Is Mexico the New China? (Ep 90)
Is Mexico the new China? Brian takes a close look at the reasons China might be in serious economic trouble and contrasts it with Mexico's rise as the #1 trading partner with the United States. What will be the impact of China dropping to third place in that metric? We'll also spend a little time circling back to our conversation about ESG and break down some popular investor personalities. How does your personality impact how you prepare for retirement? We'll touch on that and more on this episode of Make the Dough Rise!
Transcript - The following transcript was generated by a robot, so please excuse any typos or inaccuracies.
Intro to the episode. (0:02)
Pizza Development. (1:12)
Advantages of adopting social justice at the corporate level. (7:14)
The demographic collapse in china. (11:31)
What does an ideal client profile look like? (23:09)
Walter Storholt, co-host 0:02
It's time to Make the Dough Rise the financial podcast with Brian Doe. Hey, welcome to another episode of Make the dough rise. I'm Walter store Holt here alongside Brian Doe, CERTIFIED FINANCIAL PLANNER at living worth Wealth Advisors based in Greensboro, Georgia, but serving you from the lake country and beyond online at living worth.com got a great show on the way today as we look back and analyze some some past commentary and also past episodes here on the show and kind of highlight our ESG conversation. What's more here at the outset to clear up some great feedback and questions that Brian's gotten over the last month or so. We're also going to talk about Mexico is the new China. Question mark, exclamation point, we'll get Brian's breakdown on that conversation. And are you a grumbler, a DIY dabbler or the ideal client, we're going to look into some different profiles of potential clients that Brian works with and talk about maybe different planning challenges depending on your personality and your profiles. That'd be kind of fun to dive into as well. On the episode today, Brian, I can't wait to break it all down. And I hope you're doing well.
Brian Doe 1:12
Doing great doing great. Everything's well here. We got kids back in school and I have had a big new advancement or development on the pizza front.
Walter Storholt, co-host 1:22
Oh, I actually had a pizza item for you today as well. So what's your what's your pizza development?
Brian Doe 1:27
Yeah, sure. Well, we'll share here. A buddy of mine who I taught how to make my pizza dough recipe. He's taken it and run with it. He's making sourdough breads and all kinds of stuff, but he ordered a new sourdough starter culture from the Middle East. It came from Baja rain, and it's allegedly from the Garden of Eden. It's supposed to be the most sour of all sourdoughs out there and I put it to the test and holy cow if you ever wanted proof that it's always possible to up your game and make things a little better. I'm almost embarrassed. I didn't find this myself.
Walter Storholt, co-host 2:02
Wow, Garden of Eden sourdough starter if that's not a like selling point and little nugget for somebody that's that's pretty awesome.
Brian Doe 2:11
I think that's called puffery. You know, it's like one of these claims that you can't quite prove or disprove but it sounds great.
Walter Storholt, co-host 2:17
Hey, that's pretty cool sounding. Well, I've been seeing nothing my friend but ads for the affordable pizza ovens out there. . Remember if you mentioned this on on a recent episode, but the this UI is like everywhere. Now I'm seeing it on every TV channel I watch. It's all over the internet. And I even have like ads tracking turned off. So these are just organic ads somehow reaching me in most of these places.
Brian Doe 2:43
I think it just kind of sweeping the nation there is these home ovens, these gas powered ones, the more portable and smaller have come to a price point where they're very affordable. And I do think there is like a general movement into that area, I guess. Kind of like the green egg and smokers and sevens are having their heyday. It Funny story, we were at a group meeting on Amazon Prime Day, and gozney makes the Rockbox that's the one I've got at home is very, very comparable and similar to the to the ones you mentioned, but they were having a prime sale for I think it was 399 for the pizza oven. And I had three people in my immediate Group purchased one on the spot. And then they told people about it. And I told some people about it. I think I sold a half a dozen pizza ovens in about an hour on Prime Day because everybody had kind of wanted one. But that price point was just enough to tip him in favor of doing it.
Walter Storholt, co-host 3:41
You needed an affiliate link so you could earn some commission on on those referrals because I
Brian Doe 3:46
was yeah, I should come up with something like that. Now I hate to tell everybody that the buying the pizza ovens the easy part. Mastering the dough is where the magic is.
Walter Storholt, co-host 3:56
There you go. So yeah, it's not not going to make you an expert out of the gate but at least makes the the skill a little bit more affordable entry point for folks. So that's never a bad thing. Get more people into the hobby. So that's pretty cool.
Brian Doe 4:08
Yeah, no, no, it's still fun. And if you get the pizza dose at the grocery store or Trader Joe's whatever, they'll work that don't don't want to poopoo it too hard.
Walter Storholt, co-host 4:18
Amazing. I love it. Well, there you go get your get your oven for a good at affordable price nowadays and that starter culture from the Garden of Eden and you're in good shape. You're you're you're on your way to being a pizza master at that point.
Brian Doe 4:30
The question Walter is when are you going to get yours?
Walter Storholt, co-host 4:33
This is a good question. Yes, yes. Very true. Maybe I need to put that on the list for for Christmas this year. I'll drop some hints to come you'll have to come to Pizza school first. That's right. Yeah, I don't want to I don't want to jump the gun. I need to see it in action first, perhaps. Love it. Well, hey, let's dive into the content today and get into this Brian because I think this is exciting. Because so many people have responded to your last episode we talked all about of course the ESG and vesting and talked a little bit more in depth about, you know, the DEI and woke capitalism, that you kind of went into detail last time around. And you've had some great feedback over the last couple of weeks.
Brian Doe 5:12
It's interesting, it was probably the single podcast that I've gotten the most feedback from. Even more so than the conversation that we had with Jamal and Mike about modern monetary theory, that was actually a popular one, too. If, if people want to go back and review that one, it's still relevant. But yeah, I think the ESG and I did want to clear up and got some feedback on the focus that I had on the LGBTQ community and push, because a lot of the examples I gave were the ones that were in the news most recently, anyway, was target a little bit we touched on on Disney a little bit, and obviously, Bud Light being the big one. And I just want to make it very clear, I have nothing against any of these communities. I am not for sexism, racism, sin stocks, you can, you know, do what you want, or not what what you want. And I do have a few clients or children's of clients who are members of these communities. So I know firsthand what legal issues and rights and protections and fairness is needed for whether it's the LGBTQ if it's gender, if it's race, pollution on the environmental front, obviously, I'm against pollution, I want clean air, and water. So I'm not against any of these things. And I just want to do one more lap to make that abundantly clear. And refine my point and say that is possible to be a good corporate citizen provide the right benefits, it's good to have legal structures that provide the same estate planning and inheritance protections, legal powers of a spouse in medical emergencies, we could go on and on about why these things are important. The point I was trying to make was, if you're adopting this at the corporate level, because it's faddish, or because there's this ESG score that you're trying to hit or you think that you're going to get, you're going to resonate with your market by touching on that, man, it can go both ways. And for Nike, the social justice thing has worked very well for them. But the Bud Light is an example of where it really, really, really backfired. So all I'm saying is, if you're investing in companies, or if you're managing companies, and you want to incorporate this, you might want to think about whether this is something that you're offering and providing and supporting in your functional fundamental business and for your employees and things like that, or is this something you're really trying to put out there in your in your marketing and messaging, be mindful of how that could potentially backfire with your, with your core audience, because it has cost is cost some of these companies a lot, and their intentions were probably good. And I I support, you know, good, fair, equal treatment of everyone. And if you go back and listen to the past episodes, you will hear that I am. Like I said, I'm an equal opportunity. basher have bad business strategies and ideas around round the ESG. so touchy issues, for sure. But I just wanted to clear that up.
Walter Storholt, co-host 8:45
Yeah. Appreciate that. Clarity. And you talked about talking about and tackling what can be a tough subject for many to address honestly. And, yeah, don't don't just follow the fad. For the fads sake, make sure that you have those good reasonings, motivations behind it and aligns with your financial goals. We're talking about your life savings, after all. So just make sure it's not based on fads and is a more solid plan for yourself. Okay, very good. Mexico and China have both been in the news as we transition to our second topic of the day and talking about, you know, the last several months as well, recession recovery from that hitting it not hitting it, what are those numbers, all that good stuff. So what's sort of the the news update of the day?
Brian Doe 9:31
Yeah, let me just start with the market recovery that we've seen so far this year, because last year was a pretty brutal year, began to turn around the end of last quarter, but in January, would you or would you not have predicted that this this market was going to be moving in a positive direction while everybody was out? You know, squawking about to, you know, recession on the horizon, you know, just how bad things were gonna get. And here we are. middle of the year and the market has had a very nice surge recovery growth stocks have come back the most because they got hurt the most value stocks got hurt the least. And so they're they've recovered or they're not up as much as growth stocks. But the trajectory that we seem to be on is that of a recession last recovery. And how do you map that you calculate that is, is always open for debate. But where we have come out of bear markets and the down market we had over the previous year and a half the severity of the bear market, and the track that it's coming back up on seems to match that of previous bear markets where there was not a recession. Now you've heard you know, past performance is no indication of future success. Tax tagging title not includes a dealer retains all incentives and all that stuff. But the the trajectory out of this bear market that we had maps very nicely to other bear markets where we did we ended up not having a recession. So from where we sit right now it looks like maybe we're going to avoid a severe recession. And the joke I made last November, when I was sitting with a group of advisors, I made the joke that, oh, we're going to have a, the Feds going to engineer with soft landing and the markets gonna go back up and everybody's gonna have their best year ever. I said it sort of as a joke. It's kind of what's happening. And I hope it continues. There's some counter views out there. I don't know if you know, Michael Burry, the author of The or he was the Yeah, the central figures in the big, short,
Walter Storholt, co-host 11:44
big fan, good character in the movie and an engaging person overall.
Brian Doe 11:50
Yeah, well, he's got a very, you know, deep quantitative read on things. And he called the market wrong at the beginning of the year. But at the moment, he's taken a huge short position against the market, I don't know what his timeframe is for that. And Warren Buffett's sitting on a pile of cash, so make what you want from that. But the economy seems to be recovering the, in the midst of that we have the inflation, well, what's happening is a lot of the manufacturing and trade is moving back to this hemisphere. And so it'll be interesting to watch whether the US markets and the international markets how those behave. But I have talked in the past about the demographic collapse in China, and they've got this cratering of population at the lower ages, which could impact their workforce that could impact their consumption driven economic growth, there's just not going to be the people buying and doing the things that that you need for a true growth model economy. So let's look at the GDP and goods imported from China. In the in q1 and q2 of this year, the US goods imported from China worth 13% of the total, that is the lowest level in 20 years. So for all the time that we've spent talking about China, taking all the jobs, and they take it over manufacturing, and they largely have, but we're starting to see that now turn. And where did it turn it turned to Mexico, Mexico has now replaced China is our number one trade partner, Canada's number two, and China has slipped to number three. And that's very interesting, because that's the basic theme that it was Peters I had that was really talking about predicting that that we were I was quoting in the past. That now seems to be bearing out. We're we've got a great trade agreements with Mexico and Canada. They're great trade partners are geographically located near us. And the competitiveness of the labor force in Mexico is lower cost, better skilled. And then you add in that geographic convenience component, I think you're just going to continue to see this this trend, accelerate and move forward. And so I'm trying to figure out how to incorporate that into investment themes. And obviously, I I have always avoided investing in China, because it's very opaque. They're they're having this demographic collapse. They have printed money and expanded their money supply. Far worse than the US has, if you map the expansion of the US money supply and Europe, China and Japan. China has expanded their money supply at a rate that eclipses the other three bicycle To get margin, I don't know the exact percentage. But suffice to say it's It's massive. They've got a heavy debt driven economy, and they've got this huge real estate bubble, and they're very export dependent. So that switches and things continue, you definitely want to avoid China, maybe even Asia as a whole and be more selective about which countries you're investing in. Now, there could be a lot of good things happening in Southeast Asia, for example, or India, but man, Mexico, even Canada, things happening in this hemisphere. It's very interesting story to follow. And we'll definitely keep track of it and keep people posted on it.
Walter Storholt, co-host 15:39
Pretty neat to see that and the implications, just from this financial piece, certainly reverberate down the line. So really interesting to hear your takeaways on that, Brian, if you happen to have any questions, by the way, for Brian about this material that we're talking about today, I know we're covering a lot of different ground on the show, don't hesitate to reach out living werth.com is the website that's living worth.com. And we'll link to that in the show notes of today's episode. And you can contact us through the website. Alright, Brian. So we also mentioned that on today's episode, we'd have a little bit of fun and talk about some advisor profiles or client profiles, even maybe the best way to take this direction to kind of, I don't know, not necessarily put people in boxes intentionally. But I'm sure you face a lot of different personalities, a lot of different, you know, ways that people approach investing, finance their money and planning for the future.
Brian Doe 16:32
What. And last time on the last podcast, if people missed it, we profiled a few advisor types and stereotypes of people that you find out there. And so Andrea and I were just talking and we thought, well, we could do client profiles and talk about some of the different types of people types of investors, how open they are to the planning and understand the comprehensiveness of what we do. And so we have come up with a few client profiles. And this may help people decide if, if they're one of them, if they're a good fit for us. And we'll talk about what our ideal client looks like to give people an idea of if maybe, if maybe they're a right fit, or not for us.
Walter Storholt, co-host 17:14
Alright, so to get things started, Brian, you want to start with the we'll call them the Great Expectations client,
Brian Doe 17:21
I love these people, because they have such high competence in my capabilities, I think they think I can solve all their problems, control the market, and do it all, reduce their taxes, get them the maximum benefits of everything. And these are people that think we can do more than we actually can. There are a lot of things we can control, there's a lot of strategies that we deploy. But at the end of the day, we don't predict the market, we don't control the market, and we can't deliver magical results. But we do know how markets work, we have strategies for dealing with volatility. And and sometimes there's an education process that can can bring these these people around to becoming very good clients. But at the end of the day, there, there has to be a realistic understanding and expectation of what we can control what we can't control, but more importantly, how to manage, identify those two, and then manage them accordingly.
Walter Storholt, co-host 18:25
Yeah, expectations are important and anything in life and managing those expectations, just leads to a better relationship. So an advisor who helps someone that's in that category reach those reasonable expectations would certainly be valuable, I would imagine. What about the grumbler? Who's the grumbler?
Brian Doe 18:44
Yeah, we get a good few of these from time to time, not many, or a lot of times they they don't last around here, because these are people that are hyper focused on the negative they may be have lost sight of the big picture in the positive in their life, not to stereotype or characterize, but the grumpy old man that maybe spends too much time watching the opinionated news or following all the conspiracy theories on on Facebook or something like that. And they just, they almost seem miserable, because they're, they're negative about everything. They fees, or maybe a big issue for them, and they don't see the value in what we do or they're just more focused on on the negative the world. And there is plenty of that. But again, I like to have people turn and focus on the positive, what's going well in life, what do you want to get out of life? You know, again, focus on those things that you can control. And if you do spend too much time focused on this negative and that does have an impact on your life. ability and your well being and honestly, I think your health and enjoyment of longevity. So, grumblers tend to not not last too long around here. Or maybe we can spot them at the at the beginning and kind of steer them in the in the right direction. So that's, that's, that's what we've run into from time to time. Yeah,
Walter Storholt, co-host 20:21
it's important, I think, to focus not just on the finance part, but also the attitude and how you're gonna spend your time in retirement and what you're going to be thinking about and spending your time and you're gonna have to track the stock market every day. And if if there's a bad day in the market, are you going to then have a bad day in retirement? That's No, no way to live. And the grumbler seems like somebody who would fit into that profile a little bit. And so there are solutions out there for that. So you don't have to live like that in retirement. So that's good to know. All right. So you have the folks that have the great expectations. You've got the grumblers that come in and we lovingly call them the grumblers. Still great folks, of course. The DIY dabbler, who is the DIY dabbler,
Brian Doe 21:00
right, so I get a lot of DIY errs, do they still want to have their hands on a little bit of stuff, they want to trade some individual stocks, and overwhelming. So what we'll do is we'll set up their core investment strategy, and then we'll set up a self directed account where they can go trade stocks, and yeah, maybe in the short term, they might have one better year than me. And then I have to, you know, hear a little bit about how much better they did than me. And then the next year things, you know, the wheels fall off the bus and, and pretty soon that account starts dwindling, and they're like, maybe I should just give this back to you and let you handle all this error, they get tired of it and realize that it is a lot trickier. But once in a while you will get the person who makes a lucky trade into a particular sector or a couple of stocks. And it all of a sudden just eclipses the the results that they're getting from their more traditional diversified portfolio. And they get convinced that now they're smarter than me and have had this happen. Not a lot, but maybe maybe once or twice. And often they they don't see the value in what we're doing. They're missing the diversification, the tax flow, the tax planning, cash flow the like, and you just get focused on this one lucky idea. And overtime, a lot of times those things come back down to earth, and they get a dose of reality. And so getting them to recognize that they got lucky, as opposed to just being truly good, is my challenge and trying to get people to take a little bit of money off the table when they've when they've had these big wins. Even if it is something like Apple or something that continues to grow and compound and would have been best to hold over the long term. You just never know those things can can come and go. And you don't want to leave all of your exposure to one lucky trade and convince yourself that all of a sudden, you're smarter than everybody else.
Walter Storholt, co-host 23:09
Yeah, that can that can almost be one of the most dangerous things on here is to have a big win, right? Which sounds counterintuitive to have a big win and have that be a dangerous thing. But if that feeds that DIY mindset to take on more and more risk and more on your own shoulders. And now instead of playing with the fun money you're playing with your life savings that can become a bit stressful and the DIY dabbler could often turn into the to the grumbler. I would imagine Brian these these can
Brian Doe 23:36
it's entirely possible. Yes.
Walter Storholt, co-host 23:40
If if that luck turns around quickly, then yeah, the personality can too. So if we were to paint a perhaps a profile of an ideal client or somebody that would match really well, with you and living worth and the way that you guys do business, the way that you help people prepare for retirement. I'm curious, what would that profile end up looking like? Yeah,
Brian Doe 23:59
so these are great people. They're doing interesting things with their lives. They've got a big vision, or they're doing cool stuff and always have stories to talk about things like that. But the main thing is, is their delegators. They realize that there's a lot to this, and they don't necessarily want it to consume their retirement, they didn't retire to take on another job of managing their portfolios, keeping up with tax law changes, you know, trying to figure out how to generate cash flow and pick stocks and things like that. They're they're very appreciative of the advice. So a lot of times we can have good discussions about what's best what their opinion is. And a lot of the ideal clients will come in with ideas themselves and sometimes I learned things or find new things from their perspective, but they don't get convinced like the DIY dabbler that they're now somehow suddenly better. It's a it's a complementary mutual relationship and it It is always good to have an extra set of eyes on what's happening in the world or maybe something from their industry or their perspective. And if that adds to the portfolio or gives us an investment opportunity, it's not something we're going to put all of their portfolio in. We've managed to keep things in a healthy perspective. But yeah, these are, these are just interesting people. They're appreciative. They add to the conversation. And they're usually doing something interesting that we, we have discussions beyond just the portfolio on how to maximize their enjoyment, maximize their life, their relationships. And you know, at the end of the day, they're just nice people.
Walter Storholt, co-host 25:43
Very good. It's a great recap of who would be a great fit to work with Brian doe and the team at living worth. And if you feel like you fit into that profile, that personality and might be a good fit to work with Brian. We'll think a little bit more about that. And here's some ways for how you can get in touch if you're looking to take control perhaps of your financial future. But maybe you don't know exactly where to start. Well, if you talk to Brian doe, he's a seasoned certified financial professional with more than 20 years of expertise. He can be a trusted partner in your planning process, whether you want to create a solid retirement income or get that expert guidance on optimizing your investments or avoid those costly tax traps that we've done many episodes about. In the past. Brian's gonna have you covered on all those different angles. As a CFP professional, he meets the highest standards of both education, training and ethics, always putting your best interests first, you can take advantage of a complimentary 15 minute call with Brian get some clarity about those financial goals and prepare for a more secure tomorrow. All you have to do is call today, it will pave the way to financial success together, you can call 706-451-9800 That's 706-451- 9800 Or just go to living worth.com and click book a call again. That's at Living worth.com. And that contact information is in the description of today's show so you can find it easily. Brian, thanks for all your help on the episode today and covering so much ground greatly appreciate it. And I know you'll have something interesting on tap for us to discuss next time. Sounds great. I'll look forward to it. Alright, very good. cook up some more pizzas in between now then. Alright. Try and get your hands definitely doing that Garden of Eden sourdough starter.
Brian Doe 27:24
That's right. If you're in the neighborhood, stop by let me know what you think.
Walter Storholt, co-host 27:27
See what you can do with it. All right. Thanks, everybody for tuning in and we'll talk to you next time right back here on make the dough rocks.
Announcer 2 27:44
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Announcer 3 28:23
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