The Stacking Benjamins Show
Episode: Wall Street Creates (Yet Another) Hilariously Bad Investment Product (SB1643)
Release Date: February 12, 2025

Episode Overview

In episode SB1643 of The Stacking Benjamins Show, hosts Joe Saul-Sehy and OG delve into the latest questionable financial product introduced by Wall Street: the Calamos Bitcoin Structured ALT Protection ETF. With a blend of humor and insightful analysis, they dissect why this new ETF may not be the safe investment choice it claims to be. Additionally, the episode features a listener Q&A segment where a caller seeks advice on transitioning into the financial planning industry.

Wall Street's New ETF: Calamos Bitcoin Structured ALT Protection ETF

[07:25] Joe Saul-Sehy:
"Enter the Calamos Bitcoin Structured ALT Protection ETF."

The episode kicks off with Joe introducing a new ETF that promises to reduce investment risk while offering exposure to Bitcoin. The Calamos Bitcoin Structured ALT Protection ETF aims to provide a safety net by combining conservative investments with options on various Bitcoin instruments, assuring investors that their initial capital won't be lost over a year.

However, Joe and OG are skeptical of the ETF's claims. Joe points out:
"If you're not interested in losing money, why would you invest in an asset class, regardless of protections that has the ability to lose money?" ([10:14])

Analysis of Structured Investment Products

Understanding the ETF's Mechanism

[09:27] OG:
"What flip side is there?"

Joe explains that while the ETF attempts to safeguard the initial investment, it does so by limiting potential returns. The ETF claims to guarantee that investors won't lose their principal over the year, but in exchange, it caps the maximum returns at 11.65%. This limitation becomes problematic given Bitcoin's historical volatility, with Joe noting:
"Since 2016, there have been 23 occasions in which Bitcoin has risen more than that in a single day. Its average annual volatility has been 86%." ([09:30])

The Trade-Off: Safety vs. Growth

[10:37] OG:
"Anything that has the word structured in it... THERE is the trade-off: getting the upside of the S&P without the downside. But that just simply can't exist." ([10:37])

The hosts argue that products promising zero downside often come with significant trade-offs, such as limited upside potential or hidden costs. OG elaborates:
"Adding the layers of protection, you're adding layers of cost. And that's all there is to it." ([10:35])

Comparing with Other Structured Products

Joe draws parallels between the Calamos ETF and other structured financial products like annuities and whole life insurance, emphasizing that while such products have their place, they often fail to deliver on their promises without hefty compromises.

[13:33] OG:
"There is a reason for it... sometimes you forget to pay your bills and forget to pay your long-term care insurance premium, the policy went bye-bye." ([13:33])

This segment underscores the importance of understanding the true costs and benefits of structured products before investing.

Listener Q&A: Transitioning into Financial Planning

A listener named Chim reaches out with two questions:

1. Rebranding Suggestion:
   "Did you ever consider calling the 201 newsletter, the 411K? If you ever need a rebrand, that one's free."

2. Breaking into Financial Planning:
   "How would you recommend someone break into the financial planning space that's currently in another career? I'm in tech consulting and passionate about personal finance but hesitant about cold calling and traditional client acquisition methods."

[38:51] Joe Saul-Sehy:
"The answer to his question. Just start a podcast." ([38:51])

Joe and OG offer comprehensive advice:

• Niche Specialization:
  Focus on a specific demographic or professional group that aligns with your background. For instance, Pocajim suggests leveraging Chim's tech consulting experience to specialize in financial planning for IT professionals.

• Education and Certifications:
  While the pathways have evolved, acquiring relevant certifications like the CFP (Certified Financial Planner) remains crucial. OG advises:
  "If you're going to be in an advisor role, part of your job is sales and marketing. It just is." ([44:05])

• Building a Personal Brand:
  Starting a podcast or creating content can establish credibility and attract clients without traditional cold calling. Joe emphasizes:
  "Your goal is to gain the skills so it doesn't feel risky to you, it feels risky to everybody else." ([44:02])

• Gradual Transition:
  Continue your current employment while building your financial planning skills to ensure financial stability during the transition phase.

[51:45] OG:
"If you're going to be in the advisor role, part of your job is sales and marketing. It just is." ([51:45])

This segment highlights the multifaceted nature of financial planning careers and the importance of adaptability and persistence.

Final Thoughts and Key Takeaways

Key Lessons:

1. Be Wary of "Too Good to Be True" Products:
   Investment products that promise high returns with zero risk often come with significant trade-offs. Always scrutinize the fine print and understand the inherent risks.

2. Understand Your Financial Goals:
   Before investing, clearly define your objectives. Whether it's growth, income, or capital preservation, your strategy should align with your goals.

3. Education is Crucial:
   Continuously educate yourself about financial products and strategies. Tools like ChatGPT can aid in understanding complex financial terms and concepts.

4. Strategic Career Transition:
   When shifting careers, especially into fields like financial planning, leverage your existing skills and network. Build a strong foundation before making significant changes.

Notable Quotes:

• Joe Saul-Sehy:
  "If you're not interested in losing money, why would you invest in an asset class, regardless of protections that has the ability to lose money." ([10:14])

• OG:
  "Adding the layers of protection, you're adding layers of cost. And that's all there is to it." ([10:35])

• Joe Saul-Sehy:
  "Your goal is to gain the skills so it doesn't feel risky to you, it feels risky to everybody else." ([44:02])

• OG:
  "If you're going to be in the advisor role, part of your job is sales and marketing. It just is." ([44:05])

Conclusion

In this episode, The Stacking Benjamins Show effectively combines humor with deep financial insights to critique Wall Street's latest dubious ETF and provide valuable career advice to aspiring financial planners. By emphasizing the importance of understanding investment products and strategically navigating career transitions, Joe and OG offer listeners actionable takeaways to enhance their financial literacy and career trajectories.

Resources Mentioned:

• Calamos Bitcoin Structured ALT Protection ETF
• ChatGPT for Financial Queries
• Certified Financial Planner (CFP) Certification

Connect with Stacking Benjamins:

• Website: StackingBenjamins.com
• Facebook Group: Stacking Benjamin's Basement
• Contact: voicemail@stackingbenjamin.com