Hope you are enjoying the Simple Inspiration Interviews and that they are providing you with thoughts and ideas on how you can simplify your finances. This week I am interviewing Phil Ash from Baton Investing. He discusses how he has simplified his investment strategy so he can have better returns on his portfolio.
Baton Investing is a stock-picking system that has delivered 500% returns since 2003 while the S&P 500 has only delivered 170%. Its success is based on an algorithm designed by an M.I.T. engineer that mimics the investing strategies of Warren Buffett, Peter Lynch and eight more of the most successful investors of all time.
With the Baton app you, too, can gain access to that market-beating performance and manage your portfolio in just 30 seconds a month.
Eliminate all of your investing fears by joining a community of investors, including the Baton founders, who no longer settle for the 5-8% annual returns that most brokers and funds are lucky to achieve. The Baton system has delivered 16% average annual returns since 2003, and for many, it is the only way that they will actually achieve their retirement goal. Visit Barton Investing to see a completely transparent track record.
Let’s hear how Phil has simplified his finances:
What event lead you to realize you needed to improve your financial life?
In late 2013, about five years into a bull market, I calculated my average annual investment returns and determined that I was woefully under-performing the market. My portfolio was a mish-mash of income stocks, sector ETFs and high-risk bets that had no underlying strategy behind them. I would have been better off simply investing all my money in the SPY ETF that has returned 9% annually on average.
What area of your financial life needed the most work?
I needed to adopt an investing strategy that would deliver the necessary returns to hit my retirement goal. That required three steps: 1) figuring out what my historical average investment returns had been, 2) calculating what my retirement goal is and what average annual return I need to get there, and 3) identifying a proven strategy that would give me the necessary returns (because my current “strategy” was not.) Shockingly, with an online retirement calculator I created, I determined that my retirement goal was a minimum of $4 million and that my current returns were not going to get me anywhere close to that goal.
What was your biggest challenge or roadblock when it came to improving?
After identifying a strategy that had a successful, long-term track record, the hardest part was to put my emotions on the shelf and adopt the system wholeheartedly. With the 24/7 news cycle, it’s so easy to get caught up in the hype of a particular stock, or the fear that the market is about to crash again, or hundreds of other distractions that make people veer of course. All that noise is what causes people to make bad investing decisions, typically buying high and selling low, rather than just staying consistently invested for the long-term.
How did you overcome this challenge or roadblock?
After many months of research, I identified a stock-picking system developed by an M.I.T. engineer that mimics the investing calculations of the greatest investors of all time, including Warren Buffett, Peter Lynch, and eight more. The inventor, John P. Reese, began using it for himself and his high-net-worth clients in 2003, and it has delivered a 500% return since then while the S&P 500 has only delivered 170%. His system’s 16% average annual return over the span of both bull and bear markets was very reassuring. I knew it was the perfect emotion-free system to get my investing back on track, but it was more complicated and time-consuming to use than I wanted. So my brother and I worked with John to build an app (Baton Investing) and partner with a few brokerage firms to greatly simplify its use.
How has your life changed since you began to change your financial life?
It now takes me just 30-seconds a month to execute the system and manage my portfolio. And since I started using it in May 2014, I’ve earned a 24% return while the S&P has returned just 13%.
How long did it take you to make the changes?
It took us about six months to improve the process and launch the Baton system. Anyone else can now get setup in just a few minutes and reap the same benefits. We even offer a 60-day free trial for people to gain a better understanding of how it works and decide if it’s right for them. It’s only a good fit for less than half of the people who visit our site.
How much of your personal finances have you automated?
My investing is now semi-automatic. I like that I’m now forced to take a few minutes each month to do a quick check-in and set my portfolio for the next month. I know too many people with a set-and-forget approach that really have no clue how they’re performing and if any changes are needed. I’m a big fan of the two brokerage platforms that we run the Baton system on: Motif Investing and Folio Investing. Both allow for quick and cheap buying and selling of baskets of stocks in one transaction. To fund these accounts, I have automatic payroll deductions. Beyond investing, I have most of my bills setup with auto-pay, and I use Mint to keep track of everything.
What advice or tips would you give to others who want to improve their finances?
First, pay off any debt that has an interest rate above 9% (the market’s historical average.) Second, build your emergency cash fund of however many months you deem necessary. Then, amass enough money to start investing (about $5,000 minimum.) Either cut your expenses or find another income source somehow to get that first little pile of money together. If you have very little money, consider using Robinhood as your broker since they’re completely free. Begin by just investing in the SPY ETF, knowing that your emergency cash fund will keep you from having to panic and sell should the market head south. Continue adding funds to your account as often as possible. Initially, that will grow your money faster than any investment returns possibly can. As your account grows, then look to adopt other strategies that may give you higher returns. The return you need will be based upon the retirement goal you’ve calculated for yourself.
What app or tool helped you the most when it came to simplifying?
I like Mint for getting a quick take on my Net Worth and how I’m progressing towards my goal. And for my actual investing, I’m a huge fan of the MotifInvesting app. It takes me just 30 seconds once a month to re-balance my Baton portfolio.
What are your current financial goals?
As shocking as it sounds, I now know that my wife and I need $7 million to retire at age 65 and maintain our current lifestyle. $4 million is our bare minimum. There are lots of online retirement calculators to figure this out, but I prefer the assumptions we built into the Baton Retirement Calculator.
Are you on track to reach your financial goals you set for this year?
Yes, my wife and I are now on track to greatly exceed our retirement goal. Previously, we were not on track and we didn’t even know it. Regardless, we know there will be bumps in the road and we just need to stay committed to the revolutionary process we’ve now embraced.
What book, blog, or podcast would you suggest to someone who is looking to improve their finances?
The MoneyTree.com podcast does a good job of covering a wide array of introductory investing and personal finance topics.
If money was not a concern, what would you do for fun?
I have plenty of fun already, mostly outdoor athletic endeavors like running and biking. My hobby and dream job, however, would be as a furniture maker. It involves both the math/logic side of my brain and the creative side.
Any other thoughts you would like to share with others who are looking to simplify?
I’m certainly a fan of simplification, but I try not to let the tail wag the dog. Don’t simplify to the point that you’re not using the right tool for each job. With Baton, for example, the system works infinitely better if you open a brokerage account at Motif or Folio. Even though opening a new account only takes 10 minutes plus a bank transfer, many people will avoid that step and the value it brings in long-term simplicity. And with a tool like Mint, for example, it is now much easier to keep track of multiple accounts.
Thanks Phil. Appreciate you sharing how you have simplified your finances.
To read previous interviews in the series click below
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If you are interested in sharing how you have simplified your financial life, send me an email and I will follow up with you. Enjoy the rest of your week. Til next time, take one step at a time to simplify.