S2E24 Tyson Koska Have you calculated when you may retire?

S2E24 – Tyson Koska – Have you calculated when you may retire?

Tyson Koska

Tyson Koska – Have you calculated when you may retire? Most people who are investing have a high-level plan but in most cases, they haven’t calculated a target date in which they may retire or achieve financial independence. My next guest is the founder and CEO of On Trajectory, a financial planning software for consumers and businesses that allows them to track their overall financials including investments, assets, debts, and liabilities. In this episode, he talks about how this platform can benefit retail investors, along with his personal investment journey. Please welcome Tyson Koska.

Payback Time Podcast

Payback Time is a podcast for investors. The goal of this podcast is to help make investing approachable and easy to understand. We will interview beginner and experienced investors and ask them to share stories on how they got started, what challenges they faced, what mistakes they made, and what strategy works for them today. The overall objective is to provide you with a roadmap that helps you become a better investor.

key timecodes

  • (01:12) – Tyson Koska background story
  • (01:38) – His software company
  • (04:19) – His financial planning software
  • (06:28) – A bit about TYKR philosophy related to the focus of his product
  • (08:29) – How his software can help someone get out of debt
  • (10:08) – The software connects with any bank account.
  • (11:22) – How that tool can save relationships
  • (14:20) – A bit more about TYKR platform and how both have similarities
  • (09:53) – The switch from blindly investing and using TYKR to find reliable information
  • (18:15) – How it can help the success of the users
  • (20:01) – What is the 4% rule?~
  • (23:18) – When he started in the stock market
  • (24:23) – What type of investment funds does he hold
  • (25:08) – Deeper on his strategy with real estate gains
  • (26:24) – Don’t be fooled by unreal investing gurus
  • (27:44) – What percentage of income does he invest
  • (28:48) – What is his biggest investment success
  • (31:09) – The parallel with TYKR philosophy
  • (35:37) – Manage your emotions when investing.
  • (37:15) – Why he invests
  • (42:35) – Guest contacts

Transcription

[00:00:03.430] – Intro
Payback Time is a podcast about building businesses’ wealth and financial freedom. We try to uncover the challenges our guests faced, the mistakes they made, and the steps they took to achieve their goals. The overall objective is to provide you with a roadmap that leads to your own success. Sean Tepper is your host. Are you ready? It’s Payback Time.
[00:00:33.450] – Sean
Most people who are investing have a high level plan, but in most cases, they haven’t calculated a target date in which they may retire or achieve financial independence. My next guest is the founder and CEO of On Trajectory, financial planning software for consumers and businesses that allows them to track their overall financials, including investments, assets, debts, and liabilities. In this episode, he talks about how this platform can benefit retail investors, along with his personal investment journey. Please welcome Tyson Costca. Tyson, welcome to the show.
[00:01:07.390] – Tyson
Hey, Sean. Great to be here. Thanks.
[00:01:09.120] – Sean
Glad to have you here. So why don’t you kick us off and tell us about your background.
[00:01:12.870] – Tyson
Sure. My background is almost entirely in corporate It, but I’ve always had a side hustle, so not the same, but different. I dabbled in writing software for stock picking back in the late 90s, early 2000s. It failed miserably, and since then, I stayed in corporate It, but I’ve also worked on side projects, and I currently have a small company that does financial planning for consumers and for professionals as well.
[00:01:38.810] – Sean
Got it. So this company that you built today, tell us the name of the company. And is this like a software as a service, like a subscription tool or a fee based tool?
[00:01:47.330] – Tyson
Sure, it’s On Trajectory.com, and it is subscription based, but we have a free platform as well. So if you’re someone who doesn’t have a really complicated financial life, you just want to plan a little bit. Some basics, like here’s my wife and my income streams, and here are some high level expense adjustments we might plan to make over the years. And I have a that’s about it. Some kind of simple situation like that. We have a free platform, and then life gets complicated, and our software can get complicated as well. So that is a subscription. Yeah.
[00:02:21.920] – Sean
Got it. So it sounds like it’s tailored for both the retail investor or the do it yourself as well as financial planners, is that correct?
[00:02:30.110] – Tyson
That’s right. In fact, it started just as a consumer side tool. I was looking for professional grade software that consumers could use to do this kind of long term planning. So I’m talking way beyond something like budgeting software or something like that. This is like, I want to do a Roth conversion in ten years, and I want to do this and do that, and I want to make these different kinds of plans. I was looking and looking and looking, and I’m a software engineer working in corporate It, and I decided, you know what? This is ridiculous. I’m just going to write the software myself, grabbed some friends, pitched it to them, and that was back in 2014 and we’ve been working on it since then.
[00:03:07.780] – Sean
Got you. Are you full time with us?
[00:03:09.480] – Tyson
Yes, as of two years ago.
[00:03:12.660] – Sean
Got it. Are you Bootstrapped or did you raise funding?
[00:03:16.090] – Tyson
We Bootstrapped, and then someone was nice enough to notice us, I guess they had been tracking our progress for a few years and we received some funding last year and we’ll probably try to do some bigger things now. So we’re not just BTC anymore. We have coaches, we have advisors, and we’re trying to build a really different kind of product. So we’re taking on some more capital.
[00:03:37.060] – Sean
Pretty soon before we jump into your business a little further. And then of course, your personal investment journey took us back to the point you said you created a business, a stock picker of some sort around the.com bus. Yeah, tell me about that a little bit. What happened there?
[00:03:54.440] – Tyson
Yeah, here’s the thing. Stock picking, I really do like your software because it takes the emotions out of this stock picking stuff. You listen to programs, you listen to people, you read things. And I got caught up. I don’t know exactly how old you are, but back in the mid to late 90s, if you went into any It department, it was like a day trading office, everyone because cheap alternatives to making stock trades were just becoming available. Scott Trade and E Trade and these guys had just come out and he would write a little code and then we’d all be checking the Tykr for different things. And so I got really into it and I was looking for a way to take the emotion out of it for myself. So I wrote me and another guy wrote some software that would basically scrape Yahoo every night and grab I think it was everything on the S Amp P 500 or maybe thousand, I don’t know. And it would scrape everything off, it would look for splits, it would normalize everything. And then it would use bollinger bands, it would use different averages and different whatever, and it would go through and it would tick through and look for like what were the characteristics of stocks that eventually that they did turn quickly?
[00:05:15.800] – Tyson
Positive. And our idea was to have it basically spit out one Tykr per day and then you would just play that stock that day and then you would wait for it to signal to sell and then you would sell it so you don’t only have a couple in your portfolio at any time and you could back test everything. I should not have been so stupid because I’m sure, of course there’s brokerages and there’s like professional people do, but I had it in my brain anyway. Sure did that for about a year and it was fun, I learned a lot.
[00:05:45.810] – Sean
Was it meant to be a subscription tool or a free tool?
[00:05:49.500] – Tyson
Well, this would have been so this is back in the day, software as a service didn’t even really exist yet. So this would have been a downloadable application. You would turn it on. It would do a nightly job and run and spit out your result in the morning.
[00:06:02.890] – Sean
Got you. Okay. No, I appreciate the background there, and it sounds like it was very much focused on short term wins, which to me, I did look into that, and very difficult, even, like, options. How do we do that with the software? There’s a million ways to lose. And I’m like, I am so with you.
[00:06:24.330] – Tyson
Yes. I’m not going back to those old days.
[00:06:27.340] – Sean
Yeah. Trading Tykr. And you’re learning this because you’re new to the platform, is very much focused on the long term, and not just like, buying and holding, but keep buying great companies, especially when they’re down, and that you can win with. But every once in a while, I get, like, there’s a recent poster in our Facebook group that I’m looking for a trading tool. And our community pretty much said before I could say anything, like, we’re not it. Yeah, that’s good to know. Now, tell us, break us down. Like, what can this on trajectory do for customers? Give us some real life examples first.
[00:07:06.780] – Tyson
I’ll talk about it in context of just kind of the any person. But then I think for your audience, there’s some really neat kind of tie ins as well. So for anyone, I’m really big. I mentioned it a little bit ago about taking the emotion out of investing. Well, it’s not just investing that I think the emotion needs to get out of. It needs to get out of budgeting. It needs to get out of having a long term plan. It needs to get out of when can I retire? It needs to get out of how much I put in my kids 529 plan, how much I put my four hundred and one K. I mean, there’s just so many mechanical things to think about. We all have heard the can I afford the latte kind of conversation before. And for me, getting the numbers out, having a solid financial plan brings in a kind of peace of mind mental. Wellbeing, a sense of control over your life that you can stop thinking about it all the time, so you’re not consumed. I’m not thinking about budgets. I’m not thinking about can I afford this or can I afford that or this vacation or that vacation?
[00:08:11.270] – Tyson
Because I already know I can look visually and see my 60 year plan. And unless I go wildly outside of the ranges, and even when markets are doing the gyrations that they’re doing right now, I’m not stressed. And then it’s really hard to put a price on that feeling of not being stressed.
[00:08:28.310] – Sean
Right. What I want to do is connect the dots to some of the hot points I have listed here. Like for example, if somebody is looking to get out of debt, how can your software help them do that?
[00:08:41.050] – Tyson
So there are lots of ways that folks look at getting out of debt. And what I think a lot of tools miss is they’re focused on a week to week or a month to month and in those tools they’re great. I mean, I’m not bad mouthing anyone. I think that’s really important, especially to develop good money habits. But the next question is, okay, show me myself getting out of debt. Show me why. Let me see that. Longer term pay off and in our tool, so we tie the short term in the middle term and the long term together. So for example. If your listeners have heard of debt reduction strategies like snowball or avalanche. These are different ways that in a snowball method. For example. You pay down whatever your smallest debt is. You get it paid off and then the money that you would have paid into that. You snowball it into your next biggest debt versus avalanche. Which is where you try to knock down the highest interest debt that you have first because it’s going to have the biggest financial impact over time. So you can map that stuff out in our tool, you can say I’m going to use here are my debts, I’m going to use either snowball or avalanche.
[00:09:43.960] – Tyson
Show me what would happen if I took any excess money I had and show me a, when do I get out of debt? And B, what does it mean 50 or 60 years from now? And the numbers get really big because that’s what numbers do when you add compound interest and you show someone the effect of making these right choices.
[00:10:01.910] – Sean
Now that’s cool. So you can almost simulate your path and what step you take forward. This is what would happen.
[00:10:08.740] – Tyson
That’s right.
[00:10:09.520] – Sean
That’s awesome. Does this connect to any accounts, like your bank accounts or any kind of billing?
[00:10:15.550] – Tyson
Yeah, so it’s up to you. We use plaid, which is kind of an industry standard, and you can link up your accounts. It’s funny though, when we started, it has gotten more mature over time. So we didn’t have these sorts of features. And when we sent a note to the community, hey, we’re going to be releasing integration to play, you can put your institutions in, we’ll automatically pull your balances and it makes tracking your progress much easier. We always made it easy. Now it’s even easier. We had people say, if you make me do this, I’m going to quit. I’m not going to do it because people didn’t want to give up their credentials and type in their passwords. So it’s completely optional. But yes, we do have integration to plaid. But you can keep it all close to your heart in your past. You don’t have to take advantage. It’s not like mint or something where you need to put all your information in. It’s completely up to you how you want to leverage the tool.
[00:11:05.080] – Sean
Smart. And that’s one thing we’re working on. A Tykr is broker connections. But again, it’s one of those deals where you don’t have to it’s totally optional. Right.
[00:11:13.810] – Tyson
I feel weird putting my personal password into some random website that maybe didn’t exist last year. I mean, it’s scary stuff, right?
[00:11:21.480] – Sean
Yeah. Good call out. There’s another call out here and some notes I took on you, which is money and relationships. This is a big deal. Talk about your thoughts on that and how your platform can help.
[00:11:34.800] – Tyson
Yeah, I think my platform has saved a couple of marriages, some very okay. Yeah. Including my own. Entrejection is really visual, and it’s instant gratification. So if you’ve ever used and I don’t like to use the term retirement calculator, but given that there’s not a lot of tools to do exactly what we do, that’s probably the closest thing that will click in someone’s head. Some of them, they’re so simple that they give you bad information. Like, they ask you a couple of questions, and they say, you need $2 million to retire, or whatever they say. And then there’s some that are so complicated to get in you’re like, how much tax deferred income, how much this, how much that. And people are like, I don’t know what these terms mean. What do these acronyms mean? And so what we do is everything is really visual, and you only leverage parts of the application that are pertinent to your life. And so when someone gets in, they’re going to see this big chart of their entire life, and they’re going to put more information that applies to them. Then it’s going to redraw and draw and draw.
[00:12:41.120] – Tyson
It’s this kind of tool where a couple can sit down together and say, well, what if we did this? Or what if I took off when the baby’s born six months? What is that? And you can it shows the line, and you can see exactly what over a 50 year period, it makes something or it doesn’t make something. I used my own example about four years ago. Things were starting to go pretty well with On Trajectory, and I was thinking, you know what? I’m sick of corporate it. I want to take a break and see if I can make this thing work. And my wife and I sat down and she said, well, when I just said, hey, I’m going to quit my job, that was a hard conversation. But when I said, hey, I’m thinking about taking a year off and working on this thing, I want you to sit down and I want you to see visually exactly what this here’s our current endpoint. Here’s the past few years. Here’s what we’ve done. Because On Trajectory lets you update your progress. You can say, oh, I achieved, or I underachieved because markets are going up and down, right?
[00:13:39.580] – Tyson
Sometimes you’re up, sometimes you’re up. Here’s where we are. Here’s where I think we’re going. And if I take off a year, click one year off, and then it draws and she goes, oh, well, okay. I see that there’s a difference. But as long as this happens and that happens and yes, that should be fine, go for it. So it just went from a conversation of, hey, honey, I’m going to quit my job. And she’s like, no, you’re not. To, hey, I’m thinking about taking a year off, and here’s my plan. She’s like, oh, yeah, let’s do it. You would love doing that. And the fact of the matter is, I did fail at the end of that first year four years ago, I had to go back to work, and I went back to work for another year or two, and I was like, sat down. We had the same conversation, and here we are.
[00:14:21.060] – Sean
Smart. I like that. So I played a really conservative and willing to there’s a lot of entrepreneurs out there. Even if they fail, they still keep failing and keep driving forward because it’s the mentality. I can’t fail. Well, just because you go back and get a job, that doesn’t mean you failed. That’s called risk aversion. Like, now we’re creating an income stream, right? So I tell entrepreneurs all the time, don’t quit your day job. Keep your cash flow coming in. Yeah. So I like that. I really like what you’re talking about here with your platform. I’m going to relate it to my personal life right now. So I’m currently engaged, looking to get married, or on track to get married here in September, right around the corner.
[00:15:04.490] – Tyson
Your fiance didn’t hear that slip.
[00:15:06.170] – Sean
Yes, on track. We’ve been together for many years, and she fortunately, she has really solid employment. She’s in management in HR and makes a very decent living. And we were looking at what is our retirement timeline look like, and we want a place to visualize all of our different buckets. Like, of course she’s had her 401K building up, and I always told her, get as much match as you can because typically the organizations that she’s worked have been really aggressive with a match, which is awesome. They’re giving you free money. I’m like, take it right?
[00:15:46.100] – Tyson
I mean, why would you not take it? Yeah, right?
[00:15:48.950] – Sean
So that I love to see. So she’s got that she’s got a savings rate, which I told her, you’re probably saving a little bit more than you should. You should probably let’s try to invest. But she’s like, I really like the cash. And I’m like, well, your cash is depreciating. But anyway, I was like, the same portal to visualize what she has and then show what I have. Like, I’ve got my own salary, income, then I’ve got my own investments, then I’ve got a Roth IRA investment bucket. Those two I keep in TD Ameritrade and kind of keep everything in one location. So we could kind of play with the dials, if you will, like if your platform and see if we do this, like if we saved 15, 20% more, what would that look like to the end date?
[00:16:33.410] – Tyson
Yeah, no, that’s exactly what it does. That’s the entire intent behind it. And it’s all the dials and switches. You can get really granular, you can get really broad. It’s completely up to you. And in fact, I meant to mention this earlier. I was talking about what on trajectory does in general. But for folks that I think your audience would be really interested in hearing. We have this notion of.
[00:17:00.840]
Hey.
[00:17:01.170] – Tyson
I did something in the past and maybe I did something good or maybe I did something bad. Maybe I made some mistakes and I’ve corrected it or maybe I’ve had a really good few years. But I don’t want to expect 15 or 20% necessarily for every single year until I’m 60 because that’s probably not reasonable. And so what you can do is you can break buckets of time so you have your buckets, as you said, where your money is, but then you can create age ranges where I’m achieving this during this period and that during that period. If there’s a market correction, how does that affect me overall? So you can do all that. And I was going to mention, I was talking to some of my team before you and I got on, and we’re actually working on a guide that for people that are really interested in tracking their progress, how they’ve done in the past, validating what their assumptions were, and then using that as a tool to predict what’s going to happen in the future. We’re actually writing like a white paper for that. If anybody here’s this we have a little promo code.
[00:18:02.320] – Tyson
If anybody puts Payback in their promo code, we’ll automatically send that white paper to folks because I think it would be helpful to your audience.
[00:18:08.420] – Sean
Absolutely, I’m interested. Well, this is really good to hear about your tool. I’d like to talk about one more thing before we transition to your personal investment journey, which is a 4% rule and a great comment here I was reading about you is why it no longer guarantees retirement.
[00:18:29.150] – Tyson
Yeah, guarantee is such a tricky word. On the one hand, I think that for the kind of people that use your service, I don’t think the 4% rule is in any way endangered whatsoever.
[00:18:42.720] – Sean
Right.
[00:18:43.470] – Tyson
But for people, there’s so many mixed messages out there. There’s so many different investment platforms. We talk about fiduciaries all the time, but is our people really fiduciaries? And let’s face it, if you look at the compound annual growth rate returns of the past decade or 20 years and compare that to the previous 20 years, they’re different. And a lot of people think they’re going to be even more different going forward. And we’re getting really close to a point where some of the averages when I was growing up, it was, oh, the stock market is guaranteed to return ten to 15% every year. Now it’s, oh, the stock market is guaranteed to return 7% to 10% every year. Even the common wisdom has ratcheted down. And so I just think that the Trinity Study and the 4% Rule, where all this information came from, I think that it’s really important just to have a little bit more information about your spending, about the trends that you can count on without taking an active interest. For those who take an active interest, I don’t think it’s in jeopardy at all. But if you don’t take an active interest and you don’t kind of pay attention a little bit again, I said it before, on trajectory, it’s all about getting the numbers out of your head.
[00:19:56.230] – Tyson
That’s true, but you got to check in once in a while things are going the way you thought.
[00:20:01.300] – Sean
And just to summarize, here the 4% rule actually, I’ll let you define yeah. What is that in simple terms?
[00:20:08.420] – Tyson
Yeah, sure. I’m just going to make two subtle distinctions. So the 4% rule, it comes from a study called the Trinity Study, and what it says is in the year that you choose to, quote, unquote, retire or live off of your assets, let’s put it that way, you take 4% of whatever your assets were, and that’s the number that you’re going to spend every year, adjusted for inflation. So if in whatever inflation is, you adjust that number for inflation each year going forward. So you’re really spending the same amount, but you’re adjusting for inflation. And then basically the ups and downs in the market are going to allow you to spend that amount every year. A lot of people think it’s kind of a static number adjusted for inflation. A lot of people think I can spend 4% of whatever my assets are every year no matter what. That’s not actually what the 4% rule is. But in one trajectory, if you are interested, you can actually run it both ways. You can run it with the Trinity 4% rule, that’s the number I’m going to spend, adjust for inflation forward, or I’m going to pick a variable spending rate.
[00:21:13.260] – Tyson
I’m going to say I’m going to spend 4% of my profile. The difference is if the market goes really up one year, that next year you get to spend a little bit more. If the market goes down, you got to suck it in and spend a little bit less. That’s a true variable, 4% versus the Trinity Study, where you have the same amount to spend every year.
[00:21:33.140] – Sean
Right. And what I’ll do when I talk to people is, let’s say you have a million dollars at retirement. You need to spend $40,000 or less and make sure your portfolio, let’s say, you’re earning six, seven, 8%, it’s outpacing the 4%. So you’re still growing. So you can continue to pull out money and still grow your money at the same time.
[00:21:58.970] – Tyson
And because of the sequence of return, risk is very real. And if you start and there’s a down year and that’s actually what the 4% rule is supposed to protect you against, is the sequence of return. So, yeah, if the market is only making that number and then you have one single down year, it’s out the door, so you got to outpace it.
[00:22:19.900] – Sean
Right.
[00:22:20.480] – Tyson
And that’s why I said people at your audience, I’m sure they’re paying attention and they’re going to eke out a little bit better than let’s take a quick commercial break.
[00:22:33.150] – Sean
Have you ever lost money in the stock market? Maybe you heard or saw comments on YouTube, TikTok Reddit, or another social platform, or maybe you just received bad advice from a friend. Yeah, I think we’ve all been there. Most people lose money in the stock market because they make decisions based on emotions. What if you could remove emotions from investing? What if you could make consistent returns in the stock market based solely on logic? And what if there’s a software that handled that logic for you? Introducing taker a platform that helps you manage your own investments with confidence. Get started today with a free trial visit. Tykr.com that’s tykr.com again. Tykr.com. Well, let’s transition here. I’d love to hear about your personal journey. We know when you started your software. It sounds like the 90s. When did you originally get started in the stock market yourself?
[00:23:27.610] – Tyson
Yeah, I was a little bit well, I say I was late I was in my guess in my late 20s, early 30s, when I really started to put real money into it. I was such a risk adverse person. I was actually in the military when I was younger and I bought some savings bonds and I thought I was the smartest guy in the world because I was actually buying an investment. Didn’t realize it was one of the worst investments I ever could have made. Having said that, in my late 20s, early thirty s, I started really investing. But then, as I mentioned before, I made a lot of mistakes. I tried to be way too active and now I’m a really boring, sort of boggle head, sort of ETF index fund, kind of long term investor. If I told you, my investment strategy would bore you and your audience to tears.
[00:24:23.540] – Sean
Can you give us an idea, though? What type of index funds or ETFs you gravitate towards?
[00:24:28.120] – Tyson
So I’m buying the Vanguard General Market. Yeah, general Bond, General Market, some international all the really basic index funds or ETFs. And I’ve got my dollar cost averaging. I’m not thinking about it. The money is just going in and my investments have done. They’re not breaking any records, but I sleep great and I’m doing fine. I don’t spend a lot of mental energy going, oh, man, if only I had done this, or if only I had done that. Because that’s what was tearing me up, is all the things I missed. And listening to my buddies talk about wins they had had, there’s just too much emotional stuff going on.
[00:25:08.650] – Sean
Yeah. If you’ve got somebody that’s really focused on those big wins and it becomes a braggadochious moment, you know, there’s ten X as many losing events they’re keeping silent on. That’s usually what I find.
[00:25:20.930] – Tyson
Yeah, that’s absolutely true. But you can’t get them to admit it. You still got to listen. What I always try to keep in mind is that if you are an active trader and you’re trying to beat the market, that means on average, every trade you make, you need to go against what the crowd is doing. You’ve got to figure out because if you go with the crowd, you’re going to lose money. You have to go again. Because it’s buying and selling. If you’re buying something, somebody’s selling it. Right. So to outpace the market, you’ve got to be in the minority and you got to do it again and again and again. You got to be in the minority each time. And that’s just not easy.
[00:26:03.510] – Sean
Yes, we set expectations with our audience. One of our training articles, we got 20 that goes out. You’ll see one and it talks about it’s. Six reasons that really make investing different from trading. And one of those is it’s a zero sum game. Somebody is always winning, somebody losing where it’s investing. If there’s a great earnings report, you can all get in and you can all win.
[00:26:27.210] – Tyson
Yeah, I totally agree. And hopefully people will hear it enough. But you know what? Young people got to make their own mistakes. If someone had just told me, no, Tyson, don’t do this, just do this. I’ve been like, Listen to these guys. Anyway, I saw this YouTuber, he’s got.
[00:26:46.560] – Sean
This course for $2,000. It will teach you how to quit your day job and trade full time. Like, no, he’s making money off you buying the course, not off him in the market.
[00:26:59.930] – Tyson
Otherwise he would just be in the market. Why would you sell your secret? It’s so obvious.
[00:27:06.010] – Sean
Yeah, exactly. One of the tips here you’ll laugh at two of the six is the 6th one, which is there’s about 3000 billionaires in the world. And I always position this question to a trader. Like, of those 3000 billionaires, how many of those are traders and how many of those are investors? And usually when I can see the smirk on your face, as soon as I finish that line, they look at me and they’re like, there are no traders. Correct, Mike. That’s correct. There are no billionaire traders. And the majority of those 3000 billionaires, they’re a split between entrepreneurs and investors.
[00:27:43.570] – Tyson
That’s right.
[00:27:45.070] – Sean
Well, that’s good to hear about your returns. Are kind of matching the returns. I’m curious here, what percent of your income do you invest?
[00:27:54.550] – Tyson
When I had my day job in the not too distant future, I’m a pretty aggressive saver. So obviously, yes, any match that you can get in a retirement plan, absolutely do it. But in my mind, any limit, the government says that you can put your money into a retirement. That’s it. So straight off the top, there’s 15% right in your retirement account. But then I’m also going to max out my IRA, so there’s another couple of percentage points, and then I’ve got two little girls. I’m going to max out my 529 plan, for sure.
[00:28:28.220]
Absolutely.
[00:28:28.780] – Tyson
It’s tax exempt money right there. And then I’m going to put away a little bit on top in a brokerage or something like that.
[00:28:36.060] – Sean
Sure.
[00:28:36.930] – Tyson
So just in the government sanctioned stuff, that’s easily 20% of my income right there, and then a little bit more. So I’d probably save 25, 30%. It’s a pretty aggressive savings rate.
[00:28:47.070] – Sean
Nice. That’s great. All right. You talked about the savings bonds as your biggest could be your biggest mistake, and if you want to tramp that with the worst one, you certainly can. But here’s a question for what was your biggest investment success? Maybe your own company?
[00:29:04.420] – Tyson
No, I think my biggest investment success was during the Great Recession. I sold everything and bought I just did tax loss harvesting, basically, but I didn’t realize I was doing X loss harvesting. I was just like, you know what, I knew the principal, and since I’m a DIY guy, and since I’m also I don’t know. Anyway, I sold everything, took losses for half of a decade every year, because your losses, you can continue to take them until they’re all used up. And so on paper, during the Great Recession, on paper, I lost like $200,000. And so I was able to every year, my gains would not climb out of that loss that I took.
[00:29:52.250] – Sean
I’ve never heard that strategy before. You’d be the first one on this podcast. Interesting.
[00:29:58.350] – Tyson
I mean, you can’t buy back the exact same investment, right? But you can buy in kind. That’s what I did. And so I took all the losses that year, and then I continue to take losses. After your gains, you can only take, I think it’s like $3,000 in additional loss off your federal taxes.
[00:30:18.460] – Sean
So you were able to spread out because this is new to me, I haven’t actually heard of the strategy before. Were you able to spread out those losses over multiple years?
[00:30:27.030] – Tyson
Yeah, you can do it. As long as that loss still exists on paper, you can continue to take those $3,000.
[00:30:32.630] – Sean
So you’re chipping away at it every year. Got you.
[00:30:36.160] – Tyson
So I would make gains, and those gains still wouldn’t overcome the loss, and I would take another $3,000. And I was brilliant, but of course I had to take a huge everyone took a huge hit in the market, but it rebounded so quickly. So the savings bond kind of tied in to my biggest regret. But my biggest regret is having just zero tolerance for risk. You’ve got to get outside of that mindset if you want to be successful. And once you go through a couple of these market adjustments, then you don’t get so emotionally involved in them anymore, which is really nice, because here at.
[00:31:10.520] – Sean
Tykr, we’re actually in the point of who is really inspired by which is Phil Town. He’s big on the strategy of stockpiling is you want that market to go down and go down fast. And when it does that, that’s when you stockpile. You deploy that dry powder, get it into the market, buy when stocks are low, and that’s where you make your biggest returns. And that principle is in my past experience, I’ve deployed it, and it’s done very well. So we actually, in our training, everything leads up to we call it the number one strategy. So did you ever think about that? Like, hey, what if I bought for example, I had a guy on the podcast who invested in Ford in the recession. He turned 100 grand in about $2.5 million for a year.
[00:31:55.530]
Stop.
[00:31:55.950] – Sean
Piling 101. The guy mastered it, and he didn’t even know what he was doing it but he’s like, they have the best balance sheet. They didn’t take the bail out. There are a lot of people talking about, hey, the stock is poised for something special. He went in. He did say 100 grand all in one stock. Little risky.
[00:32:12.970] – Tyson
Little yeah.
[00:32:14.770] – Sean
But the financials, they spoke for themselves. So do you ever think about that? What if I did?
[00:32:21.490] – Tyson
Well, so I do agree. Market downturns are buying opportunities, 100% behind you. Of course, you either have to have the cash on hand or you need to sell something else. Based on my strategy of dollar cost averaging and not paying attention to it, I don’t fully participate in that. But you know what? You’ve kind of inspired me in looking at your tool. I’m probably going to make some adjustments here in the near future. And even prepping, to be honest, I hadn’t heard of your podcast before. So I went and I binged it a little bit, and I’m feeling pretty inspired by doing good.
[00:32:59.650] – Sean
Well, thank you. Well, the real credit I have to fill. Town, he’s got those three books, but the two books I really like are Rule One and Payback Time. And then he wrote one with his daughter Danielle called Invested. I’m sure it’s great as well, but him and then, of course, Warren Buffett, Charlie Munger, ben Graham, the Godfather. Right.
[00:33:21.290] – Tyson
And I know you’re interviewing me, but how long have you been doing Tykr?
[00:33:24.870] – Sean
So Tykr has been around for two years now. We went live two years ago, and we just launched our third version. The reason is, the first version. I know the audience has heard the story. I’ll keep it quick, but I think you’ll enjoy this. The first version was really an MVP. Get it out there, see what the interest is. We saw that Demand was hot, created a new version. This was July 2021. Just to give us a better looking UI, little easier develop, but still found ourselves limited with what features we can add. Now we’re in version three and this is what we’ve been really looking for the last three years I’ve been in my tech background. I love building software with customers. That’s been my strength is I’d say I’m pretty good at listening to the customer, kind of discerning their needs, kind of peeling back the onion to really understand what they’re looking for and then focus on that. So I love their feedback. And this new version is we’re really like now we’ve got the platform where we can scale and add those features our customers are looking for. So we had a lot of fun stuff like portfolio tracker, what broker connections.
[00:34:30.340] – Sean
As I mentioned, ETFs are coming very soon, which you may be interested in. And then in the future we will have a mobile app. Android and Apple, of course, like that.
[00:34:39.720] – Tyson
So many fun things to plan for. I feel you.
[00:34:43.200] – Sean
It’s great. It’s been a fun journey. Again, I’ll keep it short here. It’s been so much fun because I built a lot of good relationships with the customers. I’ve got a lot of new friends and it’s like I wish they lived here in the Milwaukee or golfing.
[00:34:56.620] – Tyson
I know Israel. You just feel like the sense of community and connection because when someone compliments you and says, your software helped me do this, I’m like, oh, I love I’m so happy because it’s real people that are real lives and it’s wonderful to connect with those people. It is a lot of fun. We do user groups so I get to see them. And I know you do webinars as well. A couple of times a month we do the same and I’m always like, hey, I recognize you from your email address. I remember the help desk had to forward me the question because whatever, that’s great.
[00:35:29.310] – Sean
Yeah, it is. But anyway, good question and if you want to dive in further after the call, we can certainly do it. But I got a fun question here and then we’ll go into the rapid fire round. So this last question here on your portfolio is how do you manage your emotions? You kind of alluded to you made a good comment there is you’ve been able to build a platform that helps people separate emotions. How do you do it? Personally, that’s not easy for most people.
[00:35:55.290] – Tyson
No, it’s not easy. And I actually recently wrote an article on this where my wife came because all the turmoil in the markets and she said, how much have we lost? Is how she put it right, how much have we lost? And I’m like, well, we haven’t lost anything until you sell it. But to answer your question more accurately, how far down are we? I was like, I don’t know. And she’s like, what do you mean you don’t know? Aren’t you paying attention? Aren’t you looking? I’m like. You know what? Things go down so fast. When they go down so fast, they tend to go back up. I’m going to wait for a modicum of whatever before I take a look. She’s like, well, I want to know. I’m like, fine, I’ll take a look. So it is hard to manage your emotions because even in that moment, it’s all paper money. But you look at it and you’re like, X number of percent. And then you translate that to real dollars and you’re like, that’s painful. So part of managing your emotions is just like accepting that we’re emotional beings and it might hurt a little bit, but you know what?
[00:36:52.960] – Tyson
You can be in pain and still be happy because you’ve got a plan. You can see your future and you know what you’ve been able to achieve in the past. So I’d say I manage it. I manage my own personal emotions by having a plan and trusting the universe and what I’ve been able to achieve in the past.
[00:37:10.410] – Sean
Sounds like trust the plan, trust the process.
[00:37:12.960] – Tyson
That’s right.
[00:37:13.740] – Sean
Yeah. That’s awesome. Here’s one more question. I wasn’t 100% accurate here. This is a fun question, is why do you invest? Now, you did talk about the five. What is it, the 529 for your daughter’s education?
[00:37:29.480] – Tyson
Sure.
[00:37:30.350] – Sean
And it really comes into maybe the why behind building your own software. You saw some obvious problems in the market, right?
[00:37:38.820] – Tyson
Yeah. Why? Well, for me, it comes down to one word, and that’s independence, because I don’t want to be dependent on a job. I don’t want to be dependent on parents. Well, I’m a little bit older, but I don’t want to be dependent on society. To a certain extent, we all are, of course, but I have a real independent streak. And so for me, investing gives me freedom. Building my own product gives me the freedom. I always say if nobody in the world ever uses on trajectory, at least I’ve got a tool that I want to use because this is what I was always looking for and now I have it. So the business can fail. I would still be happy because I finally have my tool. I finally have the thing that I wanted. So, yeah, it all comes down to independence. I think that’s the why.
[00:38:28.950] – Sean
I love it. Awesome answer. All right, let’s dive into the rapid fire round. This is where we get to find out who Tyson really is. You can try to answer each question in 15 seconds or less. Are you ready?
[00:38:41.430] – Tyson
Okay.
[00:38:42.090] – Sean
All right. What is your favorite podcast that you.
[00:38:44.210] – Tyson
Listen to probably choose Fi.
[00:38:47.080] – Sean
Okay. Yeah, it’s on my Apple list, actually.
[00:38:51.210] – Tyson
They’re super sincere and they’re really nice guy that I like to show.
[00:38:54.520] – Sean
Yeah, I would agree. What is the recent book you read and would recommend?
[00:39:00.010] – Tyson
I’m almost done. Does that count?
[00:39:02.470] – Sean
Let’s hear it. What are you doing?
[00:39:03.530] – Tyson
Okay. The better angels of our nature. It’s by Stephen Pinker, and it’s all about everyone’s always griping, complaining about how violent the world is and how everything’s going to hell. This book is just incredibly eye opening to understand where we have come from as a species, as a society. And it’s thick, it’s meaty, so it’s not for everyone, but the evidence portrayed and just makes you start to feel good about humanity. And I like feeling good about humanity. Awesome.
[00:39:34.530] – Sean
I’ll add it to my list. Here’s a fun one. What is your favorite movie?
[00:39:38.800] – Tyson
Memento. Which was what’s his name’s? First name?
[00:39:42.470] – Sean
Christopher Nolan.
[00:39:43.270] – Tyson
Christopher Nolan’s first name?
[00:39:44.360] – Sean
Yeah.
[00:39:46.810] – Tyson
I just think it’s incredible and so incredibly creative. I can’t imagine what the writing process was, but for anyone who hasn’t seen it, it’s a movie that takes place backwards. And it takes place backwards because the main character has short term amnesia, so he can remember a little bit, but then he forgets it. Then he remembers a little bit, and he forgets it, and the story literally takes place backwards. And for me, it’s just completely mind blowing. I love it. Plus, I had short term amnesia once in my life, so I have a special relationship with it.
[00:40:16.460] – Sean
I follow. Yeah. That movie, it set the tone for what could Christopher Nolan bring us over the next two decades? And it’s like, either this guy is going somewhere, or he’s just flashing the pan. Could have been I won’t go down. Rabbit. My favorite movie is actually Inception, one of his films, and Tennis is brilliant. And, of course, the Dark Knight trilogy. Anyway.
[00:40:46.390] – Tyson
Good stuff.
[00:40:48.250] – Sean
All right, what is the best investment advice you ever received?
[00:40:53.260] – Tyson
That I’ve ever received?
[00:40:54.760] – Sean
Yes.
[00:40:56.890] – Tyson
I think it goes back to that. And I think it’s in Jack Bogle’s book, the Little Book of Common Sense Investing. And you mentioned about zero sum game that for every buyer there’s a seller. For every seller, there is a buyer. So if you’re going to be actively trading, you’ve got to be in the minority and be correct about the way that everyone else is wrong. And once I realize that I’ve got to be more right than the majority, and then they turn out to have to be wrong, I realized I can’t do it. So I think that’s probably what’s important for me.
[00:41:35.050] – Sean
Let’s flip that equation. What is the worst investment advice you ever received?
[00:41:39.080] – Tyson
To put money in a savings account, which is what my parents told me to do. As I said, I did have some money in my savings account, and then I made the bold decision to buy savings bonds, which whatever. But the point is that that was my first step, and then I learned how poor of a step that was. But, yeah, listening to put your money on the mattress on a savings account, it’s just bad advice.
[00:42:06.650] – Sean
The shoe box under the bed, I tell you you’re losing money.
[00:42:10.970] – Tyson
Exactly.
[00:42:12.650] – Sean
All right, and then this is the time machine question. If you could go back in time to give your younger self advice, what age would you visit and what would you say?
[00:42:19.830] – Tyson
Yeah, I would go right back to my mid 20s when I started to invest, and I would say, be bold, man. Take a little bit of risk. You don’t have to take all the risk, but take some because you’ll feel better. You’ll feel better for it in the future.
[00:42:34.900] – Sean
Awesome. Well, thank you so much for your time. The last question here is where can the audience reach you?
[00:42:39.850] – Tyson
Sure. The site is on trajectory.com, and if you ever want to reach out to me, I’m [email protected], and my mailbox is always open and ready to converse with anyone.
[00:42:53.120] – Sean
Awesome. Well, thank you so much for your background here. Really excited to dive into your platform. I think this is going to be a great tool for my personal use.
[00:43:00.540] – Tyson
Great. And just a reminder, you’ll probably put it in the show notes, but if folks do put that playback in the promo code, we’ll get that white paper out to help them. What did I say? It was validate and predict your situation.
[00:43:14.220] – Sean
Awesome. Thanks, Tyson. We’ll see you.
[00:43:16.000] – Tyson
Sure. Thanks, Sean.
[00:43:22.170] – Sean
Hey, I just want to say thanks for checking out this podcast. I know your time is valuable, and there’s a lot of other podcasts out there you could be listening to. So thanks for taking the time to listen to my guest story. If you did enjoy this podcast episode, could you head over to itunes and leave a five star review? That would be much appreciated. Thank you. And last but not least on this podcast, some episodes we do talk about stocks. And please keep in mind, this podcast is for entertainment purposes only. So if you did hear any buyer’s sell recommendations, please don’t make those decisions based solely on what you hear. All right, thanks a lot.
[00:43:58.260] – Tyson
See you.