Episode Transcript
[00:00:00] Speaker A: Annette Findling is bringing us a very special episode today where we talk about fashion and finance. Two of my favorite things. And who could have thought they'd be combined? From Stonebridge Wealth Advisor, she's the CEO and founder who's going to help us translate how fashion really does correlate to finances and maybe make it a lot more intuitive for all of us. Listen in.
Annette, it's great to see you. Hi, Corbin.
[00:00:43] Speaker B: How are you? Wonderful to be here. Okay.
[00:00:46] Speaker A: Welcome to my closet. This is so much fun. Give us a quick overview of how you go about this.
[00:00:51] Speaker B: Well, I noticed a number of years ago when I would meet with a woman, her investment style directly correlated with her fashion style. And of course, you know my love of fashion, so my mind kept going. And I love educating people using analogies, and I found that the best way to educate women was through fashion.
[00:01:09] Speaker A: So tell me, if you were to correlate like a very basic investment to a piece of clothing, what would that look like?
[00:01:16] Speaker B: So my favorite category or one of them is the little black dress. So my favorite little black dress and if we all look in our closets, we probably have lots of black dresses, but they're all a little bit different, just like this one is different from this one.
But my point is, it correlates to being like a dividend stock. Dividend stocks are great companies that we hold on for many, many years. They pay dividends, they're reliable, and you just can't really go wrong. That's what a dividend stock in the little black dress and how they go together.
[00:01:51] Speaker A: So if I heard you correctly, this dress, which is going to be in my closet for a long time, I might wear it in multiple functions, I can change it up with different accessories is like a dividend, because we're going to buy and hold that for a long period of time. Is that basically that is exactly.
[00:02:05] Speaker B: Okay.
[00:02:05] Speaker A: And what level of return would somebody expect? Not numbers, but is this a low risk investment or a high risk investment?
[00:02:12] Speaker B: It's a lower risk investment. Well, in the world of stocks, it tends to be a little bit of a lower risk investment. You're going to get an annual return, but you're also going to get a dividend. So, for example, if your dividend is 3% per year, but the growth on the stock is 4%, you might get close to seven or 8% rate of return per year on average.
[00:02:35] Speaker A: Another way to look at this, my aunt always said, what are your cost per wear? So I'm going to wear this dress a ton because nobody will know that I've had it on at another event. I can change it up different, accessorize it, and it will be around for a long time versus something else that maybe we'll talk about next.
[00:02:51] Speaker B: Okay.
[00:02:51] Speaker A: I want you to tell us about another type of investment. Growth.
[00:02:55] Speaker B: Growth stocks are another favorite category, and I feel they're best represented by an investment jacket. Jackets are one of the hardest pieces to make, but they're an investment that you pay a little higher price for, you keep for a long time, but it's a great investment. And unlike dividend stocks, they don't pay dividends, they don't pay you an annual dividend, but they can tend to pay you a higher return over time.
[00:03:23] Speaker A: Okay, so if I'm hearing you right, these are blazers, things that are multipurpose in our closets that we can wear a lot and for a long time. And over a long period of time, they cost us more. And yet our cost per wears might be lower because we're going to wear them over a very long period of time. And the financial outlook on a growth stock is that it will be a higher investment, but it will also last you a long time and grow pay a higher return.
[00:03:50] Speaker B: Yes, exactly.
[00:03:51] Speaker A: That's interesting. Okay, so I guess the takeaway is buy more jackets, buy a lot of.
[00:03:55] Speaker B: Jackets and you can wear them over your little black dress.
[00:03:58] Speaker A: Okay. Got it.
[00:03:59] Speaker B: So this is how we build a portfolio because we want all the pieces to go together.
[00:04:03] Speaker A: Okay, Annette, let's have one more thing for people to consider, another investment approach that they could consider.
[00:04:09] Speaker B: Well, this one's not for the faint of heart. It's the alternative investment world. It would be like your hedge funds. It would be private real estate. It's definitely higher on the risk scale, so it's not something you have a lot of in your closet. So the example that you have, Courtney, which I love, are these gold boots. These are a wow. And you can see how that perhaps this would jazz up the little black dress and give that wow of an outfit. Now, you don't have a lot of these in your closet. You have one of them, but it is that exceptional piece and it's not for everybody.
[00:04:45] Speaker A: Okay, so if I'm hearing you right, this kind of exceptional boot that yes, you're not going to have two gold boots. You have one gold boot is really because A, it may come in and out of fashion, so it may not have a very long shelf life, which creates some risk because they're expensive and you may not wear them very often. And B, definitely people will remember you wearing them, so you really can't wear them as much. And how that correlates to finance is that those alternative investments you just mentioned PE high growth things, they do have a very high probable return, but they're also more risky. Just like this investment is.
[00:05:23] Speaker B: Exactly.
[00:05:24] Speaker A: That's exactly right.
[00:05:25] Speaker B: So not everybody wants a gold boot or an alternative investment. Again, it's depending on the person's comfort of risk and style.
[00:05:33] Speaker A: So for a small part of your closet or a small part of your portfolio, alternative investments can be a while more than 10%. Okay, I'll have to return some of my shoes.
Annette, this is fascinating. Thank you so much. And I really think it's going to help people because we all hear things differently and I love when we can attribute them to something. It's really important work you're doing and I love that you thought this up. I talk a lot about sustainable competitive advantage and I think the fact that you service so many people that also love fashion and so many people that need more information about finances has been one of your sustainable competitive advantages. Where can the audience find you?
[00:06:12] Speaker B: You can find me at WW. Dot stonebridge wealthadvisors.com.
[00:06:16] Speaker A: Thank you so much.
[00:06:17] Speaker B: Thank you.
