1 00:00:00,160 --> 00:00:02,920 Speaker 1: Welcome to How the Money. I'm Joel and I'm Matt. 2 00:00:03,120 --> 00:00:26,240 Speaker 1: Today we're discussing how you should think twice before investing. Yes, 3 00:00:26,320 --> 00:00:29,159 Speaker 1: we want you to think twice before investing, Joel. You know, 4 00:00:29,280 --> 00:00:31,720 Speaker 1: just on Monday, we were talking with West Moss and 5 00:00:31,760 --> 00:00:34,319 Speaker 1: he talked about when it comes to being happy, there 6 00:00:34,320 --> 00:00:36,040 Speaker 1: are a lot of things that he found in his 7 00:00:36,120 --> 00:00:38,920 Speaker 1: research that you can do or maybe not do, in 8 00:00:39,000 --> 00:00:41,120 Speaker 1: order to achieve happiness. It's kind of like an Alec 9 00:00:41,120 --> 00:00:42,800 Speaker 1: hartline and you can kind of pick whatever you want 10 00:00:42,840 --> 00:00:44,640 Speaker 1: to kind of throw in the stew. Yeah, you you 11 00:00:44,640 --> 00:00:46,479 Speaker 1: We we talked about how happiness is sort of like 12 00:00:46,479 --> 00:00:48,720 Speaker 1: the stew. There's not this perfect recipe that you have 13 00:00:48,800 --> 00:00:50,680 Speaker 1: to follow. It's not like baking, where you have to 14 00:00:50,720 --> 00:00:53,920 Speaker 1: have very specific ingredients, the right quantity of ingredients, and 15 00:00:54,080 --> 00:00:56,120 Speaker 1: you have to do them in the right order. When 16 00:00:56,120 --> 00:00:59,240 Speaker 1: it comes to investing, investing is a lot more like baking. 17 00:00:59,360 --> 00:01:02,000 Speaker 1: It's a little bit less like throwing a bunch of 18 00:01:02,160 --> 00:01:04,600 Speaker 1: ingredients together in a big pot and just kind of, 19 00:01:04,920 --> 00:01:07,160 Speaker 1: you know, seasoning to taste and being happy with what 20 00:01:07,240 --> 00:01:08,960 Speaker 1: you have at the end of the day. Because if 21 00:01:08,959 --> 00:01:10,520 Speaker 1: you don't follow the right rules when it comes to 22 00:01:10,560 --> 00:01:13,119 Speaker 1: baking you could. Uh. That's the difference between a nice, sweet, 23 00:01:13,120 --> 00:01:16,200 Speaker 1: fluffy cake uh and some salty plato uh. And we 24 00:01:16,240 --> 00:01:17,800 Speaker 1: want to make sure that you end up with a 25 00:01:17,880 --> 00:01:20,280 Speaker 1: nice cake uh, not something for your kids to play with. 26 00:01:20,560 --> 00:01:22,000 Speaker 1: And I know the people who've been listening for a 27 00:01:22,040 --> 00:01:24,280 Speaker 1: while might see that headline and they're like, what in 28 00:01:24,319 --> 00:01:27,640 Speaker 1: the world, dudes, you talk about investing and only in 29 00:01:27,800 --> 00:01:30,360 Speaker 1: the sunniest, rosiest terms. Why in the world are you 30 00:01:30,400 --> 00:01:32,440 Speaker 1: coming out with a podcast. It's like, thing twice before 31 00:01:32,480 --> 00:01:34,520 Speaker 1: doing this, And I promise we're not trying to be 32 00:01:34,520 --> 00:01:36,280 Speaker 1: a click baity, but really, there are a bunch of 33 00:01:36,280 --> 00:01:38,559 Speaker 1: things you need to think through before you actually start 34 00:01:38,640 --> 00:01:40,720 Speaker 1: investing in. So that's really what this episode is about. 35 00:01:40,760 --> 00:01:42,640 Speaker 1: It's saying, yes, we love it, we still think it's great, 36 00:01:42,760 --> 00:01:44,560 Speaker 1: but there's some due diligence that needs to happen on 37 00:01:44,600 --> 00:01:47,640 Speaker 1: the front end before you jump in head first. Yeah. 38 00:01:47,640 --> 00:01:49,160 Speaker 1: And even a few weeks ago, we talked about the 39 00:01:49,200 --> 00:01:53,520 Speaker 1: importance of investing over consumption, right, how ownership is key. 40 00:01:53,600 --> 00:01:55,760 Speaker 1: And so now that we've convinced you now that you 41 00:01:55,800 --> 00:01:58,480 Speaker 1: want to invest, we want to just taper things a 42 00:01:58,480 --> 00:02:00,040 Speaker 1: little bit and say, hey, there are a number of 43 00:02:00,120 --> 00:02:01,680 Speaker 1: things we want you to think about first. That's what 44 00:02:01,680 --> 00:02:04,120 Speaker 1: we're talking about today, no doubt. Before we get to that, Matt, 45 00:02:04,160 --> 00:02:06,760 Speaker 1: I just really quickly, you wanted to mention someone in 46 00:02:06,760 --> 00:02:09,560 Speaker 1: our Facebook group recently was in a car accident. She 47 00:02:09,600 --> 00:02:13,000 Speaker 1: seemed fine, which is fortunately she was. She was seemed 48 00:02:13,000 --> 00:02:15,560 Speaker 1: like she wasn't hurt from what I could tell, and 49 00:02:15,600 --> 00:02:18,440 Speaker 1: so Jessica, we wish you the best. But she had asked, 50 00:02:18,720 --> 00:02:21,959 Speaker 1: what what what are people's best advice when you're in 51 00:02:22,000 --> 00:02:23,800 Speaker 1: a car accident to make sure that you're not taking 52 00:02:23,800 --> 00:02:26,040 Speaker 1: advantage of financially. And one of the things that it 53 00:02:26,120 --> 00:02:28,280 Speaker 1: instantly made me think of that I don't know if 54 00:02:28,280 --> 00:02:30,160 Speaker 1: we've ever talked about on the show, but I feel 55 00:02:30,160 --> 00:02:32,120 Speaker 1: like for anybody who ever gets in a car accident, 56 00:02:32,560 --> 00:02:34,960 Speaker 1: one of the things you need to remember in your 57 00:02:35,360 --> 00:02:40,400 Speaker 1: potential battle with an insurance company is diminished value. Most people, Matt, 58 00:02:40,440 --> 00:02:43,359 Speaker 1: don't even know what that means. But basically, if you're 59 00:02:43,480 --> 00:02:46,239 Speaker 1: twenty dollar vehicle, hopefully it's more like a ten dollar vehicle. 60 00:02:46,240 --> 00:02:49,040 Speaker 1: But let's say you're twenty thollar vehicle gets hit, yeah, 61 00:02:49,080 --> 00:02:52,120 Speaker 1: and it causes eight thousand dollars worth of damage that 62 00:02:52,160 --> 00:02:54,600 Speaker 1: has to be repaired. The insurance company is going to 63 00:02:54,880 --> 00:02:57,480 Speaker 1: pay to have that car fixed. But the problem is 64 00:02:57,600 --> 00:03:00,240 Speaker 1: or they might total it because if it's too much, 65 00:03:00,280 --> 00:03:03,600 Speaker 1: damaging m title totally. But the thing is, after that 66 00:03:03,680 --> 00:03:07,920 Speaker 1: damage is repaired, your car isn't worth anymore, even though 67 00:03:07,960 --> 00:03:10,600 Speaker 1: the work has been done to repair it. The there's 68 00:03:10,600 --> 00:03:13,120 Speaker 1: this thing called diminished value, where on that car Fax 69 00:03:13,240 --> 00:03:15,600 Speaker 1: report that accident is going to live forever and if 70 00:03:15,600 --> 00:03:18,440 Speaker 1: you try to resell it, it's not selling a pristine 71 00:03:18,440 --> 00:03:20,480 Speaker 1: car that's never been an accident. It's selling a car 72 00:03:20,800 --> 00:03:23,280 Speaker 1: that has had some damage done in the past, and 73 00:03:23,320 --> 00:03:26,400 Speaker 1: that affects resale value. And so that is one of 74 00:03:26,440 --> 00:03:28,040 Speaker 1: the things you should pay attention to. That's one of 75 00:03:28,080 --> 00:03:30,840 Speaker 1: the things you should make sure you're asking your insurance 76 00:03:30,840 --> 00:03:35,120 Speaker 1: company for payment for the diminished value of your vehicle. 77 00:03:35,360 --> 00:03:39,040 Speaker 1: And there's actually an easy formula that you can run 78 00:03:39,160 --> 00:03:41,640 Speaker 1: your car through to kind of come up with a 79 00:03:41,720 --> 00:03:44,800 Speaker 1: realistic amount that you should be asking for. Well, we'll 80 00:03:44,840 --> 00:03:46,800 Speaker 1: link to an article I think it was on bankreat 81 00:03:46,840 --> 00:03:49,320 Speaker 1: dot com that goes through the details of that formula 82 00:03:49,360 --> 00:03:51,600 Speaker 1: and how you can figure out dimnased value in your 83 00:03:51,640 --> 00:03:53,920 Speaker 1: specific case. But that's just one of those things nobody 84 00:03:53,920 --> 00:03:57,520 Speaker 1: talks about. UH. Being made whole in an accident also 85 00:03:57,640 --> 00:04:01,120 Speaker 1: involves receiving compensation or the fact that your car is 86 00:04:01,120 --> 00:04:04,000 Speaker 1: now worthless totally. UH. And it's worth noting too that 87 00:04:04,040 --> 00:04:06,360 Speaker 1: this is specifically the case. When you are in an 88 00:04:06,400 --> 00:04:09,240 Speaker 1: accident and it is the other person's fault. You can 89 00:04:09,240 --> 00:04:11,760 Speaker 1: try to file a diminished value claim with your own 90 00:04:11,760 --> 00:04:14,200 Speaker 1: insure if it's your fault, but they're likely going to 91 00:04:14,320 --> 00:04:17,359 Speaker 1: say no, sorry, it was your fault. But if you 92 00:04:17,360 --> 00:04:19,479 Speaker 1: were in an accident it was somebody else's fault, that 93 00:04:19,600 --> 00:04:22,400 Speaker 1: is a claim that you would file with that insurance company. 94 00:04:22,720 --> 00:04:25,200 Speaker 1: Sometimes it will involve you getting a professional appraisal of 95 00:04:25,240 --> 00:04:27,279 Speaker 1: your vehicle. But I mean if you do have a 96 00:04:27,279 --> 00:04:30,400 Speaker 1: twenty vehicle or even more thirty or forty thousand dollars 97 00:04:30,400 --> 00:04:32,880 Speaker 1: on the line here, you know, getting spending three to 98 00:04:32,960 --> 00:04:36,560 Speaker 1: four bucks on a on an appraisal, would one be 99 00:04:36,560 --> 00:04:38,400 Speaker 1: worth the money if that means you're going to be 100 00:04:38,480 --> 00:04:40,960 Speaker 1: made whole and to recoup some of that lost value 101 00:04:41,040 --> 00:04:43,640 Speaker 1: because of the fact that you are in an accident exactly, 102 00:04:43,839 --> 00:04:45,800 Speaker 1: and part of it is just proving your case. Sometimes 103 00:04:45,839 --> 00:04:47,799 Speaker 1: you will need an appraisal if you're working with a 104 00:04:47,839 --> 00:04:51,080 Speaker 1: particularly stubborn insurance company. It varies by state. Yeah, but 105 00:04:51,120 --> 00:04:55,560 Speaker 1: hopefully that that actual formula for figuring out what the 106 00:04:55,640 --> 00:04:58,360 Speaker 1: diminished value is in your specific case. Hopefully you can 107 00:04:58,400 --> 00:05:01,839 Speaker 1: provide that and have to even hire someone and pay 108 00:05:01,839 --> 00:05:04,360 Speaker 1: out a pocket that would Yeah, that would be ideal. So, yeah, 109 00:05:04,440 --> 00:05:06,080 Speaker 1: make sure in the case of a car accident you 110 00:05:06,080 --> 00:05:08,960 Speaker 1: don't forget about diminished value. But Matt, let's mention the 111 00:05:08,960 --> 00:05:11,240 Speaker 1: beer that we're having on this episode. This one is 112 00:05:11,240 --> 00:05:15,080 Speaker 1: called Emergency Drinking Beer. It's by Wild Heaven Brewing, which 113 00:05:15,120 --> 00:05:17,720 Speaker 1: is just around the corner from us in Atlanta. Can 114 00:05:17,720 --> 00:05:19,760 Speaker 1: you believe that we have never had a Wild Heaven 115 00:05:19,800 --> 00:05:22,080 Speaker 1: beer on our show? Is this the first? It's I 116 00:05:22,200 --> 00:05:25,960 Speaker 1: checked actually before before we hit record, and because I thought, 117 00:05:26,400 --> 00:05:29,440 Speaker 1: certainly back in the day we had Yeah, I mean, 118 00:05:29,480 --> 00:05:31,320 Speaker 1: when Wild Heaven first came on the scene, we actually 119 00:05:31,360 --> 00:05:34,479 Speaker 1: enjoyed their beers a decent bit esctan. I remember that 120 00:05:34,480 --> 00:05:38,119 Speaker 1: one in particular, being that delicious quad that we enjoyed 121 00:05:38,160 --> 00:05:40,640 Speaker 1: one night playing some board games. But it has been 122 00:05:40,720 --> 00:05:43,240 Speaker 1: a while since I've enjoyed their beers, and I'm excited 123 00:05:43,560 --> 00:05:45,359 Speaker 1: for us to actually have one here on the show. 124 00:05:45,839 --> 00:05:48,479 Speaker 1: Wild Heaven emergency drinking beer. We'll share our thoughts on 125 00:05:48,600 --> 00:05:51,120 Speaker 1: this one at the end of the episode. Sounds good, 126 00:05:51,120 --> 00:05:52,960 Speaker 1: All right, let's move on to the subject at hand. 127 00:05:53,360 --> 00:05:57,080 Speaker 1: We're talking about thinking twice before investing and matters. We're 128 00:05:57,080 --> 00:05:58,840 Speaker 1: preparing this one and made me think about road trips 129 00:05:58,920 --> 00:06:01,719 Speaker 1: for some reason. And when you're heading to the beach, 130 00:06:02,080 --> 00:06:04,000 Speaker 1: you don't just HAVEV in the car and start driving 131 00:06:04,240 --> 00:06:06,839 Speaker 1: south to get there. If you're in Atlanta, right, unless 132 00:06:06,880 --> 00:06:10,160 Speaker 1: you are the star of a sitcom, you're like, we're 133 00:06:10,200 --> 00:06:12,599 Speaker 1: going to the beach. You're Kevin James and King of 134 00:06:12,640 --> 00:06:15,160 Speaker 1: Queens or something like that, right, Yeah, And because like, 135 00:06:15,240 --> 00:06:16,640 Speaker 1: let's if you're in college. I feel like that's the 136 00:06:16,640 --> 00:06:18,359 Speaker 1: thing that that is something maybe you do in college 137 00:06:18,400 --> 00:06:21,080 Speaker 1: where you just like, hey, guess what, I'm turning twenty 138 00:06:21,160 --> 00:06:23,599 Speaker 1: one tomorrow. I want to wake up and see the 139 00:06:23,640 --> 00:06:26,640 Speaker 1: sunrise at Charleston or at Folly Beach and Charleston. A 140 00:06:26,640 --> 00:06:28,520 Speaker 1: friend of mine actually did that, and I opted not 141 00:06:28,600 --> 00:06:31,560 Speaker 1: to go with him because classes early in the morning. 142 00:06:31,600 --> 00:06:33,120 Speaker 1: I thought, I don't think I want to do that. 143 00:06:33,240 --> 00:06:36,560 Speaker 1: I'm sorry, you're responsible, sir. Yeah, Well, the thing is, 144 00:06:36,600 --> 00:06:38,960 Speaker 1: if you literally just start driving south, you might hit 145 00:06:39,000 --> 00:06:40,920 Speaker 1: a dead end, you might hit a road closure, you 146 00:06:40,960 --> 00:06:43,760 Speaker 1: could get lost completely if you're just kind of going 147 00:06:43,800 --> 00:06:47,000 Speaker 1: with a general navigational principle. And not only do you 148 00:06:47,040 --> 00:06:50,320 Speaker 1: need a more specific set of directions, Fortunately you don't 149 00:06:50,360 --> 00:06:52,240 Speaker 1: have to pronout those map quest directions like you did 150 00:06:52,240 --> 00:06:54,680 Speaker 1: back in the college days. Remember those getting real nostalgic 151 00:06:54,720 --> 00:06:57,640 Speaker 1: over here. That was terrible, that was the worst. But yeah, 152 00:06:57,720 --> 00:06:59,680 Speaker 1: you you also actually need to have done some prep 153 00:06:59,720 --> 00:07:01,760 Speaker 1: work in advance, like did you ask your boss for 154 00:07:01,800 --> 00:07:05,400 Speaker 1: time off before this trip? Because if you didn't and 155 00:07:05,440 --> 00:07:07,560 Speaker 1: you just don't show up on Monday, that's not going 156 00:07:07,600 --> 00:07:09,760 Speaker 1: to be good for you. Right. Did you pack all 157 00:07:09,760 --> 00:07:12,320 Speaker 1: your beach gear? Matt? You always come prepared with a 158 00:07:12,320 --> 00:07:14,040 Speaker 1: shovel when you go to the beach. Oh, I'm a digger. 159 00:07:15,040 --> 00:07:16,920 Speaker 1: I love digging in the sand, and so you know, 160 00:07:17,120 --> 00:07:19,560 Speaker 1: you show up to the beach with a frown on 161 00:07:19,600 --> 00:07:21,280 Speaker 1: your face if you didn't pack it ahead, and if 162 00:07:21,280 --> 00:07:23,240 Speaker 1: I didn't have my my shovel, I would be sadness. 163 00:07:24,480 --> 00:07:26,800 Speaker 1: The same is true when it comes to investing. You know, 164 00:07:26,840 --> 00:07:29,000 Speaker 1: we talk a lot on how the money, about how 165 00:07:29,040 --> 00:07:30,920 Speaker 1: you've got to get started investing. If you want to 166 00:07:30,920 --> 00:07:34,120 Speaker 1: reach your bigger financial goals. We firmly believe this. It 167 00:07:34,320 --> 00:07:37,400 Speaker 1: is a really, really important part of your personal finances 168 00:07:37,440 --> 00:07:39,680 Speaker 1: and building your wealth. But you also don't want to 169 00:07:39,680 --> 00:07:43,480 Speaker 1: pull the trigger before you've considered a bunch of important things. 170 00:07:43,560 --> 00:07:45,520 Speaker 1: And that's what we want to talk about today. Yeah, 171 00:07:45,760 --> 00:07:47,960 Speaker 1: and you know, there's a good chance that you are 172 00:07:48,320 --> 00:07:51,480 Speaker 1: pretty much constantly hearing the quote unquote responsible voices all 173 00:07:51,480 --> 00:07:55,160 Speaker 1: around you saying that you need to be investing. And 174 00:07:55,160 --> 00:07:57,280 Speaker 1: if you are investing, when you say responsible voices, it 175 00:07:57,280 --> 00:07:58,920 Speaker 1: makes me think of Toby in the office, by the way, 176 00:07:58,920 --> 00:08:02,080 Speaker 1: It's like, yeah, I don't know, sound good. He's not 177 00:08:02,080 --> 00:08:04,560 Speaker 1: respond I mean, just because he's hr doesn't mean he's responsible. 178 00:08:04,560 --> 00:08:07,040 Speaker 1: He's just honestly though, I feel like Jim was always 179 00:08:07,080 --> 00:08:09,360 Speaker 1: just the most responsible, well rounded person, which is why 180 00:08:09,360 --> 00:08:12,040 Speaker 1: we liked him someone. But the fact is that is 181 00:08:12,040 --> 00:08:14,840 Speaker 1: what you hear, and even if you are investing, you're 182 00:08:14,880 --> 00:08:16,640 Speaker 1: likely going to hear folks around you saying that you 183 00:08:16,640 --> 00:08:18,840 Speaker 1: should be investing more right It like, it's great that 184 00:08:18,880 --> 00:08:21,160 Speaker 1: you're headed in the right direction, but let's ramp it up. 185 00:08:21,320 --> 00:08:23,720 Speaker 1: And in fact, those are both sentiments that we regularly 186 00:08:23,800 --> 00:08:26,880 Speaker 1: share here on the podcast. Investor early invest often. But 187 00:08:26,920 --> 00:08:28,800 Speaker 1: if you just take some money and you just throw 188 00:08:28,840 --> 00:08:31,760 Speaker 1: it into the market without a plan, without having specific goals, 189 00:08:31,800 --> 00:08:34,440 Speaker 1: and without knowing where you currently are in your own 190 00:08:34,440 --> 00:08:38,400 Speaker 1: personal finance journey, then the advice to just get investing 191 00:08:38,440 --> 00:08:40,080 Speaker 1: may not be all that helpful, and it could in 192 00:08:40,160 --> 00:08:43,400 Speaker 1: fact harm your personal finance journey down the road if 193 00:08:43,400 --> 00:08:46,200 Speaker 1: you get started too early. You're right, Matt, Yeah, some 194 00:08:46,240 --> 00:08:48,959 Speaker 1: people you've actually talked about how you are encouraged to 195 00:08:49,000 --> 00:08:52,520 Speaker 1: start a roth ira really early on and over time 196 00:08:52,520 --> 00:08:54,600 Speaker 1: that has been really good advice for you. But the 197 00:08:54,640 --> 00:08:56,760 Speaker 1: minute that you opened up your raw ira was's not 198 00:08:56,800 --> 00:08:59,240 Speaker 1: ready for not the best time for That's exactly exactly right, 199 00:08:59,640 --> 00:09:03,400 Speaker 1: And the truth is that some people should avoid investing altogether, 200 00:09:03,679 --> 00:09:06,200 Speaker 1: at least for now. That's because there are a number 201 00:09:06,320 --> 00:09:09,200 Speaker 1: of other money gears that you'll need to get through first. 202 00:09:09,480 --> 00:09:11,840 Speaker 1: And we've yeah, we have our seven money gears that 203 00:09:11,840 --> 00:09:14,640 Speaker 1: we've talked about. I believe we did a whole episode 204 00:09:14,679 --> 00:09:16,520 Speaker 1: in January this year. If you go to how to 205 00:09:16,559 --> 00:09:18,640 Speaker 1: money dot com and you click the start here button, 206 00:09:18,840 --> 00:09:21,839 Speaker 1: you'll see our seven money gears laid out, and it's 207 00:09:21,920 --> 00:09:25,000 Speaker 1: essentially a financial order Operations of when you should do 208 00:09:25,040 --> 00:09:27,000 Speaker 1: certain things, and if you do things out of order, 209 00:09:27,440 --> 00:09:31,000 Speaker 1: just like making that making that cake, you're you're going 210 00:09:31,040 --> 00:09:33,640 Speaker 1: to get a different end result. And so, for example, 211 00:09:33,640 --> 00:09:36,800 Speaker 1: it's important to eliminate any high interest debts that are 212 00:09:36,840 --> 00:09:40,200 Speaker 1: weighing you down before you start investing in attack sheltered 213 00:09:40,200 --> 00:09:43,040 Speaker 1: account like a roth ira. We love roth iras, but 214 00:09:43,120 --> 00:09:45,760 Speaker 1: if you're funding your roth ira before you pay down 215 00:09:45,760 --> 00:09:48,600 Speaker 1: your credit card debt, that's not a smart move. The 216 00:09:48,720 --> 00:09:51,360 Speaker 1: one exception we would say is investing enough to get 217 00:09:51,360 --> 00:09:54,080 Speaker 1: the match that your employer offers if you have access 218 00:09:54,120 --> 00:09:55,760 Speaker 1: to one. That's one of those things that you do 219 00:09:55,840 --> 00:09:58,480 Speaker 1: actually want to take advantage of before you pay off 220 00:09:58,559 --> 00:10:01,360 Speaker 1: that credit card debt. But other than that, we're big 221 00:10:01,400 --> 00:10:04,319 Speaker 1: fans of you becoming an investor. We don't want you 222 00:10:04,360 --> 00:10:06,160 Speaker 1: to put the cart before the horse. Want you to 223 00:10:06,280 --> 00:10:09,599 Speaker 1: pay off those unsecured debts or any personal loans that 224 00:10:09,679 --> 00:10:12,559 Speaker 1: have by interest rates too, before you dip your toes 225 00:10:12,600 --> 00:10:14,839 Speaker 1: in the investing waters. You'll get there at some point, 226 00:10:15,120 --> 00:10:17,679 Speaker 1: but now might not be the time. Yeah, And and 227 00:10:17,800 --> 00:10:20,439 Speaker 1: harkening back to your road trip illustration, Joel, like before 228 00:10:20,480 --> 00:10:22,040 Speaker 1: you even hit the road, there are some things that 229 00:10:22,040 --> 00:10:23,920 Speaker 1: you need to do to make sure that you are 230 00:10:24,040 --> 00:10:25,880 Speaker 1: road ready. Right, You've got to make sure you've got 231 00:10:25,920 --> 00:10:27,840 Speaker 1: gas in the tank. Smart, to make sure you've had 232 00:10:27,840 --> 00:10:30,160 Speaker 1: an oil change recently. Yeah, you want to ensure that 233 00:10:30,200 --> 00:10:32,440 Speaker 1: your tires are inflated properly. You gotta have that playlist 234 00:10:32,480 --> 00:10:34,000 Speaker 1: ready to Oh, that's true. You want to have to 235 00:10:34,080 --> 00:10:36,800 Speaker 1: have the tunes ready to go. These are all important 236 00:10:36,800 --> 00:10:39,160 Speaker 1: steps before you leave on a long road trip. Uh. 237 00:10:39,200 --> 00:10:41,200 Speaker 1: And so similarly, you first want to make sure that 238 00:10:41,240 --> 00:10:44,800 Speaker 1: you first have a solid financial foundation before you invest. 239 00:10:44,840 --> 00:10:47,040 Speaker 1: And so, like you said, Joel, paying off that high 240 00:10:47,080 --> 00:10:50,440 Speaker 1: interest debt that is important and this awesome means having 241 00:10:50,520 --> 00:10:52,880 Speaker 1: enough money in the bank to ensure that you're able 242 00:10:52,880 --> 00:10:57,480 Speaker 1: to withstand any unforeseen setbacks. That is the emergency fund. 243 00:10:57,920 --> 00:11:00,000 Speaker 1: And so if you don't have a fully funded emergency 244 00:11:00,000 --> 00:11:03,000 Speaker 1: fund in your bank, you are not ready to start investing. 245 00:11:03,040 --> 00:11:05,360 Speaker 1: In our opinion. Uh. The cool thing though, is that 246 00:11:05,559 --> 00:11:07,160 Speaker 1: you know once that credit card debt is paid off, 247 00:11:07,200 --> 00:11:09,960 Speaker 1: once you've reached that level of savings, then you've got 248 00:11:10,000 --> 00:11:12,600 Speaker 1: a green light to begin investing. Well, Matt, I would 249 00:11:12,600 --> 00:11:14,400 Speaker 1: say you're almost right on that you do have the 250 00:11:14,440 --> 00:11:17,040 Speaker 1: green lights. After a few more considerations. That's what this 251 00:11:17,080 --> 00:11:20,520 Speaker 1: episode is about. Come on, man. But yeah, another really 252 00:11:20,640 --> 00:11:23,440 Speaker 1: key factor, another thing that you have to have before 253 00:11:23,480 --> 00:11:27,439 Speaker 1: you start your investing journey is knowledge, and that's something 254 00:11:27,520 --> 00:11:30,480 Speaker 1: we want to help you receive here on how the money. 255 00:11:30,920 --> 00:11:33,840 Speaker 1: We want to make sure that you understand the fundamentals 256 00:11:33,920 --> 00:11:38,400 Speaker 1: of how any investment you're considering actually works, and do 257 00:11:38,440 --> 00:11:41,600 Speaker 1: you know the how the specific accounts function and what 258 00:11:41,679 --> 00:11:44,680 Speaker 1: they're designed for. You know, lots of folks are going 259 00:11:44,760 --> 00:11:47,520 Speaker 1: straight to investing any brokerage account when they'd be better 260 00:11:47,559 --> 00:11:50,719 Speaker 1: served to start with a roth ira A instead. That's 261 00:11:50,720 --> 00:11:53,160 Speaker 1: our biggest gripe with robin Hood exactly. Yeah, the fact 262 00:11:53,200 --> 00:11:57,439 Speaker 1: that robin Hood allows investors to start investing pretty easily 263 00:11:57,800 --> 00:12:00,640 Speaker 1: is a nice feature. But when you can invest in 264 00:12:00,679 --> 00:12:02,720 Speaker 1: those tax advantage accounts and you're just going straight to 265 00:12:02,720 --> 00:12:05,320 Speaker 1: a brokerage account, a lot of people don't understand the difference, 266 00:12:05,360 --> 00:12:06,960 Speaker 1: and they don't realize that there's going to be a 267 00:12:06,960 --> 00:12:09,800 Speaker 1: big difference when it comes tax time for all the 268 00:12:09,800 --> 00:12:12,120 Speaker 1: trades they've been making. And yeah, when it comes to 269 00:12:12,160 --> 00:12:15,280 Speaker 1: the specific fund or individual stock or commodity or other 270 00:12:15,679 --> 00:12:19,800 Speaker 1: opportunities that you might come across, you definitely shouldn't be 271 00:12:19,840 --> 00:12:22,800 Speaker 1: making the investment because you saw it in a headline 272 00:12:23,120 --> 00:12:25,960 Speaker 1: or because you saw someone say this stock is now 273 00:12:26,040 --> 00:12:28,520 Speaker 1: a buy and you're like, oh, oh really, okay, I 274 00:12:28,520 --> 00:12:30,800 Speaker 1: guess I should buy it, or maybe you saw promoted 275 00:12:30,800 --> 00:12:33,120 Speaker 1: on Reddit. Right, that's definitely a high place for people 276 00:12:33,120 --> 00:12:37,120 Speaker 1: to get investing tips these days that someone on CNBC say, oh, 277 00:12:37,160 --> 00:12:38,440 Speaker 1: this stock is a loser and you need to get 278 00:12:38,520 --> 00:12:40,320 Speaker 1: rid of it right away, and then you decide to 279 00:12:40,679 --> 00:12:42,920 Speaker 1: short it because why not give that a shot too. 280 00:12:43,400 --> 00:12:46,520 Speaker 1: All of those things like using your hard earned money 281 00:12:46,800 --> 00:12:49,920 Speaker 1: to make decisions when you don't fundamentally understand what you're doing, 282 00:12:50,320 --> 00:12:52,720 Speaker 1: that's something that we want to encourage you to actively avoid. 283 00:12:52,720 --> 00:12:55,760 Speaker 1: And it does take research. It takes acquiring knowledge so 284 00:12:55,800 --> 00:12:58,120 Speaker 1: that you can know what you're getting into before you 285 00:12:58,160 --> 00:13:00,599 Speaker 1: put your money. There another thing to ever invest in 286 00:13:00,640 --> 00:13:04,319 Speaker 1: anything you don't understand. If the investment is super complex, 287 00:13:04,480 --> 00:13:06,800 Speaker 1: we would recommend you to avoid it if you do 288 00:13:06,880 --> 00:13:09,079 Speaker 1: not understand how it works. So a real of thumb 289 00:13:09,160 --> 00:13:10,640 Speaker 1: is that if you can explain how it works to 290 00:13:10,920 --> 00:13:13,120 Speaker 1: like an eight year old, it's probably going to be 291 00:13:13,120 --> 00:13:15,360 Speaker 1: a bad idea. So, for instance, when it comes to 292 00:13:15,400 --> 00:13:18,319 Speaker 1: real estate investing, there are all sorts of ways to 293 00:13:18,360 --> 00:13:21,640 Speaker 1: make money investing in physical homes. Some folks are making 294 00:13:21,640 --> 00:13:24,360 Speaker 1: big bucks buying trailer parks or storage facilities and and 295 00:13:24,360 --> 00:13:26,200 Speaker 1: and you know, I guess in this case, we understand 296 00:13:26,200 --> 00:13:29,880 Speaker 1: how that works. But it's just not necessarily our specialty. Uh, Joel, 297 00:13:30,000 --> 00:13:31,439 Speaker 1: you and I we both right now are sticking to 298 00:13:31,520 --> 00:13:33,840 Speaker 1: single family homes near where we live here in Atlanta. 299 00:13:34,200 --> 00:13:37,160 Speaker 1: And you know, could we do more, We could go bigger, certainly. 300 00:13:37,480 --> 00:13:39,600 Speaker 1: And while you know, we are curious and we like 301 00:13:39,720 --> 00:13:42,440 Speaker 1: learning about some of the different opportunities around us from 302 00:13:42,440 --> 00:13:45,000 Speaker 1: the different ways that other investors make their money, we're 303 00:13:45,040 --> 00:13:47,640 Speaker 1: kind of experts, you know, on this one particular form 304 00:13:47,679 --> 00:13:50,440 Speaker 1: of real estate investing. We when we're looking for deals, 305 00:13:50,480 --> 00:13:53,400 Speaker 1: we have a deep understanding of specific neighborhoods and we 306 00:13:53,480 --> 00:13:55,559 Speaker 1: know that when something comes on the market, we know 307 00:13:55,840 --> 00:13:58,559 Speaker 1: when there's a deal. And we've used that specific expertise 308 00:13:58,600 --> 00:14:00,720 Speaker 1: to grow our wealth over the long all by sticking 309 00:14:00,720 --> 00:14:02,960 Speaker 1: to this method, uh that we've been able to hone 310 00:14:03,280 --> 00:14:05,920 Speaker 1: over the years. I'm just not as knowledgeable and comfortable 311 00:14:06,000 --> 00:14:08,640 Speaker 1: with other methods, and so for now we've kind of 312 00:14:08,640 --> 00:14:10,880 Speaker 1: stick to what we know. Like the back of our hand. Yeah, 313 00:14:10,920 --> 00:14:14,000 Speaker 1: and it's completely in a way of investing that I 314 00:14:14,000 --> 00:14:16,000 Speaker 1: feel like I can easily explain to my eight year old. 315 00:14:16,160 --> 00:14:18,400 Speaker 1: She understands that people need a place to live and 316 00:14:18,480 --> 00:14:20,040 Speaker 1: that they have to pay money to do that, and 317 00:14:20,040 --> 00:14:22,520 Speaker 1: they go to work to get that money to pay 318 00:14:23,160 --> 00:14:26,240 Speaker 1: someone for providing them housing. And yet there are other 319 00:14:26,360 --> 00:14:28,800 Speaker 1: ways of making money in real estate that I can 320 00:14:28,800 --> 00:14:31,400 Speaker 1: barely understand, and so then explaining it to my eight 321 00:14:31,440 --> 00:14:34,400 Speaker 1: year old becomes impossible, and so she's like, huh, Dad, 322 00:14:34,400 --> 00:14:36,320 Speaker 1: I don't get it. Like it sounds like you don't 323 00:14:36,360 --> 00:14:38,720 Speaker 1: get it either, and that is a surefire sign that 324 00:14:38,800 --> 00:14:41,800 Speaker 1: I should stay away from investing in that way. But 325 00:14:42,000 --> 00:14:44,520 Speaker 1: we've got more to get to when it comes to 326 00:14:44,600 --> 00:14:46,760 Speaker 1: what you need to think about before you actually get 327 00:14:46,800 --> 00:14:49,360 Speaker 1: into investing. A lot of it has to do with 328 00:14:49,640 --> 00:14:51,200 Speaker 1: what's going on in your own life, in your own 329 00:14:51,200 --> 00:14:54,280 Speaker 1: specific goals. Will get to that and more right after 330 00:14:54,280 --> 00:15:05,000 Speaker 1: this break. Alright, we're back. We're talking about why you 331 00:15:05,040 --> 00:15:08,360 Speaker 1: should be thinking twice before you start investing, and so 332 00:15:08,440 --> 00:15:10,640 Speaker 1: let's dive in. Right, You've done the necessary prep work 333 00:15:10,640 --> 00:15:13,280 Speaker 1: ahead of time. You've got all your ingredients laid out, 334 00:15:13,440 --> 00:15:15,920 Speaker 1: means in plas when it comes to cooking and baking. 335 00:15:15,920 --> 00:15:18,520 Speaker 1: You're ready to bake that cake, You're ready to begin investing. 336 00:15:18,600 --> 00:15:20,680 Speaker 1: I didn't know you were bilingual, Matt. Yeah, that's my 337 00:15:20,920 --> 00:15:25,360 Speaker 1: two French words. But one of the biggest aspects of 338 00:15:25,400 --> 00:15:27,600 Speaker 1: investing that you need to think twice about, though, is 339 00:15:27,640 --> 00:15:30,000 Speaker 1: your time frame. And you can't think about your time 340 00:15:30,000 --> 00:15:33,720 Speaker 1: frame really without considering your specific goals. Your your time 341 00:15:33,760 --> 00:15:36,200 Speaker 1: horizon is going to be everything when it comes to investing. 342 00:15:36,480 --> 00:15:38,560 Speaker 1: You get that one thing wrong and what might have 343 00:15:38,560 --> 00:15:40,520 Speaker 1: been a great decision maybe turns out to be a 344 00:15:40,640 --> 00:15:42,800 Speaker 1: terrible one for you. So, for example, if you're invested 345 00:15:42,840 --> 00:15:45,960 Speaker 1: in the SNP back around the dot com bubble back 346 00:15:46,280 --> 00:15:48,640 Speaker 1: around two thousand right, or even during the Great Recession 347 00:15:48,640 --> 00:15:50,720 Speaker 1: back in two thousand and eight, two thousand nine, or 348 00:15:50,800 --> 00:15:54,480 Speaker 1: even more recently during the pandemic last spring, if you 349 00:15:54,520 --> 00:15:57,200 Speaker 1: were following the fluctuations too closely, yeah, look was looking 350 00:15:57,200 --> 00:15:59,040 Speaker 1: pretty grim. But when you zoom out a bit, it 351 00:15:59,080 --> 00:16:00,840 Speaker 1: is easy to see that there were turns are now 352 00:16:01,080 --> 00:16:03,920 Speaker 1: looking great. This is an instance where your time frame 353 00:16:04,080 --> 00:16:06,080 Speaker 1: is going to have a massive impact on what you 354 00:16:06,200 --> 00:16:08,880 Speaker 1: perceive to be good news or bad news. You know, 355 00:16:08,920 --> 00:16:10,880 Speaker 1: they say timing is everything, and I tend to agree. 356 00:16:11,040 --> 00:16:12,920 Speaker 1: It makes me think about when I first started dating 357 00:16:12,920 --> 00:16:15,400 Speaker 1: Emily matt Uh. I thought she was really pretty. I 358 00:16:15,400 --> 00:16:16,960 Speaker 1: wanted to ask her out. It turned out she was 359 00:16:17,040 --> 00:16:19,400 Speaker 1: dating somebody else and it wasn't It wasn't really good 360 00:16:19,440 --> 00:16:21,800 Speaker 1: time to ask her out. And then I did ask 361 00:16:21,800 --> 00:16:24,360 Speaker 1: her out. Once they broke up and we went on 362 00:16:24,400 --> 00:16:27,040 Speaker 1: three dates, things weren't clicking. It just wasn't the right time. 363 00:16:27,200 --> 00:16:29,000 Speaker 1: But later on, like we as we developed more of 364 00:16:29,000 --> 00:16:32,360 Speaker 1: a friendship, we started dating again. That was the right time. 365 00:16:32,520 --> 00:16:37,800 Speaker 1: And so yeah, third times the charm and so like, yeah, 366 00:16:37,880 --> 00:16:40,160 Speaker 1: you never know when you know. When it comes to 367 00:16:40,160 --> 00:16:44,680 Speaker 1: the timing of your investment decisions, that and and how 368 00:16:44,760 --> 00:16:47,880 Speaker 1: long you plan to be invested for, you have to 369 00:16:48,000 --> 00:16:50,080 Speaker 1: know your own time rise. And that is a huge 370 00:16:50,120 --> 00:16:52,800 Speaker 1: part of thinking twice before investing is saying how long 371 00:16:52,840 --> 00:16:55,000 Speaker 1: am I gonna be doing this for? And yeah, if 372 00:16:55,000 --> 00:16:57,360 Speaker 1: you don't have the right timing, you could be in 373 00:16:57,360 --> 00:17:00,200 Speaker 1: for some heartache. It's important to understand that there be 374 00:17:00,360 --> 00:17:03,760 Speaker 1: periods of time where you're going to lose money even 375 00:17:03,960 --> 00:17:06,920 Speaker 1: in the market. You know, given fluctuations, like there's gonna 376 00:17:06,920 --> 00:17:09,920 Speaker 1: be weeks, months, or even years where an investment you've 377 00:17:09,960 --> 00:17:12,919 Speaker 1: made it doesn't look very good and you're disappointed and 378 00:17:12,920 --> 00:17:14,800 Speaker 1: you're like, well, Matt and Joel said, investing is supposed 379 00:17:14,800 --> 00:17:16,960 Speaker 1: to be a good thing. They always talk it up. Well, 380 00:17:17,480 --> 00:17:19,680 Speaker 1: that's really what we why we want how the money 381 00:17:19,680 --> 00:17:22,960 Speaker 1: listeners to develop a long term mentality. The gyrations that 382 00:17:23,000 --> 00:17:26,359 Speaker 1: happened consistently, they're going to happen, the volatility you're going 383 00:17:26,480 --> 00:17:29,160 Speaker 1: to see, they're they're just not worth your time and attention. 384 00:17:29,400 --> 00:17:32,240 Speaker 1: If you are a long term investor, and I guess 385 00:17:32,240 --> 00:17:34,320 Speaker 1: then the question pops up, does it ever make sense 386 00:17:34,480 --> 00:17:36,280 Speaker 1: to be a short term investor? We would say not 387 00:17:36,359 --> 00:17:39,359 Speaker 1: really not in our opinion. If my short term you 388 00:17:39,400 --> 00:17:43,120 Speaker 1: mean five years, then that's probably okay on a timeline 389 00:17:43,119 --> 00:17:45,040 Speaker 1: that's that long. But if you're talking like six months, 390 00:17:45,040 --> 00:17:47,440 Speaker 1: one year, two years, it's probably not a good idea 391 00:17:47,480 --> 00:17:50,119 Speaker 1: to be much of an investor. If we're talking about 392 00:17:50,160 --> 00:17:52,000 Speaker 1: a whole lot less than five years, you run the 393 00:17:52,080 --> 00:17:54,600 Speaker 1: risk of needing to pull money out during a bear 394 00:17:54,680 --> 00:17:59,320 Speaker 1: market correction. And that's why that time frame is so crucial, 395 00:17:59,320 --> 00:18:01,600 Speaker 1: is so important. If you don't get that part of 396 00:18:01,600 --> 00:18:04,200 Speaker 1: it right, if you haven't thought twice about how long 397 00:18:04,240 --> 00:18:06,480 Speaker 1: you can leave that money be uh, leave that money 398 00:18:06,520 --> 00:18:08,600 Speaker 1: to grow, then you might need to grab it at 399 00:18:08,680 --> 00:18:11,639 Speaker 1: the exact wrong moment, locking in losses. That's right, and 400 00:18:11,680 --> 00:18:14,000 Speaker 1: that's actually the exact opposite of what I'm looking for 401 00:18:14,040 --> 00:18:15,840 Speaker 1: when I invest my money. I don't know about you, 402 00:18:15,920 --> 00:18:18,360 Speaker 1: but I don't I don't want to lose money. I mean, essentially, 403 00:18:18,359 --> 00:18:20,160 Speaker 1: you know, the longer your timeline, like, the more risk 404 00:18:20,200 --> 00:18:23,120 Speaker 1: you can actually handle. And in fact, the longer your timeline, 405 00:18:23,119 --> 00:18:25,840 Speaker 1: the more that the real risk actually becomes not investing. 406 00:18:25,920 --> 00:18:27,359 Speaker 1: I will actually get to that here a little bit 407 00:18:27,440 --> 00:18:29,600 Speaker 1: later on in this episode, but you've got to ask 408 00:18:29,640 --> 00:18:33,080 Speaker 1: yourself the question, am I okay losing some money? Because 409 00:18:33,119 --> 00:18:35,400 Speaker 1: loss a version, it is a real thing, is something 410 00:18:35,440 --> 00:18:37,639 Speaker 1: that none of us really want to experience, but it 411 00:18:37,680 --> 00:18:40,560 Speaker 1: comes down to your ability to stomach it. And many 412 00:18:40,560 --> 00:18:42,840 Speaker 1: folks have a hard time investing because of this potential 413 00:18:43,000 --> 00:18:45,960 Speaker 1: to see that balance decrease, because it takes an emotional toll, 414 00:18:46,200 --> 00:18:50,719 Speaker 1: even though short term losses are completely insignificant to our 415 00:18:50,800 --> 00:18:53,320 Speaker 1: long term investment plan. Or if it does play a role, 416 00:18:53,400 --> 00:18:55,240 Speaker 1: it's just a signal that maybe you should buy a 417 00:18:55,280 --> 00:18:57,919 Speaker 1: little bit more while everything's on sale. But This is 418 00:18:57,960 --> 00:19:00,520 Speaker 1: exactly why people don't put lump sums in to the market, 419 00:19:00,560 --> 00:19:03,760 Speaker 1: even though everything points to the fact that time in 420 00:19:03,840 --> 00:19:06,680 Speaker 1: the market is more important than actually timing your entrance 421 00:19:06,800 --> 00:19:09,080 Speaker 1: into the market. And then over the long term, we 422 00:19:09,119 --> 00:19:12,320 Speaker 1: can take comfort in knowing that the market it goes 423 00:19:12,400 --> 00:19:15,720 Speaker 1: up nine eight percent of the time over any fifteen 424 00:19:15,840 --> 00:19:19,080 Speaker 1: year period. Long term investing wins uh. And actually, the 425 00:19:19,200 --> 00:19:22,880 Speaker 1: only reason that it's not one, the reason it's percent 426 00:19:22,960 --> 00:19:25,640 Speaker 1: instead of one of the time over fifteen year periods 427 00:19:25,800 --> 00:19:28,800 Speaker 1: is because of the Great Depression. If you look at 428 00:19:28,840 --> 00:19:30,880 Speaker 1: the fifteen year period between that in World War Two, 429 00:19:31,119 --> 00:19:33,720 Speaker 1: it's basically had the two most significant events that had 430 00:19:33,720 --> 00:19:36,840 Speaker 1: a negative impact on our modern economy, and fingers crossed, 431 00:19:36,840 --> 00:19:39,200 Speaker 1: we're not likely to see something like that again. Yeah. So, 432 00:19:39,200 --> 00:19:41,640 Speaker 1: so when we're talking about taking the long term view, 433 00:19:41,920 --> 00:19:46,639 Speaker 1: we're talking about investing in those tax advantage accounts that 434 00:19:47,040 --> 00:19:51,200 Speaker 1: are specifically designed for your money to be there for decades. 435 00:19:51,440 --> 00:19:53,320 Speaker 1: So like your four one K or your I RA 436 00:19:53,359 --> 00:19:56,679 Speaker 1: A are the accounts that you should be looking to 437 00:19:56,840 --> 00:19:59,840 Speaker 1: first put your investment dollars inside of. And that means 438 00:19:59,840 --> 00:20:02,200 Speaker 1: no touchies for a long long time. And so, yeah, 439 00:20:02,280 --> 00:20:05,639 Speaker 1: if you're just starting out in your career. It's probably 440 00:20:05,680 --> 00:20:07,879 Speaker 1: gonna seem a little bit weird to start saving for 441 00:20:07,920 --> 00:20:10,399 Speaker 1: those goals that are so far away that you're not 442 00:20:10,440 --> 00:20:12,879 Speaker 1: even sure if you'll actually get there. You're kind of 443 00:20:12,880 --> 00:20:15,159 Speaker 1: like plan on living hard and dying young. So I 444 00:20:15,400 --> 00:20:18,280 Speaker 1: don't know, Matt and Joel, the the advice to invest 445 00:20:18,600 --> 00:20:21,919 Speaker 1: for my sixties and seventies just doesn't fit me. But 446 00:20:22,000 --> 00:20:25,040 Speaker 1: the thing is, that's what you think now at twenty two, 447 00:20:25,240 --> 00:20:28,840 Speaker 1: But you will actually get to that future point it 448 00:20:29,040 --> 00:20:31,359 Speaker 1: in the earlier you start. Even if it's just with 449 00:20:31,400 --> 00:20:33,480 Speaker 1: small amounts, it's gonna add up and it's going to 450 00:20:33,560 --> 00:20:36,840 Speaker 1: make a huge difference for future you. And so yeah, 451 00:20:36,840 --> 00:20:40,240 Speaker 1: stats actually show that we become better investors. We can 452 00:20:40,240 --> 00:20:42,920 Speaker 1: think more about the actual long term if we can 453 00:20:43,119 --> 00:20:46,920 Speaker 1: visualize our future selves. And this might sound a bit cheesy, Matt. 454 00:20:47,080 --> 00:20:48,680 Speaker 1: Back in the day, I think you and I posted 455 00:20:49,080 --> 00:20:51,840 Speaker 1: a face app photo of us being like, what thirty 456 00:20:51,880 --> 00:20:53,919 Speaker 1: five years older? You definitely look much better as an 457 00:20:53,920 --> 00:20:55,919 Speaker 1: old man than I do. Oh more like fifty five 458 00:20:56,000 --> 00:20:58,240 Speaker 1: years older man? Was that a right? We were like 459 00:20:58,240 --> 00:21:00,480 Speaker 1: set up like eighty five year olds? Okay, all right, well, 460 00:21:00,600 --> 00:21:03,240 Speaker 1: uh yeah, it turns out that even just doing something 461 00:21:03,280 --> 00:21:05,520 Speaker 1: like that, there was a study done a bunch of 462 00:21:05,560 --> 00:21:08,919 Speaker 1: years back, and it's actually gonna give you more sympathy 463 00:21:09,000 --> 00:21:11,840 Speaker 1: for future you, for geriatric you, and it will actually 464 00:21:12,440 --> 00:21:16,080 Speaker 1: help you start the process that you know you need to. So, 465 00:21:16,119 --> 00:21:19,080 Speaker 1: if you've found yourself not saving for retirement because you're like, 466 00:21:19,119 --> 00:21:23,120 Speaker 1: you can't comprehend you can't bridge the gap between being 467 00:21:23,119 --> 00:21:25,240 Speaker 1: in your twenties or thirties and then being in your seventies, 468 00:21:25,240 --> 00:21:27,160 Speaker 1: like that's hard to come to grips with, something as 469 00:21:27,160 --> 00:21:29,359 Speaker 1: simple as taking a picture, putting in the face app 470 00:21:29,440 --> 00:21:31,719 Speaker 1: seeing what an older version of yourself could look like 471 00:21:31,960 --> 00:21:35,520 Speaker 1: can actually help incentivize you to start doing the hard 472 00:21:35,520 --> 00:21:37,479 Speaker 1: work and saving for the long term. Now, yeah, and 473 00:21:37,480 --> 00:21:39,600 Speaker 1: you know we just gave that stat on the stock 474 00:21:39,640 --> 00:21:42,880 Speaker 1: market performance over a fifteen year timeline. Well, here's the thing. 475 00:21:42,920 --> 00:21:46,080 Speaker 1: Once your time frame starts to become shorter than fifteen years, 476 00:21:46,119 --> 00:21:49,679 Speaker 1: you actually do start to realize a higher risk of 477 00:21:49,720 --> 00:21:52,720 Speaker 1: loss UH in what you're actually invested in should likely 478 00:21:52,760 --> 00:21:55,080 Speaker 1: start to change, and so it has an impact on 479 00:21:55,240 --> 00:21:58,240 Speaker 1: what you invest in. Uh if you're looking at investing 480 00:21:58,240 --> 00:22:00,840 Speaker 1: for the next fifteen years or longer, we are huge 481 00:22:00,840 --> 00:22:03,840 Speaker 1: fans of simply going with the total stock market or 482 00:22:03,880 --> 00:22:06,760 Speaker 1: the smp F under indexes out there in order to 483 00:22:06,840 --> 00:22:11,960 Speaker 1: maximize those higher gains with But if you are looking 484 00:22:11,960 --> 00:22:14,560 Speaker 1: at investing for a goal, say in the next five 485 00:22:14,600 --> 00:22:17,920 Speaker 1: to ten years, like kids college, for instance, then looking 486 00:22:17,920 --> 00:22:20,600 Speaker 1: to something like a target date fund could make more 487 00:22:20,640 --> 00:22:23,200 Speaker 1: sense for you. So of course, the great thing about 488 00:22:23,200 --> 00:22:26,520 Speaker 1: target date funds is that they rebalance over the years 489 00:22:26,840 --> 00:22:30,439 Speaker 1: and they automatically become more conservative by allocating more of 490 00:22:30,480 --> 00:22:34,160 Speaker 1: the portfolio away from stocks and towards bonds. This decreases 491 00:22:34,200 --> 00:22:36,199 Speaker 1: the volatility and it lowers the risk that you're going 492 00:22:36,240 --> 00:22:38,600 Speaker 1: to be pulling some money out of the market uh 493 00:22:38,680 --> 00:22:41,280 Speaker 1: during a slump where you lock in those losses. So 494 00:22:41,320 --> 00:22:42,919 Speaker 1: this is just a good thing to keep in mind 495 00:22:43,240 --> 00:22:45,479 Speaker 1: that your goals and your time frame do have an 496 00:22:45,480 --> 00:22:48,160 Speaker 1: impact on how and what it is that you are 497 00:22:48,200 --> 00:22:50,400 Speaker 1: actually invested in no doubt. So that was a lot 498 00:22:50,400 --> 00:22:53,840 Speaker 1: about personal goals and time frame and how you think 499 00:22:53,880 --> 00:22:57,240 Speaker 1: about volatility inside of that, and there are a lot 500 00:22:57,280 --> 00:23:00,399 Speaker 1: of personal decisions that you have to make a about that. 501 00:23:00,480 --> 00:23:02,919 Speaker 1: And yeah, if you're listening to how the money and 502 00:23:02,960 --> 00:23:05,679 Speaker 1: you're in your fifties or sixties, you're going to make 503 00:23:05,720 --> 00:23:09,120 Speaker 1: different allocation decisions than someone who is in their twenties 504 00:23:09,240 --> 00:23:13,119 Speaker 1: or thirties in all likelihood, right, And so the next 505 00:23:13,240 --> 00:23:16,520 Speaker 1: thing to do, still on a personal level, is you know, 506 00:23:16,600 --> 00:23:19,440 Speaker 1: now that you're hopefully identifying as a long term investor, 507 00:23:20,040 --> 00:23:21,760 Speaker 1: you're saying, you know what, I'm gonna invest my money 508 00:23:21,800 --> 00:23:24,199 Speaker 1: for a minimum of five years. You're gonna want to 509 00:23:24,280 --> 00:23:27,720 Speaker 1: have an actionable plan. And then it's also crucial to 510 00:23:27,760 --> 00:23:30,800 Speaker 1: write that plan down. So yeah, anything we would say 511 00:23:30,840 --> 00:23:35,320 Speaker 1: that you write down instantly creates a stickier effect. Studies 512 00:23:35,400 --> 00:23:37,879 Speaker 1: actually show that when you write something you hear down, 513 00:23:38,240 --> 00:23:41,360 Speaker 1: you're far more likely to remember it. So let's say 514 00:23:41,440 --> 00:23:44,720 Speaker 1: you are in class in college and your professor is 515 00:23:44,840 --> 00:23:48,639 Speaker 1: lecturing typing versus handwriting. The handwriting is actually going to 516 00:23:48,680 --> 00:23:50,440 Speaker 1: make it stickier in your brain. You're gonna do better 517 00:23:50,480 --> 00:23:53,720 Speaker 1: on the test even if you never review those notes again. Uh, 518 00:23:53,960 --> 00:23:57,439 Speaker 1: handwriting versus typing. Really, just that simple act changes the 519 00:23:57,440 --> 00:24:02,520 Speaker 1: way your brain processes the information that you're receiving. So yeah, 520 00:24:02,560 --> 00:24:05,359 Speaker 1: we would say there's something about writing down by hand. 521 00:24:05,440 --> 00:24:09,200 Speaker 1: This small short doesn't have to be very long statement, 522 00:24:09,359 --> 00:24:12,480 Speaker 1: this investment plan, it's gonna help reinforce it. It's gonna 523 00:24:12,480 --> 00:24:15,200 Speaker 1: make it easier to recall even if it's not in 524 00:24:15,280 --> 00:24:17,119 Speaker 1: front of you. That's true. But if you happen to 525 00:24:17,160 --> 00:24:20,080 Speaker 1: be somebody who lives uh in an apartment or a 526 00:24:20,119 --> 00:24:22,960 Speaker 1: house where there's no paper, I would still say that 527 00:24:23,160 --> 00:24:25,040 Speaker 1: you find it on the walls. I mean, well, typing 528 00:24:25,040 --> 00:24:27,199 Speaker 1: it out like that's better than nothing, right, because I 529 00:24:27,200 --> 00:24:29,520 Speaker 1: mean I will say, like people who I meet sometimes 530 00:24:29,600 --> 00:24:31,600 Speaker 1: I will run over to notes on my phone real 531 00:24:31,680 --> 00:24:34,600 Speaker 1: quick and write down their name, what they do, you know, 532 00:24:34,640 --> 00:24:38,080 Speaker 1: specifically who their kid is, because like meeting parents at school, 533 00:24:38,119 --> 00:24:41,280 Speaker 1: oftentimes that's the case and the ability to refer back 534 00:24:41,280 --> 00:24:44,159 Speaker 1: to that is invaluable. And so that's remembering facts in 535 00:24:44,200 --> 00:24:46,960 Speaker 1: a college course or remembering parents or kids names. But 536 00:24:47,000 --> 00:24:48,919 Speaker 1: the same thing is true with making sure that you 537 00:24:48,960 --> 00:24:51,080 Speaker 1: write down your plan of attack when it comes to investing. 538 00:24:51,119 --> 00:24:53,080 Speaker 1: You know, just the mere act of just taking pen 539 00:24:53,200 --> 00:24:54,960 Speaker 1: to paper or writing out your plan in a in 540 00:24:55,000 --> 00:24:58,080 Speaker 1: a notes app is going to reinforce your newfound plan 541 00:24:58,600 --> 00:25:00,159 Speaker 1: uh and and then having it on hay and for 542 00:25:00,200 --> 00:25:02,879 Speaker 1: future reference is incredibly helpful as well. I don't know 543 00:25:02,920 --> 00:25:05,080 Speaker 1: how many times I've gone to my document where I 544 00:25:05,080 --> 00:25:07,760 Speaker 1: write these parents names down and I search a word 545 00:25:07,840 --> 00:25:09,720 Speaker 1: that I think is associated with their name, and I 546 00:25:09,760 --> 00:25:11,639 Speaker 1: can find it, and then all of a sudden, I 547 00:25:11,640 --> 00:25:13,760 Speaker 1: remember their name and I can pick up the conversation 548 00:25:13,840 --> 00:25:15,560 Speaker 1: where we left off. And so this can be as 549 00:25:15,560 --> 00:25:17,919 Speaker 1: simple as a plan to invest five dollars into the 550 00:25:17,920 --> 00:25:20,600 Speaker 1: market every single month without fail in order for you 551 00:25:20,680 --> 00:25:23,440 Speaker 1: to max out your your wrath I ray every single year. 552 00:25:23,680 --> 00:25:25,600 Speaker 1: And when it comes to what to invest in, if 553 00:25:25,600 --> 00:25:27,760 Speaker 1: you've got a time frame of at least fifteen years, 554 00:25:27,800 --> 00:25:30,040 Speaker 1: like many of us do when it comes to our 555 00:25:30,240 --> 00:25:32,840 Speaker 1: retirement goals, then simply put that money in a total 556 00:25:32,840 --> 00:25:36,080 Speaker 1: stock market or the SMP five index fund. It can 557 00:25:36,119 --> 00:25:38,760 Speaker 1: literally be as simple as that. But making sure that 558 00:25:38,800 --> 00:25:41,000 Speaker 1: you write it out and that you can refer to 559 00:25:41,040 --> 00:25:43,240 Speaker 1: it will help you to stay the course. Yeah, Matt, 560 00:25:43,240 --> 00:25:47,080 Speaker 1: And there's a really, really good reason that we recommend 561 00:25:47,520 --> 00:25:49,720 Speaker 1: investing in a total stock market or an SMP five 562 00:25:49,760 --> 00:25:52,760 Speaker 1: hundred index fund for a whole lot of people, and 563 00:25:52,800 --> 00:25:56,560 Speaker 1: it's because it's simple. It's a really simple approach, and 564 00:25:56,600 --> 00:25:58,520 Speaker 1: I think a whole lot of One of the major 565 00:25:58,520 --> 00:26:02,280 Speaker 1: reasons that people don't even get started investing, ever, is 566 00:26:02,320 --> 00:26:05,240 Speaker 1: because the financial services industry has made it sound like 567 00:26:05,280 --> 00:26:07,440 Speaker 1: it's really difficult, and we're trying to say no, no, 568 00:26:07,520 --> 00:26:10,480 Speaker 1: actually it's not, and don't let perfect be the enemy 569 00:26:10,520 --> 00:26:13,960 Speaker 1: of great. And you know, low cost index funds are 570 00:26:14,320 --> 00:26:16,679 Speaker 1: a great way to get started in investing. But on 571 00:26:16,720 --> 00:26:20,600 Speaker 1: that note, there are other considerations that you need to 572 00:26:20,680 --> 00:26:23,159 Speaker 1: be aware of before you take the leap into investing in. 573 00:26:23,160 --> 00:26:26,359 Speaker 1: One of them is fees. We'll talk about that and 574 00:26:26,400 --> 00:26:29,080 Speaker 1: how not every index fund is created equal. We'll get 575 00:26:29,119 --> 00:26:39,800 Speaker 1: to that right after this. All right, we're back from 576 00:26:39,800 --> 00:26:41,639 Speaker 1: the break and we're still talking about how you need 577 00:26:41,640 --> 00:26:43,840 Speaker 1: to think twice before investing in Joel et s too. 578 00:26:43,920 --> 00:26:47,640 Speaker 1: Some of the other considerations, specifically fees. Let's talk about him, man. 579 00:26:47,960 --> 00:26:50,560 Speaker 1: We uh, you know, we discussed a whole lot about 580 00:26:50,560 --> 00:26:54,000 Speaker 1: low cost index funds, target date funds. If you purchase 581 00:26:54,080 --> 00:26:57,400 Speaker 1: a total stock market index funds via Vanguard, uh Fidelity, 582 00:26:57,480 --> 00:27:00,000 Speaker 1: even in one or a Schwab, you're gonna pay next 583 00:27:00,080 --> 00:27:04,000 Speaker 1: to nothing to do so. And interestingly enough, some brokers 584 00:27:04,080 --> 00:27:06,560 Speaker 1: charge an arm and a leg for what are essentially 585 00:27:06,600 --> 00:27:10,879 Speaker 1: identical funds. There are still somehow lots of investment firms 586 00:27:10,880 --> 00:27:13,960 Speaker 1: who are charging in the point five percent range for 587 00:27:14,000 --> 00:27:16,280 Speaker 1: you to invest your money in the total stock market 588 00:27:16,359 --> 00:27:20,200 Speaker 1: or the smp F hundred index funds with their firms. Yeah, 589 00:27:20,359 --> 00:27:22,720 Speaker 1: and so that's ten times what you should actually be 590 00:27:22,760 --> 00:27:25,720 Speaker 1: paying with our favorites, who are either either charging literally 591 00:27:25,800 --> 00:27:31,159 Speaker 1: zero or point zero four percent and point zero four 592 00:27:31,280 --> 00:27:33,760 Speaker 1: it sounds like that, like in your head, especially when 593 00:27:33,800 --> 00:27:36,560 Speaker 1: you hear it audibly, you're like, what's what's the big difference, dude? 594 00:27:37,000 --> 00:27:39,840 Speaker 1: This is a massive different different ten x. These are 595 00:27:39,920 --> 00:27:42,480 Speaker 1: huge savings in that same gap exists in our other 596 00:27:42,520 --> 00:27:45,560 Speaker 1: favorite funds, target date funds. The low cost brokerage firms 597 00:27:45,720 --> 00:27:47,840 Speaker 1: make it really cheap to invest in those, but a 598 00:27:47,920 --> 00:27:50,960 Speaker 1: lot of others are still charging uh, pretty high fees. 599 00:27:51,359 --> 00:27:53,520 Speaker 1: We've talked in depth about the impact of fees on 600 00:27:53,640 --> 00:27:57,160 Speaker 1: your investment returns, but uh, if you're paying around one 601 00:27:57,160 --> 00:27:59,879 Speaker 1: percent in additional fees every single year, that could cost 602 00:27:59,880 --> 00:28:05,120 Speaker 1: you of your portfolio's value over forty years. And so, 603 00:28:05,520 --> 00:28:07,720 Speaker 1: just simply put, right, instead of having a million dollars 604 00:28:07,760 --> 00:28:09,800 Speaker 1: by the time you hit retirement, you might actually only 605 00:28:09,800 --> 00:28:12,199 Speaker 1: have seven fifty dollars. And so you want to make 606 00:28:12,240 --> 00:28:14,960 Speaker 1: sure that you are paying close attention to those fees 607 00:28:15,240 --> 00:28:18,800 Speaker 1: important that there's just a really high impact of a 608 00:28:18,920 --> 00:28:22,880 Speaker 1: small amount of fee increase and it seems like that, well, 609 00:28:23,160 --> 00:28:25,439 Speaker 1: what's the difference between point one and point three, and 610 00:28:25,480 --> 00:28:29,199 Speaker 1: it's like, actually, it really really adds up significantly, and 611 00:28:29,240 --> 00:28:31,800 Speaker 1: it's your money. Then it's eroding if you're paying high fees. 612 00:28:31,880 --> 00:28:34,280 Speaker 1: And so before you invest, when we're talking about thinking 613 00:28:34,320 --> 00:28:37,439 Speaker 1: twice before investing, looking taking a hard look at the 614 00:28:37,440 --> 00:28:40,840 Speaker 1: fees uh at that your brokerage is charging you to 615 00:28:40,920 --> 00:28:45,040 Speaker 1: invest inside of those funds is really important because oftentimes 616 00:28:45,440 --> 00:28:47,280 Speaker 1: you you might just be in the wrong place. You 617 00:28:47,360 --> 00:28:51,000 Speaker 1: might be at the wrong firm who is offering you 618 00:28:51,200 --> 00:28:54,040 Speaker 1: access to one of the kinds of funds that we 619 00:28:54,120 --> 00:28:57,520 Speaker 1: talked about, but they charge much more ridiculous fees, meaning 620 00:28:57,720 --> 00:28:59,760 Speaker 1: you should you know, walk out of there and go 621 00:29:00,040 --> 00:29:02,440 Speaker 1: more else, preferably to one of the low cost providers 622 00:29:02,440 --> 00:29:04,920 Speaker 1: that Matt mentioned that isn't going to fee you to death, 623 00:29:05,040 --> 00:29:07,000 Speaker 1: that's going to allow your money to work more for 624 00:29:07,120 --> 00:29:11,120 Speaker 1: you less for someone else. And another consideration we would 625 00:29:11,160 --> 00:29:14,200 Speaker 1: say you need to make before you take the leap 626 00:29:14,240 --> 00:29:16,960 Speaker 1: into investing, you have to ask that question, how liquid 627 00:29:17,160 --> 00:29:20,800 Speaker 1: is my money at Some investment accounts give you access 628 00:29:20,840 --> 00:29:23,440 Speaker 1: to your money in an instant. You can put some 629 00:29:23,480 --> 00:29:25,880 Speaker 1: money in today, you can pull it out tomorrow even 630 00:29:25,880 --> 00:29:27,720 Speaker 1: if you want. That's what we're talking about earlier with 631 00:29:27,760 --> 00:29:31,040 Speaker 1: brokerage accounts right to give you that ability, but there 632 00:29:31,080 --> 00:29:34,320 Speaker 1: are tax implications of doing that. That is actually one 633 00:29:34,360 --> 00:29:36,440 Speaker 1: of the cool things about the Rath I RA, which 634 00:29:36,760 --> 00:29:39,560 Speaker 1: we love. It's one of our favorite investing vehicles. If 635 00:29:39,600 --> 00:29:41,440 Speaker 1: you need to take some of that money out down 636 00:29:41,520 --> 00:29:44,280 Speaker 1: the road, you actually have access to the money you've 637 00:29:44,280 --> 00:29:47,880 Speaker 1: contributed without paying any tax or penalty on it. And 638 00:29:47,880 --> 00:29:50,320 Speaker 1: so the Rath kind of gives you that balanced approach 639 00:29:50,360 --> 00:29:52,360 Speaker 1: where it's like, oh wow, yeah, if if I do 640 00:29:52,480 --> 00:29:54,240 Speaker 1: get in a pinch, I can take at least the 641 00:29:54,240 --> 00:29:58,360 Speaker 1: contribution portion out of that if God forbid, something awful 642 00:29:58,400 --> 00:30:00,960 Speaker 1: happened and I and I really needed it. But but 643 00:30:01,040 --> 00:30:03,920 Speaker 1: for the most part, retirement accounts are inaccessible, and they're 644 00:30:03,920 --> 00:30:07,600 Speaker 1: inaccessible for a reason. Right. There's penalties to make sure 645 00:30:07,640 --> 00:30:09,480 Speaker 1: that you don't touch the money that you're putting aside, 646 00:30:09,960 --> 00:30:13,560 Speaker 1: uh until decades from now. That's kind of the point 647 00:30:13,640 --> 00:30:16,560 Speaker 1: of these accounts, and so there is a a stick 648 00:30:16,680 --> 00:30:19,560 Speaker 1: essentially to prevent you from doing so. But it's important 649 00:30:19,560 --> 00:30:21,680 Speaker 1: to know whether you're gonna have access to the money 650 00:30:21,720 --> 00:30:25,720 Speaker 1: you've invested, or whether it's essentially locked away for years 651 00:30:25,720 --> 00:30:28,080 Speaker 1: and years to come, and what sort of penalty you'll 652 00:30:28,120 --> 00:30:30,640 Speaker 1: incur if you absolutely have to have it. Knowing the 653 00:30:30,720 --> 00:30:34,160 Speaker 1: rules around that and how liquid your funds actually are 654 00:30:34,640 --> 00:30:39,120 Speaker 1: is important, especially when you're considering which investment vehicle you're 655 00:30:39,120 --> 00:30:42,800 Speaker 1: gonna put that money inside of this right, Uh, let's 656 00:30:42,800 --> 00:30:45,160 Speaker 1: talk to you about inflation, because it's also important to 657 00:30:45,160 --> 00:30:48,080 Speaker 1: know what will happen to your money if you choose 658 00:30:48,080 --> 00:30:50,600 Speaker 1: not to become an investor, and that is that you're 659 00:30:50,600 --> 00:30:52,680 Speaker 1: going to see the value of your money erode, and 660 00:30:52,720 --> 00:30:55,320 Speaker 1: that erosion gets worse and worse as the as the 661 00:30:55,400 --> 00:30:58,760 Speaker 1: years chug along. Not investing for a year, maybe two years, 662 00:30:58,840 --> 00:31:00,160 Speaker 1: it's not the worst thing in the world. It's not 663 00:31:00,200 --> 00:31:01,720 Speaker 1: gonna be the end of the world for you. But 664 00:31:01,720 --> 00:31:04,280 Speaker 1: if you choose to wait another decade before you start investing, 665 00:31:04,960 --> 00:31:08,320 Speaker 1: you will have lost some really important years and it compounds. 666 00:31:08,800 --> 00:31:11,160 Speaker 1: And if you've been holding on to that money just 667 00:31:11,240 --> 00:31:15,280 Speaker 1: in savings accounts or other safe places quote unquote safe places, right, 668 00:31:15,280 --> 00:31:18,200 Speaker 1: it's not really safe there. You're actually taking on more 669 00:31:18,440 --> 00:31:20,920 Speaker 1: risk than you should. Inflation is often referred to this 670 00:31:21,000 --> 00:31:23,600 Speaker 1: invisible force. Uh. And it's just this way that we're 671 00:31:23,680 --> 00:31:26,160 Speaker 1: essentially taxed without realizing it. This is something that a 672 00:31:26,160 --> 00:31:29,120 Speaker 1: lot of economists UH point to, like Milton Freeman says 673 00:31:29,200 --> 00:31:32,000 Speaker 1: that this is the one form of taxation that's imposed 674 00:31:32,000 --> 00:31:35,360 Speaker 1: on us without legislation. Thomas Souls says something really similar. 675 00:31:35,520 --> 00:31:37,120 Speaker 1: But we need to be aware of the fact that 676 00:31:37,120 --> 00:31:39,280 Speaker 1: inflation does a road on money, even if it's not 677 00:31:39,320 --> 00:31:42,320 Speaker 1: being extracted from our accounts by a fee or an 678 00:31:42,360 --> 00:31:44,280 Speaker 1: actual heart tax that we're paying. Yeah, and of course 679 00:31:44,320 --> 00:31:47,520 Speaker 1: inflation top of mind these days, and so yes, hopefully 680 00:31:47,520 --> 00:31:50,520 Speaker 1: that helps drive the point home that not investing means 681 00:31:50,560 --> 00:31:53,200 Speaker 1: your money is going to get eaten alive by inflation 682 00:31:53,240 --> 00:31:55,440 Speaker 1: over time. And let's give some stats to back that up. 683 00:31:55,720 --> 00:31:57,840 Speaker 1: For instance, if you stuck a dollar under your mattress 684 00:31:57,840 --> 00:32:01,280 Speaker 1: in ninety three, when I was negative eleven years old, 685 00:32:01,480 --> 00:32:04,720 Speaker 1: it would be worth basically fifteen cents in today's economy. 686 00:32:05,120 --> 00:32:08,720 Speaker 1: The that's because inflation continues to take along. It is. 687 00:32:09,040 --> 00:32:12,480 Speaker 1: What Matt said, is this silent mover that you, uh, 688 00:32:12,600 --> 00:32:15,360 Speaker 1: you almost don't see until the headlines start to recognize 689 00:32:15,400 --> 00:32:17,120 Speaker 1: it and you're like, wait a second, it is having 690 00:32:17,120 --> 00:32:19,880 Speaker 1: an impact. But in most years you barely realize it 691 00:32:19,920 --> 00:32:22,360 Speaker 1: doesn't register on your radar that things are getting more expensive, 692 00:32:22,640 --> 00:32:25,000 Speaker 1: but they are. And so, yeah, being a good saver, 693 00:32:25,160 --> 00:32:28,960 Speaker 1: it's obviously important. We extol the virtues of saving money 694 00:32:29,120 --> 00:32:31,040 Speaker 1: a lot, like we think it's important, But if you 695 00:32:31,120 --> 00:32:33,480 Speaker 1: keep all of the money that you're saving in cash, 696 00:32:33,880 --> 00:32:36,120 Speaker 1: it's going to be worth less and less over time. 697 00:32:36,480 --> 00:32:39,880 Speaker 1: Cash it's not trash. I think that's another terrible misnomer 698 00:32:39,920 --> 00:32:42,200 Speaker 1: when it comes to cash. We we think having money 699 00:32:42,200 --> 00:32:45,520 Speaker 1: and savings money and an emergency fund that liquid cash 700 00:32:45,640 --> 00:32:49,480 Speaker 1: to back you up in case something happens. That's really important. 701 00:32:49,600 --> 00:32:51,400 Speaker 1: But it's also not where you want the majority of 702 00:32:51,400 --> 00:32:53,560 Speaker 1: your net worth either. And if the majority of your 703 00:32:53,560 --> 00:32:55,880 Speaker 1: net worth is in cash, well then you're gonna see 704 00:32:55,880 --> 00:32:58,920 Speaker 1: your net worth slowly start to decline. And yeah, the 705 00:32:58,920 --> 00:33:01,880 Speaker 1: only way to come at that really is through investing. Yeah, 706 00:33:01,920 --> 00:33:04,360 Speaker 1: I think another way to think about inflation it's, you know, 707 00:33:04,400 --> 00:33:07,600 Speaker 1: with distilling, Like when you're like whiskey goes in barrels, 708 00:33:07,600 --> 00:33:09,640 Speaker 1: it's like an angel share exactly. Yeah, when it says 709 00:33:09,680 --> 00:33:11,640 Speaker 1: there in the in the barrels, a little bit of 710 00:33:11,640 --> 00:33:14,160 Speaker 1: it evaporates over time, and the distillers they call that 711 00:33:14,240 --> 00:33:16,320 Speaker 1: the angel share, and that that's why there's like twenty 712 00:33:16,320 --> 00:33:19,040 Speaker 1: something year old scotches are so much more expensive. Is 713 00:33:19,200 --> 00:33:21,440 Speaker 1: one of the reasons there's been more evaporation, right, and 714 00:33:21,520 --> 00:33:24,480 Speaker 1: literally you are paying for the fact that, well, maybe 715 00:33:24,480 --> 00:33:26,080 Speaker 1: ten years ago you would have gotten a lot more 716 00:33:26,160 --> 00:33:29,160 Speaker 1: for your money, but now there's a lot less. And 717 00:33:29,200 --> 00:33:31,040 Speaker 1: so it's just another way to think about inflation. Is 718 00:33:31,080 --> 00:33:33,760 Speaker 1: this portion of your money that you're just seeing, you know, 719 00:33:33,840 --> 00:33:37,160 Speaker 1: evaporate up to the heavens, to the angels. But up 720 00:33:37,200 --> 00:33:39,960 Speaker 1: until now, you know, we've been primarily talking about investing 721 00:33:40,160 --> 00:33:42,520 Speaker 1: in the stock market, but it's also important to point 722 00:33:42,560 --> 00:33:44,960 Speaker 1: out that there are other ways to invest that might 723 00:33:45,080 --> 00:33:47,720 Speaker 1: align with your strengths and your skills that could lead 724 00:33:47,760 --> 00:33:51,320 Speaker 1: to better outcomes. And I'm thinking specifically about starting a 725 00:33:51,320 --> 00:33:53,480 Speaker 1: small business, because they can often take a lot of 726 00:33:53,520 --> 00:33:56,120 Speaker 1: money to get an operation off the ground, especially if 727 00:33:56,160 --> 00:33:58,360 Speaker 1: it involves a physical space, right, like a brick and 728 00:33:58,360 --> 00:34:00,960 Speaker 1: mortar space, And that is money that might work harder 729 00:34:01,000 --> 00:34:03,640 Speaker 1: for you in your business rather than invested in the 730 00:34:03,680 --> 00:34:06,200 Speaker 1: stock market. And so, you know, Joel, you mentioned our 731 00:34:06,200 --> 00:34:09,480 Speaker 1: money years earlier, and they're pretty formulaic but for the 732 00:34:09,560 --> 00:34:11,719 Speaker 1: vast majority of folks, we feel that they are going 733 00:34:11,760 --> 00:34:14,239 Speaker 1: to work really well for you. They're gonna get you 734 00:34:14,280 --> 00:34:16,759 Speaker 1: on that path to financial independence. But we wanted to 735 00:34:16,800 --> 00:34:18,879 Speaker 1: mention starting your own business because we feel that there 736 00:34:18,960 --> 00:34:23,320 Speaker 1: is room for nuanced conversation and there's room for opportunities 737 00:34:23,360 --> 00:34:26,320 Speaker 1: like this. When it comes to thinking twice before investing. 738 00:34:26,360 --> 00:34:29,000 Speaker 1: You don't have to always say, Okay, you must invest 739 00:34:29,040 --> 00:34:30,760 Speaker 1: as much money as you can in the stock market 740 00:34:31,160 --> 00:34:34,120 Speaker 1: before you pursue this opportunity. But there are ways for 741 00:34:34,160 --> 00:34:36,360 Speaker 1: you to say, you know what, this is something that 742 00:34:36,440 --> 00:34:38,600 Speaker 1: is unique to me. That is something that you need 743 00:34:38,640 --> 00:34:40,680 Speaker 1: to say to yourself that you need to ask yourself, 744 00:34:41,040 --> 00:34:44,000 Speaker 1: because everyone out there knows their own personal specific situation 745 00:34:44,080 --> 00:34:46,600 Speaker 1: better than we do, and sometimes it is worth taking 746 00:34:46,640 --> 00:34:49,879 Speaker 1: the non fundamental look and approach towards investing your money 747 00:34:49,920 --> 00:34:51,680 Speaker 1: as well. Yeah, if you've got an extra ten grand 748 00:34:51,840 --> 00:34:54,000 Speaker 1: and you're like Matt and Joelson, I should invest it 749 00:34:54,000 --> 00:34:55,680 Speaker 1: in the SMP five hunder, but I really wanted to 750 00:34:55,680 --> 00:34:58,520 Speaker 1: start my own business. We don't necessarily just go to 751 00:34:58,520 --> 00:35:01,880 Speaker 1: the stock market direction, because at ten grand invested in 752 00:35:02,040 --> 00:35:05,279 Speaker 1: your own online business or local business, whatever it may be, 753 00:35:05,800 --> 00:35:08,520 Speaker 1: could pay much bigger dividends for you down the road, 754 00:35:08,880 --> 00:35:11,440 Speaker 1: and it could provide a source of like continual income 755 00:35:11,480 --> 00:35:14,600 Speaker 1: of livelihood. And if it's something you're passionate about too, 756 00:35:14,719 --> 00:35:17,000 Speaker 1: you have to factor that in. So, yeah, you definitely 757 00:35:17,000 --> 00:35:18,760 Speaker 1: don't want to be a robot. You want to consider 758 00:35:18,920 --> 00:35:21,720 Speaker 1: your own personal goals and if getting your own business 759 00:35:21,760 --> 00:35:24,200 Speaker 1: off the ground is part of that, or investing in 760 00:35:24,200 --> 00:35:27,200 Speaker 1: yourself to increase your skills, that's another thing that doesn't 761 00:35:27,200 --> 00:35:30,080 Speaker 1: get talked about enough. We would say that, yeah, you 762 00:35:30,120 --> 00:35:33,280 Speaker 1: can earn more over the years if you were to 763 00:35:33,320 --> 00:35:36,600 Speaker 1: invest more in education or skills building, and so that's 764 00:35:36,600 --> 00:35:39,160 Speaker 1: something you have to consider too. It's not just about 765 00:35:39,200 --> 00:35:41,120 Speaker 1: putting more money in your wrath. If you need to 766 00:35:41,440 --> 00:35:44,279 Speaker 1: half cut your ROTH contributions in half for this year 767 00:35:44,520 --> 00:35:47,160 Speaker 1: so that you can go back and get a couple 768 00:35:47,160 --> 00:35:48,960 Speaker 1: of additional skills so that you can make more money, 769 00:35:49,040 --> 00:35:53,200 Speaker 1: that's a good investment. To get recertified. Yeah, I mean, 770 00:35:53,239 --> 00:35:55,680 Speaker 1: if that's if it's some sort of certification that you need, 771 00:35:56,160 --> 00:36:01,000 Speaker 1: Sure you no certification needed for podcast. That's either lucky 772 00:36:01,080 --> 00:36:04,200 Speaker 1: or unlucky, depending on how you view it. But yeah, yeah, 773 00:36:04,280 --> 00:36:07,080 Speaker 1: and like so as we're fond of saying personal finance 774 00:36:07,160 --> 00:36:09,399 Speaker 1: is personal, so it really is important to think through 775 00:36:09,600 --> 00:36:13,760 Speaker 1: your own personal goals and how investing fits into those. 776 00:36:14,040 --> 00:36:17,040 Speaker 1: In most of the time, you'll realize that saving and 777 00:36:17,080 --> 00:36:19,880 Speaker 1: investing more of your money is what's going to actually 778 00:36:20,160 --> 00:36:23,000 Speaker 1: allow you to achieve those goals a whole lot sooner. 779 00:36:23,200 --> 00:36:25,919 Speaker 1: But occasionally you might have a more near term goal, 780 00:36:26,120 --> 00:36:29,000 Speaker 1: which means putting more of that money towards an expense 781 00:36:29,120 --> 00:36:31,560 Speaker 1: and seeing it shrink or towards that business to making 782 00:36:31,560 --> 00:36:33,799 Speaker 1: sure he gets off the ground, rather than putting it 783 00:36:33,800 --> 00:36:36,920 Speaker 1: towards an investment and seeing it grow. Another example of 784 00:36:36,920 --> 00:36:39,640 Speaker 1: that on the purchase side would be a house for 785 00:36:39,640 --> 00:36:42,520 Speaker 1: your primary residence. That's that's an example. You know you 786 00:36:42,520 --> 00:36:44,959 Speaker 1: could you could take the down payment and you could 787 00:36:45,200 --> 00:36:47,719 Speaker 1: invest it and keep renting instead of buying a like 788 00:36:47,760 --> 00:36:50,319 Speaker 1: Sweet three two in a neighborhood near where you live. 789 00:36:50,680 --> 00:36:53,120 Speaker 1: And sure you're likely to see a better return on 790 00:36:53,160 --> 00:36:55,480 Speaker 1: your investments. But there are some things that are worth 791 00:36:55,480 --> 00:36:57,400 Speaker 1: spending money on, and you just need to know what 792 00:36:57,440 --> 00:37:00,680 Speaker 1: those things are for you. There's how healthy balance to 793 00:37:00,719 --> 00:37:02,680 Speaker 1: be struck when it comes to investing. We think investing 794 00:37:02,719 --> 00:37:07,760 Speaker 1: is great, but if you're foregoing those other important life 795 00:37:07,760 --> 00:37:10,120 Speaker 1: goals that you have for yourself in order to just 796 00:37:10,520 --> 00:37:13,440 Speaker 1: quote unquote invest more. It's possible that you might get 797 00:37:13,440 --> 00:37:15,879 Speaker 1: to the point where you would be investing what could 798 00:37:15,880 --> 00:37:18,719 Speaker 1: be considered an unhealthy amount for you. But here's the thing, 799 00:37:18,800 --> 00:37:21,160 Speaker 1: at the end of the day, investing it's a really 800 00:37:21,160 --> 00:37:22,560 Speaker 1: great thing. We don't want you to listen to this 801 00:37:22,600 --> 00:37:25,000 Speaker 1: episode and realize or or to think that we're trying 802 00:37:25,040 --> 00:37:27,719 Speaker 1: to steer you away from investing, because truly, we want 803 00:37:27,760 --> 00:37:29,560 Speaker 1: all of our our listeners out there to get to 804 00:37:29,600 --> 00:37:32,279 Speaker 1: the point where they are investing decent chunks of their 805 00:37:32,280 --> 00:37:35,040 Speaker 1: income on a regular basis, but not before you've asked 806 00:37:35,080 --> 00:37:37,680 Speaker 1: yourself some of the important questions right and making sure 807 00:37:37,760 --> 00:37:41,120 Speaker 1: that you've gone through some of those initial money gears. 808 00:37:41,320 --> 00:37:43,279 Speaker 1: And while there are some great resources out there for 809 00:37:43,400 --> 00:37:45,799 Speaker 1: buy and hold investors, it really does feel like all 810 00:37:45,800 --> 00:37:49,520 Speaker 1: the headlines these days are highlighting short term trades and 811 00:37:49,600 --> 00:37:52,880 Speaker 1: risky investment options. We do not want you to succumb 812 00:37:52,880 --> 00:37:55,359 Speaker 1: to the noisiest folks and headlines out there. We want 813 00:37:55,360 --> 00:37:56,759 Speaker 1: you to know your plan, and we want you to 814 00:37:57,160 --> 00:37:59,200 Speaker 1: write it down and then to stick to it. We 815 00:37:59,200 --> 00:38:01,080 Speaker 1: want you to not only be an investor but we 816 00:38:01,120 --> 00:38:03,920 Speaker 1: want you to be an informed investor where you're knowing 817 00:38:04,080 --> 00:38:06,800 Speaker 1: how and why it is that you're making the decisions 818 00:38:06,840 --> 00:38:08,560 Speaker 1: that you make, and we hope that we've been able 819 00:38:08,600 --> 00:38:11,640 Speaker 1: to steer you in that direction with this episode, no doubt. 820 00:38:11,719 --> 00:38:14,280 Speaker 1: And if you're like, I don't know, I'm still feeling confused, 821 00:38:14,320 --> 00:38:16,400 Speaker 1: I've got some specific questions. That's why we have our 822 00:38:16,440 --> 00:38:19,279 Speaker 1: ask h Team episodes for seriously, send in your investing question. 823 00:38:19,320 --> 00:38:22,479 Speaker 1: We'd love to tackle your specific one on an upcoming show. 824 00:38:22,560 --> 00:38:24,239 Speaker 1: It's really easy to do that. You can go to 825 00:38:24,239 --> 00:38:26,359 Speaker 1: have the Money dot com and find the directions there. 826 00:38:26,560 --> 00:38:27,960 Speaker 1: But Matt, let's get back to the beer that we 827 00:38:27,960 --> 00:38:31,160 Speaker 1: had while we were talking about investing here and rethinking 828 00:38:31,160 --> 00:38:33,959 Speaker 1: your approach to it. This one was Emergency Drinking Beer 829 00:38:34,120 --> 00:38:36,719 Speaker 1: by Wild Heaven. It's a pilsner from them. Yeah, what 830 00:38:36,760 --> 00:38:38,880 Speaker 1: was your take on this beer? Well, we don't necessarily 831 00:38:38,920 --> 00:38:40,799 Speaker 1: plan our beers out to go with our episodes, but 832 00:38:41,000 --> 00:38:43,200 Speaker 1: it is worth mentioning that it it is called emergency 833 00:38:43,239 --> 00:38:44,840 Speaker 1: drinking beer, and like we said during the episode, you 834 00:38:44,880 --> 00:38:46,880 Speaker 1: want to make sure you've got that emergency fund before 835 00:38:47,000 --> 00:38:50,160 Speaker 1: you invest. But let's actually, yeah, let's talk about the beer. Uh, 836 00:38:50,160 --> 00:38:52,759 Speaker 1: it is hard to get past the branding of this beer. 837 00:38:52,800 --> 00:38:55,760 Speaker 1: It is an all yellow cane with just stark writing 838 00:38:55,960 --> 00:38:58,239 Speaker 1: across the front of it, and it it just says emergency 839 00:38:58,320 --> 00:39:00,759 Speaker 1: drinking beer sort of, you know, not un like emergency 840 00:39:00,840 --> 00:39:03,560 Speaker 1: drinking water and like a FEMA zone where there's a 841 00:39:03,640 --> 00:39:07,120 Speaker 1: natural disaster and everyone's having to bring in water. And 842 00:39:07,160 --> 00:39:08,560 Speaker 1: I agree that we should also have that when it 843 00:39:08,600 --> 00:39:11,360 Speaker 1: comes to beer, because there are certain emergencies that just 844 00:39:11,440 --> 00:39:15,279 Speaker 1: call for solid quality drinking beer. I will tweet it 845 00:39:15,320 --> 00:39:18,279 Speaker 1: FEMA right away and then make sure they're incorporating this 846 00:39:18,320 --> 00:39:20,760 Speaker 1: into future disaster really plans. You know what's really funny 847 00:39:20,880 --> 00:39:22,799 Speaker 1: is I remember when they first came out with this beer, 848 00:39:23,120 --> 00:39:25,279 Speaker 1: all of the water in the city where this where 849 00:39:25,280 --> 00:39:27,400 Speaker 1: the brewery is went out like there is a I 850 00:39:27,400 --> 00:39:29,360 Speaker 1: don't know, like a pump ottage And anytime there is 851 00:39:29,360 --> 00:39:30,719 Speaker 1: a pump outage like that, you know, you're not like 852 00:39:30,760 --> 00:39:32,960 Speaker 1: a boil water advice. Yeah, you're not supposed to drink 853 00:39:33,000 --> 00:39:34,759 Speaker 1: it because it's been exposed to air or something. I 854 00:39:34,800 --> 00:39:36,839 Speaker 1: don't know how how it works or whatever. But they 855 00:39:36,840 --> 00:39:39,600 Speaker 1: had just released this beer, uh, and they totally were 856 00:39:39,640 --> 00:39:43,600 Speaker 1: able to dovetail that natural disaster on a very small 857 00:39:43,640 --> 00:39:46,480 Speaker 1: scale with the release of this beer. But man, this 858 00:39:46,520 --> 00:39:48,960 Speaker 1: is I mean, it's a Pilsner style ale and so 859 00:39:49,440 --> 00:39:52,839 Speaker 1: it tastes like beer, Like like, there's there's nothing really 860 00:39:52,880 --> 00:39:55,799 Speaker 1: super unique about it. It tastes like your uncle smell 861 00:39:55,880 --> 00:40:01,080 Speaker 1: that Thanksgiving. That's probably pretty accurate. What were your thoughts 862 00:40:01,080 --> 00:40:03,440 Speaker 1: on a Joel, I mean smelled like my uncle was 863 00:40:03,480 --> 00:40:06,160 Speaker 1: being honest, But yeah, I would say it's it's chill, 864 00:40:06,200 --> 00:40:08,400 Speaker 1: it's light, and it's kind of got like a just 865 00:40:08,480 --> 00:40:11,239 Speaker 1: a light biscuity kind of flavor going on with that breadiness. Yeah, 866 00:40:11,280 --> 00:40:13,680 Speaker 1: just just a little bit, but just eminently drinkable. If 867 00:40:13,680 --> 00:40:15,600 Speaker 1: you're one of those people who's like, I like the 868 00:40:15,600 --> 00:40:19,000 Speaker 1: old school style of beers, I'm not really into like 869 00:40:19,040 --> 00:40:21,440 Speaker 1: beer from the eighties, all the happy, hazy, stoudy, all 870 00:40:21,480 --> 00:40:22,759 Speaker 1: that kind of stuff, and you're like, I just want 871 00:40:22,760 --> 00:40:24,680 Speaker 1: to beer that tastes like beer, this is a good 872 00:40:24,680 --> 00:40:27,239 Speaker 1: one for you to check out, for sure. So all right, 873 00:40:27,280 --> 00:40:29,400 Speaker 1: that's gonna do it for this episode. For If you 874 00:40:29,440 --> 00:40:31,520 Speaker 1: want the show notes for this episode, including links to 875 00:40:31,520 --> 00:40:33,520 Speaker 1: anything that we mentioned, well, you can find those up 876 00:40:33,520 --> 00:40:35,400 Speaker 1: on our website at how to money dot com. And 877 00:40:35,400 --> 00:40:37,359 Speaker 1: if you haven't yet already. Make sure to rate and 878 00:40:37,400 --> 00:40:40,920 Speaker 1: review our podcast over at Apple Podcasts or wherever you 879 00:40:40,960 --> 00:40:43,279 Speaker 1: like to listen to your favorite podcasts, and a big 880 00:40:43,320 --> 00:40:45,160 Speaker 1: thank you in advance, because that truly does help to 881 00:40:45,200 --> 00:40:46,920 Speaker 1: get the word out and it allows other folks to 882 00:40:47,040 --> 00:40:49,440 Speaker 1: find this podcast, all right, Joel, that's gonna be it 883 00:40:49,480 --> 00:40:51,919 Speaker 1: for this episode, buddy. Until next time, Best Friends Out, 884 00:40:52,080 --> 00:41:02,200 Speaker 1: Best Friends Out, m M