NGPF Podcast: Kevin Thompson, MLB Player Turned CEO, on his journey from Baseball to Investing
Former Minnesota Twins player Kevin Thompson joins us to talk about his experience as a professional baseball player and his career as the CEO and President of 9i Capital Group.
Ren Makino: Hi, this is Ren from Next Gen Personal Finance and you're listening to the NGPF podcast. Today on the show, Tim is joined by Kevin Thompson, a professional baseball player turned CEO of 9i Capital Group. He joins us on the show to talk about his experience as a professional baseball player turned entrepreneur and the struggle he went through along the way. Listen to this discussion to get a glimpse into the life of a business owner and a investment advisor. Enjoy!
Tim Ranzetta: All right. Welcome to the NGPF Podcast, Kevin Thompson.
Kevin Thompson: Hey, thank you guys for having me. I appreciate the opportunity to talk a little bit maybe about finance, maybe about baseball. Who knows where this goes, right?
Tim Ranzetta: I think we're gonna go in a lot of different directions here.
Kevin Thompson: Absolutely.
Tim Ranzetta: So let's start with, let's start with money though.
And I always, one of the first questions I love asking my guests are just early money lessons they picked up in their household.
[00:00:55] Kevin's Early Money Lessons.
Kevin Thompson: Well I don't know about my household, but I know one thing, early money lesson is when you get your first bonus check, when you sign your minor league deal or when you go, like for example, I was picked up by the Yankees.
I signed for about a buck 50 and yeah, the little old me wanted to go get an SUV and get it all souped up and all that stuff. That's a money lesson number one. Don't do that. Right. So, but at the time that was what people did. And luckily I drove that truck, man, I drove that truck.
Matter of fact, I just got rid of it back in like 2016. So I drove it from like 2000 to 2016. So I'm the type of guy, if I buy something, I'm gonna drive it, the wheels off of it. And I definitely drove the wheels off of it to 206,000 miles. So not too bad. Wow. So what was it? Chevrolet Tahoe, my friend Chevrolet Tahoe.
Back when the big, the big style was, was cool and everybody was okay with getting 15 to to 16 miles a gallon. That was me, man, friend.
Tim Ranzetta: I was gonna mention that, but you beat me too. So let's let's go back a few steps here, 'cause you jumped all the way to baseball. I thought we were gonna take a little while to get there.
Kevin Thompson: Yeah, no worries. Yeah.
Tim Ranzetta: How about your first job growing up?
[00:02:00] Kevin's First Job.
Kevin Thompson: First job growing up. I used to work at these batting cages, so there's this place called Sluggers in Fort Worth. And I, I, I used to go in there and, you know, make sure the machines were all good and everything like that. But the beauty about it was the owner just let me hit as much as I want.
So half the time I was just, Hitting all day long. I'd go into the cages, hit, hit, friends would come up, we would hit a little bit. So I was basically getting paid to hit, you know what I mean? So, but yeah, I worked at a little batting cages called Sluggers. They probably paid me next to nothing, but I didn't care.
I got free hitting, so I used to hit indoors every single day. It was great.
Tim Ranzetta: What an amazing benefit. So, okay, so what was the top speed on those guns? Was it getting up to 90?
Kevin Thompson: They had this fast pitch machine that could get up to pipe. Well, it was very close, so that 70, 80 miles probably could, could seem as if it was 90.
So we had a, we had some pretty good machines in there. What what was scary is, is the crossfire. So when you're hitting those other people hitting the cage, if one of those balls somehow go, comes your way and it skims off the other ball coming out, it could be a problem. It could, it could redirect it somewhere.
So there was some there were some issues with those cages, but back in the days, I mean, we used to just sit in there and hit and, and yeah, sometimes the ball would. Go out. And sometimes what we would do, we didn't tell anybody this, we would load 'em up with actual baseballs because we wanted to hear the actual sound.
Yeah. And that was different because if it, if it would catch the seam, the ball would do something crazy. So we were, we were a little adventurous at times. But yeah, it was definitely fun.
Tim Ranzetta: Yeah. You had to be flexible in the in the batter's box there. So when, when did you know you were good?
Kevin Thompson: You know what, I never knew I was good. I mean, people always said I was, I mean, a lot of people wanted me to play on their teams in high school.
I said at one point I was playing for three separate select teams. It was crazy. I was playing every single day. I literally said, I don't like playing anymore, man. Like I tell I'm gonna settle down. And honestly, the day that I really realized I was, that I could play is when my buddy Jason Ferro, who also played in the big leagues for a little bit with the Astros, but we went to school at the same time.
He was the shortstop. I was like second baseman at the time. And he was like, man, Kevin. He said, you could, you can, you could get drafted one day. I said, what does that even mean? I didn't even know what it even meant. I said, what does that mean? What are you talking about? He said, dude, you can play this game.
And by the way, I was on varsity football as a freshman, so I was doing other things versus playing baseball at the time. And then finally I was like, you know what, maybe this is what I need to be doing. So I dropped the football and went straight to baseball and, and the rest is history.
Tim Ranzetta: Yeah. So drafted outta high school.
Kevin Thompson: Drafted outta high school in the 18th round by the Minnesota Twins as a shortstop. And I was terrible at shortstop, man. When I got with my second life, they put me in the outfield so quick. It was a blessing, but yeah. Drafted as a shortstop didn't go.
They, they only offered me like maybe a buck 50 bucks. I don't know what they offered me, but I didn't go, decided to go to school. Got a scholarship at TCU at the time, and nobody realizes this. The TCU wasn't TCU. The TCU that that I went to is drastically different than the TCU, you know, today.
People back in the day, you would say, Hey, I go to TCU, where is that? What is that? Is that Christian college? You guys have to go to all this other stuff. I'm like, well, yeah, and all this other stuff, but it's not the same. I mean, it was, no, the, the football program was terrible. Baseball program was terrible.
Right now I live five minutes from the campus, so if I go up to the campus, it's an entirely different campus right now. I mean, I ha most of the buildings were not even there.
The campus itself was not what it was today. And fortunately, one of the coaches, one of the grad assistants, said, Kevin, you need to go somewhere else. I had a scholarship there.
I wasn't paying for anything, you know, so it was good for me. They're like, no, you need to go somewhere else, man. Go really play. And really play baseball every day because TCU was more of a, Frat school where guys would just play baseball. And I was the guy, type of guy that I'd be out on the field every single day, all day, every day in the cage on the field.
'cause I loved it. I just loved it. I didn't wanna do anything else. So he said, go somewhere else. Go play and and, and do your thing. And I later left during that semester, left and went to play at Grayson County College up in Denison under Tim Tadlock, who's the Texas tech coach right now.
So and when I got there it was all she wrote, got drafted the following year and the rest was history.
Tim Ranzetta: Alright, so you're in finance now. Was that something you took up in college also? What kind of spurred your interest in finance?
[00:06:04] What Spurred Kevin's Interest in Finance.
Kevin Thompson: Funny story spurred my interest. It's great that you said that.
So I'm 2008 with the Pittsburgh Pirates making a little bit of money there. And I was in AAA starting a year out in AAA so,
Tim Ranzetta: So those, those who aren't familiar with baseball, AAA is the closest you get to the major leagues.
Kevin Thompson: Exactly. Yeah. Sorry. Yeah, yeah. Sorry.
Tim Ranzetta: You got, you got your eyes set on the prize here 'cause you're just one step
Kevin Thompson: Yeah. Yeah, because for, well for me it was, I just got out of the big leagues, like I was playing in the big leagues with the Yankees. Then I got picked up by Oakland, finish the season out in the big leagues. And now I'm totally expecting to be in the big leagues with the Pittsburgh Pirates.
It's the Pittsburgh Pirates. Come on man. You know what I mean? It's not the New York gig. 'cause I'm like, oh yeah, I got this wrapped up. And then while I was there in spring training I, was introduced to this group called the Stanford Group. Stanford group, Allen, Stanford. so I gave them my money.
They were managing my money and they started in introducing me to all things finance.
Tim Ranzetta: Oh, no. Yeah. Oh no. We'll get I know where this is going. I'll let you Yeah, exactly. I'll let you tell the story.
Kevin Thompson: Yeah. Yeah. Love the finance side of things. I said, man, I really love learning this stuff. I love everything about it.
So I really fully just ingratiated my, it just just lived it. I watched Bloomberg was all day long. CNBC was all day long. People were like, what are you doing? I'm like, I'd be in there working out watching CNBC. Right? So, Funny story while I'm watching CNBC, who's getting handcuffed coming out of his office, Alan Stanford.
I was like, uhoh. That's weird, right? So I found out what was going on my, I called my advisor. My advisor says, man, we don't know what's going on. This is all news to us. Lo and behold, he was running some kind of a Antiguan CD ponti scheme, froze everybody's assets, froze my money for like nine months. I told myself again, I said, never again.
Never again. For unfortunately, that year I tore tendon in my wrist while I was with the pirates, immediately enrolled in school. I said, I wanna learn everything about finance and I wanna, and I'm going to just live it. And finally got my money back, some of my money back 'cause the market was down almost 49% that year.
And then started managing my own money. And I just fell in love with it. Man. I love, the same effort I put towards baseball is the same effort and energy I'm putting towards this.
Tim Ranzetta: Okay, so we gotta backtrack a little bit here 'cause I wanna hear about the path to the Yankees. Just so you know, I grew up in Northern New Jersey, diehard Yankee fan.
So I'm gonna have a lot of very specific questions for you, but,
Kevin Thompson: I'm here for you.
Tim Ranzetta: How'd you get, you know, how'd you go from college through the minor leagues and kind of I wanna specifically hear about the first day you stepped foot on the field at Yankee Stadium.
Kevin Thompson: So Grayson County College got drafted out of there by the Yankees, signed for about a buck 50.
I get there, buck 50 is 150 or 1.50, I wish it was 1.5
$150,000. Okay. I wasn't a big time one first round or anything like that, but a lot, lot of us aren't, but at the end of the day, I was the number one during college kid in the nation at the time. So I mean, we have that. But yeah, so I get to the Yankees.
I was an infielder with the Yankees and they said, you know what? Take that infield glove and put it somewhere else and put you in the outfield. Fortunately they did that 'cause Tim Tatlock, for some reason, was so dead set against it. I don't know why I wanted to be in the outfield. He wanted me to be in the infield.
He says A 20 home run guy needs to be in the infield. That makes you look so much better. I was like, ah, I don't care. But anyways, so get to the Yankees. Started off pretty good. I mean, I hurt my ankle the first year really, really badly. So I kind of come off of that. Got hurt there the first year, second year I started with the, I was with the Staten Island team did okay there.
I think it was like 2 76 or seven home runs. Not too bad. The following year is when I started kind of taking off when I was in Greensboro. Greensboro did really, really well. There all star team Greensboro's, double double A. Oh, that's High A I mean, no, sorry.
Low A, Low A. I went from rookie ball. I did every single level, my friend, every single level
Yeah. So those not familiar. The path from the minor leagues to the majors has a lot of steps to it. It's rookie, lot of steps. Low A, High A, AA, AAA, and then you're in big club. And normally you have to hit every, unless you're really high draft pick.
Yeah. You're not gonna skip a step.
Yeah, so for me, I went from rookie ball the first year to basically a kind of like short season A, which is basically Staten Island. And the following year I went to low A, which is Greensboro, and I did really, really well there. Lived the league in doubles and all kinds of stuff.
So they moved me up to high during the year. I ended up hurting my AC joint during the year. So they moved me back down all the way down to their short season Staten Island team. And the reason why they did that is because they care more about their Staten Island team because it's in New York.
Yeah. So they said, we gotta win here. So I went all the way back down there, we won a championship, right? So I was like, oh, hit 300 something, four home runs, WIN championship. And then I started this next season out in high. And that's when it was just like all she wrote. Like I started, I was in articles, all star teams, all this stuff.
Then I was at like three 30, had some home runs and all that stuff. In the middle of the season, they moved me up to AA and which was good. I started really well, but I woke up one morning and my elbow was swollen. I didn't know why, so I tried to play through it. I didn't finish the season out very strongly.
Turns out I had a huge bone spur in my elbow that I found out the following season that we'll get to that point. But anyways, didn't finish out very strongly. And then The next year I come back 'cause I had surgery on my elbow the following year and then I started in the middle of the season in high A again, just to kind of get myself going.
Started out, played like 12, four or five games there. Did really well. Moved me up to AA, did well there. And then the following season again, I started in AA and I absolutely killed it. I mean, led the league and hitting, led a league in everything I made to the futures game that year. With the Yankees all star teams again, and then moved on to AAA and then finally went to the big leagues that very same year because I was just on fire.
Tim Ranzetta: What was it? Because there's a ton of competition, right? Everybody wants the move on to the next level. You saw. Folks at every level. How much of it's talent, how much of it's desire, how much of it's lot? Like what's the, I know there's no magic formula, but you've, you've seen and you've excelled at the highest levels.
How much of it's a mental?
Kevin Thompson: Well, I'll say most of it's mental, but also most of it is do you fit a system? And what I mean by that is that, for example, myself and then there's a Milky Cabrera and all the other stuff like. I was having a, a hell of a year, one year.
And then Milky, they called milky up and one of my coaches came to me and says, Kevin, I know how this must feel, all this other stuff. I said, I get it. It's the business, right? But back to your question, it just comes a point in time where you start to age yourself out. And luckily I was young and most of my times when I was playing in all these different levels, because I started out like at 19 or 20 or 20 years old, and I was just basically going through the system pretty quickly.
But. You start seeing guys that are like 24 in high A or 25 in high A. You're like, you know what? The writing's on the wall, right? 26 and aa 27 and triple A is like the writing's on the wall, and it's a young man's game. And if you're not in the big leagues, I'll tell you right now, if you're not in the big leagues at 24, 25, Significantly.
I mean, the writings on the wall. They're telling you something. Now you could be one of those guys that gets up there at 27 and then you have a great year, and they're all, it's a fairy tale story, but that's few and far between. They want you in there getting some time at 22, 23, 24, and that's the main difference.
People just start aging out of the system and that's what happens.
Tim Ranzetta: So tell me about you. So first year with the Yankees. What year? What year is that? Where?
Kevin Thompson: I think it was 2000 Year. 2000. You mean with the big league team or just in general?
Tim Ranzetta: The big club.
Kevin Thompson: 2006.
Tim Ranzetta: What's the culture, you know, because you also hear that I mean, there's obviously a legacy, there's history you know, most world championships. But if you think of it as a company . You know, what were the things that stood out to you and maybe you actually carried forward with you in the firm that you went ahead and set up
Kevin Thompson: Thousand percent.
Culture matters. Culture is everything. From the way they wear their clothes, from the way they, have people shave. I. From the way you present yourself on the field, there's nobody out there with big, huge beards. There's nobody out there wearing crazy stuff or the jerseys open or slouching around.
This is about, this is a business and this is, and you have to either accept this or go somewhere else and play like the Yankees that, that pinstripe jersey you see right there. It's bigger than that person that that's wearing it, right? So everybody around the world knows that when they have the NY on their hat, They know what that represents and the way they run their business from low way all the way up to the big leagues is the exact same thing.
You wear your pants a certain way, you wear your, your hat a certain way. You have your facial hair, hair this, this way up and down the organization. I run my life the same way. Now. I'm not necessarily as like, structured and you know, I'll give a little bit here and there, but at the end of the day I have a lot of that built in me because I was with them for so long.
Tim Ranzetta: Let's talk about your path towards finance. So those not familiar. Alan Stanford, sir Alan Stanford was offering CD rates higher than the market was advertising. The Wall Street Journal had probably seven or 8 billion under assets before his Ponzi scheme.
And, and he kind of, Of did everything right in terms of building a Ponzi scheme. He included the word Stanford. He had been knighted by, I think it was Enga. It was a Caribbean nation that kind of gave him his bank charter and Yeah. So I'm surprised you got anything back. That's, that's probably good news.
They recovered some of it.
[00:15:24] Kevin's Experience with Alan Stanford.
Kevin Thompson: Well, so fortunately my money wasn't actually invested in the Antiguan CDs. Oh. My money was actually invested in securities. But the issue was, doesn't matter if you're where you're invested, we're freezing all your accounts, you can't have access to anything. Okay. So now my money's frozen.
All my money's frozen. I have no access to it, and I don't know when I'm gonna get it back. Yeah. You know what I mean? So now I'm just going like, what am I gonna do? And unfortunately the market was down 49% that year. But yeah, it was one of those things where being involved in that wasn't a good thing.
And I said, you know what? I gotta learn more about this business.
Tim Ranzetta: Yeah. So it sounds like you took all of this energy of, you know, obviously takes a ton of discipline to be a baseball player and get to the levels that you were at. You applied that discipline, that thirst for knowledge , into finance, you know, talk us through your finance career leading up to starting your own firm.
[00:16:17] Kevin's Finance Career Leading Up to Starting His Own Firm.
Kevin Thompson: So I started out well with a small time broker dealer. Not a small time broker dealer, but with a broker dealer, TD Ameritrade. 'cause my buddy was working there. I said, let me start here. I also see how, see what this is about, got some licenses. I said, this is not for me. This is terrible.
Actually, I, I mean, if this is a business, I don't wanna be involved in it.
Tim Ranzetta: What didn't you like about it?
Kevin Thompson: It's like the cattle culture where , you answer phones, you sell stuff, and there's not really any dynamic in regards to what we do today. Like it's totally. Polar opposite into what I know.
I've come to know what financial planning actually is, right? But it was just answering phones and, and then to say, Hey, get 'em, get 'em over to this person and let them try to sell them some kind of portfolio. It just doesn't make, I mean, to me it's just not. I don't wanna say anything bad about 'em.
They're a good company. I, I still use them as my own broker dealer in regards to my portfolios and stuff like that. But at the end of the day it just wasn't for me. So,
got outta there.
Tim Ranzetta: So what I'm hearing is too transactional
Kevin Thompson: Very transactional. There you go. There you go.
That's a good way to describe it. So I get out there and I meet a guy, I worked for this life insurance company called Guardian Life Insurance, and I said, you know what? He wants me to come on and, and help him build an investment arm of his company. I said, okay, that sounds like fun. So I go in, I meet him, we talk, and we start getting advisors in and we start building this huge investment arm for his firm.
We, he started out with like nothing. There was nothing there. And we basically started getting clients in and building what we call assets under management, right. I told him day one that I'm not an insurance salesman, I'm not gonna sell insurance like that. Yes. Part of the portfolio, yes, it's much needed in regards to the financial planning process, but I'm not in the sales environment where I'm just gonna sell something to someone and then move on.
I wanna be a fiduciary. Right? So I was there for about eight, nine years and, and I just said, you know what? This just doesn't work for me anymore, especially when. My book of business starts growing, right? When your book of business starts growing and you start realizing, well, I'm giving up 30, 40%.
Yeah. And now that $400,000 of revenue, that's 160,000, 120 to $160,000 of money's going out the door. You're like, okay. What value are you guys creating here for me? And then next thing you know, you're like, you know what, I'm gonna go do my own thing. And they knew that was coming anyways 'cause I, I wasn't gonna be there longer term and started my company Nine Eye Capital Group RIA Fiduciary Comprehensive Planning.
- Assets under management, building, build, building portfolios, things like that. I'm all about just doing it the right way. Like recently I was talking to one of my guys who's a former big leaguer. I said, Hey man don't roll that 401K over to me. Keep that 401K where you're at because what we're doing for you planning wise, it's gonna disrupt that.
And those kinds of things mean a lot, especially means a lot to me because it, it shows I have integrity and that's what this business needs more of is integrity.
Tim Ranzetta: So I wanna go through a couple of these things just to kind of hit some of the terms you mentioned RIA, registered investment advisor, what does that mean?
And then fiduciary, which I think is a key term, and I always tell folks, before you work with an advisor, that's the one question you better ask.
[00:19:16] Kevin Elaborating on the Terms.
Kevin Thompson: Absolutely. So a registered investment advisor firm is basically just an independent operating firm where I'm not necessarily. Tied to any institution, any insurance company.
You may see some RIAs that have ties to that. But for me, I wanted to be completely independent because what people don't realize is that their investment advisor that they may be working with, may have a underlying I guess Contract with another company. So if I'm working for X, Y, Z company, and the next thing you know they're gonna gimme a list of things that I can talk about or list of things that I can sell.
So how's that being a fiduciary? How's that? How, and we'll get to the fiduciary in a minute, but how's that being in the best use of the client? If I can only talk about this, I always said this, if you have a hammer, everything is gonna look like a nail. Right. And that's what the issue with our current financial landscape is because most people are like, we're insurance first.
Well, because that's all you do is sell insurance or we're investment advisory first, or, because all you do is sell investments. So it's not about selling anything. I'm out of the transaction business. I'm about doing true comprehensive planning, and that's where we are. And in the word fiduciary means a lot to me as a CFP certified financial planner.
I'm all on board. If you're gonna talk to a financial advisor, make sure they're a CFP I will stand by that time and time again. And because the whole moniker or the belief and the code of ethics around the CFP is fiduciary, which means acting in your best interest, and that's what our job is.
Does every CFP do it? I would hope so. Most likely not just is based on the numbers, but at the end of the day, it's, the goal that we attain to deliver.
Tim Ranzetta: Yeah. That. So that surprises a lot of people because it's like, well, of course the guy or gal sitting across from me has gotta be working in my best interest.
So the other standard is this thing called suitability. Yeah. Now what, you know, that's obviously the lesser standard. What does that mean?
Kevin Thompson: So from a fiduciary standpoint, you have the fiduciary best interest of your clients. Then you have the suitability side where it's like, I would call it the best interest of the firm, but it's basically, Hey, I could check this box and once I say it's suitable for you, then we can go ahead and invest no matter what's going on in your life.
By the way, your house could be on fire, but it says it's suitable because you answered A, B, and C. You answered A, is it dark outside? B do you like to go to sleep at night and C, do you eat dinner every single night? Check, check, check. Okay, it's suitable. Let's go ahead and do it right.
So it's, it's that kind of mindset that a lot of institutions that we're working with, And are involved in, because now if it's suitable, guess what that does? It removes the liability from the institution, from lawsuit, but from a fiduciary standpoint, they're always going to be liable. And a lot of institutions don't want that because they don't want the liability of one of their advisors saying something.
And the next thing you know, they're saying, well, he told me this and it didn't work out that way. Now you're going back and suing Walmart versus suing the person. You had an accident in the parking lot. At the Walmart. So it's just about. Protection. And I don't, I don't agree with suitability.
Tim Ranzetta: So what about other than fiduciary for the folks who might have an investment advisor or an investment planner, you know, the first question might be, are you acting as a fiduciary? What are two or three other questions you think are critical for folks who might have a relationship already just to maybe learn a little bit more?
Kevin Thompson: Oh, so the first question of the question is fiduciary. The second question would be disclosure. Like so the products and the products that we're talking about, how do you get paid on those products? Right? How do you get your compensation? That's part two. I always have that conversation about compensation.
And finally Are you, are you basically limited to what you can talk about in regards to this relationship? Are the products that you're talking to me about, is that all you can talk about? Or is there more of a breadth of products and services that you guys can provide? I wanna know exactly what the end game is, because that's so we can not just, full disclosure, I just want full disclosure from the people that I'm working with.
Tim Ranzetta: So is the technical term for that, am I getting it right? Open architecture.
Kevin Thompson: Yeah, open architecture. Now again, most institutions probably can't afford open architecture because , they want to have relationships and they have to vet these vendors and all that stuff, and it's costly to do that.
We can do that as well. Like we vet all of our people that we work with, and again, we pick the ones that we lack based on this relationship and, I guess suitability, in regards to Disclosures that they have on their U fours, u fives and all the other stuff that's, that's on, that's on the regulatory perspective and making sure that there's, there's any, not any malfeasance with those companies.
But yeah, we do our due diligence to make sure that everything's right before we make those relationships.
Tim Ranzetta: So it's great. You've got this financial knowledge. You decide I want to go start a firm. Was there any moments in those first couple years where you're like, whoa, like this is. Harder than I thought, or, because a key aspect to, you know, there's, there's a couple different pieces, I think, to the advisory business.
One is, you, you put portfolios together. It's, it is a lot, there's a lot more comprehensive element to planning that. I know you do, but there's an element of sales, right? You gotta bring people in the door, you know? How did, or were you able to bring people across with you, who you'd worked with before?
Maybe talk a little bit about the early days of being an entrepreneur.
[00:24:19] Kevin's Early Days of Being an Entrepreneur.
Kevin Thompson: So I started, so my company started out as nine Innings Capital group back in like 2018. I did that 'cause of baseball, right? I was doing the baseball thing and everything like that. I changed the name.
Tim Ranzetta: That's a long game, right? I'm surprised you didn't go 10 or 12 innings.
Kevin Thompson: So, and that changed the name recently to nine I Capital Group once we became registered as an RIA. But, The reason why I did that is because I wanted to make it more of a I guess something that everybody could talk about. Like if I, if I bring another person on, they'd be like, what's nine innings?
I don't want it all to be about me. I want it to be about, you know, just the company and the brand and all that stuff. But I'm, I'm glad you said something. From a suitability perspective, you bought something up where I truly believe that in our industry, and I get to your question in a second, but in our industry, People, it's not, it's not the fact that we're not doing things, that people aren't doing things the right way.
I truly believe that they're not being taught to do things the right way. And what I mean by that is you, I go work for X, Y, Z firm, they're gonna teach me their core beliefs, you know what I mean? They're gonna teach me what they want us want me to say and what to do. But they may be teaching you something that's totally polar opposite in what the industry stands for.
So but in regards to the business, Yeah, it was tough. But the reason why I did what I did is because I was doing it for so long for someone else, and I saw the fact that I can do this, keep all my revenue and basically really brand myself and run my own company. Because the main reason why I left, to be honest, is because I was tired of all of the nos you would receive.
And, hey, I wanna do this podcast. No, can you imagine if I was still with this company, how long would it take me just to get, get on a podcast with you? What are you guys gonna talk about? What are you gonna say? How are you gonna say it? Don't say fiduciary, don't say this. Send me the tape after he does this, before he releases it.
I was tired of all that. I said, you know what? No more. And this gives us the freedom to do that, to have these really, really serious conversations in this industry. But as from a business perspective, yeah, I learned a lot. I'm still learning at this point. I'm always gonna be learning. And if you ever stop learning, then you're out of business.
But I'm continuing to learn and, and I enjoyed it every day. What I'm doing in regards to the learning side of things.
Tim Ranzetta: You seem very committed to the education piece too. And, and I'm sure the teachers who are listening, you know, our audience is primarily made up of high school teachers teaching personal finance.
If you got invited to their classroom, and maybe we'll get you some virtual visits if you're interested. Absolutely. And you only have one hour. How do you, how do you talk about investing?
[00:26:49] Kevin Talks About Investing.
Kevin Thompson: I would keep it very simple. I mean, investing, of course you wanna know what a mutual fund is, what a ETF is, what a stock is.
But you gotta get, you gotta get more basic than that. Like for example, you gotta kind of figure out what does a stock represent, right? It's ownership in a company. And why do you invest in that? Because you want it to grow. How is it gonna grow? Well, it's gonna grow because people are gonna invest in this.
The people are gonna buy that product and ultimately, if they buy that product and they have more net profits, then that stock should go up. And what happens when the stock goes up, your, asset value goes up. So you have ownership and part ownership in the company. So that's the simple, simple, you know, finance 101, and of course you talk about liabilities.
You can get into balance sheets and things like that. But just understanding the simple metrics of like, what is a stock, what is a mutual fund, what is an ETF? What is a brokerage account, right? Just understanding exactly how to start up a brokerage account. How to fund a brokerage account.
How, how to purchase an actual stock on a brokerage firm. Simple stuff like that. I mean, that's where you can start. We can get into the minutiae of finance about balance sheets and sharp ratios and all the other stuff, but that's more high level college stuff. Just simple, you know, 101, what is the stock?
What is a mutual fund? What do they represent? How do they work? Things like that.
Tim Ranzetta: No, I love the fact you brought up actually how to execute on it. 'cause I think we oftentimes spend so much time talking about the individual investment products and not making the distinction, like there's bank accounts and there's brokerage accounts, they're different.
Yeah. Kind of dispelling some of the you know, the myths and, and mythologies around that. What's another question that teachers often get are investing in individual stocks versus index funds.
Kevin Thompson: Okay, so I'm gonna say this, I'm gonna, full disclosure, this is not a recommendation, all right?
I don't have to put that out there. Compliance, I, I don't wanna have to arrest myself, right? So I will say this, investing in stocks over a long period of time works as long as the company. Remains a going concern, which means it ultimately continues to do business over a long period of time. Think about the people that invested in Nike and Coke and all those little companies, right?
They've made dividends. The stocks have split over and over and over and over and over and over and over again for 10, 15, 20 years. But I will tell you this, the Russell 3000, right? There's 3000 stocks and the number is 40%. Of the Russell 3000 has lost 70%, and this is since 1980. Yeah.
Lost 70% of its value and never recovered. Also, 50% of the Russell 3000 has lost 50% of their value and never recovered since 1980. That basically means roughly 5% of the Russell 3000 accounts for all the returns that's actually gotten. So my question to you is this. If 200 companies out there did really well, but the other 20, 2900 or 2,800 didn't do well, what are the chances of you picking one of those 200 companies?
You get what I'm saying? So,
Tim Ranzetta: No, I love the fact you point to that 'cause Yeah. You know, there's a data set all the way back to 26 or the twenties that show 4% of companies represent the entire return. So it's the old Jack Bogle saying, don't look for the needle in the haystack. Buy the haystack.
yeah, it's, it's the same concept as this year, right? Like seven companies. You had the, the fangs and all those have made up all the returns of the S&P 500. So, I mean, if you don't have those seven companies you're losing money. So why not just buy the index? But again, if you have a company that you, that you know and love and you wanna follow and support all for it, just make sure you do it.
Make sure you're on those conference calls. Make sure you're learning those types of things because things can change trends change. And when those trends change, you have to be be ready to change with them. I love the fact you talk about you better invest the time. 'cause I think people often think, oh, it's easy to buy stocks, right?
I can just go on my mobile phone and click a button and I'm, I'm a buyer. But if you're serious about it and just know that it takes a lot of time and there's a lot of other people on the other side of that trade who probably have a lot more degrees and a are spending a lot more time thinking about it.
Yeah, absolutely. That's, that's interesting. So yeah. Why is education so important to you when it comes to financial education?
[00:31:17] Why is Education So Important?
Kevin Thompson: Is so important to me because it's all that matters. Like, I was reading basically saying that reading fundamental, educating yourself, always learning.
It never stops. Because once you start get feeling like you know, you've learned everything then people are gonna pass you by. I see a lot of people in this business they get their CFP and they say, okay, I've finally done some. No, that's just the beginning.
There's more to it. Tax law, tax laws are always changing. Estate laws are always changing the way you can, you can do planning for comprehensive planning is always changing. So it's always good to be on the forefront because you can talk knowledgeably to your clients and you can build a good relationship and ultimately you can just put yourself in a better situation where when you're having conversations like these, you, you can, you can, you can have significant conversations and be able to pivot when necessary. So it's very important in my opinion, always learn.
Tim Ranzetta: Yeah. That, that's a great point to make to all of our educators out there, because this is, you know, they're teaching a personal finance course, which investing is one unit in it, but there's a lot of topics and it's, and it's constantly changing.
Kevin Thompson: I'll, I'll say this, when it comes to comprehensive financial planning, the investment piece, should be talked about less. And the reason being is because everything around in your financial life can disrupt what you've done in your investment life. So estate planning, tax planning savings, budgeting, all the other stuff that comes out.
I mean, that's great. I mean, but I got a great investment portfolio. It doesn't matter. 'cause now you gotta dip into it and you gotta sell it when the market's down because you didn't do everything else right on the other side of the fence. So it's always important to get everything else in order before we even start talking about investing.
Tim Ranzetta: Kevin, this has been a great conversation. I want to close out by giving you an opportunity, because teachers may be bringing this podcast into their classroom for students. Sell them on the benefits of a career in finance.
[00:33:06] Benefits of a Career in Finance.
Kevin Thompson: I'm not gonna sell 'em on the benefits because I don't like selling anything.
But I'll tell you the benefits of being in the financial industry is that. You can learn, and this is the reason why I did it. I wanted to learn everything about it so I can do it for myself. And funny. This so happened that I'm doing it for other people now.
So first and foremost, it's important to have that, that breadth of knowledge so you can do this for yourself, so you can put yourself in a better situation. And if it turns out that you really enjoy it, Then you can provide that level of love and support to other people because they'll see that genuine nature in you saying, dude, I love what I do and I wanna just tell you how I've done this.
It's almost like you're preaching the gospel. Like, dude, this, this is how it hit me and this is how I wanted to hit you, and I wanna, I want to take care of you. And that's when it all, that's, that's when it all changed for you really getting ingra, like really getting deep into this conversation and feeling it to where it is changing your life so you can change others.
Tim Ranzetta: Wow. That is a great note to end on, Kevin. It is clear how much you love. You loved baseball earlier, you love serving people through your financial planning firm today. So I want to thank you for sharing your, your insights with our audience.
Kevin Thompson: I appreciate you and thank you for having me.
Ren Makino: I hope you enjoyed this episode with Tim and Kevin. I have a few final housekeeping items before we go. And the show notes and full transcript can be found on ngpf.org/podcasts. You can also join these sessions live and ask the speaker questions by signing up for the NGPF speaker series sessions that occur on Thursdays at 4:00 PM. Pacific time. You can sign up to attend on ngpf.org/virtual-pd. Please be sure to subscribe to the NGPs podcast on iTunes, Spotify, Stitcher, or wherever you get your podcasts better yet. Leave us a review. We love hearing from you and it will help us reach a broader audience on behalf of Tim and Kevin thank you so much for tuning in today's NGPF podcast.