Welcome back to the Net Worth Podcast.
Speaker 2: This week we are diving into a crucial topic, how to navigate market volatility and turn it into a catalyst for your net worth, especially for millennials and high earners.
Speaker 1: Check out the full edition on our website, wearenoyack.com.
Speaker 2: That’s wearenoyack.com.
Speaker 1: Now, you might be wondering why we’ve uh kind of interrupted our regular programming for this deep dive.
Speaker 2: Well, the NOYACK team really felt that what you needed right now wasn’t just you know, the next schedule topic, but immediate actionable strategy.
Speaker 1: And we’re drawing this directly from this edition of Noyack Wealth Weekly, because this isn’t just a market blip like this edition points out.
Speaker 2: It feels more like a flash point.
Speaker 1: Flash point is exactly the right word.
Speaker 2: I mean, it’s not just one thing, it?
Speaker 1: You’ve got this new round of tariffs hitting.
Speaker 2: Inflation is still stubbornly high.
Speaker 1: The Fed’s tightening up.
Speaker 2: And the numbers are pretty stark.
Speaker 1: We saw, a $2.4 trillion loss in U.S.
Speaker 2: markets in just one trading session recently.
Speaker 1: That’s huge.
Speaker 2: It is.
Speaker 1: And you see…
Speaker 2: tech stocks bleeding, treasury yields jumping up, even the dollar looking bit shaky.
Speaker 1: For a lot of investors, this is where they just freeze, know?
Speaker 2: Scroll the news, wait it out.
Speaker 1: But for our audience, for you, especially if you’re a millennial or a high earner, this isn’t freeze-up time, this volatility, this chaos.
Speaker 2: It’s actually a catalyst for your network.
Speaker 1: Right.
Speaker 2: That’s the core message here, isn’t it?
Speaker 1: That we’re a catalyst.
Speaker 2: It connects directly to those big goals you have, funding freedom, making work optional, maybe having impact become your full-time thing.
Speaker 1: So it’s about shifting perspective, seeing this turbulence, not as a crisis for your plan, but as a genuine opportunity.
Speaker 2: Exactly.
Speaker 1: And look, this isn’t just us saying this.
Speaker 2: The playbook we’re talking about, it came from some intense work for this edition.
Speaker 1: The team spent like 72 hours really digging into past crises, 87, 94, 2008, even 2020, studying how investors actually navigated those moments successfully.
Speaker 2: And from all that history, we’ve pulled out this five-part action plan.
Speaker 1: It’s designed for you right now.
Speaker 2: Okay, let’s unpack that playbook then.
Speaker 1: Step one, the edition says, is rebalancing your tax sheltered accounts first.
Speaker 2: Why start there?
Speaker 1: See you specific.
Speaker 2: Well, it’s all about tax efficiency.
Speaker 1: That’s the smart first move.
Speaker 2: You get to reposition your assets, you know, make changes without immediately triggering capital gains taxes.
Speaker 1: That’s huge for preserving wealth.
Speaker 2: Okay, so it protects what you’ve already built.
Speaker 1: Precisely.
Speaker 2: So the action steps are pretty clear.
Speaker 1: Review your 401k, your Roth IRA, solo 401k if you have one, definitely your HSA.
Speaker 2: The idea is to maybe trim back some of that concentrated equity risk, especially if you’re heavy in, say, global tech or other volatile areas.
Speaker 1: And then you add some ballast and things like short-term treasuries, maybe some solid dividend paying US stocks or defensive sectors.
Speaker 2: Things that tend to hold up a bit better.
Speaker 1: Exactly.
Speaker 2: And a really key point from this edition, max out that HSA if you can.
Speaker 1: Let the money grow invested.
Speaker 2: Pay your current health costs out of pocket if possible.
Speaker 1: That triple tax free growth into retirement.
Speaker 2: It’s incredibly powerful.
Speaker 1: And for the self-employed listeners, that Solo 401k is such a flexible tool, especially in volatile times for sheltering more income.
Speaker 2: So step one is really about protecting gains, avoiding unnecessary tax hits and keeping your powder dry for future growth.
Speaker 1: I like how this edition puts it.
Speaker 2: Rebalancing isn’t panic, it’s power.
Speaker 1: It’s about setting yourself up.
Speaker 2: It absolutely is.
Speaker 1: You create that dry powder for better entry points later, all while shielding growth from taxes.
Speaker 2: It’s proactive.
Speaker 1: OK, building on that, step two, diversify, but with intention, not guesswork.
Speaker 2: This feels important because I think a lot of us, especially millennials, might think we’re diversified, but maybe not in the ways that count during downturns.
Speaker 1: That’s a really sharp observation, and the research in this edition backs it up.
Speaker 2: Get this.
Speaker 1: ultra wealthy investors.
Speaker 2: They often have 30%, sometimes even 50 % in alternative assets.
Speaker 1: Wow, 30 to 50%.
Speaker 2: Yeah.
Speaker 1: Whereas most millennials, it’s often less than 5%.
Speaker 2: That’s a huge gap.
Speaker 1: So this step is about closing that gap intentionally.
Speaker 2: The addition highlights what tends to work well when markets get rough.
Speaker 1: Things like REITs and private real estate, specifically industrial multifamily income producing stuff.
Speaker 2: Stuff people always need basically.
Speaker 1: Right.
Speaker 2: Then there’s private credit, think floating rate debt, which adjusts with rates, short duration lending, even revenue-based financing.
Speaker 1: It’s getting closer to the actual loans.
Speaker 2: Interesting.
Speaker 1: And uh fine art funds.
Speaker 2: This one surprises people sometimes.
Speaker 1: Yeah, art.
Speaker 2: How does that fit?
Speaker 1: Well, think about it.
Speaker 2: As the edition notes, blue chip artists don’t really care what the Fed’s doing.
Speaker 1: The art market has its own cycle.
Speaker 2: Historically, it shows almost zero correlation with stocks.
Speaker 1: So it can be a really smart hedge.
Speaker 2: OK, that makes sense.
Speaker 1: Less correlated.
Speaker 2: Exactly.
Speaker 1: And finally, selective venture capital, especially secondary funds.
Speaker 2: That’s where you can buy into existing stakes, sometimes at a discount.
Speaker 1: Less early stage risk.
Speaker 2: Now there’s a crucial warning in this edition about where you hold these things, right?
Speaker 1: Yeah.
Speaker 2: Especially the art and collectibles.
Speaker 1: Yes.
Speaker 2: Absolutely critical.
Speaker 1: You do not want to put things like fine art funds, wine, collectibles inside your IRA or HSA.
Speaker 2: The IRS sees that as a taxable distribution.
Speaker 1: Totally defeats the purpose of the tax shelter.
Speaker 2: Right.
Speaker 1: Bad news.
Speaker 2: So for those kinds of long-term legacy assets, you use your regular taxable accounts, maybe trusts or even donor-advised funds, DFs, if you’re blending investing and philanthropy.
Speaker 1: Got it.
Speaker 2: So know the rules.
Speaker 1: Know the rules.
Speaker 2: Use them to your advantage.
Speaker 1: That’s the key.
Speaker 2: The net worth impact here is significant.
Speaker 1: Alternatives act like shock absorbers for your portfolio.
Speaker 2: They help cushion the downside, preserve your capital when things get rocky.
Speaker 1: That builds real resilience.
Speaker 2: OK, shock absorbers.
Speaker 1: I like that analogy.
Speaker 2: Let’s move to step three.
Speaker 1: Bucket your strategy by timeline, not hype.
Speaker 2: This sounds like how the pros, like CIOs and family offices, think about it.
Speaker 1: Less reacting, more structure.
Speaker 2: It is.
Speaker 1: It’s about getting organized to avoid panic.
Speaker 2: This edition breaks it down really clearly into three buckets based on when you’ll need the money.
Speaker 1: First, your short term bucket, zero to three years out.
Speaker 2: This is cash, T-bills, high yield savings, money markets.
Speaker 1: Your emergency fund, operating cash, don’t touch it for investing.
Speaker 2: Right, safe stuff.
Speaker 1: Then the midterm bucket, three to seven years.
Speaker 2: Think dividend stocks, maybe bond ladders, private credit, designed for income with moderate risk, maybe for a down payment or a planned career break.
Speaker 1: OK, makes sense.
Speaker 2: And finally, the long term bucket, seven years plus.
Speaker 1: This is where your growth engines live.
Speaker 2: Equities, real estate equity, venture capital, higher growth potential, but you need patience for the volatility.
Speaker 1: Having those distinct buckets seems like it would make decisions way easier during volatile times.
Speaker 2: You’re not just looking at one big scary number.
Speaker 1: Exactly.
Speaker 2: It brings rationality.
Speaker 1: You know why each asset is there.
Speaker 2: And this edition has a great pro tip here, especially for parents listening.
Speaker 1: eh Set up a custodial account, like a UGMA or UTMA.
Speaker 2: If you’re kids now, that compounding clock starts ticking for them immediately.
Speaker 1: huge head start for their own future net worth.
Speaker 2: Oh, absolutely.
Speaker 1: Fantastic point.
Speaker 2: The net worth impact of this whole timeline approach is stability.
Speaker 1: It keeps you on track, keeps you exposed to that long term growth, even when markets are choppy.
Speaker 2: All right.
Speaker 1: Step four feels like a big mindset shift.
Speaker 2: Shift from market centric to goal centric wealth building.
Speaker 1: It’s challenging that whole idea that your main goal should just be like beating the S &P 500.
Speaker 2: Yeah.
Speaker 1: It’s asking a different question, not how do I beat the market?
Speaker 2: But how does my wealth fund the life I actually want?
Speaker 1: So this edition really pushes you to name your specific goals first.
Speaker 2: OK, what’s your target for core retirement income?
Speaker 1: What do you need for that house down payment or renovation?
Speaker 2: Health care costs, elder support.
Speaker 1: Maybe it’s funding a sabbatical, launching a business, paying for education, or your impact investing in legacy plans.
Speaker 2: Get specific.
Speaker 1: And then the strategy is you assign assets to each goal.
Speaker 2: Pretty much.
Speaker 1: You create almost like mini sub portfolios for each major goal.
Speaker 2: And you match the timeline and the risk of that specific sub portfolio to that specific goal, not just to what the overall market is doing.
Speaker 1: Okay.
Speaker 2: So stop lumping everything together.
Speaker 1: Align assets with actual priorities.
Speaker 2: Exactly.
Speaker 1: If launching that mission driven business is a huge priority in say five years, you build a specific pot of money designed for that with the right risk level.
Speaker 2: It forces real intention.
Speaker 1: Does this actually make a difference numerically?
Speaker 2: does.
Speaker 1: This edition cites Morningstar’s David Blanchett, who found this kind of goal-centric approach can add like 15 % or more in what he calls utility-adjusted wealth over time.
Speaker 2: Basically, your wealth does a better job of actually delivering what you want from it.
Speaker 1: It’s intentional investing.
Speaker 2: So the net worth impact here is focus.
Speaker 1: Keeping your wealth aimed squarely at your life, your goals, your impact.
Speaker 2: I like that line from the edition.
Speaker 1: Think like a CIO, because now you are one.
Speaker 2: It’s empowering.
Speaker 1: It really is.
Speaker 2: You’re the chief investment officer of your own life.
Speaker 1: OK, brings us to the final step, number five.
Speaker 2: Reassess quarterly act.
Speaker 1: Intentionally, not emotionally.
Speaker 2: This isn’t about nervously checking your phone app every five minutes.
Speaker 1: Yeah, definitely not.
Speaker 2: That just leads to bad emotional decisions.
Speaker 1: This is about a regular discipline process check.
Speaker 2: Quarterly is a good rhythm.
Speaker 1: So what’s on that quarterly checklist according to this edition?
Speaker 2: It’s pretty straightforward.
Speaker 1: First, Review all your accounts.
Speaker 2: Are things still lined up with your buckets, with your goals?
Speaker 1: Made sense three months ago, does it still?
Speaker 2: Then rebalance.
Speaker 1: Buy a bit more of what’s fallen and looks undervalued.
Speaker 2: Trim back what’s run up maybe too far.
Speaker 1: Next, tax optimization.
Speaker 2: Look for opportunities to harvest losses, reinvest smartly.
Speaker 1: And crucially, in down markets, consider Roth conversions.
Speaker 2: That can be a massive long-term tax win.
Speaker 1: Right, turning lemons into lemonade, tax-wise.
Speaker 2: Exactly.
Speaker 1: And finally, make strategic ads.
Speaker 2: Maybe deploy some capital into those alternative funds we talked about or reallocate slightly towards sectors showing relative strength.
Speaker 1: It’s planned, not panicked.
Speaker 2: And looking back, the historical examples in the edition really drive this home.
Speaker 1: Every crisis studied.
Speaker 2: Yeah, Black Monday, 94 bond massacre, the 08 housing collapse, COVID.
Speaker 1: People who came out ahead were the ones who had a plan and stuck to it.
Speaker 2: Absolutely.
Speaker 1: Look at Warren Buffett putting $5 billion into Goldman Sachs in the depths of 08.
Speaker 2: He wasn’t timing the bottom perfectly, but he acted decisively based on his plan when fear was rampant.
Speaker 1: Right.
Speaker 2: Or Howard Marks buying up distressed debt in 09.
Speaker 1: Or Ray Dalio’s approach staying relatively steady.
Speaker 2: You don’t need their billions.
Speaker 1: You just need your plan and the discipline, the confidence to follow it through the noise.
Speaker 2: That consistent process is what builds wealth.
Speaker 1: So the net worth impact of step five is really discipline compounding wealth over time, avoiding those big emotional mistakes.
Speaker 2: That’s it.
Speaker 1: And the final word from this edition really lands, think.
Speaker 2: It says this isn’t just a market moment.
Speaker 1: It’s a personal one.
Speaker 2: How you react, what you do in the next, say, 30 days.
Speaker 1: That could genuinely shape your financial path for the next 30 years.
Speaker 2: It’s a choice point.
Speaker 1: Wow, that’s powerful.
Speaker 2: So the ultimate takeaway is the big wealth building doesn’t happen when things are calm.
Speaker 1: It happens now.
Speaker 2: When others hesitate, you move intentionally.
Speaker 1: So quick recap of the five steps.
Speaker 2: Rebalance first intact sheltered accounts.
Speaker 1: Diversify smartly into alternatives.
Speaker 2: Bucket your money by timeline, build around your actual life goals, and view quarterly, stick to the plan.
Speaker 1: Nailed it.
Speaker 2: And this week’s move from the addition.
Speaker 1: Super simple, super concrete, spend just 10 minutes, set up an automatic monthly contribution to your Roth IRA or your brokerage account, even if it’s just $50 to start.
Speaker 2: That consistent action, that automation, that’s how long-term wealth really wins.
Speaker 1: Small steps.
Speaker 2: consistently.
Speaker 1: Remember to subscribe to Noyack Wealth Weekly on our website, wearenoyack.com, to read the article behind today’s conversation, and to get our weekly newsletter straight in your inbox.
