The 6 Behaviors of Investing and Why You Need Cash, Equity, Bonds, and Real Estate In Your Portfolio with James Woodall

In today's episode I'll visit with James Woodall, CPT about how to get started with investments, even if you didn't start investing when you were young.

James Woodall shares his expertise in the field and discusses topics such as the behaviors of investing, the pitfalls of obliterating cash, creating wealth, and taking small steps towards financial freedom. He also touches on the importance of physical and emotional health in relation to wealth and offers some tips for finding affordable property. 

James' 6 behaviors of investing are these:
1. Faith in the future
2. Patience
3. Discipline
4. Asset location
5. Diversification
6. Rebalancing

You can find James on LinkedIn.

Transcript

Magic Barclay: 0:59

Welcome back to a magical life. I'm your host, Magic Barclay. And today James Woodell joins us and I'm going to let him introduce himself. Go for it,

James Woodall: 1:08

James. Thanks, Magic. Uh, yeah. So, so my name is James Woodall. I run Woodall Wealth Management out here in Dallas, Texas, in the US. And, uh, I started my firm earlier this year, but after working about a decade in the industry, I realized it was time to focus more on building those deep relationships with my clients instead of trying to sell them something. So I started my firm, uh, we're an independent investment advisory firm. And what makes us unique is that while I focus on family businesses and families. I like to create what's essentially called a family office. Magic, have you ever heard about a family office or that term? Yes, I have. Awesome. So basically what I thought was, well, what if I created family offices for those that don't have 50 million in assets? Maybe they're more than normal folks. So that's what I'm doing here today and really to share a lot about what I tell my clients, particularly when it comes to the investing and financial planning and wealth management world. And just kind of the foundations of beating that drum and kind of spreading that information and making people's lives a little bit easier.

Magic Barclay: 2:19

Fantastic. Now, before I get into our standard three questions, something is burning in my brain off air. We were just having a conversation about the way the world is at the moment coming from the world of finance. What do you believe? Is the major pitfalls in the push to obliterate cash?

James Woodall: 2:41

Ooh, that's a huge issue. So there's two types of currency when we look at it. We have fiat or fiat currency, which is like, like fiscal hard cash, gold coins, et cetera, or the digital currencies that are coming up. You know, when I think through it, I think it's a mix of control and flexibility. candidly, and that's what I tell my clients too, is that I am not a fan of digital currency at all. I think it's too speculative. Um, there's a lot of FOMO going on when people talk about how much money they could have made. When at the end of the day, they're still bleeding cash. It's extremely speculative. Also, it doesn't make sense that if I want to have a decentralized currency, what's going to happen with that is that the values of those are going to start swinging so wildly, like we're seeing with Bitcoin right now, right? That's why the central banks were actually created was to help smooth those giant fluctuations and stop runs on cash. So that way you can always have your cash and have that liquidity that you need to run an efficient economy. So that's kind of my thoughts on it. Maybe the why it's happening is that it seems to be there's a thing of control. here's the new one that's trying to start. I know China is trying to start a digital dollar. The U. S. mentioned it for a bit and that got kind of shut down pretty quick, but we'll see what happens in the future.

Magic Barclay: 3:57

Thanks for answering that. I know a lot of people are really oblivious to what comes when cash is no longer around or fiat is no longer around, but we certainly don't want, you know, the, the world having a social credit system. It's really bad news.

James Woodall: 4:19

Oh, absolutely. Uh, we're, we're starting, they're trying to do that here in the U. S. with these ESG investments. and that's something that I, I can't stand because what's happening with those is that there's no generally accepted definition of X. So you're gonna then start making decisions off of someone else's reasoning and I don't know why their reasoning exists or what their blind, let's just be nice with their blind spots are. So yeah, I'm a huge fan of, you know, being a free market, cash is the king, it always is. here's a fun fact, the smaller you can make things, so I hate the fact that some currencies are getting rid of a penny, because it actually makes you lose efficiency in your system. And what I mean by that is, let's say you want to buy something for 1. 99, Well, I can't make 99 cents, but I can make 95 or 2. Well, everyone's going to round up. So it's 2 that cost me a penny. And you scale that over trillions of dollars in exchange hands every year. It kind of makes things a little more expensive for no reason, because we still want to print an extra coin.

Magic Barclay: 5:26

They did that here in Australia many, many years ago. One and two cent coins were gone. The smallest is five cents. Now they want to get rid of that one as well.

James Woodall: 5:37

Yep. There you go. And everything raises in price, right? Nothing drops. Oh,

Magic Barclay: 5:41

totally. Wow. Enough of this financial doom and gloom. Sorry, listeners. We need to get onto our standard three questions. And so the first one is what can your expertise do to accelerate health, not just physical, but also emotional and spiritual? Because we know, as we'll tie in with the next question, that affects our wealth.

James Woodall: 6:04

Absolutely. So money is a, uh, it's a very fascinating topic. I've seen it. I've personally experienced it. I still experienced as well as others is the, the fear of the unknown when it comes to the world of investing, saving for retirement, understanding how dollars work can truly stress you out. Uh, to the point where I've seen people have breakdowns, like physical, mental, emotional breakdowns. Uh, particularly during COVID because they saw their accounts losing a dollar value and not understanding what was going on. that's probably the biggest thing that we can do and talk about when we start talking about these behaviors. Because once you understand that, understand yourself and how your brain's working and at times tricking you, that's going to be the key right there to understand that money is just a tool. It's nothing more and nothing less.

Magic Barclay: 6:56

So when we're stressing out, we know from a health point of view, that, you know, cortisol is one of the most deadly substances we can manufacture. When it's over manufactured. So when people are stressing about their finances or anything like that, obviously it's going to make their health dive. And then when they're not feeling well, they make poorer choices. Correct?

James Woodall: 7:21

Absolutely. And hey, I've done it. No, I've done it recently. Uh, I was dealing with an issue where I was stressing out quite a bit and, uh. I made a complete impulse buy, we're going to see how it works out, but it happens to the best of us. If you can reduce the inflammation in your body, you win. Something about like, if I remember right, like your spinal column and your spinal fluid gets compressed that much more and that hurts the thinking in your brain. Is that correct? Is that right? Am I thinking right or am I just shooting

Magic Barclay: 7:50

you off? You are thinking 100 percent correctly,

James Woodall: 7:53

yes. Awesome. I knew that article I read was good.

Magic Barclay: 7:59

my next question, which is about wealth. What are your top three tips to creating wealth, not just the financial, but also the personal and emotional wealth

James Woodall: 8:08

of a person? Exactly. So when it comes to the, let's say the, let's just start with the financial because it's always easier. let's just dive into it. So we're talking about the, you know, the, the personal wealth of an individual. It's how do you find the admiration or respect of your peers? And then how do you create that wealth from that point of view? Um, that's how I look at it when we're talking about it. Um, candidly, I think it's being always open and honest, admitting mistakes, saying you're wrong and always, you know, just trying to do the right thing, even if, uh, I know they talk about in the Bible, I think it's called agape, uh, tough love, you know, always doing the right thing and making it difficult. And so the emotional wealth. That's the same thing. It's, you know, coming down with, sharing the love, always helping others out and giving out more than you can. I think that's the most appropriate, uh, you know, being selfish. I think it feels better to give than receive. I truly think that. And then on the financial side, it really comes down to being pretty simple. The top three tips when it comes to financials, what I always tell folks is, Number one is having faith in the future, just knowing that everything will get better. It's shown to do that over history. It always does. As well as boring, simple investing works and trying not to follow the next big trend. The Bitcoins or the Dogecoin or whatever else is out there today.

Magic Barclay: 9:33

So when someone's looking at investing, you said simple investing, what does that look like? Like, how do we get started in investing? How do we find something that will help us create wealth?

James Woodall: 9:51

Yeah. So let's, so let's talk about that. So when we talk about investing, there's really three main categories. of investments you can have. We, when I look at it from my point of view, and that's going to be cash, equities, or I'll say for cash, equities, bonds, and real estate. When you're starting out, like everyone else, you know, you typically may not have as many assets as you typically do when you're older because you don't have the time to grow it yourself, uh, but you have time. So, When you need to start looking when you're first starting investing and every country is a little bit different on when you can start here in the U. S. You have to be 18, uh, but your parents can invest for you with an account for minors as soon as the day you're born. When you're young and you don't have a lot of assets available, time is going to be your friend. And you want to be able to find an investment where maybe that dollar, 10, 100, whatever, um, Can go as many other areas as I can. Uh, that way you're kind of starting out being diversified. So a lot of times I was disguised as an example is in the U. S. you have the S. and P. 500. it's the largest 500 companies in the U. S. and there's options out there. There's mutual funds, which is just literally a. Basket of securities that can trade you say, Hey, here's a hundred bucks. It'll buy you a breakdown evenly of whatever those investments are. Or we have ETFs which are similar to mutual funds, except that if you only have a hundred dollars and ETF price is at say,$110, you can't afford it. So that's usually the best place to start is in a mutual fund or ETF. That gives you a wide variety of investment. Uh, you know, things you can invest in when you're younger from there. As you grow up, more options become available because you typically have more dollars to invest that you're not spending on yourself, you know, through like a mortgage rent, you know, saving for retirement, etcetera. That's when things really start to open up and becomes down to what works best for you.

Magic Barclay: 12:00

some great steps there to follow. Now, our final standard question is about weight. Many people battle their weight quite needlessly. And, you know, we often look at coaches or mentors as well. They've never had an issue. So. A bit of a personal question, have you ever battled your weight and how did you kind of recognize that and get around it?

James Woodall: 12:27

Oh, totally. I battled my weight. I'm doing it right now. Uh, I looked in the mirror the other day and I went, Oh, what happened? so for me, it's. You know, it basically came down to starting a business and it feels like I'm working 24 7. Uh, with that, my diet went out the window. I made every excuse in the world to not go to the gym to get in shape and stay mentally healthy. So, about a month ago, I signed up for, started doing Spartan races again. Uh, those are always fun. Great obstacle course race. And for me, it's because I have something to strive to as a challenge. It makes me want to go work out and get back in that habit. So dealing with that right now, one of the things I'm trying to do is every morning I found a workout that I like to do a little simple warm up just to get the blood blowing. And what I found is once I'm warmed up You know, getting out of bed. It's cool. Let's, uh, let's go to the gym. Let's go work out. And I noticed it makes every day that's that much better when I do it.

Magic Barclay: 13:23

Thanks for sharing that. That's really important that we hear that you're acknowledging that yourself. Now let's open up to what you do every day. So in your business, you mentioned that you were talking about working in a closer with people. What are your areas of expertise and what do you think the listeners need to hear around finance?

James Woodall: 13:49

Yeah, so, so my areas of expertise really come down to the individual and the business owner. And so what I mean by that is I typically, or I'll start from the beginning, start by building a holistic financial plan. Um, that's a skill set in itself. So I have my certified financial planner certification. Um, that's where we started getting that. And then from there, it goes, okay, we're going to focus on building investments. Okay. understanding if you need insurance and then what options are those. And then from there we start looking at retirement, where do we need to start planning for retirement, as well as understanding just simply the values in you and understanding who you are, uh, for the business owner side of things. It's a little different where I focus more on building those, let's say a 401k account for a business owner. And for their employees as well, uh, just because there's a lot of steps for them, but ultimately the goal is fundamentally the same as even on the card is simply trying to provide financial peace of mind at the end of the day, everyone's situation is so different and so unique. It's going to depend on their situation and what they want in a life to be where really work with a focus for their time.

Magic Barclay: 14:58

So someone who might not have invested before, someone who might kind of be, you know, midlife thinking, well, you know, maybe I can't work as, as much as I did, or pay is a little bit less, I'm kind of struggling to make ends meet, what are the small steps people can take towards financial freedom?

James Woodall: 15:24

Absolutely. So the small steps that folks in their middle of their lives are taking for financial freedom comes down a step of one is just taking a deep breath, taking a deep breath and understanding that one, you're not alone. There's always options out there. When you think about it, you know, the best time to plant a tree was 20 years ago. The second best time to plant a tree is today. So if I'm thinking about what small steps can I take to start saving for it, and I'm barely making ends meet, is, it's a tough one. Uh, generally I like to tell folks, if you are in a job that you've been in for a while, use that opportunity, use that time that you've been in this role as an advantage, and find somewhere else that will make you, that will give you a raise. It's very tough, because what happens is as time goes on, inflation goes up. And rarely at times do real wages outpace that. So honestly, let's take a deep breath. See if you can find honestly a higher paying job, but if not, let's say you're in a situation where you can't do anything and you're stuck trying to make ends meet. From there, it's lowering your costs as efficiently as possible while still living a life, you know, not not a poverty. So generally, what I tell folks to do is if you're in that situation, look at your budget. Where's your spending going? Uh, do you have the newest iPhone? Well, you know, look at yourself because if you're seeing that I can't, you know, increase my money and I'm trying to drop my money. Well, where's my money going? Where am I leaking money from? So look at your budget. You don't have one, start one up, and I'll send you an email magic on what it'll look like, and use this as an example as a starter, starting point. And then from there, see where your money is going. Where can you cut costs? Maybe you don't need Netflix, Hulu, and Disney Plus. Maybe you can get rid of two of those. And really start from that end. And be honest with yourself. Track your cash. See where that's going. You know, honestly, for me, it was, hey, do I need to slow down on my drinking? I was having A little bit of a problem with it. So let's slow it down and Hey, start saving a lot more cash, not going to the bars. And so that's how I would say to start. And then at that point, be honest with yourself and say, where can I go next? And what options are available to me? Uh, every place is different. Every opportunity is a little different when it comes to your investments options that are available. I know here in the U S there's a lot of places that specifically. Focus on those low dollar accounts and people that are just getting started and they do a great job of it.

Magic Barclay: 18:01

Fantastic advice there. What about property? So you mentioned real estate is one of these big things. We're seeing that property prices certainly here in Australia are skyrocketing and it's kind of out of reach of anyone now to who is on a standard wage or below to. Get their own home or, you know, to even think about investing. So what are some tips there that you might have to finding something affordable or, you know, entry level to get into?

James Woodall: 18:38

That's a tough one. Um, I've heard a lot of Australia's issues. I know, uh, certain other countries, I know Vancouver, for example, made it where certain people cannot buy real estate. Uh, it's. That's a tough one. That's truly a tough one. I think with the start of COVID and when that happened, a lot of folks and a lot of firms realized that, hey, maybe we could have more remote workers. I know here in Texas, especially, prices have been shot up to the point where folks can't afford them. Uh, and people are moving further and further and further out from the city to the point where A hour, two hour commute downtown is not unheard. So you can always move away. another option is, you know, getting roommates. I know that's not always the best. I've done it, but it does give you that advantage to say, Hey, we're splitting costs and make that leap forward, make that sacrifice today to be further ahead tomorrow. Uh, if you're looking at it from an investment point of view, when it comes to property, there, there's quite a few options out there. Uh, again, there's mutual funds that specialize in real estate. Uh, there's also things called REITS, uh, R E I T S, Real Estate Investment Trusts. Uh, those are from, you get to have a, you know, a dollar minimum to join to a million dollars to join and everything in between. And they're all very unique, but those are also give you the option to Invest in real estate. But if you're trying to do your day to day, it really depends on where you're locally at. that's always a really tough nut. That's a really tough nut to crack.

Magic Barclay: 20:14

Now we've covered quite a few topics here. What's something that you're really passionate about that you really want to discuss with the listeners? Something that maybe isn't mainstream information.

James Woodall: 20:28

Yeah. So, so the, definitely the thing I'm most passionate about, I preach this to all my clients is I call them the six key behaviors. Of investing. And the reason why is fundamentally we're people, we make our decisions based off of our emotions, uh, happens to all of us. So that's the big thing to me. So I, I kind of came up with, but also read and learn and educated and found this six key behaviors that really make a difference. So when we think about investing and we can definitely dive into each one of these separately, there's six key things in this order. So number one is having faith in the future. I know that sounds dumb, but if you think about it, uh, things have always gotten better over time. If we ignore the noise, we look long term. The second is being patient, you know, laying on the first one as well is, I don't know when it's going to get better, but I know it will eventually. Uh, the third is being disciplined. So investing in things that have always worked, not about the new big thing today. For example, Bitcoin. Uh, then from there, you also have your asset allocation. So when we were talking earlier about, you know, cash, stocks, bonds. In real estate, that's going to be your asset allocation. So whatever mixture you have of that, more stocks, more growth long term, also more risk. Uh, and then also from there, you want to be diversified. It's the fifth key behavior, which is you don't want to own enough of one company to live and die by them. You want to be diversified from all those areas as well as all those sectors and different types of assets. And then the last one is actually one that I very rarely hear is rebalancing. So when we look through that diversification over time, your stocks may go faster, your bonds may go a little slower, your cash doesn't grow at all, but we have this market volatility like we're having all over the world today. That's when your asset allocation will change and that's when, as long as you're consistent, is rebalancing that asset allocation to what you found out to be the most appropriate for you. And if you follow those six things, I know we kind of ran through them pretty quick, uh, that's 90 percent of investing right there.

Magic Barclay: 22:43

So can you just quickly remind us of the six things so people jotting it down at home can get those notes?

James Woodall: 22:51

Absolutely. So faith in the future. Number two is patience. Number three is discipline. Number four is asset allocation. Number five is diversification. Number six is rebalancing in that order.

Magic Barclay: 23:08

Some fantastic advice there. Now, before I let you go, James, we love freebies here. So what can you offer the listeners and where can they find it? Absolutely.

James Woodall: 23:21

So, uh, we'd love to send you, uh, the budget worksheet that I give my clients, help people get started on that. I know budgets sound dirty, but just think of it as a spending plan. And then also my website, I have a page under, if you go to woodallwealthmanagement. com, you look under the free resources button. I have about nine or 10, uh, guides and checklists, and they're fairly generalized and help you. Walk through the process of what you may need in these, typically, these situations, uh, they're not, you know, uses investment advice, et cetera, but they are there just to help you out and answer some pretty common questions.

Magic Barclay: 24:02

Fantastic. So that website is www dot woodall. That's w double DALL wealth management dot. Thanks so much for your time today in sharing those tips with us. Do you have some parting words for the listeners?

James Woodall: 24:22

there's a lot of noise that happens in the world of investing in finance. Uh, see what you can do to find those that, uh, give the right advice and they're always working in your best interest, not trying to sell you something and hopefully it can help, you know, get rid of the stress when it comes to the world of investing.

Magic Barclay: 24:43

Thank you so much for joining us today, James. I know it can be such a dry topic, but you've really broken it down into ways that we can all. You know, look to our financial futures and take

James Woodall: 24:55

control. Oh, thank you for having magic. It's an absolute pleasure. And I hope it helps everybody. Thank

Magic Barclay: 25:03

you. And listeners, thank you so much for your time as always. Please go and leave us a review on Apple or Spotify or wherever it is that you're listening to us. And for now, listeners go forth and create your magical life.