Investing: Making Sense of Passive Investing

Can you catch a falling knife? Take a shot at deciphering the jargon-laden world of investing in this riveting episode of Ditch the Suits. We're calling out the industry's marketing gimmicks and untangling the knotted web of passive and active investing.

We break down some of the most popular definitions of "passive investing" from sources like Investopedia, Nerd Wallet, and many others.  

Be ready for some myth-busting as we expose why you can't play pick and choose with stocks within an index fund. Also, for those just dipping their toes into the investing pool, we dive into the captivating cosmos of growth and value stocks and their fundamental role in passive investing.

The price is right, but is the value right? In this episode, we examine the often-overlooked aspect of value versus price in investments. We reveal how timing your purchases just right can make a sea change in your investment returns. From the potential pitfalls of the buy-and-hold approach to the importance of understanding an investment's worth, we've covered it all. 

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Transcript

Speaker 1: 0:08

Welcome to Ditch the Suits, a movement awakening and opportunity for you to start getting more from your money in life. I'm Steve Campbell. With my amazing co-host, Travis Moss, we're going to share industry insights nobody wants you to know about, so buckle up and enjoy the episode. Well, folks, welcome back to Ditch the Suits. In our last episode we didn't mean to leave you with a cliffhanger, but we did a little bit. We wanted to take you from this bridge of like how do the wealthy keep getting wealthier? And then, if you're thinking about investing, kind of what's the bridge from starting to where you are to get to that point? But we didn't really get into the meat of where we want to take you in this conversation. If you missed that episode, we said that we want to take a couple of episodes here to talk you through the big question that people are asking the internet, which is how should I actually invest? Just to paint a picture for you, If you listen to Ditch the Suits, you probably have access to 401Ks, IRAs, Roth accounts.

Speaker 1: 1:02

So you have these investment accounts and then the question is like, how should I actually invest them if the goal is to make money? Right. So if you want to make money. How should you invest? There's typically two schools of thought when it comes to investing. You can have passive investing or you can have active management, and you might be thinking, well, which one's right? I've kind of leaned towards one or the other Travis I want to turn it over to you. If there's, these two school of thoughts, walk people through. When we say passive investing, what are we talking about and what do we need to consider?

Speaker 2: 1:36

I don't let the cat out of the bag when we're talking. We're going to spend almost all of our time on passive investing, because the term passive investing is kind of the way the industry uses. It is a lot, yeah, it's a marketing ploy and we need to define what we're talking about. So we're going to try to define it. We're going to actually try to define it and that'll be kind of less than one. We're going to start there. Then we're going to probably get into performance and some of these other things. That'll help us kind of frame out this discussion before we get into what's the solution. After all this, right, but passive investing. If you go and you Google it and you say, okay, give me what is passive investing? Passive investing is a long term strategy for building wealth by buying securities that mirror stock market indexes and holding them. Long term. It can lower risk because you're investing in a mix of asset classes and industries, not an individual stock. So if you compare a fund of stocks to one individual stock, at lower risk, but one individual stock is not active investing. So that's like, yes, if you buy 100 things, 100 different things, of course you have less risk than one individual thing, but they're getting. What they're really making the point of is that you're going to go buy things and you don't. You have a formula for what you're buying it's. You're buying the same stuff every time, no matter what, right? If the market's high, you're buying the same stuff. The market's low, you're buying the same stuff. You're just going in there and indiscriminately buying or selling the same stuff all the time. Prices don't matter, value doesn't matter, you just put your money in or take your money out regardless, right. But they're making, they are making the argument that it's a safer strategy than buying an individual stock, which I mean we could throw an explicit in there like don't die, right, you know? Like, of course it's safer than one individual stock, but itself is not actually very diversified, because all you're getting is the average. So, yes, your chance at an absolute loss, 100% loss. If you own one company, the company could go bankrupt, right. If you own 100 companies, chances are. Even if one goes bankrupt, you're going to be fine. So it's saying that, look, we're safer than one company. Well, yeah, of course you're safer than one company, but are you safer than 100 companies? Not much, if any, actually, you may actually go the opposite way, because it just it waters stuff down. Actually, now you're getting the average that could actually increase risk.

Speaker 2: 4:11

The investopedia, my favorite place to go for wisdom on investments. I'm saying that faciously, but passive investing is an investment strategy to maximize returns by minimizing buying and selling. Index investing is one common passive investing strategy whereby investors purchase a representative benchmark such as the S&P 500 and hold it over the long term time horizon. Okay, so it's a strategy where we maximize returns by minimizing buying and selling. Well, that by itself doesn't maximize returns. Actually, in today's day and age, doesn't even really reduce fees any material amount. So I'm not really certain what reducing transactions does to increase performance. Because what if you buy 10 losers and you're like, well, I never sell anything because you're not supposed to make trades, and 10 losers just fall off the face of the earth? Your balance is decimated by it. Well, at least you didn't make any transactions. So the definition doesn't work with reality, right? But anyway, let's keep going on this because we're not done on dressing this A representative benchmark such as the S&P 500 index.

Speaker 2: 5:37

So what they mean by representative benchmark is because the benchmark isn't actually real. You can't actually go out and buy the benchmark. You have to buy a representation of the benchmark. Now, the word representation all by itself is a word game. Representation means like similar of the same qualities. It doesn't mean it's the same, it doesn't mean it's exact. In fact, we're going to get into index funds. You buy two index funds following the S&P 500, but yet they somehow get different returns. Well, how could that be? They're supposed to be an index and so the S&P 500 is easy because it's all giant US large cap companies and that you can get all kinds of information on it. But what about when you get into some kind of newer, some more obscure indexes? Lots of variation and variability can be in that, and we're going to actually talk about that. Nerd wallet says so. I actually kind of like nerd wallet. They've got some pretty good stuff sometimes, but nerd wallet.

Speaker 2: 6:44

The biggest difference between active and passive investing is that active investing involves a fund manager picking and choosing investments, whereas passive investing typically tracks an existing group of investments called an index. Okay, that's a better example, but it's still not right because passive investing, the manager still has to decide how to follow the index and what degree they're going to follow the index. For instance, somebody could say, hey, we're going to follow the small cap index. Well, what is the small cap index? Somebody's got to make up what the actual index is, and that's it. That's like beauty and the eye. How do you define that? Are there a thousand stocks in there? Are there 500 in it? You could have a 100 stock small cap index and you could have a 600 stock small cap index. So we're already starting to get money because there's an active management component to deciding how to define the term passive in the first place.

Speaker 2: 7:53

Passive doesn't mean that there's this magical fund out there that the internet created. Nobody's ever touched us All of a sudden. Something just appears as if it's like it fell out of the sky and it's there and you get to put money in there and it acts perfectly. That doesn't exist. Somebody makes up a representation of what they think perfect looks like. They make the decisions for you and then they say but it's passive. We're not trying to decide what in that mix of funds is better or worse than other ones, but yet they are deciding what gets in it in the first place and how they're going to go about buying and selling things within it, and so you end up with enormous variation in what's supposed to be consistent.

Speaker 1: 8:36

We're going to stop right there to hear a word about our sponsor. We're here to help you get the most money in life as host of this show, but that doesn't just happen. You need good financial planners that have your best interests in mind. That's why we want to take a moment to talk about Seed Planning Group. Seed Planning Group is a fee-only financial planning firm that has a fiduciary obligation to put you as your consumers best interests first. If you're not sure if they're the right fit for you, we would encourage you to head over to seedpgcom, fill out the contact us form and schedule your free discovery meeting, because you could be one good decision away from getting the most from your money in life. I'm thinking about, too, as you're talking about you just named a couple of big sources and where people are. You're going to have people from walks of life that say you can never beat the market. Let's just buy an index. That's just easy. That could be a very smart answer, a lazy answer, or you're just not sure. That's what you read on Twitter. There's enough credentialed so-called writers that can never beat the markets. So just put your money in an index. Or maybe you're somebody that did dabble one time. Maybe you were an index investor and you were inspired to go buy individual companies. So maybe you bought a few companies and had a bad beat. Maybe it was literally right before COVID and you lost money and you thought I'm never doing this again.

Speaker 1: 10:00

I think it's helpful to help people understand why this conversation is so important, because we've done several episodes about how to make money in the stock market. We've talked about coalition coefficients and mutual funds. We've tried to discuss that there is multiple ways to do things in life. As long as you have enough information, then you can make a judgment call. What's happening is people are getting bad information to start in having bad results. What Travis and I are going to try to do is help give you information that can help you.

Speaker 1: 10:39

At the end of the day, say, if you listen to all these episodes and you still determine that passive investing is the way to go for you, at least you've received the information. But what if we were actually to help somebody understand that when you talk about the ways to make money in life and the things that you can do, what if this is a fresh take of looking at it that could actually help inspire you to say okay, I'm starting to track with what they're saying. I think that what's even confusing is you just named a couple of fairly large organizations of information that people go out and seek and you can sometimes read these definitions and go I think I get it, but I'm not really sure because it's still… it's word sale.

Speaker 1: 11:22

It's still super convoluted and a lot of these we've talked about in prior episodes. I remember you and I did an episode on the top 10 investments of 2022. Eight of them weren't actually investments, but if you read that article and you didn't know that, you'd be like, wow, these all sound really good. So I want you to be able to dive deeper into this. But for a frame of reference, if you've ever heard, you can't outperform the market. This is kind of when… that's when you're starting to get a sense of okay, somebody's leading you to believing that passive investing is probably a better way, so why don't you keep going with the train of thought yet?

Speaker 2: 12:00

So I want to explain indexes a little bit more. So, indexes, you can have an index for everything. What the index means. Here's what it actually means. I'm going to suggest that there is nobody that can look at a collection of 100 stocks and figure out which ones are going to do better or worse than the other ones. It's the whole monkey throwing the dart at the wall, right. So you're going to buy one of each. Every time you put money in the market, you just buy one of each, because nobody can figure out if any of them are any better than the other ones, and so that's an index. So if I wanted to buy a healthcare index, I could buy a fund that essentially buys every public healthcare company, and when I put money in, I'm going to get whatever their ratio is. Some of them might say you get one share of each one. Some of them might say you were going to put the same percentage of money in each one. Some of them are going to say we're going to weigh them by size, so the larger ones you own more of. Again, the indexes are going to be designed differently, but somebody's grouping things up together and saying you know what Within that group. Nobody can figure this out for you. So we're just going to group them up so you don't have thumb out, you'll never have the fear of missing out, and they do it. So large companies, large growth companies, large value companies, small companies, small growth, small value, mid cap, international emerging markets, efaa, bric Asia, non US I mean like anything that you can think of. Somebody's made up a standard and said we're going to take all these things, that we're just going to group them up and we're going to say everybody's exactly the same.

Speaker 2: 13:36

Think about your life as a person, steve. You know. Are you like every single other parent with four kids or are you? Is there something unique about you and your family? Is there anything unique about you and your family that would be different than, let's say, the neighbor with four kids? Are you sure there's something different about you and your name? Because you both have four kids? It seems like you'd be exactly the same and it seems like you're so alike that, if I looked at you and I saw what you were doing with your parents let's say that your neighbors are screaming at their kids all the time and throwing stuff out the window and you have a loving household. Probably no different outcomes going to happen.

Speaker 2: 14:15

Okay, that's the same analogy with index funds. Basically, what I'm saying is when I say that you got to buy an index fund because nobody can figure out what's good or bad out of that index, think about what you're saying. You're saying look, there's 100 companies, or however many companies, 500 companies, and nobody with a brain can look at them and say, geez, did you know? 3m has $50 billion of pending lawsuits. Why the hell would you own that? They have 50, right now, something like $50 billion of pending lawsuits and they're in your index fund and anybody with a brain would say, okay, well then, I like the index, but not that one. Get that one out. Well, you can't do that with your index fund.

Speaker 2: 14:55

You're not allowed to. Wells Fargo. Wells Fargo has been fined out the wazoo. They got more fines on them for doing the same thing they were doing. That they said, oh no, that was just a win-off. They're back to the regulatory carousel of ripping people off, right, and there's. Why would you own them? Because they're part of the index. Now I gotta have the index. Okay, so you've got this index and the idea is that nobody can look at that and say dumb ideas, don't buy that in there, right? Okay, so let's keep going. What are some examples that we could get in a little bit deeper?

Speaker 2: 15:32

So there's a concept in investing called growth and, according to the best of media, back to our sources, growth, growth stock. So this is when you're buying an individual investment. If you buy a mutual fund, you can buy a growth mutual fund, and if you buy an index fund, you can buy a growth index fund. So you buy it. So a growth stock is one that is anticipated to grow at a rate significantly above average growth of the market. These stocks generally do not pay dividends. So you're talking about stocks like Google and Apple and Facebook like that. They have a profile of a company that's really growing over time. Right, there's a lot of room because they're doing lots of business and it looks like they're going to keep making money like that. Isn't that kind of active management? To figure out if a company is a growth stock in the first? Somebody has to look at the company first and go, wow, that's the next Amazon. Put them in the growth bucket, otherwise how does it get over there?

Speaker 1: 16:31

Magic.

Speaker 2: 16:31

Somebody's looking at it objectively and saying, oh, I think so that's an active decision to put it in the index in the first place. It doesn't sound so passive anymore. So we got okay, anticipated to grow at a rate. That was that one value stock. So next definition Sorry, I'm reading that definition, I'm getting pumped up. So a value stock is one trading at a price and a low price than what the company's performance may otherwise indicate. So what they're saying is is the company's making a lot of money but the stock price stinks right now. So that's a value stock. You can get some value by buying this right, because maybe it will correct and go back up. There's room for the price to go back up on the stock because the value is actually much higher than what the price is right now. So that kind of seems objective too. Right, the stock's in the tank right now and I'm looking at it and I'm going. There's an opportunity for this stock to recover and return to these higher prices. Well, that seems awfully objective too, because you're making a decision that whatever's got the stock price down in the first place isn't going to manifest into something worse.

Speaker 2: 17:44

There's an awful lot of active decision making going on here behind the scenes. This is not as straightforward as it sounds. So what is a value stock versus a growth stock? Growth stocks are those of companies that are considered to have the potential to outperform the overall market overtime because of their future potential. Value stocks are classified as companies that are currently trading below what they are really worth and will thus provide a superior return. Again, I'm still struggling with this a little bit right. How do you decide? Could a value stock actually be a growth stock? Could you have a growth stock? That's just their stock price is depressed. Meta, which is Facebook. Last year, their stock price was abysmal this year. It's wonderful. Were they a value stock last year or a growth stock? Are they a value stock this year or a growth stock? Did they flip bins? Seems like stuff's moving around here. Where does it actually go?

Speaker 1: 18:45

Can I say something too? You sent me these show notes to review. And obviously, if you found out Dish, the Suits are dirty little secret. Travis is the brains and I'm Steve.

Speaker 1: 18:57

I like to have thought he's the visionary and I'm the comedic relief that tries to bring it home for people. But when he sent me these notes, I paused for a second because you were just pulling these definitions from well renowned websites that people were reading and I thought man, I've been in this industry for over a decade. That's a fairly confusing definition. To even me, that's saying a lot and nothing at the same time. I could only imagine an engineer, a nurse, a police officer, a coach who doesn't do this for a living, wanting to do the right thing with their money. So asking the internet hey, internet, what should I invest in? And they say, well, you should, or chat.

Speaker 1: 19:39

You should choose between a growth or a value fund, and then you read the definition, and the definition is a growth could be value, a value could be growth. So, great folks, I'm no further than when I was when I started this blog. You've said a lot and nothing at the same time. So here's what happens you do nothing or you just do something, and it costs you dearly.

Speaker 2: 20:02

Steve, you just made a great point. I want to own a growth fund because it's going to go up over time and I want to own a value fund because it's going to go up over time, because the value fund is saying that it's underpriced and the price should go up and the growth fund is saying it's going to continue to make money, so the price should go up. Aren't both investments growth investments? Like, if you're buying an investment and you're saying I think it's going to crash, it's not a value investment and it's not a growth investment? What are you buying, right? If you're putting your money in a company that is not growing, that you're concerned is going to crash, that's called a loser, like you wouldn't buy it. So isn't everything growth? Like, I only want to buy stuff that grows. That's it. That's all I want. Right? And in regards to where the price is, maybe I could do a trade. A trade is when you buy something because it's selling at $10 and you think it's worth $50. You buy it at $10 and when it gets to $50, you sell it. That's called a trade, because you don't think it can go any further because there's no growth there. It's just the price was down. You know, maybe there was a lawsuit or something against it and it drove the price down and then, when the lawsuit is done, the price is going to spike, but it's only going to go back up to $50. That's called trading. That's what the day traders do, and so some of these quotes are by thestreetcom, which is pretty well known.

Speaker 2: 21:19

Value stocks are the underdogs of the investment world, waiting for the chance to prove themselves to the broader market through healthy fundamentals and steady, long-term appreciation. I don't even know what that means. The companies are trying to prove themselves right. It's like we're making the investment strategy almost seem like a person. Nerd wallet says the main difference between growth and value stocks is that value stocks that companies and investors think are undervalued by the market oh, so nerd wallet's actually saying the quiet part out loud. Investors think they are undervalued. That's an active decision. That's not passive. Somebody is making a decision, and growth stocks are companies that investors think will deliver better than average returns. Somebody's making a decision. So we're putting stocks in buckets with a decision. We're making decisions here, and then the investor gets to choose which bucket do I want to buy? That's an active decision. How much passive is happening here right now there's not much passive. Passive would mean that the buckets never change. It's the same stocks all the time.

Speaker 1: 22:27

I was going to say too and I don't know if this train of thoughts is going to make sense, but it's what's going through my head, so I'll get it out. If you really do use the internet as a tool almost every area of your life you can actually get real guidance that can help you as a parent. How could I better work with my kids? You're going to at least get a number of different resources that are going to actually, at the end of the day, say here's what you should actually do. You can take with that what it is, whether it's eating, whether it's fitness there will be people that will tell you what you should actually do.

Speaker 1: 22:59

The financial services industry is fairly fascinating in that no one wants to be liable for what they say. Everybody says very vanilla statements that don't actually tell you what to do at all, under the guise that they told you what to do. It's very confusing. No one wants to be responsible for actually telling you how to invest your money, because if you do it and you sue them, they're screwed. They will give you enough information that makes it seem as if you're getting information. How should you invest in a growth fund? How do you do that. Well, it's got to go over time, but so can a value fund you go. What do I do with that?

Speaker 2: 23:35

But everything. Then there's a debate about growth and value. Well, is growth better than value? That's a timeless debate.

Speaker 1: 23:41

I can understand and give a little bit of grace to a listener who's like so guys, what do I actually do If I go to the internet and the internet actually doesn't tell me anything at all? That helps me. Help me then understand how to sift through or how to keep going in this thought pattern.

Speaker 2: 24:00

Let's take that for a second. This is not directed at the investor that doesn't know. What the investor who doesn't know is getting from this show right now and from this series is. I'm going to fight the good fight for the investor that doesn't know. I'm going to challenge everybody who thinks they know what they're talking about when it comes to passive investing those do it yourself as investors who absolutely you got to figure it out. I am here to challenge you on this thought process. I think it'll be a lot of fun, and I encourage participation. Coming backwards, too. Let us know what you think.

Speaker 2: 24:37

Wait till we're getting through it, though, because you're going to get a lot of information. Build that up, and we'll do a follow-up series if we need to address things that other people bring up, the people who really don't know. You get to go on this path with us because, like you said earlier, it's like investigative journalism. We are just going to lay out the inconsistencies here and let people make the decision for themselves. We're going to go into the conundrum between growth and value, and this is from the Motley Fool, and I really liked Motley Fool too. I read a lot of their stuff. This just goes to show that the same company can be both growth and a value stock. Growth investing, after all, wants to buy companies selling at a discount at to their intrinsic value. Good luck if you don't know what that means. Growth investing wants to buy companies that will grow their bottom lines and presumably your investment many times over. You're telling me that people buy companies that they don't think will actually grow. That's weird In favor of companies that are having a problem and maybe will just recover to where they were before. That's a really weird thing, because they both take on a lot of risk. Let's think about what just happened. This is a challenge to the status quo. In the definition, like literally in Motley Fool's definition, they are actually acknowledging the difference in price to value. This goes back to the previous episodes we've had. We've talked about price to value.

Speaker 2: 26:22

You go out and you appraise a house. Why do you do that? Because that's all the money the bank will give you, because if they have to take the house back, that's what they know they can get for it. That's the value. What the price is what somebody comes in and offer you. What you take for the deal has nothing to do with the banks appraising it, as Somebody can come in and say, hey, your house appraised at $100,000. Here's $200,000. You say thank you very much. You crazy fool, I'll take it. Banks still ain't going to lend $100,000. Somebody comes and says here's $50,000 for your house. You say thank you very much, I wanted to get rid of it anyway. Guess what? You just got $50,000 in free equity.

Speaker 2: 26:58

For every winner on an investment, there's a loser. That's because there's a real value to things. Really, what you see happening every day is the price changing on things. To me, first off, before we even get into the whole index thing and everything, what they just did in these definitions. When you watch TV, what do they tell you? We lost $1 trillion in value today in the stock market.

Speaker 2: 27:24

Every time that market crashes, they tell you how much value you lost. When you look at your statement, you go how much money did I just lose? What did they just say? They said it's not value. You didn't lose any value. You lost. The price went down. The price has changed.

Speaker 2: 27:38

We're losing perspective on the fact that you are buying real things. What it means to invest is to take your money and actually buy a real thing. You're buying a share of a company. Now, when you put in a mutual fund, you don't think about that because you're co-mingling your money with everybody else and you're giving it to an investment manager and the investment manager is then going and deciding what to buy for you and you have actually no say within the parameter. Once you put it in there, he's going to buy whatever that fund decides to buy for you. So the only say you have is buying the fund in the first place.

Speaker 2: 28:16

And their big concern is price. They're looking at price to value. So I just thought it was fascinating because in the definition itself about whether or not you should go out and buy growth or you should buy value, and when we get into indexes versus active management, all that kind of stuff, the industry, which is never honest with you as far as TV and media goes, is literally telling you right here it's about price. Where's the price compared to what the thing is actually worth? And when they're talking about funds, they're talking about the average. So if you buy a growth fund, they're talking about the average price and the average value of everything in it. So let's think about this for just a hot second. We've acknowledged this price, we've acknowledged there's a value and we've acknowledged that when the market goes down, it's really just price adjustments. It's not a loss of value.

Speaker 2: 29:10

So why would somebody be so concerned about the index? Because if we can't look at something and say this is what it's really worth and this is what the price is, that means that we're not helpless. We don't need to buy one of everything, because we can figure out what's actually a good deal and what's a bad deal. If we take the time and part of the issue here is here is taking the time the experts within the industry. They're saying like look, there's price, there's value. We can figure out what things are worth. Because we just said it, because we got to categorize things in growth and value, we got to decide what side of the fence things are actually on. So they're deciding, they're looking at it and they're actively doing this and saying, ok, this is a value because you can make money this way and this is growth because you can make money this way. So they're literally doing active stuff and there's incredible subjectivity across the whole thing. There's subjectivity with the price part of it, there's subjectivity with the value part of it, there's subjectivity with the grouping of it and all that kind of stuff. So we end up with this buy and hold type of mentality. Well, if they told me, if I just buy it and never sell it, I'll be fine, and that's the kind of that will get you into the index investing or the passive investing. And the problem with that is that's like a deer in the headlights. Sometimes you got to get off the road If you own an investment.

Speaker 2: 30:31

An early client that I had in 2008 owned a stock in a company that just got absolutely ravaged. He had a million dollars in the stock. He's got like 35 grand in it now, never recovered. I mean, the writing was all over the wall and everything. But when it's self, because that's how I made all my money. Ok, but we can look at it. We can literally know this thing's got some problems. So we hold that all the way to.

Speaker 2: 30:57

You see people with that, with I'll buy an index and technology, a technology index or something like that, and we write it all the way up and we write it all the way down. And we write it all the way up and we write it all the way down. We can literally look at it and figure out when it's a good deal and a bad deal, or we can look at the components of it, or why would you want to own them all anyway? Why didn't you just own the solid companies, the ones with good management and good financials, the ones that are actually making money?

Speaker 2: 31:24

Think about back to the dot com. The dot com people were buying stuff and the mutual funds were buying stuff and the indexes had stuff in them that literally had no business. They were shell companies and it's all in there. All that garbage was in there and that's why people got killed so bad, because nobody with the brain was looking at it going. You know you shouldn't buy that. That's dumb. So you could have completely missed the whole dot com crash. You could have missed most of the financial crash if you were actually looking at what you owned and thought you know that's kind of dumb. I don't want to own some of this garbage.

Speaker 2: 31:52

That's not to say that, because when there's major crashes it pulls everything down, but you can avoid the catastrophe and it's not throwing up your hands and saying, oh, I give up, I just give up on everything, right. So the whole decision, the whole decision to even buy and hold something, that's an active decision. You are purposely deciding to do something. So if you're doing it because you're stubborn, then yeah, you probably need an index because you don't want to go from a million dollars 18,000 or 30,000 or whatever. You know when the thing crashes. But if you don't have, if you're doing it because you don't have the time, if you don't have the skill, if you don't know how to analyze things, you know, if you don't really understand the difference between investments or how investments, you're just not into numbers and that's. It's like watching paint dry for you. You might have to make some decisions here about finding some resources to do this differently.

Speaker 1: 32:47

Well, here we invest because we want to make money, right? That's the whole point In this episode. We told you it's very convoluted and the answers on the internet are kind of confusing. Travis told you that he wanted to challenge you, so I'm going to call this next episode as a precursor. If you've listened, prove it Right. This first one was kind of laying the groundwork, but in the second one, I'm going to make Travis prove to you with some actual truth points as to why passive investing may not be the best way. So, as always, thanks for stopping by. Catch the suits.