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Ep5: HighFivingDollars with Sarah Li Cain




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Episode #5: HighFivingDollars with Sarah Li Cain

Sarah Li Cain PhotoI had the wonderful opportunity to talk with Sarah Li Cain from HighFivingDollars.com

I love how she explains herself as a “Money Storyteller”. Storytelling runs in my blood with my mother starting the Utah Liars Contest 10 years ago, and me spending a lot of time volunteering for the Utah Timpanogas Storytelling Festival.

Hear Sarah’s story about break ups and $9000 debt, and learn some ways to be happy with your finances while working on improving your situation. Eventually, Sarah even paid for a car in cash!

Highlights

  • Sarah’s holistic approach to talking about money
  • Sarah’s adventure to Australia, which yielded a lot of money education including a pretty messy break up.
  • Dealing with self-shame about debt (and life!) in a positive way
  • Rebuilding Financial Independence after a rough patch
  • How relationships that are bad aren’t solved by money
  • How emotions affect our finances: Ego
  • How shame and guilt about bad money choices can be positive
  • About Sarah’s book “The Authentic Budget” – using your personality and values to manage your money your way.
  • A Personal Visions’ role in controlling your finances
  • Why should I budget?
  • Banishing Financial ‘Frenemies’: It’s as simple as saying “No”
  • The role of boundaries and setting expectations with others about your money

Money Maxim

Sarah Li Cain

  • Money is neutral. It’s what we do with it that matters.

Action Items

Links and Contact info from the show

HighFivingDollars.com

Ask Sarah Anything and get a Youtube answer!

Get on Sarah’s VIP list for info about her books and new ones that come out!

Her brand-new book on Amazon!

 

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Ep4: Saving Success When Young with Justin Taylor



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Episode 4: Saving and Investing while young with Justin Taylor

Justin TaylorToday I talked Saving-Sherpa, Justin Taylor!

Listen to Justin talk about military life, a frugal lifestyle and how he now saves 70% of his income! He served in the Air Force and now is an engineer for the military. Listen about how he walked into the military for school, and ended up being financially independent from a young age, from his dad’s offer to raise a cow if Justin purchased it for profit, to being paid to go to school!

Justin’s budget is in-depth and powerful for taking control of your money and spending/saving.

Highlights

  • Growing up in a low-income area and how Justin learned frugality
  • How financial concepts like compound interest effected Justin’s money habits
  • How financial education in High School could dramatically help low-income areas
  • The role of cheap robo advisers in getting younger people started in investing
  • Why investing any amount on any day in the last 85 years would yield profit
  • The power of an in-depth budget
  • How to practice with stock trading (MarketWatch.com)
  • Don’t buy a huge house and fancy car to celebrate your first job after graduating
  • The average savings for someone that’s about to retire
  • The power of set it and forget it. (Dollar Cost Averaging)
  • How saving and having a good life aren’t mutually exclusive
  • What is a Sherpa?
  • Make More Money Does Not = Spend More Money (No Lifestyle Creep!)
  • Extracting real value from every dollar you spend.

Money Maxim

Saving Sherpa Quote

Financial and Physical Health are similar. Show me where your money is going, Show me where your caloric intake is. Most people can’t tell you either.  If you take the time to see where the money is going, you can plug the holes in your financial boat.

Action Items

  • It may not be reasonable to start investing now as a college kid, but if you can, do it! (I opened my first Betterment account March 23rd, 2017! You can too! If you have questions reach out to me on Facebook or on my question page and I’d love to help)
  • If you can’t invest now because of being in school still, create a game plan for when you’ll start investing and how
  • Track your income and outflow of money. If you know where every penny came and went, you’re empowered.

 

Pro Action Items

Download Saving-Sherpa excel spreadsheet to track all your income and expenses and track it so you know where your money goes.

Contact Info

www.Saving-Sherpa.com

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Ep3: Get Your Finances Together – Erin Lowry

Ep3: Get Your Finances Together – Erin Lowry



Erin LowryToday I talked with Erin Lowry, Author of Broke Millennial Blog. Erin shares the money lessons of her childhood. Thinking that it was normal, Erin went into the world and realized how much of a stress money was for those around her. Broke Millennial came about as a solution.

Erin also has a brand new book that officially releases next week! Broke Millennial: Stop Scrapping By And Get Your Financial Life Together!

Highlights

  • Erin’s money story
  • Living in NYC for a year on $23,000
  • Where Broke Millennial blog came from
  • The Stress of Money in Relationships
  • What’s inside “Stop Scrapping By And Get Your Financial Life Together”?
  • Seeing what you value, based on your spending
  • Taco Tuesdays are important (Tangent haha)
  • Ways parents can teach children money skills through proactive engagement and setting expectations
  • Proper Goal Setting for Finances
  • Accountability Partners and Methods
  • Behavioural Finance: Multi-Banking benefits
  • Common Millennial Money Mistakes
  • The power of habit in saving and investing

Money Maxim

Erin Lowry - BrokeMillennial
“What You Spend Your Money On Shows What You Actually Value, Not What You Think You Value” – Erin

Action Items

Read Erin’s new book! Here’s a link  (special bonus chapter if you buy it before May 2nd!)

Open a second bank account and put savings into that, so you can’t see it! (makes it harder to spend your savings)

Check your bank/credit card statements and see what you truly value. What does your spending say about what you value?

Parents: talk with your children about money and how it works! Teach them principles of finance so they can have healthy relationships with their money

Parents: give your children some skin in the game. If they want to buy a new game, or get on soccer team, make them pay for part of it. Give them ways to make money, or guide them to achieve, but hold them responsible.

Couples: Be open with your spouse about all your finances. Money Fidelity is important to have trust in each other.

Start saving now! If you’re a college kid, start with $5 dollars each month, because of the power of habit.

Contact and Links from Show

Erin’s new book or buy it at barnes and noble or you can see it on her website

Send proof of purchase to [email protected] for a free bonus chapter (purchase before May 2nd!) amazon or Barnes and Noble

BrokeMillennial.com

See Erin online at Facebook Twitter
Check out this episode!

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Ep2: Budgets with AskAllea

Episode #2: Budgets with AskAllea



AskAlleaToday I talk with Allea about Budgeting and some tips for creating and acting upon good budgets

Allea is a huge fan of budgeting, minimalism, and works as a financial coach! Yes its Allea  (pronounced like Allie or Aly) She works with a lot of millennials to make proactive plans for right when graduating college and moving into their first jobs. Allea has the skill from helping so many of her peers already create action plans for finances right after school.

She thought, “How can I help people transition into financial adulthood” and AskAllea was born. It was made to reduce and make finances simple in a world of heavy duty information that is hard to discern. Let alone garbage and untrue information being out there in the internets. Her proven process that’s been trial driven on friends and colleagues has become a powerful process for empowering those who Allea works with to be in control of their money so they can put it towards what they want.

It seems that Allea and I both got in Car Accidents this January. We both have gone through learning curves in budgeting and both certainly have had issues of our own and made mistakes. No-ones perfect, but we can all at least be adults and learn how to handle money well. So enjoy!

Highlights:

  • How Allea organized a friend’s budget over 3 intense hours of work, how you can too!
  • Why a budget can empower you to spend money how you want. Even if it’s a $200 Taylor Swift concert ticket
  • Why budgeting for the responsible and boring things allows you to not be stressed when spending the other money on what you want your money to go on
  • What is Budgeting “gravy” and how to stay healthy in budgets
  • The importance of Emergency Funds
  • The emotional aspect of money and how to fix those nerves
  • The importance of saving for a rainy day now (automated savings)
  • Why everyone needs a coach or financial accountability partner like AskAllea or FinancialGinger
  • The role of emotions in bad financial decisions
  • How you can pay off debt, and still live your life!
  • Allea’s biggest financial success: (No spoilers! listen at 15:00)
  • Why talking about money is important for kids and couples
  • Average debts for student loans and credit cards are astounding!
  • Why everyone needs to learn skills in finance
  • The snowflake method of paying off debt

Money Maxim

Allea Grummert Maxim

“Living Within Your Means Doesn’t Have To Suck” – Allea

Action Items:

Organize your finances into a budget. (you can work with Allea or Me if you like)

Have an accountability partner.

Build an Emergency Fund, start with building up to 1 full paycheck, make a goal and plan to get to 3 months of spending.

Know it takes time to improve, and it’s okay to live life and have fun while working on debt.

It’s okay to say “I don’t know” and to get a coach to help.

Don’t call Allea “Ah-lee-uh” like Jacob did.

 

—————–

If you want to work with Allea you can visit her at AskAllea.com and visit her coaching page! She has a new 17 page guide the “Real Life Money Guide and explanations of what they are, with some sass and fun. You can also ask her your own question that she will answer!

Find her on Twitter at AskAllea and Facebook at AskAllea and Pinterest

Get the starter homework and then sit down to make a beautiful organized budget.
Check out this episode!

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Ep1:Health Savings Accounts with Jackie Koski

Episode #1: Health Savings Accounts with Jackie Koski



Dream of LiteracyToday I talked with MoneyLetters2.com head Jackie Koski about Health Savings Accounts (HSA’s)! She wrote a wonderful book called Money Letters to my daughter. Why? Because most schools in the US don’t require students to take personal finance courses. As she wrote, many schools and groups became interested in what she taught her daughter. She ended up giving lectures in high schools and in the community of South Carolina. Her wisdom and keen eye for detail in finance speaks for itself when you listen to her. Listen for her story in collecting $2 bills, and also the power of Health Savings Accounts!

Highlights

Most schools don’t require any form of finance! It’s important to get some sort of Financial Literacy in during school if you can!
Jackie’s $2 bill collection, over 1600 $2 bills!
What an HSA account is and how It’s used
HSA vs FSA Triple Tax Benefits of HSA accounts. (Now, Growing, and Later)
How HSA’s can help us prepare for common expenses in retirement
Jackie shares how much her accounts have grown
Things not to with an HSA account
HSA account hacks
How to write off HSA accounts from taxes
Don’t be scared of health care and big acronyms
HSA’s are relatively new, only been around about 10 years
Visiting doctors and labelling doctors’ visits for proper HSA coverage

Money Maxim

Maxim 27 - Jackie Koski

  • We measure everything else, but we don’t measure how much we know about money, something that everyone will deal with. Learn something new each day.

Action Items

  • Open an HSA account! (which requires a Qualified High Deductible health insurance, it may not be right for everyone!)
  • Read this article from Mad Fientest about HSA’s
  • Keep a file system of all medical receipts that you incur after opening an HSA account. So, you can pay yourself from your HSA account later if needed. (or don’t and let that money grow)
  • Whenever possible ask medical professionals to label your visits as “routine visits”
  • Share this episode with someone who could benefit from an HSA account.

Contact Info

Jackie Koski works with groups and schools to increase financial literacy in a fun enjoyable yet simple matter. She wrote a book that can be found here all about how she taught her daughter about money. She is enthusiastic and extremely knowledgeable.

www.Moneyletters2.com is her website to connect with her!

Facebook LinkedIn Twitter @MoneyLetters2

Correction: When speaking of Vanguard I spoke incorrectly, Their math ends up being 18% 401(k) not 28%. Pardon!
Check out this episode!

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The Basic Financial Plan

Basic Plan

A frequent question that people ask their one financial friend all the time is, “What should I expect when…” and the next bit is usually the part about getting a new job, or paying for a house, or what a good interest rate looks like for a car. Sometimes these questions are about saving for retirement, what a realistic return is for their 401(k), and how they should prepare to retire. Occasionally the question is “why is it important that…” or “Do I really need…” of course the answer is usually yes.

“Yes if you save younger it’ll make it so you can retire easier”, “Yes, Life Insurance is beneficial for most people who have dependents or debt like a mortgage”. The fact that you’re asking, is a sign you have a general idea of what you should be doing.

I figured I’d try to compile a bunch of basic principles that will get any individual to retirement in a relatively save and aware way. The purpose here is to help you set your expectations of what you need to do and understand in order to have enough money to one day be able to say, “You know what? I don’t need a job anymore, and I can live the rest of my life off of my own money.”

 

There are three basic parts of our financial life: Saving, Investing, and Diversifying.

First: Saving

Everyone hears a ton about saving, so I’m not going to hash why you should save any more. Just a few stats. The average person that should retire, (I.e. is 65+ years of age), only has about $80,000 according to Dr. Craig Israeleson of UVU. The Motley Fool recently found numbers could be potentially as high as $148,000 for those between 65 and 75.

Why does that matter to you as a 20-30 year-old? Here’s why, those people that can’t retire, they are holding your jobs. Once they retire, everyone down the line can start moving up.

The amount you save will directly relate to how much money you have for retirement. Many experts recommend saving 10% of your income, Dr. Craig Israelson, who performs research and analysis on portfolio theory, and investment returns suggested in a lecture at UVU that many millennials should adopt a rate of 15% of savings for retirement. Once you graduate and get that first job, immediately start saving 15% of every dollar you earn for retirement, and according to the experts, you’ll be very much secure for retirement.

Second: Investing

Being a Millionaire has nothing to do with income, but everything to do with Net Worth. Think about how time affects the value of money. Its been exhaustively said, so you can just google it, but the difference between the same $5,000 invested at the age of 25 and invested at 50 when you’re 65 is dramatic and exponential.

Consider a Crockpot. Have you ever gone to church on a beautiful Sunday morning, come back in the afternoon, and decided, “I want a nice roast and potatoes for dinner” then set the crock pot at 5pm for dinner at 6?

If you have, you should seriously reconsider your dining experiences. Waiting until “Later” to save if you’re not in school, is the same as setting the crock pot a-cookin’ after church, instead of the morning of, so it can simmer and soak in goodness all day.

Investing: I’m sold, but WHERE?

This is where everyone says, “Jacob, you’ve sold me on this. Where do I put my money?”

Betterment is an amazing place to invest your money. Acorns isn’t half bad either. Wealthfront is a newer online investment site that utilizes algorithms, often called a robo-advisor(LINK TO 7 TYPES OF INVESTMENT ADVISORS), and your risk to make your money grow too, and its free for portfolios smaller than $15,000. It’s also not hard to go directly through a major company like Schwab, Fidelity, or VanGuard.

Part of your portfolio (your money for retirement), will be in your 401(k) at work. You’d better be matching that sucker to 100% of the matching contribution, because if not, that’s free money you’re missing out on. Make sure the limit of up to $5,500 a year beyond your 401(k) is going into an IRA with whatever advisor you’re using, because that can create some tax savings. Then, any above that can go into either a personal brokerage account through your investing institution or other more complex retirement accounts you can work with a professional on. (The secret is to get started).

Third: Diversify

Here is where I’m going to teach you some amazing truths about investing. If you’re invested in 10 different things and they are all going up by exactly 6% a year. There is some serious issues. That means all of your investments are perfectly correlated, which means if they drop one year by 40% (cough 2008) then they are all dropping. A good portfolio has uncorrelated assets. Meaning that at least part of the time, when one is going up, another will be going down. Some parts of the global economy will be having rough weeks or days or years, while others have awesome times, then 5 years down the road it’ll switch. Because the market is unpredictable, meaning that it’s impossible to know exactly what will happen, a diversified portfolio that has a little bit of money in all types of markets is proven to generally outperform any one specific investment type.

Three Analogies: Baseball, Salsa, and Cereal

Imagine that stocks are like baseball players. If one stock bats at .365 and another bats at .127 but only hits home runs, you want a little bit on both players! According to portfolio theory, the more batters you have, the higher your average becomes, while reducing variance. Stocks bat at about .700 and bonds bat at about .960. Enough to be in the hall of fame for any baseball player in the history of ever.

So, what does this mean? It means you should put money in stocks, put some in bonds, put some in Mutual Funds that use active aggressive algorithms and research to try to find opportune moments to buy and sell stocks to make you money, use some passive ETFS that just automatically balance 50 or 100 stocks in a particular category like large healthcare companies, or medium growth companies that pay dividends.

Imagine this investing like making Salsa. If you invest in the S&P 500, sure, you have some diversity, but you just purchased 500 different types of tomatoes. Of course, you can’t invest in the S&P500 but you can invest in ETFs and mutual funds that invest in it. So, if you invest in some large cap stocks for your tomatoes, then you buy some bonds for your onions, purchase some commodities for your cilantro, and so on and so forth, you’re going to be making a good salsa.

In fact, experts have shown that the recipe (allocation) of your salsa (investments) accounts for 94% of the deliciousness (returns) in them. Meanwhile, the ingredients (actual funds and investments) only account for less than 6% of the taste (return). Using a great recipe for salsa makes better salsa then just getting good ingredients, but having an awful recipe. If you have perfect ingredients, but the wrong recipe? You’re not even making salsa any more.

Many people have told me, “I’m invested in a mutual fund, I’m diversified”, or “I’m invested in an ETF” or “Target-date Fund”. Well, yes, this is diversity, but it’s the 200 types of tomatoes diversity. Think about Cereal boxes. Do you remember those funny boxes that had 8 miniature boxes inside of them? This is how you should think about a mutual fund. Each box of cereal is a specific investment, the Mutual Fund, or ETF, or Target Date Fund, is the whole package. It choose those 8 investments and said, “here’s a good deal”. If you choose a Mutual Fund for 12 different asset classes: Large Stock, Small Stock, Mid stock, non-us stock, emerging markets, real estate, resources, commodities, US bonds, TIPS, non-US bonds, and Cash, you’d have a pretty awesome set of cereals.

You will have created a beautiful portfolio, a fund of funds of funds. That is a recipe for success, that now only needs your savings added.

 

Remember your basic financial plan.

  • Save (now)
  • Invest (all of it above emergency funds and short term purchase plans)
  • Diversify (so 2008 doesn’t get you)
  • Retire (at 45, okay maybe not, but still retire)

You’ll thank yourself later (about the retiring side of it, and the stressful side of it, and the peaceful side of it)