Wealth Tactic Rebels is a unique podcast because there are few people out there looking to help people think differently about their money. Mark Willis, of Not Your Average Podcast and Lake Growth Financial Services, is one of those people. In this episode we talk about market performance the “Roaring 20’s,” why hope is not a good plan, what’s more important than rate of return, why liquidity and control is so important, what is safe money, about how to use debt (leverage) to your advantage, a great value bomb and the most important decision you will make.Ingenious tactics to accumulate wealth, for people who see things differently.Mark Willis[email protected]Not Your Average Financial PodcastLake Growth Financial ServicesLinkedInFacebookTwitterYouTubeResource:  Debt: The First 5,000 Years Read Full Transcript Transcript[Today I am joined by a guest, Mark Willis. Hey Mark, how are you today? Doing fine, thanks.[is, well I'd say he's a kindred spirit in the thinking differently field of finances and non-mainstream thinking. Right Mark?Oh man, yeah. It's like a breath of fresh air. Right? So Mark is, like us, on a mission to try to helppeople think differently about their finances over how banks in Wall Street typically makes people think about their money in their financial,what does it do? Creates a of financial insecurity, or uncertainty, right? So after graduating with six figures of student loan debt, like many people today due, and discovering a way to turn his debt into real well,he's watched a lot of other people lose their retirement Investments and a home equity, you know 2018 2009 when the market crashed,and he decided to find a way, find a sane way to help his[And is a number one best-selling author and the owner of Lake Growth Financial Services, a financial firm in Chicago Illinois,But over the years he's helped hundreds of his clients Take Back Control, key word there, "control,"of their financial future and build businesses with sophisticated tax-efficient Financial Solutions. Now he specializes in building Custom Tailor Financial strategies that are unknown to the typical stockbrokers and typical financial planners attorneys and other financial gurus that we typically see in mainstream media.He's also co-host of Not Your Average Financial Podcast, where he shares a lot of these strategies for thinking differently about wealth and financesThat's just a little background on, on Mark's but Mark is the expert on Mark so I'll let him talk a little bit more about where he came from and how he got to where he is with those philosophies today.[it's only going to get more interesting. Your episodes of an awesome so far I've really enjoyed a lot of the content and the interviews you guys have shared.[willing to push back the frontiers of ignorance, Nelson Nash would maybe say. To help folks understand the realities of what's going on in the financial world no others are quote that says "when you understand,what's happening you'll know what to do. When you understand what's happening you'll know what to do." Most Americans don't know what's happening,For example you know in the last 100 yearsthere is an interesting trend line against the stock market if you were to look at the, the return of the Dow Jones over there from December 1913 when they started tracking the data.all the way up through today, you'd see a fairly interesting sort of just level horizontal line ups and downs another Great Depression of courselooks like a blip in on the radar and then we have an increase and build up, up through the late 60s and then it comes down as we have our stagflation and recession in the 1970s when the oil crisis and everything hit.[Really came to start you know having families and building up real estate and there, you know, when the 401K came on the scene in 1981.It's amazing that just vertical Cliff face that the stock market takes over that you know very interesting.20 year period, from 1985 to 1995. We call that the Roaring 20. Because it's the 20-year period, really from 1981 to 2001.It goes all the way up from '81 to 2001 when we had the tech bubble.[that one little blip on the radar we have never achieved anything close to that,ever before or anytime sense and yet most financial planners including CFP's that I got my training with in classical financial planning.All seem to have been taught, or raised, or came of age, during that season in that special magical 20 year period. Andwe can talk about it certainly but there's a lot of people out there who think that they can just fall off a log and get 14% 12% on their mutual funds. AndI think we're both trying to get the word out that that may or may not be as efficient strategy to hopefor, for your own financial future. And I think you just kind of hit on it there a little bit, "hope for." you know. You can't plan on, hope, it's just hope.that's not something you can count on, it's not something you can control, its not a plan. Yeah, it's true, hope is not a strategy. Exactly right.[some hoodwinked member of the public sits down and here's that they're going to get an average return of 12% they're going to think that they're going to be wealthy and no time slapbut unfortunately you know we can talk about this but your listeners probably already know that average returns mean nothing.Right and we have an episode on that where we talked about that. Your average return has nothing to do with your actual return. You can get an average return of 25% and still get nothing, zero.That's right. Well why is that? You know. How is that possible? You know. Well one helpful metaphor is imagine you know you're leaving work at the end of the day.And you need to drive home. So you have a fixed[Soon as you head out on your path way back home suddenly you get a text from your spouse and says hey you need to pick up.Groceries, you need to drop by the dry cleaners, you need to pick up the kids, oh whoops, you know you, got pulled over cuz you were racing home so now you get a ticketthe trouble is the volatility,on the way to your destination. So we can have an average return of and in fact we did from 2000 to the end of 2016 we had an average return of,I call it a "change in value," of 5% but the compound annual growth rate in the S&P 500 was only 3.35%.Which is a big difference you know that's the difference of a lot of money. You know you'd need a lot more cash to get 5%. So it's the beta, is the technical term hear, it's the volatility of yourReturns the sequence of your returns that matters more than what the average sticker price is, the average rate of return on the mutual funds you might get.[That's right.So that's why we call our podcast and not your average Financial podcast. Because we, for one, don't believe in averages, but also, we don't want to be average. You know if the average American life is built around 30 year mortgage,and hoping and praying in our 401K, having no accessible cash. You know the Federal Reserve study says that the average American,this is done in 2015, the average American, up to 47% of us, would have to sell something or going to debt, if we had an emergency of just $400.That's an unfortunate situation. And this is the wealthiest country in the world apparently, so we have been lured into thinking that Wall Street is where all of our answers lie. But you know, Kevin, I know you know, thatWall Street is a tremendous marketingproject. It's not necessarily a foregone conclusion that we have to put our money into that system just to reach your financial objectives which I know you guys are.Really focused exclusively in the end, end expert focused on helping folks or take the red pill sort of speak and see if there's a whole 'nother World waiting for them.[they're asking people where their money is, they're trying to get whatever risk assessment profiles, and say oh well, according to this, let's put your money here and you can make a higher rate of return. But this is the problem is you know I'm not saying you can't put your money in the market,people certainly can and they do and people certainly do make money but the problem is,it's a predictable. And you don't have control over that, and it creates other issues that we talked about like if it's actually in the stocks you crate tax issues. So people don't have,a base of money, as safeplace to put it, where they can count on it it's always going to grow where they can access it and they can control it. Liquidity stopped really when we became a nation of speculators. When we stoppedsaving in insurance contracts, in savings strategies like savings accounts, and we started speculating.Which has a lot to, we talk about why and so forth but you know we could look into it in general yeah we we all saw the.[according to the US Census Bureau saving 30% of our income on average 30%. These days it's like 5% or less,The results in my opinion, Kevin, is that people can't save as much so they have to put more at risk to overcome that loss of savingsThey've lowered their savings volume and what little they can sock away, they put into riskier and riskier assets, like stocks, crypto, whatever, just to try to make up for it.[[well that's 10 grand. Okay. Easy enough, right. Now let's say that we fast forward a few Generations, so our grandparents might have save 30%, let's say we saved,10% of our money, so on $100,000 of income that's ten thousand bucks. Let's say that we got zero rate of return on that $10,000.[Okay so we're now we're in a more tight time, are cell phone bills have risen, are Netflix bills and everything else have risen, our kids are needing 5 extracurricular activities and we need a bigger McMansion.And we can't save as much. All right, so now we can only save $5,000 let's say that we can get a 50% rate of return on our money 50.5-0 so what kind of speculative instruments are we talking about here you know crypto, swampland in Florida. I mean what's it going to take? Right?If we can get 50% on our money that's 2500 bucks added to the original five grand that we saved, okay. That's a total of $7,500.Now that is still less far less than just saving 10% of your money.[[without sacrificing your lifestyle and so forth. But what are some ways you can pack away, where you don't have to hope and pray you're going to get your 50% rate of return.[there's just really two things you can do with your money you can order invest it which inherently has what we call risk and that could be an investment risk or tax risk or other risk, but.safe means.It's protected, right, it has some sort of guarantees, something you can count on. What's your thought about safe money as part of people's portfolio, what that is and how that fits in? Well that's a good question I mean you might.meet somebody, the average person is going to have most of their net worth tied up in their home or their 401K. Neither of which has any kind of accessibility or liquidity.We all see what happens when someone loses a job they're having to take loans from there 401k's and they're having to get a,[If you don't have a job yeah it's not exactly a great time to be trying to get a mortgage a new mortgage there. So. I mean liquidity, safetyit's not sexy it's not what you know we hear about on CNBC everyday all day long or read about in the Wall Street Journal but who actually hits their target.You know. I think we have something called survivor-ship bias, in the media, where the rare unicorn of some investoror some IPO, that makes it to a billion dollars, or a Warren Buffett type person who does tremendously well over a very long. Of time,we think that if it happened to one person that can happen to everybody and that's just unfortunately not the case. You know I wouldn't.certainly wouldn't pin my financial future to that. And that's what it is right there, it's pinning everything on one bucket.You know, it's not that you can't have one or the other or both it's just that putting all your hopes into something that has no guarantees with it, well that's what it is, it's a hope.Right. It' back to what we talked about earlier, a hope, which is not really much of a plan. Correct. And it's not about either or it's about properly aligning your objectives with your money you know one of the best questions your audience can ask is,"what do I want my money to do for me?"[you know I can't answer that question for each person on this on this podcast of course each person couldsit down and think through it themselves of course, or with a competent professional. But the key is what is it you want your money to do for you. And then we have a series of questions we ask you know do you want that money to grow tax-deferred or do you want to have access to it without taxes do you want any kind of predictablepath of growth, do you want a decent rate of return,do you want that money to be safe from being sued upon or taken in terms of creditor risk, do you want that money to be multipliedwith collateral, so you can use it to take advantage of opportunities when there's a a medical emergency or a real estate opportunity?In other words do you want to be able to leverage that asset so you can make the most amount of wealth off the least amount of money? I mean these are all questions that most people never think about,most people, Kevin unfortunately, are just handed a portfolio when they get their job and sign here for the 401K.Right, Oh just pick this one or this one what are they I don't know what they are. Pretty much. Right. I don't know what I'm picking I'm picking something. Yah. Let's more on we've got lunch to go get, we're bringing in subs problem is just,The problem is just thinking is is a rare commodity in our culture today. And I'm so encouraged by the podcast movement because.[about their own economy, what they can do to Take Back Control. Cuz it's so easy to just give up our control to Wall Street or the government or whatever.Right. I agree. You know you mentioned something too you said "leverage," which I think is important term. Because leverage really is what, it's debt andI don't know about you but what I grew up one thing that was hammered into me is debt is badyou don't want that you need to stay away from it avoid it like the plague, pay as little interest as possible to the banks or whoever else, it's a bad thing right. But,It can be a good thing right.[[