Bond Series: Should you own bonds?

In this episode, we discuss whether or not you should own bonds. We emphasize the importance of defining the purpose of owning bonds, which is to have predictable income and the safety of the principal. We also explain the components of bonds, including coupon, maturity, and price. 

We take time to discuss the impact of money supply, inflation, the changing financial landscape, and interest rates on bond investments. 

As the market ebbs and flows, the potential for losses can surge like a tide against the unprepared investor. We dive into the lessons learned from the 2022 market downturn, showcasing the pitfalls of selling bonds in a pinch and drawing an effective parallel with real estate market dynamics under rising interest rates.

Stick with us as we peel back the layers of mutual fund misconceptions and shine a light on the importance of distinguishing short-term noise from long-term investment strategies. Our discussion is a must-listen for those looking to fortify their investments against the unpredictable waves of the economy.

Lastly, we delve into the fine print that can make or break your bond investments. Just as a meticulous home inspection can save you from future headaches, understanding the intricacies of bond contracts is crucial to avoiding unnecessary losses. With a nod to #WarrenBuffetts emphasis on investment competency, we underscore the power of knowledge and careful selection. 

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Transcript

Speaker 1: 0:08

Welcome to Ditch the Suits podcast, where we share insights nobody in the financial services industry wants you to know about. We're here to help you get the most from your money and life, so buckle up and welcome to Ditch the Suits. Well, welcome back to Ditch the Suits. Steve Campbell and Travis Moss.

Speaker 1: 0:24

We are going to be wrapping up our three-part series today talking about fixed income and bonds, these IOUs that we can sometimes, as investors, be caught up in as an asset class, and today, in our second episode, we talked about bond mutual funds and how they could be a potential money trap. If you missed that episode, go back and listen, but in this one, if you've been tracking along with us, we now want to talk about should you own bonds, and, really, is there a better way? If bond mutual funds are not really a great course because of the limitations and being affected by other investors, if fixed incomes, these contracts you've been talking about still could be advantageous, is there a better way to do it? So, travis, why don't you talk to the investor that's out there that says, well then, how should I do it? And should I own bonds? What's a good starting point for them?

Speaker 2: 1:08

The good starting point is you have to define why you want to own bonds. And a lot of people, I think, confuse bonds a lot of times with regular investments like stocks and stuff. We think about bonds as I'm going to buy a fund, and how much oh, that fund made 19% last year must be a good investment. And again, we were talking about the contracts right, when you own bonds, this is what we think internally, our investment committee that we have at seed, and this is the one thing that we always kind of keep going back to. When there's opportunities to buy bonds that are maybe paying higher interest rates or take some risks with the bonds, what is the purpose of you owning the bonds in the first place? And there's an old saying that pigs get fat and hogs get slaughtered, and this is like people will do the dumbest things to try to make an extra percent on their bonds. Right, because they don't understand the risk that can be associated with them. My opinion is, when you, the reason why you own bonds is because you want predictable income and you want safety of principle, you're using them as a placeholder. Because if you want risk, what do you buy? You buy, you buy stocks. Stocks are the risk. So if you want something that can make double digit returns by stocks, don't buy bonds. But for some reason, people buy bonds with hopes of making stock performance like well, let's buy high yield bonds because you know we can average eight or 9% a year on some of these things. Yeah, and you can lose everything on them too. So if that's case, if you're, if there's a higher propensity of loss in that type of investing, why wouldn't you just buy a stock? Because instead of being capped because again, it's a contract, but instead of being capped at a certain percentage return, it's infinite with a stock. So it's I always go back to why are you buying this? What is the role of this in your portfolio? Do you need a bond? Because in five years you need to make sure there's a hundred grand available so that you can pay for tuition, right? Well, bond can get you there. You can buy something, or a CD can get you there. You know, kind of same category. You can buy something that says look, in five years you're going to have this much money and you can calculate it out and you could be pretty darn sure that it's going to be there for you. And if we do that, then we're really thinking about okay, I want something that's predictable. I want something that's gonna be safety for principles, so when the market crashes and goes haywire, I don't have to worry about that part. I always have enough money to take care of things.

Speaker 2: 3:51

And simply put the function of how much you're gonna make on the bond and I wanna go through some examples of this is coupon, maturity and price. Coupon is the interest payment. So, steve, you've loaned me money. I have promised to pay you 5% a year. That's the coupon. You get 5% a year. Here you go, and bond language that's a coupon, and regular people language is called interest. Then there's maturity that's when I actually give you your principal back. It's when we're all done, you've got all your principal back. And then there's price, and that's what I sell you the contract for in the first place. So every bond has those three components and when I'm thinking about owning a bond I'm thinking about the whole purpose behind it. And I thought it'd be good just to go through a couple of these scenarios so you can kind of get real life numbers about how some of this stuff actually the performance actually shows up in your account.

Speaker 1: 4:52

Yeah, and before you even just jump right into that, for those that might be new, to ditch the suits when you hear Travis say things like investment committee, just as a reminder, travis and I operate a financial planning company with our team where investments are a major component of financial planning. We use ditch the suits as a way to educate, to empower you to make good decisions. But in this episode particularly, we're gonna be talking from our experiences when it comes to fixed income and how we've been leading up to this conversation. So I think these scenarios will be really helpful.

Speaker 1: 5:20

And again we're talking about in episode two we talked about commingling all these contracts and bond mutual funds where you're really not sure what you own. You can't look at any one given time. Travis Moss can't call the bond mutual fund company and say, hey, get rid of these bonds or these bonds, I don't wanna own these. You can't do that. There's no individualization. What you're gonna be talking about is some examples around individual bonds. So if you just own that one-on-one agreement, that one-on-one contract like, how would that work and what are some of these scenarios? So gonna be some numbers and figures. Don't worry, you can watch along with us on YouTube or you can listen in your car, but I think these scenarios will help paint a picture as to how some of these different moving pieces can work within bonds.

Speaker 2: 6:01

So this is literally what happened in 2022. So this is what your mutual fund was doing when you were giving the mutual fund money in general, especially index funds, and people say I don't believe that that's how it was. That's how you lost money in 2022. So it is how it was. If you don't wanna believe it, that's on you. I think you know what I mean it's like. This is how it works.

Speaker 2: 6:27

So imagine this situation You're gonna buy a $1,000 bond that pays 25%. There are $25 per year in interest and it's going to pay you for the next five years and at the end of five years you get $1,000 back. So that means over five years you're gonna get $125, right, $25 of interest a year times $525. So that's essentially 2.5% a year. But what if we paid $1,150? Because there's a way to actually look in a mutual fund and see what the average cost of the bond is, and I remember doing work for clients at the end of 2021 and trying to find bond funds that were selling at discounts and they were all in the double digit premiums everything that I could find anyway. So not all, but, like across the board, most funds were up in the double digits. So if you pay $1,150 for a $1,000 bond, you are paying a 15% premium or a 15% markup. You're overpaying by 15% and you'll do that if you can get lots of extra interest for that.

Speaker 2: 7:39

But in this case let's pretend this bond matures in the five years that we were talking about Same bond it's paying you 25% a year, or $25 a year, I'm sorry, 2.5% a year. So you're gonna get $125 of interest because you get the $25 is based on the $1,000 face value. So you get 2.5% of 1,000, not the 1,150, that's just what you paid for it. But when it matures in five years you only get a thousand bucks back. The guy who originally accepted the loan, who borrowed the money he didn't borrow $1,150, he borrowed a thousand he ain't gonna give you the extra $150 back. They're only gonna give you the $1,000 back. So in five years you get the $1,000 back. But you paid $1,150 for that $1,000 contract. So that's a $150 loss right, goes away, disappears. You didn't get anything for it. So you made $125 in interest payments but you overpaid $150 for the contract. So you actually lost $25. The day you bought that contract you were guaranteed that loss.

Speaker 1: 8:51

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Speaker 1: 9:27

I think that's a huge point, though, is you describe bonds for people that may not understand that. That's how that works. You don't get back at the end of the maturity what you paid for it when you got it from somebody else. You're going to get the face value. So I think, as you go back to that analogy that you used, of the $1,000 of the face value, when that matures, it's $1,000. If you paid $1,150 for it, you don't get $1,150. At the end of the five years, you get the $1,000. So that's how that math works out. So that's the risk You're paying premium to get, maybe, a higher interest, because maybe your interest rate wasn't 2.5%, maybe it was.

Speaker 2: 10:04

Or you're chasing return. You basically pay the premium, because most of what was happening in those bond funds is we're pumping money in the bond fund and the bond fund has to buy bonds and if enough people are saying, buy me more of those bonds, I paid that higher interest last year it forces the price up. There's a finite supply. As big as the bond market is, there's still a finite supply, and so if everybody wants some of it, they just force the price up. It's a supply and demand issue. So then there's another scenario the Silicon Bank scenario. We talked a little bit about this in the last episode. But here's this scenario. Here's how this scenario actually worked. Just put it in layman's terms. You have $110,000 bonds that you consider your emergency savings. So $100 times $1,000 is $100,000, right. And on average on those bonds you get 3% a year on each of those bonds. So you have $100,000 face value of bonds. You get 3% on the face value Every year. You're getting $3,000. These are 10-year bonds. You're going to get $3,000 every year for 10 years, no matter what's going on in the market, and then at the end of 10 years you get $100,000 back. So you're going to get $30,000 over the 10 years. So essentially your return is 30% over 10 years. Right, interest rates go up three times in a 12-month period Sounds familiar and the resale price of those bonds each of those $1,000 bonds drops to $880 per bond. So because interest rates are higher, I can get something that's paying a lot more than 3%. So I'm not going to pay you $1,000 to get you out of this early, steve. I'm only going to give you $880 per bond. So 100 of those is going to be worth $88,000. You still get the 3% on $100,000, though. You still get $3,000 in interest, which is really cool. When they say yields are up, it's making it look like you're making a lot more money because you only paid $88,000 for it and you're making 3% on $100,000. It's going to make it look like you're making a lot more interest. There's a thing called yield to maturity where you take that well, you got interest that you're paying, and then you look at what you're buying it for and you add the adjustment in there and that's your average price. So, anyway, you're still making the $3,000. You're still going to make the $30,000 over the 10 years.

Speaker 2: 12:58

However, an emergency comes up the year after you buy it and you need the money and you're forced to sell the bonds because you have no other choice. And think about what happened in 2022. The stocks were down and the bonds were down, so normally there's an inverse relationship. If bonds are down, stocks are normally doing pretty good. If stocks are down, bonds are doing pretty good.

Speaker 2: 13:18

In this case, everything's down and you can't get a loan. Maybe you lost your job, maybe you got a health issue, maybe tuition. Whatever, the problem is, you got to sell it. So you go and you sell them for $88,000 because that's the resale price. That's all you can get for them, and you have to have your money. Now you don't get the $3,000 per year that was the original terms but you don't own those anymore.

Speaker 2: 13:40

Somebody else bought them for you and somebody else paid you $88,000 for them. So basically, you're out to $27,000 that your contract, your bond, was going to pay you and you're only going to get $88,000 for something you paid $100,000 for. So you lose $12,000. So that's what happens to Silicon Valley Bank. We have to sell it before we want to. We lose the money. We no longer have the interest. We're getting off that money either. And if we took $88,000 and we paid off the debts and everything. And then let's say we got $88,000 new dollars. In the future we may not, if interest rates move, we may not be able to buy the same stuff back. So that can become a real finite loss to us.

Speaker 1: 14:27

Yeah, and I don't know again if this analogy doesn't make sense.

Speaker 1: 14:30

We can move on.

Speaker 1: 14:31

But I think when you talk about home sales, there was a season where interest rates went up on mortgages and so if you got into dire straits and needed to sell your home and we're hoping to make $100,000, but the next person that could purchase it their interest rate is way higher. If they needed to take out a loan, they're going to offer you far less than the $100,000. And if you're desperate and they offer you that $80,000, $8,000 from that home and you need that money, you just got to eat it. And the reason that they may be doing that in that case is because their money, the purchasing power, with that interest rate isn't as much to them, so they can't afford as much. So sometimes if you weren't involved in the Silicon Valley bank situation but you just have a home loan, sometimes that's also an easier analogy. So when you talk about risk, that's a huge part of it. It's supposed to be my safe money, so how come I just took a $12,000 loss? I think that puts in a context of understanding how contracts work.

Speaker 2: 15:45

Well, and think about it like this too, because you could say well, I didn't have $100,000 individual bonds, I had a mutual fund. So if your mutual fund went down 12% in 2022, that's what that is. You know what I mean? And the difference is is it didn't come all the way back, did it? You know? Maybe it came back 5% or 6%, and you're still down 7%. Well, what's the difference? The difference is what was overpaid for those bonds in that portfolio.

Speaker 2: 16:13

That doesn't come back. It shouldn't come back. It shouldn't have been there in the first place. What will come back is after you get enough interest payments over time. So people will sit there and say, well, I lost a bunch of money in my bonds, I need to wait till I make it back. Now. You literally lost money, it's gone. It's not coming back, unless there's some fool out there that repeats the issue.

Speaker 2: 16:32

Right, like stocks can go down 30%, come back 30% in a heartbeat because there's not a termination of it. Right, there's no finite value, but bonds is a finite value. You only have so much time. So if you overpay for a bond by 10% or 15% and you still have 10 years to go, you might have some ups and downs and peaks and valleys in there, but the closer it gets to the maturity or the payout date, the less ups and downs it's going to move, the less chance you're going to have to sell it back and get your money back. And so they become these, like we were talking about liquidity traps. So we have some challenges.

Speaker 2: 17:16

Today, though, and this is what we sometimes don't understand, I think cause and effect very well, and I think if we can be better at causing effect, we can deal with some of the volatility a little bit better. We can if we understand why some of these things are happening and how these mechanisms work. Like if I were to say Steve, we can buy you a bunch of 10 year 4% bonds right now, or a bunch of, you know, 6 year 5% bonds right now, and you go yeah, but I can buy an 8 month, 6 or 7% CD. Why wouldn't I just do that? Well, the issue is is one gives you 7% for 6 months and the other one is giving you a higher interest rate for a longer time period, right? Well, if we understand how the contracts work and are we getting a good deal on the contracts and all the risk associated, we can make better decisions about what we're buying.

Speaker 2: 18:12

And then, when the resale prices are going up and down and all over the place, it's not panicking us. So we're not coming in going oh my gosh, my mutual funds down 12%, sell it. Or, oh my gosh, my mutual funds down 12%. But bonds always come back because if they already matured, if it's too late, the only thing that's coming back is future performance. You know, buying future things at under sticker price, essentially, you know, or at a discount.

Speaker 2: 18:38

But today's challenge, really, I think, is that we you know, if you go back to 2019 and you look at how much money they call the M2 money supply, you look at how much money was in circulation like cash, like these are savings accounts and stuff like that, like how much money was actually out there, and you know financial assets and stuff. It has increased by $5.5 trillion since 2019. That's, I think, somewhere around like a 25% increase or bigger. That might actually be bigger, but it's a gargantuan amount of money that has been printed and put into circulation. Where do you give me your best guess at where you think that money goes?

Speaker 1: 19:26

I would even have a clue.

Speaker 2: 19:28

It's not those darn pesky one percenters. Go someplace else. I mean, they get a piece of it, but it's not all in their pocket. So we have inflation, right, we have this horrible inflationary event that happened over the last couple of years and it caused the bond market to crash, caused the real. You know the real estate market is taking a pounding. You know, I went way up and now it's like struggling, especially commercial real estate. You've got a stock market took a big hit because of inflation, all these things. What is inflation? Inflation is too much money. Hello, we put $5.5 trillion. We've increased the amount of money out there by $5.5 trillion since 2019. We didn't all of a sudden like double our productivity. It's not like all of a sudden. Like you know, you took every single business and carbon copied it and there was a new one there, right, we just created a whole bunch of extra money and we said here you go, world, have the money. And what happens with the money? It ends up in the markets, it ends up in companies, it ends up in debt and ends up in real estate. Look at this the real estate market went nuts, didn't it Like? Residential real estate went crazy, bond market way overpriced. Stock market, you know, crashed. But now it's, like you know, all type back up the all time highs.

Speaker 2: 20:59

If people will say, well, you know it doesn't all go in the market. You know, maybe I saved my money, I put it in the checking account. Well, what do you think? The bank, they would the money, they in that, they gave it to businesses, gave it to people to buy houses. You know they're loaned it, right, they invested it, they put it to work. So it ends up back down into the market.

Speaker 2: 21:21

Basically, as we're talking about it and what you could say well, nope, I live day to day. I don't even have enough money to pay the bills. I spent my money on food. What do you think? Where do you think that money goes? That's profits, right. And what happens when companies charge more for stuff they have? They make more profits. What happens when they make more profits? Right, well, in this case, they have to make more profits because everybody's making more money. There's not enough workers. We got to pay everybody more. So, if we got to pay everybody more, we got to charge more. We're gonna charge more as a percentage. We're gonna make higher net profits, right, all just through. Well, what happens when companies make more money? They give out bonuses, right, their stock prices go up, they do all kinds of stuff with that money. They reinvest the money, they, they, so it all ends up back in the market and so you have all this money chasing around.

Speaker 2: 22:14

The same old, same old investment formulas, even though the the the world is, the financial world, is very, very different now than it was in 2019. Then it was. You know, if you go pre-covid to now, it is dramatically different. There are, for instances that have happened that are completely unique in nature, that are like, you know, the Python swallowing the pig and it's just kind of like Flowing through the system and it's got to get its work its way out. You have these For instances that have happened and we're acting like nope, there's no difference, you know.

Speaker 2: 22:52

And in the context of bonds, people say well, you know, why would anybody bit the bond prices up so much? Because what else are you gonna do? All you've been told is by index funds, by these mutual funds. They're safe, you know. I mean, these people know what they're doing and you're saying I got extra money, I guess. And on top of that, we have an aging demographic. You have baby boomers retiring like crazy and they're gone. I, because I'm older, I should be safer with my money. So they're putting larger and larger allocations, you know, which by itself is like a myth, right, but anyway they're being there. They're putting larger and larger allocations into bond funds. They're jacking the price because they're putting that money into the bond funds. The bonds have to go buy bonds. It jacks the price of the bonds up because there's a limited supply and All that's gonna do is increase volatility.

Speaker 1: 23:45

Well, and I thought that that was a great point that you've shared a few times now that if the If the language of the bond mutual fund is that they have to continue to buy more bonds, then you're, then you're really kind of throwing everything into the wind because they're not gonna hold money, they're not gonna hold off, they're not gonna wait for a better time, it's their prerogative to go buy it. So you know, you build in all these things that you talk about some of the challenges. I mean, are there any other challenges that you think are, you know, really impacting what's going on with bonds and what to do Is an investor?

Speaker 2: 24:16

right, we just got to my. No, I didn't notice. 5.5 trillion dollars is actually 33% increase since 2019. I mean, that is a big jump think about that.

Speaker 2: 24:26

We we haven't even felt the whole impact of that 5.5. I mean this this is when things seem out of whack economically. That's why there's so much dry powder there that's out, that's floating around. And when we look at what that's gonna and I'll tie this back to bonds, I promise when we look at what inflation does, you know, that's one thing. But what about? Now?

Speaker 2: 24:52

You have some major changing like change agents. You have this battle between returning to work Like and working from home, right, and that's a huge issue for the cities. So you've got corporate real estate, which interest rates tend to have a negative impact on corporate real estate. But you've got corporate real estate now where you have a high interest rates and you have workers that don't want to come back to work and and certain corporations who figured out they can have displaced Workforces across the country who don't necessarily need those footprints. So you're gonna have change happen in those markets and that money's moving around right, like like. Money is like water it's gonna fill in. You know the cracks up to the top and then it'll fill in. You know the the next lowest point and it just kind of it just keeps filling in and so Money's gonna figure out where to go. And if money starts leaving corporate real estate because of a changing demographic there, where does it go? Right? So, and and and. There's a limited supply of everything. So Inflation and some of these concerns are real. Artificial intelligence and the impact on on jobs, you know, the the more that there's layoffs or the more that you know we can optimize things because of artificial intelligence. Well, that impacts Employment. Well, what if it goes the other way? What if it creates employment opportunities? Right, or what if it, you know, frees up or changes demand for labor in certain ways? What does that do and how does and how does that drive? You know the way that money is changing hands out there.

Speaker 2: 26:40

Interest rates you know, people talk about interest rates and that's kind of the big driver behind a lot of this is this irrational fear over interest rates. If you talk to somebody in their 40s or 50s or even 60s or anybody older than that, really, but you start with the kind of mid 40s and up, they'll tell you that they remember when we're interest rates right now. This was pretty darn reasonable. This was a kind of a good place to be. They don't have to go down, they could stay here. You know why would interest rates stay here? Well, you know, the governments don't have to fund the pension plans quite as much. That's nice, because the way that those things are calculated. Why else would they stay up like this? Well, because you, you really want interest rates at a reasonable level.

Speaker 2: 27:27

So if you do have a recession, you can stimulate by dropping interest rates. Well, just so happens, you got five point five trillion dollars floating around that needs to be sucked back out of the economy, and Higher interest rates is one of the ways you suck some of that money back out, right? So there's there's a lot of reasons why interest rates might stay up or or possibly even go up, and I think it could be a very big challenge for interest rates to actually go down Right now. You know, because you've got a lot of money floating around there to still got to figure out where to go.

Speaker 2: 27:58

So it we've got some really interesting things that if you were negotiating for contracts that are very sensitive to interest rates and Very sensitive to what other people are doing, would you take a basket of them that you really don't know what any of them are, or would you be really Meticulous and would you kind of comb through and pick out just the really good ones, and if you couldn't find a good contract, would you still buy?

Speaker 2: 28:30

Or would you say you know what, even though I could make four or five percent on that one, you know, because of the coupon or something like that, I think over paying by five, ten percent. That's kind of a fool's game. I'm gonna sit this one out. If you actually understood each contract that you were buying, it seems like you could make a much. You could make much, much better decisions and you could number one, you could control some of this risk. You could have a lot less anxiety about what you're doing. But you could also, every time you buy something, know that you're going to make a certain amount of money on it.

Speaker 1: 29:09

Yeah, I think we've been bold enough in our time together that you know when we talked about things like crypto, we were pretty passionate. That you know, if you want to be in a Ponzi scheme, understand what you're getting into and feel free to ride this wave out with bonds. We're not calling bonds a Ponzi scheme. It's a real asset class that people invested.

Speaker 1: 29:26

It's a good thing, it's just more of how people go about doing it, which is where people have gotten in trouble by just wanting to own a fixed income, safe investment and throwing their money into a bond fund that they don't really understand the contracts that make it up and they get thrown around like a 2022 and they're left saying, guys, what the heck? Well, we've tried to do in this last episode to say, hey, if you're going to own bonds, understand why you want to own them and then look at the individual past. Like you said, you can meticulously look at these contracts and how they're arranged. So I think, travis, as we kind of you know, bring this one home. Is there anything else as to why someone might want to own bonds that you want to leave people with?

Speaker 2: 30:04

Well, I just want to leave more from a positivity standpoint. I think that right now, any any time where you can buy individual bonds, I think that there's normally opportunity, but it's it's about how you're able to sift through what's available out there. And so the first thing that again to remind people to go back to why do you want to own bonds in the first place? If you want high returns that are going to cause volatility, then go buy stocks, don't buy bonds. Right? If you want safety and predictability, then you can't just buy something that it's on its faces in the safety and predictable category, because that's just a category, there's all kinds of subcategories within it and and plus, there's still a price that you have to pay. So I think that you have to actually look within that category and say what am I actually buying? You really need to understand what you're buying because, again, different than a stock where stock you can, you can just hold that thing and and you know, probably make your money back over time a bond can actually lock you into a loss if you buy it wrong. And it's kind of like the same reason that you would hire somebody to do a home inspection when you buy a house. Why do you hire somebody to do a home inspection? Because you want to make sure you're not buying a lemon, right? You want to make sure that the second you buy it, the furnace doesn't die and the Sceptic doesn't back up and the stairs don't fall down and the electricity doesn't burn the house down all these other issues, right? So you have to do a home inspection because you want to make sure that you're not Just going to financially destroy yourselves. Shouldn't we be doing like our inspections on the mutual funds and stuff that we're buying? Right? And and if we're gonna do that much work, why not? Why not spend some time and learn how to read these individual contracts and try to take, you know? I mean and again I Don't think individual investors. I don't think it's a safe thing for them to run out and say I'm gonna buy all my own individual stocks and all my own individual mutual funds.

Speaker 2: 32:07

I think this is why a lot of famous investors like Warren Buffett and stuff will say, well, go buy the index. And the reason why they're saying that is because you have to have some competency in what you're actually doing, right. This isn't a recon warrior job. This is an actual thing that you have to be dedicated to, because you have to understand how it works, because you can't get yourself in trouble even when you think you're doing the right thing. But if you're working with an advisor, you know, this is kind of like one of those things where everybody says what's an advisor worth? Well, what are you getting? You know, what are you paying for? Are you paying for them to throw you in the same junk you can buy yourself, with the same risk you could deal with yourself. You know, if you're working with somebody, really what I would be saying, as you know, how do I lock in and have more predictability and more safety and Know that when I buy one of these things, I'm actually gonna make money?

Speaker 1: 32:59

and bring a home full circle. It's. It's not just that. Bonds are a tool that helps you get to the eventual point of where I think you're trying to go, which is to have the freedom to use your money the way you want to. You don't want to be buying junk that could derail your ability to go do the things you want to do with your spouse or your family because you took a loss like we described, because you Didn't understand how something worked. So again, you got to use investments as a way to fuel and really add to the bottom line Of what you're doing, just kind of make sure you understand all the moving parts and how they work.

Speaker 1: 33:27

So if you have any questions at all about anything that Travis and I have talked about, don't hesitate to reach out to us. You can visit ditch the suits calm that stitch the suits calm. There's a contact us bus and button. Send us a message. We'd love to hear from you. We love hearing from listeners, but again, we hope that this series on bonds and fix income Expires you to go out and live your best life, because you only got one shot at this thing. So we appreciate you stopping by ditch the suits.