Power Up Wealth podcast – Episode 85 – Changing World – Focus on Unchanging Truths
Sharla Jessop 0:00
The world around us is ever changing. How can anyone keep up? I’m Sharla Jessop, President of Smedley Financial and today, my friend and colleague James Derrick, will shed some light on where we should focus.
Welcome to the SFS Power Up Wealth podcast where we provide impactful insight and expert opinions on timeless financial principles and timely investment topics, preparing you to make smarter decisions with your money.
James, thanks for joining me.
James Derrick 0:46
Happy to be here.
Sharla Jessop 0:47
James is the Chief Investment Strategist at Smedley Financial, and he holds a CFA designation and also an MBA. James, you have written an article in Money Moxie that was pretty interesting to me, and it talked about the changing world and focusing on unchanging truths. What do you mean by unchanging truths?
James Derrick 1:05
Well, we tend to get caught up on what is changing, and the challenge to that is we really don’t know what the future is going to bring, and sometimes it can be counterproductive to spend either our energy or our mental energy on these uncertainties that we don’t know about. You know, one example that that I got from the book, Same As Ever, which I highly recommend, talks about unemployment going into the 1930s. You know, in a survey of Americans, unemployment was the 18th biggest concern in the year 1930. The 18th. I mean, like that is so far down the list, like nobody has any idea what the future is going to bring. By 1931 unemployment was the fourth biggest concern. So we’re getting there. But, I mean, this is headed into the Great Depression. It should have been number one, but we just don’t know what’s coming. We don’t know what 2025 is going to be like. We don’t know what 2026 will be like. We don’t know, and spending too much time worrying about it is not going to be helpful.
Sharla Jessop 2:06
Sounds like it can easily sidetrack us from maybe what, what we should be thinking about or focusing on.
James Derrick 2:12
Yeah, and it’s not just you and me. I mean, it’s, it’s everybody listening to our podcast today, and it’s other people. Jeff Bezos often gets asked he’s, you know, he’s the founder of Amazon. And people think, well, he’s, he’s wealthy, he’s successful. He must have some insights into the future. And so people say, hey, you know Jeff, what, what’s the future going to be like? And he doesn’t know. He replies something along the lines of, I don’t know, but I know people are gonna want low prices, and I think it just makes so much sense, like, focus on what you do know.
Sharla Jessop 2:46
It does make sense, but in reality, it seems a little bit harder to manage, because I think of myself. I won’t put words into anybody else’s mouth, but it’s easy to get drug into whatever the hype of the day is. You know, whatever is happening, whether it’s economic market in the world, it’s easy to get focused on that and become very short sighted. So how do you how do you know when you’re doing that and how to avoid it?
James Derrick 3:10
Well, I think it’s a lot of fun to get pulled into these things, you know? I mean, that’s part of what makes life interesting. And so there’s nothing wrong with that. I think it’s just a good reminder, though, to all of us like, think about what matters most to you, and make sure that is also a big focus in your life. You know, I think it leads to more peace. I think it leads to more happiness. I think it’s going to lead to more success too, financially. So in the article I wrote, I mean, I put several ideas of universal truths when it comes to money that would be helpful.
Sharla Jessop 3:40
I wanted to share some of those with us, because I I just think back of some of the things that have happened in maybe the last 5-10, years that have been pretty concerning, but you know, turned out to be that if you were focusing long-term or on other things, they didn’t really drag you down. For instance, I remember sitting with and looking at the computer monitor together and seeing during 2020 and watching the number of COVID cases rise.
James Derrick 4:06
That was just unbelievable.
Sharla Jessop 4:07
And, you know, we were blindside. I mean, it was, that was our full focus at that point in time. But it wasn’t the most important thing that may have been going on.
James Derrick 4:16
Yeah. I mean, it seemed very important, but looking back, you know, we got through it. The first thing that I talk about in the article is knowing where you want to go. And this is, you know, my own take on the Alice in Wonderland story, where she is trying to figure out where to go, she runs into the Cheshire Cat, and she asks which path to take. And I can only paraphrase here, but the cat replies, Well, where do you want to go? And she says, well, I don’t know. And the cat says, well, then it doesn’t matter what path you take. And so keeping in mind what is important to you, and having your goals in mind is the first thing you have to do. You have to know, and money plays a role in that too, and money means something different to everybody. But I wanted to point out to everyone that in some circles, money is seen as a bad thing, and that just doesn’t make sense to me. People can do a lot of good with their money, and so it’s good to realize what money means to you. It might be independence, it might be power, it might be charitable giving. It could be providing to those who rely on you. I mean, it can do all kinds of different things, and it’s good to realize which things make money important to you and then use it for good.
Sharla Jessop 5:25
I like that, especially in when we’re doing planning and things like that. We talk a lot about money personalities and, you know, understanding what your money means to you really is the basis of your financial plan and everything you do in preparing for the future.
James Derrick 5:42
And when it comes to spending your money, as they say, you can only spend it once. And I mean, this is something that I think that we all need to remind ourselves of periodically. I know I’m always trying to talk about stuff like this with my children. You spend it once. You can’t save what you’ve already spent, but if you save it, you can always spend it later. So make.
Sharla Jessop 6:01
Great advice.
James Derrick 6:02
Make it a priority. Always save first. Albert Einstein is famous for saying that compound interest is the eighth wonder of the world. We’ve got a this famous saying too. He who understands interest earns it, and he who doesn’t pays it. And I think that’s really true and a valuable thing to recall, because interest rates are much higher now. So if you’re on the one end, you’re paying a lot. If you’re on the other end, you’re receiving more. Interest rates haven’t been this high for 25 years, and that means that those who understand interest receive it, those who don’t pay it. That’s always been true, but it’s more true now than ever.
Sharla Jessop 6:37
Yeah, I can see that, because we know a lot of people who, when interest rates were very low, really burdened themselves with debt. That was the theory is, it’s so cheap, why wouldn’t I borrow? But the reality is, borrowing that money has now put them, a lot of people, in a really tight situation that’s hard to get out of.
James Derrick 6:56
Especially when it’s linked to credit cards, because those rates are flexible. Typically they go up as interest rates go up, and they’re over 20% right now, so carrying a balance on the credit card from month to month is extremely painful, but you can get a lot more in savings, and then you used to be able to get so it’s been nice.
Sharla Jessop 7:18
Very nice, I think for a lot of people who have short term savings, where they need to keep money for emergency funds or plan spending, it’s nice to get a little bit extra for the money you’re saving.
James Derrick 7:28
Absolutely. We talk about minimizing taxes. Arthur Godfrey said, “I’m proud to be paying taxes to the United States. The only thing is, I could be just as proud for half the money.” I think that rings true for all of us. And the final piece of advice I gave here was create experiences and build friendships.
Sharla Jessop 7:46
Things that last over time.
James Derrick 7:48
Yeah, make it a priority.
Sharla Jessop 7:49
Regardless of what’s happening in the short-term around you in the world, the experiences in those relationships are what you carry on long-term.
James Derrick 7:57
Absolutely and so even though, as financial advisors, we’re always talking about save money and invest first, and now is always a good time to invest. And all of those things are true. It does make sense to have some balance in your life. And building relationships and creating experiences with those you love is critically important, because when you look back, that’s what you’re going to want to remember.
Sharla Jessop 8:16
Great advice.
James Derrick 8:18
One more thing that I want to mention is the Snickers bar. Back in 2009 and and I don’t know if people listening, remember 2008, 2009, but this has been called the Great Recession. So not the Great Depression, but the Great Recession. And a lot of younger people won’t know about it, or won’t know what it feels like to live in a time that was pretty rough, and Warren Buffett was driving through the streets of Omaha with a friend of his, and at the time, I think he’s was the second richest person in the world, and he’s still up there, but not that high anymore. And he’s driving through Omaha, and his friend says, Warren, how will we ever recover from this? I mean, it just felt so permanently damaged. The economy felt permanently damaged. And and Buffett says, you know what candy bar was the best selling in the 1960s? Friend says, no. Snickers. And he says, you know what the top selling candy bar is now? And he says, Snickers! And I looked it up in 2024 and the number one selling candy bar worldwide was Snickers.
Sharla Jessop 9:23
Amazing!
James Derrick 9:24
Amazing, right? So when you think about whether you’re thinking about investing or anything else going on in your life, like you’re gonna have truths like Snickers that you can count on. Now, I don’t know if 25-50 years from now, it’ll still be Snickers, but I’m pretty sure that in 2025 it’ll be the Snickers at the top of the list. And so there’s things like that in our lives, and when we have them, they anchor us and help us steer our lives and focus on what’s most important.
Sharla Jessop 9:54
I think that’s really important. When you say anchor us, focus on things that are important, because there’s going to be a lot of change throughout your life. Between the time you’re young and you know, starting a family, raising family, through your career years and into retirement, there’s gonna be so much change in, you know, what areas of the market are doing the best, or what areas of the economy, or housing prices and interest rates, long-term focus really makes a difference?
James Derrick 10:20
Yeah, I think about this stuff all the time as an investor, because I don’t know what’s going to happen tomorrow, and I don’t know how the stock market is going to react to what is going to happen tomorrow. And sometimes you get news that you would think is positive, and then the market reacts opposite of what you might think. It happens all the time. And so just by sticking with a financial plan, sticking with a system that I am running that’s very helpful to me. It helps me maneuver the changing world.
Sharla Jessop 10:49
James, thanks for sharing that great information, how we can stay focused and not get caught up in what’s going on in the short-term. I’m sure it’ll be helpful to all of our listeners.
Shane Thomas 11:02
Thank you for joining the Power Up Wealth podcast. Smedley Financial is located at 102 S 200 E Ste 100 in Salt Lake City, UT 84111. Call us today at 800-748-4788. You can also find us on the web at Smedleyfinancial.com, Facebook, Instagram, Twitter, and LinkedIn. The views expressed are Smedley Financials and should not be construed directly or indirectly as an offer to buy or sell any securities or services mentioned herein. Investing is subject to risks, including loss of principal invested. Past performance is not a guarantee of future results. No strategy can assure a profit nor protect against loss. Please note that individual situations can vary. Therefore, the information should only be relied upon when coordinated with individual professional advice. Securities offered through Osaic Wealth, Inc., member FINRA/SIPC. Investment advisory services offered through Smedley Financial Services, Inc.® Osaic Wealth is separately owned, and other entities and/or marketing names, products, or services referenced here are independent of Osaic Wealth.
