Ep. 225 - Monopolies Through Time: Lessons from Economic Giants

  📍 📍 Good day. This is Gabriel Shahin, certified Financial Planner and your host of More Knowledge, more Wealth here on every weekend, talking about all important topics of personal finance. My job is to go over the knowledge you need to increase your wealth now to the listener, you can always reach out to myself or one of my colleagues here at Falcon Wealth Planning.

Our phone number is (855) 963-2526. That's 8 5 5 96 Falcon. Like the bird or visit our website at falconwealthplanning.com, that's FalconWP.com for short, where you can get this episodes or any one of our previous episodes as well through Spotify, iHeartRadio or podcast. And by the way, our website has this fantastic knowledge center.

We're actually redirects you to YouTube. We have almost a million views on that and it's just fantastic. You get so much good content and the information and. The items that I go over are from you of what you want me to talk about, and you just send those requests to radio at falconwp.com. That is radio at falconwp.com.

The most recent one was on charitable giving. So those are, uh, really cool. Now folks, I'm the president of Falcon Wealth Planning. We are a fee only non-commissioned true fiduciary folks. We go over all important topics of personal finance that goes over where you are today, how retirement looks like.

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Folks, we are giving a free financial assessment where we can answer those questions that you have. Folks, our phone number is eight five five nine six three. 25 26. That's 8 5 5 96. Falcon like the bird. Or visit our website at falconwealthplanning.com. That's falconwp.com for short where you can go ahead and visit any of our locations and we can help nationwide.

Folks, we service 40 metropolitan cities and we are able to help you. It doesn't matter where you are. We can help now folks. Is the season of Super Bowl and football. My goodness. I mean the Super Bowl. I'm just gonna go over some like information with you guys. I just thought like, let's do some research and see how much just financial, economic impact the Super Bowl has.

So I'm looking at numbers here from last year and it was $1.3 billion. Of total generation in Arizona, uh, my home state, $1.3 billion of generation, which really accounted to $726 million towards the GDP alone. I mean, that is insane what the Super Bowl does, and that doesn't even include the 600, almost the $600,000,578 million that the us, or excuse me, that the NFL.

From the Super Bowl. I mean, the numbers are astronomical. Now the irony is it's nothing compared to the World Cup, but the fact is, is just everybody tunes in. It's not just sports enthusiasts and a, a football enthusiasts, but now people are watching 'cause of the concerts, the, the Mid-show, the halftime show, that is become the pinnacle of you got 15 to 20 minutes to make one of the best performances out there where you have.

Hundreds of million of people watch you. It's absolutely insane. And I just want you to kind of capture something for a little bit. 'cause a lot of people look at these YouTubers and things like this, and when they see that the average person, like the average NFL, let me actually ask NFL average. Uh, average, uh, attendance or, or people watch?

How many people watch the, uh, how many people watch the Super Bowl? I'm gonna guess it's a hundred. Over a hundred million could be 300 million. It is. A hundred million. So it's consistently goes up. So it's about 115 million people, a hundred to 115 million. Uh, watch it. So that is quite substantial, right?

That is no joke. So, but you have certain YouTube's that come out where a hundred million people watch those 200 million, 300 million. And if people are paying $5 million for advertisement. Don't you think? Maybe just, maybe there's some validity to paying them millions of dollars because they're bringing eyes to their screen and so when they have an advertisement going on on their channel, this is how social media makes money.

There are hundreds of millions of people that are viewing it, right? That's how billboards make money. They get 40,000, 50,000 cars per day. That's not a hundred million that watch the Super Bowl. It's the same eyes. And the interesting thing, specifically speaking about YouTube and other ad generation is Super Bowl is only ca, super Bowl is great 'cause it does cater to a whole bunch of people.

Typically sports enthusiasts watch the game they leave during Super Bowl. Normally those who aren't sports enthusiasts, like the commercials, which has become a whole thing in itself. And the halftime show. Why do I bring this up? I bring this up because if you were to YouTube, depending on the video and the content and the person producing it, they're able to capture a certain subset of potential clients.

Folks, this is how just the finance works. This is how economy works. It's how they can spend money. And get the results that they want for the people that want Marketing. Marketing is a big piece in our economy.

You have so much money that is spent on marketing campaigns where it has to generate revenue back. It makes no sense. Do you ever notice there's not like a realtor? There is not a a, a lawyer. There's rarely a, a financial advisor because those companies that can't cater everybody, they don't care about a hundred million eyes.

They would rather get 10,000 eyes that are specific to them and their situation. It is hard for them to produce en masse versus Budweiser versus Clorox versus Pepsi versus pizza. Hut. Everybody needs to eat, so they're trying to capture market audiences like that. That's why when you look at some of the largest companies that spend money, they do it strategically 'cause it all is based on how much money they receive.

Back, and that is one of the biggest pieces that I wanted to talk to you about today. By the way, folks, if you're just joining me, you're listening to Gabriel Sheen, certified Financial Planner, and you're host of More Knowledge, more Wealth here and every weekend talking about all important topics of personal finance.

And today I wanted to go over with you. I. Just the idea of, I started with the Super Bowl and now going into marketing, the impact marketing has on companies and take it into account, just other analysis that's necessary to make sure you are making the right decisions when investing. 'cause a lot of people do individual stocks and there are simple ways to do it and there are complex analytical ways to do it.

But when you look at the number one marketer in the world, it is Procter, &, Gamble. They spend $8 billion I. In marketing. Now, putting that in context, they bring in 8 billion or 80 billion. They're spending about 10%. Of what they make on marketing. That's insane. I mean, most people in my industry spend less than 1% the idea, and most industries spend less than 1%.

I'll see what Apple's here is in a little bit, and the idea is, is this company obviously is making money. I. I'll give you an example. They netted almost $15 billion in twenty-twenty-three Procter, &, Gamble. I just chose them 'cause they almost spent twice as much as a second place. Second place Amazon spends 4.8 billion in marketing.

Procter & Gamble, well, 8.1 million billion in marketing. So even after spending 8 billion, they still netted 15, almost $15 billion. That's including paying taxes and so on. You know what I mean? That is insane to think. Now here's the, here's the thing. I mean, just to go over with this. These are these massive conglomerate companies like Gabriel.

You're talking about spending billions of dollars to be known worldwide. I get that, but have you ever thought about that? Maybe if you run your own business, you don't have to do $8 billion. Have you ever thought of $800 that that would do something as simple as a Google spend or a Yelp spend, or a Facebook spend?

Or excuse me, $800 or $8,000. What do you think that would do? My point is there's so many people that are just scared to take risk, and part of success is getting yourself outta your comfort level. I use my father-in-Law's example. He owns a jewelry store in the wholesale district in Los Angeles. I say it all the time.

I understand you have 5,000 clients and you're busy, but why not just invest $800 in my example, on advertising to see what that brings you in? Wouldn't you spend. $800 if it made you a thousand dollars. That's or should be. Absolutely. It should, right? Because you spent 800 and it brought you a thousand dollars client, you're still ahead.

200 bucks. Let's say if you spend 800 and makes you 1600, you double. That makes sense. Now you have to figure out how much does it cost. If you buy something for a thousand and sell it for two, you only net 1000. So you don't wanna spend a thousand in marketing just to break even. So there's a science to it, but the point is, we're all decent in numbers.

We all can figure this out. How come small businesses are not doing that? I see people all the time that complain about growth, but are doing nothing proactive about it. Folks, I bring this up because. This is what a financial partner does. They bring situations like this up and they take a look at what your situation and they find ways to help.

This is what people say business consultants are, but business consultants only focus on the business and not you. Financial advisors only care about your money. Hey, how much did you make? Oh, you didn't make enough work harder, but have you had an actual financial partner? I'm just fixating on marketing 'cause of the Super Bowl and the ads were crazy.

I'm just saying, taking a look. At the actual, these top companies in the world. And by the way, Procter, &, Gamble, if you've never heard of 'em, they just have, they have multiple products like Coal Rocks and the, the Colgate, probably Tide, you know, just things that we use all the time. And so the, the idea is each, they have 20 plus companies that make over a billion dollars, and so they're spending across all of 'em.

So Procter, &, Gamble is like the parent company to the. Other companies we're familiar with, but I mean, how does this impact you? The way it impacts you is taking a look at your situation, especially if you're a business owner. I'll take it a step further. Reinvesting in yourself. I mean, making yourself, sometimes I've told clients that are very well off, you could afford to actually spend a little more.

I've made a couple comments saying, if you don't fly first class, maybe your heirs will. God willing. You're blessed to be in a situation like that where you can do that. My point is, is do you know, have you run the numbers? Have you taken tax into consideration, debt into consideration? Have you taken into account other income sources that you may be cutting, like social security or pension or rental income or portfolio income?

Have you taken every little piece of you helping kids, potentially you helping them in the future? Maybe you helping parents, how much you spend, what you spend today might be different. Tomorrow might be more or less. Are you going to be going on additional? Vacations. Are you gonna be getting different cars?

Are you gonna be getting more frequency of cars? Are you gonna get a lease because they change so free so often, and now you're 70 and you're worried you might not be able to drive by 80. But if the cars get more enhanced and you keep redoing them and re-upping them, maybe you can. Are you having conversations like this with yourself or any professional or any friends or anybody?

Probably the answer is no. Why? Because they call us for those. And this is why we offer a free financial assessment. Folks, where we can help relate this show to your specific situation. Folks, we can offer one to two meetings, one to two hours of our time, folks at no cost. Give us a call. Our phone number's (855) 963-2526.

That's 8 5 5 ninety-six Falcon like the bird, or visit our website at falconwealthplanning.com. That's falconwp.com for short, where you can just go on there, put in an inquiry and we can reach out to you to help answer these questions. One side of it, it's a business owner taking a look at your actual business and what you could be doing to enhance your situation.

And the other side of it is you as a person. Taking the look at your current savings and current spending. 'cause some people are fantastic savers, but they are not good spenders. They're great at accumulating. They're not great at accumulating. And that is an important successful transition in retirement.

Folks, we're gonna go to a quick break and when we come back we're gonna talk more about the finances and some of these companies and comparing you their revenue, net income to their actual marketing dollars. I think it's just more as an FYI, so you can see how these companies are really operating folks will be right back after a few words.   📍 📍

  Welcome back folks. This is Gabriel Sheen, certified Financial Planner and your host, more Knowledge, more Wealth You're on every weekend, and we're talking about all important topics of personal finance and today. I just thought we'd have fun. We talked about the Super Bowl, the economic impact it has and how people spend 5 million plus dollars on a three-thirty second ad in the Super Bowl.

So, and I started talking about YouTube, how people are making money on YouTube. I mean, if they have a hundred million people watching their video and oh, by the way, just let's call it a one-week span, maybe a one month span. I mean, who cares at the simple fact that in a very specific time, you have people watching the game, right?

You actually have, for a hundred million people watching the Super Bowl, let's just say that's the case, right? That a hundred million, well, they're not watching it. Twenty-four, seven. It's a social event. People are talking, okay? People actually take a break. Sometimes half the people that watch it, the of the a hundred million, they don't wanna watch the game.

They just wanna watch commercials. So they come for the commercials. The other group goes out and socialize and they miss a little bit of the game. Advertisers know this, the networks know this, yet they're still paying millions of dollars for a thirty-second ad. Why do I bring this up? Well, when people do YouTube and they have a hundred million views, they have 2 billion views.

These people are actually watching it sitting there in their moment, and they're specifically watching that Taylor uh, Swift video with 2 billion views. How much do you think she's getting paid for that? That's 20 times more. Then what people are paying on the Super Bowl. Now, I'm not here to suggest she's making a hundred million dollars off that YouTube video.

Maybe she is, I don't know. But what I am here to tell you is you've got people like Mr. Beast making hundreds of millions of dollars. He said he wanted to sell his channel for a billion dollars. Maybe there's some truth to that. He may be making a hundred million dollars just 10 years from now. He makes his billion.

So the idea of all of this is understanding how marketing plays into growth of companies. And I like and I talked about Procter & Gamble, who has $8 billion of spend the most in the industry. Of spend and on an annual basis, uh, they spend 8 billion, they make 80 billion, and they net eight, uh, eight, uh, what is that?

15 billion almost. So I'm, I like using round-event numbers. Of course, the next company is Amazon. They spend $4.8 billion. Now, if you notice, Procter, &, Gamble spends 10% of what they gross, right? They make a dollar, they spend 10 cents in marketing, but then they net 15 cents on that dollar.

This is important for you and just in general for just the business owner. Even just self-reflecting on yourself to spend money on yourself could help you long term. In this case, I'm just discussing Amazon. Amazon, who spends that? 4.8 billion. They bring in 500 billion a year of revenue. That's 513, almost $14 billion.

That is not even 1%. Right. If you think about it, compared to Procter, &, Gamble, 10%. Now here's the thing. In 2022, they lost $3 billion. Just just noting. Right. That's just interesting to note. Okay, well let's look at the Unilever. Unilever spends 4.7 billion. Oriel. 3.9 Disney, 3 billion, apple 2.7. Let's look at apple's.

I I think that will be an interesting one. If we look at Apple, who spends that $2.7 billion, I think that's just important to know. And you take a look at what they're actually netting. So if we go and pull up their financials right now, they gross. Almost 400 billion and they net almost a hundred billion.

They're only, you know, when I say only, they're still a top 1, 2, 3, 4, 5, 6 company in the world that's spending in advertising, but they're netting a hundred billion a year. I'm good Lord. These are the things you have to take a look at. And everybody knows Apple. They know 'EM two ways. Used to be they would see their commercials and so on and so forth.

Now they don't have to as much. I'd be curious how much they spent in marketing. Five years ago, 10 years ago, and what their net profits were at that time as well. The point is, as you have Nestle, as you have, uh, Nissan, uh, Google, Volkswagen, Coca-Cola, McDonald's, all these companies that are spending multiple billions of dollars a year come mind you watch McDonald's and they're strategically putting that channel on, uh, that commercial on between, let's just say 10 45 and 1230.

Why is that important? Hmm? Because you're probably hungry. Or they put advertisements on radio or TV at ten-thirty. Why? 'cause you just got down watching a game, hanging out with people. You're driving home, whatever the case is, late at night, everybody's sleeping. I'm hungry. So their strategy to this, so I'm just telling you as a potential business owner, or you as an individual.

Is, there are many different ways to analyze your situation and to make a determination of what's best for you. These companies as chief marketing officers, are spending millions and billions of dollars, and they're getting paid millions of dollars because they have the knack to understand what makes sense for them and their companies.

So I'm just saying, do you know what's best for you? Do you know where you should be spending the money? How you should be saving it, where you should be saving it, what you should be investing in? I mean, there are specialists in every industry for a reason. I. Now you may be a specialist in your industry.

If you're an engineer, you're probably great at engineering, making seismic calculations. Hey, even though I understand maybe the math and science behind it, I'm not gonna go put up my own flagpole. You get what I'm saying? It takes sophistication and knowledge and so on and so forth. It's experience. You can't afford to be cheap.

You know how I can prove that? I've seen flagpoles, that people did DIY in front of their house that went up 30 feet that fell on their house. I. There are right and wrong ways to do things. This is why we're offering a financial free financial assessment to help relate the show to your specific situation where we can take a look at what you're doing and if it makes sense, and if there's ways we can add help and value.

Folks, our phone number is (855) 963-2526. That's 8 5 5 96. Falcon like the bird, or visit our website at falconwealthplanning.com. That's falcon wp.com. For short, where there's inquiry on our website where you can help, we can help make sure we answer those questions you may have. Um, by the way, folks, if you're just joining me, you're listening to Gabriel Shane's, certified Financial Planner and you're host of more Knowledge, more Wealth here and every weekend talking about all important topics of personal finance.

And today I was spending time talking about just marketing in general. And this has to do with the reinvestment upon yourself. And I'll give you a couple examples. Sometimes you have to spend money. To make money and some, and I'm gonna give you three core examples. A lot of 'em are in the professional world.

I'll try to maybe swap out the last one that I've written down to make another professional one, but the first one is having an attorney. I'll give you a couple examples just within that sub-examples. Having an estate plan, you have to spend a few thousand dollars to get a trust. Well, why is that important?

Because it helps save your family, assuming you care for your family more than the IRS. If not, don't listen. But if you do, then that saves on probate fees. Here in California, that's 4%. For the first a hundred thousand, that's $4,000 alone. That is 3%, 2%, and then 1% for onward. So that is the probate fees.

And that even if you wrote on a napkin, it still goes through probate and you guys have your heirs have to pay that. Another one, it could just be getting in trouble instead of representing yourself. You hire an attorney, typically a smarter thing to do that can get you outta more trouble and save you money.

Number two is an accountant. If you could do your taxes on TurboTax 50 bucks, or you could pay somebody 500 bucks and they can identify ways, they can save you more money if you're, especially if you're a business owner. You are gonna learn and balance your own books and do everything like that. Find, see research and development credits, see other types of, uh, strategies that are available to you that could save you a bunch of money by doing it on your own in triple tax by spending maybe not 50 bucks, 'cause your business owner will call it a hundred bucks versus paying maybe a thousand bucks.

You're gonna get more value out of an accountant. I, I don't think I need to convince many people of that. It's not so much they don't wanna do it. They don't have the time to do it. Maybe they bill out a hundred dollars an hour and it's gonna take 'em more than 10 hours to do their taxes. Maybe that's one way, but the other realistic way is they provide.

Value. Hopefully your accounts are providing value. Hopefully you're just not meeting with them once or twice a year. 'cause if you are, that's not a tax planner, that's a tax preparer at that point. Yes. Might as well go through TurboTax, if you know what I mean. So, uh, and if you need help with that, folks, we can help, right?

We are tax planners. We help with that situation. We have a tax arm that actually does the taxes as well. Give us a call if you need help with that. By the way, that's 8 5 5 9 6 3 25 26. That's 8 5 5 96. Falcon like the bird, but I don't wanna digress too much into that. The third one is an advisor, financial advisor, if I may add, and that was the third type of professional.

It's ironic that I'm choosing that. I don't know, call it self-serving, whatever you wanna say, but obviously people make mistakes when the markets drop. They don't buy where we do. They sell. And when markets are up and everybody's excited, they buy. So they do the exact opposite thing. And that's why the Dow, Bar studies has proven that individual investors like yourself has gotten a 50% less return.

If the market averages 10%, they do roughly 5%. So they do half as bad 'cause they're buying and selling at the wrong time. Ugh. Annoying, frustrating reality, by the way. And so that's yet again the thing. The thing is, is sometimes you have to spend money to make money. It costs money for that advisor. It costs money for that lawyer.

It costs money for that accountant. So you have to sometimes spend that money just like these people spending marketing. Sometimes you have to spend on yourself. Sometimes buying a new car with a low interest rate, which those ships have sailed with a warranty, is better. Buying a car, one to two years old, depending on the car, and it maybe hasn't depreciated as much and it's in warranty.

And all of a sudden you buy a car that you don't know much about it and all of a sudden it breaks down and you're spending more, plus you're out of a car. These are the things that, again, people do not take into consideration. I'm here just to tell you, these are valid, important things that people don't think about.

I have a saying, you can't afford to be cheap, and some people sometimes are, it's in their DNA, and I use the word cheap and that's rude. Maybe I should say frugal. I say sometimes being frugal is smart, but that doesn't mean. If there's a difference, right? If you have family overseas and you have to fly, but you don't wanna spend the money on the flight and you can afford it and you don't do it, that's just annoying.

That's where people get upset at you, annoyed at you, right? If you don't wanna spend money ever, well that's, that's the cheap part, right? Why not? It's understanding how money could work for you. Learning what money can do and learning how to grow it and to respect it. We don't like to blow it and people have different definitions of that.

Some people think getting an appetizer when they have chips and salsa is a waste of money. Some people say getting anything outside of a water is a waste of money. Some people say flying in general, let alone first class is a waste of money. Some people say getting anything outside of a Honda or Toyota, uh, that's a luxury vehicle is a waste of money.

'cause all they care about is going from point A to point z. So I get all that, but I think I specifically identify in your situation is gonna be key because if that's the case and you know you have more money than you need, then that's where you have to start realigning your goals. Maybe you retire or maybe because you're so good at what you do and you love what you do, maybe you start to redistribute that income to family that may need it, or with whether it's kids or brothers or sisters or whatever the case is.

Maybe it's just helping people in need. But the point I'm saying is, let's just say it's none of that. Well increase your lifestyle. These are the decisions that people just don't make. They're not comfortable to make, they're not happy to make. This is why we offer a financial assessment where we can help.

Just take a look at your situation, give you a pat on the back, let you know what you're doing is right and wrong, and just telling you, you at least now know what you have, your options, what you can do. Folks, give us a call. We can help. Our phone number is (855) 963-2526. That's That's That's. We're happy to give you one to two hours, one to two meetings of our time.

At no cost. Folks, that was a fast, fast show. I wanna thank you for tuning in with us this weekend. You can always reach out to myself or any one of my colleagues here at Falcon Wealth Planning. Our phone number is (855) 963-2526. That's 8 5 5 96 Falcon. I. Like the bird or visit our website at Falconwealthplanning.com, that's falconwp.com for short, where you can get this episode or any one of our previous episodes as well, whether it's on their website or through iTunes iHeartRadio or the classic old podcast.

And our website has this great link on our knowledge center to, it's a direct link to YouTube where we've had so many views on there and it's really based on items you wanted me to discuss. And if you have items you want me to discuss, I can review it and put it on there. At radio at Falcon WP, submit that inquiry of just what do you want to hear Folks, I wanna thank you for tuning in with me.

I want you to have a fantastic week and God bless.