Episode 19: What’s Investing All About?

GRANT: Hey, Mak. 

MAK: What’s up G?

GRANT: Do you know what happens when you start early?

MAK: I do G. You go wealthy. 

BOTH: It’s time for Money With Mak and G. Finance for you and your family.

MAK: Wow, I can’t believe we’re done with season three. We’re back in school and it’s starting to get cold outside.

GRANT: Hey, but we had some great interviews on season three. And now we’re on season four. And we haven’t even scratched the surface.

MAK: Exactly. But now that the business is making money, and we have our allowance, I actually have some leftover from my spending. 

GRANT: It’s time to talk about investing babies. 

MAK: Yeah, it was great to hear tips on running a business from Kopi. And also to hear about uncle Tony’s angel investor.

GRANT: Agreed. We might be able to raise money from uncle Tony, but we’re not ready to invest with him.

MAK: Nice job. Gee, I love how you use the lingo to raise money. You sound like a pro. Excellent.

GRANT: Well, thank you Mac. I was going to use a startup too, but I decided I like seeing money better. With our growing bank accounts. It’s time to invest. 

MAK: You couldn’t have said it better brother. And since dad had that job for years, I think he can help. 

BOTH: Dad.

DAD: What’s going on? Well, what’s happening?

MAK: Dad, were you sleeping again?

DAD: No, I love lower taxes. I mean, what day is it? 

GRANT: He’s a delirious Mac. He must have been having that dream. He has lower taxes. He’s so crazy.

DAD: Okay, maybe I was taking a little nap. But don’t tell mom. She wanted me to fix the squeaky door in the bathroom.

MAK: Secret’s safe with me, dad. But we want something from you. Can you help us with investing?

DAD: Sure thing? I’d love to. What do you want to know? I can dust off all my old books.

GRANT: Dad, we only want to know about making our money grow. We don’t need to know any of that other stuff.

DAD: Mm hmm. That sounds like when you were a little kid learning baseball. You knew how to hit and catch. But you didn’t know about the rules at one of your games G, you hit the ball on random third base. It was so cute. Your mom and I left for a week.

GRANT: Okay, you made your point. Maybe we need to know a bit more. So where do we start?

DAD: Let me start by asking why you invest? 

GRANT: To make money. 

DAD: Excellent. Investing is all about putting something you have like time, effort or money into something or action, because you expect it will grow or be more valuable in the future. For us. It’s money.

MAK: So could it mean putting in time practicing singing now to be much better in the future?

GRANT: Or working on my video game skills to get to the next level upgraded my weapons.

DAD: You’re both right. But I’m a little scared about your investment philosophy G. So for right now money, the first thing we need to know is very basic. Can you say buy low and sell high?

BOTH: Buy low and sell high.

DAD: Yes, yes. I love it. You got it. We have to learn that the only way to make money is to buy something at a price that is lower than what we sell it for. Otherwise, you see 6000 sell at 2200 for instance.

GRANT: Yeah, that’s not rocket science. Dad.

MAK: That sounds super simple. So you can invest in stuffed animal toys, games, or almost anything?

DAD: Yep. As long as you 

BOTH: Buy low and sell high. 

DAD: Excellent. Do you remember when we watched Star Wars?

MAK: Of course, may the force be with you? Oh, didn’t you say that original came out when you were RH. Why?

DAD: Thanks for remembering that age thing. But yes, it did. Do you remember Obi Wan Kenobi? I love him. His first name was Ben just like mine. And he helped Luke Skywalker.

GRANT: Didn’t he also train Darth Vader to be a bad guy?

DAD: Okay, yes, he did. But that’s beside the point.

MAK: What does this have to do with investing? 

DAD: Well, investing can be anything if you invest in or bought the special action figure of Obi Wan Kenobi with these super cool lights back in 1978 for less than $5 it would be worth $30,000 now.

GRANT: What are you serious about? 30 large plastic dolls for $5 investment.

MAK: Dad, I got to say that a lot of chatter.

DAD: It is but what do you think is hard about investing in those plastic action figures that you play with?

GRANT: How would you know which one to buy right now?

MAK: What if you played with it for over 40 years and Oreo tore off his arm? Would it be worth as much?

DAD: Those are perfect questions. If you invest in action figures you have to know which ones to buy. And you can’t really play with them. Most of the time, they have to be in really good shape or even perfect condition. 

GRANT: So if Oreo bit off his head, it would be worth less than $5. 

MAK: Maybe one? 

DAD: Yep, that’s exactly it. That’s why alternative investing is tough to do without a lot of knowledge and time.

MAK: All turn around. What did you say? 

DAD: Al-ter-na-tive. It means another possibility. Like when you go to get ice cream, you could get double chocolate chips or an alternative could be a rocky road. It’s another option.

GRANT: So what’s the first choice if investing in action figures is the second choice or alternative investment?

DAD: Well, the first choice is stocks and bonds, because they tend to be the easiest to invest in. We’re definitely going to talk about those next time. Can you guys name any other collectibles you might be able to invest in?

GRANT: I’m assuming that collectibles are something you can collect. 

DAD: Yep.

MAK: How about stuffed animals? People collect those or. 

GRANT: Video games. I collect video games.

DAD: Those work too. And did you know there was a game called stadium events that was released by Bandai in 1987. It had an exercise mat that you could walk, run and jump on to play video games.

MAK: Why are you bringing this up? Sounds a little bit like the Wii U. What’s so special about it?

DAD: Well, Nintendo bought the game from Bandai, and wanted to change it. So they pulled all of the bandana games off the shelf and didn’t sell it. But 200 were sold before they got them all. 

MAK: So what happened? 

DAD: Well, since only 200 were sold, it was really rare. Kids who got the game would rip it open and rip up in the box and throw it away. Did you know The Box alone sold for $10,000. And that was just cardboard.

GRANT: What the box? Most games download now and there isn’t even a box.

DAD: I know. Well, a guy in Kansas was just about to give a brand new sealed copy of a stadium event to goodwill that he never used. And then he heard that story. He put this perfect copy on eBay to sell it. And guess what? He sold this for?

GRANT: 20,000?

DAD: No higher. 

GRANT: 30?

DAD: No. 

GRANT: 40? 

DAD: $41,300 But for these investments, you would have bought it 30 years ago. You need to know it’s rare, how much someone will pay for it, where you can sell it. And a lot of other things. And most of all, you had to keep the box. 

GRANT: I’ve never heard of that. 

DAD: Exactly. Collectibles like action figures. Dolls, coins, art video game baseball cards, and items you hold on to or collect are tough without knowing a lot of stuff. Even the Star Wars action figures.

MAK: But if you buy low and sell high and you love to collect stuff, this could be good. Some people love to collect stuff.

DAD: That’s right on the money. As mentioned, it can be super hard to sell special collectible items too. For very special art it gets worse. Have you ever heard of a forger?

MAK: Is that a person who yells when they hit the golf ball?

DAD: No. That did make me laugh. A forger is someone who creates copies or imitations in order to trick people.

GRANT: Couldn’t be like buying a diamond ring. But it was a fake diamond.

DAD: Absolutely. For paintings people want to own paintings done by really famous people. Have you ever heard of Picasso?

MAK: Yeah, he is those really crazy paintings with noses on sideways bases with three eyes is really weird.

DAD: That’s him for sure. Some of it is really weird, but his paintings are super expensive. A forger in California was paid $1,000 To make a copy of a famous Picasso called Love thumb oh chapeau blue.

MAK: Is that the one you just showed us? And it means the woman in the blue hat.

DAD: Yep. And it was sold for $2 million. They sure trick that guy who bought it, huh?

GRANT: Yeah, that’s crazy. Seriously, 2 million bucks. And it was fake.

DAD: Yep. Collectibles can definitely be investments. But art can be very difficult in a lot of ways. That’s why we want to talk about stocks and bonds.

GRANT: Let’s get on with it. Stocks and bonds buy low and sell high.

MAK: I’m on board with that. Let’s keep this train thing going, buy low and sell high.

DAD: You totally got it investing is about putting in money now and expecting it to grow to a higher price in the future.

MAK: Kind of like planting seeds.

GRANT: That’s a good one Mak, that was so good. I could have said it myself.

MAK: Funny. Haha. But it was good, was it? I got this investing thing.

DAD: Wow, this is exciting. We’re investing. I love it. Today we spoke a lot about alternative investing to highlight that you can invest in anything. As we move to our next episode, we start to dig into stocks and bonds. But we don’t want to overlook that investing can be anything that is anticipated to deliver more in the future than what you put in today, you can definitely invest your time into being a better soccer player or singer or business person. But for us, we’re talking about investing money. There are so many great stories about alternative investments, whether it be coins, baseball cards, wine, paintings, or other if that’s your thing, awesome. Some of the same skills can be used for investing in stocks and bonds, you have to understand one the value of your purchase and two what makes it grow. For collectibles, you generally have to know how rare the item is, how good a shape it’s in, what makes it special, or how it grows in value and where you can sell it. The mantra for making money is all about buy low and sell high. It sounds simple, but that’s our end game. You’ll hear true investors say they make all their money when they buy, not when they sell. This highlights how you have to buy at the right price no matter what it is. Buy low, sell high. Keep that in your mind and let’s dig into stocks and bonds. Here’s a preview from our next episode.

MAK: Hey Grant. Now that we know investing is growing our money. It’s time to dig into stocks and bonds.

GRANT: Yeah, I’m not sure I would have known to buy Ben Kenobi 40 years ago, but 30k is quite a return.

MAK: Agreed. That’s something from Crazy Town.