77. How to get your money to work for you
In this episode my guest, Chip Stites, chats with us about how to make your money work for you in the stock market. Get ready to take notes, friends, as Chip dives into what works, what doesn’t work and how to create a portfolio that can stand the test of time.
In 1978 Chip began his financial services career, selling insurance door to door in the coalfields of West Virginia. It didn’t take long before he realized that most people’s real need was to learn how to save money – not to purchase more insurance. After four years and three promotions, he left the job, moved to New Mexico to be closer to family, and started again. No one would hire him in the investment industry as most of the industry is built making initial contacts with people you know, and he was new to the area. Finally, he made a General Agent (GA) an offer he couldn’t refuse: “You can keep all my commissions if I am not your top salesman by volume and numbers of sales in six months.” The GA laughed and hired him. Again, he started going door to door. Using a survey he asked about finances, needs, fears, savings, budgeting, investing knowledge, and insurance. What he learned supported his belief that the average family’s needs were not for more insurance but investment education. He adopted the strategy “buy term and invest the rest” until he got his securities license. After that, he concentrated solely on investing.
In 1987 he passed his general securities license. Over the coming years, he got his supervisor’s license, his Certified Financial Planner’s ® designation, his supervisor of initial public offerings for Municipal Bonds license, and his state licenses to charge fees instead of commissions and his fiduciary marks.
What interested him most was professional investment management and why the average investor constantly underperforms the indexes.
By 1996 he was responsible for over $700 million in investor assets while managing his clients of $100 million. In the late 1990’s he became wary of mutual funds and their penchant for buying whatever was popular, not what fits into their objectives. During this time, he saw what has become his “Perpetual Income Engine™,” or P.I.E.™ Except for the portfolios he built himself, he has never seen another portfolio like this, though he knows where they are found!
In 1997 in a series of bank buy-outs, he was one of 700 to lose his job as his local bank was purchased three times in a year. He was back on the street, going door-to-door again, starting over.
Initially, he was taught to sell mutual funds and moved to ETFs over the next decade as they became popular. Then as their fees increased and they added active management, he continued his
investigation into the shortcomings of ETFs and the types of stock that solve the problems of investors and retirees alike.
In 2008 – 2009 his average client lost 11.9% and had their
money back the following year. The drops he saw in 1987, 1994, investment changes in the 1990s, 2000 – 2003, and the shifts before 2008 had prepared him to make the changes necessary to
help control losses. These many years of experience, his testing, and his work with others have prepared him to help those interested in creating a portfolio that can stand the “test of time” much longer, with less risk and higher income, than standard Financial Services teaching dictates.
Book a call with Chip here: https://calendly.com/info-tlr-48
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