Paul Earnest

When I was in college, I was a business major and I got involved in the stock market because there was a free promotion from Robin Hood and a lot of people started and Just snowballed from there.

I found Jeremy’s channel and started watching his content every once in a while. What I liked about it is that he is going in-depth on certain topics. I am looking more at the educational side of his content.

I kind of recently say Thanksgiving ish time, I switched over from Robin Hood to fidelity because that’s been great. That’s a little too I guess that’s probably the best thing you can do this year to explain their history.

So, Yeah. So that that’s nice. And I, I had a separate advisor for my role and I moved that family too. So it’s just everything all in one place has it’s been good. Are you self directing the. So that the IRA, I just right now, I just have a target fund, ok?

OK, and do you ever feel like let me probably start off, you know, help. How did you even get into investing? What got you into the whole investing stuff? Well, I guess it kind of goes back to when I was in high school. I mean, sometimes you get those weird ads sometimes and I watch them occasionally. Those like hour long, like videos or whatever. Yeah and it was just interesting.

I didn’t know what I was doing, so I didn’t really do anything back then. Yeah, but once I got to college, I was a business major, so I took something like finance classes and some people who were I guess already involved and.

I mean, the reason I got involved because there was that I mean, the free promotion from Robin hood, I think it’s gotten a lot of people just started so that that kind of got me started and. I guess just snowballed from there.

I see, and you feel like you feel like that’s something that you want to continue doing, like long term to create that wealth, because I know there’s a lot of venues for wealth like the stock market.

It’s like you definitely need the confidence to be able to do it for a long time. Yeah, and I. I one, I’m definitely maxing out my Roth every year regardless. I mean, as long as I can, but that that’s my first step really.

I’m very curious about the role of 6000, 6,000. Yeah, it’s similar to hear something of that nature here. That’s that’s good to hear. So you’re using your resources to be able to do that. It’s really cool.

And then I’m trying to put in a little bit extra into my other account, but. Kind of holding back because I’m also saving for a house at the same time, so it’s kind of like. Because I’m still living at home, yeah, yeah, and I’m assuming you’re trying to use the market, hopefully, to kind of propel you to be able to kind of.

Get that home faster, maybe you it pay it off a little bit faster, maybe. Yeah, and I do want to I guess. Separate from, I guess, the stocks, I don’t get into real estate and maybe like I get rental properties, so.

Yeah, yeah, no, that’s definitely like that, you at least have your know, you have your head on your shoulders, which is like incredible, especially nowadays, like just people are just playing around more than anything with stocks, which, you know, I don’t advise anyone to, but.

Yeah, like so like how so when you started, like, did you were you following the financial education channel by any chance and how did you get even started with it? So when I started, I want to say it was December 20 ’17.

So I didn’t I didn’t see this channel at that point. I think actually, when I first started, I still have I have a Motley fool subscription, so that that kind of I bought that at first, just I guess for myself, because I guess if I was paying that little bit, even if it was just like 100 or 200 dollars, it forced me to actually use the resources and actually learn.

So that’s kind of what. Like, I force myself to know what I was going to be doing and actually utilize it, otherwise I was just wasting money. Yeah, I know, smart man. You put yourself in a place of accountability, so then you kind of have to.

And that’s I guess that’s the way to start, obviously. Right and then you get into a habit of just liking it. And given that you’re from a finance majors, it definitely doesn’t help because you kind of like are not completely starting from scratch, not understanding anything that’s always, you know, it’s always encouraging and it gives confidence to whomever is starting in the stock market.

And like so what’s your goal in terms of like, you know, let’s say like twenty, 25. What’s your biggest goal that you want to achieve in terms of your stock market portfolio and whether that is for your rental properties, like you can combine those two together. What’s your biggest goal that you would see is actually ran numbers yesterday?

Wow look that. Here we go. Now we’re talking I’m an accountant, so I understand when you run numbers, I’m like, oh, no, I like that. Yeah, the numbers were a little bit bigger than I thought. I did really, I guess, smaller gains, too, which could be larger, but I like smaller to be conservative just based on it and.

And we’re looking at, I guess, five years out. Yeah, I mean, you can be five years, like five years is always a good benchmark because that’s not too long where you can’t predict it, but also not too short where you’re playing short term gains.

So yeah, I was looking at this just getting my number. And I feel like it would be. I mean, when I think I was on Instagram, I was telling you 175. Yeah, I ran the numbers even at. I did like a I’m 23, but how I kind of did the calculations, I did a. 10% deescalating returns, so it would be 10 percent, 29.9 and 9.8.

I did it deescalating down to just down like years. OK, so it’s. And I came up with them just based on. Contributing 7,200. I think I did this a little bit wrong, but, yeah, I came up with in my role that would be able to get up to just eighty-three and.

And this is like within the five years, within the five years and the actually and my regular account should be able to get up to 100. So that’s like 180. Just based on contributions and. Return, yeah, no, I mean, that’s and where you are at the moment, like, what do you feel like your what’s your life?

You ballpark your accounts right now. Like, what are they out again? I remember you in was like in the 50s from a regular chat. My Roth is at 20 and my individual accounts at 29. OK, yeah, so basically you get like you didn’t stretch yourself too far, but you also keep you gave yourself that you can definitely something hit, that’s for sure.

You know, I would have thought, like from hearing other people’s goals in the last couple of months, I would have thought I would have been a little bit higher in terms of what you wanted to kind of achieve in five years. But, hey, you know, if you can beat your expectations, it’s always the best.

Yeah And I guess I’m just trying to, I guess, develop more like a better goal, because this I mean, I didn’t run these numbers that they were really before. Yeah this is just this pretty much nine to 9.5% return going through these years.

But this is also, I guess, take into account if like nobody knows if it’s going to happen, but if the market does lose for a little and comes and then ends up coming back up, kind of, I guess, takes into account that as well.

Like if there’s volatility. And in terms of like your portfolio analysts say, are you more. Of like a stock picker, or are you more of the kind of ETFs fund type of person? So I’ve been mainly stocks since I started,

I’ve been trying to diversify more into the S&P funds just to bring down the volatility, not even that I was uncomfortable. I just wanted more. I mean, some of my accounts, I’m trying to lower my. Amount of positions yet.

As well, and I kind of wanted a little bit of a stable S&P, even if it’s not even my largest position, but it’s a little bit S&P just to have a little, I guess, a baseline. Yeah, like what are like let’s say if you like you can you tell, you know, first and foremost, can you name at the top of your head like the top three positions that you have?

Because most people don’t even know that because they’re spread so thin that like, oh, I have like 35 stocks, you know, like, are you in that range or are you more like, you know, I have I think eight to 10, maybe 15 max. OK, but I have three or four that I’m trying to, I guess, divest.

I’ve divested a few in the recent a few months. And are you are you can you name the top three? One is Tesla. It would be Apple. I think 3 is S&P and then 4 is discover. Maybe think 5 is papel.

I mean, definitely solid companies like mucking around, obviously, you know, S&P, you’re always going to get the steady gain over time and Tesla, you know, it’s already run up or you’re going to be looking at it from a very long term perspective, obviously, for you remains Apple. Obviously, it’s like a powerhouse. Just name.

I’m just curious, are you are you first and foremost, are you familiar with the financial education channel? Yes, yes. Yes, I, I started to go into this and I think we got lost track, I think in 20, maybe second half of 20.

18 I found the channel. And I wasn’t like regular, I think I was just going back every once in a while, but I would say since. They may be back at 20, 19, or maybe even before that. Are back midmonth the back half of 2019.

Probably pretty much been more regular watching most of the content. And what kind of what was it like kind of really drew you to that channel? Because I know there’s so many out there and, you know, a lot of people do their picks and a lot of people do.

They’re kind of like, hey, buy this stock or you should buy this. Or and then they kind of don’t go in depth about their research or some people go in depth about the research, but people don’t understand it. So like, what was it that kind of got you to the point where had the financial education channel?

Jeremy it was good for me. I want to keep watching it. What got you kind of hooked on, let’s say, maybe not hooked on the show, but something in that? So when I first, I guess, found it. It was more his content was a little bit different than he’s doing now, I guess before he had a team and everything.

And I guess they have, I guess, the evolution, it’s kind of gotten more. You can get more in depth than. I like the his is the financial education three, how he’s kind of going a little bit more in depth in certain topics and instead of just the.

10 best stocks or whatever. I mean, I’ll watch those, but those aren’t, I guess, my goats, too, because. Yeah, I mean, you can get some good I guess, picks from there, but. So more and more looking for, I guess, the educational or that kind of makes sense, instead of just saying, oh, invest in absolute lockstep, whatever their commitment that you mentioned in financial education three.

I think kind of give me an idea of what type of content you liked from him. And I think the finance major that you told me, like you majored in finance. I majored in just a minor. No, actually. I just I’ve taken science classes of business, major, I was a supply chain.

OK, OK, OK, so here’s someone within the business world. It’s not like you’re in health sciences or in somewhere, you know, so someone in the business world. So definitely I totally get where you’re coming from. So the financial education three, I don’t know.

I don’t know if I I’m the only that kind of picked up on this financial education story seems to be kind of the start of his first. When he first started the YouTube channel, it was more like very in-depth analysis, like why he’s doing this, why he’s doing that.

And I feel like financial education three now is taking over that role. And like you said, in an educational world, he’s kind of keeping it more to the private group. I guess now we’re never and I’m seeing that a little bit more involved because watching Jimmy over time evolve is pretty funny.

At first he was very educational and then he would turn into kind of like, you know, he would talk about stocks at that point where, like you said, look, you know, top 10 stocks. I feel like a really good.

So then it became kind of like, hey, it’ll give you a sphere of what to go research. And then I got those two channels kind of got really big. And then he wanted to continue doing the educational side.

So I guess that’s where financial education three came. But, you know, obviously in the private group, he’s kind of he’s pushing himself more into the educational side now because he realizes the value that’s going to be that’s going to be creating, especially with the markets, the way they had been the last couple of months.

It’s I mean, it’s just like everything goes up until one week we get like a small correction. Everyone loses their minds. It’s I mean, it’s funny, but it’s not funny in terms of I don’t want people to lose their money. That’s my thing.

I don’t want people to get too freaked out based on a little bit like a 10% correction. Exactly exactly. And that only comes from, if you think about it, that only comes from fundamental knowledge. If you have a fundamental knowledge in a fundamental place, those corrections present themselves as opportunities rather than a scare tactic or some sort of fear that comes into you.

You see it as it’s a buying opportunity only long term if you’re looking at a very long term. This this is a beautiful opportunity. So, yeah, look, I mean, it’s fiscals hearing from other people how they have used the channel over time.

You’ve definitely wanted liked it more, but the educational side of it and things of that sort, I wanted to ask you, like what would be a couple of things that you feel like you wanted to improve on in order to be able to hopefully, like, exceed that 180 benchmark that you put for yourself?

Because I feel like personally, I feel like maybe you could it really depend on the investor you are. Right so like if you like, you know, if you really ballgown on a certain strategy on how to pick stocks that are undervalued and continue to do so and not always try to go for the home runs, everybody goes down, you know, because, yeah, one home run, you’ll hit home runs and then deal with your long term.

But you seem like more of kind of want to follow the more educational route. And it’s like you have a set system and and it’s good. It’s like, you know, companies spend big earnings like Jeremy likes to say. Right? yeah, I think you have that and you kind of use that. You are like me as well. So I kind of do that as well. I sandbagged my expectations.

So when I hit when I beat them, it’s like, OK, I beat them. But you you never want to short, which is kind of like a gut punch. Yeah Yeah. The only thing is, I mean, I’m trying to I guess it is, it is more conservative.

What I’m numbers I’m thinking it’s more so because in addition to. Contributing to stocks, I have to save for a down payment and all the housing prices are going ridiculous right now. And I also have student loans to pay off, too. So I just I mean, I don’t have any other debt besides student loans.

And so that’s good. And you have a lot of debt that that just that will lower the amount that I can invest. Yeah, no, that’s I mean, that’s good. As I hope you don’t have too much student loans or I hope you have a system where you’re paying them off in a way where it’s allowing you to continue to invest, obviously.

Yeah I mean it’s been nice because all the interest is lost on them right now. Perfect yeah, that’s always a good I don’t right now, especially in times like this, although interest rates are very low anyways, but still tatting, that is just something that’s just that they they, they don’t for the student loans, they don’t bring them down as much as most of those other things.

So Yeah I know. Like just in general but Yeah. Like I know what you mean because they haven’t fixed anyway. So it’s like whatever you came in it’s the way it is and the but it’s good to hear that you’re, you know you’re first of all, what’s your long term focused.

You’re not you’re not looking for the quick buck or two, which you know, I think I mentioned earlier in the fall, people are like that nowadays. It’s just, you know, it’s just the nature of the way things are going right now.

Especially with the media, social media, and how the volatility of the stock market has really kind of shocked people to looking at it as more of a gambling venue rather than something to build over time. And, you know, finding people like yourself, you know, it’s tough nowadays.

And I’m happy for you, obviously, because I feel like that’s the only way you’re going to be able to build wealth consistently over time. It’s to have that approach rather than the gambling approach, because the gambling approaches, it’ll look nice for two days and then boom, all of a sudden your account can be wiped down.

You’re just like, what the heck happened? Yeah, I, I was not getting into GameStop when all that was happening, you know, and it’s nothing crazy. But like if you get into game stocks. Sure but don’t put your freaking account that you have as the one that you’re growing, the one that you’re using to build wealth, don’t use that account because then it’ll just like, you know.

Have a sum of amount of money where you say, hey, I want to play around with this money and you’re OK losing and you’re OK. That’s you’re right. That becomes just like a kind of just like fun money. Exactly exactly. You know, that’s always good to hear.

I wanted to I actually wanted to get from you, like, what would be the one thing that you wanted to kind of learn or you feel like you need to improve in your investing. I know we talked about a little bit in the chat.

Would be nice to hear from you. Yes so I didn’t mention, like I guess at the stage where I’ve been trying to find that it’s like a formula to use and I. I know there’s one out there, I just don’t know what it is to, I guess if I can look at a company and see what their growth rate is for, like revenue revenue streams or.

And see what they’re I guess, what they’re EPS is now and. Or maybe in future or the four p, Yeah. Kind of, I guess, use a little bit of those metrics and kind of. I guess benchmark or an idea of where this is going to be, where it’s going to be, because I guess I get I get to a point where with some things.

That does go up so high. And then I. It’s I guess, harder for me to, like, figure out, oh, you I do, I just keep this and just keep it. Keep it. Keep going up the mountain or, yeah, just get rid of it. Yeah, and I definitely like if I were to add some value to that comes a lot with valuing the companies.

Like I think you hit it on the head, like having evaluated and having good production outlook. So, you know, if you do hit the goal prior to the years that you had set out, you know, whether to get out of it or stay in, and that all comes from forecasting, from being able to understand the company on a deeper level, because obviously, like, you know, if you go through research, you can read the same thing as I can, let’s say.

And you can probably let’s say, for example, two people can read the same exact thing from a company and interpret it completely the opposite. And the only reason to do that is because maybe one of them is lacking experience and the other one has experienced market or the other one has a fundamental grounds to be able to kind of do it right in terms of making projections.

And the one doesn’t. And that’s what usually happens. And valuing companies comes from, number one, understanding the business model on a deeper and higher level stake. And especially now, it’s much more difficult to do so just because of so many distractions out there.

We also, you know, we always have work, like you said, you know, you’re looking to buy a house. You’re hoping that you have so many things in your life that you’re trying to do. And it’s the last thing you have is to be able to research a company properly. So some people sit down and research it, but they don’t actually go to the right places.

So then what that does is it forces their numbers to be skewed if they were to do a projection. Right and your numbers are skewed to do as skewed to do a projection, that’s when it becomes just tough to be able to gauge, hey, do I get out less than what am I looking for in the next couple of years?

What what that is. And I’m assuming you have some sort of knowledge about the financial statements. When we look at them, you have an understanding and you’re able to read them a little bit in depth. Yes yes, I do. Kind of.

I mean, I, I don’t we do need to improve learning more about it, but I do have a baseline knowledge of how to, I guess, interpret what’s being said on the. Yeah, no, that’s I mean, that’s good, that’s good, because that’s always a starting point that you want to get.

You want to that’s a stepping stone to get to where everywhere else in terms of value in companies and in terms of exiting and and entering. I mean, I had that problem. And once I was able to find a system to research the company more efficiently and know where to look rather than looking wrong places.

Then I was able to make projections based on, like, you know, Jeremy’s teachings and those projections, like they’re never going to be spot on accurate, but they’re going to be in the ballpark, where you’re comfortable holding the stock over years.

Right yeah, and that’s probably the biggest value that I give, is kind of learning the fundamental basics of being able to research no first and foremost, and then the fundamental basics of knowing how to use that research to be able to kind of value that company, which which is great.

I mean, it’s great hearing from you that you’re able to do all those things. It’s definitely nice hearing from people outside the private group that have been watching Jeremy’s financial education channel. And they have to have a long term mindset in the market.

And I hope people start getting to that point more and more. You know, I don’t know what my take is. You’re in a good place to be able to build on that foundation. Others may need a little bit more work in terms of shifting their mentality before they shift, before they start learning anything, because you want to shift to that long term mentality.

So when the strategy works, it might. I mean, one of my things is. I think I’ve really only sold. Like only a handful of times and. I mean, I think most of that selling has been, I guess, previous couple of months because.

I’ve been trying to pull down how many positions I had because I was buying and then not selling anything else. So it was kind of it was just building up as I was buying more. And a lot of them were just, I guess, smaller values, because it was when I was first starting, I wasn’t really putting much into it.

Yeah, I think you mentioned you hit it on earlier. You said you want to kind of trim down your portfolio. Yeah there’s obviously Jeremy talked about like I’m looking at your portfolio, let’s say 50 k, you know, a ballpark in here, obviously 29 and 20.

And just giving a quick buck or 50 k, you know, 15 stocks would make it very difficult for you to see progressive gains if one stock does perform well on what you want is do you want to take like a smaller portion of stocks and be able to be more comfortable with them and understand them on an index level?

So then whenever one of the meet your projections and, you know, jump start 100% over five, five years, which I’m hoping that’s what people are getting into, stocks that are they’re going to double their money, you know, unless you’re very, very different value play, which is totally fine as well.

But you want to be able to have that ability to see whenever a stock does really well, it actually affects your portfolio, not just barely moving it. And that’s the goal. It’s just to be more confident in terms of that. You know, first of all, thank you for being on the call. I was down.

That was a great discussion. I, you know, New Jersey and everything and others from the same time zone, so. Yeah, Yeah. So thank you for being on the call. First and foremost, I want to thank you for that.

Is there anything I can do for you to help you out in terms of that, in terms of anything that you want to do and you want to be able to kind of push for your goals? I get my biggest thing is. Like, I can get, I guess, some of the data I need to, I guess, value a company and I guess understand the data.

My I guess my issue is using that data and putting into a formula and spitting out a number of what it’s going to be 10 years down the line. OK, yeah, I mean, there’s definitely ways around that there’s stuff to learn that I’d love to provide you that value.

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