Speaker 1: Episode on understanding the stock market and investing with Boloso Kumbi.
Speaker 1: Welcome to the Frugal Friends podcast, where you'll learn to
Speaker 1: save money, embrace simplicity, and live with your life. Here
Speaker 1: your host Jen and Jill o o oh, welcome to
Speaker 1: the Frugal Friends podcast. My name is Jen, my name
Speaker 1: is Jill, and we have a super special and unique
Speaker 1: episode for you today. Yes, I am very very excited
Speaker 1: about this, as am I because I think this is
Speaker 1: a topic we really don't know much about just in general,
Speaker 1: unless you are working in finance who are writing about
Speaker 1: personal finance. In general, we don't have much knowledge about this.
Speaker 1: I think in part because it doesn't affect us right now.
Speaker 1: We're not great at future thinking and planning for retirement,
Speaker 1: so it's just like, oh, well, that's in the future.
Speaker 1: I don't need to worry about that, you know, kind
Speaker 1: of like scheduling doctor's appointments. But I think that this
Speaker 1: really pairs well with frugality because Bola is about to
Speaker 1: encourage us so much to do our own research and
Speaker 1: to understand and not just to a ignore this or
Speaker 1: be pass it on to somebody else and just pay
Speaker 1: somebody else to do this. For us, but to really
Speaker 1: problem solve, understand research, and be involved in this very
Speaker 1: important aspect of our finances in a way where we
Speaker 1: are empowered to do so and can even do it
Speaker 1: in a frugal manner. Absolutely for sure, and I know
Speaker 1: that this is going to be a very much listened
Speaker 1: to episode because this is something that everyone's interested in
Speaker 1: and we don't cover much on the show because we
Speaker 1: try to stick to more of kind of are safe zone.
Speaker 1: But we definitely want you to be while staying in
Speaker 1: your zone of genius, it doesn't mean you can't branch
Speaker 1: out when it is super relevant and that's kind of
Speaker 1: where we are at in this episode. So we brought
Speaker 1: in Bola because she has a new book out called
Speaker 1: Learn How Investing Works, Grow Your Money, and it is
Speaker 1: just phenomenal. So super honored to have her. But first
Speaker 1: we got to give it up to our sponsors for
Speaker 1: the show. First is Side Hustles. So if you don't
Speaker 1: think you have enough money to invest for a retirement,
Speaker 1: think again. Side Hustles can provide you with the extra
Speaker 1: money you need to start stashing cash. All you need
Speaker 1: is an extra hundred fifty dollars a week, So if
Speaker 1: you want some ideas for really good side businesses. Head
Speaker 1: to Modern frugality dot com slash biz with a z
Speaker 1: ideas and I've got ten simple business ideas that you
Speaker 1: can start pretty quickly. And then you'll also get emails.
Speaker 1: Every Friday we have new episodes of the show, so yes,
Speaker 1: perfect also brought to you by Things I should understand
Speaker 1: by now but don't today. Sponsor is a bit more
Speaker 1: of a confession about things I don't know, like how
Speaker 1: electricity works, or how to navigate social media, or what
Speaker 1: different cuts of meat are and how to use them. Nevertheless,
Speaker 1: I can't let my lack of knowledge keep me from
Speaker 1: living my life. So here's to admitting what I don't
Speaker 1: know and doing more research things I don't know but
Speaker 1: should I'm in my thirties and still learning. Amen. Well,
Speaker 1: when you stop learning, you stop growing, and then you
Speaker 1: are considered dead. So that's a good thing and you
Speaker 1: shouldn't be ashamed of it. Thanks, thank you. Also, I
Speaker 1: can't remember if we talked about meat on the episode,
Speaker 1: so that's I'll be interested to see if that came up.
Speaker 1: The other two I remember, but meat wasn't there, so
Speaker 1: I'm interested to see if I just zoned out on
Speaker 1: that one. Pay attention to the after show. Okay, if
Speaker 1: you are interested in investing, we've got a few other
Speaker 1: episodes in the archive, just a few. Episode fifty three,
Speaker 1: we're talking to Aaron Lowry of Broke Millennial on paying
Speaker 1: off debt and investing. At the same time, episode fifty
Speaker 1: six we have an interview with Abby Chow about saving
Speaker 1: for kids college, specifically in A five nine, which is
Speaker 1: an investment account. And then episode ninety four was a
Speaker 1: very popular one where we go through basically retirement one
Speaker 1: oh one. So this will kind of dive a little
Speaker 1: deeper into some things from that episode, and some of
Speaker 1: it will be a refresher because we've got Bolascumbi. She
Speaker 1: is a certified Financial Education instructor, money expert and CEO
Speaker 1: and best selling author and founder of Clever Girl Finance.
Speaker 1: You've probably seen Clever Girl Finance on Instagram or some
Speaker 1: we're on the internet. She's just done great work there
Speaker 1: and she's so kind, she's so great. After reading her
Speaker 1: latest book, I really believe that it is the handbook
Speaker 1: that everyone needs to learn about investing and then to
Speaker 1: refer back to whenever questions come up. It's very comprehensive
Speaker 1: and easy to read. Beautiful. Let's get into it. Welcome
Speaker 1: Bola to the Frugal Friends podcast. Thank you so much
Speaker 1: for having me. I'm excited to be here. We are
Speaker 1: so looking forward to talking with you about this topic
Speaker 1: that most people know a little to nothing about. Yes,
Speaker 1: I okay. So I was mentioning this a little bit
Speaker 1: before we started recording, but I had a tiktoko viral
Speaker 1: over the weekend. Thank you. I'm in my thirties, so
Speaker 1: I don't feel like that should be a thing I
Speaker 1: should say. But I meant for it to be about,
Speaker 1: you know, do side hustles so that you can like
Speaker 1: help pay off your debt, but it also helps you invest.
Speaker 1: And there's like almost a million views on it, and
Speaker 1: everyone is asking all these questions about where to invest.
Speaker 1: What's wrath? I are all the stuff. So this interview
Speaker 1: comes at the perfect time because it's been a long
Speaker 1: time since I've covered investing. Yes, and I'm excited to
Speaker 1: talk about investing. It's like one of those murky areas
Speaker 1: that you know, people talk about a lot, but not
Speaker 1: everyone knows what things mean, or how to get started,
Speaker 1: or what they're really doing to be honest, and there's
Speaker 1: a lot of trends and you know, social advice that's
Speaker 1: not always accurate. So I'm always happy to talk about
Speaker 1: investing in a way that empower empowers the person who's
Speaker 1: listening and trying to learn about it for themselves. Yeah,
Speaker 1: and we're just here to ask the questions. I know,
Speaker 1: I'm not an expert on investing, nor am I licensed
Speaker 1: or have any of the letters to be giving this
Speaker 1: kind of advice. It is purely for entertainment, but yes,
Speaker 1: hopefully there can be some helpful tips from you Bola
Speaker 1: for those listening in. Yeah. I also don't have any certifications.
Speaker 1: It's purely retirement education and not advice. So let's yeah,
Speaker 1: that's probably a good preface to make on this episode. Well,
Speaker 1: we're giving disclaimers, not your financial advice, but you are
Speaker 1: a certified financial education so you do you. I mean,
Speaker 1: you're probably more qualified than the rest of us. So
Speaker 1: we're super excited. And I think your book is after
Speaker 1: reading it, like the manual for investing, So I hope
Speaker 1: everyone goes out and just to have a copy on
Speaker 1: hand for reference, Like it's that good. So we'll just
Speaker 1: cover kind of like the basics in this episode. But
Speaker 1: if you're listening and you have more questions, they're probably
Speaker 1: answered in the book. So definitely will put a link
Speaker 1: to the book in the show notes for you too.
Speaker 1: You go get that on Amazon. It's so great. But first,
Speaker 1: so this wasn't a question that was on the list,
Speaker 1: but I kind of wanted to know, like, how did
Speaker 1: you get into like investing? Just interested in it and
Speaker 1: started with it. Yeah, so I got into investing pretty
Speaker 1: early on in my career. My first foray into investing
Speaker 1: was with my four one K. I didn't know what
Speaker 1: it was. I had no idea what it meant. But
Speaker 1: I remember sitting out and starting to tune out of
Speaker 1: the HR meeting at my first job. All I could
Speaker 1: hear was what And then they said he had talked
Speaker 1: about the four one yah mi whatever? Like what kind
Speaker 1: of scam? You know? Is it that I have to
Speaker 1: give you my money when you're paying me? Like pay
Speaker 1: me and I pay you back. I was like, no way.
Speaker 1: And then I heard them talk about free money and
Speaker 1: they're like, well, match you at the time up to
Speaker 1: six percent of your contribution. I was like, wait a minute,
Speaker 1: that is free money. I'm on that. So I automatically
Speaker 1: signed up for that really understanding what the four mon
Speaker 1: key was. And it took me three months for my
Speaker 1: probationary period to end for me to actually start contributing.
Speaker 1: And that three months I started to learn about the
Speaker 1: four one key. And then I got curious about investing,
Speaker 1: like where was this money being put, whether the stock
Speaker 1: market mean, and then I got into investing, so I
Speaker 1: started I opened up my own brokerage account, and then
Speaker 1: I started out with just investing in companies that I
Speaker 1: liked that had stocking Kmar at the time. I had
Speaker 1: stock and Gap at the time, and it sounds really
Speaker 1: smart and like, oh my god, she was on top
Speaker 1: of things. But I had no clue what I was doing.
Speaker 1: I would panic every time the stock would fall and
Speaker 1: I would sell it, and then it will go up
Speaker 1: and I would buy more. Don't do it and then
Speaker 1: and the on the rare occasions and I would make money.
Speaker 1: I would forget that I would have to pay taxes
Speaker 1: at the end of the year, and so you know,
Speaker 1: I was just all over the place when it came
Speaker 1: to investing. I was like, wait a minute, I actually
Speaker 1: need to figure out how this thing really works and
Speaker 1: stop listening to my coworkers and stop, you know, just
Speaker 1: doing hearsay investing. And so I picked up at the
Speaker 1: time an investing book for dummies, and I remember I
Speaker 1: would be on the subway in New York City with
Speaker 1: my investing book for Dummies, that's what it was called,
Speaker 1: Investing for Dummies by Wiley, reading it, and people would
Speaker 1: look at me like, look at this dummy, and I
Speaker 1: would stare back like, no, you're the dummy because I'm
Speaker 1: learning about investing with my book for dummies, Thank you
Speaker 1: very much. That's look at me now, yeah, hanging out
Speaker 1: New Jersey. No, no dummy, no mo. All right. How
Speaker 1: I think about those for dummies books? Um, they're great. Cool.
Speaker 1: That's that's a cool. That's such an accessible story because
Speaker 1: it's some people think like as professional, like financial educators,
Speaker 1: we come into this through some kind of like education
Speaker 1: or certification or something. But like, no, you had a
Speaker 1: four oh one K and you wanted to figure out
Speaker 1: what to do with it, nuts, and you know, you
Speaker 1: have to start somewhere, right. This was my first job.
Speaker 1: This is me as a child of immigrants, not knowing
Speaker 1: a lot about the US financial system, Like the stock
Speaker 1: market was completely new to me. So by starting with
Speaker 1: that book, it was incredibly helpful. And then I started
Speaker 1: learning about index funds and like long term investing and
Speaker 1: not trying to time the market, and tax planning and
Speaker 1: capital preservation and like, you know, all these other important
Speaker 1: elements my risk tolerance, should I be investing in individual stocks,
Speaker 1: and all these different factors that allow me to create
Speaker 1: my own investing personality and you know, grow over time.
Speaker 1: And so I think the biggest barrier to investing is
Speaker 1: that people assume that you're born with this knowledge and
Speaker 1: you automatically know how investing works, but you have to
Speaker 1: learn it. Right. A lot of people talk to talk,
Speaker 1: but they actually don't know what they're doing. So, you know,
Speaker 1: there's no shame in learning about investing. There's no shame
Speaker 1: in starting at the basics. What is a stock? What
Speaker 1: is a fund? What is the stock market? What hours
Speaker 1: do they trade? Those little factors all help with your
Speaker 1: education around invest becoming as accessible investor. Well said Bola.
Speaker 1: I think it's amazing to even hear a little bit
Speaker 1: about your background and some of the additional barriers that
Speaker 1: you faced in learning about what this is and how
Speaker 1: to invest, And I think it's encouraging in a lot
Speaker 1: of ways that yes, this can be done regardless of
Speaker 1: the different barriers. It might require more work and more
Speaker 1: effort in some regard, but there is information out there,
Speaker 1: and so thank you for doing it, and then for
Speaker 1: turning back around and saying, Okay, how can I help
Speaker 1: others in understanding this and not putting shame around it
Speaker 1: either that. Yeah, no one is born knowing this and
Speaker 1: you've got to learn. And there might be some sweat
Speaker 1: that this requires to put into that, but yeah, amazing,
Speaker 1: well done, Bola and just being curious and asking questions
Speaker 1: to get to this point of real understanding. And now
Speaker 1: no other woman has to sit on the subway reading
Speaker 1: a for dummies book because they can. Just was a
Speaker 1: good fun I don't know if they still make it,
Speaker 1: but I do recommend it, you know, like I don't
Speaker 1: care people think what I'm reading certain books in public places,
Speaker 1: Like you know, I'm not bothered by it. I'm getting
Speaker 1: the knowledge. If you don't want to join me, good
Speaker 1: for you. There you go. That's it, alright. So let's
Speaker 1: dig into some of this knowledge that you drop. Tell
Speaker 1: me kind of about the different types of stock market
Speaker 1: investments that are available in which may be best for beginners,
Speaker 1: because this was a big question that I got over
Speaker 1: the weekend, like what do I invest in? Yes, so
Speaker 1: you know when it comes to what you should invest in.
Speaker 1: The first thing you want to invest in is knowledge,
Speaker 1: understanding how it works. I do not have an investment
Speaker 1: recommendation for you. You have to because the thing is,
Speaker 1: you work so hard for your money. The last thing
Speaker 1: you want to do is follow the horde or the herd,
Speaker 1: because everybody's doing it, but you don't really know what's happening.
Speaker 1: So the first thing you want to do, the first
Speaker 1: investment is educating yourself basic book on how investing work,
Speaker 1: what it means, or just going online, watching YouTube videos,
Speaker 1: listening to podcasts like this one and you're here listening
Speaker 1: to this one. The second thing as a beginner is,
Speaker 1: you know, I'm pretty wary of saying, hey, go buy
Speaker 1: your favorite song because everybody's talking about Tesla, everybody's talking
Speaker 1: about cryptocurrency, and I'm sure all those are really great investments,
Speaker 1: but I think it's really important to have really really
Speaker 1: broad diversification when you're first starting out. This way, you
Speaker 1: can minimize the amount of mistakes that you make, and
Speaker 1: you can recover quickly, and so I always saw someone
Speaker 1: who's starting out. A great place to start if your
Speaker 1: employer offers one is through your company's for one key,
Speaker 1: this is automatic investing. You don't have to think about it.
Speaker 1: It's before taxes, right, which reduces your overall taxable income.
Speaker 1: Many people will say, well, the four one K can
Speaker 1: be expensive, and that is true. They sometimes charge higher fees,
Speaker 1: but the fact is that it is one way where
Speaker 1: you can automate your investing, and studies show that when
Speaker 1: you automate you save even more than if you're doing
Speaker 1: it manually. You're come But he doesn't offer a form
Speaker 1: one K. They may offer an IRA, which is an
Speaker 1: individual retirement account, or they may offer a WRATH, or
Speaker 1: you can open up one of those for yourself. The
Speaker 1: difference between the IRA and the ROTH IRARA is basically
Speaker 1: the traditional IRA is contributions to an investing account for
Speaker 1: retirement before taxes, and the ROTH is contributions to an
Speaker 1: investment account after taxes have been taken out and you
Speaker 1: don't get taxed again in the future. Both are great
Speaker 1: avenues and your goal is to start investing in those platforms,
Speaker 1: leveraging index funds that will provide you with broad diversification.
Speaker 1: So when you open one of these accounts, whether it's
Speaker 1: your Form one K, A traditional IRA or roth irara,
Speaker 1: then it's a good idea to leverage something like index funds,
Speaker 1: which give you broad diversification in terms of investing and
Speaker 1: minimizing your risk. And basically what an index fund is,
Speaker 1: it's an investing vehicle at tracks an index um of
Speaker 1: the stock market. So everybody has heard in one way
Speaker 1: or the other of the SMP five hundred, this is
Speaker 1: one of the major US industries traded on the stock
Speaker 1: market that basically tracks the performance tracks benchmarks of five
Speaker 1: hundred large corporations of the largest corporations in the U S.
Speaker 1: So by investing in an index fund that mimics SMP
Speaker 1: five hundred, you're essentially investing in each of these five
Speaker 1: companies based on a certain percentage breakout that's defined by
Speaker 1: that index fund you're investing in. And this, like I said,
Speaker 1: gives you broad diversification. So that's a good place to start.
Speaker 1: And then you also want to think about can I
Speaker 1: max out my four one K? Can I max out
Speaker 1: my I raise based on the guidelines that have been
Speaker 1: put in place by the I R s and just
Speaker 1: work on pursuing that. So I believe the four one
Speaker 1: K as of this recording is about eighteen thillars to
Speaker 1: max it out, and then the I RAS or six
Speaker 1: thousand dollars. And what you can do if you cannot
Speaker 1: afford to just set up a max out right now,
Speaker 1: is that you can increase for contributions by percentage points
Speaker 1: every month or every quarter until you can get as
Speaker 1: close to maxing out as possible. So, you know, going
Speaker 1: back to your original question like getting sorry, where do
Speaker 1: I invest? Start by educating yourself and how all this works.
Speaker 1: You know, I just throw out a bunch of different
Speaker 1: terms for one K, traditional ira A roth, ira, SMP five,
Speaker 1: index funds, etcetera. It's not that complicated if you just
Speaker 1: dedicate some time to learn how it works. And I
Speaker 1: will say that people can get overwhelmed by investing. You know,
Speaker 1: hearing people talk about investing. You don't need to be
Speaker 1: Jim Kramer to invest. You don't need to know all
Speaker 1: the jargon. The investing world is full of jargon. Think
Speaker 1: about it this way. You have a car, right to
Speaker 1: drive your car to get safely to your destination. You
Speaker 1: don't need to know how your engine is turning the
Speaker 1: engine oil and how the gas is going through the systems,
Speaker 1: or the aerodynamics of the tires, and the blah blah
Speaker 1: blah jargon. All you need to know is how to
Speaker 1: turn the car on, put on your seat belt, no
Speaker 1: one to break, no one to ccelerate, know how to
Speaker 1: use your navigation, turn on your radio if you want
Speaker 1: to to get to your destination. So don't get overwhelmed
Speaker 1: when you hear all of this no investing jargon. Instead,
Speaker 1: focus on what's most relevant to me and what I
Speaker 1: need to learn right now. Do I know what the
Speaker 1: stock market is? No, let me go and learn what
Speaker 1: this is. Do I know what a stock is? No,
Speaker 1: let me go learn what this is. Do I know
Speaker 1: what an index fund is? Do I know what all
Speaker 1: these different things are? No? And there's no shame in learning,
Speaker 1: because learning is how you become a confident investor. There's
Speaker 1: so many people who are investing right now who cannot
Speaker 1: say in confidence that they feel comfortable, that they understand
Speaker 1: their objectives, that they are clear on their risk tolerance,
Speaker 1: on how they are investing. You don't want to be
Speaker 1: that person. You want to sleep well at night knowing
Speaker 1: that your money is working for you regardless of what's
Speaker 1: happening in the economy, because you're focused on building wealth
Speaker 1: long term. You don't want to be pulling your hair
Speaker 1: out and having panic attacks because you don't know what
Speaker 1: you're invested in and you're seeing this investment going crazy
Speaker 1: and like, oh my god, you know what am I doing?
Speaker 1: All us Yes, and we just get a round of
Speaker 1: applause and anyone listening, pause, rewind, Listen to that section again.
Speaker 1: That was a monologue of goodness right there, not only
Speaker 1: with some of the low hanging fruit of items that
Speaker 1: we do need to understand, so if we're wondering where
Speaker 1: to start even just looking up this knowledge, but then
Speaker 1: also your message of it's okay if you don't know
Speaker 1: what all these words mean, go back and educate yourself.
Speaker 1: I was considering a similar thing to what you're saying
Speaker 1: about our understanding and are doing. We do plenty of
Speaker 1: things that we don't fully understand. Like I flick on
Speaker 1: the lights. I don't really understand how all of that works,
Speaker 1: but I still do it. But yet our lack of
Speaker 1: understanding about investing often keeps us from doing it. But
Speaker 1: I love your metaphor to a car if we our
Speaker 1: understanding of cars from driving, if we don't fully understand
Speaker 1: it all, so I'm not going to drive. Well that's ridiculous.
Speaker 1: So similar thing with this and you, even going back
Speaker 1: to your background, you began before you fully understood it.
Speaker 1: There can be some opportunities to fail, to make mistakes
Speaker 1: and then learn from them, to not be so fearful
Speaker 1: of this thing. But let's take the first step and
Speaker 1: then the next step, and then the next step and
Speaker 1: just continue to grow in it. So thank you for
Speaker 1: that entire message, Bowla. I think it's what we need
Speaker 1: to hear is a cold glass of water in this topic.
Speaker 1: So with that being said, I'm curious, just as we're
Speaker 1: talking about some of the beginner things and the low
Speaker 1: hanging fruit, and when we're talking about investments, where should
Speaker 1: we go to purchase some of these investments? And why
Speaker 1: is robin Hood not the best place to go? Okay,
Speaker 1: you're putting me on the spot, Robin Those. I don't
Speaker 1: know what that is, um, but you know, I would
Speaker 1: just say a brokerage of choice that has good customer service,
Speaker 1: that had good reviews and offers a wide variety of
Speaker 1: options to you, it's a good place to start. You know,
Speaker 1: your employer, if they offer you an investing plan for retirement,
Speaker 1: is probably partnered with a major brokerage firm that you
Speaker 1: can contribute to a four one K there, but you
Speaker 1: can also write open up your own I RA open
Speaker 1: up your own non retirement investing accounts with a broke
Speaker 1: Which popular brokerages are Vanguard and Fidelity specifically for their
Speaker 1: really good customer service and very very very low cost.
Speaker 1: I think between the both of them, they're competing on
Speaker 1: lowest costs in the industry. Shop job to ro price
Speaker 1: um there's lots of these really reputable large investment platforms.
Speaker 1: There's even the fractional investment platforms like the Acorns, and
Speaker 1: there's other um road advisory services like Betterment and wealth Front.
Speaker 1: Take some time out to do some research and you know,
Speaker 1: see what people are saying about their customer service, about
Speaker 1: their expenses, and just visually do you like the user interface.
Speaker 1: Is this somewhere that you feel comfortable putting your money.
Speaker 1: That's a great place to start. You know, when it
Speaker 1: comes to robin Hood, I don't have a robin Hood account.
Speaker 1: I'm not entirely familiar with their platform. I think we
Speaker 1: have talked about on the Clerical Finance platform in terms
Speaker 1: of there's a list of different places you can invest,
Speaker 1: but I know they focus a lot on individual stock investing.
Speaker 1: I would say, you know, a platform that doesn't offer
Speaker 1: a lot of variety is maybe not a great place
Speaker 1: for a beginner, especially there's no retirement options. If you're
Speaker 1: prioritizing your investments, I think the first place you want
Speaker 1: to start is invest for retirement, right, invest for longer
Speaker 1: term goals, and then the money you have leftovers you
Speaker 1: can use that for fun and higher risk investments, which
Speaker 1: I find a lot of people tend to do with
Speaker 1: the robin Hood platform. But you want to make sure
Speaker 1: that you're not putting your long term investing, your emergency
Speaker 1: savings or life savings into an individual stock platform right
Speaker 1: where there's a lot of higher risks. So do your research,
Speaker 1: Do your research, do your research. That's so important. Yeah,
Speaker 1: And when the younger you are, the more time you
Speaker 1: have on your side. And so that's kind of the
Speaker 1: benefit to these retirement accounts and index funds is that
Speaker 1: you can put some in like in your twenties and
Speaker 1: thirties and just let it grow and compound interests will
Speaker 1: work in your benefit and if it's like in a
Speaker 1: raw IRA, you can take it out like tax free,
Speaker 1: So those tax advantages and time are so much more
Speaker 1: reliable than like a single stock or something like that. Yeah,
Speaker 1: and I would say that you know you want to
Speaker 1: aspire to maxing out those retirement savings accounts, right, But
Speaker 1: if you get to the point where you've maxed out
Speaker 1: your four owne K, you've maxed out your you know,
Speaker 1: your IRA, whichever one you have, and you have spare money,
Speaker 1: don't stop investing, right, There's still opportunity for growth. So
Speaker 1: you can open, like I mentioned, your own independent brokerage
Speaker 1: account and invest in non retirement accounts, which means these
Speaker 1: accounts are not tied to any restrictions, but they also
Speaker 1: don't have the tax advantages. Right, you still have the
Speaker 1: opportunity for your money to grow. And the way your
Speaker 1: money grows from investing, specifically investing in the stock market
Speaker 1: is from appreciation, dividends, and compounding. And compounding is that
Speaker 1: magic that gives your money the opportunity over the long
Speaker 1: term to grow pretty much exponentially. And basically what compounding is,
Speaker 1: it's your money having a baby, which is interest and
Speaker 1: then the baby, having another baby, and the baby's babies
Speaker 1: baby having another big and in retirement you get a
Speaker 1: big old family. But these are all dollar bills. These
Speaker 1: are all dollars that are having dollars having dollar babies,
Speaker 1: and you want all those babies. You want the big,
Speaker 1: big family. When it comes to these are babies you
Speaker 1: do want. I'm gonna take a family portrait with all
Speaker 1: of my dollar babies. This is the kind of family
Speaker 1: planets Jill and us and all of our babies dollars.
Speaker 1: One more thing I'll say about robin hood, and this
Speaker 1: is because I was also not familiar with it, but
Speaker 1: so many people asked me about it last weekend that
Speaker 1: I actually had to look into it. And it should
Speaker 1: be telling that like people in the financial industry don't
Speaker 1: use robin hood very often versus like Pete random people
Speaker 1: on Instagram and TikTok that are loving it. So just
Speaker 1: be cognizant of where you're getting your financial advice. Rather
Speaker 1: I say that, but there are some There are some
Speaker 1: great people on TikTok that offer like really great financial
Speaker 1: advice there, and then there are some some weirdoes. I
Speaker 1: would say when it comes to any platform, like you know,
Speaker 1: I think any platform that gains popularity probably have something
Speaker 1: good going for it. But just because something is popular
Speaker 1: doesn't mean that it's right for you given your circumstances.
Speaker 1: If you don't know anything about investing, are those kind
Speaker 1: of platforms your first start, right? If you don't know
Speaker 1: anything about investing, you want to make sure that you're
Speaker 1: leveraging a platform and a resource that's going to help
Speaker 1: you have a good experience and put your money to
Speaker 1: good use for you, And so I would just say
Speaker 1: do your research. Yeh. It's it's usually not the platform,
Speaker 1: it's the individuals. Am. Because something is trending does not
Speaker 1: mean that you need to jump on the bad wagon
Speaker 1: if you don't know what it is. People talk about
Speaker 1: cryptocurrency and for us all day long it is trending.
Speaker 1: Is it for you as a beginner investor? You know,
Speaker 1: when you if you do not have retirement savings, you
Speaker 1: don't have emergency savings, your finances are not in order.
Speaker 1: Maybe not at this point. Yeah. I think that ties
Speaker 1: into just our lack of understanding. If something just sounds smart,
Speaker 1: it can feel as though, well, then I'll just do that.
Speaker 1: People who sound like they know what they're talking about
Speaker 1: it sounds smart. I don't really understand it. I should
Speaker 1: probably do it, It's not necessarily the right thought process
Speaker 1: comes to something we don't understand. Yeah, and you know,
Speaker 1: I recently needed a YouTube video on how your favorite
Speaker 1: influencers might be making you broke. And this was in
Speaker 1: relation to like shopping and all of that. But you
Speaker 1: know financial influencers, you know also, and I guess I
Speaker 1: fall into that category. Whenever somebody tells you something to do,
Speaker 1: to buy, to try, don't do it blindly. Right, So,
Speaker 1: just because Bolas as investment in next one, doesn't mean
Speaker 1: you should go and buy the index one. Go do
Speaker 1: your research first. I cannot and I cannot stress the
Speaker 1: importance of research. And in addition to that research, does
Speaker 1: this thing that I'm having hearing this influencer tell me
Speaker 1: to do doesn't align with my goals of things I
Speaker 1: want to accomplish over the long term? Right? Does this
Speaker 1: fit in? And also does this tie into my risk tolerance? Right?
Speaker 1: Does this seem too aggressive of an investment? Too expensive? Like?
Speaker 1: Is this making me uncomfortable? Just because you love your
Speaker 1: influencers you follow them, does not mean that you are
Speaker 1: sheep right. You have a mind of your own and
Speaker 1: you want to leverage your incredible intelligence to figure out
Speaker 1: if what they're telling you is going to make sense
Speaker 1: of you personal finances, personal finance, because it is personal, right,
Speaker 1: that's the key word here. So there's a lot of
Speaker 1: things trending, a lot of people are jumping on the
Speaker 1: bandwag and a lot of so much is going on,
Speaker 1: but always bring it back down to you and your
Speaker 1: unique personal situation because at the end of the day,
Speaker 1: a lot of people out there don't know what they're doing.
Speaker 1: That's just the truth. That's so true. It's just there,
Speaker 1: honest truth. So many words of wisdom coming out of
Speaker 1: your mouth. Okay, so let's talk a little bit more
Speaker 1: about accounts to put your investments in, because so many
Speaker 1: people get confused. It's like they open an account and
Speaker 1: then they put money in there and it sits or
Speaker 1: they think they have to buy index fund, but like
Speaker 1: where does it go? Like, let's talk about the best
Speaker 1: account out for beginners kind of like what order you
Speaker 1: should go in. So when it comes to investing accounts,
Speaker 1: let's assume let's create a scenario and let's assume that
Speaker 1: you have an employer that offers you an investment plan,
Speaker 1: and they offer a form one k UM. There's also
Speaker 1: a four or three B which is similar to a
Speaker 1: formal case specific to people who work in certain industries,
Speaker 1: or four fifty seven plan. They're all very similar something
Speaker 1: that an employer offers to help you, say for retirement.
Speaker 1: So that's one account that if it's offered to you,
Speaker 1: it's a good idea to have, right, And money is
Speaker 1: taken automatically from your paycheck into this account. And at
Speaker 1: the beginning of setting up this account, you pick out
Speaker 1: what you want to invest in. Right, So let's say
Speaker 1: you pick out two different index funds or an index
Speaker 1: fund and some other type of investment like a bond, right,
Speaker 1: which is essentially and I owe you loan that you
Speaker 1: make to a government of corporation or something like that.
Speaker 1: So you have these investments there, and that happens automatically
Speaker 1: because you've set that designation from the beginning of starting
Speaker 1: that account. You can change them whenever you want, but
Speaker 1: every time money comes out of your pre check, it's
Speaker 1: automatically invested there. Let's say then you decide, okay, I'm
Speaker 1: going to open my own traditional or wrath I AARA,
Speaker 1: and I'm going to open it with fidelity, you contribute
Speaker 1: money in there. You can decide that every time you
Speaker 1: get paid, you have your perial deposit a hundred dollars,
Speaker 1: five hundred dollars, whatever it might be, into this account. However,
Speaker 1: once that deposit is made, unless you have set up
Speaker 1: to automatically invest in a particular investment, you're going to
Speaker 1: have to go in every couple of weeks to make
Speaker 1: that investment right. And so there are different ways you
Speaker 1: can invest. You can invest a lump sum. Let's say
Speaker 1: you get a bonus or a a tax refund. You can
Speaker 1: invest that every year. You can invest every month. You
Speaker 1: can invest every two weeks when you get paid, you
Speaker 1: can invest every week. You can set up your own
Speaker 1: investing schedule. But it's all about being consistent over time.
Speaker 1: And by investing consistently over time, you do something called
Speaker 1: dollar cost averaging, which basically means one investments are high.
Speaker 1: So let's say you have this fixed amount of money
Speaker 1: you're investing every pay period. For example, let's say's five dollars.
Speaker 1: So what investments are high? Right? Stock market? Stock prices
Speaker 1: are more expensive, your five per dollars buys you less.
Speaker 1: And when investments are low, right, stock market has a
Speaker 1: decline or etcetera. Your money buys you your fire phere
Speaker 1: dollars buys you more of the investment, and over time
Speaker 1: you have this average through right. And the whole idea
Speaker 1: is with dollar costs investing or dollar cost averaging, is
Speaker 1: that you're not trying to time the market. You're just
Speaker 1: buying consistently at different points in time with a long
Speaker 1: term focus on investing. And what this means is that
Speaker 1: over time your investments are likely to go grow given
Speaker 1: the historical performance of the stock markets and also given
Speaker 1: the historical behaviors of economies as a whole, even despite
Speaker 1: recessions and depressions. And this is because demand for items
Speaker 1: grows as population grows as resources decrease. Right, That's what
Speaker 1: it has shown over time historically. And so you have
Speaker 1: the opportunity and then tying you know, in addition to
Speaker 1: that growth in value, tying in dividends which is you know,
Speaker 1: profit sharing in a sense that companies give to their investors,
Speaker 1: and then tying in compounding based on the average earnings
Speaker 1: on your investments, which can allow your investments to grow
Speaker 1: over time. So you have your four one K. You
Speaker 1: then have your traditional iras and let's say okay, have
Speaker 1: maxed out my four one can have maximum traditional iras.
Speaker 1: Then the next account you want to open is a
Speaker 1: brokerage account, just a regular broker account that's not tied
Speaker 1: to investing. You don't get penalized at age if you
Speaker 1: take money out before age fifs nine and a half.
Speaker 1: It's just a brokerage account and you can start to
Speaker 1: contribute money here and invest in index funds. If there
Speaker 1: are some individual stocks you're interested in, invest that way,
Speaker 1: knowing that you don't want to have all of your
Speaker 1: money in one stock. You want to diversify, right. The
Speaker 1: key to diversify and then invest that way. And it's
Speaker 1: important to give in mind though, that when if you
Speaker 1: choose to sell an investment that has appreciated, that has gained,
Speaker 1: you're going to have to pay something called capital gains tax.
Speaker 1: And this is basically the tax that you pay on
Speaker 1: your investment account. And this is something that you would
Speaker 1: get a letter or a tax form at the end
Speaker 1: of the year from your broker saying this is how
Speaker 1: much you earned in profit from your investment. This is
Speaker 1: what reported to the I R S and you would
Speaker 1: have to pay those taxes. So it's important to keep
Speaker 1: that in mind that if you invest ten tho dollars
Speaker 1: and you sell it for twenty you're going to have
Speaker 1: to pay taxes on that profit of ten thous dollars
Speaker 1: depending on what that capital gains tax rate is. So
Speaker 1: those are the different accounts that you can have when
Speaker 1: it comes to where to put your money as it
Speaker 1: relates to investing, which is really simple. I mean it's
Speaker 1: basically three accounts. Yeah, it's not complicated, and you can
Speaker 1: have you know, like when I think about my financial situation,
Speaker 1: which is a bit more complicated, but you know, I
Speaker 1: don't have a four one K because I work for myself,
Speaker 1: but I have something called a step I RA which
Speaker 1: allows me as an entrepreneur to say for retirement, and
Speaker 1: then I have brokerages and then I also brokerages in
Speaker 1: my kids names for their college investing in their future investing.
Speaker 1: So you can have more than one brokerage account, but
Speaker 1: you just want to make sure that you're not overwhelming yourself.
Speaker 1: People do this with bank accounts a lot um. They
Speaker 1: have so many different bank accounts, so people remember what
Speaker 1: bank accounts and they're chasing all these bonuses dollars opening
Speaker 1: a new bank account twenty dollars here, Like all these things,
Speaker 1: it's not keep it simple. You don't need to chase
Speaker 1: the twenty five dollars or twenty dollars. It's not even
Speaker 1: a getting your time. To be honest, a lot of
Speaker 1: times you'll tell you, oh, we'll give you the twenty
Speaker 1: five dollars, and six months after you've made seventeen deposits
Speaker 1: equaling ten dollars, come on now. So so don't get
Speaker 1: into a bank account chasing for twenty five dollars or
Speaker 1: twenty bucks. Just keep it simple. Once you have your
Speaker 1: account set up, you want to check in and see
Speaker 1: how your investments are doing. Right, and before you check
Speaker 1: and take a deep breath and know that, remind yourself
Speaker 1: of why you're investing. You're investing for the long term,
Speaker 1: for your kids, education, for retirement. What are your long
Speaker 1: term objectives? And then when you log into your accounts,
Speaker 1: just make sure that you know there's basically a check in.
Speaker 1: Sometimes things may be down, depending on the economy, depending
Speaker 1: on your investments, but that's okay given that you have
Speaker 1: a long term horizon. Right, you don't want to start
Speaker 1: panic selling because everybody on Instagram is like, oh my god,
Speaker 1: cell Cell Cell. The stock market is taking and you
Speaker 1: also don't want to start panic buying because everybody's saying,
Speaker 1: oh my god, bye bye bye. Tesla is going to
Speaker 1: do a stock split, apples in the stock spit bye
Speaker 1: bye bye bye. Like it has to align with your
Speaker 1: own financial goals and fit into your life. If you
Speaker 1: have high interest credit cards that you're trying to pay off, right,
Speaker 1: makes more sense to take that spare money you have
Speaker 1: and pay off that credit card, then go buy the
Speaker 1: latest scryptocurrency that you have no idea how it works. Right.
Speaker 1: Once you're jet is gone, take that money invested and
Speaker 1: make sure you're investing it sensibly in accordance with your
Speaker 1: long term goals. Absolutely, thanks for that step by step
Speaker 1: list for us, Bola, and a lot of things that
Speaker 1: where we can start to research. If where you don't
Speaker 1: understand all the things that are coming out of your mouth,
Speaker 1: and then you know exactly where to start in your research. Yes,
Speaker 1: and I know that we've talked a lot about making
Speaker 1: this personal and identifying what works for us. I am curious, however,
Speaker 1: if you'd be willing to tell us, Bola, what are
Speaker 1: your favorite fund portfolios? So I invest with Fidelity. That's
Speaker 1: where I have primarily most of my investments. I've set
Speaker 1: up investing accounts for my children, but I use Fidelity
Speaker 1: and they hold my retirement and non retirement accounts, and
Speaker 1: within them, I invest in index funds. So I like
Speaker 1: total market index funds, which are index funds that basically
Speaker 1: aggregate the broad stock market. I have money in international
Speaker 1: funds outside of the US. I have money in bonds.
Speaker 1: I also have money in more niche funds like healthcare
Speaker 1: and technology. And also one thing I'm very keen on
Speaker 1: is just like, what is the word ethical responsible farming? Yes, yes,
Speaker 1: so I have some farmland food production funds that aligned
Speaker 1: with that um and also property and development funds and
Speaker 1: align and that. So I primarily invest in index funds.
Speaker 1: I do have certain individual stocks, and then my kids,
Speaker 1: I'm teaching them, they're seven years old, I'm teaching them
Speaker 1: about investing. So we're investing in individual stocks with them
Speaker 1: to teach them how the stock market works. Like you know,
Speaker 1: you don't always have to buy something at costco you
Speaker 1: can also own part of the company that we go
Speaker 1: to buy something at all the time. Or you don't
Speaker 1: always have to buy a new barbie instead we can
Speaker 1: buy stock and Mattel. You know, we don't always have
Speaker 1: to buy the toys. We can buy something in Scholastic,
Speaker 1: for example. So I'm teaching them the concept of ownership
Speaker 1: and just being able to tie the way they consume
Speaker 1: to what alternatives can we spend this five dollars just
Speaker 1: ten dollars from Grandma, from Auntie. That is not about
Speaker 1: acquiring a thing, but instead building an asset. That's what
Speaker 1: I'm trying to teach them right now. How empowering to
Speaker 1: expand the mind larger not just this thing, this toy,
Speaker 1: but you can actually go bigger than that. You can
Speaker 1: own part of that company. That's my mind is a
Speaker 1: little bit right now to think that you're saying your
Speaker 1: rols are beginning to grasp this concept, and I like
Speaker 1: confusion there? When can I start teaching kai this? Like
Speaker 1: should I wait till least like three or four? Because
Speaker 1: I teach Yeah, that's a great age in small ways.
Speaker 1: I mean. Now, so my kids they love dunkin Donuts,
Speaker 1: so we have stock in Dunkin Donuts. And my daughter
Speaker 1: has this idea that when she graduates from college, she's
Speaker 1: going to get a job at our local dunka Donuts
Speaker 1: are like, well, that's not kind of how it works.
Speaker 1: But she's like, no, but I'm an owner. I need
Speaker 1: to work at my store. I'm gonna get a job.
Speaker 1: So I have a girl who's going to collegical work.
Speaker 1: Don't get there, don't get there. But I also like
Speaker 1: about what you're saying, Bola. It excites me that as
Speaker 1: we learn more and as we get more involved and
Speaker 1: personally invested in our financial investments, we can start to
Speaker 1: look for ways that align with our own personal passions, interests, values, morals, ethics,
Speaker 1: that it doesn't just have to stop at I gotta
Speaker 1: four O long K, but we can go even deeper
Speaker 1: and really put our money where our mouth is, our
Speaker 1: money where our ethics and values are. That there's so
Speaker 1: much more to be grasped here. That is very exciting. Yeah,
Speaker 1: I was super interested to hear what you would say,
Speaker 1: like just for like portfolio types, because we started out
Speaker 1: we just had like in the total stock market and
Speaker 1: ten percent in bonds and that was that was good
Speaker 1: to start out, but then we didn't want to stay there,
Speaker 1: so like you, we started we added the international funds
Speaker 1: when we rebalanced for the first time ever, that's when
Speaker 1: we added our third fund. But now we do have
Speaker 1: some in the E S I funds and some healthcare,
Speaker 1: and that's kind of where it's very simple, super simple,
Speaker 1: and it feels safe because it's it's indexes. So I
Speaker 1: would say that, you know, so a couple of things
Speaker 1: for a new beginner. When you're investing in your I
Speaker 1: RA or in your four one key, you know, you
Speaker 1: can shift these investments around as you please because you're
Speaker 1: not withdrawing the money. But if you are making investment
Speaker 1: changes in a regular brokers account that you set up,
Speaker 1: you want to be mindful as to how often you're
Speaker 1: doing them because there can be tax implications. So a
Speaker 1: typical rule of them is that you don't want to
Speaker 1: rebalance your accounts too often once a year if you
Speaker 1: need to, like if they're falling out of alignment with
Speaker 1: how much you want to have in this index fund
Speaker 1: versus this index funds in the national versus U S stock.
Speaker 1: You know, maybe you have too much in TESLA versus
Speaker 1: total stock. You know, you want to be mindfless to
Speaker 1: how often you're making these trades in a regular brokerage
Speaker 1: because of tax implications, and just keeping that in mind
Speaker 1: and the second thing I was gonna say, You know,
Speaker 1: for a beginner investor, it's okay to start out with
Speaker 1: one fund, a total market index fund, or an index
Speaker 1: one that mimics SMP five. But you may decide, Okay,
Speaker 1: I want to do more, I want to invest internationally,
Speaker 1: I want to have some bonds, right, So you can't
Speaker 1: start to determine what your distribution is. One thing that
Speaker 1: I'm very mindful is, especially as you start to get
Speaker 1: closer to your timeline or you know, depending on your
Speaker 1: risk tolerance, is capital preservation. And that means trying to
Speaker 1: keep the value of your investment so you don't lose
Speaker 1: too much of what you've invested if there's like a
Speaker 1: severe economic downturn, if there is a depression, if you're
Speaker 1: getting close to your timelines. Right. So, for example, in
Speaker 1: the two thousand and eight recession, a lot of people
Speaker 1: who were closer to retirement how to delay or defer
Speaker 1: their retirement plans because they're investments lost so much value
Speaker 1: they weren't able to take out what they needed to
Speaker 1: take out annually to support the timeline of retirement. So
Speaker 1: retirement is on average about twenty to twenty five years.
Speaker 1: That is a long time, right, and so you want
Speaker 1: to make sure your investments can support you. I'm not
Speaker 1: super high risk, and you know, I think we definitely
Speaker 1: have to recognize the times that we live in were
Speaker 1: in a pandemic where the government has tried to put
Speaker 1: in place and continues to put in place all these
Speaker 1: different programs to kind of help sustain the economy, the
Speaker 1: ppe loans, the stimulus check stood at loan deferrals, mortgage forbearance,
Speaker 1: all these different things. And once we really step into
Speaker 1: that true recovery, all these programs are going to go
Speaker 1: away because they're not sustainable long term, which means we
Speaker 1: may see I'm almost certain that we will see the
Speaker 1: ripple effect in the economy and in the stock market.
Speaker 1: So you want to be thinking about, okay, you know,
Speaker 1: what is my risk? What is my portfolio risk looking
Speaker 1: like right now? Do I need to become more conservative?
Speaker 1: And it is a great time for me to become
Speaker 1: more understanding your risk is really important so that you
Speaker 1: can plan out how you want to preserve your capital.
Speaker 1: What percentage of your money is non negotiable when it
Speaker 1: comes to risk. What percentage of your money you're okay
Speaker 1: taking higher risks? Was depending on how you want to invest.
Speaker 1: But those are all things you want to keep in mind.
Speaker 1: And also keep in mind that if you see big
Speaker 1: declines in the stock market and you have a long
Speaker 1: term horizon ahead of you, you're not retiring anytime soon.
Speaker 1: This is a great time to take advantage of that
Speaker 1: low point to buy more. But this is not you
Speaker 1: timing the market. This is you opening up your mind
Speaker 1: to pursue opportunities as they present themselves to you. Well
Speaker 1: said Bola, speaking of taking advantage of the prime time
Speaker 1: and lowering risks and wise words. It's time for that's right,
Speaker 1: it's time for the best minute of your entire week.
Speaker 1: Maybe a baby was born and his name is William.
Speaker 1: Maybe you've paid off your mortgage, Maybe your car died
Speaker 1: and you're happy to not have to pay that bill anymore.
Speaker 1: That's bills, Buffalo Bills, Bill Clinton. This is the bill
Speaker 1: of the week. Every week we invite our listeners for
Speaker 1: our guests to come on and share their favorite bill
Speaker 1: with us. Um and I know you've got one, so
Speaker 1: will you share it with us? Yes, it's that incredible
Speaker 1: bill that just interrupted our podcast recording where I had
Speaker 1: to pay one thousand, five and forty dollars to fix
Speaker 1: my HVAC heating system so we don't die of cold
Speaker 1: in the middle of winter. And mind you, this was
Speaker 1: after the warranty came in to playing favorite bill of
Speaker 1: the week the week I yeah, I mean hopefully we
Speaker 1: have good editors so the listener is not necessarily going
Speaker 1: to know that you had to step out in the
Speaker 1: middle of this podcast. But yes, this is a very
Speaker 1: recent bill that you had to pay it. It may yeah,
Speaker 1: maybe the first time we've ever had a bill actively
Speaker 1: come during a podcast recording. So this is history so important.
Speaker 1: You need that heat in the north, I know, New Jersey.
Speaker 1: It makes me cold thinking about it, like I get
Speaker 1: cold in Florida, and it's my heart went out to you.
Speaker 1: I'm looking at it as an investment in my warmth
Speaker 1: and if you are warm, then you will feel more
Speaker 1: motivated and energized to do your work. And thanks thank
Speaker 1: goodness Interest for your wisdom and personal finance that allows
Speaker 1: you to pay that one bill. I know, well, it
Speaker 1: doesn't get easy. Even when you have the money for it,
Speaker 1: it's still still still hurts. I mean I could have
Speaker 1: just spent that money on, you know, a pair of shoes,
Speaker 1: and hand bad. You could have could have just warn't
Speaker 1: warn't those to keep you warm. Put your hands in
Speaker 1: the handbag and your feet and the shoes. I don't
Speaker 1: know how often you watch YouTube, but there's one of these,
Speaker 1: um I forget what video it was, but there was
Speaker 1: this woman who you know her most expensive purchase of
Speaker 1: it was like one of these annual salary how do
Speaker 1: I spend my money? And she had bought a seventy
Speaker 1: dollar for a blanket, and I was like, you know,
Speaker 1: I did a bought it for a blanket. You know
Speaker 1: it's okaying for the eating right. We're all about maybe
Speaker 1: spending a little more upfront to get a better lifetime
Speaker 1: value and save over time. So you just have to
Speaker 1: determine the way some people spend their money. What gives
Speaker 1: you joy? Yeah, what gives you joy? Well? Thanks Bola,
Speaker 1: And if you all listening, want to submit your bill
Speaker 1: of the week, whether it's a bill buying a blanket
Speaker 1: hopefully not. That's the only bill I want to hear.
Speaker 1: Paying your recent bills, lowering a bill, anything related to bill.
Speaker 1: Visit for Cool Friends podcast dot com, slash bill. Leave
Speaker 1: us your bill, We'll listen to it and probably play
Speaker 1: it on the podcast. Let's be real, sure will play
Speaker 1: it before listening to it. That's how we do it.
Speaker 1: And now it's time for the Lightning Round. All right,
Speaker 1: yeah you should be. Just because we yell doesn't mean
Speaker 1: it's scary. Jill yells on that one. It's it's kind
Speaker 1: of like the child that you had accidentally. Um, you
Speaker 1: love it, you still love it as much as you
Speaker 1: but it's just like you're a little reluctant. There's always
Speaker 1: this tinge of like I'm your a lot of bitch
Speaker 1: five years. No, the Lightning Round is my reluctant child.
Speaker 1: Got it? Got it? Jill, You're my first. You are
Speaker 1: Um yea, you made me a podcaster. We are going
Speaker 1: to talk about our biggest investing mistakes that we want
Speaker 1: other people to learn from. So as our guest below,
Speaker 1: we would invite you to give us yours first. Yes,
Speaker 1: my biggest investing mistake was my incredibly large and amazing
Speaker 1: Chanel handbag collection. Whoa, I do. I love Chanelle chance
Speaker 1: that the perfume is my favorite, but I've never purchased
Speaker 1: a handbag. Yes, um, yes, so I have a lot
Speaker 1: of them and they are very expensive. They were at
Speaker 1: a point where I'd saved all this money. I'm like,
Speaker 1: I just ever bag, but you know, one was just
Speaker 1: not enough, and I bought two that I bought three,
Speaker 1: and then it got down this slippery slope and I
Speaker 1: was wasting to buy money on these handbags when I
Speaker 1: could have been investing the money instead. And one day
Speaker 1: I looked at my closet and it just looked like
Speaker 1: mold stacks of money turning to mold in the closet.
Speaker 1: And my husband's like, these bags are hideous anyway, what
Speaker 1: a waste of your money. He was my boyfriend at
Speaker 1: the time, And I was like, you know what, they've
Speaker 1: got to go. So I sold them, and you know,
Speaker 1: given the crazy price increases with designer brands, I was
Speaker 1: able to recoup a lot of money. But when I
Speaker 1: decided to go onto an online calculator and calculate how
Speaker 1: much money myself I would have made if I had
Speaker 1: not bought the super bag but instead invested, I almost
Speaker 1: jumped off a bridge. Listen, So that's why, you know,
Speaker 1: I mean, you live and you learn, but that's a
Speaker 1: big mistake. You know, I still buy handbags, but not
Speaker 1: nearly in moderation now, and I'm I'm more focused on
Speaker 1: long term building. But that was just one of mine.
Speaker 1: You know, twentysomethings flurges excessiveness. Um yeah, big mistakes. Wow,
Speaker 1: good for you for recognizing it and being able to
Speaker 1: reframe that mold. I mean, how what a word picture
Speaker 1: that the bags that you thought were beautiful at one point,
Speaker 1: with your new knowledge and research and understanding, makes those
Speaker 1: bags nearly look repulsive to you. They were beautiful, but
Speaker 1: I was so for anyone who loves designer bags, no shade,
Speaker 1: I love designer bags. Whatever your thing is, your whatever
Speaker 1: your kryptonite is, your vice is, but you have to
Speaker 1: be getting your value out of this thing. And I
Speaker 1: was only really using the first one I ever bought.
Speaker 1: I was hardly barely using the others, which is why
Speaker 1: I was able to sell them and get so much
Speaker 1: money for them. Because they were practically brand new, it
Speaker 1: didn't make sense. The cost for wear was dumb. It's
Speaker 1: like buy a Lamborghini and keeping it in my garage
Speaker 1: for what everyone that's what we do because it was
Speaker 1: so expensive, and it's so that's what I do with
Speaker 1: my raspberries. To me, raspberries are luxury and they are
Speaker 1: more expensive than any other berry and then they just
Speaker 1: sit in my fridge and then they get moldy because
Speaker 1: I'm like, oh, they're so they're so tasty and they're
Speaker 1: so expensive, so I need to save for them, and
Speaker 1: then I just can't maldy raspberry waste of money? Can
Speaker 1: you tell? Can you tell? Rulled three fifty for a
Speaker 1: tiny thing of raspberries? It's money. This is like when
Speaker 1: we asked Chris Hogan, like, what would you do if
Speaker 1: you could you have unlimited money to spend on whatever
Speaker 1: you want? And Jill was like an indoor water future
Speaker 1: from Facebook Marketplace? What that cost? Like three d bucks?
Speaker 1: What is that though? And then Chris he called us
Speaker 1: out and he's like, you guys collectively do like you can't.
Speaker 1: You can't spend more than mine with the Aldi Wine
Speaker 1: Advent calendar, which is seventies so mine was worse. Um,
Speaker 1: but he's like, you just said, like unlimited money, and
Speaker 1: he's like some brand new Harley that would be his dream.
Speaker 1: So clearly we don't even need we don't even know
Speaker 1: what to do with money. We don't know what to
Speaker 1: do with money. That's we're learning. We're learning, Yeah, we're
Speaker 1: learning what real luxuriou is because beyond raspberries, O N
Speaker 1: what's yours? Okay? So mine happened actually last year, and
Speaker 1: it was so embarrassing because this is something that I
Speaker 1: tell people to do all the time, like an article
Speaker 1: in assignments personally is too. When you put your money
Speaker 1: into an ira A, you don't let it sit there.
Speaker 1: You actually have to buy the investments once you transfer
Speaker 1: the money, like manually, or if you're setting up an
Speaker 1: auto then you have to set up an auto purchase
Speaker 1: of index funds. And so I had a four oh
Speaker 1: one K that I rolled over to a traditional ira
Speaker 1: and it was right when I had Kai. So the
Speaker 1: whole process like I got it rolled over like right
Speaker 1: after I gave birth, and I for a whole year
Speaker 1: I forgot about it. And then one day was going
Speaker 1: in actually I think it was in March or something
Speaker 1: when the when we had a big dip, and I
Speaker 1: was like going in to be like, oh, okay, can
Speaker 1: I put a little extra in right now into which
Speaker 1: I noticed that my traditional ARRA had grown like point
Speaker 1: four percent or for you know, something really paltry, and
Speaker 1: I was like, no, I did it. I forgot to invest.
Speaker 1: It was just sitting in the brokerage account, and so
Speaker 1: that was my biggest and I actually did a video
Speaker 1: on it on YouTube, like just saying like, don't make
Speaker 1: my mistake, and somebody actually in the comments was like,
Speaker 1: oh my gosh, mine was in my brokerage. And so
Speaker 1: I saved somebody else from at least prolonging the mistake
Speaker 1: I made. So well, it sounds like you turned your
Speaker 1: failure into a success, and it sounds like this might
Speaker 1: have been a humble brack and I didn't know I
Speaker 1: lost there it was still your money. Yeahn't lose money.
Speaker 1: I mean I lost money that I could have been
Speaker 1: making over a year. Branded it was just a year.
Speaker 1: But sure, it's it's a good thing to know. It's
Speaker 1: one of those beginner mistakes. It was embarrassing because I'm
Speaker 1: not a beginner. I was. I am a professional personal
Speaker 1: finance writer. I was. I was. I was the retirement
Speaker 1: writer at the Penny Harder And so it's it's humbling.
Speaker 1: You weren't taking your own int I love you anyway, Jenna,
Speaker 1: Oh thank you. My biggest investing mistake is not doing
Speaker 1: it so uh, you know, not asking questions, letting my
Speaker 1: embarrassment and lack of understanding be a barrier to doing
Speaker 1: it that I want to learn from and I want
Speaker 1: other people to learn from. Even though you co host
Speaker 1: a personal finance pack, I do have a wrath I
Speaker 1: ra a. But I will say so, my husband and
Speaker 1: I have been independent contractors, self employed, and so where
Speaker 1: you typically have this four oh one K that's the
Speaker 1: beginner step, we haven't had that, and so that has
Speaker 1: been a big barrier. I'm learning more about what is
Speaker 1: available to us, and my husband and I do have
Speaker 1: a roth ira and there's more to learn and grow
Speaker 1: from there. But yeah, so there are more ways that
Speaker 1: we can understand what works best for us. And even
Speaker 1: if you don't have access to a four oh one K,
Speaker 1: there are other things out there that you can be
Speaker 1: investing in. But I think even that has been a
Speaker 1: barrier to me. I've been too embarrassed to ask. It's
Speaker 1: one of those things and I'm like, well, in my thirties,
Speaker 1: now I should know this. And then because I'm too
Speaker 1: embarrassed and I think I should know it already, it
Speaker 1: just like perpetuates me just living how I'm accustomed to
Speaker 1: living and thinking, well, hopefully I'll be okay. You know,
Speaker 1: sometimes when you ask people don't even have the resources
Speaker 1: to tell you. I remember talking to my old account
Speaker 1: about how to just save money on taxes because who
Speaker 1: wants to pay taxes? And they didn't really have much
Speaker 1: to help me in terms of resources, so they were fired.
Speaker 1: But I started doing my own research and you can
Speaker 1: definitely look into accept ira into a solo for one k.
Speaker 1: Those are great resources for entrepreneurs to save for retirement.
Speaker 1: It helps reduce your taxable income. You can save more
Speaker 1: a lot more than the traditional four one K or
Speaker 1: IRA limits like by far more. So definitely look into those.
Speaker 1: They are a pain to set up, but once you
Speaker 1: set them up, it totally works, and you can have
Speaker 1: a sep ira and a wrath ira and you can
Speaker 1: layer these things up as long as you you meet
Speaker 1: the overall bulk requirements that the i r S has set,
Speaker 1: So definitely look into those. If you guys are independent contractors. Yeah,
Speaker 1: thanks so much for coming on. This was a really
Speaker 1: helpful episode. I think it's going to answer a lot
Speaker 1: of people's questions that maybe they didn't even know to ask,
Speaker 1: and they're gonna drive away with much more investing knowledge.
Speaker 1: So where can people find more about you and what
Speaker 1: you offer? Yes, so I have a book on investing, yes,
Speaker 1: called Clever Girl Finance to learn how investing works, Grow
Speaker 1: Your Money. A great book if you're trying to learn
Speaker 1: about how investing works and you don't want to hear
Speaker 1: all that jargon and you want real life experiences from
Speaker 1: people who have made investing mistakes, including myself and some
Speaker 1: other incredible women, as well as key steps as to
Speaker 1: how to set up your investment accounts, what to invest in,
Speaker 1: understanding all the jargon and all that good stuff. And
Speaker 1: then you can find us at clever world Finance dot com.
Speaker 1: We have tons of content on the blog, free courses,
Speaker 1: a fun Instagram account. Just start Clever Girl Finance. Yeah,
Speaker 1: you have over forty courses for free. We have about yeah,
Speaker 1: about thirty six three courses completely free, no catches, to
Speaker 1: support our community and to help women, you know, to
Speaker 1: financial wellness. So get the book. It is literally a
Speaker 1: complete guide to the stock market and investing. It will
Speaker 1: be a great to have just as a reference, even
Speaker 1: if you don't read it through the whole way at first.
Speaker 1: But it's great, it's accessible, it's not boring, And head
Speaker 1: over to Clever Girl Finance dot com and check out
Speaker 1: everything that offers. So thank you so much for coming.
Speaker 1: Thank you for the opportunity to be here. This is
Speaker 1: so much fun. Yeah, thanks for coming. That was fantastic.
Speaker 1: That was a good interview. So much good stuff in there,
Speaker 1: I think, just a really good combination of tangible tips
Speaker 1: as well as encouragement. So I'm going to be coming
Speaker 1: back to this one myself, yes, and I will be
Speaker 1: coming back to her book, like I'm talking a lot
Speaker 1: about it, but that's because I haven't seen a book
Speaker 1: like this that is about investing about the stock market
Speaker 1: that's also accessible for people who are not super into
Speaker 1: the jargon. So that's why I think besides Simple Path
Speaker 1: To Wealth was the one that I love and typically recommend,
Speaker 1: and now this is going to be the other one
Speaker 1: because I feel like this is even more readable than
Speaker 1: Simple Path to although both of them are great, perfect
Speaker 1: So thank you for listening out there. We want to
Speaker 1: thank you for your kind reviews. They are kind of
Speaker 1: the lifeblood of the show. They help people find it
Speaker 1: and decide if it is worth their time. Um, and
Speaker 1: that in turn can really help, you know, change people's
Speaker 1: lives if they take something away from the show and
Speaker 1: and implement it. So thank you like this one from Rebecca.
Speaker 1: It's just titled love and it happens to be five stars.
Speaker 1: She says as an Aussie, I feel that a lot
Speaker 1: of American money podcasts are hard to relate to, but
Speaker 1: I enjoy every single second of Frugal Friend. I find
Speaker 1: myself listening to the same episode many times over because
Speaker 1: there are so many good points. Since I started listening
Speaker 1: to this podcast, my financial situation has completely changed. You
Speaker 1: have both inspired me to make smarter choices with my
Speaker 1: money and given excellent tips. Keep doing what you're doing.
Speaker 1: Thank you, Rebecca. That's our goal. That's amazing. I'm really
Speaker 1: glad to hear that it's helpful for people even in
Speaker 1: other countries, and be able to make the tips relatable
Speaker 1: or even inspire some creativity, even if all the things
Speaker 1: aren't exactly translatable. I think, yeah, just opening up some
Speaker 1: mindset even to what else is out there and how
Speaker 1: can I create something similar? So so so glad. Thanks
Speaker 1: for your review. Becca. We also want to thank our
Speaker 1: friends who share these episodes on social media. So when
Speaker 1: you share the latest episode and tag us on Facebook
Speaker 1: or Instagram, we're adding you to our monthly drawing for
Speaker 1: every five tags and reviews we get. Each month, we
Speaker 1: give away a copy of the Frugal Friends workbook. Who
Speaker 1: so keep leaving us reviews on iTunes or Stitcher. Send
Speaker 1: the screenshot to Frugal Friends podcast at gmail dot com
Speaker 1: before you submit it, and don't forget to tag us
Speaker 1: on social. Frugal Friends podcast See you next week. Frugal
Speaker 1: Friends is produced by Eric Sirian. So tell me about
Speaker 1: the true confessions I realized recently, Well I've realized it
Speaker 1: a lot, but I think I gave it a full
Speaker 1: thought a couple of weeks ago. I do not understand
Speaker 1: the different cuts of meat or what to do with them,
Speaker 1: and I've been wanting to ask me in general or
Speaker 1: particular meets meets. I guess maybe I'm primarily talking about
Speaker 1: at meat, maybe just all meets. I mean, I understand
Speaker 1: the difference between like cork, poultry and beef. I get
Speaker 1: that different animals, but all the different types of packages
Speaker 1: of meats, like what do you do with it? And
Speaker 1: then I was thinking about this and then my sister
Speaker 1: just mentioned it to me recently, just like I don't
Speaker 1: know what all the different meets me just could just
Speaker 1: be like a family problem that could just be that
Speaker 1: her and I growing up. I don't know, we just
Speaker 1: didn't understand it. But I realized, Holy smokes, I think
Speaker 1: I'm embarrassed that I don't know what all of these means.
Speaker 1: So I just stick to what I know. I avoid
Speaker 1: conversation about meat. Thankfully, it doesn't come up all that often. Right,
Speaker 1: you're gonna talk about me because I think I also
Speaker 1: avoid I don't know recipes. I just feel like there's
Speaker 1: this whole world out there. I just don't understand it.
Speaker 1: I've learned to live life without it. But then I realized,
Speaker 1: I think I need to express this lack of knowledge,
Speaker 1: get your insight and input. Maybe I'm the only one
Speaker 1: out there, but hopefully it creates a less shame for
Speaker 1: others who have things that they don't understand. I don't know, Jen,
Speaker 1: but I don't know what the different meats I mean,
Speaker 1: the meaning I have only eaten meat for a total
Speaker 1: of two years of my adult life, and you feel
Speaker 1: like you you have a full grasp of it. Oh no,
Speaker 1: I'm saying, like I'm not the person you should ask,
Speaker 1: like I went into a meat market. That's probably my
Speaker 1: first problem. I've never I haven't been to a meat
Speaker 1: never been and took me once. It looks so gourmet.
Speaker 1: But then I'm like, I have no idea what to
Speaker 1: do with that thing. And then they've got all these
Speaker 1: different titles to it. Also, I know that I like steak,
Speaker 1: and then I go to purchase steak and I'm just like,
Speaker 1: I don't know. I don't know either bone. I mean,
Speaker 1: I do know what a filet is. I do know
Speaker 1: that I like that. But then but then you've got
Speaker 1: all this chuck gross and this and that, and I'm
Speaker 1: just throwing out names. I'm just like, well, would you
Speaker 1: what would you do with that versus this other thing.
Speaker 1: I'm sure I'm going to get an onslaught of emails
Speaker 1: from now until eternity, which I do welcome. If you've
Speaker 1: got an infographic on how to use meat and what
Speaker 1: they mean, I have no clue. I've literally only been
Speaker 1: eating and cooking with meat for two years. But you
Speaker 1: know what, my lack of knowledge has not kept me
Speaker 1: from eating meat, but my lack of knowledge about the
Speaker 1: stock market has kept me out of the stock market.
Speaker 1: So you know, go and explain that one mm hmm, Well,
Speaker 1: meat is tastier than giving away money, you know. Instant gratification.
Speaker 1: You know, when you talk about my money making babies,
Speaker 1: then I am kind of sure of me with just
Speaker 1: lots of money, um and mostly I mean all dollar
Speaker 1: bills because it's not that much. But and then it's
Speaker 1: a family portrait. I love this idea money. I could
Speaker 1: see a few problems with that, but let's do it anyway. Yeah,