What can Europe’s economic challenges teach us about America, faith, and long-term investing?
Many people see headlines about Europe’s economy, rising poverty rates, regulation, energy issues, and declining standards of living and wonder what it all means for investors. But what if the bigger takeaway is not fear, but perspective?
In this episode of Retire in Texas, Darryl Lyons shares his thoughts after recent time spent in the UK and Europe, reflecting on the differences between Europe and the United States from a cultural, economic, faith-based, and investment perspective. He discusses why America’s capital markets, culture of risk-taking, and foundation of trust remain meaningful strengths, while also explaining why European companies may still have a place in a diversified portfolio.
You’ll learn:
• Why Darryl believes America remains a powerful environment for innovation, entrepreneurship, and wealth creation.
• How faith, trust, family, and culture can influence economic strength.
• Why regulation, energy policy, and population decline may be creating challenges across parts of Europe.
• What investors should understand before reacting to European exposure in their portfolios.
• How long-term thinking can help investors stay grounded when global headlines feel concerning.
Europe may be facing real challenges, but that does not mean investors should panic. Darryl explains why perspective matters, why diversification still has value, and why appreciating America’s strengths can help us think more clearly about the future.
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Transcript:
Hey, this is Darryl Lyons, CEO and Co-Founder of PAX Financial Group. And you’re listening to Retire in Texas. This information is general in nature only. It’s not intended to provide specific investment, tax, or legal advice. Visit PAXFinancialGroup.com for more information. So, there’s a subscription. I guess, subscribe to a newsletter, and it’s called Faithwire.
And it’s not one of those. I don’t, it’s not like Wall Street Journal Force, but it’s good. I always find it to be interesting, a different take on topics that are usually we see headlines in the secular world. I did just a lot in like the secular world, as you would imagine. CNBC and Wall Street Journal and Forbes and stuff.
So, I like hearing from a faith perspective. So, faith was good. This article and I’ll put a link in here is about Europe, and I’ll read the first part and then I’ll give you my thoughts on it. So, one of the major reasons for the creation of the European Union was to make your Europeans wealthier.
Along the way, however, something went seriously wrong. Europeans are becoming poorer compared to Americans who are becoming richer. 1 in 5 Germans now face the risk of imminent poverty. Which was once one of the wealthiest nations in France. The poverty rate has hit a 30-year high. And while every nation has poor people, the standard of living in Europe has been falling behind America for over 20 years now.
And some believe that it could spark a revolution. Now I want to talk about Europe. I just got back from the UK and Europe again, for various reasons. But, my what I’m going to share with you is, is my European perspective, both from being there, having friends that live there and then from research and recognizing that there’s always another side of the story, but I’m giving you mine because I’ve the mic, and I also want to share with you the problems with Europe, but I also want to share with you why we, when we look at our investment portfolio, we can’t consider, like Europe to be a horrible investments part of our portfolio.
I mean, I think it has a place and I’m going to tell you why, but really the point, there’s a couple points I want to make in a short podcast. One of which I want you to appreciate America, relative to Europe. And then I also want you to leave and say, okay, I have Europe in my portfolio, and that’s fine.
I don’t need to freak out about it. First, this is a comment in this Faithwire article I’m going to pull out. It’s the last of the article, but it says this. The guy says I’m an economist. His last name is Larson, and he says he says I’m an economist. But I need to add this, Christianity is a spiritual, moral, and social force that builds civilization and prosperity and helps us become responsible citizens.
So, we don’t need government. I think that’s a really powerful statement. And that’s something that you get in Faithwire and not other publications. That’s why I like Faithwire and what we see in America, and we’re all concerned with is the deconstruction of our faith and how that manifests in society. See, I think we recognize today and we can have a comparison to Europe that removing faith is real problematic not only for population.
I mean, we’re seeing a major population decline in Europe right now. Major population decline is problematic when people wake up and they find that prosperity, financial prosperity is more important than families. That’s a problem. Families matter. Babies matter. Trust alone. Trust that there’s accountability by God is the lubrication that makes a whole economic engine work. And that’s not even me touching on the fact that as a Christian, I believe God blesses and honors those who honor Him.
And as a nation, I want to honor God. So just kidding if you’re a secularist and you just look at the fabric of the belief system and the benefit of a population as a whole, that should that should add merit to the idea that Christianity should be the foundational piece of a economic system in a society as a whole, in the absence of that which we see in Europe, is starting to manifest in a very dangerous way.
And, you know, I’ve seen that firsthand, going to Europe and spending time there. And it’s real problematic. So Europe, we can’t, I really like, I think the best way to understand something is have a point of reference. And I’m stating the obvious here, but U.S. is actually still the best place in the world. I know it’s the dirtiest or the cleanest sheet in a dirty load of laundry.
That’s the reality. And we know that we all have warts. But I need to make sure I point out that it is absolutely, unequivocally, in my biased opinion, still the best place, but supported by where the money’s going, the money don’t lie. And the gap is widening between the US and other countries, specifically in Europe.
One of the things that makes us go, whereas other engines are sputtering is the capital markets. And again, the lubrication of this whole thing is trust. Don’t discount that. And I think trust is a byproduct of the relationship with our creator. But the capital markets as confusing as they can be in the corruption that may come out of it.
They are a very sophisticated smart system that’s often been stress tested. Many, many, many, many times, not just in the great financial crisis and the depression, but every single day they get tested. It’s a brilliant, sophisticated system, not perfect, but very hard to duplicate by somebody like Nicaragua or Venezuela. It is a machine. And I don’t think we recognize that we’ve got this machine that can take somebody who used to not have anything like me, or, you know, others that are even worse situations.
And it’s a mechanism for them to own companies, not just start a business, but own companies long term. And I’ve seen people have very little income and use this machine of the stock market to accumulate wealth and become millionaires. I’ve seen it over decades. It’s unbelievable. We take it for granted. It doesn’t exist as well in other countries, and neither does the startup culture, our willingness to risk capital.
Some would say that the ability, the creation of the LLC, where we can actually protect our personal assets from business assets, was the catalyst to get us to be able to take risks. Yes. I also think we just have a culture of risk. And you can even see this in pockets. I see, different risk takers in Austin, and then I do in San Antonio.
There’s cultures of risk and they manifest differently. But the United States is a culture of risk and the ability to try new things, to innovate new things, from where I sit, to discover God and what He has inside of us and outside of us. And then we work hard, and we need to continue to work hard.
I don’t mean to make this a sermon, but our original task by God was to keep and cultivate the garden. And that is still a calling. When I go to Europe and you want to get up for breakfast, there’s nothing to eat. Now, again, my experience has, I’ve lived over there, but things start at 10 a.m. and then they, you know, some places they shut down at 2 p.m.
Like who works like that in America? You won’t get anywhere. I also have again friends that live there and they just say there’s just kind of a cultural element of just not working hard. And maybe it’s not because they don’t want to. Maybe there’s just not enough incentive. And I’m going to make a case. This is probably too much regulation.
Not only probably there is too much regulation. So, it just weakens the fabric of who we are. We want to work, we want to innovate, and we just have to have the environment to do that. And again, the United States is that environment. Germany used to be and I think it still has it inside of them. But if I look at an example, there’s a company called BASF and, they moved $10 billion of a plant over to China because what they say, not my words, their words is unstressed, unsustainable green energy plans.
And so that, you know, when you try to just choke and either directly or indirectly choke innovation and put these regulations on, it just becomes real problematic. In fact, Europe is, part of the issue with Europe is one of the huge issues of Europe is the whole green energy policy. Now I’m with you, I think, you know, again, as a Christian, I think that it’s our responsibility to care for the world and to take care of the world and be conscientious about it.
But there’s just over steps that take place and, frankly, illogical conclusions. So, for example, in Europe, no fracking is allowed. They depend on other countries for enough. They have enough resources, but they don’t. They depend on other countries for natural gas and fuel. Those other countries are led by some guy named Vladimir Putin, who really doesn’t always make good decisions.
Now, as a result of the war, they’re now depending on the United States to bring over natural gas. There’s a whole process that goes into bringing liquefied natural gas overseas. And it increases the cost and it just totally messes up the system when they then, the whole idea of this green energy thing, even what I’ll say, this green energy was just a huge over regulatory reach.
The other overreach was AI. They put a whole AI regulatory framework hundreds of pages before it, even before the innovation even adopted. It’s like saying we’re going to regulate Mars before we even put a rocket ship up. This idea of regulating. And I don’t know if it’s like I want to become our own God or I want to be God, I don’t know where it comes from, but it’s not what we do in America.
I mean, it’s what some people try to do. We’ve got to fight against that. We’ve got to push back. I think it’s almost Texan that we push back against at least second guess regulation. I mean, we’re not all against it. I want to make sure my water’s pure. I want to make sure my food is good.
I want to, seatbelts are good, but we’ve got to have this healthy push back. Otherwise, what happens in Europe is going to be real problematic. And then when you choke innovation, you do end up. Why? Why get up at 6 a.m. to work? Because, you know, the government’s going to take half of it and you know, there’s regulations and why even bother.
And so, or you stay there and it’s like a why even bother attitude or you move, which is what a lot of people are doing. I know I read an article recently about somebody moving from Germany to Spain because, it was just slightly better. So, it’s a real mess. And it’s going to continue unless there’s just like something that breaks and the Faithwire article says that it’s just right for revolution.
We’ll see what I’m hearing right now. It’s just young people moving. They just don’t stay there and they just go to the US and they start businesses or participate. Even companies that have had success there, they don’t stay there. They go get listed on the New York Stock Exchange, or they get bought by a bigger company.
I love the history in Europe. I love the food in Europe. I love the people in Europe. I just want to see better. And I think it’s time for us to say we’re, we’ve got something really special in the United States, and we cannot take it for granted otherwise. We’ve got a point of reference, and that’s problematic.
The second part of this podcast, I think, is from an investor’s point of view, is like, what do we do with Europe in our portfolios if we have Europe, if we’re looking on a statement and we see something that’s European because of what I just told you, do we freak out and say, hey, we’ve got a problem in our portfolio, especially if it’s a lot, and I want to tell you, no, you don’t worry about Europe from an investor point of view.
And here’s why. First of all, many times when you own European stocks in portfolios, it’s done at a fund level. So, there’s oftentimes an individual a manager or team that’s responsible for screening out nonsense companies. But regardless of that, I think the bigger story is that just because a company has a headquarter in Europe doesn’t mean they sell all their stuff in Europe.
So just where they get their mailbox does not mean that’s where they sell their goods and services. Let me give you a few examples here, like Nestle. By the way, I love, like, if you, if my wife or kids make cookies, which I love fresh baked cookies and the dark chocolate chips are in the refrigerator and they’re cold.
Those are just so good. The Nestlé dark chocolate chips, they’re just awesome. Thank you. Switzerland. If you see Nestle in your portfolio, don’t freak out. Yes, it’s a Swiss company, but 79% of their sales come outside of Europe. Unilever, a British company. Like I said, I was there and in fact, I was there in the UK and Wales and I actually went into I like buying sports cards and memorabilia and, I went into a shop to buy some stuff.
And the guy. I’m not making this up, he told me from the US. And his first thing that he said was, I love Trump. And he was matter of fact; there was no apology. There was no hesitation. There was no he was. And he said he was just tired of the nonsense in the UK. And I think that’s the sentiment.
I think that’s probably why Trump got elected, is nobody wanted the nonsense anymore. Sometimes we forget. We like, man, this guy’s insane in the White House. He tweets all these things. But the reality is, is that we, just the idea of losing some of the fabric of the United States, we just wanted somebody to get in the way.
And that’s how Trump got elected. And apparently in the UK, there’s a few people that want somebody to shake things up as well. And so hopefully they get it shaken up there. But this guy who’s a business owner and trying to make things work, that’s the first thing he told me. Well, doesn’t mean that you don’t invest in Unilever.
You know, it’s a, a company that is, if you don’t know, makes Dove products, the Axe body sprays in 1930, you know, old company, but the vast majority of their products that they sell are overseas or, Louis Vuitton, Louis Vuitton, another one out of Paris. Most of their sales are in the United States. Japan.
So, yeah, I mean, just because they have a mailbox in the European area does not mean that they’re a bad company. So just keep that in mind. In fact, some might say that there’s some good deals in Europe. And so I would say that always, mean, I’ve mentioned this many times for keep a healthy amount, maybe 20, 25% of your money in the international space and know some of that’s going to be in Asia, some of that’s going to be in India, some that’s going to be in South America.
And some of that is going to be in Europe. And despite what I would say is very concerning vacuum of Christianity that’s causing a lot of problems over there. There’s still opportunities to invest. So, you want to have some of your money in the spirit of diversification in Europe, continue to pray for our friends in Europe.
We, you know, I’ve done mission work in Eastern Europe with my friends, the admirals, and we’ve discussed extending into Wales. That’s something that we’re talking about now and, I think there’s wonderful opportunities to just love on the Europeans in a new way, in a new, you know, there’s certain time in life that we get to this pain point that we develop a humility that opens our eyes to new ways of thinking.
And maybe Europe’s there. Maybe there’s an opportunity to turn around that doesn’t require a revolution in, like the Faithwire article said. So, continue to pray and continue to support Europe, continue to appreciate America, continue to invest in Europe. And as always, I encourage and remind you, you think different when you think long term. Have a great day.
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