Some of the most common advice is also the worst. Bobbi and her guest, certified financial planner Roger Ma discuss some popular myths and how investors can protect themselves - and their money- from going down the wrong path. 

4 Myths About Money and Investing

• Myth #1 - Earning a high salary will make you financially secure

• Myth #2 - Renting is throwing your money down the drain

• Myth #3 - Investing is the most important aspect of personal finance

• Myth #4 - Investing is complicated

Episode Links:

• Website - lifelaidout.com

• Roger’s book - Work Your Money, Not Your Life

• Roger’s book is featured in this Business Insider piece - 11 books to help your grow your career during a recession

Follow Roger!

• Twitter handle - @lifelaidout

• LinkedIn - rogermacfp

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

After buying an expensive home, Certified Financial Planner David Rae found himself facing an income crunch during the recession. His decision to get a roommate helped him keep the home and stay on track with his financial and lifestyle goals. 

In David's money story you will learn:

-That even CFP's experience money troubles too

-Creative ideas to help alleviate the cost of a home

-Ways to cope with the feeling of failure when financial goals aren't met

-The real reason people can afford big houses

-What David looks for in a roommate!

In David’s money lesson you will learn:

-Financial problems should be dealt with head on

-There are creative ways to cut spending that won't inhibit your lifestyle

In David's everyday money tip you will learn:

-David's favorite credit cards and the perks of each one

-The easiest way David saves money while traveling first class 

-How to prioritize your spending to afford nice vacations

In My Take you will learn:

-Being a financial grownup means keeping on track with your goals, not living a certain lifestyle

-Take action if a financial disaster is coming your way, don't wait for it to go away

EPISODE LINKS

Check out David's website FinancialPlannerLA.com

Follow David!

Instagram: @DavidRaeLA

Linked In: @David Rae, CFP

Twitter: @DavidRaeCFP

Facebook: @DavidRaeCFP

In this Financial Grownup episode we have Certified Financial Planner David Rae as a guest on our show. He talks about decisions he made that make him a Financial Grownup like getting a roommate. He also gives us tips on how we can save money traveling first class. #FinancialGrownup #SaveMoney #Traveling

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

Transcription

David Rae:
It did kind of feel like I was failing in a way to have to get a roommate, but then looking forward, I'm like this means I can actually be successful and keep the house, rebound, and let it rebound in value, and still travel and have fun and do all the things I wanted to do.

Bobbi Rebell:
You're listening to Financial Growing Up with me, certified financial planner, Bobbi Rebell, author of How to be a Financial Grown up. You know what, being a grown up is really hard, especially when it comes to money. But it's okay, we're gonna get there together. I'm gonna bring you one money story from a financial grown up, one lesson, and then my take on how you can make it your own. We got this.

Bobbi Rebell:
Hey friends, that was my friend certified financial planner, David Rae. Even though he felt like he was failing, he was in fact pivoting, very well in fact, to deal with things beyond his control. More on that in a moment. Just wanna thank all of you for your support. We have been doing some new content here, adding in bonus episodes on topics you guys have requested, and the feedback has been amazing. Please keep it coming, DM me on Instagram at BobbiRebell1 and on Twitter and BobbiRebell, and tell me what you think about the changes we've been making, and what kind of topics you want us to be covering. Reviews are great, too if you wanna support the show, and of course, tell a friend.

Bobbi Rebell:
Let's talk now about about David Rae. He takes being a financial grown up very seriously, and so it was hard, but maybe not too hard to make a decision when the recession hit a decade ago. Here is David Rae.

Bobbi Rebell:
Hey David Rae, you're a financial grown up, welcome to the podcast.

David Rae:
Thanks for having me on.

Bobbi Rebell:
I am such a fan of all the wisdom that you share with so many people. You're quoted very widely in the media, you're on TV all the time, and a lot of it has to do with your expertise being a financial planner, and telling us what to do when we need it in advance of what we need it. And the story that you brought to share with us here on Financial Grown Up I love because it has to do with the fact that you're kind of just like us in that things happen that you can't always control with the economy and the larger environment, but you, even though you're a CFP, still have to deal with them. Tell us your money story.

David Rae:
I did a lot of planning and I went out and bought a very nice and expensive house in LA. This was right before the financial crisis, so I bought my house in early 2007. I thought I got a great deal, I got like $300,000 off the asking price, little did I know that the financial crisis was coming. I got a house that I thought I could afford with my growing income, and when we went into the financial crisis, my income didn't go up as much as it had in the past, and a few years in, it had started to decline actually, and that combined that with real estate values tanking, I had to go back to my financial plan and look at my spending and where I wanted to spend money, and instead of having to cut back on my travel and fun with friends, I decided to get a roommate

David Rae:
And I think that was a really big financial grown up moment because it did kind of feel like I was failing in a way to have to get a roommate, but then looking forward, I'm like this means I can actually be successful and keep the house, rebound, and let it rebound in value, and still travel and have fun and do all the things I wanted to do. And I have a big, nice house, I can have a roommate here. It wasn't like I was sharing a room.

Bobbi Rebell:
Tell us more about what happened. How do you even start looking for a roommate? How old were you at the time, and you'd been living on your own for how long?

David Rae:
I hadn't been on my own that long. I'd had roommates before I bought the house, so it wasn't like a huge, big deal. It wasn't like I was married with ten kids running around which would make it a lot more difficult, but I was in my mid twenties, I had been a few years in to being a financial planner, and I planned ahead. I could make the payment, I could afford the house, even with the drop in income, but it juts would be tight and really not a fun process. Plus, I was looking at real estate values and they had dropped pretty substantially around the country.

David Rae:
By getting a roommate, I was able to still travel, still have money, and still be able to save for my financial goals, like retirement and all those fun things that a financial planner should be doing. And at the same time, it allowed me to stay in my home because I bought a bigger, more expensive home knowing I would be there for a long time. Since I've bought the house, it's doubled in value, it just had a very nice 30 or 40 percent dip during the financial crisis, like much real estate did during that time. But looking forward, because I kept the house and stuck with it, even when times were tough, I was able to come out ahead with this great investment on my house which if I took the dip out of it, it looks great, my house doubled in value in like 10-11 years, which is a pretty nice return there.

Bobbi Rebell:
Right, because the truth is, as long as you can afford the payments, and you don't fall into a problem situation, it only matters the day that you buy an investment, and the day that you sell it. So even though there, as you say there's this dip, ultimately, it really is just on paper, because you had enough of a financial cushion, and you also made a big lifestyle adjustment.

David Rae:
Absolutely, and you know, most investments, it really does help to have time on your side, and real estate is one of those things as well because so many bailed out. And don't get me wrong, there are people that maybe their house dropped a lot more or they didn't want to live there and there was reasons to sell, or if I was gonna be going into credit card debt or racking up other bills, or not able to pay my mortgage, it would be a different conversation.

David Rae:
But with roommates, I was able to maintain my lifestyle, and then now I don't have roommates. I've since gotten married, and the house is mine and it's been upgraded and all this great stuff. But I weathered the storm, and I think having a plan and facing being a financial grown up really can make you smooth some of these tough times out.

Bobbi Rebell:
What was it like looking for a roommate? How did you even do that? Were there a lot of people looking for places to stay more than usual because of what was going on in the larger economy?

David Rae:
You know, I'm in the center of LA, so a lot of people are looking for roommates. Rent is really expensive here, so me renting a room in the house was still a few hundred dollars cheaper rent wise for someone coming to rent a room versus getting their own one bedroom or studio apartment. Plus it was fun, I mean I was in my 20's, so I think a lot of people in their 20's still have roommates, especially in bigger cities, and it was still fun to have because we had game night at the house, and we had people over for American Idol, so it was actually a really nice social thing because I was single and it probably actually aided my social life more than being a hindrance. Like oh my god, my terrible roommates sitting on the couch, you know, the horrible thing that people are probably picturing when they're thinking of getting a roommate or some hobbit that never leaves the house.

David Rae:
I actually had friends living with me, and it was not a problem to find roommates, and over the years I had a few roommates move in, and then the final roommate stayed probably two years after I got married. We just enjoyed having them here, and when they finally moved out, we didn't replace them.

Bobbi Rebell:
I love the fact that you're not living in absolutes. You didn't say well I am a grown up now, so I must live in this house alone, and it would be very immature to have roommates or whatever, or deal with people judging you. You made a financially responsible decision and it also was kind of fun in the end.

David Rae:
It was fun in the end, and looking ahead to where I'm at financially now as a financial planner, that meant my 401k contributions were still made, my mortgage was still paid, I didn't rack up credit card debt, and that's turned into hundreds of thousands of dollars over that time when I put it into the stock market and let it grow. So it really can make a huge difference when you give it time and let it compound.

Bobbi Rebell:
And what is the takeaway for our listeners?

David Rae:
Don't ignore financial problems. That's the biggest thing. I could have probably ignored it, and a lot of other people ignore when they're out of work and they don't wanna cut back, or they've gotten a decrease in pay, or they've had an illness. I face it head on, and it really meant that I could brave the storm and come out stronger on the other end. And I had some fun along the way.

Bobbi Rebell:
Yeah, and you know what, the other thing is you you didn't have to deprive yourself of things you enjoyed, like travel, so you were able to still do things that were discretionary to some degree. Because sometimes people in that situation, maybe would not have thought to take on a roommate, or chosen not to, and then they just wouldn't have traveled for two years.

David Rae:
And do what's right for you. I mean obviously some other people, you're right, it may be better to just not travel, but that wasn't what I wanted to be doing in my mid 20's when I was single and free and could run around the world and have a great time and I also wanted to have a house and I wanted to save for the future cause I am a financial planner, and I do love saving my money and seeing my net worth grow, which wasn't necessarily happening on paper during the financial crisis when the market was dropping and real estate values were dropping, and my income wasn't doing what I would like it to be doing, or what it's doing today.

David Rae:
But I'm here and I made it through and I was a financial grown up.

Bobbi Rebell:
You were proactive, and that's the important thing. Lets talk about your everyday money tip, because it also has to do with travel and making sure that you can travel the way that you want to travel. You have some tips for us.

David Rae:
Absolutely. My big thing to think about is prioritize what's important to you, cause I see so many people that say they can't afford to travel, but they're driving an expensive car, or they're living in a really expensive house, and that just doesn't leave any money leftover to travel. So prioritize your spending, and for me, one of the biggest ways that I can really travel in style, because I've gotten spoiled and like to fly say first class around the world. I use credit card points and miles to really make that affordable. I'm not gonna be spending $15,000 a ticket like my last trip to Europe would have cost if I paid cash. But i used miles, so I spent like $50 on that, and the way I accrue a ton of miles is I put all of my bills on credit cards, just disclaimer, I pay them off every month, I can afford what I'm spending. And I put them on the credit cards that will get me the most miles.

David Rae:
At Staples and Office Depot I get five points on one of my cards, and I have another card that gives me like four points on dining and other cards give you money on gas and utilities. So finding the cards that will give you the most points, as well as sign up bonuses and status matches. So I have an airline card that helps me have higher status, and I've gotten upgraded like 12 times this year on almost all of my flights from just having status, so that's free, sitting in first or business class. Just for having status. I like free.

Bobbi Rebell:
I like free.

David Rae:
I like nice stuff for free.

Bobbi Rebell:
So what resources, do you have any favorite resources that you can point us to?

David Rae:
I really like the points guy. It's a website that has a bunch of tips there, and there's another blogger called Eric Rosen who has a bunch of stuff on the internet if you google him, he talks really about how to get upgraded to first class, which is a great resource there.

Bobbi Rebell:
I need that.

David Rae:
I know you do. There's nothing more financial grown up than being first class, especially [crosstalk 00:10:46]-

Bobbi Rebell:
Not if you pay for it though. Definitely not gonna pay for it in actual cash or money. But if it could be free, that works for me.

David Rae:
We could all do that, we can all use miles and points or status, and just being a little strategic on how you do it, I book my hotels a lot of times through hotels dot com and I just went away for the weekend and used free nights. I went to Vegas and had two free nights of hotel. So it's just stretching the money you're making and spending to turn it into more travel and more fun, and that's just the stuff I love. I know other people like cash back, or gift cards or things like that, but I love to travel, and again, I've become a little spoiled and wanna be up in first class when possible, even though I believe Barbara Corcharan says she's back in coach. But I'll be up in first and that's how I like it.

Bobbi Rebell:
Before I let you go, I love your blog. Tell me about your blog.

David Rae:
My blog is Financial Planner LA dot com, and I really just try to bring fun tips to money. I know we get pretty serious as a financial planner, and you say the big B word, budget, but I really like to go more in the range of pop culture and fun, and I did a big series on the Golden Girls retirement, how you can retire and have a fabulous time [crosstalk 00:11:56].

Bobbi Rebell:
I love that, I was retweeting that one, I loved it.

David Rae:
I know, it's so much fun. People really love that. It's kind of taking that roommate story and going this can actually be a great, positive thing, and a happy dream retirement. We'd all love to live with friends, or at least have that kind of friendships around. So I try to make money fun, and definitely the tax stuff is in there, and the nuts and bolts are in there, but we try and wrap it in something fun so you're not just stocks and bonds.

Bobbi Rebell:
Yeah, and it's a great resource, especially because we're heading into the end of the year, and there's a lot of changes, and you mentioned the tax law, so you're a great resource as a Certified Financial Planner to check out for all of that. And just before I let you go, one last thing, share with us your social handles so people can follow you.

David Rae:
Yes, on Twitter I'm DavidRae, R-A-E, CFP. On Instagram, I'm DavidRaeLA, and on Facebook it's David Rae CFP as well. So check me out.

Bobbi Rebell:
Thank you, David.

David Rae:
Thank you.

Bobbi Rebell:
Okay. For all the talk about delayed adulthood these days, the truth is, there is still a stigma with having roommates as not being a very grown up thing. But, being a grown up means making adjustments and being real when you need to. Life's complicated, things get messy, and there's a lot of unpredictable stuff that we can't always be fully prepared for. So we have to be ready to make changes and go with the flow a little bit. Sometimes things just kind of happen.

Bobbi Rebell:
Financial grown up tip number one, do what you have to do to stay on track with your financial goals. David took on roommates. It wasn't so bad, in fact, he had a pretty good time with it. I moved back in with my parents when I got a divorce early in my adult life. I sold the tiny one bedroom apartment that I had owned, regrouped for a year, saved money, and moved out. Stronger financially, and also just like David had a good time with his roommates, it was kind of nice getting to know my parents as an adult.

Bobbi Rebell:
Financial grown up tip number two, if you see the financial train wreck coming down the tracks, and you know it's coming guys, you can see it, get a plan together fast. Don't assume things are just gonna fix themselves or you can just bury your head in the sand. They're not gonna go away so easily. Even if your plan isn't perfect, just have some kind of plan. Do something. You can adjust it later. But denial and procrastination like David said, just too expensive. You deserve better.

Bobbi Rebell:
Thanks to everyone for your continued support. If you have not, please subscribe to the podcast. It's free. Go into the manual settings when you do it, and setup auto downloads so you don't miss any upcoming episodes, and of course, please tell a friend that you care about and who you think deserves to have a rich life.

Bobbi Rebell:
David Rae is such a wonderful role model for all of us. Thank you for helping us all get one step closer to being financial grown ups.

At 20-years old, Lauryn Williams CFP® was the fastest woman in America, and suddenly faced some very grownup financial decisions. Lauryn shares how she put together a team of advisors including her coach and an agent, how they vetted different sponsors, and how she learned to get paid to run for a living. 

In Lauryn’s money story you will learn:

-Why one of the fastest women in the world chose to slow down and carefully make her financial decisions

-How much money a three-time Gold medalist really makes 

-What goes into an olympic sponsorship deal

In Lauryn’s money lesson you will learn:

-How keeping an open mind prepared Lauryn for the opportunity of a lifetime

-How to cope with money anxiety when making a big financial decision

In Lauryn's everyday money tip you will learn:

-The one person who will always save you money

-How to listen to others talk about finance with a grain of salt

In My Take you will learn:

-The number one question you always need to ask yourself before making a financial decision

-Why Certified Financial Planners need to be your best friend

EPISODE LINKS

Check out Lauryn's website here

Listen to Lauryn's podcast here

Follow Lauryn's company! 

Instagram: @worthwinning

Twitter: @worth_winning

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

Transcription

Lauryn Williams:
And so you can put the Adidas contract next to the Nike contract, next to the New Balance contract, et cetera, et cetera, and see one is offering a higher salary but the other one is offering a lower salary but is also going to pay for your school. Which I had one semester of school left when all this was taking place and that was really important to me, that I be able to finish my education and finish it for free.

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:
Hello, my financial grownup friends. That was fellow Certified Financial Planner, Lauryn Williams. Her company, by the way, is called Worth Winning. She also just happens to be a three-time Olympic medalist, the first American woman to medal in both the Summer and the Winter Olympic Games. Lauryn was a track star and then just kind of decided to get into the bobsledding thing, because why not, and of course she won a medal there to. By the way, she's a four-time Olympian. And Lauryn not only is a CFP, she is an MBA, she has an MBA in Finance. Talk about a role model.

Bobbi Rebell:
So welcome, everyone. So glad you are investing the time. And for those of you that are new to the Financial Grownup podcast, we try to keep it short, about 15 minutes, because we know how busy you are. But if you have a little more time, feel free to stack a few episodes together. Let's get right to Lauryn, I met her through our mutual friend, Jamila Souffrant, of the Journey to Launch podcast at Podcast Movement, where else, this past summer. And immediately I adored her, I know that you will too. In addition to all of the accomplishments that I just mentioned, and many more, she's just the coolest and most lovely person, and also a fellow dog lover. Here is Lauryn Williams.

Bobbi Rebell:
Lauryn Williams, you're a financial grownup. Welcome to the podcast.

Lauryn Williams:
It's so good to be on. Thanks for having me, Bobbi.

Bobbi Rebell:
And I'm so excited to have you because not only are you a four-time Olympian, the first woman to earn a medal in both the Summer and the Winter Olympics, you get the biggest gold star from me because you're an actual CFP, Certified Financial Planner. So, so great to have you, Lauryn.

Lauryn Williams:
It is really good to be on the show. I'm looking forward to telling my financial story today.

Bobbi Rebell:
I do want to just mention, you also are a financial professional, you are the real deal. Your company, Worth Winning.

Lauryn Williams:
Yeah. I started a company to be able to help young professionals, people specifically in their 20s and 30s, organize their finances because I felt like there was such a big gap there. During my career as a professional athlete I had some advisors that didn't do a good job for me, and it was mainly because they didn't get what I needed at that age. So my company is specific to helping young professionals organize their finances.

Bobbi Rebell:
And we'll give all the information for that. And by the way, your podcast, Worth Listening, after your money story. But we want to get to this because this is really a unique perspective into the world of a money-savvy athlete. Because when you were in college, just 20 years old, you won a very big, big race and that brought you to a big financial milestone in your life. Tell us your money story, Lauryn.

Lauryn Williams:
Yeah, so I was a junior in college at the University of Miami, having a blast. Made it to nationals my freshman and my sophomore year, but didn't have success. So on my junior year, I was on a tear. What do I need to do to win this national championship, I wanted to be the fastest girl in all of college. And I did, I achieved that. I ran the fastest time that day, won the race. It also happened to be the second fastest time in the world, for the whole year.

Bobbi Rebell:
Just happened to be.

Lauryn Williams:
Just happened to be. And it was 2004, the Olympic year. So immediately I had to turn my focus from this one goal that I had of wining college nationals to, oh my goodness, America is counting on me to go to the Olympic trials a month from now and win that thing and represent Team USA.

Bobbi Rebell:
But also, there was a money element to this.

Lauryn Williams:
Exactly. So immediately after running that time I started to be approached by agents and they started approaching mostly through my coach. She was kind of the middle woman and she just had to sit me down and say, "Lauryn, as much as I'd like you to stay in college, I think it's going to be more lucrative for you to leave school. And the first part of that process if for you to get an agent."

Bobbi Rebell:
Right. What happened was you were being approached by a bunch of companies who wanted to sponsor you.

Lauryn Williams:
Exactly. So, with track and field, the shoe companies are usually the main way that we earn a means of income. So it's not a situation where you earn a W3 employment somewhere with Team USA and then you get this as extra. If you don't have a sponsorship, you don't have an income and you're not really a professional athlete. That was the main thing, so I had to decide which shoe company I wanted to go with, which contract was going to be the best. And the agent helped a lot with putting in the restrictions and the bonuses and making sure everything was really good.

Bobbi Rebell:
Right. So let's take a step back. You finish the race, what happens then? Does a shoe company just call your mom? How do they first get in touch with you? Break down exactly what happens and, if you feel comfortable, who was approaching you and how they value an athlete early on.

Lauryn Williams:
Yeah. So the shoe companies are there at the meet, they're walking by you, they're shaking your hand, telling you good luck, we'd love to talk to you. And you don't have any long conversations in that moment, you just have kind of shorter ones. And then, like I said, my coach was very protective, made sure that first step is to get an agent, find someone that you trust, and let those shoe companies go through the agent instead of you having to talk to them directly. Because they're trying to woo you and tell you all these great things, but really it's going to come down to what's on that pen and paper and whether or not we should sign that. So we've got to get someone that's a professional, that knows about these contracts, in order to get the information we need. So that was the first step in the process really.

Bobbi Rebell:
So your coach guided you in choosing an agent. And what was that conversation like? Were you just swarmed by agents? How did you vet the agents?

Lauryn Williams:
I had to make a list of questions. I had to find out what I was looking for, what do I need from being a professional athlete, what can I expect from you? Because I'm 20 years old, I'm not even legally a grownup grownup yet. I'm going to need your guidance but I also know that I'm hiring you and you're going to make a living from this. So what can I expect from the money that you'll be paid to provide this service to me? And in track and field, an agent takes 15% of whatever they get for you, and that's a pretty hefty chunk of change. It's not 1% or 2% like it is in the other professional sports, so you'd better make sure that it's somebody that you trust and that's going to be making the best earnings for you so that they too, in turn, can earn.

Bobbi Rebell:
Wait, is that true? So in track and field they take 15%, what sports do they take only 1% or 2%? That seems really low.

Lauryn Williams:
Pretty much the big three sports. So the Major League Baseball, National Basketball Association, NFL. All of those have much lower percentages, but they also have much higher earnings.

Bobbi Rebell:
Fascinating.

Lauryn Williams:
Yeah, our income fluctuates quite a bit in track and field. And so, for me, I was at around $200,000 as a 20-year-old. Like you said, fastest woman in the world in 2004. With, like I said, different bonuses and prize bonuses, if I ran a certain time I could get a bonus, if I won the Olympics I'd get an increase in salary. All those different sorts of things had to be negotiated.

Bobbi Rebell:
All right. So let's back it up a little. So you get the agent, then what happens? Did you just get a pile of offers and you just picked one? How did it work? Were there other factors? Was it just money? What kinds of things were you seeing, as a 20-year-old just getting these first money offers?

Lauryn Williams:
Yeah. So the agent comes to me kind of with a summary of here's what Adidas is offering, here's the salary, here's the bonus structure, and here's the ... You know, he was just going with the main things. Of course, you know, the final contract is 20 or something pages long, but the initial part is just here's a summary of what it is. And so you can put the Adidas contract next to the Nike contract, next to the New Balance contract, et cetera, et cetera, and see one is offering a higher salary but the other one is offering a lower salary but is also going to pay for your school. Which I had one semester of school left when all this was taking place and that was really important to me, that I be able to finish my education and finish it for free.

Bobbi Rebell:
And so you went with Nike. What were the factors that made that the winner for that first sponsorship endorsement deal?

Lauryn Williams:
Ultimately it was, like you said, the schooling was one of the big keys for me. Because, like you said, education was not optional. So for them being willing to support me, one, financially with a really good salary, then also pay for my education, they had a really good prize and bonus structure that if I did in fact run fast I would be compensated accordingly, which I thought was very fair. Every year that I won, I got a nice rollover or a nice salary increase. It was the most lucrative of the different contracts that were offered.

Bobbi Rebell:
Tell me what was your feeling when you signed that first contract. Did you have a new sense of financial security when you signed with Nike, at age 20, for $200,000?

Lauryn Williams:
As a finance major, I think my biggest feeling when I signed that contract was anxiety. It's like you've been given a really cool opportunity, don't blow it. And so the first thing I wanted to do was go and find a financial professional to help me, because I knew even though I was a finance major that I didn't have what it took just yet to be able to organize such a large amount of money that I'd never seen before, no one in my family seen before. It was excitement but mostly anxiety.

Bobbi Rebell:
What is the takeaway for our listeners from your story? From signing that first big contract at age 20?

Lauryn Williams:
I would say the takeaway is you never know when something really awesome is going to happen, when that windfall is right around the corner, but it's really about being prepared all the time. When opportunity knocks, be ready to answer the door and be prepared to take life at whatever it is, because it can immediately change. And my life changed overnight, I was a broke college student to hundred-thousandaire. Literally overnight.

Bobbi Rebell:
Amazing. All right, let's get your everyday money tip, because this also relates back to those early experiences and some good habits that you learned early on.

Lauryn Williams:
Yeah, I would say everyday money tip, make sure you have questions for whatever it is that you're going through in life. Whether it's hiring a financial professional, an accountant, an agent, when you're talking to your friends, ask questions. It's so important to be pulling information out of others as opposed to just taking the information as being fed to you. I found frequently during my career that people would give me information and they were only giving me the information they wanted me to have, and that ended up being catastrophic in a lot of different situations. So really having the ability to ask questions, look for red flags, and educate yourself in all aspects of life is the most important everyday money tip that I think your listeners need to hear.

Bobbi Rebell:
Wonderful. Tell us a little bit more about your business now. So you did have some tough experiences with financial advisors and you've talked about that widely, that really helped pivot your career when you moved away from full-time being a professional athlete into being a full-time financial advisor.

Lauryn Williams:
Yeah, I just had to find a way to fill the gap. Like you said, there was so many basic things, from budgeting, to understanding first-time home purchase. I needed help with just those basic things and I realized that as young professionals, there's a gap in the industry. There's these big wealth managers that require you have at least a million dollars before you can get help and then there's these other guys that sell you crappy products. And I was like we deserve something better, we deserve just unbiased advice that could help us build wealth, sort through our student loans situation, sort through the financial basics so that we can get on the right track. And that's how Worth Winning was born.

Bobbi Rebell:
And what inspired you to become a CFP and not just a financial advisor? Because you don't have to be a CFP to do this.

Lauryn Williams:
You don't have to be a CFP but I feel like it's the standard. I wouldn't go to someone who said, "I read medical books all the time, so certainly I can perform this surgery on you." Yeah, you may be really smart, but I'm going to go with a doctor that's actually been to medical school. And CFP to me is the same sort of standard, where you've gone through rigorous education, you've gotten a certain amount of experience, you've taken a hard, hard, hard exam, and you're held to a level of ethics that is not what the whole industry is held to right now. So it was really important to me to be able to put that seal of approval and that stamp on, to be able to say I'm competent to serve people and do my best job for them.

Bobbi Rebell:
Awesome. Where can people find out more about your and Worth Winning, and Worth Listening, your podcast?

Lauryn Williams:
Yes. Worth Winning is worth-winning.com and the podcast is worth-listening.com. And you can get to Worth Listening by going to Worth Winning, so I'd love to have you go and check out my website and see if something there rings true with you.

Bobbi Rebell:
And your social channels, you have a great following, by the way.

Lauryn Williams:
Oh, thank you. @worthwinning on Instagram, @worth_winning on Twitter. And then if you're looking for me, Lauryn Williams the Olympian, you can do lauryncwilliams on Instagram, Twitter, and you can find me on Facebook as well, by typing in either of those.

Bobbi Rebell:
Awesome. Thank you, Lauryn.

Lauryn Williams:
Thank you.

Bobbi Rebell:
Hey, everyone. Love Lauryn's story, because it's such a different world. I mean, can you imagine being a star athlete and being offered hundreds of thousand dollar contracts when you're 20 years old, out of the blue, and all the responsibility that comes with it? I love the fact that she came out so strong and then it became such a great foundation for building her Worth Wining financial advisory business, and her Worth Listening podcast, which everyone should check out. Lauryn is a wonderful role model.

Bobbi Rebell:
Financial Grownup tip number one. Lauryn talked about asking a lot of questions and having your list. Okay, I want everyone listening to always have one question at the top of that list, no matter what you are buying, financial services or otherwise, how do you get paid? It's very important to know, is someone being paid a flat fee or are they being paid on commission. Now, there's no right or wrong answer, as long as you're comfortable with the answer. Generally, it's nice for financial services to go to somebody who's not being paid on commission because you know that they're seeling you, in theory they should be selling you, what is best for your needs. If it's commission-based, they may be selling you what gives them the best commission and you never really know.

Bobbi Rebell:
So it's important to know how they're being paid. But remember, this is the financial services industry. In many other industries the general rule is that commissions are often the preferable way to be paid. For example, think about travel. Very often someone that helps you set up a trip is getting a commission and most people are okay with it being paid that way, as opposed to paying them a separate fee, although it can be done that way as well.

Bobbi Rebell:
Financial Grownup tip number two. You may have noticed that I was fawning all over the fact that Lauryn is a Certified Financial Planner. It is a big deal. When you give your money to someone, you need to know that they are qualified, that you can trust them. And I can tell you, that as a Certified Financial Planner myself, we are what is called fiduciaries. And that means that we have to work with you to find whatever solution is in your best interest, not just what is suitable. Fiduciary, big word, very important word, but pay attention to it.

Bobbi Rebell:
Thank you all for your support. If you have a financial question, a money question, or just a question about what goes on behind the scenes here at Fin aical Grownup that you want answered on one of our bonus episodes, we are taking listener questions. So just DM it to us on any of the social channels. On Instagram @bobbirebell1, on Twitter @bobbirebell, or you can also just email it to us at hello@financialgrownup.com. That's hellow@financialgrownup.com. And thank you to Lauryn Williams for helping us all get one step closer to being financial grownups.

Bobbi Rebell:
Financial Grownup with Bobbi Rebell is edited and produced by Steve Stewart and is a BRK Media production.

Award-winning CBS Business News Analyst, and radio and podcast host Jill Schlesinger CFP® talks about how she literally paid off her ex-husband to go away, after just one year of marriage. She also shares her best tip for organizing and tracking spending. 

In Jill’s money story you will learn:

-The negotiation that went on during her divorce

-The advice her father gave  her and the significance of his perspective

-The financial- and other- costs of marrying the wrong person

 

In Jill’s money lesson you will learn:

-The value of using money and financial resources to move on, even when it is not a fair payment

-How Jill’s background as a trader gave her perspective on cutting her losses in bad situations. 

-How to apply Jill’s lessons to different situations in life, from stocks, to high living expenses

 

In Jill’s money tip you will learn:

-Her advice to cut transportation and commuting costs

-Don’t sweat the small stuff but pay attention to the big stuff like life insurance

-Keep your finances simple, for example charge on just one credit card

-About the book Jill is writing “Dumb Things Smart People Do with Their Money” including a sneak peak!

 

In My Take you will learn:

-Ways to apply Jill’s philosophy of cutting your losses, including stocks, business partnerships and consumer goods

-How to know what to insure

-Specifically how I just was able to get a 44% price cut on my annual home insurance

 

Episode Links

Learn more about Jill at https://www.jillonmoney.com/

Check out the Better Off Podcast

Follow Jill!

Twitter: @jillonmoney

Facebook Jill On Money

Instagram: @jillonmoney

Linkedin JillonMoney

YouTube Jill Schlesinger

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Transcription

Jill Schlesinge:
He asked for a number that I thought was ridiculous. I countered with a number that he thought was ridiculous. We agreed on a number that we both thought was unfair, which probably meant it was a good deal for both of us.

Jill Schlesinge:
I wasn't paying him, I was paying for my freedom.

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 gonna get there together. I'm gonna 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 friends, do you ever wish and imagine that there would be a check big enough to make a problem go away? It could happen. We'll talk more about that soon, but first a quick welcome to our new listeners, and welcome back to our Financial Grownup regulars. Please keep telling your friends about the podcast so we can continue to grow, and if you listen on Apple Podcasts, take just a few minutes to rate and review it. That also helps us get discovered and is really important, and needless to say, much appreciated.

Bobbi Rebell:
Now to our guest, Jill Schlesinger, award-winning journalist for her national radio show, she is also the CBS Business news analyst, and she hosts the Better Off podcast. I met Jill when my book came out. A mutual friend introduced us, and then I was thrilled when I got to be on her award-winning radio program. Did I say award-winning enough? She won a big Gracie award recently.

Bobbi Rebell:
As you guys know, I'm a big believer in learning from the best, and while modest, Jill is way up there with the best in the business, and scores extra points in my book for being a certified financial planner and encouraging my efforts to get the designation as well. But what I did not expect was such a candid conversation with Jill. What she says about how she literally, she bribed, let's say what it is, she bribed someone to get out of her life. It really took me by surprise. She goes there. You guys should listen to this. You're gonna enjoy it. Here is Jill Schlesinger.

Bobbi Rebell:
Hey Jill Schlesinger, you're a financial grownup, welcome to the podcast.

Jill Schlesinge:
Thank you for having me.

Bobbi Rebell:
Big congratulations are in order. You just got back from a very special trip to LA for a very big award. Tell us.

Jill Schlesinge:
Oh, well as you know, I got a Tony award. Just kidding. I got a Grammy award. No, just kidding, I got something called a Gracie. A Gracie, I'm so old I knew exactly who that referred to. That refers to Gracie Allen who was a very strong woman in Hollywood many, many years ago. The Alliance of Women in Media gives out an award for TV, radio, podcasts, and my executive producer Mark and I won for the best national radio show, so we're very psyched.

Bobbi Rebell:
I'm very psyched for you. I am honored that I was once a guest on the show when my book came out. And you even got to walk the red carpet.

Jill Schlesinge:
I know, and that is always sort of a frightening thing for a big, tall woman who does not usually wear heels that are that tall, so that was daunting. That was the hardest part of the whole thing. Give me a spreadsheet to go through, but don't make me walk in heels.

Bobbi Rebell:
All right, so you brought with you a money story. Do tell, Jill.

Jill Schlesinge:
Remember when you were on my radio show and at the end you like completely hijacked me and turned the tables, and you're like-

Bobbi Rebell:
Totally.

Jill Schlesinge:
... "Tell me something."

Bobbi Rebell:
Exactly.

Jill Schlesinge:
So I have a money story that is basically about divorce, and it's kind of both a real divorce, a marriage dissolving, a partnership, a business partnership dissolving, and my story is this. I learned something from my now deceased father when I was talking about my divorce and I was very upset about the whole things. I had really such a schmucky ex-husband who literally threatened to sue me for alimony after being married for a year, a month, and a day.

Bobbi Rebell:
Oh my gosh.

Jill Schlesinge:
Yeah. I hope you're listening. You know who you are. And what I realized very quickly after my father kind of laid it out for me, he's like, "You know what, honey? You worked your butt off on Wall Street, you made a few bucks, you got some money. All this guy wants is for you to pay him off. Pick a number, make him feel like a man..." He put that in sort of italics, "and move on. And the quicker you move on, the quicker you move on for your life, and there's actually no price tag for that freedom."

Jill Schlesinge:
That is a money story that I have brought through my life, which I was able to actually help my clients with 'cause I went into the client business where I was managing money as a certified financial planner. And as soon as you realized you had enough money to sort of write a check, and you realized that it really wasn't the amount, it was just the fact that you would do it, that that became a really important lesson for me.

Jill Schlesinge:
And so my wisdom to impart on you and your listenership is that sometimes, don't worry about who's right or wrong. Just pay and move on.

Bobbi Rebell:
So, you did that, I assume, with your now very long time ago ex-husband. Was it an amount of money that was meaningful to you or was it actually just a small amount that made it go away in principle? I mean, did it hurt financially?

Jill Schlesinge:
No, it did not hurt financially. It hurt from a pride perspective because I felt like I was being punished monetarily for marrying the wrong person for a year. And so it hurt me to even think that I had to put a dime in this guy's pocket after one year of marriage. What I really stopped doing in that ... again, after my dad gave me this really good advice is that I wasn't paying him, I was paying for my freedom, and that's how I made the adjustment.

Bobbi Rebell:
And how did the ex respond? Did he just say, "Great, I'll take the check. Thank you very much. Goodbye." Or was he a jerk about it?

Jill Schlesinge:
Oh man. Well, obviously if you're married to someone for a year and that person is suing you for alimony, the jerkiness is sort of well-documented.

Bobbi Rebell:
True true.

Jill Schlesinge:
But what I could say is this. He asked for a number that I thought was ridiculous. I countered with a number that he thought was ridiculous. We agreed on a number that we both thought was unfair, which probably meant it was a good deal for both of us, that we both kind of moved on.

Jill Schlesinge:
And you know what? He got remarried, I moved on, it kind of did work out. But again, for me the lesson being, there is absolutely no reason to get stuck. For me, I'm the kind of person who could get stuck on it is not the right thing, and that was just not worth it for me. Whether it was right or wrong or someone was right or wrong or whether I was wronged or he felt wronged, it didn't matter. We both had to get out of this thing. We both realized it was over.

Bobbi Rebell:
So for our listeners, I like what you said before about this isn't just about ending a marriage. It could be about ending any kind of partnership. How does this apply ... what is the takeaway for our listeners? What's the lesson here?

Jill Schlesinge:
I was born a trader. That was my first job on Wall Street. I was a commodities trader, and the one beautiful thing about being a trader is that you quickly learn you always have a bad trade. There's nobody who gets to go through life as a trader and not experience the recognition very quickly of, "Oh my god, I'm in a bad trade."

Jill Schlesinge:
So, you're gonna do that in your financial life a million times over. You're gonna realize like, "Uh-oh, bad trade. Like uh-oh, I actually moved into an apartment that is too expensive for me. I am going to pay the two month penalty to get out and move to another apartment." Or, "I'm going to do something different." Or, "I bought something, I bought a stock, I bought a mutual fund, I did something," and you immediately realize you've screwed up. "I bought an insurance policy I don't understand. There's a penalty to get out. Maybe I need to get out."

Jill Schlesinge:
When you feel that recognition in your soul that you've done something that's probably not right for you, if you don't know for sure, go get advice, but do not ignore that feeling.

Bobbi Rebell:
Okay, I am on the edge of my seat. What is your everyday money tip for our listeners.

Jill Schlesinge:
Well I have two different things to just impart for everyday money tips, and this is for anyone who lives in a city. Like, I'm a walker. Just walk everywhere. That is actually how I saved more money than anything. People take cabs all the time. I'm a huge mass transit person. Now, you don't live in a place where there is mass transit, this is irrelevant to you.

Jill Schlesinge:
My other everyday tip is don't sweat the small stuff that you ... you're gonna think that I'm a certified financial planner and I count every single penny I spend. I don't. I've done that, but I know generally how much to spend, and I don't quibble over little things. But I'm very thoughtful about big things. So my everyday money tip is that like, you know, you're worried about whether you get a latte at Starbucks versus making your own coffee, that's not the big decision to sweat. Sweat more about the big decisions like, "Gee, I need to buy life insurance but I haven't yet."

Jill Schlesinge:
So, I really am not a big sweat of the small stuff kind of person. My everyday is to live my life, walk around, know exactly how much money's in my pocket, and I loathe to do anything besides charge on one credit card only. That's it.

Bobbi Rebell:
Keeping it simple. Thank you, Jill. So tell me more about what you're up to post-Gracie award.

Jill Schlesinge:
Well, you know, obviously I have to put those shoes away 'cause I'll never walk in them again.

Bobbi Rebell:
So those are not the shoes you use to walk around Manhattan?

Jill Schlesinge:
No. No, I am a big fan of the Allbirds to get all over Manhattan. So, I host a podcast called Better Off. I host a radio show called Jill on Money. I write a column for Tribune. I am working every day at CBS News, both in radio and TV. And here's the big news that I've just submitted my manuscript for my first book.

Bobbi Rebell:
Wow.

Jill Schlesinge:
So that's dropping next February, so I'll come back on in February when the book drops. How's that?

Bobbi Rebell:
Yes. Absolutely. Oh my gosh, congratulations. You didn't tell me that till just now. I'm so excited for you. Can you tell us just a little more about it?

Jill Schlesinge:
Yes. The tentative title is Dumb Things Smart People Do With Their Money, and it is based on the fact that I have been in the business for so long and I've been around incredibly bright people who consistently shoot themselves in the foot. They mostly do it to themselves, and there are a series, you know, maybe a dozen or so very practical things that you can do to avoid making those dumb mistakes.

Jill Schlesinge:
So, that is ... it's not a book for everyone, but it is definitely a book for someone who has a brain and says, "Why do I keep doing dumb financial things? I have a brain. Why is it that I can't do these things?" And I know that's most of your audience, 'cause smart people listen to people like you, Bobbi.

Bobbi Rebell:
Oh, thank you Jill. And smart people listen to people like you, and I love listening to your podcast and your radio show. So thank you, and I'm looking forward to your book.

Jill Schlesinge:
I am too. Thank you so much for having me.

Bobbi Rebell:
Jill totally delivered, so let's get right into it.

Bobbi Rebell:
Financial Grownup tip number one: Cut your losses and move on. This applies not just to divorce, as was Jill's main example, it also applies to things like investments, like stocks. If a stock that you liked is no longer in your like category, it doesn't have the same criteria that it had when you picked it, get out. Cut your losses. It's okay to take a loss and move on and use that money to buy a different stock that's maybe a better investment that you'd otherwise be missing out on.

Bobbi Rebell:
Business partnerships, not working, not fixable, find a way out. We all want to come out with the win. You're gonna want to have more, especially if you're in an adversarial position with your business partner, but you know what? Sometimes getting out is more important than getting even. So focus on that and make sure that you can get out and move on to something that's gonna make you happier and maybe more money than that business. Maybe you bought something, maybe an electronic device and the store wants to charge you a re-stocking fee, which is so ridiculous. But you know what? If you don't return it and pay that penalty, you're gonna have something that you don't want taking up space in your home, and you won't have the 90% let's say, of the purchase price that you'd be getting back to then buy what you actually do want. So don't dig in your heels. Just get out, get your money back, move on.

Bobbi Rebell:
Financial Grownup tip number two: Jill talked about insurance, which is a really important thing to talk about, a very grownup thing. At least once a year, take a look, assess what you've got, and figure out, are the things that would be really hard to replace if something unexpected happened covered. Things like home insurance, renter's insurance, they usually have under them, personal liability. Those are good things to make sure that you have. You can usually tie them together.

Bobbi Rebell:
And guys, this is a big one. I kind of blew it. I have not been negotiating well with my insurance companies, but I did recently, I went to my homeowner's insurance company, pointed out that I'm a really good customer. I've been with them for years. I don't file claims, which is very fortunate on my part, hopefully that won't change, and I asked them to lower my rate and just said, "I'm gonna start shopping around for a better rate somewhere else." And you know what? Within 24 hours, they came back with a new policy, all the same coverage, but 44% lower in terms of annual premium. So, that was a nice chunk of change on annual homeowner's insurance just for asking. And if that's my hourly rate for spending not even an hour doing that, I'll take it.

Bobbi Rebell:
All right. We just had our first listener episode. To be considered for a future one, email us at info@financialgrownup.com. That's info@financialgrownup.com. Share with us what money story you would like to tell, and the lesson and the everyday money tip that you think our listeners would get value from.

Bobbi Rebell:
And a reminder, you can't win it if you're not in it. If you want a custom video like the promos that we do for the show, join the competition. All you have to do, it's totally free, when you see one of the promo videos for the episodes, just share it. Retweet it on Twitter or share it on Facebook. Everyone keeps DMing me and telling me they'll never win and can they just buy one. You have to try. Guys, you gotta be in it to win it. Just share it and retweet it and repost, and you may surprise yourself and be the winner.

Bobbi Rebell:
Thank you all for being part of our Financial Grownup community. If you enjoy the show, consider leaving a rating or review, and of course, hit the subscribe button and just tell a friend if you're enjoying the show. It means a lot to us.

Bobbi Rebell:
I am on Twitter @BobbiRebell, on Instagram at BobbiRebell1, and on Facebook at Bobbi Rebell.

Bobbi Rebell:
Jill's advice definitely resonated with me. I hope it worked for you as well. We all tend to cling to our previous convictions. We need to move past that. So thank you, Jill, for helping us all get one step closer to being financial grownups.

Bobbi Rebell:
Financial Grownup with Bobbi Rebell is edited and produced by Steve Stewart and is a BRK Media production.

Certified Financial Planner Manisha Thakor bonded with her dad over a love of the HP12C calculator and all of its investing tools. Now, the author of Get Financially Naked  shares her actual math formulas on how to lock in the right number for retirement and other goals. No excuses for listeners after this episode. 

 

In Manisha’s money story you will learn:

-The important role her father played in her early financial lessons

-How she bonded with her father over an HP12C calculator

-The specific way Manisha calculated different retirement investing outcomes as a tween. 

-The role inflation plays in the future value of investments

-The power of compounding

In Manisha’s lesson you will learn:

-Why Manisha feels women in particular need to focus not just on saving but also on investing

-The corrosive power of inflation

-Why we need to put  the recent period of historically low inflation in context

-How to manage your investments in times of extreme market volatility

In Manisha’s money tip you will learn

Manisha’s investing formula

1. Take the total dollar of your current savings and investment portfolios

2. Subtract out money you know you will need to spend in the next 5 years

3. For any of your long term money, like retirement, take 110 and subtract your age 

4. That is the amount that should be in equities

5. For example Manisha is 47. 

6. 110-47 = 63 percent should be in equities

 

In My Take you will learn:

-Why you do not need an HP12C calculator because so much is available online

-Exactly how to find out the status of your retirement accounts and if you are on track to reach your goals

-How and why you should automate your retirement savings. 

 

Episode links: 

Follow Manisha!

Twitter: @manishathakor

Facebook: Manisha Thakor

LinkedIn Manisha Thakor

YouTube: Manisha Thakor

Instagram Manisha Thakor

Pinterest Manisha Thakor

MoneyZen.com

Get Manisha’s books! http://www.moneyzen.com/books/

---

Transcription

Bobbi Rebell:
Support for Financial Grownup with Bobbi Rebell and the following message come from TransferWise, the cheaper way to send money abroad. Built by the brands behind Skype, TransferWise takes a machete to the hefty fees that come with sending money abroad. So don't get stung by a bad exchange rate or sneaky fees, join the two million people who are already saving with TransferWise. Test it out for free at transferwise.com/podcast, or download the app. It is the wise way to send money.

Manisha Thakor:
He showed me how to calculate how much money I would have by the time I was 65 if I invested my babysitting and my lawn mowing money, and then we did a couple scenarios. We tested how much I would have if I was earning 5% after inflation, if I earned 6% after inflation, and when I saw how big those numbers were I was just hooked.

Bobbi Rebell:
You're listening to Financial Grownup with me, certified financial planner, Bobbi Rebell, author of How to Be a Financial Grownup. You know what? Being a grownup is a really hard, especially when it comes for 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:
We are geeking out here at Financial Grownup, but stay with me friends because you will have more money and be wealthier if you listened to this episode and follow my guest advice. Manisha Thakor is the author of Get Financially Naked, How to Talk Money With Your Honey. She is also the force behind MoneyZen, and is a practicing certified financial planner. If that sounds pretty cerebral, well, she will take that as a compliment. She started learning about investing very, very early. Here is Manisha Thakor.

Bobbi Rebell:
Manisha Thakor, welcome. You are a financial grownup. I'm so excited you're joining us on the Financial Grownup podcast.

Manisha Thakor:
I'm so excited to be here, and to be deemed by you a financial grownup.

Bobbi Rebell:
You're very much a grownup. You're the author of two books, On My Own Two Feet, and I love the second title, I know everyone does, Get Financially Naked. You also have MoneyZen. Lots going on.

Manisha Thakor:
I feel super excited about the world of personal finance and investing.

Bobbi Rebell:
Good, and I'm super excited about the story that you brought to share today, because it has to do with some father-daughter bonding around, not the dinner table, around the HP 12C calculator.

Manisha Thakor:
I love this. When I was around 11 years old, my dad, he's an MBA and a CPA, he sat me down in a moment of father-daughter bonding that only financial geeks, like ourselves, could really appreciate. He had an HP 12C calculator, which for folks who may not be familiar with it, is a financial calculator that enables you to do sophisticated compounding calculations on it.

Manisha Thakor:
He showed me how to calculate how much money I would have by the time I was 65 if I invested my babysitting and my lawn mowing money, and then we did a couple scenarios. We tested how much I would have if I was earning 5% after inflation, if I earned 6% after inflation, if I earned 7% after inflation, and when I saw how big those numbers were I was just hooked.

Manisha Thakor:
That was really my first introduction to the power of compounding, and I think because he had my physically touching the buttons on the calculator, and then he made me write down the numbers in a little grid on a notepad. I can literally still even remember what the notepad looked like. It was so tactile and so visual.

Bobbi Rebell:
Do you have the notebook still?

Manisha Thakor:
You know, I wish I did. He and I both say in retrospect, "We totally should have saved that for the grandkids," but it's in my mind's eye. That's how I got hooked on saving and investing.

Bobbi Rebell:
So then what is the lesson for our listeners? Should everyone be bonding over calculators?

Manisha Thakor:
That's right.

Bobbi Rebell:
We know that's not going to happen.

Manisha Thakor:
No, I-

Bobbi Rebell:
Let's bring it down to a realistic level.

Manisha Thakor:
The lesson for me, and the lesson that I want to scream from the mountain tops, is, and particularly for women, is that it's not enough to just save money. Saving is great, and it's freaking hard to do, but you must invest it as well, first and foremost to offset the corrosive power of inflation.

Bobbi Rebell:
Which is picking up by the way, so that's something we need to start being more aware of, and a lot of young people haven't really seen inflation at the level that other generations have. But it is going to become a bigger part of our dialog.

Manisha Thakor:
Yeah, and Bobbi, you've nailed it. We've just gone through such a bizarro period of de minimis inflation. An example I love to give is 100 bucks over a 30 year period at 3% inflation is worth $40, was, at the beginning. If you just increase that inflation to 5%, which doesn't sound like a big jump, but that drops the value of $100 in 30 years to what $20 would have bought.

Manisha Thakor:
So small [inaudible 00:05:54] inflation have a huge, huge impact, and that's why you cannot just save. You have to invest, because the first step of investing is keeping your money growing at least with the rate of inflation. If you do investing well, then ideally over the long run you grow your portfolio even faster than inflation, which increases your real purchasing power.

Bobbi Rebell:
Okay. Now for your money tip, Manisha. We're geek out even more, because you have actually brought a formula. Your, Manisha's, magical formula for investing success. I promise everyone, just stick with us, she says it really well. She's going to explain it all, and we're going to have it all written down in the show notes for you as well. Go for it.

Manisha Thakor:
The way I think about how to take your hard earned savings and invest it is the following. First, take a look at the total dollar value of your current saving and investment portfolios. Second, subtract out any money you know you need to spend in the next five years. This could be money you need for a home down payment, or it could be your six month emergency fund.

Manisha Thakor:
Then, for any of your long term money, which for most of us is our retirement money. So it's any money that you know you don't have to spend in the next five years. What you do, is you take 110, and you subtract your age to get a back of the envelop estimate of what percent of your portfolio should be invested in stocks. That was a mouthful, and Bobbi, as you mentioned, it will be in the show notes, but I'll give you an example.

Manisha Thakor:
I'm 47 years old. We'll round that down, because at my age you like to round down. To keep the math easy, 110 minus 45 equals 65. So a good starting point for me, for how much of my long term money at my age should be in stocks, is 65%. Lo and behold, that's how much I have of my long term money in stocks.

Manisha Thakor:
The biggest mistake that I am seeing with young people these days is shying away from investing their savings, because they're afraid of losing money. So they're missing those vital early years of compounding. That's why it's so important that you subtract out the money you need to spend in the next five years, so no matter what the market is doing, you're fine. The money you know you needed, it's in cash. It's only your long term money that's being invested.

Bobbi Rebell:
I think a lot of young people witnessed their older siblings, or their parents, really being burnt in the recession, and that's a lot of the hesitation.

Manisha Thakor:
I'll just say, Bobbi, when I hear somebody tell me that 2007 to 2009 ruined their retirement, what I say is, "No. Either you had the wrong asset allocation going into it, or you blink and you deviated from your plan." Because if you followed the formula that I'm saying, and you didn't have any money that you needed to spend in the next five years in the market, in 2007-2009, you would have seen your portfolio drop as much as 50%, but you wouldn't have sold a single share of anything, because you didn't need to touch it, and then you would have seen your money double or triple as you came out of the recovery.

Manisha Thakor:
So the people who lost in 07-09, where the people that were forced to sell at bottom to maintain their lifestyle, or got scared because they didn't have the cash cushion, and sold at the bottom. That's why this formula is so important.

Bobbi Rebell:
Right, and you've got to sit tight. Even the beginning of 2018 we had some scary days. You've got to know your focus and stick with the plan. All right. Mrs Manisha, I also hear you have big news, new projects, new jobs. Tell us.

Manisha Thakor:
I'm so excited. I have just accepted the role of vice president of financial education for an amazing firm called Brighton Jones. I could not be happier. When I think about what I want to accomplish in this world, my belief is that money is power, and women need more of both.

Manisha Thakor:
And so I am going to be doing my darnedest in this new role to help women achieve that. As part of that, I'm really going to be ramping up my efforts with my MoneyZen newsletter. So if listeners are interested, I encourage you, go to my website, moneyzen.com. I'll have a monthly newsletter that I'll be putting out. It's educational, and I'm really going to be working hard to share the most vital resources, articles, tools, each month around women's economic empowerment, and how we can all use personal finance and investing to increase our voices and choices. I always say, "Money gives women, it gives everyone, voices and choices," and financial education, and financial guidance are what helps unlock those doors.

Bobbi Rebell:
Awesome. Before I let you go, where can we find you on social media?

Manisha Thakor:
My name is a mouthful, and I'm the same handle on everything. I'm ManishaThakor everywhere. It's M-A-N-I-S-H-A-T-H-A-K-O-R, on Twitter, Facebook, LinkedIn, Instagram. If you forget that, go to moneyzen.com, because I have all my social media icons right up at the top.

Bobbi Rebell:
All right. Thank you so much for joining us.

Manisha Thakor:
Bobbi, always a pleasure to chat with you.

Bobbi Rebell:
As warned, Manisha and her dad totally geeked out with all that math, but the good news is, you guys don't need to go out and buy yourself fancy HP 12C calculators and do all this kind of fancy math, because these days it's really all there for you.

Bobbi Rebell:
Financial grownup tip number one, there is nothing more powerful than seeing the numbers. And like I said, you don't even have to do the math yourself these days. Log into your HR website from your job, or if you work for yourself and you have retirement accounts, which you should, go there. Go to the provider, and just take a look. Most of them will have nice calculators. They'll do the math for you. They'll have probably some graphic ways to show you how you measure up, where you are relative to your retirement goals.

Bobbi Rebell:
You can actually see how you stand, and see how you feel about it. You might get pretty emotional. It could be a really emotion. You might doing pretty well. It could possibly be not that great, but maybe that will motivate you. But the important thing is, get the information, it doesn't take much work, and make decisions from there.

Bobbi Rebell:
Speaking of decisions, financial grownup tip number two. While you're on that website, look at the retirement savings, and look for a box that says, "Increase your withholding," or a box you should check that says, "Increase your withholding by 1% every year," and of course check that box.

Bobbi Rebell:
Now, you can always undo it, but by checking that box it will automate increasing the amount of money that you are putting away each year, and you probably won't feel it because it's tax deductible, so it won't cost you that full amount, and it will amplify your savings.

Bobbi Rebell:
We have been hearing a lot from you guys, wanting to share your own financial grownup money stories, lessons, and money tips. So we are going to start having one guest a month be a listener. If you want to be considered, email us at info@financialgrownup.com, and tell us, what is the money story that you would like to share, and what is the money tip that you would also share with us, if you are chosen.

Bobbi Rebell:
Subscribe if you have not already, and help us spread the word by sharing on social media. I am @BobbiRebell on Twitter. Follow me, and please retweet these silly promo videos I'm doing. They're a lot of fun. I enjoy making them. Hopefully you guys are going to enjoy seeing them, if you have not already. Help us reach more listeners. On Instagram I am @BobbiRebell1, you can also repost those, and go to bobbirebell.com/financialgrownuppodcast to learn more about the show, and sign up for our mailing list so you can hear about things like how to be guest on the show. I hope you enjoyed Manisha's story, and that we all got one step closer to being financial grownups.

Bobbi Rebell:
Financial Grownup with Bobbi Rebell is edited and produced by Steve Stewart and is a BRK Media production.