YouTube superstar Sarah Wilson documented and inspired others with her journey to being debt free. But after she got to do the debt free scream with Dave Ramsey, she had a whole new set of challenges. Plus Sarah saves Bobbi from buying things she can get for free at the Fincon conference. 

Sarah's money story:

sarah wilson:
five years ago I was working in a newspaper for about $26,000 a year. I had deferred my student loans from college, and there were $33,000 of them. I lost my job. Suddenly I was extremely scared and I swore to myself that whenever I got a new job, I would figure this money thing out. Because being unemployed would've been so much less stressful had I not had $33,000 worth of student debt looming.

sarah wilson:
So, I got a new job making $26,000 a year at a newspaper, in a new state, and I started budgeting. I did everything possible to lower my expenses, increase my income, side hustling. And over the next three years, I actually documented it on YouTube. Every single week, I'd go on and tell people how much debt I had left and what I was doing that week to help fix it. It took me three years and a couple of different jobs where I raised my income a little each time, but I paid off all my debt.

bobbi rebell:
We're so proud of you for that. And also, what you're leaving out with your modesty is that while you were doing this, there was something about you. You have a relatability and an it factor that you also developed a huge following of fans and supporters while doing this. How many YouTube subscribers do you have right now?

sarah wilson:
A little over 56,000.

bobbi rebell:
Wow. And you also have monetized that. So, you actually have this side business of this YouTube channel, which is really inspiring and helping so many people. Then you hit a big milestone a year ago and that changed everything. We're going to start your story, your money story that you're going to share, with a big scream.

sarah wilson:
Yeah, I actually went on the Dave Ramsey show because I was a huge fan of his and I was following his steps to get out of debt. I was able to do my debt free scream live in studio. That was just incredible. It felt like closing and opening a chapter in my life.

bobbi rebell:
It's a big milestone and it brings us to what we want to talk about, which is what happens when you reach your money goal. Because your money goal was to be debt free. That scream was so symbolic. Then what?

sarah wilson:
The first thing I decided was to save up a giant chunk of money. Once again, ala Dave Ramsey. I saved six months worth of living expenses in case I ever lost my job again. I would be okay for a while. Or if I suddenly got into a car accident, or a medical thing, it just gives so much peace to know that I have 10 grand sitting in a interest earning bank that I can use if something terrible happens.

sarah wilson:
And then I also started investing, which is super fun and kind of intimidating for someone who was never taught about money.

bobbi rebell:
How did you start investing?

sarah wilson:
I did a lot of research, and procrastinated way too long. And then I just kind of jumped in. I bought a few index funds. I did a little robo-investing. Just kind of got my feet wet and figured out what was right for me. I'm still exploring that. I'm starting to purchase, actually, some single stocks and do some more exploratory stuff.

sarah wilson:
I funded my... I did more retirement funding for her, so I opened a couple of Roth IRAs. It's a really fun time now because I'm learning about all of that, which was not within my capacity when I was getting out of debt. I couldn't think about future dreams then.

bobbi rebell:
How specifically are you learning? What are your tools and how did you set up these things? I mean, if we get really basic, did you choose a robo-advisor? Did you just walk into a branch of a brokerage firm? I mean, what specifically did you do at that point?

sarah wilson:
Well, I tried working with a planner first and then I didn't like that. They wanted 5% of whatever I invested and I was like, "You know what? No. I can figure this out. I figured out how to get out of debt. I can figure this out on my own."

sarah wilson:
So, I've read every single thing that Bigger Pockets has ever wrote. I've watched so many YouTube channels that my friends are on. As they've learned, they've shared that information as well, which is incredible. And read a couple of books. Erin's Broke Millennial's Guide To Investing, TFD, all of it.

bobbi rebell:
The Financial Diet.

sarah wilson:
Yes.

bobbi rebell:
It's The Financial Diet.

sarah wilson:
Oh, I'm sorry, the Financial Diet. And of course, How To Be a Financial Grownup by someone you might know.

bobbi rebell:
Thank you. I think education is such an important message. As you go through the different phases of being a grownup, your phase one was paying off the debt. Your phase two is educating yourself to grow your money. So, you didn't go with a financial advisor that wanted to take 5%. What did you go with? Are you with a discount brokerage. Are you with a robo-advisor? How did you come to those decisions?

sarah wilson:
Right. I don't advise people who watch my channel to do this, because I think you should do things more simply. But I have, probably, 15 different investment accounts. I have accounts at Vanguard. I have accounts at different robo-advisors. Because I wanted to try everything, and I wanted to see the pros and cons.

bobbi rebell:
So, you're sampling?

sarah wilson:
Yeah, I'm sampling. I will continue to kind of narrow things as I figure out what is right for me. The different fee structures, pros and cons, that kind of thing.

bobbi rebell:
That's interesting. And so-

sarah wilson:
I'm not advising that. People ask me like, "Well, what do you think of Robinhood?" And I'm like, "I don't know. Let me go try it."

bobbi rebell:
Right. Well, one thing that people should... I just want to note. Very often, if you do consolidate your money and you get to a certain level, you can get benefits at these things.

sarah wilson:
Yes.

bobbi rebell:
So, I do advise you even though I don't... But I advise you to consider consolidating into fewer accounts than 15 at some point.

sarah wilson:
Yes.

bobbi rebell:
Because there are often benefits. People do want to reward their better customers. And also, from a question of just tracking your money and having those efficiencies. That might be something to consider.

sarah wilson:
I have a lot of spreadsheets right now.

bobbi rebell:
You mentioned in terms of your bigger picture life planning, what have you been able to do since paying off your debt?

sarah wilson:
The next big thing is going to be buying a multifamily property, and house hacking that into another stream of income. This is something I never dreamed of before. I never thought I'd be able to buy a house on a currently around $50,000 a year. But I have no debt. I live off of about 50 to 60% of my income, invest and save the rest.

bobbi rebell:
And explain what house hacking is. And that's a topic we're going to cover, actually, on a new Financial Grownup episode coming up.

sarah wilson:
Wonderful. House hacking is say I purchased a duplex for $200,000. Because I live in Texas and I'm very lucky. So, I move into one unit and then the other unit I rent out for say a little bit above what my mortgage payment and taxes are for the entire property. Suddenly, I've got essentially someone else, a renter, paying my mortgage for me. I've opened up another line of income and I'm also building equity in this home. In a couple of years, I can be saving the money that I'm saving on rent and do that again. Rent out both sides and maybe move into a different property, or maybe a fourplex.

“I was able to do my debt free scream live in studio. That was just incredible. It felt like closing and opening a chapter in my life.”

Sarah’s money lesson:

sarah wilson:
I think that money mastery is a muscle and that none of us are born with it. And if we had been having this conversation three years ago, it would've been like, "I can't talk about house hacking. I can't talk about investing right now. I can't. I don't have the capacity."

sarah wilson:
But by doing small things in the direction of your goals, whether it's cutting your grocery budget a little bit, or ballsing up and opening your first investing account, even though you're a little intimidated, making those steps is going to get you to the place where you are financially free. You just have to keep moving forward one step at a time. You can't just suddenly wake up and be you.

bobbi rebell:
You make a great point to not be afraid. And even though I do hope that you eventually consolidate your 15 accounts, I do think there's something to be said for just starting. If you open an account at a brokerage firm and you decide, for whatever reason, it's not the right fit, you can move that money to someplace that is a better fit. It doesn't have to be forever, but it should be starting.

“It just gives so much peace to know that I have $10,000 sitting in an interest earning bank that I can use if something terrible happens.”

Sarah's everyday money tip:

bobbi rebell:
I want to transition to talking about your money tip because this is something that I totally did not know. I am significantly older than you, but apparently other people do. My husband made fun of me now for not knowing this. However, I feel that I have to be honest that I did not know to do this all these years, and maybe there are other people out there that haven't.

bobbi rebell:
We were chatting earlier at FinCon and I mentioned that I'd forgotten toothpaste. I had a toothbrush, I forgot the toothpaste. You gave me this amazing advice because I was about to go buy one. Go for it. What's your money tip?

sarah wilson:
I told you to go down to the front desk and ask the concierge, or hospitality, or the front desk clerk, just tell them that you forgot your toothpaste and toothbrush and they will give you one.

bobbi rebell:
For free.

sarah wilson:
Yeah, completely free. Like 50 feet away from the gift shop where they sell a miniature size toothpaste for $4 and a toothbrush for 3. He'll just hand you one.

bobbi rebell:
Not only did they give me toothpaste, they gave me a toothbrush. A full size toothbrush, by the way, Sarah.

sarah wilson:
Yeah. Like an Oral B toothbrush and then like Crest mini toothpaste.

bobbi rebell:
Totally.

sarah wilson:
It's the good stuff.

bobbi rebell:
And apparently they give away other stuff. The concierge.

sarah wilson:
What else do they give away?

bobbi rebell:
My husband has informed me they give away combs. They can give you a razor. All kinds of things that you would go to the gift shop right next door and purchase.

“By doing small things in the direction of your goals, whether it’s cutting your grocery budget a little bit, or opening your first investing account, even though you’re a little intimidated, making those steps is going to get you to the place where you are financially free.”

Bobbi’s Take:

Financial Grownup tip number one:

I never thought about the fact that hotels and tons of other places that we visit, that we see throughout our everyday lives, have lost and founds. They do, guys. It's not just school.

When you're growing up, this can be very important. If you lose something, or misplace it, or maybe if you need a charger, like Sarah did. I know this is very basic, but just like I didn't know that you could just ask for things for free from a hotel front desk, that were for sale right around the corner. Make sure that if you misplace something, or you just maybe need to borrow something, again like a charger, you ask if there is a lost and found. Maybe the thing that you lost is there, or maybe something that you need to borrow is there.

I once left a pair of shoes in a hotel. Don't ask how I lost the shoes. I was wearing other shoes. Just trust me. And I called anyway. They looked in the lost and found. Sure enough, they were there and they mailed the shoes to me. All is not lost. Just ask.

Financial Grownup tip number two:

Financial Grownup tip number two. Sarah is all over the place with her investing. That's her thing right now. We're not going to judge. But I do want to caution that although I said in our interview that you don't want your resources too scattered, and that there are often perks that you get if you have larger balances and you consolidate in one place, it's also okay to have your resources in a few places. Maybe not, and I know it's an expression but, put all your eggs in one basket. Put all your eggs in just a few baskets. Not too many, but a few.

Maybe I'm a bit paranoid, but sometimes things do go wrong. There have been companies that have gone out of business, or sometimes something not so legal happens in some places that seem to be pretty above board until they're not. So, it's okay to have your wealth in a few places. Make sure that they have the appropriate protections in place. Whether it's a bank with FDIC insurance. Or SIPC, for example, for a brokerage. And understand what that protects.

For example, SIPC is not going to protect you from a stock's value going down. That's just the market. What it does protect you from is the custody function of a broker. So, if a brokerage firm fails, that's going to give you some limited protection. Take the time to understand the protections for your investments when you choose what entities to park your money in. Whether it's banks or brokerage firms, what have you, there's a lot of startups, make sure that they've been vetted, make sure you understand the protections that are in place. Made a deliberate decision about how many entities you're going to be parking in your money in. Again, 15 seems like a lot. Whatever works for you, though. I think it's your decision. Just make sure it is deliberate, as I said.

Episode Links:

• Sarah’s Website - www.gobudgetgirl.com

• Sarah’s Dave Ramsey Debt Free Scream - https://www.youtube.com/watch?v=9ofhfT4mx7s

Follow Sarah!

• YouTube - @BudgetGirl

• Facebook - @GoBudgetGirl

• Instagram - @GoBudgetGirl

• Twitter - @GoBudgetGirl

• Pinterest - @GoBudgetGirl

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.

Shark Tank’s Kevin O’Leary shares a story about his mother and a secret he learned about after she passed away. The Entrepreneur, who is also behind O’Shares and O’Leary Ventures  reveals in the story how his mothers choices informed his investing style, which is heavily focused on dividends. 

He goes on to discuss the two types of investments his mother chose, including her thinking and mindset in making those choices. 

O'Leary also talks about the importance of the tax changes and why that is something that will benefit investors who follow his strategy. 

In his money tip Kevin explains how people who can’t save can find the money to get on track. He also reveals another lesson from his mother that was a bit surprise. O'Leary also shares his 90 day money test that he does with his wealthy friends to help them stay rich. 

O'Leary talks about an app that he launched  called Beanstox that allows investors to buy small dollar amounts of ETF’s and market-leading stocks. It gets people into investing without having to commit large amounts of capital up-front. 

Links to things mentioned in this episode

Kevin O’Leary’s financial literacy books the Cold Hard Truth series can be found here. 

His app to start investing can be found at Beanstox

To learn more about the companies he backs as well as his wine business and more, go to O’LEARY VENTURES

Kevin also talked about his ETF business O'Shares

In his story about his mom he spoke about Chanel and Gucci

Books I recommended in the episode: 

The Opposite of Spoiled by Ron Lieber

Smart Money Smart Kids, Raising the next generation to win with money by Dave Ramsey and Rachel Cruz

Make your Kid a Money Genius even if you are not by Beth Kobliner

 

Money A-Z Scott Alan Turner

Steve Jobs, The man who thought different by Karen Blumenthal

 

I also mention Fincon which is a fantastic conference for anyone who creates content about money, 

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Transcription

Kevin O'Leary:
The executor called me and said, "Look, your mother has kept a secret account from both of your husbands her whole life, you should come here because you're not going to be executor of this".

Bobbi Rebell:
You're listening to Financial Grown Up, with me, Certified Financial Planner, Bobbi Rebell, author of How To Be A Financial Grown Up, and you know what, being the 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, welcome to this edition of Financial Grown Up, and for those of you who have not guessed yet, yes that was the voice of Kevin O'Leary, aka Mr. Wonderful on Shark Tank. He is going to join us in just a moment to share a story about a secret, a financial lesson secret that he learned from his mother only after she passed away. It is a great story and it's gonna change your whole mindset about how you think about investing, so stick with me here. I just want to do a quick introduction to Kevin, tell you guys a little bit more about him for the maybe one or two people out there that don't know exactly who Kevin O'Leary is.

Bobbi Rebell:
He is a serial entrepreneur. He's got his own ventures including an investment company that focuses on dividend ETS. He also is in the wine business and of course, O'Leary Venture supports all the Shark Tank companies that he's invested in. Recent success of note, Plated, which he sold for a cool 300 million dollars. He's also got a really interesting app I want you guys to hear about and you will hear about it in just a moment. Here is Kevin O'Leary.

Bobbi Rebell:
Kevin O'Leary you are a financial grown up and I'm so excited you are on the podcast. Welcome.

Kevin O'Leary:
Great to be here. Thank you so much.

Bobbi Rebell:
And you are, of course, so special in my heart because you are such an advocate for financial literacy. You make it part of everything that you do, including your entrepreneurial ventures. Before we get to the financial grown up moment that you're gonna share with us, I do wanna have you tell us more about the app Beanstox. Tell us about Beanstox.

Kevin O'Leary:
You know, for the last few years I've been teaching at colleges and high schools and I've just been stunned by the fact that we teach young people in America pretty well everything about math and reading, geography, even sex education, but we never talk to them about financial literacy. We never teach them how to invest, and even when I teach graduating cohorts of engineers at places like MIT, Harvard, Notre Dame, Temple, I'm blown away that these young people going off in the workforce have never bought a stock or bonds.

Kevin O'Leary:
So, the genesis of Beanstox, and I've spelt it B-E-A-N-S-T-O-X, is an app. You download it and it allows you to buy fractional shares of your favorite stocks or exchange traded funds, which means if you only have $2 to invest, or $5, or $10 or whatever you've got, you can actually own a real share and learn about how the prices go up and down, when dividends get paid, and just to build a diversified portfolio. I find when you do that on your mobile device, you actually watch it every day. Some people go on 10 times a day, and I've just been thrilled.

Kevin O'Leary:
Hundreds of thousands of them have been downloaded now. People have set up accounts, even if they only put in 50 bucks a month, it's great to start investing because the truth about America is the average salary is $52,000 a year, and if you started investing just 10% of your income at the age of 22, by the time you're 65, if the markets do what they have done for the last 50 years, which is give you six to seven percent a year of return, you'll have 1.2 million dollars sitting in the bank for-

Bobbi Rebell:
Very nice, all right, everybody check out Beanstox now. I'm really excited for you to share your financial grown up moment money story because my mom passed away a few years ago and it's, in some ways, only in retrospect that I learned some really important lessons from her, and you learned a big lesson from your mom at that time.

Kevin O'Leary:
Yes, when she passed away, I was the older son. I'm two years older than my brother, so the executer called me and said, "Look, your mother's kept a secret account from both of her husbands her whole life, you should come here because you're now gonna be the executor of this" and when I got there, I was blown away. I mean she ... I had always wondered how she'd provided for my brother and I, her sisters, and her extended family. She always seemed to have money, and what she had done is she had done exactly that.

Kevin O'Leary:
She had put aside more than 10% of her paycheck when she was a young woman, and she invested in two types of securities. 50% of this portfolio were in large cap dividend paying stocks, and the other half were in Telco bonds, five to seven year bonds and her thinking was that nobody would ever let their phone be disconnected by not paying their bill, so she trusted Telco Company, and this portfolio, over 50 years, outperformed everybody else in the family's, so I did some research.

Kevin O'Leary:
It really changed my mind forever about investing. 70% of the returns of the stock market over the last 50 years have come from dividends, not capital appreciation, so I never buy a stock today that doesn't pay a dividend. I learned that from my mother, and her whole mantra was never spend the principle, only the interest. She was so right about that.

Bobbi Rebell:
And it's interesting because that really did inform your whole approach to investing and your whole business, when it comes to your ETF business.

Kevin O'Leary:
Yes. O'Shares is build around her philosophy. We don't have a single security in any of our O'Shares funds, including the new midcap one OUSM. The reason I'm really intrigued with midcap stocks in America today, the ones that pay dividends, is because of this tax reform. They used to pay 36% tax, now they pay 21, so their cash flows this year are going to grow up by 15 to 20% more free cash. And if you look at the Russell 2,000, which is the universe of all the small companies in America, 339 are profitable and pay tax, and they're all captured in OUSM.

Bobbi Rebell:
Wow, all right so, what is the take away lesson from that story? Do you wish, for example, that you talked to your mom more about her money philosophy and what she was doing?

Kevin O'Leary:
Basically the take away story is this. When you start saving, there's two aspects to your saving. There's the principal, the money you're putting away, and then there's the interest you make off the principal, or the dividends you get if you bought a stock. What she basically said was it's okay to spend and live off the dividends and interest, but it's not okay to spend the principal, because once you spend the principal, you never get it back.

Kevin O'Leary:
The principal is what makes the money for you, so that philosophy is, you live off interest, you live off dividends, and that's how you monetize your lifestyle, but you never dip in to your principal. Some people say, well I really wanna buy a boat, I wanna buy a bigger house, I wanna buy something and I can't because I don't make enough, and they spend their principal. That always ends badly.

Bobbi Rebell:
Wow, all right. Your mom was definitely a financial grown up and certainly we appreciate you sharing what she taught you.

Bobbi Rebell:
Before you go, give us a money tip for our listeners. Something that you do that maybe they can emulate that can make a difference in their financial wellbeing right now. Something they can implement today.

Kevin O'Leary:
I've learned this years and years ago, and again taught to by my mother. When you go out every day, the whole world is designed to take money from you. That's how they market and tell you to buy this or get a new latte or buy new jeans or a new pair of shoes. Every time you get tempted to buy something, and I do this even to this day, I ask myself, do I really need this thing, do I really need it because when I take it, I take my cash and I buy it, I'm basically killing those dollars in terms of them making me interest or dividends because I bought those shoes or I bought those pants or I bought whatever it was.

Kevin O'Leary:
People say to me, well I can't save 10% of my salary. I'm living paycheck to paycheck, and I always remind them what my mother said, yes you can. You buy so much crap that you don't need and anybody can look in their closet and look at all the stuff they don't wear anymore. The shoes they don't wear or the junk they bought, and so I've really, really learned, buy really good things once in a while. And I'll tell you the anecdotal story.

Kevin O'Leary:
When my mother passed away, the women in my family fought like cats or dogs because all her clothes were Channel and Gucci and really good stuff that she kept for decades, but she didn't buy any crap, and that was her lesson to me. Buy a good suit. Buy a great pair of shoes, but don't buy a bunch of junk. That way you feel good about what you own, but you save a lot of money, and I've been able to cut my spending by a ton because I don't buy crap, and because she taught me that.

Kevin O'Leary:
Even wealthy people I work with, I do this special test with them, I say get a piece of paper, just two sheets, you don't need any technology.

Bobbi Rebell:
Oh no.

Kevin O'Leary:
And write down all of the things you make money from in 90 days, and all the money you spend in 90 days, and even really wealthy people outspend their income, and they learned sobering basis. That's my lesson. Do your 90 day test, but don't buy crap. You don't need it.

Bobbi Rebell:
Thank you so much Kevin O'Leary. It was such a pleasure having you. We will all keep tuning in to Shark Tank and all your other ventures, thank you.

Kevin O'Leary:
Take care.

Bobbi Rebell:
I always love talking with Kevin O'Leary, he's an amazing advocate for financial literacy and such an inspiration. Here is my take and it probably won't surprise you guys. Financial grown up tip number one, talk to your parents about money, and yes, get their advice, but also try to get them to open up about what they did right and also, just as important, what they would have done differently. Get them to share their financial grown up moments, their money stories. When we're kids, our parents often shelter us from what is really going on behind the scenes in our daily lives.

Bobbi Rebell:
For example, I remember as a teenager, my family moved into a bigger and newer house. Now, I didn't think that much about it, when I saw my mom putting towels over the windows. It was a little weird, but you know parents can be weird. What I learned later on was that they had really stretched to buy the house, and they were waiting, holding off to buy the window coverings, so my mom was basically making due with what she had, and really, it was just fine, no big deal.

Bobbi Rebell:
All right, financial grown up tip number two, if and when you have kids, make a plan for how you want them to learn about money. There is no right or wrong plan here, every kid has different ways of learning and every family has different things that are right for them. Find out what works for you guys.

Bobbi Rebell:
Some resources though, I am a big fan of a book called The Opposite Of Spoiled by Ron Lieber. Another classic to check out, Smart Money, Smart Kids by Dave Ramsey and Rachel Cruise, and finally, Make Your Kid A Money Genius by Beth Kobliner. Check them out. And, for fun, I was recently gifted a book at FinCon by Scott Allen Turner called Money A To Z. It was a lot of fun to read with my child, and of course, don't shy away from business stories for kids, especially as they get older.

Bobbi Rebell:
Harry is now 10 and we are reading about Steve Jobs. The actual book title if you guys wanna check it out is Steve Jobs The Man Who Thought Different. It is by Karen Blumenthal. It's opening up a lot of discussions about funding a start up and all the different things that go into a business. It's also interesting to read about Steve Jobs and all of his personal quirks, so I will leave it to you guys to see if you wanna read that book with your children or just check it out yourself.

Bobbi Rebell:
Thank you all for listening to Financial Grown Up. We are new and we need your support. Please subscribe to this podcast and then of course, be sure to rate and review it on iTunes and especially please share this with your friends. And until next time, I am wishing all of you financial freedom.

Bobbi Rebell:
Financial Grown Up with Bobbi Rebell is a BRK Media production.

Retire Inspired’s Chris Hogan had a taste for expensive food at the grocery store- and it was was thinning out his bank account. But when he saw the true cost of his weekly habit he quickly hit the brakes and kept the change. 

 

In Chris’ money story you will learn

-How Chris Hogan had money wake up call

-Why his spending was spiraling out of control

-How he curbed his grocery spending bill from $1500 a month to close to nothing

-How routine and habit was hurting his wallet

-The specific strategy Chris and his wife used to get back on track with their spending

-The crazy meals the Hogans had while cleaning out their food stash!

In Chris’ lesson you will learn

-Chris’s strategy to avoid mixing up wants and needs

-The importance of being intentional with how you spend your money

-How to curb spending even when you think you can afford it

-Chris’ saying: interest you pay is a penalty but interest you earn is a reward

-How to get debt out of your life

In Chris’ money tip you will learn

-Why he believes cash is the best tool to control spending

-How electronic payments can confuse you and cause you to spend more than you intend

In my take you will learn:

-While eating out can be a budget killer, eating at home can be expensive as well

-Be deliberate at the grocery store- have a list and don’t buy those impulse items!

-Don’t shop hungry

-Use apps like Grocery IQ and Grocery pal to help stay on track in the store and to plan better

-Avoid routine spends. But on purpose, and with purpose!

EPISODE LINKS

Chris Hogan’s website https://www.chrishogan360.com/

Chris Hogan’s book Retire Inspired

Chris Hogan’s podcast Retire inspired https://www.chrishogan360.com/podcast/

Chris Hogan’s Retirement calculator https://www.chrishogan360.com/riq/

Follow Chris!

Instagram @ChrisHogan360

Twitter @ChrisHogan360

Facebook https://www.facebook.com/chrishogan360/

 

Grocery apps to check out:

Grocery IQ

Grocery Pal

 

Here are some stories about Grocery apps:

8 apps that will save you real Money on Food- from Money

http://time.com/money/5095326/8-apps-that-will-save-you-real-money-on-food/

10 Best apps to save money on groceries 2018 from Frugal for Less

https://www.frugalforless.com/apps-to-save-money-on-groceries/

Best Grocery List apps article from best products;

https://www.bestproducts.com/eats/food/g1505/grocery-shopping-list-apps/

6 best grocery shopping list apps for iphone and ipad 2018 from appsdose

http://www.appsdose.com/2015/04/6-best-grocery-shopping-list-apps-for-iphone-ipad.html

7 Grocery List apps for iPhone and Android for best shopping experience

https://mashtips.com/best-grocery-list-app-iphone-android/

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Transcription

Chris Hogan:
You would have thought I was getting ready for Y2K. I had food in the cupboards, the freezers. I had food everywhere, but yet I was still every Saturday morning going to the grocery store.

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 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, friends. We talk a lot these days in our society about being mindful. I'm working hard about bringing that into my life in a consistent and intentional way, but we also need to talk about mindlessness especially when it comes to our every day spending. I love the story that Retire Inspired author and podcast Chris Hogan is about to share with us because of its brilliant simplicity. We need to hear this stuff and know that even the people we look up to when it comes to money have not always been the role models for money mindfulness. He became aware, and once he saw the numbers, change came. Chris Hogan, you are a financial grownup. Welcome to the podcast.

Chris Hogan:
Thank you. It's a pleasure to be with you.

Bobbi Rebell:
It's an honor to have you. I am such a fan of all that you do for people from Retire Inspired, the book, to your podcast, to all of your good teachings and advice. It is truly a privilege, and we thank you.

Chris Hogan:
Thank you. It's a pleasure to be with you.

Bobbi Rebell:
You have brought with you a money story about spending and the grocery store, which is something that people don't always realize what's going on there. Do tell.

Chris Hogan:
Bobbi, I had an issue. I wasn't being a grownup at this time.

Bobbi Rebell:
Oh no.

Chris Hogan:
This is back before I had kids. I'm now the proud father of three boys, but no kids, double income household. We were just getting started getting serious about where we were financially and what we were doing. I sat down and was looking at bank statements. I wanted to add up, I wanted to know where was my money going? Where was our money heading? I started adding up the different categories, the eating out, but the grocery bill. This was one that was jumping out at me. I thought, this can't be correct. I went another month back, and yeah, $1,200 a month on groceries, a family of two.

Bobbi Rebell:
What were you buying?

Chris Hogan:
Anything and everything, meats, cheeses, anything and everything at any time. Again, we had the money. We weren't hurting anybody. I went back a third month and added it up. It was like $1,500. I was like, "Okay, let's go back to the $1,200," and it was just too much. Then I started realizing something. I was making the grocery store rich, instead of me building my own wealth. That became my financial wake up call, so to speak. Literally, looking at this, we got intentional. We got on a budget, and we set up a dollar amount that we were going to spend on groceries. That was the taking control. I'll never forget, we looked at all the food that I stockpiled. You would have thought I was getting ready for Y2K. I had food in the cupboards, the freezers. I had food everywhere, but yet I was still every Saturday morning going to the grocery store. I realized something. I was shopping out of habit, not out of necessity.

Bobbi Rebell:
It sounds like it was part of your routine. That was your weekend routine.

Chris Hogan:
That's exactly right. It was the routine. Regardless if we needed anything or not, I was going and buying things because I could. Stepping back and really looking at that, we put some parameters in place. We set up a dollar amount that we were going to spend on groceries, but before we did that we ate the food that we had. I'll never forget, that was a grownup moment for us, really starting to take a stand because the $1,200 to $1,500 that was normally being spent in that month, we didn't spend it that month. We actually sent it toward our debt.

Bobbi Rebell:
The entire amount?

Chris Hogan:
The entire amount. We had $100 for groceries. We built the milk, and eggs, and things like that. The other stuff, we ate the things that we had. Now I'm not going to lie to you, Bobbi, we had some interesting meals. It was interesting. Ramen noodles with corn. We did some stuff, but we made a stand at that point financially that we were going to be in charge, and our habits weren't going to take charge of us.

Bobbi Rebell:
I want to ask you something. Earlier you said you could afford it, but then you said you were putting that money towards debt. You could afford it in terms of cash flow, but yet maybe you should not have been spending that, clearly, because you could have put it towards debt, so your perception of afford has changed.

Chris Hogan:
Absolutely, it did, because my math changed. Looking at debt, it was one of those things that at that time we rationalized it, because why? Everybody had credit card debt, everybody had a car payment. As you start to look at it, and you start to run the numbers, you understand interest that you pay is a penalty. Interest that you earn is a reward. When you start to learn real math, as I call it, you start to see debt for what it is. It's a threat, and it's a thief. You want to get it out of your life.

Bobbi Rebell:
What is the lesson from this for our listeners?

Chris Hogan:
I'd say, "Be intentional." It's the lesson of wants versus needs, and we can get confused. We can want something so bad that we feel like we need it, but I want us to be clear. Set spending limits for yourself. Understand what you normally spend, but let's put some dollar amounts on there of hey, here's what we're going to spend on groceries. This is what we're going to spend eating out. Now you start to construct that budget. It puts you in control, and then you don't have to feel regret.

Bobbi Rebell:
Let's move on to your money tip because this is one, I know what you're going to say. It's so brilliantly simple.

Chris Hogan:
Yes.

Bobbi Rebell:
What is your money tip for everyone that they can use right away?

Chris Hogan:
Right away, my money tip is this. Use cash. I know it sounds crazy, but I'm telling you, when you have cash, and you go into the grocery store with that dollar amount, it helps you stay aware, and it helps you stay in control. Now when they say the total amount is $85, and you count out $85 you are feeling the spending of the money as you're counting out those bills as opposed to with a debit card, the swipe, we don't feel the pain there. It's just this swipe. Now there's a chip, and all these things going on. It doesn't become spending until you balance your checking account. Use cash in those areas that you struggle in, whether it's eating out. Get an envelope, write eating out on it. Put a dollar amount in there each and every pay period. When the money is gone, you're done. It's this great reminder, and it keeps us aware of where we stand financially.

Bobbi Rebell:
All right, Chris. Thank you so much. I want to hear more quickly about what is going on with you, and what you are working on at Dave Ramsey Solutions and at Retire Inspired. Do tell.

Chris Hogan:
Yes. We launched Retire Inspired in 2016. I'm working on my second book that we're going to have ready and available for the public in 2019, but I'm traveling all over the country doing smart money events where we walk people through the baby steps. I'm also doing corporate events where I'm talking about money and leadership. They can go check me out at ChrisHogan360.com, look at the events page, and they can find out where I'm at and where I'm going to be.

Bobbi Rebell:
One my favorite things about what you do in your books, and I hope you have this in your next book, is that you really as you travel you get so many unique stories that are relatable, or sometimes hopefully they won't be relatable because some of them can be pretty scary, but I look forward to hearing more of those stories. In terms of social media, always Chris Hogan 360?

Chris Hogan:
Always, everything, on Facebook as well as Twitter, Instagram. @chrishogan360 is where I'm at.

Bobbi Rebell:
Okay, there was a lot there that I could relate to and have definitely been guilty of. This is a case where I am right in it with you guys. Financial Grownup Tip Number 1: We think of eating out in restaurants as a big expense that has to be watched, and it does, but you can also buy quite expensive items at the grocery store, and have some very pricey home cooked meals, or even worse as in the case of the Hogan household, some expensive food just sitting in the pantry and the freezer. You have to watch that bill. It seems so simple, but make a list when you go shopping and stick to it.

Bobbi Rebell:
You've heard this before, but I'm going to remind you. Don't shop hungry. It happens, I do it. I always buy more than I should and fall for the impulse items. I'm working on it, and you should too. There are a ton of apps that can help you to be more organized and save money when you shop for groceries. I'm going to put links to a few articles with suggestions in the show notes, but a couple to check out just here, Grocery IQ and Grocery Pal. You make your list, and the app will sort out and show you discounts including those for other brands of the same item. While it may seem like it's okay if you can afford it to spend that extra money at the grocery store, it's not always as okay as it seems. For example, in the Hogan's case, they realized that they could be using that money to pay down debt. They thought that they could afford it, but maybe not so much. If you don't have debt, wouldn't it be more fun to do something else with the money, or more smarter, to invest the money? Savings is a good thing.

Bobbi Rebell:
Financial Grownup Tip Number 2: Ditch the bad money habits that are just there because they're routine. Chris Hogan was shopping at the grocery every Saturday because it was Saturday. He did not need the food. In fact, he probably didn't have room for it at a certain point. This comes back to things like lattes. If you want one because you want one, and you can afford it, that's fine, but if you're just buying one every morning because that's your routine, think about it. Maybe you want to do something else some days.

Bobbi Rebell:
I want to thank all of you for your ratings and reviews on iTunes. It is making a huge difference in helping others discover our new podcast. I also want to thank Forbes for naming Financial Grownup one of the five podcasts that is getting it right. It was amazing to be getting that kind of recognition less than two months after we started this project. Keep spreading the word, friends, and keep in touch. I am on Twitter, @bobbirebell and on Instagram at bobbirebell1, on Facebook. Check me out under Bobbi Rebell and learn more about the show at, you're getting the theme here, bobbirebell.com/financialgrownuppodcast.

Bobbi Rebell:
Chris Hogan is pretty much as grown up as it gets. I loved his episode, and I hope you did too, and that it got us all one step closer to being financial grownups. Financial Grownup is edited and produced by Steve Stewart and is a BRK Media production.

Shark Tank’s Kevin O’Leary shares a story about his mother and a secret he learned about after she passed away. The Entrepreneur, who is also behind O’Shares and O’Leary Ventures  reveals in the story how his mothers choices informed his investing style, which is heavily focused on dividends. 

He goes on to discuss the two types of investments his mother chose, including her thinking and mindset in making those choices. 

O'Leary also talks about the importance of the tax changes and why that is something that will benefit investors who follow his strategy. 

In his money tip Kevin explains how people who can’t save can find the money to get on track. He also reveals another lesson from his mother that was a bit surprise. O'Leary also shares his 90 day money test that he does with his wealthy friends to help them stay rich. 

O'Leary talks about an app that he launched  called Beanstox that allows investors to buy small dollar amounts of ETF’s and market-leading stocks. It gets people into investing without having to commit large amounts of capital up-front. 

Links to things mentioned in this episode

• Kevin O’Leary’s financial literacy books the Cold Hard Truth series can be found here. 

• His app to start investing can be found at Beanstox

• To learn more about the companies he backs as well as his wine business and more, go to O’LEARY VENTURES

• Kevin also talked about his ETF business O'Shares

• In his story about his mom he spoke about Chanel and Gucci

Books I recommended in the episode: 

• The Opposite of Spoiled by Ron Lieber

• Smart Money Smart Kids, Raising the next generation to win with money by Dave Ramsey and Rachel Cruz

• Make your Kid a Money Genius even if you are not by Beth Kobliner

• Money A-Z Scott Alan Turner

• Steve Jobs, The man who thought different by Karen Blumenthal

 

I also mention Fincon which is a fantastic conference for anyone who creates content about money. 

Kevin O'Leary explains how people who can’t save can find the money to get on track. O'Leary also shares his 90 day money test that he does with his wealthy friends to help them stay rich and how you can save 10% even when you're living paycheck to paycheck. #SaveMoney #MoneySavingTips

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Transcription

Kevin O'Leary:
The executor called me and said, "Look, your mother has kept a secret account from both of your husbands her whole life, you should come here because you're not going to be executor of this".

Bobbi Rebell:
You're listening to Financial Grown Up, with me, Certified Financial Planner, Bobbi Rebell, author of How To Be A Financial Grown Up, and you know what, being the 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, welcome to this edition of Financial Grown Up, and for those of you who have not guessed yet, yes that was the voice of Kevin O'Leary, aka Mr. Wonderful on Shark Tank. He is going to join us in just a moment to share a story about a secret, a financial lesson secret that he learned from his mother only after she passed away. It is a great story and it's gonna change your whole mindset about how you think about investing, so stick with me here. I just want to do a quick introduction to Kevin, tell you guys a little bit more about him for the maybe one or two people out there that don't know exactly who Kevin O'Leary is.

Bobbi Rebell:
He is a serial entrepreneur. He's got his own ventures including an investment company that focuses on dividend ETS. He also is in the wine business and of course, O'Leary Venture supports all the Shark Tank companies that he's invested in. Recent success of note, Plated, which he sold for a cool 300 million dollars. He's also got a really interesting app I want you guys to hear about and you will hear about it in just a moment. Here is Kevin O'Leary.

Bobbi Rebell:
Kevin O'Leary you are a financial grown up and I'm so excited you are on the podcast. Welcome.

Kevin O'Leary:
Great to be here. Thank you so much.

Bobbi Rebell:
And you are, of course, so special in my heart because you are such an advocate for financial literacy. You make it part of everything that you do, including your entrepreneurial ventures. Before we get to the financial grown up moment that you're gonna share with us, I do wanna have you tell us more about the app Beanstox. Tell us about Beanstox.

Kevin O'Leary:
You know, for the last few years I've been teaching at colleges and high schools and I've just been stunned by the fact that we teach young people in America pretty well everything about math and reading, geography, even sex education, but we never talk to them about financial literacy. We never teach them how to invest, and even when I teach graduating cohorts of engineers at places like MIT, Harvard, Notre Dame, Temple, I'm blown away that these young people going off in the workforce have never bought a stock or bonds.

Kevin O'Leary:
So, the genesis of Beanstox, and I've spelt it B-E-A-N-S-T-O-X, is an app. You download it and it allows you to buy fractional shares of your favorite stocks or exchange traded funds, which means if you only have $2 to invest, or $5, or $10 or whatever you've got, you can actually own a real share and learn about how the prices go up and down, when dividends get paid, and just to build a diversified portfolio. I find when you do that on your mobile device, you actually watch it every day. Some people go on 10 times a day, and I've just been thrilled.

Kevin O'Leary:
Hundreds of thousands of them have been downloaded now. People have set up accounts, even if they only put in 50 bucks a month, it's great to start investing because the truth about America is the average salary is $52,000 a year, and if you started investing just 10% of your income at the age of 22, by the time you're 65, if the markets do what they have done for the last 50 years, which is give you six to seven percent a year of return, you'll have 1.2 million dollars sitting in the bank for-

Bobbi Rebell:
Very nice, all right, everybody check out Beanstox now. I'm really excited for you to share your financial grown up moment money story because my mom passed away a few years ago and it's, in some ways, only in retrospect that I learned some really important lessons from her, and you learned a big lesson from your mom at that time.

Kevin O'Leary:
Yes, when she passed away, I was the older son. I'm two years older than my brother, so the executer called me and said, "Look, your mother's kept a secret account from both of her husbands her whole life, you should come here because you're now gonna be the executor of this" and when I got there, I was blown away. I mean she ... I had always wondered how she'd provided for my brother and I, her sisters, and her extended family. She always seemed to have money, and what she had done is she had done exactly that.

Kevin O'Leary:
She had put aside more than 10% of her paycheck when she was a young woman, and she invested in two types of securities. 50% of this portfolio were in large cap dividend paying stocks, and the other half were in Telco bonds, five to seven year bonds and her thinking was that nobody would ever let their phone be disconnected by not paying their bill, so she trusted Telco Company, and this portfolio, over 50 years, outperformed everybody else in the family's, so I did some research.

Kevin O'Leary:
It really changed my mind forever about investing. 70% of the returns of the stock market over the last 50 years have come from dividends, not capital appreciation, so I never buy a stock today that doesn't pay a dividend. I learned that from my mother, and her whole mantra was never spend the principle, only the interest. She was so right about that.

Bobbi Rebell:
And it's interesting because that really did inform your whole approach to investing and your whole business, when it comes to your ETF business.

Kevin O'Leary:
Yes. O'Shares is build around her philosophy. We don't have a single security in any of our O'Shares funds, including the new midcap one OUSM. The reason I'm really intrigued with midcap stocks in America today, the ones that pay dividends, is because of this tax reform. They used to pay 36% tax, now they pay 21, so their cash flows this year are going to grow up by 15 to 20% more free cash. And if you look at the Russell 2,000, which is the universe of all the small companies in America, 339 are profitable and pay tax, and they're all captured in OUSM.

Bobbi Rebell:
Wow, all right so, what is the take away lesson from that story? Do you wish, for example, that you talked to your mom more about her money philosophy and what she was doing?

Kevin O'Leary:
Basically the take away story is this. When you start saving, there's two aspects to your saving. There's the principal, the money you're putting away, and then there's the interest you make off the principal, or the dividends you get if you bought a stock. What she basically said was it's okay to spend and live off the dividends and interest, but it's not okay to spend the principal, because once you spend the principal, you never get it back.

Kevin O'Leary:
The principal is what makes the money for you, so that philosophy is, you live off interest, you live off dividends, and that's how you monetize your lifestyle, but you never dip in to your principal. Some people say, well I really wanna buy a boat, I wanna buy a bigger house, I wanna buy something and I can't because I don't make enough, and they spend their principal. That always ends badly.

Bobbi Rebell:
Wow, all right. Your mom was definitely a financial grown up and certainly we appreciate you sharing what she taught you.

Bobbi Rebell:
Before you go, give us a money tip for our listeners. Something that you do that maybe they can emulate that can make a difference in their financial wellbeing right now. Something they can implement today.

Kevin O'Leary:
I've learned this years and years ago, and again taught to by my mother. When you go out every day, the whole world is designed to take money from you. That's how they market and tell you to buy this or get a new latte or buy new jeans or a new pair of shoes. Every time you get tempted to buy something, and I do this even to this day, I ask myself, do I really need this thing, do I really need it because when I take it, I take my cash and I buy it, I'm basically killing those dollars in terms of them making me interest or dividends because I bought those shoes or I bought those pants or I bought whatever it was.

Kevin O'Leary:
People say to me, well I can't save 10% of my salary. I'm living paycheck to paycheck, and I always remind them what my mother said, yes you can. You buy so much crap that you don't need and anybody can look in their closet and look at all the stuff they don't wear anymore. The shoes they don't wear or the junk they bought, and so I've really, really learned, buy really good things once in a while. And I'll tell you the anecdotal story.

Kevin O'Leary:
When my mother passed away, the women in my family fought like cats or dogs because all her clothes were Channel and Gucci and really good stuff that she kept for decades, but she didn't buy any crap, and that was her lesson to me. Buy a good suit. Buy a great pair of shoes, but don't buy a bunch of junk. That way you feel good about what you own, but you save a lot of money, and I've been able to cut my spending by a ton because I don't buy crap, and because she taught me that.

Kevin O'Leary:
Even wealthy people I work with, I do this special test with them, I say get a piece of paper, just two sheets, you don't need any technology.

Bobbi Rebell:
Oh no.

Kevin O'Leary:
And write down all of the things you make money from in 90 days, and all the money you spend in 90 days, and even really wealthy people outspend their income, and they learned sobering basis. That's my lesson. Do your 90 day test, but don't buy crap. You don't need it.

Bobbi Rebell:
Thank you so much Kevin O'Leary. It was such a pleasure having you. We will all keep tuning in to Shark Tank and all your other ventures, thank you.

Kevin O'Leary:
Take care.

Bobbi Rebell:
I always love talking with Kevin O'Leary, he's an amazing advocate for financial literacy and such an inspiration. Here is my take and it probably won't surprise you guys. Financial grown up tip number one, talk to your parents about money, and yes, get their advice, but also try to get them to open up about what they did right and also, just as important, what they would have done differently. Get them to share their financial grown up moments, their money stories. When we're kids, our parents often shelter us from what is really going on behind the scenes in our daily lives.

Bobbi Rebell:
For example, I remember as a teenager, my family moved into a bigger and newer house. Now, I didn't think that much about it, when I saw my mom putting towels over the windows. It was a little weird, but you know parents can be weird. What I learned later on was that they had really stretched to buy the house, and they were waiting, holding off to buy the window coverings, so my mom was basically making due with what she had, and really, it was just fine, no big deal.

Bobbi Rebell:
All right, financial grown up tip number two, if and when you have kids, make a plan for how you want them to learn about money. There is no right or wrong plan here, every kid has different ways of learning and every family has different things that are right for them. Find out what works for you guys.

Bobbi Rebell:
Some resources though, I am a big fan of a book called The Opposite Of Spoiled by Ron Lieber. Another classic to check out, Smart Money, Smart Kids by Dave Ramsey and Rachel Cruise, and finally, Make Your Kid A Money Genius by Beth Kobliner. Check them out. And, for fun, I was recently gifted a book at FinCon by Scott Allen Turner called Money A To Z. It was a lot of fun to read with my child, and of course, don't shy away from business stories for kids, especially as they get older.

Bobbi Rebell:
Harry is now 10 and we are reading about Steve Jobs. The actual book title if you guys wanna check it out is Steve Jobs The Man Who Thought Different. It is by Karen Blumenthal. It's opening up a lot of discussions about funding a start up and all the different things that go into a business. It's also interesting to read about Steve Jobs and all of his personal quirks, so I will leave it to you guys to see if you wanna read that book with your children or just check it out yourself.

Bobbi Rebell:
Thank you all for listening to Financial Grown Up. We are new and we need your support. Please subscribe to this podcast and then of course, be sure to rate and review it on iTunes and especially please share this with your friends. And until next time, I am wishing all of you financial freedom.

Bobbi Rebell:
Financial Grown Up with Bobbi Rebell is a BRK Media production.