LOUIS BARAJAS | From Opportunity Knock$

Louis Barajas is President of International Private Wealth Advisors​ and business manager for some of the most iconic Latin artists and executives in the entertainment and sports industry for the last two decades.

Featured in Billboard, Variety and Money Magazines’ top business manager lists, he was also the first minority to serve on the National Board of the Financial Planning Association.

Born in the barrio of East LA, the son of Mexican immigrants, Louis keeps his roots as a “financial healer” providing financial coaching there still today. He was chosen by People en Español as a person making a difference in the lives of Latinos and received the prestigious Heart of Financial Planning Award from the Financial Planning Association.

Louis is a renowned speaker, author, media segment expert, and author of six books. He has been featured in USA Today, The Miami Herald, The Los Angeles Times, People en Español, Success Magazine, Hispanic Business, Senior Market Advisor and Latino Leaders Magazine. He has provided his financial and business insights to national news programs such as CBS Sunday Morning, CNN’s Your Money, CNN’s Your Bottom Line, CNBC, The Willis Report on Fox Business News, Aqui Y Ahora and Despierta America on Univision, ABC News and National Public Radio’s Tell Me More and NPR’s Marketplace Weekend Edition.

Premiering this Fall/Winter on PBS stations, Opportunity Knock$ will pair six geographically and demographically diverse families with one of three expert coaches to help them chart a path out of debt and into financial stability, providing digestible and sustainable tips and local/national resources viewers can utilize.
 

The three Opportunity Coaches are TODAY Show financial expert Jean Chatzky, “America’s Money Maven” Patrice Washington and Certified Financial Planner Louis Barajas.

With 60% of Americans living paycheck-to-paycheck, the topic of financial independence and security couldn’t be more relevant right now. Opportunity Knock$ will capitalize on research which shows the impact programming like this can have in encouraging positive actions, in the same way that 1,000+ studies have concluded Sesame Street helps raise children’s literacy scores.

TRANSCRIPT FOLLOWS AFTER THIS BRIEF MESSAGE

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EPISODE TRANSCRIPT

Louis Barajas (2s):
So I would love for you to go to your boss or the person responsible for giving you a raise tomorrow and ask them, I really would like to provide more for my family and I'd like to earn more income. I'm not asking you for a raise, but what I'd love to do is I'd like to ask you is, what do I need to do? What do I need to learn? What kind of person do I need to become to move at the next level where I'm at so I could earn more money? Because if they knew that they would be doing it already, but they don't have a plan for earning more money.

Phil Muscatello (36s):
Hi, and welcome back to Stocks for Beginners. I'm Phil Muscatello. 60% of Americans are living paycheck to paycheck. Financial independence can seem out of reach for so many in the community. Change is hard, but it can be achieved. Joining me today is Louis Barajas. Hello Louis.

Louis Barajas (53s):
Hey Phil. How are you doing? Good,

Phil Muscatello (55s):
Thank you. Thank you very much for joining me today. Louis Barajas is CEO of International Private Wealth Advisors and business manager for some of the most iconic Latin artists and executives in the entertainment and sports industry. He's also one of the expert coaches on Opportunity Knocks a TV reality show that just premiered on PBS Passport. Anyway, just to get started, we'll get to the TV program shortly, but tell us about your childhood and growing up in East LA.

Louis Barajas (1m 25s):
Yeah, well, for most people who don't know where east LA is, East LA is considered a barrio, right? And it's a place where a lot of Latinos live in the United States. My parents are Mexican immigrants. They came to the United States very young, had me very young, and my dad was a blue collar worker who back in 1971, lost a couple jobs and looked towards his 11 year old son to say, I'm I, He looked at me cuz I spoke English. And I said, he said, son. And I said, Yes, dad. I go, I'm gonna start this business. He took all the money that he had and bought a welding machine and created an ornamental iron business that's doing like window guards and fences and whatever.

Louis Barajas (2m 7s):
And so my dad and I took a bus to downtown Los Angeles, filled out an application for a business license, and that's how he got started. And that's how I became at 11 years old, a CFO for my dad's business, right? Who knows? I had no idea. And just another quick little story. And in that community there weren't a lot of people who were professionals, a lot of people, there was no access to financial planning advice or accounting advice. Two years later, the IRS showed up at my dad's office and said, Mr. Barajas, you haven't filed business tax returns for the last couple years. And my dad looked at me and asked me what they were saying. I translated for him.

Louis Barajas (2m 49s):
And then I asked the lady, What are tax returns? And I said, Is there a book that I can read to complete tax returns? And she said, Yes. Now in East Los Angeles, it's the heart of where most Mexican Americans live in Southern California. And as of last night and as of 40 years ago, there were no bookstores there. So my dad drove me like 15 miles to another location, bought me a tax book. Back then, Phil, they had no internet. So I went to the local post office to get all the tax forms. At the age of 13, I filed my first Schedule C, self-employed tax return for my dad. And, and at the age of 15, we got, we got audited for that return, believe it or not. And I won the audit.

Louis Barajas (3m 29s):
But, so that's how I got started in, in financial planning. And that's where I came from, that community,

Phil Muscatello (3m 35s):
It's, it's amazing though, that generation, that immigrant mentality of that generation was just to work hard. There was no financial planning really as such. There was no investing, I'm assuming, but it's, it's like someone, immigrants come into the community and they've got this plan that they're just going to work and work and work and make life better for their kids. Was that what it was like for you?

Louis Barajas (3m 57s):
They, they don't have a choice, right? They don't have a choice. They don't come. My dad had an education from Mexico from like, from the sixth grade. My mom got pregnant with me at age 15, had me at 16. Wonderful parents, just the most kind, loving, honest. What I got from them was just hard work. I remember my dad cutting himself with, with when he was working on the iron and went to the house, wrapped himself in with some bandaids, went back to work, right? And so every time I see an employee of mine who wants to not show up at work because they have a headache, I always kind of giggle at like, you know, my dad, who's would laugh at them, probably just a lot of hard work. They taught me that. But you know, luckily that their children got educated, right?

Louis Barajas (4m 41s):
And I, from there, I realized that my dad needed more help and I realized that education was probably the key to helping him. And that's how I kind of moved forward.

Phil Muscatello (4m 50s):
Yeah. Try telling young people that these days, huh? About how work used to be. So you became interested in financial matters from them. How did it develop from that point onward as you get older and as you became educated? I mean, what was your, what was your education?

Louis Barajas (5m 4s):
Yeah, so I, you know, I, I asked my dad, Well, after the audit, we got audit from the irs and I think the lady felt really bad for us, but had a no change audit. And my dad was living, talk about paycheck to paycheck day to day, really. And I made a commitment to my dad that I get a, a lot of financial information. I ended up going to ucla, got accepted to ucla, and then from there I went and got my master's in business and MBA and and finance. And I said, when Peter Drucker was there, most people may not remember who Peter Drucker, but is a great professor. And I went through the whole certified financial planning program back in 1985, 86. And as far as I know Phil, I'm the first Latino in the United States to become a certified financial planner.

Louis Barajas (5m 47s):
And that's how I got started. Now, I went directly into financial planning, don't wanna mention the company who actually taught me a lot about financial planning, but I started helping people in my community. And one of the things that was taught is you gotta build an emergency reserve. Now, back then, Phil Latinos were probably 65% were unbanked, didn't even have a checking account, savings account, They did everything in cash. They went to these, you know, places where they would charge 'em one or 2% to cash their paychecks and then did everything in cash. So I realized that I needed to open, help them open up checking accounts, savings accounts, have money reserved. When my, the company came to me and said, Louis, you're a great financial planner, but you're not making a lot of money opening up bank accounts for some of your clients.

Louis Barajas (6m 29s):
Why don't you open up annuities and it's a win-win for you and for them. And I realized that it wasn't how I was raised and it wasn't the best thing for me. So I became very disenchanted with the financial planning industry because it was very product driven and I really wanted to make an impact. So Phil, I quit and I said I would never be a wealth manager. Financial planner again, went to go work for a big CPA firm back in the eighties, late eighties. And they saw that back then, fi CPAs could not sell any products. They could do planning, but could not selling any products. I was one of the first CFPs in the country. And they hired me to come in and do not only good my own CPA license, but at the end of the day do financial planning for some of the wealthiest people in the country, multi-millionaires and billionaires.

Louis Barajas (7m 16s):
And I realized, oh my God, if I could do this in my own community and help people out, but at a way discounted price and not have to sell a product, what would that look like? A few years later, I had tragedy strike in my life and I ended up going back to that community and providing that kind of services to them. And since then I've grown in, it's, now I'm working with iconic Latin stars, but I continue to help people across the country and give them access to really honest, ethical, competent financial planning advice without having to sell a product if I don't need to.

Phil Muscatello (7m 48s):
And maybe many people don't understand that they're, many advisors and planners are conflicted because they're selling products that they're going to make a commission from.

Louis Barajas (7m 56s):
Well, they're pushed, right? It depends if you're, you know, I, I don't wanna make the industry look dead, but the problem is that with certain type of places that you work for, you have to produce because they're, you know, charging for your desk and you have to sell a product. And sometimes life insurance products with investments have a lot of commission and they sell it. Like if it was hotcakes and it's not the best for the family. My job is to of not having our clients think about investing for the long term and not the day to day trading type of stuff, but for the long term. But I also think about also having clients for the long term, and that's giving them advice. That's what's best for them. That's what's best for the investment

Phil Muscatello (8m 34s):
Though. Do you say any similarities or differences in the kind of mistakes and misconceptions that people have amongst the wealthier and even the not so wealthy people?

Louis Barajas (8m 44s):
The most common mistake that I see is really more mindsets and the mindsets that they're not earning enough money. And when you see a lot of books written for communities that do not have a lot of money, they focus on budgeting, right? They focus on budgeting. And that's, I actually see that as a big mistake. What I do is I focus on, I know I can't, but if I could help them create more value in themselves to be able to make more money, the other mistake is that they believe that they're never gonna have enough and they'll just gonna have to work until they die. And I have them believe that they can and they save. And so one of the things that I do is I start to create systems and habits for saving.

Louis Barajas (9m 26s):
Phil. They can't invest in stocks, right? They can't invest in stocks or inequities if they do not have any savings. It starts there first. And a lot of people are in bank that I make sure that they start saving first and then I'd start teaching them what long term investing and equities does. But again, long term, we have things now like Robinhood who have democratized, you know, trading and stocks. But it's been a double edged sword for communities that have not a lot of experience, right? They've kind of used those as day trading and they've actually now with the market, so volatile, have lost a lot of money and people are scared. So now they have a bad taste in their mouth, and now they don't wanna invest for the long term. So the mistakes are that, you know, they don't save.

Louis Barajas (10m 10s):
And they're taught to focus on budgeting when they're not taught to focus on creating more value. The other thing is, the mistakes are, there aren't a lot of people of access. So they're buying insurance products that have cash value when at the beginning, when they're first starting now, they actually just need a term insurance policy. I always believe there is no bad product, whether it's investment or insurance, it's just if you're not using it for the suitability for that, for that person, right?

Phil Muscatello (10m 41s):
So what part does investing have in financial stability? I mean, obviously that you've gotta get the, It's a big thing with changing the mindset of people to go from working every day to make money, to trying to convert that into something that will make money for them, I presume.

Louis Barajas (10m 56s):
Yeah. You know, financial, So I always have these tiers, right? So the communities that I work with, they're, I always call the tiers at the beginning, the struggle, excuse me, The bottom tier is survival, then struggle, dense stability, dense success, and then significance, right? And a lot of the people that are in this survival motor, in the struggle mode, the goal is to get them into that stability mode. There's a great saying by Henry David Thoreau that said, Most men lead lives of quiet desperation while working with communities that lack capital or lack income. I've always said that most people live lives of quiet financial desperation.

Louis Barajas (11m 38s):
Financial stability gives people what I call financial dignity. And what does that mean? As an example, with financial stability, you'll, you'll have a single mom who, you know, instead of driving a Jalopy or an old car that's gonna break down and you know, and she's driving in the middle of the night, you, she'll have some kind of car. Financial stability provides medical insurance, right? Financial stability provides a roof over your head without having to worry that if I lose my job, what's gonna happen to me and not moving in the car. We're seeing a tremendous amount of homelessness, right? And a big wealth gap. And so investing is key to all of this. The problem is now that we have to allow people to think, or we have to give them the mindset that they can invest and we need to show them how.

Louis Barajas (12m 24s):
And I will share with you, Phil, that I've been doing this for 35 years in the, in these type of communities. And we've had tremendous success. And we've done it by creating these systems or these habits or creating accounts where they're on automatic, right, where they're saving because otherwise they would never save. And to be quite honest with you, Phil, I've got clients that are also making millions of dollars and we still have to save for them. It doesn't matter. It seems like people who just keep making more, just keep spending more.

Phil Muscatello (12m 46s):
It's always a problem, isn't it? The more you have, the more you want. That's it. You talk about those five tiers, is the change in mindset like ratcheted up through those five tiers or does the change in mindset happen and then those other tiers start following from from each other?

Louis Barajas (13m 5s):
You know, I've never been asked that question, and thank you for asking that. So, so let me share you what I do when I talk to people and I do workshops, I have those tiers written on, on a board or on a screen, and I ask them, if someone's on the survival mode, what's their mindset? Are they thinking long term or short term? If they have no place to sleep tonight, if they have no food to eat, even if they stepped away from church that day, would they steal to eat and feed their children? Would they, what would they do for money to, you know, And they go, Oh, they're thinking, They're not even thinking at the end of the week. They're thinking like, what am I gonna do today? Okay, what's the mindset in the struggle where you have a job but you don't know if you have enough money to pay the rent?

Louis Barajas (13m 50s):
Or you're always talking to the landlord and say, I'll pay you next month. Or my, I'm gonna get some money coming in. What's the mindset? Well, maybe it's at a week at a time, but we're still struggling. I've got people from collections calling me because I haven't made the car credit card payment, or I haven't made the car payment, or are gonna get my, my car impounded. Then I talk about stability and then success. Cause even people at success, Phil, I've got a lot of people success who have come to me and said, Louis, you know, when I thought I had the Mercedes Benzs, I'd be happy when I thought I would get the nice house, I'd be happy. And now that I have everything, I'm still not feeling happy. There's something lacking when they've had the money. And then significance is when they're making enough and they're making a a difference. So if I can get people who are in the survival or the struggle mode to talk about what the people's mindsets are at each level, and if I can get them to start thinking at maybe one or two levels above, and how would they behave and how would they that, what would that person have to be and what kind of behaviors they would have to have.

Louis Barajas (14m 47s):
Now the problem is it depends on how much of a struggle they're in, right? Sometimes you have to, to intervene, you gotta find them help. But there are people who are in that struggle mode that we want to get in stability mode that just require a little bit more help and a shift in mindset to get 'em to there. And then you have to let get them to feel or understand that even achieving success, making money for the sake of making money's not gonna make 'em happier. They have to have a purpose or a meaning behind that.

Phil Muscatello (15m 12s):
Have you got a case study or two that you could share with listeners?

Louis Barajas (15m 15s):
Well, I mean, case study in the, in the sense of what I will share with you that I've had people who've gone through divorce and they've had that single moms and they've been in this struggle mode because the dad's not paying the child support, right? And they've never had any money. And they said, I'm living paycheck to paycheck. We've still have gone to online where they work and connected them and gotten, put $10 a month away in their 401k. We've opened up bank accounts, we're doing, you know, $10 a month in that, in that savings plan. And we meet with them and as we go through six months, okay, now you had $60, but let me tell you, when was the last time you had $60 of the savings account? And they'll tell me, it's been two or three years, or tell me when you had money in your retirement plan.

Louis Barajas (15m 57s):
I've never had money in retirement plan. I know that you're still paycheck to paycheck, right? Phil? People are listening to us. I, an analogy is, you talk to people who have a car that's breaking down, they can't make an extra car payment, but eventually the car just breaks down so bad that it's not even worth fixing. They go to the car dealer and the next day they come out with a lease or they come out with a car purchase and all of a sudden they're making the car payment that they didn't have enough money to make the car payment before. And so what I'm saying is that somehow we always are able to prioritize or able to do what needs to be done. And so sometimes we do that other thing times is I sit down and I'll take a look at what they're spending the money on and how we can prioritize it differently.

Louis Barajas (16m 40s):
Or I will teach 'em concepts on how to make more money. Here's one quick concept that I teach people. So I would love for you to go to your boss or the person responsible for giving you a raise tomorrow and ask them, I really would like to provide more for my family and I'd like to earn more income. I'm not asking you for a raise, but what I'd love to do is I'd like to ask you is, what do I need to do? What do I need to learn? What kind of person do I need to become to move at the next level where I'm at so I can earn more money? Because if they knew that they would be doing it already, but they don't have a plan for earning more money, I will share with you that 99% of the time they come back and they say, I have a plan.

Louis Barajas (17m 24s):
And most of 'em are earning more money within six to nine months. There are times when the boss will tell them, or their manager says, Huh, I don't even, you know, they wanna make this kind of a raise. I don't even make that. Well, it's better for you to find out now that you're in a place that's not gonna pay you more. So you can go gain what I call cash knowledge, abilities, skills and habits to move to another job where there will be that more value for you and they'll, they'll pay you better. So we've gotta teach these kind of concepts. They're very simple concepts and they've, when when you hear them, it sounds like common sense, but nobody's doing that.

Phil Muscatello (17m 58s):
You referred a few moments ago to the kind of new investing products like Robin Hood that are allowing people to invest directly themselves. And another guest referred to that as being like getting the keys to the Ferrari with, without even having your L plates on your Kia. You know, and there's a bottle of whiskey on the passengers

Louis Barajas (18m 19s):
Or going to Vegas. Or going to Vegas, right?

Phil Muscatello (18m 21s):
Yeah, that's right. And I think, well, what I always try and say to people is that, okay, you can invest with a very, very small amount of money, but don't think of it as a sports betting app. Think of it as an educational app and to educate yourself. Would you agree with using it that way?

Louis Barajas (18m 38s):
A listen, Absolutely. Again, these type of apps weren't around, and most people would never have access to investing or didn't even know how to invest, right? It's on your phone. There's no excuse for not being able to invest these days. It's

Phil Muscatello (18m 56s):
No friction at all

Louis Barajas (18m 56s):
with, there's no excuse for you to buy, to buy one share of Amazon at a fractional share price, Right? The the, what needs behind that though is the context of what investing really is. Because let me just share with you that if you go into poor communities, when you see that there's a lotto and, and let's just say lotto right now is at a, you know, a hundred million dollars, the lines are at the door, at the liquor stores, the lines are at the door, at the convenience stores. Everybody's buying a ticket. And so they think that that's your only chance of building wealth. And you and I know, and in fact, I actually know somebody who won 11 million and after whatever taxes had 7 million and literally lost it within three years.

Louis Barajas (19m 41s):
I mean, this is a true story. Hmm. And so we need to have some kind of education of how investing really works. People think that investing in the stock market is gambling, it is absolutely not. But when they're day trading and they're, you know, it is, it does become like gambling, right? And so at the end of the day, it's a wonderful tool. We just have to provide a lot more education behind it. And they treat it like a lotto ticket, to be quite honest with you.

Phil Muscatello (20m 9s):
And these days there's so much more financial advice available in podcasts, blogs, videos on YouTube and so forth. Can this be a good thing or a bad thing?

Louis Barajas (20m 17s):
It is a great thing. But let me share with you with the problem that I have now with all the information. When I left the big firm out of Newport Beach, California, and it was Kenneth Leventhal and I went back to East LA to help the poor, there was no internet then. It was just starting. We were just getting there. And people said the reason why people are poor is there's a lack of financial literacy. That's why I've written five books and I will share with you now, with so much information, the wealth gap, especially in the United States, has gotten larger. And so now with all the information, why has that wealth gap gotten? You know, there's so much wonderful, great information from great organizations out there.

Louis Barajas (20m 57s):
I don't know if there's too much information now, but the problem is the right information is available to you at the great university of Google, right? Or whatever you're using. And you have to know to go to which organizations are giving you consumer friendly information. You have to be careful sometimes when you go with individual advisors, let's say I'm an individual advisor and I'm giving information, you have to be careful about where their intentions are and if they're also selling a product or what they're trying to do. So I love to go to more of the government kind of organizations, the finra, the sec, what SCC site where they're giving you consumer friendly information without having any intentions to sell a product behind it.

Phil Muscatello (21m 42s):
Can you suggest for listeners, when we're talking about going to Dr. Google and the University of Google, what they should be searching for? Is it something like long-term investing or passive investing? Any, any terms that you would suggest people put in their search engine?

Louis Barajas (21m 57s):
How do I start to invest? Simple as that. How do I start to invest? Hmm. You know, in Investopedia has tremendous amount of information. How do I know where to invest? I wanna, how do I invest for college funding for my children? I mean, it's asking the question repeatedly a few times and seeing what comes up. And then you'll see right away, right at the very top is it says this is an ad, this is an ad, this is an ad. So you kinda go down a few steps below and look for information that, you know, just be very careful with people who are out there telling you how wonderful something is and how great and grand something is. Again, I go back to when people tell me, you know, right now, Louis, I'm invested.

Louis Barajas (22m 37s):
I'm nervous, the accounts are down. I go, well, if you're invested in equities, they're supposed to be down, right? If you had money invested with Madoff, your accounts would not be down in a down market. You, there's something to worry about, right? So you have to know how to work. As far as I see it, there's only really three types of investments in the whole world. There's cash fixed and equity. And you have to teach 'em how they work and, and what they're for. And I'll ask somebody, I'm gonna teach you how to be a financial planner. Equity investments are volatile. You put a dollar in, you don't know what's gonna be worth tomorrow. It could be real estate, it could be companies stock like stocks. Fixed investments are like bonds or loans where, you know, you lend somebody money and they lock it in for a certain time period.

Louis Barajas (23m 18s):
And you're gonna get that. But you know, you're subject to interest rate risk, and then cash is cash. And most banks here were paying prior to the inflation 0.01%, right? A 10th to 1%. But I would ask him, you know, what's the goal and what's the time horizon? And if, to be quite honest, Phil, I don't even think the goal matters. It's the time horizon. If somebody tells us I'm gonna need that money within the next three to six months, you're gonna put it in cash, you're gonna put it in a short-term cd, you're gonna put it in cash. I, you know what? I need money for my kids' education fund. Great. How old is your kid? Right? Because if I, if I tell you, Phil, my kids 17 years old will go to college in the next six months, or I tell you my child is a year old, it's gonna be a completely different portfolio for that child, right?

Louis Barajas (24m 2s):
The same thing with somebody says, Oh, I need money. I need to retire. Where should I invest in? Should I invest in etf? Should I invest in cash? How old are you? And when do you plan to retire? You know, what's our time horizon? And so it goes back to asking those type of questions. If you have anybody come to you and talk to you about a product first before they're asking you what's your, how old are you? Or how much time do you have for the investment? What does it need to be liquid or not? What's your risk tolerance? Have you ever been in these type of investors or are they teach, you know, they should teach you that. If you've never invested in equities, the markets are supposed to be down at certain periods, it's not gonna be a smooth ride up. And you need to be comfortable. And maybe if you have extra cash on the markets or down, like at this time, do we put more money in? So I think we need to be educated from that perspective.

Louis Barajas (24m 45s):
And I think there are a lot of wonderful people out there giving great advice. But I also think that the industry is still at a point where we're very product driven instead of very people driven.

Phil Muscatello (24m 54s):
One of the traditional ways of earning a greater income is education. And young people go to college obviously to, to get skills and to make a lot more money. But then it's a double edged sword with the, the debt then hanging over their head for many years. How would you talk to a young person a approaching this kind of situation?

Louis Barajas (25m 14s):
We have these conversations all the time, and I will share with you that if you talk to a lot of college counselors, you're gonna see a lot of people who are in college paying a lot of money, who are undecided as to what they're going to study. And so it's more of looking at also their career path long term. There are some kids that definitely know, I mean since they were 11 years old, what they were going to do. I was gonna be a doctor, so I was 11 years old. Go for it. You're gonna make a lot of money, but it's gonna, it's a lot of work, right? It's, it's eight, nine years of college and it's a tremendous amount of effort and work. But if you're gonna do it, that's fine. If you're undecided and don't know, that's why community colleges have been a great resource for a lot of people.

Louis Barajas (25m 55s):
It's been a big strategy where you go get your general courses for literally nothing these days and then you transfer. If people don't have an idea of what they wanna do, I'll tell 'em, Why don't you go do a lot of internships and don't even start college for a while until you finally decide what you really love and what's your passion. And then there you'll find that there are some careers that don't require college to make a lot of money if that's what you're meant to do. And so it just depends. You have to take a look at every person individually. But again, if somebody wants to go and they've known they've always wanted to be a doctor, then I don't let money interfere that, you know, we're gonna figure out a way to, for them to get the money. Whether it's grants, scholarships, loans, sometimes they're not even aware of what grants are or scholarships and there's a lot of help out there, but you have to look for it when there's a will, there's a way.

Phil Muscatello (26m 41s):
So tell us about Opportunity Knox, the TV show, How's that been? And I, I, I know we can't do any spoil, We have no spoiler alerts. Okay.

Louis Barajas (26m 49s):
No spoiler alerts. But I will share with you that I'm doing this show called Opportunity Knocks. It will be shown throughout the country on pbs and it's, you know, as we know was launching in November. And so it's with Patrice Washington and Jean Chatzky. Jean Chatzky has been on NBC Today Show for many, many years. And the goal is to show America that if you are having financial struggles or challenges, there are resources out there available to help you. And so this is a wonderful show that it's not about the coaches, but there's a team of people around six families that will help guide, coach, teach change mindsets and push 'em and guide them to the right resources to change their lives.

Louis Barajas (27m 37s):
One of the, the families that I had was a single mother with five children who was, had not paid their her home mortgage in 10 months because she taught art classes at home. When we Covid came in, she, nobody came in right there couldn't be any art classes. And she and her, she was not making enough money that where she can teach these classes off the internet. And so started, I mean, really spiraling downward and had some health issues as well. And we stepped in to help her. But what people will see is that there are so many resources available for them if they're in debt, they have some financial problems and some of them were not even financial problems, they were problems of opportunities.

Louis Barajas (28m 18s):
Do I stay here as a teacher or I have an opportunity to move to Austin, Texas and make more money and change the whole life? It maybe takes some risk and they got guidance, you know, career guidance there as well. So it's a wonderful show that I think is gonna show a lot of people that if they can do it, I mean, if the people on television can do it, they can do it themselves. And it's not just advice. We actually guide them to the website, opportunity knocks.net and there's an opportunity finder there where they can put in what kind of problem they have and it'll guide them for people in their community at nearly almost, you know, no expense whatsoever. So that's what we're trying to do.

Phil Muscatello (28m 55s):
So some of the, the major artists and mainly Latino and Latino artists that you represent, can you share some of those names?

Louis Barajas (29m 4s):
Yeah, I've been working for the longest time. If you'll see somebody again, gentleman named Nicky Jam, who was born in Boston in the United States and moved to Puerto Rico and then went through some severe difficulties, hardships, and then made it, made a a, he turned back his whole entire career and is doing extremely well done in movies in the us And I've got, and Ricky and Head out of the Ortiz and I worked for the Rivera family for the longest time. So I mean, I can continue and give you a list and list of clients and what we do for them is, you know, we sit down and we help them pay their bills and do their tax returns and guide them with their, their investments and help them vet out private equity opportunities for them.

Louis Barajas (29m 46s):
I mean, really kind of a family office. And again, it's a very boutique firm. Billboard Magazine has put us in the, you know, top business managers list for the last six years running. And so we're very proud of the work that we're doing and we're, you know, we're basically creating that wealth and business management. So, so that's, that's the type of clients that I have.

Phil Muscatello (30m 6s):
Yeah, it's, and, and I guess that's part of the dream, isn't it, that at some stage some people can achieve that kind of financial success.

Louis Barajas (30m 16s):
It, you know, Phil, I will share with you that one of the things that being so close into the entertainment industry and dealing with a lot of executives in the entertainment industry is that you realize there's a lot of great talent out there, but the people who don't give up, the people who have a lot of heart eventually make it right. I, some of these stars lived in their cars, that the beauty of the clients that I have is that they're, they also were come from families that did not have a lot of education and didn't have a lot of money and they did a lot of struggles. So once they make money, most of them, not all of 'em, but most of them really appreciate the money that they've made and they really want to take care of it, right? And, and so I love that, that they're really involved with their finances.

Louis Barajas (31m 0s):
I have a young group, two young kids named Mo and Ricky, they're not that young, but they're young and they are really invested in time. I meet with 'em and talk about private equity, about stock market, about their retirement plans. And I have never seen any 20 year olds that sit me down and wanna learn as much as possible. And I love that. I mean I love that again, people who have come from nothing. And so if they can do it, anybody can do it. Now music is different, right? It's a little bit of luck, it's a little bit of luck. It's the same thing with actors, not a lot of people working, but I also have people from the Body Hills that I've had for 25, 30 years, people who were school teachers and never made more than $40,000 a year and have over a million dollars in their retirement accounts.

Louis Barajas (31m 42s):
And again, it's done through time, it's done through common sense investing. We don't need to complicate stuff. This is not really, it's not that complicated what we do. I think the biggest goal is to get them just to be consistent investors. Right?

Phil Muscatello (31m 59s):
A friend of mine who works in the music industry was having a dinner with an accountant who worked with Elton John. When Elton John, suddenly his party years were over and he had to get his finances together and on the books there were four Rolls Royces, but they could only find three of them. And it took them about five years to find one of the rollers sitting in the long term car park at Heathrow Airport with no air in the tires.

Louis Barajas (32m 22s):
That's when you know you've got a lot of money, Phil. That's when you know you get a lot of money when you can't. Yeah. Yeah. So I'm not, I, my clients are not that there yet, but right now what I'm seeing Phil just is that a lot of people are selling catalogs. A lot of hedge funds in the investment world are buying music catalogs from these artists. That's right. Yeah. And a lot of these artists are getting big lump sums. I've got some clients that, you know, are getting 25, 30 million from selling their catalogs. And I guess that all started when, because interest rates have gone down that they were looking to diversify the portfolios. And so they saw that the streaming, the, the, the music royalties coming from all the streaming was a, a great income.

Phil Muscatello (33m 2s):
Yeah, they're kind of, they're kind of like a long-term bond.

Louis Barajas (33m 4s):
They're like a long-term bond. And they were getting, so they were being, you know, where then prior they used to sell some of these catalogs at 8, 9, 10 times multiple. They're now going for 17, 18 times multiple.

Phil Muscatello (33m 14s):
I believe there's ETFs now that are offering exposure to some of these, you know, you can get exposure to Bob Dylan's catalog and David Bowie's catalog. And, and David Bowie really was one of the first to do this. I think it was even back in the late eighties where he sold his catalog. Yes. Yeah. Interesting to think of as an income stream. I

Louis Barajas (33m 32s):
Think it is. You know, and, and it's interesting to see some of these 30 year olds selling catalogs for 40, 50 million. And when we're sitting there, we have to take into the capital gains taxes. But we gotta say, Okay, what do we do to make sure that we don't run out of this money? Cuz this is was your future income string that you've just sold now, and now we've gotta invest it wisely. And so it takes, there's a lot of time in planning what we're gonna do with that money and make it grow as well.

Phil Muscatello (34m 0s):
I gotta say, I think 300 million for the Bob Dylan catalog is so cheap that he got for that, but I guess at his age, he doesn't need too much money to, to about his days.

Louis Barajas (34m 9s):
Absolutely. Phil, if, since we're kind off a little bit on the subject, so what do you stocks for beginners? What do you actually teach on your podcast? What's the, what what are you teaching the, the listeners?

Phil Muscatello (34m 22s):
I'm not so much teaching. I mean, I don't see myself as a teacher. I feel like I'm channeling okay. Channeling my guests and their knowledge and their information. One of my guests a long time ago said, Listen to the words you just got, li gotta listen to the words. So what I'm trying to do is expose listeners to people who have expertise in this industry and who by listening to the words will pick up basically. Well, really what I am trying to say is that long term you, you wanna be invested for the long term. You wanted to do it with as little risk as possible, and to think about what your goals are in the future and not think that you're gonna make, you know, walking into the stock market today, that you're gonna make a lot of money straight off the bat.

Phil Muscatello (35m 5s):
Yeah. So that's basically where I'm coming from. Yeah.

Louis Barajas (35m 7s):
So are you a musician as well?

Phil Muscatello (35m 10s):
I've got a bit of, I

Louis Barajas (35m 11s):
See, I see a guitar. I see a guitar behind

Phil Muscatello (35m 13s):
You. Yeah. I, I wouldn't call myself a musician as such, but I do like playing and I actually play all the, the themes on my podcasts. I take copyright very seriously and

Louis Barajas (35m 23s):
No kidding. That's

Phil Muscatello (35m 24s):
Awesome. Yeah, and I just, That's great. I always feel like the, I like to get the vibe and the, and that. Right.

Louis Barajas (35m 30s):
Oh, that's fantastic.

Phil Muscatello (35m 31s):
Okay. Well, okay. Thank you very much Louis for joining me today. It's been a real pleasure and it's not often where I get interviewed as well, by my guest,

Louis Barajas (35m 39s):
Phil, my, my pleasure. And thank you so much.

Phil Muscatello (35m 42s):
Thank you very much, Louis. If you found this podcast helpful, please tell a friend, especially if it's someone who needs to start thinking about investing for their future, you'll be helping them and helping me to keep their show on the road.

3 (35m 53s):
Stocks for beginners is for information and educational purposes only. It isn't financial advice and you shouldn't buy or sell any investments based on what you've heard here, any opinion or commentaries. The view of the Speaker Only not Stocks for beginners. This podcast doesn't replace professional advice regarding your personal financial needs, circumstances, or current situation.

Phil Muscatello (36m 12s):
And thank you for listening to my podcast.

Stocks for Beginners is for information and educational purposes only. It isn’t financial advice, and you shouldn’t buy or sell any investments based on what you’ve heard here. Any opinion or commentary is the view of the speaker only not Stocks for Beginners. This podcast doesn’t replace professional advice regarding your personal financial needs, circumstances or current situation.