.
Steve Lewit: Oh, I see where you’re going.
Gabriel Lewit: The resolution related to what we were talking about here is discover or ask yourself for your money. You can take it account by account or even just as a whole, what’s my goal for this money? And start to give your money a purpose and a goal.
Steve Lewit: It’s like putting a suit on it or a dress on it so it has a certain look and feel to it, it’s just not money that needs to grow.
Gabriel Lewit: Correct. Yeah. You’re trying to ask, why do I want this money to grow? That’s the question.
Steve Lewit: Or what do I want to do with it? Or what’s the purpose of it?
Gabriel Lewit: Yes.
Steve Lewit: Yep. Got it.
Gabriel Lewit: Okay. That would be your resolution number one. Now, next one here on this article, and what we’re going to talk about here is, let’s say you do want to start spending, it says or suggests or recommends, “That you spend in ways that are true to who you are and not others expectations.”
Steve Lewit: Hard one. That’s a hard one.
Gabriel Lewit: What does that mean? Well, your neighbor buys a new car, so you go out and buy a new car. Well, the question would be is, was that true to what you really wanted or were you just keeping up with the Jones, the neighbors?
Steve Lewit: Or it’s the herd mentality where everybody else is doing this so I’ve got to do… There’s a lot of fear about the stock market running around. That seeps into a lot of people and they come in and say, “I’m afraid of the Morgan.” I say, “Why are you afraid?”
Gabriel Lewit: Well, we’re talking about spending Mr. Lewit.
Steve Lewit: Yeah. Well, that affects spending if the market goes down.
Gabriel Lewit: Yeah. No, of course. But the goal is as you spend money. So let’s say you’re going out there, you’re buying clothes, you’re buying cars, you’re buying… You go to the mall, you buy stuff on Amazon. Are you, the question is, assessing your spending and saying, “Am I spending in a way that is true to what I am?” Like me, I’m not a very materialistic guy. I don’t go out and just buy tons of stuff just to have lots of stuff. I prefer to spend my money on things that are more experience-driven, vacations, for example, activities with my kids. Not just stuff just to have stuff, because I’m not a stuff kind of guy.
Steve Lewit: And you’re not an impulsive spender.
Gabriel Lewit: No.
Steve Lewit: I’m much more impulsive than you are.
Gabriel Lewit: Yeah. That’s the question, right? Is your money… I’m asking the question to me now, I want to buy a new car. I love cars. I would love to have a new car and I could afford it. But the question is, do I want to pay double the interest rate that I would normally otherwise pay on a new car loan or could I take that other money… Is it better served in a car or is it better served improving some other quality of my life? And that’s the point behind asking yourself before you go buy that new Tesla payment, before you go buy fancy whatever, is this really where you want to spend your money, assuming you don’t have unlimited dollars and can just buy whatever you want? Which is, most people can’t do that.
Steve Lewit: I’ve been working on this, because I’m impulsive and I get passionate about stuff and then get dispassionate. I’ve been working on this and what I’ve found, Gabriel, and you do this naturally, is before I put my credit card in the slot or before I sign an agreement, I really take five minutes and ask myself that question is, why am I doing this? Is this really good for me? Is it good for my family? I’m asking these questions rather than just satisfying a desire.
Gabriel Lewit: This is getting a little philosophical here-
Steve Lewit: Therapeutic.
Gabriel Lewit: … guys and gals. But it’s important, because your money is more than just us helping it double or triple or quadruple in the stock market over time. That was number two resolution for you here this year is, determine if how you are spending is how you really want to be spending by being aware when you purchase or before you click that button to buy or sign on the dotted line, ask yourself, is this really… Because there’s an opportunity cost, right? You don’t buy this, you have to buy that. You buy this, you can’t buy that.
Steve Lewit: Yes.
Gabriel Lewit: Okay. So you want to ask yourself if this is really where you want your money to go.
Steve Lewit: Yeah. I would suggest, if there’s something you see out there that you say you got to have it, before you got to have it take a day or two.
Gabriel Lewit: That’s actually, that’s a very astute-
Steve Lewit: Therapeutic.
Gabriel Lewit: Therapeutic contribution, Mr. Lewit.
Steve Lewit: Yes.
Gabriel Lewit: I like that.
Steve Lewit: Yes. Part of my therapy course.
Gabriel Lewit: Perfect. After your book., right?
Steve Lewit: After my book.
Gabriel Lewit: All right. Number three resolution here for money is, can you use your money to buy yourself time? This is also an option for where you spend your money. Financial well-being is not just about having peace of mind, but also you can buy yourself time. Now, how do you do that? You do things like paying for a house cleaner, paying for a landscaper. You could even pay for a grocery getter. If you don’t feel like schlepping through the minus four degree weather to go to Whole Foods or Target, you can literally pay people go shopping for you. You pay a little premium, obviously, but that’s the whole point, right? Is your money used best to buy you more free time?
Steve Lewit: Yeah. It’s a really interesting thing when you start watching your time and saying, where am I spending my time? It’s like, I’m giving my time to this. Again, why am I cleaning the house? Because I don’t want to spend the money, I can do it myself. Well, is there something else you’d prefer to do, so that spending the money on someone to clean the house gives you more pleasure because it frees you up to do something you really want to do. Time is hard because as you know, time goes by.
Gabriel Lewit: Well, time is finite. That’s the idea here is, one of the key ways you can spend your money, so one of the resolutions here for you this year is to say, “Can I spend my money in a way that takes away something I dislike in exchange for giving me more time?”
Steve Lewit: But then behind that is always the question, “Oh, can I afford this?”
Gabriel Lewit: Right. Yeah. Well, that’s obviously, we will circle back to that. Obviously there’s a retirement plan that you should have, a savings plan that you should have. And whether or not you feel comfortable spending is a whole other story. But if you do spend, one of the places that’s not a bad place to spend is somewhere, assuming it’s not sacrificing your future retirement, is somewhere that frees up more time for you.
Steve Lewit: So, it’s as if you’re looking at time, Gabriel, as a commodity. It’s something you’re buying with your life energy. This is the time you have. Like you said, it’s finite. All of our times are finite. So why not evaluate my time, just like I evaluate something else, am I going to cook dinner or am I going to eat out?
Gabriel Lewit: Right. Yes, exactly. Exactamundo.
Steve Lewit: Exactamundo.
Gabriel Lewit: All right, so the next one here, and probably the last one that we will talk about here is, basically focusing on what really drives your values? What really gives you happiness? Maybe it’s free time, that could be one. Maybe it’s spending time with your family. Maybe it’s giving to those who need more than you, through charitable donations. Maybe it’s just going on a vacation for yourself and your spouse, traveling and enjoying and experiencing the world. As we dive deeper and deeper into this, we’ve talked about making sure that you think through opportunity costs. Make sure you have a goal for your money. Make sure you think about buying yourself maybe time.
But last but not least, make sure that you are thinking about the big picture. What do you really value in life? This is even more philosophical. We’ve gone progressively more philosophical here. This is a hard one, I find, for people to answer when we have this conversation, what are your dreams? What are your wish list items? What are your goals? People, very commonly, “I want to travel. I want to not worry about my money.” And in some cases, those are all we get.
Steve Lewit: That’s it.
Gabriel Lewit: But if you take some time this year to really sit down and think about deeper and deeper meaning of your money, what you want it to do for you, for some people that might be, “Well, I really don’t think I like my job and my career. I’d like to make a change.”
Steve Lewit: I don’t mean to interrupt you, but I’m going to. Make a list, this is what I would suggest, you make a list. You start with, what makes me happy? And make a list of all the things that make you happy. If travel makes you happy, then you match that list to your finances and make your finances connect with what makes you happy, intentionally, not by accident or not by saying, “Hey, let’s take a trip this year.”
Gabriel Lewit: Yeah, exactly. So for-
Steve Lewit: Exact amount.
Gabriel Lewit: Yes, yes. That’s another way of just making sure that what you spend is in alignment with who you are, but it’s a little bit different than that. It’s trying to go deeper and just really think through what are those core values. Spend some more time on that piece so you can really make sure that, for example, that you align your money with your goals. Like last summer I decided to put in a pool-
Steve Lewit: You did.
Gabriel Lewit: … in my backyard.
Steve Lewit: It’s quite a story.
Gabriel Lewit: And why did I do that then? Well, I said, my kids are growing up fast, man. It felt like the right time to make sure that I can enjoy time and memories. My kids love the water, they love the pool. We went in at 20, 30 times whatever last summer, even in the tail end of the summer. They’re already talking about it for this summer. I think we’re going to gain a lot of experiences and enjoyment out of that. If I had waited until they were 15, 16, 17, it would be a different story. It’s also about understanding the timing in life of when you want to do certain things and making sure you’re taking advantage of that.
Steve Lewit: If you have grandkids, on your list it might be, “I want to spend more time with my grandkids.” Okay, now we’ve got to figure out how do we fund that so that you don’t worry about it and actually spend more time with your grandkids or give them more gifts. That all gets built into this therapeutic suggestion that you’re making, is that we look beyond the surface into the deeper meaning of the things that we do.
Gabriel Lewit: Exactly. With that in mind, guys and gals and listeners of all ages…
Steve Lewit: Why are you looking at me?
Gabriel Lewit: I didn’t look at you.
Steve Lewit: You said, “Of all ages,” and you stared at me.
Gabriel Lewit: I looked at you because I was basically using a… What’s the welcome to a circus or something, “Ladies and gentlemen. People of all ages.”
Steve Lewit: Ladies and gentlemen, people of all ages.
Gabriel Lewit: I was wondering if you picked up on that.
Steve Lewit: Oh, I didn’t. No. I picked up on something.
Gabriel Lewit: I wasn’t looking at you because of the all ages, no. So think about that this year as you’re going along. Certainly, nothing wrong with resolutions. I want to save more. I want to get a plan in place. I want to do X, y or Z, but really think deeper about your money and we think you’ll get greater financial enjoyment out of it, quite frankly.
Steve Lewit: Well, you will be more motivated once you have a real purpose to do something. If you’re really passionate about something, there’s no stopping you. You can get passionate about money by understanding what it means to you more than just money, and then get passionate about saving or about spending or about going away or whatever it is you get passionate about.
Gabriel Lewit: Yep. All right. Well, with that very positive and motivational topic under our belt here, we wanted to switch gears a little for the rest of our show.
Steve Lewit: We’re not going to depress anybody, are we?
Gabriel Lewit: We might depress a little bit.
Steve Lewit: Oh, we are.
Gabriel Lewit: Well, actually not so much. It’s more of a warning and a reminder. But one of our favorite things at the start of each year is to take a look at companies in the prior year that went out of business.
Steve Lewit: And they all do. Many do that we don’t even hear about.
Gabriel Lewit: Why is it a reminder? Why do we like to bring it up? Not to depress anybody, and hopefully you didn’t have any money invested in these companies, but it’s a reminder that investments in specific individual companies can be very risky. There are many of our clients out there that often ask, “Why are we invested in mutual funds and ETFs? Can you pick the best stocks? Can we be more aggressive here or there?” This is just another example of the risks that are innate to buying concentrated positions in individual companies. Because any individual company could run the risk of going out of business. And many do.
Steve Lewit: Well, look, to your point, we have clients that have substantial amounts of Apple that they’re in love with and will not sell a share. Or they worked at a company like UPS or Baxter and they have all their stock, people who are in love with Walgreens stock that worked at Walgreens, and they would never sell it and they would tell me how loyal they are. That story is written, they should have sold it. Nothing is forever. I think that’s your point, Gabriel, things change.
Gabriel Lewit: Just to be aware. I want to cover seven big companies here that went bankrupt in 2023, and then we’ll circle back and just reiterate the risks that we face here. One of the ones here that you probably have heard of is called WeWork. They were once the nation’s most valuable startup, and it was designed to make everybody have a place where they can go, office shares, if you will, or co-work with other people in just different places.
Steve Lewit: It’s like having a place to go.
Gabriel Lewit: So instead of Starbucks, you go to WeWork. Unfortunately, they file for chapter 11 bankruptcy in November. There was obviously the pandemic that threw a couple monkey wrenches in their plans, because nobody was going to share office spaces, that could of course created the death spiral there. They were basically struggling to pay back their debt and that can create big problems for businesses. But it was actually, if you look at it here, it says it was starting to become undone even before covid. They had some other bigger challenges. There was some difficult leadership styles, there was some struggles with the owners. But here’s an example, big, huge venture capital funded, most valuable start up in America.
Steve Lewit: And tons of people bought that stock.
Gabriel Lewit: Filing for bankruptcy.
Steve Lewit: Filing for bankruptcy.
Gabriel Lewit: We’ve got Rite Aid was another big name from last year, similar to obviously CBS and Walgreens as a pharmacy store, but they file for chapter 11 bankruptcy in October. They of course had to settle similar to CBS and Walgreens, also expensive lawsuits stemming from accusations of filing unlawful opioid prescriptions.
Steve Lewit: These drug stores get suit all the time for misbehavior, even if it’s not really so and Rite Aid could not get… CVS and, what’s the other one?
Gabriel Lewit: Walgreens.
Steve Lewit: Walgreens. Were able to win or cushion those lawsuits, but Rite Aid couldn’t.
Gabriel Lewit: Rite Aid couldn’t pull themselves out of the losses.
Steve Lewit: So Adios, Rite Aid.
Gabriel Lewit: Adios. Now, we can get into whole discussions about big business bankruptcy and how that works and all that kind of jazz, but it’s not a good thing. Let’s put it that way. This was a big name, Bed Bath and Beyond closed its final 360 stores and 120 Buy Buy Baby’s, which I remember when my babies were babies, we went to Buy Buy Baby to buy baby stuff.
Steve Lewit: They do.
Gabriel Lewit: It’s a lot of babies.
Steve Lewit: I never went there.
Gabriel Lewit: Where it’s all in a [inaudible 00:29:06].
Steve Lewit: But this is one store I really miss, because I’d love to go into Bed Bath and Beyond and just poke around the kitchen department and the blanket department and the pillow department and the cooking department and just walk around and do that.
Gabriel Lewit: Well, you’re in luck, overstock.com bought the brand out of bankruptcy and relaunch its own website, but it’s a digital only model. You can’t go to the stores any longer.
Steve Lewit: You see, now I have no interest in buying online with Bed Bath and Beyond, then I’d rather go somewhere else. It’s really interesting the psychology of that. But they did get bought up.
Gabriel Lewit: Yep. Let’s see here. Now this one I hadn’t heard of, but Tuesday Morning is a home goods store that went bust in 2023, filed chapter 11 bankruptcy.
Steve Lewit: Kate, do you know where they were located?
Producer Katie: All over the place.
Steve Lewit: Where?
Producer Katie: They had a bunch of stores around here.
Gabriel Lewit: Yeah. So in Chicago… Yeah. So I don’t know if I just never saw it or-
Steve Lewit: No, I never heard of that one.
Gabriel Lewit: Well, they had prolonged store closures during the pandemic and created what they said was an insurmountable financial hurdle. And over a couple of years ago, three years ago, had over 700 locations.
Steve Lewit: Wow.
Gabriel Lewit: Well, goodbye Tuesday Morning.
Steve Lewit: Adios, Tuesday Morning,
Gabriel Lewit: Party City.
Steve Lewit: Oh, I love-
Gabriel Lewit: Party City.
Steve Lewit: I loved Party City when I had kids.
Gabriel Lewit: The party is over.
Steve Lewit: The party ended.
Gabriel Lewit: For Party City file for bankruptcy in January 2023. It had debt holders, had a 1.7 billion debt load, couldn’t come out of it.
Steve Lewit: How do you do that? What does that management thinking?
Gabriel Lewit: Well, it did exit bankruptcy in September with some reorganization plans. But many of the 800 stores will close, but some will still stay open, believe it or not. That’s what’s interesting about bankruptcy. It doesn’t mean they’re gone forever, in some cases they get resurrected.
Steve Lewit: They get reorganized.
Gabriel Lewit: Yeah, reorganized.
Steve Lewit: But if you own the stock it’s-
Gabriel Lewit: It’s not a good thing.
Steve Lewit: Not a good thing.
Gabriel Lewit: Not a good thing. Okay. Smile Direct Club, Telehealth Orthodontics company had big, big plans to reshape the world of orthodontics, but they got shut down three months after filing for chapter 11 bankruptcy. The drama here that was all over the news is, if you were mid-course of your expensive treatment, what happens to you? Well, you’re probably out of luck, I’m sorry.
Steve Lewit: Well, yeah. But Kate was telling me that… Kate, our director, who should be on here telling you all this herself, but she won’t, was telling me that they kept billing everybody for their services, even though they were out of business and providing no services.
Gabriel Lewit: Of course, come after them in bankruptcy court. That’s too bad. That’s terrible. Hopefully you didn’t have their orthodontics folks. If you’re out there. That’s a tough break. Lordstown Motors, an electric vehicle maker, filed for chapter 11 bankruptcy protection in June, put itself up for sale. There’s probably going to be more electric car companies going out of business, I would guess in the future. Oh, so speaking of that, because it’s super cold, and we’re going to wrap up our show here in a second, but apparently there was many, many long lines of dead Teslas at all the electric charging stations here in Chicago, because the cold-
Steve Lewit: Because the cold.
Gabriel Lewit: … killed all the batteries.
Steve Lewit: Killed all the batteries.
Gabriel Lewit: Not a good sign for electric.
Steve Lewit: I never thought of that.
Gabriel Lewit: If you’re a Tesla owner, I sure hope you didn’t have that problem, but gosh, that’s no good either.
Steve Lewit: Nope, not good at all.
Gabriel Lewit: Okay, what’s the point here, folks? Individual stocks, very risky. If they are still in your portfolio, it’s good to remind yourself that these aren’t risk-free investments. Big companies can and do, go out of business. Be cautious with how much you own in individual stocks. It’s common to say, “Well, that won’t happen to me. This company is huge. Nothing will ever go wrong with them.” But it can and does happen and it’s something you want to limit your exposure to inside your portfolio.
Steve Lewit: It is the old, what goes up-
Gabriel Lewit: Sometimes comes down.
Steve Lewit: … must come down. Must come down.
Gabriel Lewit: Yeah. So that’s our show for you today. We hope you enjoyed your time here with us. We sure enjoyed our time spent with you.
Steve Lewit: Definitely.
Gabriel Lewit: We hope you have a very wonderful day. Try to stay warm whatever day you’re listening to this show, and make some resolutions for the year. Go out there, think of something that you want to spend your money on that’s meaningful and important to you. Come up with a more deeper, meaningful goal of how to have your money improve your life. Of course, let us know if we can help in any way, shape or form. You can call (847) 499-3330. Go to sglfinancial.com or email us anytime, firstname.lastname@example.org.
Steve Lewit: Well said, sir.
Gabriel Lewit: Well, take care. We’ll see you on the next show.
Steve Lewit: Be well everybody. Bye now.
Gabriel Lewit: Bye.
Announcer: Thanks for listening to our 2 cents with Steve and Gabriel Lewitt. 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.
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