Speaker 1: Welcome to How the Money. I'm Joel and I am Matt,
Speaker 1: and today we're discussing the key characteristics of great investors. Yeah, boie,
Speaker 1: this should we start an episode with me saying, yeah, boy,
Speaker 1: yes we should. It's okay to do that occasionally. If
Speaker 1: we did that every single episode, I think folks would
Speaker 1: not like it drop off. But to me, it's more
Speaker 1: of a Scrubs throwback for anybody who's never seen didn't
Speaker 1: j D or Turk one of them. I feel like
Speaker 1: one of them used to always say, yeah, boy, don't
Speaker 1: those guys have a podcast to uh with? I heart actually,
Speaker 1: or they used to where they would they're going back
Speaker 1: kind of reliving glory days. I didn't either, even though
Speaker 1: I loved Scrubs, that sitcom. It was a salad show, fantastic.
Speaker 1: I definitely enjoyed watching that one in college. But that
Speaker 1: is not what we're talking about today. We are dedicating
Speaker 1: an entire episode to investing. You know, like every episode
Speaker 1: we touch on investing a little bit, but we felt
Speaker 1: it was necessary that it was time to do a
Speaker 1: deep dive into the realm of investing and specifically kind
Speaker 1: of some of the things that go on internally that
Speaker 1: make the best investors out there. And these are things.
Speaker 1: Some of these things might may become more naturally to
Speaker 1: people than others, based on your personality type or your inclination.
Speaker 1: But I think all the things we're gonna mention here
Speaker 1: you can also develop, like you can become better at
Speaker 1: and so as we kind of point these things out,
Speaker 1: you might be like, I'm not naturally a patient person,
Speaker 1: but it's something we can we can all work on.
Speaker 1: You're given away the goods already. All right, that's all
Speaker 1: no more until we'll get there. Sure, But first we
Speaker 1: we need to continue the So you've talked about your pixel,
Speaker 1: your your new phone. It's it's sort of like a
Speaker 1: saga here, this this epic journey of your phone. And
Speaker 1: you've got a little update. Uh well, do I okay
Speaker 1: sharing this? I thought you were going to share it
Speaker 1: for me because I'm too bashful, because we've got to
Speaker 1: talk about this. So I have. I finally got a
Speaker 1: case because but it was too late, Yeah, too little,
Speaker 1: too late. I did the steps out of order. I
Speaker 1: cracked the screen and then got the case, and I
Speaker 1: really should have done it the other way around. I
Speaker 1: have learned my lesson point typically for a lot of years. Man,
Speaker 1: I didn't crack my screen. I was pretty good and
Speaker 1: not having a case. We came into work a couple
Speaker 1: of days ago, I saw your phone and had the
Speaker 1: crack screen, and I was so pissed you. I was
Speaker 1: pissed for you. I was just like, no, we literally
Speaker 1: just shook your head, like you idiot, you just got
Speaker 1: that phone. It's just it's been a few weeks. But
Speaker 1: I think it's fair to share it because like we
Speaker 1: share wins that we have, and I think it's it's
Speaker 1: good for folks to know that we're human. Sometimes we
Speaker 1: make dumb mistakes. Uh, And I think you would categorize
Speaker 1: this as a as a dumb mistake. Yes, And unfortunately
Speaker 1: it's only in a small corner and it doesn't really
Speaker 1: affect until you drop it again in that one crack.
Speaker 1: But that's why I got the case. Now the case,
Speaker 1: I'm even gonna give screen protectors. Get that screen protector there.
Speaker 1: It should act as like like glue. Let hold it
Speaker 1: all together. That's the goal. There. We're going from getting
Speaker 1: worse and my wife, she's like, one, just go get
Speaker 1: another screen, and I'm too cheap. Yeah, you just paid
Speaker 1: for this, No, no, I am such an idiot. I
Speaker 1: must like walk around with this crack screen for years
Speaker 1: to kind of walk of shame, just to remind myself
Speaker 1: of how much dummy I am. So I'm gonna I'm
Speaker 1: gonna leave it as is, but I'm gonna have the screen,
Speaker 1: get the screen protector, and hopefully it will stay just
Speaker 1: a small crack. And obviously that's absolutely the most affordable, cheapest,
Speaker 1: easiest thing that for folks to do to protect their phones,
Speaker 1: as folks might be upgrading getting new gadgets this fall,
Speaker 1: get that, get that case. I think the screen protectors
Speaker 1: are like five for nine dollars or something like that,
Speaker 1: so the the expenses minimal. You don't necessarily need an
Speaker 1: insurance policy. I didn't have an insurance policy that I'm
Speaker 1: not I'm not going to do that. That's a that's
Speaker 1: a waste of money. We're not crazy self insure, right,
Speaker 1: and the cheapest self insurance is a case. I realized
Speaker 1: that I just kind of thought it was poppy cock
Speaker 1: and thought I was above the law. So I thought
Speaker 1: you were better than me because I got was it
Speaker 1: last week or two weeks ago? I got a case
Speaker 1: or got the screen protector on there kind of mentioned
Speaker 1: it as an aside, but how did you drop your phone? Like?
Speaker 1: How did it happen? Had it? Literally I said it
Speaker 1: on the night table and it like slipped off like
Speaker 1: or something. Yeah. I was like what, No, And it
Speaker 1: was a short drop. I just assumed that it was
Speaker 1: gonna be okay, but it wasn't. Oh my gosh, when
Speaker 1: did Well you've got concrete floors in that room. Uh,
Speaker 1: They're like, aren't they there? There? No, that's tile, okay,
Speaker 1: hard hardwoods on a cross space or a basement where
Speaker 1: there's a little more bounced to. Well, sorry to hear that, dude. Hey,
Speaker 1: all right, I'll be okay. It's a minor inconvenience really
Speaker 1: when it comes down to it. But for everyone else
Speaker 1: out there, this is your warning. Don't be like me.
Speaker 1: All right, let's move on. Let's mention the beer we're having, Matt.
Speaker 1: This is October Fest by Dry County Brewing. They are
Speaker 1: right around the corner from where we live now, so
Speaker 1: I figured should try that. And it's gonna be that
Speaker 1: time of year where October Fests are on the shelves again,
Speaker 1: so let's let's drink one of these. September, though, Joel
Speaker 1: I know, but still you're like pumping spice Lotte guy,
Speaker 1: where you're like jumping the gun. You're like, okay, it's
Speaker 1: still summer, you're sweating, You're it's only not okay in July, right,
Speaker 1: So that's that's when I start to get annoyed. But
Speaker 1: October Fest beers, it's it's May now, is it okay
Speaker 1: to dream? Right? Not cool? Or they have the pumpkin
Speaker 1: beers are on the shelves obviously in full force at
Speaker 1: this point in time too. I think it's okay to
Speaker 1: start for taking in September if you start drinking in yeah,
Speaker 1: July or even early August. Sorry too soon? Fair enough,
Speaker 1: looking forward to enjoying one of these. And this is
Speaker 1: we've never had a beer by Dry County on the show,
Speaker 1: so looking forward to talking about them here at the
Speaker 1: end for sure. All right, well, let's get to the
Speaker 1: topic of hand. We're talking about the key characteristics of
Speaker 1: great investors, and Matt, there's been this, uh, I don't
Speaker 1: know if you've noticed. I think everyone's noticed this mass
Speaker 1: proliferation of micro transportation devices in recent years. I think
Speaker 1: That's what I'm gonna call it, at least, And there
Speaker 1: were the Bird scooters. I think they were maybe at
Speaker 1: least the most popular um of these micro transportation vices
Speaker 1: to show up in cities, and then all these competitors,
Speaker 1: Lime and all these other companies just sprung up and
Speaker 1: started putting hundreds in thousands of scooters in different cities
Speaker 1: and kind of got out of hand. A lot of
Speaker 1: them got became electronic litter on the sidewalks that people
Speaker 1: stopped using. A lot of them ended up just kind
Speaker 1: of thrown thrown in the trash sadly. But segways that's
Speaker 1: another one, right, they kind of make like a nerd.
Speaker 1: I feel like the actual Segways, the actual site Joe Blue. Yes,
Speaker 1: they're the nerdiest of the micro transportation devices, and I
Speaker 1: think mostly only used by downtown tourists at this point. Uh.
Speaker 1: Electric true electric skateboards. They're another interesting transportation to Actually,
Speaker 1: I'm pretty fascinated in those because those look like a
Speaker 1: ton of fund Like the ability just to go carbon
Speaker 1: down a hill like or not not even down a
Speaker 1: hill like. That's the fun on a regular skateboard is
Speaker 1: having to find a hill to go down, but the
Speaker 1: ability to be on flat ground and leg and do
Speaker 1: it do some carbon like, that's like a lot of
Speaker 1: fun of the one of the other really cool micro
Speaker 1: transportation devices is the one wheel, Like those things are
Speaker 1: kind of taken off. Well, I gotta be honest, right,
Speaker 1: there's some really cool stuff out there, but none of
Speaker 1: these newer transportation inventions holds a candle to the old,
Speaker 1: ultimate classic, to the bicycle. It's we talked about bikes
Speaker 1: all the time. I see where you're going. It's and
Speaker 1: it's not that bikes haven't improved in the past hundred years, right,
Speaker 1: they certainly have, but those iterations have been relatively minor.
Speaker 1: Yet bikes continue to reign supreme as the number one
Speaker 1: personal transportation device, at least in our opinion. Bicycles were
Speaker 1: the o g They were the one point of personal
Speaker 1: transportation vehicle for sure. And similarly, our world, it changes quickly, right,
Speaker 1: There's always something new that were supposed to be considering.
Speaker 1: There's new diets, there's new kids toys. I was shocked
Speaker 1: at the latest toy that probably got that like makes potions,
Speaker 1: and it's there's never an end to the iterations on
Speaker 1: kids toys. There's always something fancy or knew that they want.
Speaker 1: There's new gurus out there, pitching new products. I mean,
Speaker 1: our world is constantly changing and there's always something new
Speaker 1: to grab our attention, and there's also new investments. But
Speaker 1: is the new stuff better than the old stuff? Almost
Speaker 1: always answers no. And so today we're going to discuss
Speaker 1: how to be a great investor, and particularly in a
Speaker 1: world where there's so many new fangled offerings, there's so many,
Speaker 1: there's so much more for us to choose from. How
Speaker 1: do we stay the course and make good decisions when
Speaker 1: everything around us is changing? What what seems like all
Speaker 1: the time. That's right. Even though there are all those
Speaker 1: new forms of micro transportation, fact is, we both still
Speaker 1: have our leg powered bikes that are set up here
Speaker 1: on the walls in our office. Um, And it's not
Speaker 1: that technology or like the advanced advancements that we've seen
Speaker 1: in our world. It's not that it's all bad. Right,
Speaker 1: And in particular when we're talking about investments, there have
Speaker 1: certainly been some like there are there are some pros
Speaker 1: to things changing and things evolving. Accessibility that folks have
Speaker 1: not to be able to invest is great. Uh, you
Speaker 1: don't have to know somebody, You don't have to hop
Speaker 1: on the phone and call up the brokerage and actually
Speaker 1: place in order. Those advancements are good. Uh. The fact
Speaker 1: that fees don't exist, like, that's a good thing as well.
Speaker 1: But like, there really are a lot more crap your
Speaker 1: investments out there though. Uh. And there's also been a
Speaker 1: proliferation of not so awesome investment advice as well. It's
Speaker 1: a constantly changing space. Uh, there's a wider range of
Speaker 1: options available to us. We actually discussed this back in
Speaker 1: episode four forty six, where we talked about investing in farmland,
Speaker 1: investing in wine, investing in art and whiskey. And that's right.
Speaker 1: I prefer to drink it and not invest in it.
Speaker 1: There's a way you can do both it. But these
Speaker 1: new fingled like they're sexier options, right, but they can
Speaker 1: throw us off our game, and it's difficult to address
Speaker 1: every single product that's out there. We like, we certainly
Speaker 1: weren't able to cover all of the alternative investment products
Speaker 1: out there on that episode. I'm sure there's a bunch
Speaker 1: that we haven't even heard of, and I know that
Speaker 1: there are plenty more that will be invented in the future,
Speaker 1: and so we wanted to make sure that you are
Speaker 1: able to cultivate and then embody the characteristics of what
Speaker 1: it takes to be a great investor so that you'll
Speaker 1: be able to make wise decisions with your money, even
Speaker 1: in an era where there are our potential investment options
Speaker 1: at your disposal. We want you to know why it
Speaker 1: is that you are investing, because in the fact is
Speaker 1: like Joe and I were doing the show, but we
Speaker 1: may not always be here for you. There might come
Speaker 1: in a day. That's why we have life insurance like
Speaker 1: a policy genius. But we're planning to be here and
Speaker 1: we want to be able to continue to to be
Speaker 1: sort of like your partner as you advance along, as
Speaker 1: you travel down the personal finance path, as you're seeking
Speaker 1: financial freedom. But we may not always be there. That's
Speaker 1: all I'm saying. It's true, it's true. That's the ultimate reality.
Speaker 1: But the I want to say what this episode isn't, Matt,
Speaker 1: because I think you might read the title and you
Speaker 1: might say, well, the key characteristics of great investors. They're
Speaker 1: going to talk about the individuals who are great and investing.
Speaker 1: The greats we can replicate what they did and know
Speaker 1: the goal of this episode is not to turn you
Speaker 1: into the next warm buffet, the next Charlie Munger or
Speaker 1: the next Peter Lynch. And you might say, I don't
Speaker 1: know who any of those people are, and that's okay,
Speaker 1: I don't need to. But those are individuals who have,
Speaker 1: over a long time span, out performed the market, even
Speaker 1: though that's really really hard to do. If we were
Speaker 1: to create some sort of mount rushmore of greatest investors
Speaker 1: like those, those three guys would probably be on it.
Speaker 1: I don't know who else we would include necessarily, but
Speaker 1: it's widely accepted that those are three of the greatest
Speaker 1: investors to have ever lived. And you know, most of us,
Speaker 1: we've got jobs, we've got families. We're just not interested
Speaker 1: in nor are we even equipped to start competing on
Speaker 1: their level, to even seek to rival what they've done.
Speaker 1: But the good news is that's not necessary for us
Speaker 1: to achieve our financial goals. That there are certain key
Speaker 1: things we can learn from folks like them and we
Speaker 1: can implement into our own lives, increasing the possibility that
Speaker 1: we're able to get out of our own way in
Speaker 1: order to watch our investments grow over the years and
Speaker 1: over the decades. But I just want to mention that
Speaker 1: we don't necessarily need to be exactly like these folks,
Speaker 1: we don't necessarily need to become professional investors, but we
Speaker 1: would say there's still a lot that we can learn
Speaker 1: from the way they go about their jobs. Sure, there's
Speaker 1: a way that you can continue living your life and
Speaker 1: the life that you want to lead and live without
Speaker 1: you know, becoming a total nerd, which is what it
Speaker 1: takes to be uh, the very very best investor. But
Speaker 1: one of the characteristics that we think is really important,
Speaker 1: body is that you need to be hungry to learn
Speaker 1: and specifically learning from others. That is one of the
Speaker 1: biggest keys to success. You don't need to reinvent the
Speaker 1: wheel if you can pattern your investing game after the
Speaker 1: best folks out there, you know, and not the ones
Speaker 1: who who say that they're the best, like on YouTube
Speaker 1: and TikTok. Those platforms are full of those folks. A
Speaker 1: lot of a lot of big heads out there, man
Speaker 1: telling people that you've got to follow their plan in
Speaker 1: order to succeed, and that's pop Yeah. And we're also
Speaker 1: not saying twice this episode, I think so, yeah, you've
Speaker 1: already hit your one poppy cock per episode limit. Uh,
Speaker 1: And like we're also not talking about just finding a
Speaker 1: single individual, right like like a guru and following them
Speaker 1: to the ends of the earth. That's more cult like
Speaker 1: behavior that we are not in favor of. What we're
Speaker 1: talking about is using time tested wisdom that has accumulated
Speaker 1: over the decades and over the centuries um. And it
Speaker 1: can also be helpful to find a group of folks,
Speaker 1: right like a hive mind of individuals who are dispensing
Speaker 1: information that you can trust on a regular basis that
Speaker 1: tends to work together in order to inform sort of
Speaker 1: a cohesive strategy. We think that that will make a
Speaker 1: massive difference for you moving forward as well. It makes
Speaker 1: I mean, specifically, we talk a lot about the how
Speaker 1: the money Facebook group, the ability for folks who share
Speaker 1: a lot of common goals, right like, the actual ends
Speaker 1: that they're seeking after might vary slightly, but the means
Speaker 1: to get there are oftentimes very similar. And that's what
Speaker 1: I love about personal finances, that we we all can
Speaker 1: take a very similar path, a similar strategy, even if
Speaker 1: our end goals are slightly different. Yeah, and even if
Speaker 1: our particular situations look a whole lot different, if our
Speaker 1: income is differently, if we live in opposite parts of
Speaker 1: the country or even different different countries like, there are
Speaker 1: a lot of similar principles that we can adopt and
Speaker 1: put into practice. And so, yeah, Matt, you mentioned basically
Speaker 1: the first characteristic is being hungry to learn or being
Speaker 1: thirsty for knowledge, right, because information builds on itself and
Speaker 1: we're all indebted to those who have gone but for us, Right,
Speaker 1: I'm thankful that that we can iterate based on the
Speaker 1: discoveries and the inventions of others without having to start
Speaker 1: over from square one, because the reality is knowledge really
Speaker 1: can get lost over time if we're not vigilant, Like,
Speaker 1: is there anybody out there who knows how to build
Speaker 1: a pyramid these days? Uh? Like one of the great
Speaker 1: Egyptian pyramids? No, Like nobody knows how to do that.
Speaker 1: That knowledge has actually been lost, like it wasn't transmitted
Speaker 1: down to future generations. And that's a really important thing
Speaker 1: to realize, Like, we're fortunate the level of information we
Speaker 1: have available to us as investors, Like it can be overwhelming,
Speaker 1: but we should also be pretty thankful because there is
Speaker 1: a whole lot that we can learn in less time
Speaker 1: than ever because of what's at our fingertips, and that
Speaker 1: maybe real quickly we should discuss our biggest influences because
Speaker 1: we've actually been able to have a lot of them
Speaker 1: on the show. Sadly, Warren Buffett still hasn't responded to
Speaker 1: our emails, but a lot of the other folks who
Speaker 1: have come on the show, we would we would say
Speaker 1: they're worthy of you listening to regularly reading, reading their
Speaker 1: books or blog posts or whatever. Morgan Household, Clark, Howard, A. L. Collins,
Speaker 1: Ben Carlson. There there are a few of our favorite
Speaker 1: money writers and thinkers. We've had the good fortune of
Speaker 1: having each one of them on How the Money. That's right,
Speaker 1: Warren Buffett and Jack Bogle they are from there, from
Speaker 1: an even more distant generation. So those guys have been
Speaker 1: around for decades and decades and we haven't had them
Speaker 1: on the show, and sadly Jack Bogol is no longer
Speaker 1: with us. But their thoughtfulness about investing has been invaluable
Speaker 1: to informing how we view investing. We haven't created these
Speaker 1: concepts out of thin air like Matt and I. We
Speaker 1: didn't just stumble upon our own investing philosophy through self actualization.
Speaker 1: This is really has been a project of many years
Speaker 1: of reading and learning from the wisdom of others. Yeah again,
Speaker 1: you don't have to reinvent the wheel, right because chances are, like,
Speaker 1: if you wanted to, you could self actualize your way
Speaker 1: into a winning strategy. Perhaps there is a chance that
Speaker 1: things don't pan out very well, uh, depending on your
Speaker 1: proclivity to learn and to make the right decisions. But
Speaker 1: if you're a smart individual, if you're willing to not
Speaker 1: make decisions based on your emotions, there is a chance
Speaker 1: that you could just isolate yourself, look at the data,
Speaker 1: and make the right decisions. But why like, why would
Speaker 1: you be off in the corner by yourself kind of
Speaker 1: spending your wheels when you can just look at these
Speaker 1: proven methods, these proven paths that are well worn that
Speaker 1: I mean millions of people have taken in order to
Speaker 1: grow their wealth. That's why it's important to to be
Speaker 1: able to learn from others. Well, maybe you read that
Speaker 1: Robert Frost poem and you're like, I'm gonna want to
Speaker 1: go the road less traveled, and in some cases that
Speaker 1: is the way to go in life. But when it
Speaker 1: comes to patterning your investing decisions, like, you don't necessarily
Speaker 1: want to go the road less traveled, Exactly, it's gonna
Speaker 1: be boring. Is better to be the route for misery exactly. Yeah.
Speaker 1: And you know, not only should we learn from history
Speaker 1: and the experiences of others, we think it pays to
Speaker 1: be constantly curious as we're looking to learn from everything
Speaker 1: around us. We want you to be like a sponge
Speaker 1: that's constantly soaking up the nuggets of wisdom that you
Speaker 1: encountered every day. But not only is it important to
Speaker 1: learn and understand what's going on in the world, but
Speaker 1: understanding yourself is just as important. Increasing yourself awareness is
Speaker 1: a vital part of increasing your knowledge, where you know,
Speaker 1: you're recognizing that they're they're gonna be limits to what
Speaker 1: you can know, to what you can do. It's it's
Speaker 1: not difficult for us to begin to think that we're
Speaker 1: smarter than than we actually are. But the reality is
Speaker 1: that the more you learn, the more you realize that
Speaker 1: you don't actually understand. I remember people saying that when
Speaker 1: I was in my early twenties, and I was like, now,
Speaker 1: I'm pretty sure I'm gonna learn a lot and I'm
Speaker 1: gonna know it at all. And it is true, though,
Speaker 1: the more you learn, you're like, wow, there's still a
Speaker 1: lot to be It almost like heightens your sense of
Speaker 1: humility because you realize how much you don't understand. Sure,
Speaker 1: it's it's sort of like you're walking along with a
Speaker 1: torch and like when you're younger, you think that, oh no,
Speaker 1: when I specifically, I'm thinking of like the old school Zelda,
Speaker 1: because like you create the map, you know, like as
Speaker 1: you go into these certain areas. Um. But it's it's
Speaker 1: as if you think in your earlier years that once
Speaker 1: you discover the boundaries of the level, or you know,
Speaker 1: once you figure out where all the walls are, then
Speaker 1: it's all you gotta do is just kind of fill
Speaker 1: in the gaps, right, But in reality, instead of there
Speaker 1: being walls, there's just more doors there. There are always
Speaker 1: going to be more doors and more arenas or industries
Speaker 1: that you could learn more about. I'm so glad you
Speaker 1: brought a Zelda reference. It's here, I mean this episode
Speaker 1: reference before. I don't know, but that was one of
Speaker 1: the classics. Man, it really was the gold the gold cartridge,
Speaker 1: that's right. Remember you had always like blow on it
Speaker 1: in order to if it wasn't working, that does build up,
Speaker 1: blow like it, run your finger across it. Yeah, I
Speaker 1: don't know the last time I played the video games
Speaker 1: all the tricks. I don't even know how they work
Speaker 1: or what games are hot these days. But the reason
Speaker 1: I mentioned that mention this is because it's actually a
Speaker 1: helpful realization. Obviously, by you realizing that you don't know everything,
Speaker 1: this is going to keep you from trying to make
Speaker 1: investing decisions with hubris. And you know, we're kind of
Speaker 1: talking about humility here, which we feel is is another
Speaker 1: great characteristic to possess when when you know yourself better,
Speaker 1: you can be humble. Um And and not only is
Speaker 1: it important to realize what it is that you don't know,
Speaker 1: but it's important to understand your natural inclinations and how
Speaker 1: it is that you behave. And the reason I and
Speaker 1: this is because you literally could have all of the
Speaker 1: knowledge that Warren Buffett has, but if you are not
Speaker 1: able to actively implement that knowledge into how it is
Speaker 1: that you invest, well, you're not gonna be a good
Speaker 1: investor if you haven't developed the other characteristics aside from knowledge. Yes,
Speaker 1: you're still you can know everything there is to know,
Speaker 1: but make massive mistakes exactly if you cannot implement it well,
Speaker 1: then that doesn't automatically make you a good investor. So
Speaker 1: let's get to those other characteristics mats. We'll get to
Speaker 1: a laundry list of the important, the key characteristics that
Speaker 1: you need to develop if you want to be a
Speaker 1: good investor, and we'll talk about those right after this.
Speaker 1: All right, we're back from the break talking about some
Speaker 1: of these key characteristics what it takes to be a
Speaker 1: great investor. These are not poppy cock. These are sorry
Speaker 1: if you if you say that one more time. Uh no, okay,
Speaker 1: So we already talked about a desire to learn, a
Speaker 1: thirst for knowledge. Uh. The next characteristic that we wanted
Speaker 1: to get to is patients because the truth is that
Speaker 1: investing it is a long game. When when we talk
Speaker 1: about investing in the market, we're talking about like typically
Speaker 1: investing at a minimum of five years, if not five decades,
Speaker 1: and so over that course of time, you're going to
Speaker 1: experience a lot of volatility. You're gonna see a lot
Speaker 1: of ups and downs. And it's important to maintain that
Speaker 1: scope to understand that you are investing for the long
Speaker 1: haul in order to see out those ups and downs,
Speaker 1: right because in reality that you know those fluctuations, that volatility,
Speaker 1: those aren't bugs, right, Like, those are features of the market. Uh.
Speaker 1: And if you are too focused on the near term
Speaker 1: and you see the market crashing, you see you see
Speaker 1: a dropt Well if if you don't, if you don't
Speaker 1: have a thirty year time arizon, you're freaking out in
Speaker 1: that stress. First of all, it's not good for you,
Speaker 1: but then secondly it could potentially lead you to make
Speaker 1: decisions that are not wise. And the same the opposite
Speaker 1: is true as well. Right like you start, you see
Speaker 1: something taken off and you're thinking, oh, my gosh, is
Speaker 1: take it in. I need to jump on that to
Speaker 1: make sure I don't get left behind under chairs of
Speaker 1: bed bathroom on stock right now exactly. And were you
Speaker 1: to do that, you'd be out a lot of money
Speaker 1: right now. And so being patient, having a proper view
Speaker 1: of your your time frame super important. Well, it makes
Speaker 1: me think that there was a tweet I saw recently
Speaker 1: from Alex Lieberman who started Morning Brew, which I think
Speaker 1: is just a killer email newsletter. I mean, it's not
Speaker 1: quite as good as the How the Money newsletter, but
Speaker 1: you know they're doing what they're doing, all right, They're trying. Yeah. Well,
Speaker 1: then I have a lot of respect for Alex. I
Speaker 1: think he's great, but but he asked this question of
Speaker 1: his followers, Hey, if you wanted to turn a hundred
Speaker 1: thousand dollars into a million dollars within twelve months, what
Speaker 1: investments would you make? And the only thing I could
Speaker 1: think when I read that was, if you're trying to
Speaker 1: grow your money ten x in just a year, chances
Speaker 1: are you're putting in at too much risk and there's
Speaker 1: a really big chance you're gonna lose it, or at
Speaker 1: least lose a big portion of it, because you have
Speaker 1: to make risk of your bets if you're not patient
Speaker 1: enough to see that hundred k grow a lot more slowly. Right,
Speaker 1: The greedier you get, the less patients that you have,
Speaker 1: the more likely you are to invest in a way
Speaker 1: that doesn't align with your long term goals and then
Speaker 1: puts your capital a whole lot more risk. Yeah, fact
Speaker 1: is that's that's kind of an invalid question. Yeah, like
Speaker 1: like the same question. Yeah, Like how could you ask, uh,
Speaker 1: what's the best investment in order to turn a hundred
Speaker 1: k into one million? It's like, well, and in reality,
Speaker 1: that's not truly investing. It feels a bit more like
Speaker 1: like gambling to how do you do that over twenty years?
Speaker 1: Like that's a different question, right, Yeah, we can talk
Speaker 1: about that how to do it that is investing versus something. Yeah,
Speaker 1: a shorter time frame like that feels a lot more
Speaker 1: like speculators. Literally, if you're doing this, I would take
Speaker 1: the hunter k to Vegas, Like that's the only legitimate
Speaker 1: answer then, I know, probably be the most fun way
Speaker 1: to do it as well, Like could you imagine going
Speaker 1: to Vegas with a hundred k? I've never have you
Speaker 1: been to Vegas and like gone to the casina, dude
Speaker 1: one of these days. Because I feel like there's something.
Speaker 1: There's just something that I think I'm gonna learn when
Speaker 1: I go and do that, right, Like, I feel like
Speaker 1: there are going to be certain life lessons, not because
Speaker 1: I'm trying to strike it rich, but just like we're
Speaker 1: talking about earlier, the process of learning there's something. But
Speaker 1: you know, from exposing myself, they're going there with a
Speaker 1: certain amount of money and literally betting it, knowing that
Speaker 1: there's a good chance I could lose it. All I
Speaker 1: want to experience that I've gambled. I've gone to Tunic
Speaker 1: Coup before, but I bought a lot of the ticket.
Speaker 1: But I mean I bought the Megan millions or whatever,
Speaker 1: a few weeks ago. I kept it. You kept as
Speaker 1: small though, right you might one ticket. Yeah, technically that's
Speaker 1: not totally true because in Georgia they require you to
Speaker 1: put tim Bucks in if you do it via the app.
Speaker 1: And I had downloaded the app, and so I did
Speaker 1: ten dollars, which I was kind of pissed about because
Speaker 1: because I wanted to drop too. In reality, I did more.
Speaker 1: I did some upgrades or something. It's a total sham.
Speaker 1: But even still, I do want to go to Vegas
Speaker 1: one of these days. But what we're talking about here
Speaker 1: is the opposite of going to Vegas, which is being
Speaker 1: patient with your investments. Uh. And like like delayed gratification,
Speaker 1: you know, like that might come easier for certain folks,
Speaker 1: but delayed gratification is the direct action that accompanies the
Speaker 1: virtue of patients, right, like you just wait, you waited out, uh,
Speaker 1: And then like the true impact of patients is going
Speaker 1: to be shown through the magic of compound returns as
Speaker 1: your patient, and as you delay that gratification and wait,
Speaker 1: you get rewarded with those returns over the years and decades.
Speaker 1: Because great investors do not get rich overnight. It takes time.
Speaker 1: Even though you're doing the right thing. You know, like,
Speaker 1: even though you're sacking money away into the market paycheck
Speaker 1: after paycheck, the results are they're often going to be
Speaker 1: like invisible for for months or even years. But over time,
Speaker 1: eventually you might start to think that your net worth
Speaker 1: is looking somewhat impressive. Like say, after a decade, I
Speaker 1: feel like a decade that's the time frame when you're like,
Speaker 1: oh wow, okay, I'm starting to see what the compounding
Speaker 1: returns things all about. Whereas to three years in you're like,
Speaker 1: I don't know, I don't get it, you don't really
Speaker 1: feel it. But I mean both of us, I mean
Speaker 1: we're we're pretty young even still, even though we're getting older,
Speaker 1: I feel like we're young when it comes to our investments,
Speaker 1: like to to to really see those incredible results. I
Speaker 1: feel like we've got another ten years ahead of us.
Speaker 1: I feel like they're on their way, they're coming, and
Speaker 1: those investments that that seems so small ten years ago,
Speaker 1: uh a few percentage points you know, of of your
Speaker 1: paycheck or me maxing out my my wrath I ra
Speaker 1: a as a self employed person. Eventually, at some point
Speaker 1: those are going to look crazy impressive, exactly a little
Speaker 1: bit over a long time makes a big difference, but
Speaker 1: it takes patience to then reap those results. And so
Speaker 1: we've got a couple of characteristics down, but well we've
Speaker 1: got more to cover. And another one is becoming a specialist. Right.
Speaker 1: The more the more you try to accomplish, the less
Speaker 1: you're gonna be able to do well. I heard someone
Speaker 1: say the other day math that they were the thing
Speaker 1: they were good at was multitasking, and I was like,
Speaker 1: that's interesting, because I think of that. I like to
Speaker 1: think of myself as a good multitasker. But I've been
Speaker 1: told and from everything I've read, people aren't like, it's
Speaker 1: not possible. It's not possible to be doing a few
Speaker 1: things well at the same time, and so I do
Speaker 1: think of it. It's I don't know, it's made me
Speaker 1: more critical of myself as I as I think that
Speaker 1: and try to just hone in on doing one thing
Speaker 1: at a time instead of trying to spread myself too thin.
Speaker 1: It actually makes me think of a recent like Stoic
Speaker 1: proverb that I saw from one of the Stoics. I
Speaker 1: don't know who it was, but he who is everywhere
Speaker 1: is nowhere, and that is absolutely true when it comes
Speaker 1: to our mind, because if we're trying to do multiple
Speaker 1: things at once, we're not truly anywhere fully. Yeah, I
Speaker 1: don't know. It makes me think of two sport athletes
Speaker 1: and you're back in the nineties, like there were a
Speaker 1: few guys that were really good at multiple sports, like
Speaker 1: Michael Jordan's. Uh see, he wasn't so great at baseball,
Speaker 1: as it turns out, even as the one of the
Speaker 1: most accomplished basketball players of all time. And I kind
Speaker 1: of wonder if you'd just stuck with bass, like how
Speaker 1: many championships would you have? Maybe maybe eight? But you know,
Speaker 1: Bo Jackson, he was a pretty good two sport athlete.
Speaker 1: We had Neon Dion Sanders here in Atlanta, and remember
Speaker 1: that guy, he was pretty good at both. But they're
Speaker 1: the exception to the rule. And and we're not saying
Speaker 1: that doesn't mean that you can't have multiple investment accounts
Speaker 1: that you have to specialize in just your four own
Speaker 1: k or something like that. Of course you can, and
Speaker 1: you probably should have a roth IRA and you should
Speaker 1: also be using let's say your HSA in order to
Speaker 1: invest in your future too. But if you're spreading yourself
Speaker 1: too thin by investing in too many different types of
Speaker 1: asset classes. That's that's what I'm talking about. Or if
Speaker 1: you're investing in let's say a dozen or more individual stocks,
Speaker 1: you're way more likely to make mistakes that are gonna
Speaker 1: pamper your progress. And again, we're not trying to be
Speaker 1: like Warren Buffett. If we had all the time in
Speaker 1: the world to research these companies, to dig into their financials,
Speaker 1: we might be able to be uh investors on par
Speaker 1: with Warren Buffett. But most of us don't have that time.
Speaker 1: So we have to specialize, and we have to we
Speaker 1: can't spend ourselves too thin, or we're not gonna be
Speaker 1: good at any of the things that we're attempting to do.
Speaker 1: That's right. Yeah, we're talking about being focused here, uh
Speaker 1: and like generally speaking, for a lot of these different
Speaker 1: characteristics we're talking we're talking about the stock market, but
Speaker 1: this is especially true when it comes to real estate
Speaker 1: as well, because we know we talk about going hyper
Speaker 1: local and finding the particular path, the specific path that
Speaker 1: makes the most sense to you. But if you're looking
Speaker 1: at condos and quad plexes, you're looking at apartment complexes,
Speaker 1: you're also thinking about maybe doing the flip, maybe starting
Speaker 1: your own HDTV show. I'm gonna all the above, man,
Speaker 1: let's go at all. If you do all that, the
Speaker 1: chances that you accidentally ignore an important red flag about
Speaker 1: at property, or maybe you fail to crunch the numbers
Speaker 1: well enough before making an offer, the chances grow significantly
Speaker 1: that that happen. And so when we spread ourselves too thin,
Speaker 1: we are often going to end up doing everything, maybe
Speaker 1: a little bit more poorly than you would otherwise. So
Speaker 1: limiting our scope and becoming experts on just a couple
Speaker 1: of things, becoming those specialists, we think that will increase
Speaker 1: our chances of success markedly. Yeah. Man, that makes me
Speaker 1: think of simplicity. Right. That is another just intelligent investors
Speaker 1: value simplicity because the more complex something is, the more
Speaker 1: likely it is to be a bad investment. Right, I'm
Speaker 1: looking at you, ad two kinds of annuities or awkward
Speaker 1: mixtures of life insurance and investments. If you can't, if
Speaker 1: you can't explain the investment that you're taking into a
Speaker 1: seven or eight year old, chances are you probably don't
Speaker 1: quite understand it fully yourself, and you've let someone else
Speaker 1: convince you of something based on faulty assumptions and bad
Speaker 1: numbers and just an excess of exuberance. And so it's
Speaker 1: kind of like how the best writers they actually avoid
Speaker 1: the most flowery, cut ci language, the ones who are okay,
Speaker 1: they're using their the source like a much uh in
Speaker 1: order to make their prose sound better than it actually is.
Speaker 1: The absolute best writers they don't need to do that.
Speaker 1: And and similarly, the best investors, they don't need to
Speaker 1: get too cute with their money investing in things that
Speaker 1: are more complicated. Those are those are usually more hassle
Speaker 1: than their worth, and they're gonna they're gonna push you
Speaker 1: into a worse place when it comes to your overall
Speaker 1: investment choices. That's right. Yeah, so we're talking about keeping
Speaker 1: it simple. We're talking about having a high degree of focus.
Speaker 1: You mentioned being a specialist, being patient, being thirsty for knowledge.
Speaker 1: Another characteristic is to be blissfully ignorant. It sounds like
Speaker 1: the opposite of thirsty for knowledge. Mass so please do
Speaker 1: tell we do not want investors to pay attention to
Speaker 1: the results. And this again kind of goes counter and
Speaker 1: to maybe what we've been saying so far, because you
Speaker 1: might be thinking, well, I'm investing to grow my money idiots.
Speaker 1: I need to be focused on the results. They're kind
Speaker 1: of important, uh, And you're not wrong. But the more
Speaker 1: you're checking in on the growth that you're experiencing, the
Speaker 1: more likely you are to tinker in order to just
Speaker 1: juice those returns and see if you can kind of
Speaker 1: outsmart the market. But those changes are often implemented as
Speaker 1: an emotional reaction, not because our actual goals have changed,
Speaker 1: and not because the way that we were investing no
Speaker 1: longer makes sense to us. We're making a knee jerk
Speaker 1: emotional reaction to buy or sell or to invest in
Speaker 1: something else, And so ignorance is bliss in so many
Speaker 1: areas of life, investing included. It's a it's a good
Speaker 1: idea to check in maybe just once or twice a
Speaker 1: year if you want to update your net worth uh,
Speaker 1: and to have a general idea of where you are at.
Speaker 1: But other than that, we would just recommend that you,
Speaker 1: for the most part, just try to ignore it. Yeah,
Speaker 1: if the market, ladies, it loses like three percent in
Speaker 1: one day, you don't want to log into your accounts
Speaker 1: and see the red and then do something about it.
Speaker 1: That's actually what I love about when we talk about
Speaker 1: the robo advisors. Matt Betterment is the best of the
Speaker 1: robo advisors, largely because they implement so many great behavioral
Speaker 1: tools to help people stay the course. Um, they're kind
Speaker 1: of like, wait, are you sure you want to do that?
Speaker 1: They're holding people's hands to help them make smart decisions
Speaker 1: to help them be better investors, which I think is cool.
Speaker 1: And what we're talking about here is being indistractable, centering
Speaker 1: our attention on what matters to us and ignoring the
Speaker 1: headlines and the noise that are kind of floating all
Speaker 1: around us. There's like an endless stream of predictions about
Speaker 1: what the market's gonna do today or tomorrow, about recessions,
Speaker 1: are we in one, are we headed for one? We're
Speaker 1: talking about macro trends. There's no shortage of people on
Speaker 1: Twitter or on CNBC telling you what they think is
Speaker 1: going to happen. But here's the thing that is noise,
Speaker 1: and it shouldn't impact our day to day decisions in
Speaker 1: the least. And then another benefit is that those civil
Speaker 1: choices you set in motion, they just allow you to
Speaker 1: going back to focus. They allow you to focus on
Speaker 1: the stuff that really matters, which often has nothing to
Speaker 1: do with your portfolio, keeping it simple. I'm talking about
Speaker 1: living life, man. I'm talking about riding your you know,
Speaker 1: riding your electric skateboard or whatever it is that you
Speaker 1: want to do. Talking about doing the normal stuff and
Speaker 1: not not having to think about constantly like well, do
Speaker 1: I need to buy yourself? Do I need to make
Speaker 1: a shift here? Do I need to change things up
Speaker 1: based on what's happening today? And if you're taking the
Speaker 1: long term approach, if you're taking the blissfully ignorant, sim
Speaker 1: pull approach, you don't have to think that way. You
Speaker 1: can kind of like tune that stuff out completely and
Speaker 1: get on with your life. Yeah. And one thing that's
Speaker 1: worth mentioning as well, right, Like we're talking about tuning
Speaker 1: out all the noise, and folks might be thinking, well, man, Joel,
Speaker 1: you'll talk about the meme stunks, you talk about crypto,
Speaker 1: you talk about whatever crazy thing that Elon's tweeted recently.
Speaker 1: He's talking about buying another soccer club, maybe buying a country.
Speaker 1: I will say we we have not talked about Elon
Speaker 1: Musk very much, even though the headlines all the people
Speaker 1: love to Halon elong and they're like, but they publish
Speaker 1: headlines about him on every single little thing he does.
Speaker 1: We we we try not to major on Elon musk Well.
Speaker 1: What I'm saying, though, is that we do talk about
Speaker 1: these things that we're telling that we're kind of from
Speaker 1: a very high lofty perch, saying that you should be ignoring.
Speaker 1: But but wait a minute, you guys are bringing this
Speaker 1: to my attention. I wanted to clarify as well. The
Speaker 1: reason we talk about those things is because we think
Speaker 1: it's funny, right, Like, like, we're not talking about those
Speaker 1: things because we think that that is actually where you
Speaker 1: should be putting your money. And usually what we're saying is, hey,
Speaker 1: this is a trend that's happening, and do the opposite,
Speaker 1: and here's why and how you should avoid it. Because
Speaker 1: if you let this thing become too influential on your thought,
Speaker 1: if you let the cryptocurrency spike in price, you know,
Speaker 1: not now, but like of a year ago, if you
Speaker 1: let that influence your decisions now, in all likelihood, you're
Speaker 1: gonna be poor in the end because of it. Exactly.
Speaker 1: We we put it out there as a warning. And
Speaker 1: so even though we do talk about these things, it's
Speaker 1: important to be aware of them and for them to
Speaker 1: be on your radar. But hopefully you're not thinking, oh,
Speaker 1: wait a minute, these guys are making how much and
Speaker 1: you ignore the part where we say, uh, you should
Speaker 1: not be doing that. We hope that that's not the
Speaker 1: case for you. Those are the headlines, but what you're
Speaker 1: not seeing is all the people on the other side
Speaker 1: of that trade who lost a lot of money, exactly.
Speaker 1: And you know it's it's worth pointing out to a
Speaker 1: lot of what we're talking about here in this section
Speaker 1: is about removing things from your life, right, Like we're
Speaker 1: talking about cutting out the note, like we're talking about
Speaker 1: curating and culling and cutting. Uh and yeah, like in
Speaker 1: the first section we talked for a little bit about
Speaker 1: in putting new and proper things into your mind, like
Speaker 1: the proper knowledge and who you should be learning from.
Speaker 1: And but there is a lot of information out there,
Speaker 1: just like we said at the very beginning, and so
Speaker 1: much more work I think is required of us to
Speaker 1: put the blinders on, because we are like, there is
Speaker 1: no shortage of information of that investing advice. And I
Speaker 1: think it's really interesting that we may not have been
Speaker 1: used to limiting the inputs of our lives. But I
Speaker 1: do think that that's something we need to implement more
Speaker 1: of in our life. It's more important now than ever
Speaker 1: because there's never been so many people vying for There's
Speaker 1: so much stuff out there, there's so much media, there's
Speaker 1: so many podcasts, there's so many books. It's never been
Speaker 1: so readily accessible. So right in our fingertips to have
Speaker 1: a hundred people screaming at us telling us what to do,
Speaker 1: and so we have to find the right people who
Speaker 1: probably aren't screaming, trying to help us figure out what
Speaker 1: the best course of action is for us, and not
Speaker 1: not just trying to sell us on what's best for
Speaker 1: them or what's most beneficial in the here and now,
Speaker 1: right in the very moment. Yeah, the investing guys that
Speaker 1: are screaming, you just want to completely stay away from
Speaker 1: that guy. If they're read in the face, veins bulging
Speaker 1: in the neck, you're like, oh, sorry, man, I think
Speaker 1: I wanna avoid you. We try to stay calm when
Speaker 1: we're talking about this stuff right in. Another Another characteristic
Speaker 1: math that we would say that great investors possess is
Speaker 1: that they consider tradeoffs well. They think through risk and reward.
Speaker 1: There's obviously there's no free lunch in life. For example,
Speaker 1: let's say you say yes to one of those free
Speaker 1: state dinners. Typically you're going to be sold a really
Speaker 1: crappy financial product like an annuity, and so that free
Speaker 1: lunch could actually end up costing you a lot of money.
Speaker 1: Great investors, as it turns out, they're able to figure
Speaker 1: out what the tradeoffs are between different class, asset classes
Speaker 1: and different fund types. For for instance, like sticking all
Speaker 1: your money in meta stock right now, like Facebook right
Speaker 1: because you assume that virtual beers with your friends are
Speaker 1: the future. Nothing sounds further from the truth. Yeah, nothing,
Speaker 1: So like that's like the opposite of what I want
Speaker 1: to do. I would rather fat beers, Like what does
Speaker 1: the FaceTime a friend who lives somewhere else than meeting
Speaker 1: him in the metaverse for a beer? But the reality
Speaker 1: is meta stock It could double over the next six
Speaker 1: months as the metaverse is starting to see maybe some
Speaker 1: signs of life. I don't know. But the reality is
Speaker 1: that the downside is steep to if everyone realizes that
Speaker 1: in person beers are superior in every way, which they
Speaker 1: might already know that, well, uh, then it could tank
Speaker 1: that stock and maybe your bet that had a lot
Speaker 1: of upside. Well, it's also got a lot of potential downside,
Speaker 1: so knowing your personal risk tolerance is important. It also
Speaker 1: helps you avoid speculation and gambling behavior because one of
Speaker 1: the most surefire ways to help you experience less risk
Speaker 1: while getting most of the upside, it's just by investing
Speaker 1: in low cost index funds. But knowing those traineoffs, knowing
Speaker 1: your personal risk and reward is going to help you
Speaker 1: make decisions that allow you to invest in such a
Speaker 1: way that you don't feel compelled to make changes based
Speaker 1: on curn events. That's right. Yeah, So those are some
Speaker 1: of the characteristics, and it turns out, Jill, there's actually
Speaker 1: a subset of the population of investors out there who
Speaker 1: are already doing this. Who are these people who have
Speaker 1: already implemented a lot of these these characteristics into their lives,
Speaker 1: And so we'll get to that's as well as how
Speaker 1: it is that you should go about starting to invest
Speaker 1: your money. We'll get to all that right after this break.
Speaker 1: All right, for folks out there who want to be
Speaker 1: a great investor, which doesn't necessarily mean being some ninety
Speaker 1: year old billionaire, It just means investing in a way
Speaker 1: that you can continue to do weekend, week out decade in,
Speaker 1: decade out, so that you have enough money on hand
Speaker 1: to become financially independent earlier than most. That's what we're
Speaker 1: shooting for here. Well, Matt, you tease to kind of
Speaker 1: a subset of the population who has more figured out.
Speaker 1: You want to reveal who that is? You do it? Okay,
Speaker 1: it's women, it's the ladies out There's right. So it
Speaker 1: might sound weird, but a Fidelity survey from like five
Speaker 1: years ago found that women end up talking more money
Speaker 1: away on a regular basis. I think it was nine
Speaker 1: percent of their paycheck versus eight point six percent for men.
Speaker 1: And so yeah, women are are typically investing more of
Speaker 1: their money than men do. And if you if you
Speaker 1: want to talk about something that's very much in your control,
Speaker 1: it's your savings rate and how much of the money
Speaker 1: that you save they were able to stock away into
Speaker 1: those tax advantaged accounts. We would love to see you
Speaker 1: increase your four when K or your TSP contribution or
Speaker 1: your four oh three B contribution like clockwork every time
Speaker 1: you get a raise, but you might not even want
Speaker 1: to wait until then. Right, maybe maybe you can increase
Speaker 1: by a percentage point or two. Now, the reality is
Speaker 1: that You're barely going to feel it in your paycheck,
Speaker 1: but future you is going to be thankful that you
Speaker 1: did more right now. So, if you want to be
Speaker 1: a successful investor, you heard it here first, you I
Speaker 1: want to think a little bit more like a woman.
Speaker 1: That's right. And not only do ladies invest more of
Speaker 1: their income, but they also tend to see higher returns. Again,
Speaker 1: this is according to the Fidelity study based on the
Speaker 1: average of men and women that they studied. Uh. And
Speaker 1: one other reasons for this is because women tend to
Speaker 1: mess around with their investments less often. Men, turns out,
Speaker 1: our thirty more likely to make regular investment trades and
Speaker 1: fiddle with their accounts than their female counterparts. And so
Speaker 1: what that means is that the average woman is taking
Speaker 1: more of a long term view, which actually leads to
Speaker 1: more success and larger balances at the end of the day.
Speaker 1: And so yeah, you know, focusing on on these two characteristics,
Speaker 1: investing more every page a check and then touching your
Speaker 1: investments less that will massively improve your ability to build wealth. Uh.
Speaker 1: And what's also great here is that neither one of
Speaker 1: these two behaviors is overly complicated or complex or requires
Speaker 1: like a ton of discipline. Just literally do less. Yeah,
Speaker 1: that's what we're trying to get you to do. Do
Speaker 1: more on one hand, put more money away, and then
Speaker 1: do less by not doing anything once you put that
Speaker 1: money into the index fund of your choice. It's it
Speaker 1: really is as simple as that. And we like to
Speaker 1: make it more complex and make people think that they
Speaker 1: need to jump through a bunch of hoops in order
Speaker 1: to be a good investor. But if if you boil
Speaker 1: it down to just a couple of things, that's really key.
Speaker 1: And and so let's talk about how to do this
Speaker 1: map because you're also going to learn by doing. You're
Speaker 1: not gonna be perfect. There's just there is no perfect
Speaker 1: when it comes to investing. And you you don't necessarily
Speaker 1: need to hire someone in order to be a good investor.
Speaker 1: I think we have to put that out there too.
Speaker 1: It can help to have a coach in your corner.
Speaker 1: We think that more folks need a money coach than
Speaker 1: they need a financial advisor. Somebody like Erica Taylor, who
Speaker 1: we had on the She can help you think through
Speaker 1: budgeting and cutting expenses and increasing your savings and and
Speaker 1: even getting started investing. Whereas financial advisors they can make
Speaker 1: sense for some folks, But we would say cultivating the
Speaker 1: traits we're talking about here can help you become the
Speaker 1: kind of person who can effectively d i y their
Speaker 1: own investments. No incredibly expensive person uh necessary in your corner.
Speaker 1: And if you feel like you do need somebody's help,
Speaker 1: typically most folks actually the help of a money coach
Speaker 1: more than they need the help of a financial advisor.
Speaker 1: That's right. Coaches focus more on behavior as opposed to
Speaker 1: financial advisors who are looking more at the nuts and bolts.
Speaker 1: And oftentimes we already know the nuts and bolts, we
Speaker 1: just need maybe a little kick in the butt when
Speaker 1: it comes to actually doing the dame things. And sometimes
Speaker 1: financial advisors are are focused more on the big picture.
Speaker 1: And it turns out there's a lot of like small
Speaker 1: changes that you can eat more easily make in your
Speaker 1: life that are gonna make a bigger difference behavior in psychology,
Speaker 1: part of it that that they tend to focus on UH.
Speaker 1: And so let's kind of talk through some of the
Speaker 1: easiest ways that you can get investing, specially the different
Speaker 1: accounts that you can be investing in. And first we
Speaker 1: want to mention the employer match, because if you've got
Speaker 1: to work sponsored account with an employer match, you better
Speaker 1: be getting it. And you know this is this might
Speaker 1: be kind of like Noah kind of advice, but there
Speaker 1: are still so many folks who are not doing this.
Speaker 1: Somewhere close to thirty percent of folks who have access
Speaker 1: to a workplace retirement account either aren't contributing at all
Speaker 1: or they aren't contributing enough to get the full freebie
Speaker 1: basically that their employer is laying out for them. This
Speaker 1: is why on our money gears. Aside from having some
Speaker 1: cash like if you you know a little bit of
Speaker 1: cash in the bank, you need to be getting that
Speaker 1: employer match and literally money number number two besides having
Speaker 1: two thousand, four hundred seven dollars in your bank account.
Speaker 1: The second thing we want you to do is get
Speaker 1: the full employer gear you Number two is is massive
Speaker 1: if that's a gear that's available to you for sure,
Speaker 1: so employer match that's one how to. The other thing
Speaker 1: is tax advantaged accounts. Like after scoring that free money
Speaker 1: from your employer, the next thing you want to do
Speaker 1: is to take advantage of accounts that allow your investments
Speaker 1: to grow in attack sheltered way. And these are accounts
Speaker 1: like four oh, one ks t sp s if you're
Speaker 1: a federal employee or you're a member of the military.
Speaker 1: I RA as individual retirement accounts that any of us
Speaker 1: really have access to, and h S A S and last,
Speaker 1: but but also least actually via cony nine accounts. Those
Speaker 1: are tax advantage, but those are are our least favorite
Speaker 1: because saving for your kids college should be a lower priority,
Speaker 1: a much lower priority on your financial bucket list, compared
Speaker 1: to staving for your retirement. It's not that five nine
Speaker 1: accounts aren't good, like those are excellent accounts if you
Speaker 1: are looking to say, if your kids college, but compared
Speaker 1: to you putting a side money in your wrath, uh,
Speaker 1: if that's your only retirement account, well that definitely needs
Speaker 1: to come first, no brain or choice there, Rath all
Speaker 1: the way every time. But if you focus on growing
Speaker 1: wealth in those other ones via simple index funds or
Speaker 1: target date funds, there's no need to go any further.
Speaker 1: If you don't want to write. We actually sent out
Speaker 1: a newsletter a few weeks ago, Matt talking about how
Speaker 1: you can become a millionaire really easily by just maxing
Speaker 1: out one of these accounts. That's right for a few
Speaker 1: decades and with something like a roth IRA A the
Speaker 1: annual contribution limit. It's only six thousand dollars, but you
Speaker 1: can still become a millionaire investing only in a roth IRA,
Speaker 1: which I think is saying something. It means a lot.
Speaker 1: It says these tax advantaged accounts are really important. You
Speaker 1: should prioritize those soccer as much money you can away
Speaker 1: in those accounts. They're really the best wealth building tool
Speaker 1: that's available to us. That's right. Yeah, And so some
Speaker 1: of those accounts, like the IRA, you can set up
Speaker 1: on your own without an employer, but definitely UH take
Speaker 1: advantage of those employer sponsored accounts. But the thing is,
Speaker 1: if you work for yourself, that's that's that's not a
Speaker 1: big deal, because there are awesome accounts available for you
Speaker 1: that allow you to sack away even more money then
Speaker 1: you're traditionally employed. Friends, if you're so inclined, the step
Speaker 1: I ra A and the solo for ohn k are
Speaker 1: are the two worth looking into. And if you have
Speaker 1: a high deductible health plan, you can open up your
Speaker 1: your own hs A, your own health savings account as well.
Speaker 1: It just takes a little more intentionality because income you
Speaker 1: know to is to be maybe a little more irregular
Speaker 1: if you own your own business and plus you don't
Speaker 1: have an employer, making it easy to contribute, perhaps on
Speaker 1: a bi weekly basis, But it is still super important
Speaker 1: and not terribly complicated, and it's one of those workplace
Speaker 1: benefits that you can participate in as well, even though
Speaker 1: it doesn't feel like one of those free benefits because
Speaker 1: you know, with your friends who have all of their
Speaker 1: healthcare coverage provided for them for free, or you know,
Speaker 1: maybe they have a match, well, guess what, you can
Speaker 1: suck away a ton of money as well. Yep, you can.
Speaker 1: And then the next thing. Let's say you're a high
Speaker 1: income earner or you're just a go getter who's hoping
Speaker 1: to retire early. Your brokerage accounts are a great next
Speaker 1: step worth considering. Even though they don't offer you any
Speaker 1: sort of tax advantage, they can be really helpful if
Speaker 1: you're on the path to let's say fire right, you
Speaker 1: wanna you want to retire early at the age of
Speaker 1: forty five, and a brokerage account can help you get
Speaker 1: there because you're gonna need to pull those that money out.
Speaker 1: You need to pull some of those funds out to
Speaker 1: live before you reach retirement. Age, it's right, you gotta
Speaker 1: bridge that gap that's right before you hit retirement age.
Speaker 1: Investing in real estate, that's another one of those things
Speaker 1: you can consider. It's worth molding over if you're if
Speaker 1: you're kind of interested in investing in real estate, we'd
Speaker 1: say becoming a mom and pop landlord has a lot
Speaker 1: of benefits for investors. It's definitely a route to consider
Speaker 1: if that's something you're interested in. But beyond those basic
Speaker 1: pieces of how to advice, you know, which route you
Speaker 1: decide to go in is largely going to be dependent
Speaker 1: on your specific goals in your specific timeline. Like investing
Speaker 1: in real estate. It's not for everyone, and some people
Speaker 1: are like, listen the four one case, set it and
Speaker 1: forget a thing and just putting more and more money
Speaker 1: into that every year. That's easy and I don't really
Speaker 1: have to think about it, whereas if I start investing
Speaker 1: in real estate, I do have to think about it
Speaker 1: more Right it is on my radar. I can't just
Speaker 1: hop on my electric skateboard and go because I gotta
Speaker 1: go fix the leaky toilet. Those are the kind of
Speaker 1: things that you should consider. But in reality, Matt, this episode,
Speaker 1: it's all about the characteristics, right, and not even the
Speaker 1: how to But we just wanted to provide that here
Speaker 1: as well, because the reality is a lot of people
Speaker 1: are like, cool, I'm down to develop those characteristics. I
Speaker 1: see the need to to be more patient, right, see
Speaker 1: the need to pick something that's a simpler option than
Speaker 1: maybe the way my assets are currently allocated. But yeah,
Speaker 1: so much of the specific how to direction it will
Speaker 1: be determined on your specific goals in your specific timeline.
Speaker 1: The reality is, though, that those characteristics of investors that
Speaker 1: we talked about, those are necessary for all of us
Speaker 1: to develop no matter which how to direction we go in.
Speaker 1: Those are crucial to us succeeding in whichever path we choose. Yeah,
Speaker 1: this characteristics hold fast regardless of what you're what you
Speaker 1: want your personal life to look like, because I think
Speaker 1: that's a lot of what those additional steps and how
Speaker 1: you want to achieve that sense of financial freedom, A
Speaker 1: lot of that is going to come down to what
Speaker 1: you want your life to look like like. If you
Speaker 1: want to be uh that mom and pop landlord where
Speaker 1: you're you know, occasionally, yeah, you are going to have
Speaker 1: to take some calls. You are going to have to
Speaker 1: show the show the property but you know, on that note,
Speaker 1: one more thing that we should mention as we wrap
Speaker 1: this puppy up. Investing it's great, right, but we do
Speaker 1: not want you to overdo it. You should have some
Speaker 1: other life, probably parties. Like here on the show, we
Speaker 1: we we drink beer and the craft beer equivalent. That's
Speaker 1: a huge part of our ethos of how the money, uh,
Speaker 1: and so building wealth, starting to create a nest egg
Speaker 1: for your future like that is great, but it is
Speaker 1: possible to focus too hard on that goal while you
Speaker 1: are depriving yourself today, while you're wrecking maybe your health,
Speaker 1: maybe you're wrecking relationships, you're wrecking all of these other
Speaker 1: things that you will not find on a Google sheet
Speaker 1: or within an Excel document or on personal capital. There
Speaker 1: there are things that are not reflected within your net
Speaker 1: worth UH. And so we want you to find ways
Speaker 1: to spend money freely on the things that matter to you,
Speaker 1: while saving and while investing for your future. Because we
Speaker 1: believe that balance is impossible to fully achieve, but it
Speaker 1: is definitely worth consistently striving for. And that's what we
Speaker 1: do here on the show, and it's what we're constantly
Speaker 1: seeking after in our own lives. As well. Yeah, it's
Speaker 1: like a pendulum, right, and you're always kind of trying
Speaker 1: to find that center, but you're always off by just
Speaker 1: just a little bit. But it doesn't mean we're always
Speaker 1: we're not always striving to get to that place right
Speaker 1: where we are good investors, but where we have enough
Speaker 1: free time to have great hobbies and great relationships, great
Speaker 1: family lives like we want we kind of want all
Speaker 1: of the above approach, and and sometimes that that's not
Speaker 1: gonna lend us being becoming the next warm Buffett. Like
Speaker 1: it's just not because when you actually look at some
Speaker 1: of the lives of some of the greatest investors, their
Speaker 1: personal lives were not so great. And so if you
Speaker 1: really want to be the best investor out there, that
Speaker 1: means you're gonna have to sacrifice a lot of those things,
Speaker 1: just like Michael Jordan's. If you want to be the
Speaker 1: best basketball player so good at baseball, it means you're
Speaker 1: not gonna make a lot of friends on the basketball court,
Speaker 1: and your teammates are not gonna love you at times
Speaker 1: until you hoist the championship in the year and you're like, boom,
Speaker 1: we did it. But all along the way, it's a
Speaker 1: difficult route because you're so hyper focused. We're not talking
Speaker 1: about that. We're talking about being a great investor, not
Speaker 1: being the best investor. And I think there's a difference,
Speaker 1: there's a real meaningful difference in trying to become the
Speaker 1: best versus becoming great when you can become a great
Speaker 1: investor actually pretty easily, and you can still kind of
Speaker 1: retain the things that matter team most in life while
Speaker 1: I'm doing that. Again, that's a well worn path that's proven.
Speaker 1: Like Warren Buffett, he couldn't he couldn't talk to girls
Speaker 1: like That's one of the things like as a teenager
Speaker 1: as he went off to school that he was terrible at.
Speaker 1: I guess he spent all this time reading about companies.
Speaker 1: His marriage fell apart too. I mean, I think I
Speaker 1: read one story about where one of his children was
Speaker 1: on the floor or something and he like stepped over
Speaker 1: his child to walk up to the office. Is John
Speaker 1: having a tantrum? And there's just there are all these
Speaker 1: things you sacrifice sometimes in order to be the best
Speaker 1: at something, and we're not willing to do that. We
Speaker 1: don't want to be the best podcasters, we don't want
Speaker 1: to be the best investors. We want to be really
Speaker 1: good at what we do, but it wouldn't be worth
Speaker 1: the sacrifice in order to get to the number one
Speaker 1: slot on iTunes or whatever it is. I mean, the
Speaker 1: negatives would just far outway the positives in that case.
Speaker 1: That's right. Yeah, we're just trying to be great all around, dude.
Speaker 1: And a part of how we do that, like, like
Speaker 1: we just said, is that we enjoy a beer during
Speaker 1: every episode. Man, And this was Octoberfest by Dry Candy
Speaker 1: Brewing in Kennel Saw, Georgia. What your thought on this
Speaker 1: seasonal beer? Yeah, so obviously I don't really have october
Speaker 1: Fest about the year. Much of the time they're not
Speaker 1: really available. But so I don't even remember the last time.
Speaker 1: I haven't. I don't. I don't know if I had
Speaker 1: one last fall. But I thought it was good, man,
Speaker 1: I thought it was good. It's safety, it's multi it's
Speaker 1: kind of like a very melty if you like brown nails.
Speaker 1: It's like a much lighter version of a brown nil.
Speaker 1: And it's it's not my go to style, that's for sure, um,
Speaker 1: but it is like it's kind of one of those Okay, hey,
Speaker 1: I like regular beer, but I don't like any of
Speaker 1: the fancy stuff. This is one more step into beer
Speaker 1: for for people like that, finding in october Fest this
Speaker 1: time of beer on the shelves, you might be like, oh,
Speaker 1: I'm pleasantly surprised, I actually like this beer. So for
Speaker 1: the beer newbies or novices, I think october Fest and
Speaker 1: this one if you probably don't get this one where
Speaker 1: you live unless you live around where we live in Georgia.
Speaker 1: I don't think this brewery distributes very far. But or
Speaker 1: look for a mars En because that's it's the same style.
Speaker 1: Oftentimes though, like mars N's were served. It's like the
Speaker 1: German word for it. I guess maybe, yeah, yeah, like
Speaker 1: that's the actual type of beer. October Fest is more
Speaker 1: of like a brainding, like like a marketing thing, like
Speaker 1: Marsen is March in German because it was a beer
Speaker 1: that they brewed because back in the day they weren't
Speaker 1: allowed to brew beer during the summer because it was
Speaker 1: too dry and the high temperatures and having the fire
Speaker 1: and boiling water could lead to buildings burning down and whatnot,
Speaker 1: and so they actually outlawed brewing during the summer months,
Speaker 1: and so this beer they would brew in March and
Speaker 1: it had a higher alcohol content. It had higher hops
Speaker 1: and higher malts, which means generally speaking, more flavor than
Speaker 1: like the typical lager or pilsener that they were used
Speaker 1: to brewing. So that's a little Marsen october Fest beer
Speaker 1: history for you. And it's called october Fest because they
Speaker 1: would it would sit in like the basements or the
Speaker 1: sellers all summer and then they would drink it in
Speaker 1: the fall. There you go, There you go. That that
Speaker 1: would be another one of those things like I have
Speaker 1: no desire to go to Mount Rushmore, but I would
Speaker 1: love to go. So we just mentioned Mountain Rushmore in
Speaker 1: the investing Mount rush but I would love to go
Speaker 1: to Octobertoberfest. Yeah, I would be a lot of fun.
Speaker 1: Maybe how do Money trip with some listeners in Vegas
Speaker 1: and then professed, yes, I'm in I'm in opposite directions,
Speaker 1: but let's go. We can make them both happen. Pull
Speaker 1: it off, all right, that's gonna do it for this episode.
Speaker 1: For folks who want the show notes and links to
Speaker 1: everything we mentioned, we'll put those up on our website
Speaker 1: at how to Money dot com. That's right. If you
Speaker 1: have not subscribed to our newsletter, head to how to
Speaker 1: Money dot com forward slash newsletter. It is free, It
Speaker 1: shows up on Tuesday mornings, and it has all of
Speaker 1: the personal finance news that you're gonna need for the week,
Speaker 1: along with some encouragement to get you through to Friday. Joel,
Speaker 1: that's gonna be it for today, buddy. Until next time.
Speaker 1: Best Friends Out, Best Friends Out,