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Transcription
Linda P Jones:
The first person would have $48,000. The second person would have over a million dollars. Yet, they both earned the same amount of money. So it's really not about how much money you make. It's about making the right choices.
Bobbi Rebell:
You're listening to Financial Grownup with me, certified financial planner, Bobbi Rebell, author of How to Be a Financial Grownup. And you know what? Being a grownup is really hard, especially when it comes to money. But it's okay. We're going to get there together. I'm going to bring you one money story from a financial grownup, one lesson, and then my take on how you can make it your own. We got this.
Bobbi Rebell:
Hey, financial grownups. Okay, saving money, absolutely important. Key advice this holiday season, my friends, but you can't stop there. As you heard from our guest, financial advisor, podcast host, and author, Linda P. Jones, because, as she tells her listeners on her podcast, Be Wealthy and Smart, and readers of her book, You Are Already a Wealth Heiress, you need that compounding. In other words, you need to invest it, and you need to be smart about it.
Bobbi Rebell:
And by the way, happy holidays to everyone, whatever holidays you celebrate, even if that holiday happens to be just taking a break from work around New Year's. I want to thank everyone for their support of the show. It is hard to believe it's been almost a year, and if you like the show, let me thank you. If you have a minute, post a screenshot on social media and tag me so I can do so. And if you are not already, please remember to subscribe, and thanks to everyone that leaves reviews as well. They are so meaningful to me and really the only payment that I ask if you enjoy the show. And with that, I want to share with you guys a gift from Linda P. Jones, this episode where she shares her journey to becoming a wealth heiress and how we can all create our own fortunes. I adore her, and I know you will too. Here is Linda P. Jones.
Bobbi Rebell:
Hey, Linda P. Jones. You're a financial grownup. Welcome to the podcast.
Linda P Jones:
Thanks, Bobbi. I'm so excited to be here.
Bobbi Rebell:
Many of our listeners know you as the host of the podcast Be Wealthy and Smart, and more of them are getting to know you as the author of You're Already a Wealth Heiress, Now Think and Act like One, Six Practical Steps to Make it a Reality Now. The good news is it's selling really well. The bad news is it's sold out and on back order. Linda, what is going on?
Linda P Jones:
Well, it got a lot of popularity and is resonating with people. They love the idea that their ability for wealth is already within them, just like the small seed of a tree can grow to be a very large tree. It's already within that seed. It's a law of nature. And so I make that point that women can go from nothing to wealth, and I have lots of stories in the book about that. So that's really what I believed is that it's already within you.
Bobbi Rebell:
I love that, and it's so perfect that you became a successful author among your many accomplishments, which we'll talk about later, but a lot of this came from a book that your dad gave you when you were only 10 years old. Tell us your money story.
Linda P Jones:
Yeah, so my dad handed me a copy of Think and Grow Rich when I was 10, and I was already interested in financial things. And he handed me that book, and it really, Bobbie, set me off on a different course because a lot of that book is about mindset and thinking big and thinking positively and affirmations, a lot of mindset. And so it really started me in that direction, but it was really when we would get in the boat and go around the island where I grew up, Mercer Island near Seattle, we would look at these huge homes along the waterfront and say, "Look at that house. I want to live in that house. Oh my gosh. Look at that mansion." And we'd say, "How do people get rich? How did these people be able to afford this kind of a home, and how does that happen?" And it became my life's purpose to really study, "What are the steps to wealth? How did this happen?"
Linda P Jones:
I read all these autobiographies and biographies of millionaires, studying it all, and then-
Bobbi Rebell:
Like who? What other books did you read?
Linda P Jones:
Oh, everything from I mean way back to old things, like Earl Nightingale. I don't know if you remember these really old classics, way back, that came out of Think and Grow Rich, about Carnegie and Rockefeller and Aristotle Onassis. A lot of the people that were mentioned in that book, I actually went and did some more research on. Benjamin Franklin even. I mean, I went way back, and then I would also cover some of the people of the day. But I really just wanted to see what were the common points of those people, and that's when I come up with the six steps to wealth, and that's actually when I started following them and that is what enabled me to make my $2 million at age 39.
Bobbi Rebell:
How did you make $2 million by age 39?
Linda P Jones:
I worked on Wall Street for a long time. After I graduated in business, I went into working for a Wall Street firm and represented investment firms, money managers. I wasn't a financial advisor. I did get my CFP and have had it all along, but I decided I didn't want to work with individual clients. I wanted to work with the people who actually invested the money and, again, find out what are they doing to be successful making this money grow? I realized my money wasn't compounding fast enough.
Linda P Jones:
The mutual funds were working fine. I started investing in real estate and got my compounding rate up to about 15% a year buying real estate with partners and doing flips, and this is years ago. This is a long time ago. That market eventually dried up because a lot of that came out of a banking crisis, and when the economy recovered, a lot of the opportunities to buy low really disappeared. And so I thought, "Okay, now what am I going to do because this is ending, and I need to find something else?"
Linda P Jones:
Well, back to the stock market. It started going up. In a particular year, it went up about 30%, and I thought, "Well, gosh, no flipping houses, no dealing with contractors, realtors, paying commissions, cleaning toilets, anything like that. That sounds like it could be a much better way to invest." I thought, "Well, maybe I can learn how to invest in stocks." So I got this book called How to Make Money in Stocks by William J. O'Neil. Because of my background in the financial world already, I had a lot of knowledge to build on, and I was able to teach myself through trial and error how to invest in individual stocks, and I was investing in a time that was the technology time, technology bubble, internet bubble, what I call bubbles and cycles where you can really find where is the fast compounding place of the particular day, of a particular year, or few years-
Bobbi Rebell:
So you were trading? You were really trading?
Linda P Jones:
I was not trading, actually. I was buying and holding, but I was identifying companies that would be the winners of the future and identifying them pretty early on.
Bobbi Rebell:
So doing a lot of individual stock research.
Linda P Jones:
Correct. Yes. And so that is how I grew my investment account to $2 million.
Bobbi Rebell:
Well, congratulations, and here you are now sharing that knowledge with so many people. What is the takeaway from this for our listeners?
Linda P Jones:
Well, I think you have to start getting obsessed with compounding. I think a lot of financial experts are barking up the wrong tree in a way because they're very focused on being frugal, and they're trying to save their way to wealth. And that's very difficult to do because you have to make a lot of money in order to be able to save enough to be financially independent. The reality is most people are going to become financial independent through compounding and through their investments. And so if you get really good at investing and get really focused on your compounding rate, that's going to serve you much better than trying to save a few pennies here or there, in my opinion.
Bobbi Rebell:
And that brings us into your everyday money tip.
Linda P Jones:
Yeah, so my everyday money tip is that it doesn't matter how much you're making as much as it matters what you do with your money, the decisions that you make, the way that you invest your money. And let me give you an example, Bobbi. So let's say there's two people, and they each earn $40,000 a year, which by today's standards is an average to modest income. But let's say they make very different choices with their money. One person saves the average savings rate in the US, which is 2.8%. That's $1,120 a year for a total of $33,600 saved over 30 years. If they put that into their bank account and earn 2% annually over 30 years, their lifetime, let's say, their money will grow to about $48,000.
Linda P Jones:
Let's say the other person earning $40,000 a year is a better saver. They save $5,500 a year, which is the maximum you're allowed to put into your IRA if you're under age 50. You can save more if you're over 50. And they earn 10% a year in a long-term stock market portfolio, and they're able to do that for 30 years. That person's money will grow to over a million dollars.
Linda P Jones:
So, to summarize, the first person would have $48,000. The second person would have over a million dollars. Yet, they both earned the same amount of money. So it's really not about how much money you make. It's about making the right choices, decisions, and investing well so that you can achieve financial freedom.
Bobbi Rebell:
Right. The ultimate mistake that people make is they save money rather than invest it. If you have it, once you have your emergency fund, it's really important that it not just sit in a savings account because you're waiting for, for example, the right time to invest it or something like that. It's a great point that you make. And you make a lot of great points like that in your book. So let's talk about your book. It has a fabulous title. You Are Already a Wealth Heiress. I feel better just hearing that, Linda.
Linda P Jones:
Well, you are already a wealth heiress. It's already within you, as I said, and you're already the bright, successful, confident person. There's one within you. You don't have to have a brain transplant. You don't have to have some magic spell put upon you. It's already within you, just like that little seed grows into a big tree. It's a law of nature. And so in the book, I talk about a woman who was basically destitute in China, no education, was responsible for her family, worked in a factory, made very little money, and eventually became the richest woman in the world. And that was not because some exterior force came and did something to her. That was within her all along. And so I just want to encourage people that you do have financial brilliance within you already. You just have to develop it, learn, get some knowledge, and take action.
Bobbi Rebell:
And you share that three times a week on your podcast, Be Wealthy and Smart, which I am a new fan of and obsessed with. And Linda, your podcast is in 181 countries. You've had more than two million downloads, and now you're expanding into video.
Linda P Jones:
We are. We're doing Wealth Heiress TV on YouTube. There were a lot of people that wanted the video format, and I felt I could reach a completely different audience on video. My Be Wealthy and Smart podcast is also on YouTube, so it plays to both, but I really wanted to have a video component where I could see people, they could see me. I guess I can't see them, but they can see me, and I just felt like we could do some fun things. We could go on trips together. I could take them places with me. I could show them wealth-building ideas in a different way. So it's going to be something that will evolve over time. Right now, I'm in the basics, but I hope to expand it over time.
Bobbi Rebell:
Well, it is all a gift, and thank you so much for all of it. Where can people find you? Give me all your social handles and all that good stuff.
Linda P Jones:
Well, let's see. They can find all of my podcasts at LindaPJones.com/podcasts. They can, of course, find Be Wealthy and Smart on iTunes or Stitcher Radio, wherever podcasts are. They can find my Instagram page, which has wealth tips twice a day at Instagram.com/LindaPJones and as well as Twitter, Linda P. Jones and on Facebook Linda P. Jones fan page.
Bobbi Rebell:
Amazing. You are one busy lady. Thank you for it all, Linda.
Linda P Jones:
Thank you so much, Bobbi.
Bobbi Rebell:
The first thing I want to talk about may catch some of you off guard, and that is Linda's offhand comment, you may have even missed it, about cleaning toilets. Financial grownup tip number one, do not let any job or wherever you start in life hold you back. For those of you who read my book, How to be a Financial Grownup, you may have noticed a story in the book from a guy who also, by the way, contributed the foreword, named Tony Robbins. You know what he did before he was Tony Robbins? Well, he was a janitor. He cleaned toilets. Also, he was broke and from a really dysfunctional family and so on. If Tony Robbins can create his own wealth dynasty, so can you. Go read Linda's book, and while you're at it, check out Awaken the Giant Within. That's one of Tony's books that I love.
Bobbi Rebell:
Financial Grownup tip number two, do an end-of-year assessment of where your money actually is. Sometimes we save it and we forget it, and it's not actually invested in something that is going to grow. Make sure that your money is where you think it is. Sitting in an investment account is not the same as actually being invested in, for example, a stock, a mutual fund, an ETF, whatever is right for you. Make sure it actually got there.
Bobbi Rebell:
Thanks everyone for your time. I value it, and this is why we keep the episodes short. If you value this podcast, please help it grow by doing all the things, rate, review, subscribe, and definitely share it in social media. Be in touch [inaudible 00:14:25] on Instagram. I am @BobbiRebell1 on Twitter @BobbiRebell, and you can always email us your suggestions at hello@financialgrownup.com. That includes guest suggestions. By the way, if you enjoyed this episode with Derek and want to see more people like him, send us some ideas. We'll see what we can do. And of course, tell your friends so we can keep spreading the word about the podcast, and let's all thank Linda P. Jones for such great advice helping us all get one step closer to being financial grownups.
Bobbi Rebell:
Financial Grownup with Bobbi Rebell is edited and produced by Steve Stuart and is a BRK Media production.
