WEBVTT - The BA Q and A: How to Invest a Windfall

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<v Speaker 1>Hey, Hey, ba fam, it's Bandy here with another episode

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<v Speaker 1>of Brown Ambition, and today is the ba Qa. I

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<v Speaker 1>miss Tiffany, y'all. She's saying it so good and I

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<v Speaker 1>feel so awkward singing it out loud. So if you're

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<v Speaker 1>at home right now, can you please help me sing

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<v Speaker 1>the b a qa, the VK wait the va qa.

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<v Speaker 1>Oh my god. I miss Tiffany. We wish her all

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<v Speaker 1>the best as she is on her healing journey. But

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<v Speaker 1>I'm telling you, you guys are finding out which one

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<v Speaker 1>of us was really musically inclined in which one of

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<v Speaker 1>us would just be in the background awkwardly two stepping. Okay,

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<v Speaker 1>that was me, But we are here with the va qa.

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<v Speaker 1>I can't wait to answer some of your questions, and

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<v Speaker 1>y'all have been sending us so many, keep them coming.

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<v Speaker 1>Hit us up at Brown Ambition Podcast on Instagram, or

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<v Speaker 1>you can email us at Brown Ambition Podcast at gmail

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<v Speaker 1>dot com, or skip on over to Brown Ambition Podcast

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<v Speaker 1>dot com. You can check out not only were to

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<v Speaker 1>submit a question through our website, but also cepast f

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<v Speaker 1>episodes and coming soon, I'm finally gonna have transcripts for

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<v Speaker 1>y'all because you've been asking for seven years, and I

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<v Speaker 1>took my damn time, but they're coming. All right, Okay,

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<v Speaker 1>well let's jump in. Let's see what kind of questions

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<v Speaker 1>we've got from today. All right, Amanda, Hey, name twin.

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<v Speaker 1>Amanda says. One of the first episodes of Brand Ambition

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<v Speaker 1>I heard was was your interview with Jamila su Front

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<v Speaker 1>from Journey to Launch. You both mentioned that you use

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<v Speaker 1>online savings accounts. I'm wondering if there's any particular account

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<v Speaker 1>that you would recommend. Hey, Amanda, thank you for your question. Listen,

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<v Speaker 1>the same way that I talk about not being loyal

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<v Speaker 1>to any one particular employer, because you know they'll drop

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<v Speaker 1>you in a minute anytime they want to, I feel

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<v Speaker 1>the same way about bank accounts, because, honestly, bank accounts,

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<v Speaker 1>I feel for a lot of us, you know, we

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<v Speaker 1>get the first bank account when we're like, I don't know,

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<v Speaker 1>old enough to have a job, sixteen, seventeen, eighteen or

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<v Speaker 1>after college, and then we just kind of stick with

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<v Speaker 1>it for years and years and years, even when it

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<v Speaker 1>may be the worst thing for you financially. And because

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<v Speaker 1>of the growth of online savings accounts and online banks

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<v Speaker 1>in general, if you haven't looked at who you're banking with,

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<v Speaker 1>and then the last I don't know, three to five years.

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<v Speaker 1>It's definitely worth taking a new look and potentially switching

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<v Speaker 1>banks if you were finding better deals out there. So

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<v Speaker 1>I think the fact that you're asking this question is great.

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<v Speaker 1>I think everyone should be shopping for the best bank

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<v Speaker 1>account on a regular basis. There's a couple of things

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<v Speaker 1>that you should be looking for, especially when it comes

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<v Speaker 1>to online savings. Yes, you want to find the highest

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<v Speaker 1>interest rate possible, because this is the money that banks

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<v Speaker 1>are paying you to let you park, for you to

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<v Speaker 1>pick their bank to park your money at. Because of

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<v Speaker 1>the pandemic, and because the FED has increasingly decreased rates,

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<v Speaker 1>I was a little confusing. Why did I say it

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<v Speaker 1>that way? Because the FED kept slashing rates through the pandemic,

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<v Speaker 1>that directly impacted savings rates, so we saw savings rates

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<v Speaker 1>just plummet. I mean, they're pretty crappy these days. So

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<v Speaker 1>even the highest high yield savings accounts are not that amazing.

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<v Speaker 1>So what's become you know, that's become an important factor,

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<v Speaker 1>but like less important. So I would also look at

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<v Speaker 1>things like minimum balance requirements, and then just for your

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<v Speaker 1>own convenience, you know, how do they make it? Do

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<v Speaker 1>they make it easy for you to transfer funds to

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<v Speaker 1>your savings accounts so you can continue growing that fund?

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<v Speaker 1>Do they charge things like do they charge fees for withdrawals?

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<v Speaker 1>Do they charge you a fee for not keeping a

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<v Speaker 1>minimum balance? Like look at all that fine print. But yeah,

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<v Speaker 1>like I said, rates are not that sexy right now.

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<v Speaker 1>So a couple of years ago, it was like two percent,

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<v Speaker 1>you know, which was actually really amazing, and now it's

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<v Speaker 1>just so abysmal. Particularly which banks do I recommend? There's

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<v Speaker 1>a bunch out there. I could list off any any

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<v Speaker 1>of them. There's vo v Roo, There's Chime, there's Ally,

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<v Speaker 1>of course there is Oh my gosh, oh Marcus by

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<v Speaker 1>Goldman Sachs AMX has a decent online high yeld savings accounts.

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<v Speaker 1>The point is it's never been easier to go online

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<v Speaker 1>and shop and compare bank accounts and see which ones

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<v Speaker 1>offer which you can actually go to my former employer,

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<v Speaker 1>I still love them, Magnifi money dot com. This is

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<v Speaker 1>a place where you can actually go to and compare

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<v Speaker 1>savings account rates right in one place, and you can

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<v Speaker 1>kind of see what all the different banks were offering.

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<v Speaker 1>So if you're on the fence. Start with a site

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<v Speaker 1>like Magnifi money dot com. You can also check out

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<v Speaker 1>nerd wallet. There's just so many options. Google is your friend. Okay,

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<v Speaker 1>all right, thank you for your question, Amanda. All right,

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<v Speaker 1>moving along, we have a question from listener Ali. She says,

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<v Speaker 1>I'm thirty nine years old and I'll be turning forty

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<v Speaker 1>next December. I feel like I'm extremely behind on my

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<v Speaker 1>journey to become financially independent. I have about eighty five

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<v Speaker 1>thousand dollars in student loan debt, five thousand dollars left

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<v Speaker 1>that I owe on my car, and eight thousand dollars

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<v Speaker 1>in credit card debt. I've been listening to your podcast

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<v Speaker 1>on the Fire movement and I calculated my fire number

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<v Speaker 1>and it's almost five hundred thousand dollars. I make forty

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<v Speaker 1>five thousand dollars right now per year, and I rent

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<v Speaker 1>my house. How do you start working on financial independence

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<v Speaker 1>when you're late in the game. Can I start at forty?

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<v Speaker 1>Is it too late? I really feel like I'll be

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<v Speaker 1>one of those who'll be working forever. What advice or

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<v Speaker 1>suggestions do you have for people who are starting in

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<v Speaker 1>their forties. Also, I have a photography business. But it's

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<v Speaker 1>not making a lot of money, so it's a hobby

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<v Speaker 1>until I feel like I can improve and meet my

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<v Speaker 1>target audience. Hey, Ali, all right, I feel the stress here.

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<v Speaker 1>I feel the anxiety. Forty is not that old, Ali.

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<v Speaker 1>You are fine. You are so so fine, and honestly,

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<v Speaker 1>it sounds like you're not even in as dire shape

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<v Speaker 1>as you may think. Okay, yes you have some student

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<v Speaker 1>loan debt, and yes that eight thousand dollars of credit

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<v Speaker 1>card debt that is concerning, but it's not insurmountable. And

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<v Speaker 1>I think, stop worrying about your age so much and

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<v Speaker 1>just start making small decisions today that can put you

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<v Speaker 1>on that track toward a big goal. I know that

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<v Speaker 1>you've went in and calculated your fire number, and for

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<v Speaker 1>those of you who aren't listening, you can google around

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<v Speaker 1>and find like a fire calculator. A really easy rule

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<v Speaker 1>of thumb is to take your household income and then

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<v Speaker 1>multiply it by twenty five I think, to get your

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<v Speaker 1>fire number. But what you'll find is, like people like Ali,

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<v Speaker 1>for example, you get that fire number, so hers is

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<v Speaker 1>fift five hundred thousand dollars, and then you're like houseway

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<v Speaker 1>where the math is not math thing. How do I

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<v Speaker 1>actually get there? And that is where the fire number

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<v Speaker 1>I think can be a little bit. I don't know,

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<v Speaker 1>it can It can sometimes do more damage than good.

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<v Speaker 1>It's nice to know where you want to end up,

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<v Speaker 1>but you also need to realize that it's going to

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<v Speaker 1>take you time to get there. It's going to take

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<v Speaker 1>time and small decisions every day. So Ali, if we're

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<v Speaker 1>going to sit down and look at your finances, you know,

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<v Speaker 1>how much money do you have left over after you're

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<v Speaker 1>paying your expenses and how much more can you be

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<v Speaker 1>putting toward that credit card debt that you've got. Are

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<v Speaker 1>there things that you could be doing to pay that down,

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<v Speaker 1>like taking out a debt consolidation loan, for example, or

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<v Speaker 1>doing a balance transfer where you're transferring credit card debt

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<v Speaker 1>to a new credit card that's off for you some

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<v Speaker 1>sort of promotional rate like zero percent for twelve months

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<v Speaker 1>or something like that, Because I definitely want you to

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<v Speaker 1>get that credit card debt down. At the same time,

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<v Speaker 1>you say that you have a photography business and that

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<v Speaker 1>it's a hobby, and it sounds like you're working nine

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<v Speaker 1>to five. At the same time, I would look at

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<v Speaker 1>some ways to increase and better monetize your photography business.

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<v Speaker 1>It could be that maybe you're looking at traditional, you know,

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<v Speaker 1>sources of income for your photography business, which could be,

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<v Speaker 1>you know, weddings, I don't know, events. Are there types

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<v Speaker 1>of photography that you could, you know, start offering that

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<v Speaker 1>people are looking for, even just looking at who your

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<v Speaker 1>target audience is and what is it that they're asking for.

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<v Speaker 1>I know all the time I have clients of mine

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<v Speaker 1>who are looking for professional headshots. Oh my goodness, now

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<v Speaker 1>that I'm a mom. I don't know if it's just

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<v Speaker 1>because I'm a mom now or if this is happening

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<v Speaker 1>more and more, but I feel like there every month

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<v Speaker 1>there's a new reason to do a photo shoot for

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<v Speaker 1>a baby or for kids. So maybe it's family photos.

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<v Speaker 1>But what different types of photography can you start getting

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<v Speaker 1>into to actually increase your business Or it may not

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<v Speaker 1>be necessarily the types of photography that are your passion,

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<v Speaker 1>but could you do some commercial photography or could you

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<v Speaker 1>use your skills to support an events planning firm or

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<v Speaker 1>like a wedding planning firm who is looking to have

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<v Speaker 1>a photographer you know on speed dial so that they

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<v Speaker 1>can use them for different events. Really start working your network,

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<v Speaker 1>asking people, asking fellow photographers for advice on how to

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<v Speaker 1>increase your income. It may feel like it's outside your

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<v Speaker 1>comfort zone. But when I talk to women, especially who

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<v Speaker 1>are feeling stuck, like in their career or with their

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<v Speaker 1>business and like they're not able to get to that

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<v Speaker 1>next level time and time again, the real magic, the

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<v Speaker 1>real key for them is talking to other people and

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<v Speaker 1>talking to people who are either in their business or

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<v Speaker 1>understand their business really well. So who's actually on your

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<v Speaker 1>like what I call personal advisory board? Who can you

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<v Speaker 1>talk to fellow photographers, people who are in the space

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<v Speaker 1>and work with photographers, and just really start asking questions.

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<v Speaker 1>You know, here's my business model. Do you have any

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<v Speaker 1>ideas this is the type of photography that I'm doing?

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<v Speaker 1>But what are you seeing clients or you know, clients

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<v Speaker 1>asking for Because the key for you, you know, you say,

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<v Speaker 1>you're making forty five thousand dollars a year and you've

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<v Speaker 1>got this debt. So I feel like the key for

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<v Speaker 1>you is not so much scrimping and you know, budgeting

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<v Speaker 1>and maybe that is part of it, decreasing your expenses,

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<v Speaker 1>but you're gonna also want to actually ratchet up your

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<v Speaker 1>earnings so that's why I'm like immediately going to that

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<v Speaker 1>photography business and wanting you to like really push yourself

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<v Speaker 1>to find ways to better monetize it so that it

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<v Speaker 1>can become, you know, a more meaningful source of income

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<v Speaker 1>to not only paid on your debt, but also get

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<v Speaker 1>you moving toward fire. And then you know, the key

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<v Speaker 1>to fire is not about squirreling away money into a

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<v Speaker 1>safe means account that's just going to sit there and

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<v Speaker 1>barely beat inflation. I mean, especially with inflation right now,

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<v Speaker 1>there's no way in hell y'all that any savings account,

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<v Speaker 1>no matter how high yield it is these days, is

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<v Speaker 1>ever gonna come close to beating inflation. So it's more

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<v Speaker 1>important than ever to learn about investing and to learn

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<v Speaker 1>how to invest for long term growth. I highly recommend

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<v Speaker 1>checking out Our Rich Journey. That's Christina and Amman. We

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<v Speaker 1>had them on the show before. They have a wonderful

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<v Speaker 1>YouTube channel with so much content, so much educational content,

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<v Speaker 1>and they specifically have an episode all about fire after

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<v Speaker 1>forty okay, allie, So I feel like I need to

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<v Speaker 1>go dig up that episode and just send it to you,

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<v Speaker 1>because they truly prove that it's possible and they honestly,

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<v Speaker 1>you know, were able to save and increase their income

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<v Speaker 1>to the point where they could retire early. And they

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<v Speaker 1>are the real deal. So I love Christina and a

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<v Speaker 1>Mon from our Rich Journey and I feel like they'll

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<v Speaker 1>really inspire you to not get so tied up in

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<v Speaker 1>your age and what that can mean for you. Okay,

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<v Speaker 1>I hope that was helpful. Thank you so much again,

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<v Speaker 1>Ali for your question. We are going to take a

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<v Speaker 1>quick break and I'll be right back with more Baq

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<v Speaker 1>and A. Hey, Hey, ba fam. All right, I am

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<v Speaker 1>back with our last question for Baq and A this week. Again.

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<v Speaker 1>If you want to send us your questions, hit us

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<v Speaker 1>up Brondambission Podcast at gmail dot com or go to Instagram.

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<v Speaker 1>We are at Brandabission Podcast. All right, this comes from anonymous.

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<v Speaker 1>Anonymous says, I am thirty four years old. I have

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<v Speaker 1>a I have an old four oh one k from

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<v Speaker 1>a previous job with about ninety thousand dollars in it,

0:11:32.600 --> 0:11:35.040
<v Speaker 1>and I just opened up a roth iray that basically

0:11:35.080 --> 0:11:37.440
<v Speaker 1>has nothing in it. Yet I'm about to get a

0:11:37.480 --> 0:11:40.640
<v Speaker 1>windfall of five thousand dollars soon and I'm wondering what

0:11:40.679 --> 0:11:43.160
<v Speaker 1>I should do with it. I have about thirty thousand

0:11:43.240 --> 0:11:46.080
<v Speaker 1>dollars in student loan debt, and I'm wondering if it'd

0:11:46.080 --> 0:11:49.040
<v Speaker 1>be better to take that five thousand dollars and add

0:11:49.080 --> 0:11:51.040
<v Speaker 1>it to that, or pay use it to pay down

0:11:51.120 --> 0:11:54.680
<v Speaker 1>that student loan debt, or put that five thousand dollars

0:11:54.720 --> 0:11:57.880
<v Speaker 1>into my roth iray. I'm excited to start contributing to

0:11:57.920 --> 0:12:00.280
<v Speaker 1>my wroth as much as possible, and I hope to

0:12:00.280 --> 0:12:03.520
<v Speaker 1>be able to max it out this year. Okay, I'm

0:12:03.520 --> 0:12:06.440
<v Speaker 1>not sure which way to go, all right, excellent questions.

0:12:06.520 --> 0:12:09.559
<v Speaker 1>So she does specify in her note here. I was

0:12:09.600 --> 0:12:12.280
<v Speaker 1>trying to summarize it that this is federal student loan debt,

0:12:12.600 --> 0:12:15.320
<v Speaker 1>which means until I believe May of this year, you're

0:12:15.320 --> 0:12:17.920
<v Speaker 1>not actually owing anything on that federal student loan debt.

0:12:17.960 --> 0:12:20.320
<v Speaker 1>Which you know, if you take that five thousand dollars

0:12:20.360 --> 0:12:22.600
<v Speaker 1>and you use it to put it toward your student

0:12:22.640 --> 0:12:25.600
<v Speaker 1>loan debt, that's, you know, potentially great because you're not

0:12:25.760 --> 0:12:28.560
<v Speaker 1>having to worry about any additional interest. So all that

0:12:28.640 --> 0:12:32.040
<v Speaker 1>money is going toward your principle, which sounds good. But

0:12:32.200 --> 0:12:36.560
<v Speaker 1>let's think a little strategically here. Your wroth iray is

0:12:36.600 --> 0:12:41.240
<v Speaker 1>an excellent vehicle to start investing and growing your wealth. Right,

0:12:41.880 --> 0:12:44.079
<v Speaker 1>you've got your four one k from your previous job.

0:12:44.480 --> 0:12:46.920
<v Speaker 1>I'm going to assume that you're contributing to your four

0:12:46.920 --> 0:12:49.000
<v Speaker 1>to one k from your current job now, and that

0:12:49.040 --> 0:12:52.480
<v Speaker 1>your roth iray is really for wealth building. You have

0:12:53.080 --> 0:12:56.640
<v Speaker 1>five thousand dollars coming and this is this is my

0:12:56.760 --> 0:12:59.520
<v Speaker 1>personal opinion, this is what I would do. I honestly

0:12:59.520 --> 0:13:01.640
<v Speaker 1>would take that five thousand and put that into your

0:13:01.720 --> 0:13:04.599
<v Speaker 1>roth thigh array and let that start working for you.

0:13:04.600 --> 0:13:07.040
<v Speaker 1>Your interest rate on your federal student loan debt, you say,

0:13:07.120 --> 0:13:10.440
<v Speaker 1>is about six percent, but history has shown the stock

0:13:10.440 --> 0:13:13.640
<v Speaker 1>market will beat that rate. Of course, you can never

0:13:13.640 --> 0:13:16.319
<v Speaker 1>predict what the stock market does. But you're thirty four

0:13:16.400 --> 0:13:19.920
<v Speaker 1>years old. You've got plenty of time to recover and

0:13:20.000 --> 0:13:23.400
<v Speaker 1>plenty of working years to recover from any you know,

0:13:23.480 --> 0:13:27.120
<v Speaker 1>downturns in the market in the future, which will always come.

0:13:27.200 --> 0:13:29.760
<v Speaker 1>The market just goes up and it goes down, and

0:13:29.800 --> 0:13:31.760
<v Speaker 1>it goes up and it goes down. It's just how

0:13:31.760 --> 0:13:35.160
<v Speaker 1>it rolls, okay, But personally, I would say, a nice

0:13:35.200 --> 0:13:37.960
<v Speaker 1>little windfall like that, go ahead and invest it, and

0:13:38.000 --> 0:13:40.360
<v Speaker 1>then make sure that you've got a payoff plan for

0:13:40.400 --> 0:13:43.040
<v Speaker 1>your student loan debt. You've got thirty thousand dollars that

0:13:43.040 --> 0:13:45.240
<v Speaker 1>you're working to pay down. You're thirty four years old.

0:13:45.880 --> 0:13:49.360
<v Speaker 1>You were able to save you know, ninety thousand dollars

0:13:49.360 --> 0:13:50.880
<v Speaker 1>in your four to one K, So that tells me

0:13:50.920 --> 0:13:53.000
<v Speaker 1>that you've got money on the side that you can

0:13:53.040 --> 0:13:56.360
<v Speaker 1>start pumping toward, you know, that student loan debt payment

0:13:56.440 --> 0:13:59.600
<v Speaker 1>and really get that paid off not that long you know,

0:13:59.640 --> 0:14:03.280
<v Speaker 1>down the road from now. So that is my opinion. Again.

0:14:03.480 --> 0:14:06.040
<v Speaker 1>I really feel like when it comes to wealth building,

0:14:06.440 --> 0:14:09.200
<v Speaker 1>the sooner you start, the better. And when you've got

0:14:09.240 --> 0:14:12.640
<v Speaker 1>an opportunity like this windfall and you don't have things

0:14:12.720 --> 0:14:14.520
<v Speaker 1>like a bunch of credit card debt, which you say

0:14:14.520 --> 0:14:17.000
<v Speaker 1>you don't have, it doesn't sound like you're struggling to

0:14:17.080 --> 0:14:20.120
<v Speaker 1>meet other expenses, you know. I hope you've got a

0:14:20.120 --> 0:14:22.320
<v Speaker 1>little bit of a savings fun on the side. But

0:14:22.400 --> 0:14:24.640
<v Speaker 1>if all those things are true, and you've got this

0:14:24.720 --> 0:14:27.520
<v Speaker 1>five thousand dollars coming to you and the federal student

0:14:27.560 --> 0:14:29.320
<v Speaker 1>loan bill is not going to be due at least

0:14:29.400 --> 0:14:31.880
<v Speaker 1>until after May of this year, girl, I would just

0:14:31.960 --> 0:14:36.160
<v Speaker 1>invest that and let that money start growing for you. Okay. Again,

0:14:36.520 --> 0:14:40.120
<v Speaker 1>personal opinion. Not a financial advisor. Not your financial advisor,

0:14:40.200 --> 0:14:42.920
<v Speaker 1>but that's how I'm feeling. I'm feeling a little very

0:14:42.960 --> 0:14:46.680
<v Speaker 1>bullish on investing right now. Okay, so thank you so

0:14:46.840 --> 0:14:49.520
<v Speaker 1>much for your question, Anonymous. And that is it, y'all.

0:14:49.640 --> 0:14:52.320
<v Speaker 1>I am Mandy again with Brown Ambition. Thank you so

0:14:52.440 --> 0:14:55.240
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0:14:55.240 --> 0:14:57.000
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0:15:05.600 --> 0:15:08.560
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0:15:22.840 --> 0:15:26.160
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0:15:26.200 --> 0:15:28.720
<v Speaker 1>with Brown Ambition. Thank y'all again for all your support.

0:15:28.880 --> 0:15:31.280
<v Speaker 1>Can I just say that I really miss Tiffany? All right,

0:15:31.320 --> 0:15:31.840
<v Speaker 1>I'm done now