4 Ways To ACCELERATE Stock Market Returns!

Transcript:

On this episode of the personal finance podcast, four ways to accelerate stock market returns.

What's up wealth builders and welcome to the personal finance podcast. I'm your host, Andrew, founder of mastermoney. co. And today on the personal finance podcast, we're going to be talking about four different ways to accelerate your If you guys have any questions, make sure to hit us up on Instagram, Tik TOK, Twitter, or join the master money newsletter and follow us on Spotify, Apple podcast, or whatever podcast player you love listening to on this podcast.

And if you want to help out the show, consider leaving a five star rating and review cannot thank you guys enough for leaving those five star ratings and reviews. Now, today we're going to be diving into the. Four different ways that you can accelerate stock market returns. And if you didn't know, there really are only four ways to accelerate your stock market returns.

And this is something where I think a lot of people think, well, I'm going to start day trading. And when I start day trading, I can really increase my returns. Well, this is something that has. Proven to be false for a very long period of time, or they'll say, well, I'm going to start investing in individual stocks.

Well, 90 percent of professional hedge fund managers do not outperform the S and P 500 and of the 10 percent that do, they are not the same year in and year out. So why do you think that you can beat the S and P 500 by investing in individual stocks? So that's another one. And so this is something where a lot of people try to manipulate their returns in the market.

And it's really not a very easy thing to do. And I think this is something where I want to debunk that myth and show you the four different things that really you can do. And some of these are very simple. And then some of these are something that may be. You are making a mistake right now on, and you can make that adjustment so that you can move forward and increase those returns significantly.

And so I'm going to go through these. And the first one that we're going to be going through today is one of the highest important things of all. And so I think a lot of people need to hear this one. And, uh, this is going to be really, really important for a lot of people. So really excited to jump into this episode.

We got a lot to cover. So without further ado, let's get into it. All right. So the first thing that you can do. Is you can minimize fees. Now you may be saying to yourself, well, I've never even thought about fees when it comes to investing and understanding the impact of fees is going to change your trajectory for your wealth longterm.

This is a million dollar decision for a lot of people. And I'm going to show you exactly why this is one of the things that if you can control your fees, you can save yourself six figures to over a million dollars, depending on how much you're investing and how long your time horizon is, I can not stress.

How important it is to minimize fees when it comes to investing. If you have an advisor that is taking a 1 percent fee or one and a half percent fee or a 2 percent fee, you are destroying your rate of return long term when it comes to investing. Or if you have an expense ratio on a mutual fund, that is a 1 percent expense ratio.

They are taking away a massive amount of money. And you may be saying yourself, well, it's 1%, it's 2%. It's not a big deal. It is a massive deal. And I'm going to show you exactly why today and why the high cost of small fees can really destroy your wealth over time. So here's the first example. Is let's take a scenario where an investor is investing a thousand dollars a month into a portfolio with an average rate of return of 9.

7%. Now the S and P 500 has returned a little more than that historically, actually. And so 9. 7 percent is not out of the ordinary. And we're just going to look at the historical context and the data here. And looking at this going forward. So without fees, this would result in a nest egg of approximately 5.

8 million over the course of 40 years. So a thousand dollars a month, 9. 7 percent rate of return 40 years turns into 5. 8 million boy. Oh boy. Is compound interest something special? Isn't it? You're getting that rate of return. You're investing that a thousand dollars. It can really change your trajectory over time and time paired with compound interest is absolutely amazing.

However. Typically, if you have an advisor, the typical advisor fee is right around 1%. And so this is something to note because they're going to come to you and they're going to say, Oh, it's 1%. It's not that big of a deal. In fact, we're going to be able to help you increase your returns over time. Well, historically, and the data shows that does not happen.

And so when we do this, we bring it all the way down to 8. 7 percent rate of return. So instead of 9. 7%, you've got a 1 percent fee. Now we're dropping that rate of return to 8. 7%. What this does is it lowers the portfolio's value to 4. 3 million. So you went from 5. 8 million to 4. 3 million because you had a 1 percent fee.

How staggering is this? This is a 25 percent reduction in your total portfolio because you had somebody with a 1 percent fee. This can absolutely destroy your wealth building ability. And. If you do not control fees, let me say it again. You need to control fees when it comes to investing. If you don't listen to anything else ever on this podcast, I just saved you a multimillion dollars.

If you're investing in the longterm, you need to watch your fees. It will absolutely change the way that your financial trajectory happens. Now let's make this even worse. Because what a lot of advisors do is they'll stick you into something like a mutual fund, for example, or they'll try to do direct indexing or something else that adds additional fees on top of that to your portfolio.

And so let's say we added an additional 1 percent mutual fund fees for expense ratios. This further diminishes the portfolio. Guess how much it brings the portfolio down for just an additional 1 percent fee. So on top of that first 1 percent fee, we have another 1 percent fee with our mutual fund. It brings the portfolio down to three.

Point 2 million, another 1 million reduction because we added an additional 1 percent fee. This is just mind blowing to me. It is absolutely mind blowing to me and people give their money away with a 1 percent fee without thinking twice about it. This is one of the most important things that you can do.

Now let's look even deeper. Uh, personal finance club. If you don't know who that is, that's Jeremy Schneider. He has a great Instagram page called personal finance club, and he did this analysis. This Where he looked at how much money you would lose to fees based on how long you invest. And so for long term investors, you lose even more money to fees over that long term time horizon.

So this is really, really important to understand. When you go through this, I want you to understand your annual fee here. When you go through this, if you have an annual fee, Of 0.05%. That is the standard annual fee. If you're just investing in an index fund or an ETF, typically it's 0.05% or less. A lot of them are free.

Now, things like the Fidelity zero funds, for example, if you invested for 10 years, it's a 0.5% reduction. If you invested for 15 years, your total portfolio is a 1% reduction from what it was, and over the course of 50 years, your portfolio has reduced 2%, and so you lose 2%. In your portfolio over the course of 50 years.

Okay. Now let's look at a 0. 2 percent and what Jeremy did here is he has 2 percent reduction at 10 years, a 5 percent reduction at 25 years and a 10 percent reduction as 50 years. So it is a big difference where really even I'm saying, you know, your minimum. It's gotta be 0.3% or less, but you're still, you're taking a reduction over the course of 50 years of 10%.

So it does make an impact on your portfolio. Now let's get into the meat and potatoes that we're talking about here, though, 'cause I'm gonna show you the difference between a 1% and a 2%. This is a great illustration, and if you're a visual learner, go check out this post. It's called Lost to Fees.

Alright? The annual fee at 1%. If you invested for 10 years, just a 1 percent fee at 10 years is going to be the same as if you invested for 50 years at the 0. 2%. So you're going to have a 10 percent reduction in your total portfolio over the course of 10 years because you have a 1 percent fee. So say for example, that you went out there and you invested a million dollars over the course of 10 years, you worked your butt off, you handed away a hundred thousand dollars just over the course of 10 years to an advisor.

Okay, let's look at 25 years. Which a lot of you listening to this podcast probably have 25 years if you're in your 30s. And so 25 years is a 22 percent reduction in your portfolio because you had a 1 percent fee. 22 percent of your portfolio. Poof. Gone. Because you had that 1 percent fee. Now let's look at the 50 years.

And man, oh man, this is starting to make me queasy. You lose 39 percent of your portfolio based on a 1 percent fee over the course of 50 years. That is absolutely disgusting to me. It is one of the things that I really, really just hate to see. Now we're gonna make it even worse. Let's look at 2%, a 2% fee.

Maybe your advisor charges you 1% and the mutual funds charge you 1%. Maybe your advisor charges you one point a half percent. The mutual fund charges you half percent. It doesn't matter where you land on this. Maybe there's extra fees added in the backend. You don't even notice. Okay? A 2% fee over the course of 10 years reduces your portfolio already.

18% just 10 years. So if you invested a million dollars over the course of 10 years, you'd lose $180,000. Does that feel good? I don't think so. How about 25 years? Over the course of 25 years, with a 2% fee would be a 40% reduction in your portfolio? 40% over 25 years? 40%. I don't even wanna tell you the 50 years.

If you had a 2 percent fee, just 2 percent that you're paying to an advisor or somebody else, over the course of 50 years invested, it would take away 64 percent of your portfolio. It would eat away at the majority of your portfolio and all you would have left is 36%. To be honest, that makes me mad. That is something that should not be happening.

You are doing all of this work for your money. You give your money to someone who usually will give you worse returns than you would just buying an S& P 500 historically. And. They're going to take 64 percent of your portfolio away. That is something you can absolutely not do. So you need to make sure that you understand what you are paying to advisors when it comes to these fees.

Now, when it comes to advisors, I love certified financial planners. I think you can work with a CFP who you pay an hourly rate. You do not pay a percentage of your portfolio. You pay an hourly rate. Hourly rates of these people, and they put together a financial plan for you. They can help you with investments.

They can help you with so many different things. And there are some great ones out there. We've had a number of them on this show, but if you are paying a percentage of your portfolio and fees, you need to stop doing that. Now you need to stop doing that. Now it is absolutely robbing you of your retirement.

When you pay a percentage to fees. You're always gonna have to pay some sort of fee, likely, especially if you're in an index fund or an ETF. There's always like a 0.03% fee. We see over the course of 50 years, your portfolio goes down 2%. Over the course of 25 years, your portfolio goes down 1%. The math is something where the percentages looks small.

But the dollars you lose a great. And so I want you to make sure that you understand that as we go through this. Now there are a bunch of different types of fees. I want you to know how to identify those fees, because it's really important to me that you know what you're talking about when you have these conversations with people.

So number one is the expense ratio and expense ratios are what you will see in a lot of mutual funds or index funds. You can always look for these, uh, when you're looking at a fund analysis. So if someone tells you, Hey, I want you to invest in this fund. I want you to say, Hey, what's the expense ratio on this fund?

And if this expense ratio is anything above 0. 3, 30 basis points, then you need to reconsider what that investment is because there's so many low cost investments out there. There's really not a reason to do that. Number two is advisory fees. These are charged by financial advisors or robo advisors, and these are a percentage of the assets under management assets under management, or a cuss word here on the personal finance podcast.

I don't want to see you paying a percentage on assets under management. AUM sometimes they'll call it. And so you need to make sure that you know what those advisory fees are. And ask that question, transaction fees. We live in a world where there should be no more transaction fees. You can go to Fidelity.

You can go to Vanguard. You're not going to have any transaction fees, but if you go somewhere else, you're going to have some transaction fees. Every time you have a transaction, they could charge you a 1%. Those are what can happen. And I know, for example, just had a conversation with someone very close to me who has an advisor and their advisor charges a 1 percent transaction fee.

My blood is boiling. Just thinking about it. All right. Last one is load fees. So these are sales charges applied at the purchase or sale of a mutual fund share. So load fees are just another way to take your dollars out of your hand and put them Into someone's pocket who is in a giant high rise in the middle of New York city on wall street.

And it is something that you really need to avoid. You can fight back on your own by just having a financial education. That's all you got to do is have this financial education. Now, one cool thing is that there are a bunch of free tools out there that can help you analyze financials. One of my favorite ones is empower, which used to be personal capital.

They have like a fee analyzing tool. So you can run your funds in there and you can say, Hey, how much am I paying actually in fees in here? So that's a great free tool out there to analyze your investment fees. Uh, but I want you to kind of learn how to look for this yourself. Like I want you to learn how to identify where these fees are so that once you can do this, then you can run them in these fee tool analyzers and then make those adjustments based on that.

But I want you to learn how to do this because it's really, really important stuff, uh, to make sure that you know that. So. Here are some strategies for minimizing fees, because if you're saying to yourself, well, I've always just given my money to an advisor. I need some strategies to minimize these fees.

Well, number one is index funds and ETFs investing in things like low cost index funds and ETFs will significantly lower the amount that you're paying. You can also, if you're paying an advisor 1%, you can consider a robo advisor. They charge, I think, 0. 25, 25 basis points is typically what they charge.

They ask you a bunch of questions and they build a portfolio based on your risk tolerance. But really, if you want to keep the advisor relationship going, go to a certified financial planner who does not take assets under management, who does not take a percentage of your investments. Instead, you have conversations and you pay them an hourly rate.

That's all you got to do. And so when you do this, you can find a bunch of CFPs out there, I'm not affiliated with any of them, but there's a bunch of great ones out there. There's been a bunch of great ones on this show. And so if you go back and some of those episodes, you'll see a bunch of great ones, but this is the way that you can do that.

There's also services out there now where you can pay an advisor, like 100 an hour, just to get on a one hour call with him. There's also services out there like that. So really think through what you're doing here. If you're giving money to an advisor with assets under management, really think it through.

It's really important to note how big of an impact it has on your portfolio. So that's number one, just a little teensy, tiny multimillion dollar thing. Number two, you're going to say to yourself out loud in the car, you're going to shake your fist in the sky and you're going to say, no, duh, Andrew. But number two is invest more.

Now I'm not going to say wishy washy invest more. We have a really high rate of inflation. Everything costs way too much money. Affordability is really low. Yeah, just go invest more dollars. That's not what I'm saying here because I know that's not the case for most people. In reality. A lot of people are struggling right now just to make ends meet.

So how are we going to invest more? How are we going to actually go out and do that? So what I'm going to do first is I'm going to motivate you a little bit here and give a little fire under your butt. And then secondly, then I'm going to show you how to do it, because I think this is what a lot of people need is that practicality of how they can actually go about doing this instead of just hearing people say, invest more dollars.

That's all you hear on social media is just invest more. It's so easy. Just invest more. Hey. I know it's not easy. I know how difficult it can be in this world right now to invest more. You have to pay for student loans. Housing costs is through the roof. If you have kids, daycare costs are absolutely through the roof.

You're just trying to get by. You're just trying to make ends meet, but let me tell you what investing more can do if you really can buckle down and figure this out. If you can really buckle down and figure out how I can, I invest more. Are there ways that I can invest more? Maybe you can. Maybe you are doing.

Every single thing you can. And if that's you, then I understand we're going to work on some things that you can actually increase your income and work on ways that you can get more dollars money flowing through that checking account. So you can disperse and automate those dollars into different brokerage account.

But if it's not you, I want you to think through how you can do this. Okay. Because first of all, if you invest more, you get your time back, you get your freedom back. Investing more allows you to put more fuel to the fire so that over time you will be able to build up this snowball, this investing snowball that's going to spit off cash for you every single month and you don't have to work another day in your life.

If you're in a cubicle, you hate right now, you will not have to work another day in your life. If you figure out a way to invest more, that's why this is so important. This is going to change your life forever. Number two is that you can give more dollars to causes you believe in. How many times do you watch the news and something happens and you just get ticked off?

You're just angry about it, but guess what? Guess what? It can actually propel something forward that can make an active change in everyone's life. Money. And so the rich people have known this forever. The 1 percent have known this forever. But what if everybody learned this? That you can give your dollars and actually make a massive change.

This is something that can absolutely change your life. Here's an example for me. And this is where the light bulb moment went off. One big example was human trafficking specifically with children. This is a cause that really just breaks my heart. Once I had kids, I could not imagine this scenario for another child.

And so this is something where it really just lights a fire in my gut. And I changed my entire financial plan based on this cause bothering me so much. It's something that I want to figure out a way to help. And the way that I want to do it is with my dollars. And then with my time. So what I'm going to do is I'm going to get my dollars.

I'm going to get them going. And then I'm going to start spending my time once I have more time from my dollars. And so I had a lean fire goal. Now I have a fat fire goal only because of this specific thing. And so I want to give back to causes I believe in. This is a major thing as a wealth builder.

You're a wealth builder. Anybody listening to this podcast is a wealth builder who is actively pursuing, trying to build wealth and making a difference in their dollars and making a difference in their net worth and making a difference in the way that they see money. You're a wealth builder and every wealth builder should have some sort of plan to give to causes they believe in when they get to a certain level.

Because when you start to do this, it'll absolutely change your trajectory. Guess what? The next thing is if you start to save more, I've never heard anybody in my life say, Hey, I really regret investing more dollars. I really hate that. I actually did that. Now, if you do it later on in life and you're investing so much money that you're not taking family time, you're That's when you'll regret it.

You'll definitely regret that. But outside of that, if you're investing more dollars instead of going and buying the fancy car, or if you're investing more dollars instead of going out to eat every single night, or if you're investing more dollars instead of shopping on Amazon all the time and getting 12 boxes to your front door every single day, well, guess what?

You're not going to regret that whatsoever. Your house is going to fill with junk. That car is going to get old. But you're not going to regret having that money in the bank for financial security safety. Guess what? It reduces your stress. It reduces your anxiety. It reduces everything that you hate about money.

And if you're listening to this podcast and you hate money, and you're just trying to figure out what the heck do I do with money? This is what you do. You find a way to fuel the fire to be able to invest more. And guess what? The last thing it does is it helps you outpace inflation, because inflation, oh boy, oh boy, inflation is the thorn in our side right now.

What if you could rip that thorn out of your side and be able to actually outpace inflation and your dollars can go further? That's what investing does. Investing allows your dollars to go further, and you can make that massive change over time. So this is something where I think most of you need to understand you need to learn how to invest more.

Now, how do we do this? How do we invest more of our dollars? It's really important to understand how we can actually do this. And really it's just learning how to increase our contributions by small percentages. You know, you're not going to be able to just do it all at once, especially if you're just getting by, this is not something I want you to just rip the entire bandaid off all at once.

Instead, I want you to do this gradually. When you reduce expenses, I want you to reduce your expenses gradually. When you increase your investing, I want you to increase your investing gradually. So let's do a given. and take here. Let's imagine that we have a scale and on one side of the scale is your expenses.

And on the other side of the scale is the amount of dollars that you can invest. So the thing that you can do today is slightly reduce your expenses. And when you slightly reduce those expenses, you're gonna have a little bit of extra money left over. What are we gonna do that? A little extra money?

We're going to invest those dollars. And so the scale starts to tilt a little bit. If you're watching on YouTube, I'm doing this weird thing with my hands to show you how a scale works. And so as we do this, we're going to reduce our expenses by 1 percent and we're going to increase our investments by 1%.

Let's just do that for the first couple of months. Okay. So we're two months in, we're reducing our expenses by 1 percent and increasing those investments by 1%. Okay. Now, a couple months down the line, we say, Hey, that's not so bad. I think I could do it again. And so we're reducing our expenses by another percent and increasing our investments by another percent.

Do that for a couple more months. Well, by golly, that's not terrible. We reduce our expense to another 1 percent and we increase our investing another 1%. And so this is how you gradually over time can increase the amount of dollars that you are putting away towards retirement and fuel the fire without feeling the major pain that comes with ripping the bandaid off when you have to invest just a ton of money all at once.

If you have lifestyle inflation, for example, it is a lot harder to go backwards than it is just to increase your income. And so you really need to do this gradually over time. Otherwise you're going to quit. I know how human psychology works. You are going to quit if you do it any other way. And so this is how you can make a difference when you go through this.

Now, let me just show you how powerful increasing your investments by 1 percent can be. This is just with a five and a half percent rate of return. Uh, if you just increased by 1. 5 percent on your salary and you started at the age of 35, you would have 85, 000 more in your portfolio just by that 1 percent increase with a 5.

5 percent rate of return. That's what you can almost get in a high yield savings account right now. So you're going to have more than that on a rate of return. If you invest those dollars in a portfolio, if you started at age 45, you'd have an additional 42, 900. And if you started at age 55, you'd have an additional 17, 000.

And that's contributing less than 16 per week, 16 bucks a week, small amounts of money over time can grow to very large amounts of money. You hear me say that all the time, small amounts of money over time can grow to very large amounts of money. Now let's look at this a little bit deeper, because if you wanted to do this with a 10 percent rate of return and your boy loves that 10 percent rate of return, because your boy loves to motivate you all.

And so what we're going to do on that 10 percent rate of return is we're going to look at this and say, Hey, let's increase our contributions every single year by 1%. We're going to do it 1 percent every single year, and we're gonna start at 300 per month. So let's say we start investing 300 per month and every year we increase it by 1%, uh, on a 70, 000 salary.

So we're looking at a 70, 000 salary increased every single year by 1%. After 10 years, you'd have approximately 103, 000, 300 bucks a month. Increasing it 1 percent every single year, you have 103, 000 after 20 years. This is cumulative 488, 000. Pretty good stuff there after 30 years. Wow. 1. 6 million just by starting at 300 bucks a month, increasing by 1 percent a year, 300 bucks a month, increasing by 1 percent every year.

And after 40 years, Oh boy, you ready for this number? 4. 6 million by making that 1 percent increase. My friends. Small percentages make a big, big impact, as you can see. And this is why we're talking about this on the fee side. And this is why we're talking about this on increasing your investments is you need to learn how small percentages will actually make a massive impact.

It's going to change your life. If you can start doing this now, especially if you have time now, if you don't have a lot of time, we're going to need to invest more in larger chunks. We can't do this 1 percent anymore. And so how can you actually do this? Well, a is making sure you're tracking your money flow, knowing what's coming in.

What's going out and being really meticulous about this. If you really want to increase this and you need to do it in a short period of time, number two is we want to reduce all those unnecessary expenses that we do not need sell the crap you don't use so that you can take those extra dollars, fuel that fire, put them towards the things you actually value.

Really important to do that. Number three, I want you to automate your savings, meaning that your dollars, every time they come in, I want you to just automatically get it out of your account and put them into your investment accounts and sweep it out, sweep it out into your investment accounts. That's the next thing we're going to do.

Then we're going to cut down on some of these major expenses. You're going to look at the big three, housing, food, transportation. Those three kill most people. And so if you can control those three, you can control most of your other expenses. The other one is daycare costs for people who have kids.

That'd be a big four, really. Uh, but the big three are those most people need housing, food, or transportation. So those three can absolutely kill you. And then lastly, you just want to make sure that you, you know, reduce your debt, those types of things as well. But we've talked about that in a number of different podcasts.

We won't dive deeper here. So investing more, that's a big one. Now let's get into number three. Number three is invest longer and investing longer. Is something that can really, really change your financial returns over time. In fact, when you do this, it could be something that absolutely, it just blows everything else out of the water.

It's just investing for a longer period of time. You saw that in our last example, for example, that we did. Uh, is over the course of 30 years on a 70, 000 salary, increasing it by 1 percent every single year and with 300 a month, it went from 1. 6 million. But if you just add an additional 10 years, it went to 4.

6 million. So as time progresses, it's usually between that 30 and 40 year mark. Where this really just starts to accelerate because compound interest is at work. You have larger numbers in those portfolios. And so it just really starts to snowball. This is why we always talk about getting to that first hundred K because that first hundred K helps you really just get those dollars working.

And it seems like it gets a little bit easier after that first hundred K. And so why start investing earlier? A. Compounding returns, the dollars that you invest. Now, if you're in your twenties, listen to this podcast, the dollars that you invest now are going to be the most valuable dollars you ever invest in your entire life.

You're going to have to work three, four, five times as hard just to get the same results. Instead, you could just invest right now. And so that is one big thing I want you to understand. Number two is you have. More time horizon for risk tolerance, meaning that you can actually invest into a higher percentage of stocks, which have historically returned more.

And you can do that because you have a longer time horizon for corrections and to make it through some of these things. Number three is it helps build the habit of investing. So starting early helps build that habit for investing. We have a lot of high schoolers that listen to this podcast. We've had messaging before.

If you start investing in high school, boy, Oh boy, those dollars are going to turn into massive amounts of money. And then you have recovery time. If there is any recession or anything like that, that's going to help you recover, uh, over a very long period of time. Now, I want you to look at this for a second, because I want you to consider two scenarios.

Number one, an investor starts at age 25 years old. Okay. This investor starts at age 25. Number two, an investor starts at age 35. So both of these investors are going to contribute 5, 000 annually, and we're going to assume an annual rate of return of 10%. And we'll calculate this amount by each investor to retire at the age of 65.

Okay. So case one is the investor who started at age 25. Now has a future value of 2, 434, 259 by investing 5, 000 per year at a rate of return of 10%. Investor number two starts at age 35 and the value of their portfolio with the same amount of investment every single month is 904, 000. 2. 5 million for starting 10 years earlier.

And if you start 10 years later, your portfolio is 904, 000. That is almost a 1. 4 million difference just by starting 10 years earlier. This is why I'm saying when you start earlier, those dollars are so incredibly powerful. I cannot explain it enough. And so this is something that I think you really, really need to understand.

And so there are a bunch of reasoning. Why you want to start early and I gave you a bunch of them here. Number one is compound interest. It is really important to get compound interest working as early as you possibly can. The earlier you do it, the more of those dollars, even if it's a small amount of money, I don't care if it's a very small amount of money.

It is still really important. If you had a 10 percent rate of return, you invest a 10, 000 per year. It is really important to understand how those numbers work. And if you want to learn how to do this, just play with an investment calculator. There's a bunch of them out there. I like calculator. net.

There's a bunch of other ones out there. We actually have our own. I got to release that one, but there's a bunch of great ones out there that I with it reduces your risk over time because of diversification. And when Brian Feraldi came on this podcast, the first time he's been on here three times now, when he came on here, the first time he talked through the S and P 500 returns.

Like if you invested in the S and P 500 and you did it over a certain amount of time, the longer your time horizon, the lower your risk is. So. Investors who invested in the S& P 500 for 20 years or longer, never lost money. Historically have never lost money. And that's the crazy power of just investing over time into good quality stocks.

And then you have more time to recover from downturns. You have volatility smoothing, meaning that when The market goes up and down, it's going to just smooth out over the long time horizon. And you can see that when you pull up a stock market chart, you can look at the stock market chart and say, Hey, in the short term, that chart is going up and down and left and right and backwards and forwards.

When it comes to the long term, that chart starts to just smooth out. And so calm and cool investors invest for the long term and frantic investors invest in the short term. So that's number three. And then number four is to reduce your taxes. And I don't really want you to spend a lot of time thinking about reducing your taxes unless you're really into this stuff.

This is kind of like an advanced thing that you can do. But there are some things that you can do. And, uh, One is that we talk about all the time is like using your tax advantage accounts. So your Roth IRA, your 401k, your HSA, your SEP IRA, your solo 401k, your TSP, all of these different accounts, your 457B, all of these different accounts are going to be ways that you can reduce your taxes without really having to lift much of a finger.

Okay, if you're saving for your kid's college, a 529 plan will help you reduce your taxes. Um, there are so many different tax free growth and things that you need to do. Guys, you need to take advantage of these accounts. If you hear somebody on TikTok or Instagram or Twitter or wherever else say that these are a scam, they're probably trying to sell you a real estate course.

You need to take advantage of those tax advantage accounts. Number two is holding your investments long term, like we said, is another way to reduce your taxes because if you hold them for a year or longer, You get long term capital gains tax, which is taxed at a much lower rate than short term capital gains tax for folks who only hold stocks for less than a year.

And so long term capital gains tax is really, really important. You can also do things like tax lost harvesting, which is a much more complicated system. We'll do an entire episode on this where we can actually talk through how you can do it in a way that makes a lot more sense for people instead of having to do it all the time.

And then making sure you choose the right asset allocation. This is a big one. That's a six figure decision, uh, because choosing the right asset allocation is going to ensure that you have the right stocks and bonds in the right accounts. And it's going to make sure that you are investing tax efficiently and then looking at tax efficient funds.

So things like index funds, ETFs, all are managed. Funds that have lower turnover ratios, meaning they buy and sell less securities than would like a traditional mutual fund. And that's going to lower your tax bill as well as you go through this. So these are the four ways that you can really, uh, accelerate your stock market returns.

One more time. It's minimizing fees and boy, oh boy, your boy went on a rain on that one. Number two is investing more. And I showed you practically how to do that. Number three is investing longer. And then number four is reducing your taxes. And so those four are going to be something that's can really, really make a huge impact on your portfolio.

And I think most people need to learn that this is one of the biggest ways that you can accelerate your stock market returns. You've got to focus on the things that you can control. These are the things that you can control. And so it's really, really important to understand. Well, listen, thank you guys so much for listening to this episode.

I truly appreciate each and every single one of you listening. If you guys have any questions, make sure to reach out to us. You join the mastermind newsletter, and then you can reply to that newsletter and it'll come directly to me and I'll be able to see your questions there. And thank you guys so much for listening to this podcast.

Our entire goal is to bring you as much value as we possibly can. And we hope we were doing that every single week. If there's a way that we can bring you more value, please reach out to me and tell me. That's another thing I want you guys to do is constantly communicating with me, telling me how I can bring you more value.

I want to know, I want to know how I can bring you more value. What do you want me to dive deep on? What do you want me to look into more for you? How can I help you? How can I serve you? That is what I want to know. That's what this podcast is all about is serving you more. So thank you guys so much for listening to this episode.

We will see you on the next episode.