YAPLive: Take Control of Your Financial Future with Andrew Sather, David Ahern and Rachel Podnos O’Leary | Cut Version

YAPLive: Take Control of Your Financial Future with Andrew Sather, David Ahern and Rachel Podnos O’Leary | Cut Version

Do you want to invest in the stock market but don’t know how? Are you intimidated by all the financial jargon and worried about the marker’s ups and downs? You’re not alone! In this YAPLive, experts in the financial space Andrew Sather, David Ahern, and Rachel Podnos O’Leary share how investing in the stock market doesn’t have to be intimidating! You can use simple investment strategies and grow your wealth. Start improving your financial health and literacy today! In this episode, Hala, Andrew, David, and Rachel educate listeners about the stock market, talk about simple strategies like dollar-cost averaging, dive deep into obstacles and opportunities for millennials, and get into best practices to reduce debt!

Topics Include:

– Overcoming excuses to not invest 

– Importance of financial literacy in the US

– Credit cards and emergency funds 

– Advice for new investors

– Simple strategies to get started 

– Dollar-cost averaging 

– Obstacles and opportunities for millennials 

– Best debt reduction tips 

– Tips for attracting money with mindset

– And other topics… 

Andrew Sather is the co-host and co-founder of The Investing for Beginners Podcast (iTunes Top 40 for investing), and the founder of einvestingforbeginners.com, where he publishes their daily email newsletter, The Sather Research eLetter.

David Ahern is a self-taught investor. He is the co-host and co-founder of The Investing for Beginners Podcast (iTunes Top 40 for investing). He is passionate about helping people learn to invest, and making it relatable in everyday language.

Rachel Podnos O’Leary is a Certified Financial Planner. She is the author of 21st Century Wealth: The Millennial’s Guide to Achieving Financial Independence. Rachel is also a licensed attorney and member of the Florida Bar. 

Sponsored By:

Shopify – Go to shopify.com/profiting, for a FREE fourteen-day trial and get full access to Shopify’s entire suite of features

Jordan Harbinger – Check out jordanharbinger.com/start for some episode recommendations

Constant Contact – To start your free digital marketing trial today, visit constantcontact.com

Peloton – Visit onepeloton.com to learn more.

Resources Mentioned:

Full YAPLive Episode: https://podcasts.apple.com/us/podcast/yaplive-take-control-your-financial-future-andrew-sather/id1368888880?i=1000529792448 

Andrew and David’s Website: https://einvestingforbeginners.com/ 

Andrew and David’s Podcast: https://einvestingforbeginners.com/the-investing-for-beginners-podcast-episode-list/

Investing for Beginners’ Facebook: https://www.facebook.com/e.investingforbeginners/ 

Investing for Beginners’ Instagram: https://www.instagram.com/e.investingforbeginners/

Investing for Beginners’ YouTube: https://www.youtube.com/channel/UC4TXiSS6QqcXVVhwsCqjuVw  

Andrew’s LinkedIn: https://www.linkedin.com/in/asather/ 

Andrew’s Twitter: https://twitter.com/ValueTrapBlog 

David’s Twitter: https://twitter.com/IntrinValue 

Rachel’s Book: https://www.amazon.com/21st-Century-Wealth-Millennials-Independence/dp/1544515057  

Rachel’s LinkedIn: https://www.linkedin.com/in/rachel-podnos-o-leary-jd-cfp%C2%AE-a6084845/ 

Rachel’s Twitter: https://twitter.com/rachelpodnos 

Connect with Young and Profiting:

YAP’s Instagram: https://www.instagram.com/youngandprofiting/    

Hala’s LinkedIn: https://www.linkedin.com/in/htaha/    

Hala’s Instagram: https://www.instagram.com/yapwithhala/    

Hala’s Twitter: https://twitter.com/yapwithhala 

Clubhouse: https://www.clubhouse.com/@halataha  

Website: https://www.youngandprofiting.com/ 

Text Hala: https://youngandprofiting.co/TextHala or text “YAP” to 28046

Learn more about your ad choices. Visit https://megaphone.fm/adchoices

Hala: [00:00:00] You're listening to yap young and profiting podcast, a place where you can listen, learn, and profit. Welcome to the show. I'm your host, Hala Taha, and on young and profiting podcast, we investigate a new topic each week and interview some of the brightest minds in the world. My goal is to turn their wisdom into actionable advice that you can use in your everyday life.

Hala: No matter your age, profession, or industry, there's no fluff on this podcast and that's on purpose. I'm here to uncover value from. By doing the proper research and asking the right questions. If you're new to the show, we've chatted with the likes of ex FBI agents, real estate moguls, self-made billionaires CEOs, and bestselling authors.

Hala: Our subject matter ranges from enhancing productivity, how to gain, influence the art of entrepreneurship and more if you're smart and like to continually improve yourself, hit the subscribe [00:01:00] button because you'll love it here at young and profiting podcast. Welcome to a live episode of young and profiting podcast.

Hala: I'm your host . And today we are exploring how to take control of your financial future and achieve financial freedom. In this episode, we're going to discuss the ins and outs of investing the obstacles and opportunities for millennials. When it comes to wealth, building top tips for debt reduction and how to best prepare for retirement.

Hala: And my guests are uniquely qualified to talk about all these different topics. Joining me today is Rachel O'Leary. Rachel is a certified financial planner, and she's also the author of 21st century wealth building. Rachel is passionate about working with millennials to help them achieve financial independence through wealth building.

Hala: We also have Dave Hern on the panel. He's the cohost of investing for beginners podcast. He's a self-taught investor who focuses on companies. He can invest in and hold for a long time. And [00:02:00] lastly, we have Andrew. Sat there. And he's the cohost of investing for beginners podcast, which has reached over 1.5 million total downloads.

Hala: He's also a self-taught investor with nine years of experience. And he's also the publisher of E investing for beginners.com. So super excited for all of you guys to be joining with me today. And we're going to be covering a lot of great topics that I know my audience here on clubhouse is interested in as well as my young and profiting audience, which thousands of people are going to listen to this episode.

Hala: So let's make it as engaging and educational as possible. And here's how it's going to work. The first hour is going to be a guided interview where I'm going to ask you guys some questions. I might direct it to the panel as a whole. I might direct it to you guys individually, and I'm going to be inviting.

Hala: Yup. And my podcasts are friends always end up joining me on these stages as well. So that's how it's going to go. And just quick reminder, this conversation [00:03:00] and podcast episode is not a substitute for financial advice. And the content shared in this room is for informational purposes. Only if you're looking for financial advice, please reach out to a financial services professional.

Hala: This is for informational purposes only. Okay, guys. So really excited to get started. Thank you everybody for tuning in. If you're in the room, ping your friends in tap that plus sign at the bottom of the screen. Let's make sure that we are the number one room tonight in clubhouse. Let's do it. And I'd like to get started today by debunking myths, around investing.

Hala: There's so much anxiety around this topic from people believing that they don't have enough money to get started to believing that their age is a barrier. There's so many different concerns. I'd love to hear from the panel about what you guys think. Some of the excuses people have in terms of not investing.

Hala: And what would you say to encourage someone to get started with investing today? So let's start off maybe with Andrew. I don't know if you feel [00:04:00] comfortable answering this question and then we can kick it to you. Whoever wants to just flash your mic. Yeah. 

Guest 3: Awesome. The rabbit hole of the stock market is really endless and you know, it can be intimidating.

Guest 3: You look at the whole game stop situation and you know, it seems like you have these huge hedge funds, other betting against the average person. And you know, you just have a lot of money being put around and, and it, it's very intimidating. It's very tough, but you know what I find to be. Interesting about the stock market is it's really a lifelong journey.

Guest 3: And so, you know, remember the first time you tried to, to ride a bike, I'm sure it looks scary. I'm sure it felt scary. And you probably bruise yourself a couple of times, similar thing with investing similar thing with managing your own money. And so to me, if you can just take little baby steps and get your feet in the water, and, you know, if that means, maybe I'm just going to buy one stock and even just one share of one stock, one company I'm interested in and, you know, as you [00:05:00] move on and become more comfortable, you can put more and more money in.

Guest 3: But the key really is to get started because it is a long-term game and that's not about what you're going to do next week or what you're going to do next month. It really is about how can I learn as much as I can and just take steps to get better and better. And then over time, you know, all of that will compound and it can become something really great, but you know, it's not going to come with.

Hala: Yeah, I totally agree. Dave, Rachel, I'd love to hear your thoughts around some of the excuses that people have when it comes to not investing and what you would say to someone to encourage them to get started with investing and growing their wealth. 

Rachel: Yeah, I think Andrew made some great points. It really is kind of a lifelong journey.

Rachel: It's a marathon. The earlier you start, the easier it is to build wealth through investing time is such a powerful thing when it comes to building wealth through investing. [00:06:00] So, and I think a lot of people think I'm too young or I'm so young. I have plenty of time. I'll, I'll start later. I, I have too much going on to worry about that now, but time really is the most powerful advantage we have as young investors.

Rachel: So starting now is what. Affect your, your overall returns at the long-term really more than, than almost anything else you do. So I would say being young is kind of an excuse. Some people use to not get started. And I think if anything, that is the reason that you should get started. 

Guest 4: Yeah, I would totally agree with that.

Guest 4: And I think as somebody who is probably the oldest person on the stage today, it's never too late to start. And starting as soon as you can, is going to benefit you. Because one thing that you're going to what's, if you don't start early and you get to my age, I'm 54 and you get to my age. And then all of a sudden that endpoint starts to become a lot more real.

Guest 4: And all of a sudden you're like, oh, why didn't I [00:07:00] start when I was 25? And. So the earlier you can start the better because compound interest is your friend. And as Rachel was saying, time is your, your biggest friend. And the longer that you can do this. And the thing is, I think a lot of people think that they have to have thousands and thousands of dollars to start you don't in today's world, especially with the apps that you have on your phone, as well as the online brokerages.

Guest 4: I. Fidelity Charles Schwab in particular, they offer no fee trading. They also offer stock slices. So for example, if you're dying to buy Amazon, you don't have to save up $3,400 to buy a share. You can, with $50 buy a percentage of the company. Granted, it's not going to be huge percentage, but if you put $50 in a month at the end of the year, that's $60.

Guest 4: And then whatever return the company gets over the year, that's additional money you've earned for just adding $50 a month. And I think the thing that people get bogged down in are a [00:08:00] combination of what Rachel and Andrew were talking about, where there's an overwhelm, there's an information overwhelm there's I can't do this.

Guest 4: I'm too young. I don't need to start now, but I think the sooner that you can start and there are so many options, now, it doesn't have to even be buying individual stocks. If that's, if you think that I just don't know enough about. Tesla or Amazon or apple or whatever company it is. There's ETFs, there's index funds.

Guest 4: There are so many different options now. And with the technology available to us, to be able to learn a little something about what it is that you're buying, that you can start any time. And again, it doesn't have to be millions of dollars. You can start with as little as 10 bucks, I think. Charles Schwab offers $5 trades.

Guest 4: So you can buy a company for as little as $5, less than a coffee at Starbucks to get started. So I think once people realize that, and I think the hardest part is dipping the toe in is taking the plunge. I remember in 2012, when I bought Microsoft, which was my [00:09:00] first investment, I was scared to death. I was terrified.

Guest 4: And once I pulled the trigger, it, it became a lot more real, but it also became a really exciting, and I think once you, once you jump off that diving, boarding and get into the water, it's, it's maybe a little chilly at first, but you warm up quickly and it's a lifelong thing that you can pursue. 

Hala: Oh, my gosh, such great points.

Hala: And I completely agree. I mean, I was really into investing in stocks about two years ago and I had such great returns. And actually, when you mentioned the stock price of Amazon today, it's over $3,000. I sold mine about it was $1,200 and I'm kicking myself like, man, I wish I was back in the stock market.

Hala: But like you said, you know, you just gotta, you just gotta try and, uh, not be afraid. So I'd love to continue to kind of go over the landscape, so to speak of, of what we're dealing with. And when I was researching for the show, I found out that 60% of Americans don't even have $1,000 [00:10:00] saved for retirement and less than 40% of Americans couldn't even handle a $500 emergency.

Hala: And I read those stats and I felt so bad. So I'd love to just understand and help our listeners to understand why there's like a need for this shift in Americans to change the way that they manage and invest their money. And wants to kick that off. 

Rachel: I think a big, big issue is that there's a real lack of financial literacy in the us today.

Rachel: And that's been a problem for a really long time. And I think it's really easy way to change that is to teach it in high schools. When I finished high school, really, honestly, when I finished college, I didn't know what a stock was. I didn't know what a bond was. I barely knew how to use a bank, which is pretty shameful.

Rachel: I mean, I managed to get through life just fine, but I, I think. Having some basic financial education in high school would probably serve us far better [00:11:00] later in life than almost anything else that we are taught then. And just teaching people about what is debt, how does debt work? And actually, what is the true cost of borrowing money?

Rachel: How does interest work to make it. In some cases, very expensive, you know, that would be useful to learn in high school. Before you maybe make a decision about taking on debt to finance your higher education. How do credit cards work? What's a deductible. All of these things are things that a lot of us kind of, we learn later in life the hard way.

Rachel: And I think just kind of having, you know, standard financial literacy courses in schools would go a long way towards. Preventing, you know, the kind of behavior that leads people to end up in these really precarious financial situations later on. I think a lot of people get there cause they just, maybe they're over-relying on credit cards that they're not paying off or maybe, [00:12:00] you know, clearly they don't have an emergency fund, which again, that's something teaching people to have an emergency fund.

Rachel: That would be a number one thing that I would think they should teach people in high school, you know, having some money set aside for a job loss or a large medical bill or whatever it is. So you don't get wiped out when those things kind of inevitably happen. So I, I really hope that schools in the U S start focusing more on that.

Rachel: I think it would. 

Hala: Yeah, I agreed. I mean, we learned stuff like calculus and geometry. We never end up using any of that stuff and, and all this financial planning or tax, you know, knowledge. We don't learn any of that in school. We have to learn it on our own. I think it's so backwards, Dave. I know you had something to add here, so I'd love to hear your 

Guest 4: thoughts.

Guest 4: Yeah. I would agree with everything that Rachel was saying, the, the education system in this respect I think has failed us. And I think, you know, from my own experience, I, I learned this all the hard way. My parents really [00:13:00] frame. I didn't talk to me much about this. And so like everybody else, I'm sure. I just kinda got thrown to the wolves and had the word word as I went.

Guest 4: And luckily I'm a conservative guy, so I didn't go crazy and do a lot of things like taking on a lot of. And things of that nature. But in hindsight, I wish I would have learned about investing in the stock market and the benefits of that at a much earlier age, because then I would have been able to start putting money aside.

Guest 4: There are so many resources now out there, I worked in the banking industry. And so I saw firsthand everything that you were mentioning about the lack of savings and the lack of knowledge. I, I can't tell you how many times I had somebody sit at my desk and tell me that they were building credit because they're using their debit card or that, what do you mean?

Guest 4: I don't have any money. I still have checks. I mean, those, those conversations actually do happen with real people and it's, it's kinda staggering. And I just think that the financial illiteracy of the [00:14:00] country is, is kind of scary. And, uh, we were talking the other day with a financial advisor from another company and we were talking about the.

Guest 4: The oncoming financial crisis that we think of the retirement of the, my generation and the generation before B and after me, I think our G it's going to be a big impact. And I think that I don't think it's talked about enough and it's kind of a scary thing, but you know, any of the younger people that are on here, go out there and try to find out as much as you can about finances and how to balance a checkbook.

Guest 4: It's not something that's taught anymore, but those kinds of things of understanding how your money works and how you can use it to work for you, Andrew. And I talk a lot about this kind of subject on our show about the, the impacts that we're learning to use money to help you in the long run is really what it's there for.

Guest 4: And credit cards are a great thing, but they can also be kind of a scary thing because a lot of people think that, Hey, I got a, I got a [00:15:00] credit card, I got free money. I'm going to go out and buy that X-Box, but they don't realize that when they max out their card and it takes them seven years to pay it.

Guest 4: They have over doubled for paying for that, that X-Box. And so I just think that, you know, I agree that teaching in schools is, is something that has to happen. I, I try to teach it to my daughter. It's not easy, but I try to teach it to my daughter. I have a younger daughter and I try to teach her and teach her the ways of the force if you will, but it's not easy.

Guest 4: And I, I just think that this is something that really needs to be addressed and it ranks right up there with, with some of the other social issues that have been going on in the country. For sure. 

Guest 3: I would just add on to, I mean, to talk about credit cards, Really what Rachel was saying about having an emergency fund.

Guest 3: That sounds so small and it sounds so simple, but really credit cards can be one of the worst financial instruments of destruction that you could have. I mean, you're talking about paying 20%, 25% interest on money. You're borrowing. [00:16:00] Uh, you know, I don't, I like to think I'm a good stock market investor, you know, even some of the best investors of all time.

Guest 3: They can't make 25% a year, reliably year after year after year. So why are you going to pay that on the credit card and the problem with credit cards a lot of time. Yeah, you do get that unexpected building, unexpected repair, you know, you gotta, you gotta fly here, fly there. And if you don't have an emergency fund set for that, then of course, you're going to put it on a credit card and then you can start to get down this, like never ending spiral downwards of always paying minimum payments and racking up more and more credit card debt.

Guest 3: And that's sad. And at some point you have to put a stick in the sand and say, that's it I'm done with credit cards. I mean, for me, I've always considered myself kind of. Uh, smart guy. Like I can be somebody who can beat the system. And I learned, I learned the hard way that I thought I could manage the whole credit card rewards game.

Guest 3: And it's just like playing with fire and I've gotten burned too many times. All right. I keep a credit card for credit score, but other than that, [00:17:00] you know, I don't use it ever basically. It's it's there if I need it, but I don't use it because I know, you know, how easy it is to get wrapped up in. Well, let me just charge it here.

Guest 3: I'll pay it at the end of the month. And, uh, I'm, I'm collecting these rewards and yada, yada, yada, it's dangerous sneaks up on you. And then before you know, it, you're in a mess. You can't get out of it. 

Hala: Oh, my gosh, such great points. And I definitely want to get into tips in terms of debt reduction later on, because I know it's a huge problem, especially in this country with student loans and everything like that.

Hala: So let's get into stocks. I really want to dive deep on stocks and get everybody's best actionable insights in terms of stock investing. So let's start with David I'm. Sure. So many of my listeners tonight are finding themselves in a similar position to how you were back in 2012, when you first started investing, they don't know much about it and they want to get started.

Hala: So what is some advice you can give to newbies? Looking to get started with investing? Let's go to Dave and Andrew, and then. 

Guest 4: For me, [00:18:00] I am, I'm a reader. I love to read. I looked at her and I'm a curious person, and I've always been very inquisitive about information and gathering your information. So I was lucky, very lucky.

Guest 4: So when I really started to go down this whole rabbit hole of stocks and wording, how the stock market works and investing, I was working at a bank at the time and we had a financial advisor that worked in my branch and he and I became friends and he helped me really kind of start down this path. And so he suggested several things.

Guest 4: That I could go to, that would give me kind of the basics of learning, how to invest. I went to the library and started investing, checking out books like stock market for dummies, you know, just the very basic, simple things that really can start to help you get a grasp around the idea of heart, of how to invest.

Guest 4: But I think that the, the biggest thing is you have to understand that, like anything else, I really believe that investing or the stock market is like a [00:19:00] language and you have to learn the language. Yeah. To learn the language. You have to dive into the, the source material and learn as much as you can.

Guest 4: And I've done that with just about everything I've ever done in my life, whether it's learning to be learning music or whether it's learning about wine, learning about finance is just reading as much as you can. I listen to podcasts quite a lot. Uh, I watched YouTube videos. I watched movies. I read books, I read blogs.

Guest 4: I read magazines. I, I just, I really dived into this as much as I could to really start to familiarize myself with the terminology, as well as how. All these things work. And I think the, the biggest thing that I learned that if we can impress upon anybody and Andrew and I talk about this a lot is the stock market is a compounding machine and knowledge is as well.

Guest 4: And the more that you learn, the, the, the more that you'll learn. So as you grow in your financial knowledge, you'll learn more and more, and you'll be able to pick up more and more. [00:20:00] The other things that you may not have quite understood at the beginning will start to become more. They'll start to make more sense and you'll start to understand it better.

Guest 4: But when you're buying a stock, you're really buying a piece of a company. And I think that's one thing that people, I think sometimes miss, is that, would you buy a piece of apple, for example, a stock apple stock. You're buying a piece of that company. You are a company owner of apple, and it's not a ticker.

Guest 4: It's not a piece of paper. It's not some electronic symbol on your phone, on an app. It's an actual, you're actually owned at the business. And once you start to kind of get your mind around that, then you can start to understand what it is to own a business and how the business functions, how they make money, how they could possibly lose money and all those things kind of start to make sense.

Guest 4: And it can be overwhelming at first. And I have this analogy that I like to share on the show. Thanks. It's kind of comical, but I always think of learning these things like eating a pizza. Everybody wants to, you know, everybody loves pizza and I love pizza. It's one of my [00:21:00] favorite things in the entire world.

Guest 4: And you can't eat the whole thing at once. You have to eat it piece by piece, and that's the only way that you can get through the whole thing. And so I think learning to invest or learning the stock market is the same idea. You have to start with the first piece and you have to eat that and then work around the pizza before you can understand it.

Guest 4: And also remember this, that knowledge is like, anything else you're going to compound on it. And if you keep working at it, you're going to start to understand things. It's kind of like water dripping on a stone. Eventually it's going to make an impression and if you keep working at it, you can figure it out.

Guest 4: Trust me, I am not the smartest guy in the world. I'm smart in spots, but I'm not the smartest guy in the world. So I've been able to figure some of this out and it's just by doing some work and really paying attention. And, and I really encourage people to do this and. 

Hala: Yeah, I absolutely love what you said about just learning the terminology.

Hala: It's actually something that I learned about on my podcast a long time ago. I don't remember who told me, but basically [00:22:00] the number one reason people have imposter syndrome is because they don't know the terminology of the space. And so they've walked into a situation and they hear acronyms and they don't know what it stands for and it makes them feel like they just know so much less than everyone else.

Hala: When really it's like 10 or 20 words you need to understand. And then, you know, things start to click. So I love that. Learn the terminology, do the work. I think that's really smart. Andrew. I'd love to hear your top tips when it comes to newbies, looking to get started with investing. 

Guest 3: Yeah. I mean, let, let me, let me provide the second slice of pizza if you will.

Guest 3: So Dave mentioned that stock ownership is partial ownership of a business and that's super, super key because. At the end of the day, that's what it is. The problem with most people who buy stocks is they don't view it that way. And so what they might do is, you know, they see apple trading at 200 today, and then they hope it's going to Trey that to 20 next week.

Guest 3: And then, you know, can I sell it and make a $20 profit? And you can certainly try to [00:23:00] do that. And that's kind of what the stock market game has become, but that's not how you can sustainably build wealth from the stock market over the longterm. And so what we need to understand about the stock market itself is that it's very, very emotional.

Guest 3: One of the investors we follow his name is Benjamin Graham. He calls it Mr. Market. And Mr. Market's basically like this bipolar maniac who one day he says, I want to buy all the stocks you have the next day. So. You know, I don't want any of your stocks, they're worthless. And so if, if you follow the stock market, you'll see how it can move very drastically in short periods of time.

Guest 3: And other times it's, it's calm, you know? And so what you need to understand, what we need to understand as investors is that to have success in the stock market, we need to find great businesses. And that does eventually take some jargon, you know, because I might think Apple's a great company and somebody else might think that the iPhone stupid.

Guest 3: So who's, who's really the. [00:24:00] Who's going to be right here. And so you need to learn about the basic numbers of businesses and events. So you understand that some companies are obviously doing very well and making profits and some aren't, some could and some couldn't, but it does take some jargon to get there.

Guest 3: But at the end of the day, if I have a group of stocks in my portfolio and I hold them for the long-term, I know the stock markets can be emotional. I know it's going to be a maniac. And I know sometimes it crashes, but if you were the graph, the stock markets price over the longterm, which by the way, this might blow somebody's mind.

Guest 3: Hopefully, maybe one person the stock market was open in 1792 in the United States. So if you really think about how, how far along it's gone, it's survived. A couple of pandemics, it's survived. The civil war, it's survived two world wars. And so all along all along, it's been a very wild ride and it's been a rollercoaster, but all along the business world has advanced [00:25:00] and companies have provided enormous wealth for their shareholders, but it's really the shareholders who hold for the longterm and they're willing to hold through the huge swings.

Guest 3: The only way you get hurt, if you're riding a rollercoaster is if you jump off. And so if you're really going to be a part owner in the business and you're, you're, you're willing to ride the ups and downs, that's how you can make wealth in the stock market. And so that's how these businesses that grow from, you know, little bitty businesses, you know, maybe they, they have like a marketing.

Guest 3: Takes over a city. And then one day they take over the world and that's, that's how wealth is built. And you can build wealth all along if you buy and you hold, but it's, it's so hard to do because it's so easy to get caught up in the numbers and the games and the emotions that a lot of people frankly fail and, and they get turned off by it.

Guest 3: And it's, it's sad because if you're approaching this game with, with the wrong rules, You're going to strike out and you're going to miss out [00:26:00] on one of the greatest weapons for building wealth that there is today. 

Hala: I definitely want to touch on, you know, your perspectives in terms of like when we should actually pull out of the stock market and, and when we should stay, let's hold that thought for a second.

Hala: I want to go to Rachel. I know that in your book, you say that in terms of investing, you suggest a path of long-term buying hold in a portfolio of diversified stocks. So Rachel, I'd love to understand your top tips for newbies when it comes to investing and your approach to investing that you 

Rachel: recommend.

Rachel: Well, Dave and Andrew, they did a great job of explaining what it means to be a stock investor and, and explaining, you know, kind of generally how the market moves. So I'll just add that if you're a beginner and you're just getting started, it doesn't have to be complicated. It can actually be very simple.

Rachel: If you do have the time and interest to dive [00:27:00] deep and learn and, and read and research, then do that. That's great. And if, you know, after doing that, you come up with a complex strategy for investing then. Okay. But I think a lot of people are hesitant to start because they either don't have the time or don't have the interest to dive deep.

Rachel: And they think that they don't know what they're doing. Maybe they don't know the jargon and, and that kind of creates inertia and, and it keeps them from ever getting started. So I think I would just say to those people, if there are any of you out there, it doesn't have to be complicated and you don't have to do a ton of reading and research if you're not interested because most people will do just fine with a very simple strategy, which is just long-term.

Rachel: Buy and hold investing into a passive index fund. So an index fund is like a basket of stocks. And so, you know, a [00:28:00] very well-known index is, is the S and P 500. It's a basket of the 500 largest American companies at any given time, but by market cap. And so, you know, if you're just getting started, you will almost certainly do very well.

Rachel: If you simply, for example, invested in an S and P 500 funds and then just left it alone for a very long time, you know, all you need to ask yourself early on is, do I think the us market will be worth more in 10 years in 20 years in 30 years than it is today? I mean, if it's not, then we probably have way bigger problems, but if you say yes, then just doing that, just investing in the U S.

Rachel: In a diversified passive way and letting it sit and letting it grow, you are almost certainly to do very well. And if you consistently add more money over time, even better, but I would just say, you know, that's the strategy [00:29:00] pretty much in a nutshell, it's very simple. Now simple doesn't mean. It can be really hard to do buy and hold investing.

Rachel: You know, it can be really scary when there's market volatility. Like we saw, you know, back in March of 2020, and you know, many times before that markets are cyclical and there is volatility, you know, yesterday for example, we had, you know, a market sell off that was all over the headlines today. It's it's up again.

Rachel: That's just how markets work. So I think that. You can have a simple strategy that's successful. It can be hard to stick to it. And that, that requires, you know, kind of some emotional distance and discipline and kind of a sticking to the strategy. But that would be kind of my, my advice to beginner, man. I 

Hala: wish I had you guys with me back in March of 2020, because I literally pulled out all of my stocks.

Hala: I had 50% gains and then it went [00:30:00] down to 30%. I got scared. I pulled out all my money and I still have not put my money back into the stock. So I bet you there's. A lot of people like me who took out their money during COVID and are wondering, should they get back in? What's your perspective? Should I go back to investing in stocks?

Hala: Are things kind of calmed down now? I know I should have never taken them out to begin with, but what are your thoughts there? If people took out their money, should we be putting it back in. 

Guest 3: So it's interesting. So there's a, there's a strategy called dollar cost averaging. And it's also another simple thing.

Guest 3: Basically, the idea is you're going to put a little bit of money in every single month. And so what that does for one, it creates a habit. And so if you want to get in shape an easy way is just to make a habit to at least get in the door of a gym. So similar thing, you know, your stocks go up, they could go down, but if you're dedicated to doing this every single month, then when the March, 2020 hits, [00:31:00] yeah.

Guest 3: Your portfolio might go down, but you're also able to pick up more stocks at a bargain because you're constantly putting money into it. And so, you know, to Rachel's point where you want to have a long-term focus and a long-term mindset, and you want to be able to let the stocks do the work for you. A big part of that is.

Guest 3: Being humble enough to say, look, I don't, I'm not smart enough to be able to time to market. I don't know, because really nobody knows. And if they, if, if somebody is trying to tell you that they know, uh, when the market's going to crash, they're either deceiving you or they're deceiving themselves or both.

Guest 3: And so really the only thing that we can be sure of with the stock market is that it's going to go through ebbs and flows. It has seasons, just like you can depend on spring, summer, winter, and fall. You can depend on the stock market crashing. We don't know when, but it's going to crash and it's going to rise.

Guest 3: I mean, the sad part of missing out when stocks crash in 2020 is they just came roaring back and they, they [00:32:00] did so well. And the recovery house. So so fast. I think that's what, what gets lost a lot with investors in the stock market is you think everybody kind of thinks, well, I'll get out. And then when things calm down is when I'll get back in, but all the recovery comes just as fast as, as it, as it crashed.

Guest 3: And so really the only way that you're able to take advantage of the recoveries in the stock market is if you're invested in the long-term for the stock market, which is why set and forget it is such a key strategy, but it's so, so hard to do because you know, you really need to have a deep understanding of why am I going to just let it, why am I going to just let it sit?

Guest 3: And why am I going to trust that the stock market will come back? And it goes back to our first couple of slices of pizza. It's because it's not this casino, it's not a game. It's the fact that there are businesses behind me. Stop. And so as long as I am confident that the stock market is going to, you know, as long as I'm [00:33:00] confident about businesses are going to continue to grow and, and, and, you know, the economy is going to continue to innovate and we're going to have a brighter future than I should totally be invested in the stock market.

Guest 3: And so, you know, to answer your question, dollar cost averaging is great because instead of trying to figure out, man, I'm going to put all my money into the stock market this month, take it out this month and I'm putting it in this month. Dollar cost averaging, this kind of completely eliminates that. And it gives you that nice benefit where if you have this set amount you're putting in every month, you're automatically going to buy more stocks when the market's down.

Guest 3: And you're automatically, you're going to buy less stocks when the market is up, because you've really said I'm going to put this amount of money. So something that has been like my, my crusade of my life has been to say, look, I understand how hard it is to save and invest. I've totally been there. I've been loaded with student debt.

Guest 3: Like I said, I've had credit cards before. And so I ran some numbers and me being like a numbers nerd, I ran some numbers and [00:34:00] I said, look, if you start at the age of 25, you put $150 into the market each month. And if you're the guy just average stock market returns. Okay. And like, you're not like Warren buffet, you're not able to pick the next apple or Amazon.

Guest 3: You're just buying an S and P 500. And you're just invested in the market. If you're the do that, starting at age 25, $150 a month, by the time you retired, you would be close to a million dollars. If you got 11%, which is just 1% higher, you'd have a million dollars, you'd be a millionaire. So really that small amount, just, just sticking to something that's even as small as like $150 a month.

Guest 3: I mean, that's like, that's less than a phone bill for some people, right. So just having a dollar cost, average and sticking to it and being like, you know, I'm going to put this in and not worry about what the stock market does or how it performs. And I'm just going to keep putting it in and you'll be amazed how much your wealth will compound and how big that balance in your account will be if you just [00:35:00] keep at it.

Guest 3: And like Dave said, while they're dripping on a stone, eventually that makes an impression. And it's so, so true in investing. Oh my 

Hala: gosh. Such great points, Andrew. Thank you so much. I'm just going to quickly reset the room. You guys are listening to a live episode of young and profiting podcast. Thank you so much to the panelists who have joined us today.

Hala: If you haven't yet, make sure you follow them here on clubhouse and on Instagram. Show them some love. Barbara raised her hand and has a really relevant question. We talked about this very lightly in the beginning, in terms of the different reasons people kind of are scared to invest. So Barbara, I'd love to hear your question.

Hala: It's super relevant to the conversation. 

Rachel: Hi, my name is Barbara and I'm over 50 years old and I do have my safe and, um, I don't have any problems with credit cards. I'm a massive that one, but I'm afraid because I'm older to invest. Dave was talking about learning more so, and so that was good for me. I think I'll go to the library and [00:36:00] try, but I'm, I'm afraid to invest.

Hala: Does anybody on stage want to give Barbara some words of encouragement or advice in terms of investing at her age? She said she's 50 years 

Guest 4: old. Yeah. I'd love to talk to Barbara. So Barbara. First of all, it's understandable to be afraid. It's, it's scary. It's nerve wracking. And I think that the first thing that you should do is, is pick anything, a company, or you could pick something like Rachel was talking about an ETF, something simple.

Guest 4: And just by one thing, The hardest step is the first step. And once you get over the first step, then it starts to become, as Andrew was talking about a habit and it's never too late to start. And the sooner that you start, the bigger the impact is going to have on your life. And the biggest thing is I think people worry about losing money.

Guest 4: And I think the thing you have to think about is for [00:37:00] me, like I bought Microsoft, for example, because I thought it was a stable company, a great company at the time. It wasn't a, the monster that it is now, but at the time I thought, Hey, this is a well-known respectable stable company that I may buy, you know, a couple shares and.

Guest 4: It's not a huge investment. And if I lose some of that money, no big deal. And it helped me start to down the path and you can absolutely do this. And like Rachel was talking about, you don't have to go the path that I'm talking about, where you have to learn all the ins and outs of the stock market and all this jargon and terminology and financial numbers.

Guest 4: And if you're not comfortable with that, like Rachel was saying, there are a million different kinds of other options that are very easy to use. If you work in a business, for example, let's say that you work at a bigger company and they offer a 401k you're already investing in ETFs and index funds. And mutual funds [00:38:00] with your 4 0 1 K and it's the same idea.

Guest 4: And you could do it on your own individually if you want. And, but the biggest thing is not timing the market it's time in the market. So the sooner that you can get money into the stock market and have it start working for you instead of you working for it, the better off you're going to be. And it could be.

Guest 4: As simple as buying one share of one company, it could be as simple as buying one ETF, which has woke costs fees. They generally match the returns of the market. And the stock market over the last hundred years has returned between eight to 10%, which blows away anything you can get in a savings account.

Guest 4: And it's absolutely something you can do. It doesn't matter if you're 50 or 22 or 71, this is something you can start anytime and you, you absolutely can do it and you can make it as simple or as hard as you want to. And the options are open to you. And I just really encourage [00:39:00] you to try to do it. And I hope that helps a little bit Barbara, if it doesn't let 

Rachel: me know.

Rachel: Yeah. That helps a lot. And my other concern was I didn't want to go to like companies and stuff because I wasn't knowledgeable and they would probably talk over my head. So I was wondering, can you go online? By your stocks like that, or do you have to go with someone like Edward Jones and 

Guest 4: all of that?

Guest 4: No, you can absolutely go online depending on who you bank with. They might have a brokerage account through your bank. That is an option. You also have the ability to open a brokerage account. Uh, I mentioned fidelity Charles Schwab. Those are two that I have used in the past and, and I love them. They're very easy to use.

Guest 4: You can open them online, just like anything else. There's also apps that you can download, probably get in trouble for this, but I'm not a huge fan of Robin hood, but that's for a whole nother conversation, but there are lots of different ways to, to invest. And you can do it as simply as opening an account on your phone, or you can do it online.

Guest 4: And the process takes [00:40:00] maybe five minutes and then you can transfer money into your account, which could take a few days. And then once that's done, you can, you can start buying stocks, whatever, again, whatever, whatever you want to do there there's women unlimited options for. 

Rachel: Thank you so 

Guest 3: much. Could I ask you, I think, you know, when you talk about investing significant amount of your life savings and kind of thinking about dipping the toe versus jumping all the way in, if you're first learning to drive a car, I don't think it's smart to go.

Guest 3: And try to drive and, and, uh, you know, formula one race or a NASCAR race. And so, you know, similar thing with your money, you probably don't want to put a significant amount of all the time that you've saved and, and, you know, uh, worked for and put it all in at once without knowing what you're doing. And so my favorite advice is what Dave talked about with, with going to the library.

Guest 3: And there's a lot of good books I will teach you, you know, you don't have to learn about stocks, but you should definitely learn about [00:41:00] how the stock market works. If you're going to put money in the stocks, that's a huge part of that. There's also a lot of information about bonds and, and some of the ways where if you're drawing from your savings and retirement, those are all factors too.

Guest 3: So it is overwhelming. There is a lot of jargon, but at the same time, it is something that you're gonna have to deal with for the rest of your life. Right? So to at least get. If we could have had like a high school class to, to at least teach the basics so everybody could understand like diversification and, um, you know, long-term returns like certain jargon just needs to be taught and it needs to be learned.

Guest 3: And that's the only way that you can have adequate returns from, from your money and to be able to use that, to sustain and build wealth. And so I think having that curiosity and having that drive to want to educate yourself is probably most important out of anything else. Thank you as 

Rachel: [00:42:00] helped a lot.

Hala: Great. I'm so happy that it helped Barbara. And I'm really proud of you for thinking about this and having the courage to ask this question. And while we're on the topic of age, I'd love to hop to Rachel, because I know that you're passionate about working with the younger generations like millennials and gen Z to help them create more financially independent futures.

Hala: And when I was studying for this interview, I found a NPR article that was published last April. And it said that the net worth of a millennial household was 40% lower than previous generations. And to me, that was really shocking. So from your perspective, Rachel, what are some of the obstacles when it comes to financial independence from millennials and then what are some of the opportunities that we should keep in.

Rachel: As a millennial, you know, I'm very aware, I'm sure you're very aware of, we're all very aware of these statistics. You know, they're in the headlines all the time, kind of put different ways or, or in different [00:43:00] contexts. And kind of the general message is that millennials are worse off than our parents were at our age kind of overall.

Rachel: And, you know, we haven't had the easiest time. A lot of us, we came of age in the midst of pretty pervasive economic uncertainty. And we faced a lot of headwinds for a lot of us. We became adults at a time of high unemployment and underemployment, tuition, inflation, and crazy increases in the cost of housing stagnant wages.

Rachel: It wasn't easy. I know, you know, when I came out of school, so I came out of finally finished like all school in 2012, and even then a few years, really, after the financial crisis, it wasn't really. Job market. It wasn't a good time to kind of be coming out into the world. And, you know, for, for a lot of my friends who graduated in oh eight, no nine, it was even harder.

Rachel: And so we're, we're all very familiar with that. [00:44:00] And then when we compare that experience to that of the baby boomers or our parents' generation, you know, they came of age for the most part in the eighties, and they enjoyed a couple of decades of, of great economic growth and low unemployment. And I think this is really important, important, kind of a lot of optimism just generally.

Rachel: And I think that goes a really long way and, and that's all pretty much true, but I think what's not discussed as much when we talk about the plight of millennials is what Dave touched on earlier, which is the baby boomer retirement crisis. That is. Kind of impending. And if you start kind of watching the headlines, you'll start to see that there are, you know, headlines about that too.

Rachel: And statistics about that that are coming up more and more, and kind of the bottom line is [00:45:00] that the baby boomers are retiring, you know, every day more and more of them are retiring. And 90% of them aren't financially prepared to cover their, their expenses for the rest of their, their life. At least for their life expectancy.

Rachel: You know, a lot of them are retiring in their early sixties and they're gonna live for another 30 plus years potentially. And when they were, you know, young and earning, they weren't prepared to spend 30 years in retirement. I, that just wasn't the expectation. And I also think a lot of them were, were, you know, very reliant on social security to, to kind of provide for them later in life.

Rachel: You know, that's in trouble. So kind of just bottom line, they're not in a great position. And I think that millennials shouldn't really look to them and say, we're so much worse off than they are. Maybe we started out in a worse position than they did, but they're not in a good [00:46:00] position now. And I think that we should kind of look to that and say, how did they get there and how can we end up in a better position?

Rachel: And so, you know, kind of the broad strokes are they under saved, they relied on, on debt too much to finance consumption and, and they really underestimated how far their money would go. Their savings would go later in life and I don't know how that's going to play out for them. I, I, you know, it's so early on, but I think we can just look to that and say two things.

Rachel: One, we have a lot of time on our side and like we talked about before. The single greatest resource we have as young earners and savers and investors. And if we exploited. It's a very powerful thing for building wealth. And the second thing is we can learn from their mistakes and, and despite kind of starting out in the worst position, I think we can [00:47:00] end up in a, in a much better position.

Rachel: So that's kind of how I look at it. 

Hala: This episode of yap is sponsored by setup. Getting things done is a challenge that everyone struggles with one way to tackle it is to make sure you have the right tools and for your computer. That means the right apps. The problem is not all apps do what they promise and the drawn out search for the right solution makes it harder to get the job done.

Hala: That's why they're set up, set up is on a mission to help users get more done with setup. There's no more worrying about how to search for apps to solve a problem. Set up packs over 200 apps for your Mac and your iPhone into one. There's an app for almost any task. So you can stay in your flow and finish what you started.

Hala: With setup, you could think about your tasks, not apps, a dedicated curation team only selects the highest quality apps. New apps are added to set up regularly. Updates are free [00:48:00] and all the apps are full featured pro versions. It's also a great value instead of paying thousands of dollars for separate licenses.

Hala: There's just one flat monthly fee. Head over to set-up dot com to try set up for free for a week. If you like set up, just pay 9 99 per month, as long as it's useful to you and trust us, it will be. I want to get into debt reduction and retirement. Rachel touched on both of those topics. Let's start with debt reduction.

Hala: So from my understanding, there's a big problem. When it comes to debt, specifically student loan debt, it looks like 42.9 million Americans owe a total of 1.5, $7 trillion in student loans. The average person who has student loans carries about $36,000 in federal loans. So I'd love to hear everybody's thoughts in terms of your best debt reduction tips.

Hala: And how would you get started if [00:49:00] we have student loan debt, where do we start? What do we do? Who feels best equipped to answer that question? I 

Guest 3: don't know about best equipped, but I could ruin the mood for a minute. I, you know, there is unfortunately no secret whether you're paying credit card debt or you're paying student loan debt.

Guest 3: It's really the same thing. And when it comes down to is just spending less than you make. And so just from the star, you really got to be honest with yourself and be honest with how much am I really spending and how much am I am I really. Making and I is that lining up and them, is there even any wiggle room and, you know, it's, it's really tough.

Guest 3: I mean, depending on what area of the country you live in, you know, I used to live in Southern California and rents are just outrageous. And you talk about like starting a career, having to deal with that, having to deal with debts and other obligations, it's, it's really, really tough, but you know, you just, you don't know where you're bleeding money and where it's going down the drain until you really take that honest [00:50:00] assessment.

Guest 3: So I know for some people, they like the apps that kind of do that kind of stuff for you. I think Mint's one of them. I'm not really much of an app type person. I'm more of like a, a spreadsheet person. So I've got spreadsheets for days. Um, and I realized that's probably not most people, but you know, there's apps, there's, you know, another great resource is podcasts.

Guest 3: Again, just going back to what Dave was saying about learning the language, there's a ton of personal finance focus, podcasts, and they're going to help you if they get you on. Plan where, you know, they're telling you that guess what? You make this much, you're spending this much, and you're going to figure out how to increase, how much you make and how to lower, how much you spend.

Guest 3: And that's, that's really the ball game. So if you find resources like that, you're going to give you different tips and tricks, but that's, that's really right. You need to start, you gotta be transparent. You gotta know what's going on. If you don't know what's going on, you can't fix the problem. 

Hala: That makes sense.

Hala: Rachel, Dave, do you have anything to add in terms of ways to reduce. 

Guest 4: Yeah, I think, uh, I would echo what Andrew was saying [00:51:00] is it really comes down to sending lengths to you make it. And I think one thing that I know that when I was, when I graduated from school, I was, uh, I went to school to be a musician.

Guest 4: And so that qualified me basically to work in a restaurant. So I had student loan debt when I graduated and I had to learn how to pay it off with the bigger income that I was making. So one of the things that I did as guidance that I got from, from one of my teachers at school, was to contact my student loan people and consolidate the loans.

Guest 4: Okay. Reduce the amount of that I owed each month and it also helped reduce the amount of interest that I was going to pay. And so by doing that, it helped me make the payments a little more manageable and learn to deal with that and pay them off faster. Uh, the other thing that I learned along the way.

Guest 4: Gentlemen that I work with used to work for a student loan companies. And he noticed through his, his working with people on their student loans, a lot of people would just ignore it [00:52:00] and would hope that that problem, which is go away and it doesn't go away and it follows you and then it affects your credit and it can be an even worst burden that it may be.

Guest 4: And so his advice to me, and to other customers that he worked with was to try to work with, with the student loan people, as much as you can, to try to there's programs out there that can help. Some sort of debt relief that can help you in certain circumstances and there's there's options to help you figure out a way to do that.

Guest 4: And you know, there's other options like learning to have a side hustle, to make extra income that you can learn to pay towards that. There's also strategies of accelerating your payments. So let's say that you're in a position where you actually can pay more than what you owe. So instead of paying $150 a month, you pay $300 a month and you request that that $150 codes, those towards the, the primary debt instead of just the interest [00:53:00] and that will help reduce the overall interest that you pay on the loan over time.

Guest 4: And so some of those things can help, but it really comes back to unfortunately, the, the unsexy thing, which is learning to spend less than you make. And I think Rachel would probably have some great ideas as well. 

Rachel: I think Dave, you made a great point. That I see a lot in my work. Um, and that's that a lot of people get into trouble because they ignore the loans and I get why, you know, we all just kind of want to push aside me thinking that that's stressful or painful, but in the case of debt, especially you get a relatively high interest rate debt.

Rachel: Like a lot of student loans are that is, is so problematic and it'll really get you. In the long run and you know, like, like Andrew said, if you don't know what's going on, you can't fix the problem. And that's another big thing that I find is that a lot of people with student loans, either because [00:54:00] they're ignoring them or, or they're just unaware, they don't know what's going on with the loans.

Rachel: They don't know what kind of loans they have, what payment plan they're on or even what their balance or interest rate is. So I would say, you know, if you have student loans and you can't answer those questions, you don't know the details of exactly how much you owe at what interest rate, how many loans to who, where, you know, who's the servicer, all these things, figure that out.

Rachel: Get intimately familiar with your current situation as a first step. And that's a huge step and then figure out what your payment options. That can be very complicated, but there are a lot of great sources on the internet. One of my favorites is student loan, hero.com. That is a great site for, for figuring out what your different options are and learning about how all these different options work.

Rachel: So I [00:55:00] recommend anyone in that situation go there as a resource. And once you figure all that out, I would say, you know, for most people, that's the best strategy. If you're aiming for financial independence is to get rid of debt, all debt as quickly as possible. And that means. Throwing money at the loans.

Rachel: But like I said, there are a ton of different options in the case of student loans. Like there are certain forgiveness programs and other, you know, payment strategies. And so you'll have to just figure out really what's optimal for you. And that would be my advice. 

Hala: Thanks, Rachel. These were all such great insights when it comes to debt reduction.

Hala: So I know that a bunch of people on stage have questions for you all. And we're going to start going into our open Q and a. So, Melissa, I know you had a question Jonas. I saw you flash as well. So let's start with Melissa and then Jonas. 

Rachel: Thank you so much. Holla. Thanks everybody. On the stage, Dave, Rachel Adger, this has really been an insightful [00:56:00] conversation.

Rachel: I have a. The real question for the panel, you know, as a first time investor in the stock market, you know, how much time is required in terms of looking at the market, or is it wherever we invest our money? Is there a guide person like who's managing the accounts are watching it and deciding, or helping us decide if we should either pull out if we should stay or is that entirely up to us?

Rachel: Right. Okay. What's your, your feedback on that? 

Guest 3: Yeah, I guess I'll start. So it is up to you, but I would say that. There is definitely like a couple of hurdles you want to jump over and it's, it's really as much as we're really pounding the table, it comes down to education. And so there's just so many different ways that you can invest in so many ways that you can buy stocks.

Guest 3: You know, some people find that they like to spend a bunch of time and day trade. I'm not really that type of person. I'm somebody who I just want to find good businesses and let the businesses do the work. You know, I don't want to work for the money. I want to have the money work for me. [00:57:00] And so for me personally, you know, since I, I do this, full-time obviously, so I'm researching the stocks, but once I've purchased the stock, because my timeframe is long-term, I put minimal effort into monitoring and, you know, I stopped could go down and I'm not concerned if it goes down because I don't really truthfully care what the stock market does.

Guest 3: What I care about is if my business continues to grow and so. But to get to that point, it did take me time to understand why, why, why can I rely on that? You know, and it goes back to some of the basics of what is a stock, what kind of stocks do I want to buy? And why is it likely to work? Going back to the example of the stock market average return, it's been about 10% a year for decades.

Guest 3: I mean, going back to like the 1920s, even you could, you could count on that, but again, the road was Rocky. And so to be a good long-term investor, you need to understand that that's the [00:58:00] nature of the beast, and you're not going to get that kind of return unless you can hold through peaks and valleys. And so, you know, really internalizing that, you know, I know we hear things and, and there's some study out there, but they say like, it takes you six, seven or eight times.

Guest 3: To hear something before you actually internalize it. And so, you know, as you learn the language of investing in applies equally to the stock market, but you got to start first with investing and it's all intertwined, but it goes back to that having a long-term mindset and letting compound interest do do it's what com I mean, compound interest is, is extraordinary.

Guest 3: I like to think of it, like, like if you were to look at the tree, so I'm in, I'm in Raleigh, North Carolina. So it's easy for me to look at a tree and see the branches, because you know, when the winter comes on, the leaves fall off and you're going to see branches everywhere. But if you're looking at a tree and you looked at the way a tree grew, it started with a small little seed, and then it grew into.[00:59:00] 

Guest 3: Like a stump. And then if you, if you look closely at the way the branches go, the branches will have branches that branch out and make more branches. And so the way that, that multiplies that's what happens to your wealth when you invest it and when you get returns, but that doesn't happen if you're jumping in and out.

Guest 3: And if you're freaking out about the stocks you're going to buy. And so that's why understanding compound interest and understand the things that Dave and I talk about all the time on our podcast, whether you're interested in the stock market or not, it really applies to investing because all those principles hold true.

Guest 3: You know, any, any business could get wiped out tomorrow. And so that's why you need to not have all your eggs in one basket, but your eggs in many baskets. Right? And so diversification, longterm approach, dollar cost averaging, like we talked about before making it a consistent habit. So you're not trying to time what's going on with the market.

Guest 3: Those are all key things that apply to both the stock market and for investing. So. As a first-time [01:00:00] investor, again, it's a lot. And again, you probably don't want to jump into the deep end, but that's why you learn a little bit over time and you start to understand how it all works. And then from there, you know, once you cross those hurdles of like, okay, I know, and I've mentally prepared myself that the next time a pandemic crash happens in the stock market.

Guest 3: I'm not going to freak out and pull my hair out, you know, and, and cry about it. I'm going to understand that this was to be expected. And so to get there, make means crossing those hurdles. But eventually you can get to a point where, you know, whether you're trusting somebody else to pick the stocks for you.

Guest 3: You're just going with a completely passive index fund or you find researching businesses fund, and you're doing it for yourself. Once it gets to that point, it doesn't need to take hours and hours and hours. You can do it with very little time investment because it's a long-term game. It's not happening overnight.

Hala: Great advice, Andrew and fantastic question, Melissa. Thank you guys so much for your [01:01:00] contributions. If you are on stage Polina, Amelia, Jonas, mark. If you have a question, just flash your mic. I know Jonas, you had a question. So I'm going to head over to you. What is your question for the. 

Guest 4: Sure. Thank 

Rachel: you.

Rachel: Hello. My question is, uh, for the panelist, I'm curious about alternative investment strategies and passive income strategies. So stuff outside of the stock market. It seems a little frothy right now, and I'm 

Guest 3: wondering, 

Rachel: you know, sort of, 


Guest 3: there are a few 

Rachel: ideas that you have, that you can 

Guest 3: share with us 

Rachel: about thinking more broadly, you mentioned a diversified portfolio, give us some examples.

Rachel: So what are the categories you like real estate specific aspects of real estate? Are there other types of maybe overlooked areas that folks who are in a 

Guest 3: position to do so should look 

Hala: at, I love this question. Great job for bringing this up. Jonas. Thank you, Dave. Rachel, Andrew, who wants to kick it? 


Guest 4: right.

Guest 4: So Jonas, that's a fantastic question. [01:02:00] So here's, I guess here's some of my thoughts. So the diversification game is an important game to play for a variety of reasons. So the first reason is not all of us have the time or the inclination to become experts in a specific field, whatever that may be. And the greats that Andrew and I talk about all the time on our show of the Warren buffets of Charlie mongers and those kinds of guys, they have spent their lifetime studying particular businesses and they have insights and information and ways of thinking that I just they're beyond me.

Guest 4: They're the Michael Jordans of, of investing. And so their ability to pile into one particular company or asset or different kind of sector is beyond my skill set. So I have to use. I have to kind of pick and choose my spots and find a different kinds of investments. I'm going to be honest with you. I'm not super hip or hip to the [01:03:00] alternative investments.

Guest 4: If you're, if you're talking about some of the crypto and some of those things that that's really outside of my expertise area, when you're looking at different things like real estate and things of that nature, I tend to stick to stocks personally. That seems to be the area that I can operate to the best end and looking at stocks for me, if I'm looking at real estate, for example, one of the things that I would look at is REITs, and those are real estate investment trusts, and those are, they function like stocks, but they allow you to buy real estate without having the money or the effort to, to buy an individual property.

Guest 4: And so you can get into things like apartments, or you can buy healthcare, you can buy shopping malls, you can buy just about anything, apartments, whatever you want. There's a different readout. There there's information centers out there that, that housing. All the cloud servers for Amazon, for example. So there, there's lots of different avenues in that regard, some of the unlooked and unloved sectors out there.

Guest 4: One of the [01:04:00] things about investing is there tends to be certain areas of the market that are loved in certain areas that are unloved. And some of the unloved areas, if you will, right now are things like banks. You could look at utilities. For example, some of those things are not the most attractive right now, but the returns over a long period of time have always done well.

Guest 4: And you know, I'm more of an old school kind of value investor. And I try to find companies that sell for a discount and buy them at a good price. And it's not, I'm not looking for cheap companies, but I'm looking at the way. I like to describe it as I'm looking for an iPhone 12 for 800 bucks instead of 1200 bucks.

Guest 4: And if I can't find it, then I'll wait and try to find something else. But there are lots of opportunities out there if you sift through the dishes. And I would be curious to hear what everybody else has to say about. 

Hala: Yeah, Rachel, let's go to you. And Rachel, I have a question. I'll let you answer this, but then I have a question for you afterwards.

Hala: So go ahead and answer this question and then I have a follow-up for you as well. [01:05:00] 

Rachel: Yeah. Sure. So I'll just add, um, to, uh, Dave said, so I'm also a stock investor stock. And the thing is, is by no means the only investment strategy that, that people can successfully use to build wealth. But I think that a lot of the alternative strategies to that for most people are just not great options because these alternative strategies be it real estate or crypto or commodities or whatever it is come often with more risk and with more complication and a lot of times less liquidity.

Rachel: So I would say that, you know, if you're a beginner or an average person, if you're not a subject matter expert on, you know, a specific alternative strategy, then I think stock. Long-term buy-in hold stock investing really is the best strategy for you. If you're looking to build wealth over the [01:06:00] longterm, you know, so we can say Joan is like you said, okay.

Rachel: I think the stock market's looking a little frothy right now, maybe, but relative to what do we think? I think we have to kind of zoom out and take the long-term perspective and say, do we think that the market will be worth more in 10 years, 20 years, 30 years than it is today. And I say, you know, with total confidence, the answer to that is yes.

Rachel: And so I kind of take this long-term view as a young investor, and I'm kind of, don't look at the short term valuations because whatever it's at now, I know it's going to be worth more later. I'm not going to sell and buy and hold. And, and that's kind of, it's, it's just very simple. That's, that's my approach.

Rachel: But again, if you have subject matter expertise in, in real estate investing, it's not a bad way to build wealth, but I just find that a lot of people who kind of try to dip their toes into alternative strategies, because for whatever reason, they're turned off by [01:07:00] stock investing. A lot of times they kind of.

Rachel: Enough just to be dangerous, but not enough to kind of successfully execute that, you know, with all the complications they can bring and over a long period of time. So, so that would be my answer. 

Hala: Yeah. And you were just touching on something I want to dig deeper on or just get more of a definition around it.

Hala: And that's speculative investing and I read in a recent interview that you had, that you're actually pretty against that. And you think people should avoid any sort of speculative investing. So I'd love for you to define that for us. What does that mean and why do we need to avoid it? 

Rachel: Yeah, I think that's a really important distinction to make.

Rachel: When we talk about investing is kind of the difference between speculating and investing. So investing is when you put money into something, let's say a company because you truly believe. That company's internal sources of return, like growth in the company's [01:08:00] assets and earnings and income will make your investment profitable.

Rachel: Speculating on the other hand is when you put money into something because you're counting on external sources of return. So like in the case of mean stocks, for example, you know, you're counting on that. It'll just keep going up because everyone's buying it or because it's getting hyped on social media, you're kind of, it's like the greater fool.

Rachel: You're hoping that a greater fool will come along and just pay more than you did regardless of the fundamental value of that company, the game stocker or AMC or whatever. So, and, and kind of to speak to that too, to all the mean stock trading, which I think is a really good example of, of speculative behavior and in a really large group of people that drove these companies up to.

Rachel: Crazy prices that I think, you know, most people look at those companies and say, [01:09:00] these prices don't reflect the fundamental value of these companies. And I think that, you know, a lot of the people who were buying them either knew that and didn't care because they were speculating and just hoping. It would keep getting hyped and other people would keep buying it and they would keep going up or they were unaware.

Rachel: So it was so kind of speculating is like gambling. It's like going to Vegas and, you know, putting it all on, on red and in the long run, I would say most people end up getting screwed through, through speculative, invest through not investing through speculative trading. So my advice would be to avoid that.

Rachel: And again, not. Go back to what I keep saying, but really it just being a long-term buy and hold investor. If you can do that, you will come out ahead of just about every short term speculator that is almost guaranteed. Um, 

Hala: thank you for breaking that down and Jonas, a really great topic [01:10:00] to have brought up.

Hala: And since we're on this topic, we have to touch on NFTs and at least define what an NFT is. I've been personally hearing a lot about sports card investing in the NFTE space. I feel like so many people that I know are investing in these sports card and FTS, and I feel like it's the silliest thing. Like I just don't understand how you would put your money into that personally.

Hala: I just can't see it. So I'd love for somebody to break that down, Dave, Andrew, can you define what an NFT is for us and maybe give your perspective. Let's go to Andrea. 

Guest 3: Well, hell I, I completely agree with you because I don't understand that either. And so. To be honest, I don't spend my time worrying about it because similar to Rachel, the way I look at an investment versus a speculation is an investment is when you risk some money and you receive an income for risking it.

Guest 3: And a lot of times when you do that, you also, if you're buying stocks, you hope to get you hope to get growth along with that. [01:11:00] But you know, if you're loaning, if you're a bank and you loan to somebody, that's also an investment and you receive principal and interest back. Right. And so that's what investing is all about.

Guest 3: And I just, I don't see that with NFT, there's no income stream and. And it's so brand new. And so it is very, very speculative. And the thing is, if you do go down the rabbit hole like Dave and I have you start to learn about the history of the stock market. I know history can turn some people off, but guess what?

Guest 3: The speculative stuff is nothing new. It's just, it always takes new forms. So back in 2000, you know, everyday people were having second mortgages, third mortgages for four mortgages. The real estate boom was insane. People were doing these speculative investments. Like you wouldn't believe today, we would laugh at them.

Guest 3: But back then, that's what everybody was doing. And it was because the real estate market never went. It never went down. It always went up until that one day when it did it. And then in the, in the late nineties, it was the internet stocks, anything that had [01:12:00] a.com on it, you literally just had to make a company.

Guest 3: And put a.com and your company name, and you can IPO and make millions and billions of dollars. And so again, the same thing happened there where it worked until one day, it didn't. And so I'm not trying to imply that NFT is, is like, you know, going to be like those two things where my point is is that speculative investing is not something that's that's new.

Guest 3: And so you really have to be where you, when you see new kinds of investments that haven't been tested over time. If you look at long established track records, again, over decades, the stock market wins every time. And that's because I can't think of anything more reliable than businesses that are around us.

Guest 3: I mean, if you're employed, you work for a business. And so, you know, these are the primary profit generators. And so I want to be invested in the places that are employing people and making money. And that's why I invest in the stock. 

Guest 4: Yeah, I guess something I like to [01:13:00] take on to what Andrew was saying is one of the things that I think a lot of people don't think about when they think about an investor like Warren buffet, probably one of the most successful investors of our generation.

Guest 4: And certainly me ever, arguably, and he's been doing this for, I don't know, 60, 70 years now, and he's still going strong, but he didn't really start to become the gazillionaire. He is until about his seventies. He's a believer 90, 91 now. And so it took, it took time for him to build up as wealth. And I think a lot of people think that in a stock market, you have to be active to make money.

Guest 4: And he sometimes would go years without buying new companies. And he would just basically sit on his hands and wait for something to come along that would be attractive for him to buy. And so it was just a matter of. Being consistent and finding the companies that he liked and holding them for a very long time, just like Rachel and Andrew have been talking about the entire time we've been [01:14:00] on the show tonight and that's really where wealth generation comes from.

Guest 4: And I think sometimes people think that they have to buy the newest, hottest, latest, greatest thing to get rich quick. And unfortunately, with the meme style. So Rachel was talking about earlier, there have been a few people that had it big and then meeting. Blue is that completely out of proportion? It makes it sound like all of us can participate in that and become rich quickly.

Guest 4: And unfortunately it doesn't turn out that way. Most of us are on the losing end of those kinds of trades and the stats will show you that the numbers will show you that, and it proves out time and time again. And so I think the NF key thing is it's not something that I personally invest in. I like Andrew I've spent a winter zero.

Guest 4: I've now spent more time talking about it than I've thought about it. And it's just not, it's not something that enters my, my radar it's, it's buying and holding companies for a long period of time. And that's [01:15:00] how you make money in the stock 

Hala: market. Awesome. Jonas, any ups or, oh, it looks like Rachel has something to add.

Rachel: Yeah. Yeah. I was just going to add like, so if we break it down, NFT stands for non fungible token. So fungible means interchangeable or replaceable. Non is, you know, obviously the opposite of that, it's not replaceable. And the token in this case is like your stake to the digital asset. It's like your share.

Rachel: So these non fungible, non replaceable tokens, once they. Minted or created, they're the only ones. And there is a lot of hype around them now, especially in the context of art or hollow, like you said, in, in collectibles it's sports cards and things like that. And I think it's, you know, highly possible that down the road we'll see much broader applications of this technology and, you know, a lot of times, so [01:16:00] technology usually starts out kind of in, in little niche-y areas or little niche-y parts of the market before you really understand the true ramifications or, or broader uses of it.

Rachel: I wouldn't be surprised if we're sitting here years from now and they're common and well understood. And there's, there's very broad uses. But the reality right now is that, you know, 95% of people, me, myself, included don't understand them. And if you don't understand them, I think you should be honest with yourself and you're putting money into them, then you're speculating.

Rachel: And so I would just kind of say, if you're not a subject matter expert on NFTs or blockchain in general, you shouldn't be putting your life savings into this. That would be speculative and not investing. And that would be my advice to, you know, the 95% of people who just don't 

Hala: understand these. And it's great advice.[01:17:00] 

Hala: Anybody on the stage have a question for the panelists flasher, Mike. Okay. Let's go to Pauline. 

Rachel: Hi, everyone. Thank you so much for sharing this great information. I'm not a new investor. I spent quite a few years in wall street. My question is a little bit different and I hope that it serves other people.

Rachel: How does the panel feel about infinite banking, which for people that don't know, which is investing money into life insurance and using that as a wall generating tool? 

Hala: Oh, we can go to Michelle at the bottom. Michelle is a financial educator and has something to contribute. 

Rachel: Hi, thanks for having me. So your question Polina was on life insurance and whether or not it was a good investment.

Rachel: I didn't catch if you named a specific type of life insurance. Yeah, I named it infinite banking. It's a specific way of investing into life insurance and using that as leverage specifically for investment purposes and for tax purposes. Not a lot of people are familiar with it. And I was wondering if anybody is familiar with it and how they [01:18:00] felt.

Rachel: Gotcha. Gotcha. Okay. So no, I'm not familiar with that particular aspect. Like you're talking about infinite banking, there are different types of life insurance. Usually what I have found is that there's new names or products that come out, but the concepts are all the same. So I'm not sure if maybe somebody else on the panel knows about that particular name, but if there's a, if there's kind of an underlying concept that you know, that, that I could understand a little bit better it's because I might be able to talk to it a little bit better, but typically if you have life insurance and you've got investments inside of that, whether it's savings or actual stock investments for bond investments or whatever, a portion of the premium that you're paying is going to go to the actual insurance premium and then a portion of it is going to go to the investment.

Rachel: And then some of that's going to go to the costs. Are going to be needed by the insurance company, like [01:19:00] administrative costs and then there's commissions for brokers. So usually with life insurance investments, just generally speaking, I haven't found that it's been like the best investment. You have to be really careful with how you're going about doing it because you need to be looking at the underlying investment to make sure that there's enough return because life insurance policies do have the ability to you can accumulate wealth.

Rachel: And it's not, it's it's tax deferred. It's not technically tax deferred. It's, it's actually it's tax-free, but at age a hundred is matures. And then, you know, you've got estate issues and stuff like that. So most people will invest into a life insurance policy because of a tax advantages, but you kind of just have to weigh out if the amount of money that you're putting into the policy itself, because anytime you're putting money into a life insurance policy, you're paying for both the insurance part of it and the administrative costs and the commission.

Rachel: To whoever sells it to you and then also the investment. So you really have to kind of [01:20:00] do an apples to oranges comparison around. Should I just take that money and put it strictly into investments and then maybe use some of that extra money to, you know, some of, some of the money that I wouldn't be putting into the insurance policy, do I buy a low cost insurance policy?

Rachel: So there's kind of a couple of different ways to look at it. So I'm not sure if that's helpful for you, but I just wanted to kind of talk about sort of the general concept around life insurance and using it 

Hala: as an investment vehicle. Thanks, Michelle. Rachel, it seemed like you had something to add there.

Rachel: Yeah. Well, I was just going to say kind of what Michelle said. Actually. I think she put it really well if I don't know the specifics of infinite banking, but. We'll say that kind of, as a financial planner, we see a lot of insurance scams that come our way and that are pitch to our clients. And a lot of them have clever names.

Rachel: And I would just say kind of generally, any sort of. [01:21:00] Insurance-based scheme, that's pitched as a sound investment is likely a scam and is likely not to be a good investment. Kind of like Michelle said, a lot of life insurance in particular, whole life insurance, not, not term life insurance is, you know, the, the returns are low.

Rachel: The fees are high. You pay high commissions to the person that's sold to you in most cases. And it's very illiquid. And so I would say all of these things make it a very bad investment for most people. And I would be really weary of any life insurance based investment schemes. 

Hala: Awesome. Paulina. Hopefully that helps to answer your question.

Hala: And with that, we only have a couple minutes left of this panel session, which I think was excellent. The last question I want to leave, Dave, Rachel, Andrew, our panelists for tonight. A question about mindset. So, you know, we always hear this question or we always hear this [01:22:00] phrase, like you need to get in the mindset to attract money, right?

Hala: So I'd love to hear what you guys think is the right mindset to attract money and how we can get in that right mindset. So we can make smart investment decisions. Let's go to Dave, Rachel than Andrew. And this is your last opportunity to give any gem of wisdom to the audience. Both here live on clubhouse and on the podcast.

Guest 4: Okay, so I'm first. All right. So I guess the mindset for me with money is I'm the boss and it's, I have the right to make the decisions that I need to make, to do what I want to do. And I have taken the time to write down what my goals are and have a plan. And once I have that plan, it's easier for me to execute on that.

Guest 4: On that plan. I find that when I do not have a plan just in general in life, that I tend to get frazzled and a little bit uncomfortable about where I want to go or what I need to do. And so I guess I'm kind of a list person. And so by having a plan, it helps me feel like I'm in [01:23:00] control. And I understand what my goals are and where I'm trying to go with my money.

Guest 4: And so that's really, I guess my mindset is I'm in control. I'm the boss. I'm going to do what I need to do to go where I want to go. And that, that helps me a lot. 

Hala: I love that. I'm the boss, Rachel, what is your best tip for getting in the right mindset to attract. 

Rachel: I guess I would kind of frame it as be aware of what mindsets to avoid, and that would be, you know, an emotional mindset as an investor.

Rachel: I think emotions and money are very intertwined. And if you let your emotions dictate your investment decisions that's so that's a way to end up way underperforming the general markets and buy in and you'll end up speculating or, or selling in and out at inopportune times. So, yeah, I would just say to try to be stoic, that would be a better way to put it.

Rachel: I would say the stoic. [01:24:00] 

Hala: Awesome. Andrew, what are your final thoughts in terms of getting into the right mindset to attract. Well, 

Guest 3: I can't remember where I heard this and that was quite awhile ago, but it was basically asked for money and get advice, ask for advice and get money. And so, you know, knowledge really is power when it comes to money.

Guest 3: So whether that's, you know, how am I going to side hustle to make more money? Whether it's, you know, how am I going to learn to be better at my job so I can make more money, whether it's, how am I going to learn, uh, to budget so I can have more money, whether it's, how am I going to invest so I can have more money.

Guest 3: It really is a learning thing. And before you can get the behavior, right, you got to get the learning, right. Then you just take those steps from there. And, you know, it's an exciting process. And, you know, I commend everybody for making it this far, because this is very, very important knowledge to have. But if you're here and you've shown you the interest, then just keep going and keep going down that path because it's.

Hala: Awesome. Well, guys, this was such an incredible [01:25:00] conversation. I want to thank everybody who joined us today. Dave, Rachel, Andrew, for all of your wisdom and your insights that you shared. I think that's so many people are going to take away actionable insight and steps that they can actually implement in their daily lives to create more wealth for themselves.

Hala: So thank you guys so much for all the service that you provide today and for everybody in the audience, if you haven't yet, make sure you follow Dave, Rachel and Andrew on clubhouse and on Instagram. So with that, this is Hala and friends signing off. Thanks everybody. Have a great night.

Subscribe to the Young and Profiting Newsletter!
Get access to YAP's Deal of the Week and latest insights on upcoming episodes, tips, insights, and more!
Thanks for signing up. You must confirm your email address before we can send you. Please check your email and follow the instructions.
We respect your privacy. Your information is safe and will never be shared.
Don't miss out. Subscribe today.