Sea: 3- Ep- #14 - "The 2 and 20 Rule Of Investing" (Shocking Costs For Money Management)

0:00Welcome back season three episode 14 of not me but you podcast I want to talk today about the two and 20 rules you know about the two and 20 rule of investing if you do and you got this far you may want to skip this episode if not you want to know more stick around thank you for all the listens and all the downloads I do appreciate it I wanted to say that if you're interested you can follow me on the X platform some of you reach out to me and say hey how do we contact you you know there is a comment section or a comment mechanism that is linked directly to the podcast but if you want to follow me online on a on a social media platform or message me you can follow me on X you know formally Twitter you can follow me on X at WAPA today

1:04or if you don't like X so you don't have an X account and you still want to message me you can email me at WAPA today at gmail.com and yes I do offer one on one coaching because some of you've asked about that some of you've taken advantage of that and I offer a free 20 minute zoom call so we can just get to meet each other and I can basically find out from you what is it you want to learn more about and to see if it makes sense for us to work together and then after that call or during that call I can discuss rates with you and my rates are very reasonable compared to most online people offering coaching because I look at the competition and I log on and I go through there you know free calls and their sales pitches to find out how much they're actually charging and a

2:09lot of them are asking for $4,000 up front and my rates are nowhere even in that universe so if you're interested in that one-on-one coaching true one-on-one coaching not putting you in a private Facebook group with a hundred or two hundred other people and calling it you know coaching that's what marketers do that's not what true instructors and teachers do it's not what true coaches do remember in in learning in the learning ratio there's no better ratio than one teacher and one you know student or learner I don't think of US students I think of US fellow learners learning in life right alongside of me but yeah I do know some things and I can coach one-on-one or small groups what is a small group no more than three people because that way I can give everyone in the small group individual attention okay all right enough about that this podcast has no sponsors I picked the topics I talk about whatever I want I

3:10talk about what I choose nobody's paying me to mention them so zero sponsors okay and this is basically always free there's no super secret paywall that I force you to fork over money in order to you know learn the really valuable information the coaching is really just a lot of reinforcing or teaching you more in depth about the things we talk about for free on the free version of this podcast and that's how that works okay so hopefully that clarifies it for you all right two and twenty rule of investing before we jump into that I'll just say some basic premises that you've heard me say if you're new to the podcast this is maybe new for you if you're not it's gonna be a review but it's a quick one nothing's more important in life than cash flow why because your whole life revolves around cash flow well that's true up except for one thing there might be one thing that's more about important than cash flow and that's

4:12your health okay so or maybe they're equally important your health and cash flow right because if you can create cash flow in your monthly budget you weekly monthly budget you can basically retire and walk away from your nine to five job you can have total freedom and get your time back right your time jimals value asset not really your money your 401k your home your IRA's your time jimals value asset and when we go to a job or even if you work from home but you're working a set schedule say 8 a.m. to 5 p.m. you're giving up your time during that 8 a.m. to 5 p.m. time slot why because you're dedicating your time you're selling your time access to your time and your ability to someone else right another company or whoever pays your paycheck or if you're in business for yourself whoever your clients are you're selling time okay you're giving up access to your time in your time is your most valuable asset and to me total freedom is having the ability to get up every day when you choose do whatever you

5:18want to do each day because you decide you want to do it or don't do it you don't have to ask permission to go on vacation you go on vacation whenever you want and how do you get to that point well you have to invest right so what are some more basic premises that this podcast is based upon keep stacking Bitcoin save your money quote unquote and Bitcoin why because there's a finite supply Bitcoin will even though it the prices down right now 68,000 coin or whatever the price is right now and as we coming up on the end of February 2026 it's going to be 300,000 a coin at some point I don't know when maybe three years from now five years from now the point is not for me to predict accurately the price of Bitcoin three years from now five years from now the point is you need to stack slices of it consistently and build this habit into your you know weekly or monthly routine where you just keep buying

6:19slices of it and kind of like tucking it away because you know it's a long-term growth asset and the value over time will rise okay we have heard quotes as you've heard me say them in the past from Charlie Munger who was a guy who's he's a really old guy right now I don't even know if he's still alive honestly he maybe I hope he is he used to invest right alongside with Warren Buffett and you know Warren Buffett retired probably about a year ago so this guy you know you might you might not know Charlie Munger's name but you certainly probably have heard of Warren Buffett before Charlie Munger said the really big wealth you know the big money it's not made in buying and selling you know these I think of like day traders or peace swing traders or you know yeah I'm not saying there's anything wrong with that if that's your thing but that's not how you make really big wealth you accumulate wealth with patience over time okay just have patience that's basically what Charlie Munger said and it's easy to say you have

7:22patience but it's hard to do in real life and you'll be tempted to sell when you know your profit and when you're in profit but sometimes here's another key phrase you know let your winners ride like you have really winning stocks if you're doing single-risk stocks and you're investing for growth which is basically what Bitcoin is it's a growth play over time with patience if you're doing that I would pick a handful of those stocks I wouldn't pick more than five stocks per se to just invest in over time and I'd have the bulk of my money in income producing assets why because you want cash flow you want income and guess what you can do with cash flow answer anything you want that's what makes cash flow so valuable here's another key premise that this podcast is based upon and we're almost done going through the key premises premises the government is not coming to save you right hopefully you're not waiting for

8:23to hit retirement so you can just live on Social Security alone it's going to be very challenging for you to just live on Social Security alone okay so instead learn how to invest you know this is not financial advice on this podcast but I encourage everyone to do their own research right I am not a financial planner but do your own research if you have a smartphone with the internet connection you got all the answers you could ever want to all the questions you could ever have you have them at your fingertips via your smartphone so do your own research and learn to be your own money manager and let's now talk about the two and 20 rule of investing it refers to percentages so it's 2% and 20% okay what do they mean when you deal with money managers okay when you deal with financial planners who are investing your money for you you are paying to types of

9:23fees the 2% is a standard management fee and what have I shared with you previously in several episodes before this one about money managers and financial planners what have I shared with you I've shared with you they money managers and financial planners make the bulk of their personal income don't gloss over that too quickly let this sink in they make the bulk of their personal income from charging their clients fees not from investing in the very things that they will advise you and me to invest in let that sink into your brain let it steep like a teabag steeps and hot water right simmer on that thought ponder that fact and then ask yourself if using a money manager which I don't care if you do you don't that's your personal decision but I want you to make an informed decision ask yourself if using a money manager an alleged

10:25professional is better than you managing your money yourself so the 2 and 20 rule what does the 2% is the management fee so what's the 20% refer to well the 2% you pay right off the top you pay 2% of your total portfolios value as the management fee and that's before the money manager financial planner makes you any money you just pay that fee automatically okay then we get to the 20% which is their not management fee it's the money manager financial planners performance fee okay and the performance fee means they are going to collect 20% of any profits that they make you okay so what that means is the

11:2620% that they're going to take as the performance fee will be 20% of the profits that they make you on your money the 20% performance fee has several other names it is also known as the hurdle rate it it is also known as the incentive fee and it can sometimes be called carried interest and these performance fees are usually linked to something called a high water mark okay so what does this all mean it means that in addition to the management fee of 2% that's the money that the money manager or financial planner earns no matter how your portfolio performs good better in the middle they can also take up to 20% of the profits they earn for you so if that's the case you are paying a total percentage in fees of 22% so that's what you're giving up 22

12:31percent ROI 22 percent return on investment for the money manager by turning your portfolio over to them to manage your assets under management to the alleged professionals right who are guaranteeing you what exactly well I don't know what they're guaranteeing you because what they guarantee you is the answer to that question depends on how the management contract is structured and worded so you have to pay close attention to that right all right so does that what I just shared with you give you some reason to pause and ponder for those of you that currently have money sitting with money managers how are they doing in terms of their performance on your money okay are you earning at least 14 percent a year or higher consistently every single year because you should be because number one you need to be earning at least 14% or higher to keep

13:33pace with the true rate of inflation not the reported rate of inflation that you may see online or in the news so let's talk about if you're willing to try and manage your own money you're your own money manager what's a simple approach to doing that well you could likely one we already talked about one thing you could possibly do you could buy a whole Bitcoin a second thing you could do is you can invest in some ETFs like SPYI and QQQI which earned which would earn you 12% to 14% a year on average SPYI's linked to the SP500 indexing QQQI's linked to the tech heavy NASDAQ you could stack some shares of a closed-end fund called CLM which is a cornerstone fund that is that's gonna earn you about 17 to 18% a year on average if you simply bought and held the shares

14:36but CLM has a special feature that you may choose to take advantage of or not totally up to you you can also participate in what's called the annual rights offering each year it's typically done in the spring March April May so it's coming up soon since we're almost at the end of February 2026 and by participating in the annual rights offering you can boost those returns from 17 to 18% to a much higher ROI and you do that by participating in the annual rights offering each year each year where you get additional shares of CLM at a discount and as we get closer to the actual annual rights offering when CLM announces it I'll do a special episode just on how to take advantage of that and how I play that okay the annual rights offering for CLM and there's a second cornerstone fund called CRF so you may want to do some research into

15:37both of those let's talk about AI growth plays all right remember that there are two basic reasons to invest right either for growth or for income we talk about these things repeatedly right you we all need income weekly a monthly cash flow so investors and financial experts are realizing right now that hardware companies hardware not software hardware companies will do well in AI pivot AI revolution so obvious growth obvious growth plays maybe in video or you may feel that the stock price of a video is already way too high and you want it you don't want to invest now because the price may come down but there's also some other companies to consider in the semi conductor category and they are micron M.R. M. I. C. R. O. N. ticker symbol M. U. M. U. but microns four hundred twenty nine dollars per share right now or you could take a look at broad calm ticker symbol A. V. is Invictor G. O. Go. So A. V. G. O. but

16:43broad calm share price is three hundred thirty three dollars per share right now or you could take a look at AMD who's another chip maker similar to Nvidia and ironically AMD's company ticker symbol is also AMD kind of like New York New York one price of our one share of AMD stock will cost you two hundred thirteen dollars today and Qualcomm is the last one Q. A. U. L. Qualcomm ticker symbol Q. C. O. M. like a Mary Qualcomm one hundred forty five dollars a share so there's some other potential A. I. plays but and A. I. is all the rage now as we are closing in on the end of February twenty twenty six here's a cool website and I like to share cool websites with you when I come across them from time to time or when I think of it you can check out this website called Macro Trends.net Macro Trends with S Macro Trends.net and you can look at

17:48things like historical price charts of the Dow Jones price history the S&P five hundred index price history the Nasdaq index price history the trend by the way on all of these markets Dow Jones S&P five hundred Nasdaq all these markets right all these indexes the trend on the on the charts is what we call up and to the right just diagonal line up and to the right and that's a good thing that shows historically over time you can make money in the stock market but of course you have to have the P word patience to hold the assets long enough to capture big gains so this type of approach to investing would be the polar opposite having patience and holding the shares over time would be the polar opposite of day trading right and because in day trading you're trying to capture some gains today by buying and selling or swing trading you're trying to capture some gains by buying and selling maybe in the next 30 days okay another

18:51cool thing about this Macro Trends.net website is you can see graphs and trends of mortgage interest rates 30-year treasury yields okay this may end up being a short episode today or on the shorter side of things I wanted to touch upon maybe one other news item I was at Yahoo Finance two days ago and there's this article about workers eagerly awaiting big pay hikes after their stellar performance reviews are in for a rude awakening instead of rewarding employees based on merit many bosses will be dishing out flat and low quote-unquote peanut butter raises spread to all staffers in 2026 wearingly it's a trend that last that last emerged during a perilous economic time in our history the

19:55title of the article says nearly half of companies are turning to poor quote-unquote peanut butter raises following the same pattern of the 2008 recession and experts says it could take years to recover so I don't know if that's inaccurate prediction but I will say do you want to give yourself a raise or do you want to have it feel in your personal budget like you were just given a decent raise pay your high interest credit cards off then reallocate that money to investing pay off your car loans you know accelerate them and pay them off early if your car payment is 400 for 5,500 600 a month if all the sudden you have that much cash free floating around in your but monthly budget it's going to feel like you got a raise okay so if you want to give

20:56yourself a raise meaning give yourself a raise through investing and through budgeting and through smart finances because remember what I said in the beginning of this episode the government is not coming to save you or me to something you have to you know put the time in on your own do the work on your own you can do this you can learn how to do this I saw this really cool post on ex lately and it had the acronym key they're the word key K-E-Y but then they had they made words out of each letter in the word key the K they made into the word keep and the E in the word key they made into the word educating and the Y in the word key they made into the word yourself so keep educating yourself that's the key see that's pretty cool I like those quick little things like that and how do you keep educating yourself listen to this podcast listen to other podcasts watch YouTube videos you know do your

21:56own searches online start your own brokerage account have the three accounts that we talk about that you should probably everyone should have regular brokerage account traditional IRA Roth IRA those are the three accounts and then start buying some dividend producing assets because what do wealthy people do with money new money when they get it in their budget they go by assets what do poor people do when they get new money in their budget they go by things so you decide you want to think and behave the way wealthy people do then you have to buy assets you have to be looking to add to your pile of assets always buying assets instead of doing what poor people do always looking to buy some new thing get interested in some new hobby some new collections some I don't know there's plenty of ways in life to you know fill your time and entertain yourself but you're spending money and the real question you have to ask yourself

23:00is can I be afford can I really truly afford to spend this money because if you can't you got to get yourself maybe on a strict budget and that no one hates that no one likes that word budget everyone hates being on a budget for the most part but once you realize the budget is like the key the tool the pathway to wealth if you stay on a budget for two years and then your position yourself for wealth isn't that worth it to be on a budget force yourself to go through that pain and discipline of being on a budget for two years I'd say it is all right so to recap what is what's going on in my portfolios you know markets have been beat down lately a lot of my positions that are risky are down but you know things like OT ULTY it's still holding at 34 35 dollars a share still paying me weekly dividends misty still paying me weekly dividends if you just google the word yield max and go look at the yield max ETFs I'm not endorsing them

24:00again no sponsors on this podcast nobody pays me to mention any particular fund or website or youtube channel I just choose to do that on my own but if you just google yield max funds but there's also I don't know bitwise funds there's any any OS and the OS funds I mean there's plenty of them okay why don't you go take a look at if you're just starting investing go look at msty which is misty ULTY which is ulti go look at QDTI that's Q David Thomas Edward I'm giving you the ticker symbols you can go to the free website stock analysis dot com stock analysis dot com stock analysis dot com type in these ticker symbols like QDTE ULTY and STY hit the dividend tab okay and check out the things that I taught you to look at when I'm picking investments and if you didn't hear that episode it was probably in the last five episodes maybe the last three where in the title it says I go step by step and I teach you how to you know how how I pick

25:04investments you don't have to do it that way you maybe do it differently and that's fine too but what the way I do it has worked for me certainly so I just share my results and it's up to you to do your own research and decide for yourself okay but you go invest in things like that now these things that I just mentioned ICOI ICOI YMAX YMAX these things are risky okay TSYY risky that's a Tesla one right what's less risky the things are already mentioned like SPYI QQQI go look those up at stock analysis dot com look up CLM CLM cornerstone CRF another cornerstone fund go look those up at stock analysis dot com okay free website uh cost you nothing but a little bit of time who knows what you might learn that's the key to life keep educating yourself

26:09and have the courage to be your own money manager don't buy this into this theory did well I don't know anything about investing so I better just I'll better off turn my money over to the professionals going to quote and the professionals are not making the bulk of the personal income by investing in stuff they're making it through charging their clients fees okay so I hope this helps you and then if you want some single stocks to maybe buy and hold for the next five to eight years buy fractional shares of Tesla that means you don't have to buy a whole share a whole share is like four hundred something dollars right now but you can buy fractional shares of stocks little slices you can do that on Robinhood that's one of the platforms with there's other platforms I don't know what platform you use if you want to leave a comment send me a message send me a message uh on x at waypa today tell me what training platform you like

27:11to use or email me at waypa today at gmail.com and tell me what training platform you like to use okay thank you for spending some of your most valuable asset with me yes you're time today and as we wrap up I will say most importantly have courage today to pick one thing and work on your dreams we will talk again soon you

28:34You