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On The BIGG Success Show today, we introduced the 3 financial experts who will be joining us for a special podcast series. Here’s a summary of that discussion.
We are hosting a special podcast series for Money Smart Week, March 30th-April 6th. Money Smart Week is a national public awareness campaign coordinated by the Federal Reserve Bank of Chicago to help individuals and families better manage their personal finances.
Our mission at BIGG Success is to help good people have more money to do more good! So we decided to create a special podcast series to bring you advice from the top financial experts in the world!
During this special podcast series, you’ll hear from
- Broke Millennial, Erin Lowry, on how to start investing
- TODAY Show’s money expert Jean Chatzky, with tips for women and their money
- New York Times Best-selling finance author David Bach, with the secrets to financial freedom
A Taste of the Expert Advice You’ll be getting
You know Erin Lowry from her critically acclaimed book “Broke Millennial.” She’s back with a new book called Broke Millennial Takes On Investing – A Beginner’s Guide to Leveling Up Your Money. During our discussion in Episode #966, we ask Erin, how do you know when you are ready to start investing? She says you can think of it like putting on your financial oxygen mask…
I believe everyone should start educating themselves whether or not you’re financially in a position to start when the book is a great place to do that. But you do have to go through this process of what I refer to as putting on your financial oxygen mask. And obviously, this is a riff on when you fly, and the flight attendant tells you put on your own oxygen mask before assisting others.
Same thing with your money investing inherently does put risk on your money. So it is important that you’re protecting yourself and you’re protecting your money before you get started in investing.
And I don’t want to scare anyone off from investing. It’s a great way to build wealth, but you need to have some other things handled first. And a couple of those things are paying off high interest debt like credit cards, because if that’s got 15, upwards of maybe even 30% interest rate, odds are, you’re not probably going to see those kind of returns in the market on average. So let’s go ahead and get rid of that credit card debt.
You want to be setting your goals, why are you investing? What are you investing for, if you’ve got short term goals, for example, I’m moving this weekend that costs a lot of money, that’s not money that I want to tied up in the stock market. So if you had short term goals, you want to be saving for those.
And speaking of saving, you want to have an emergency fund. Now, classic rule of thumb is six months, I think you could probably get away with three months save a basic living expenses as well.
So Erin says before you invest you should first, protect yourself and your money. We’ve talked about this before on the podcast – specifically how the middle class and upper class differ in the way they think.
Middle class people tend to be “thing” oriented – they save money to buy things. If they don’t have the money, they may use a credit card.
Wealthy class people are “goal” oriented – first they preserve capital. High interest debt is an expense they choose not to afford. The key is they have thought this way from the time they were middle class.
Here’s the thing to really understand…if you are in the middle class and you want to be part of the wealthy class, start by protecting your money.
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You’ve seen Jean Chatsky, on NBC’s TODAY Show as their financial expert. She’s the owner of HerMoney Media at HerMoney.com, and is a bestselling author. Jean has a new book called Women with Money, which helps women determine what they want from their money and provides the pathways to get there.
In Episode #967, Jean tells us most of the women she talked to, say they feel inadequate about how they are handling their money. But she says there’s no need to….
Most of the women that I spoke to, for this book, and most of the women I’ve encountered in my life, we just feel inadequate, you know, we tie ourselves up into knots, thinking that we’re not doing the right thing, thinking that I’m not an investor, because I just have a 401k that doesn’t make me an investor, I’m not watching the markets every single day and trying to decide should I invest because things are going to go up a little bit.
And And my answer to that is actually the fact that you have a 401k the fact that you’re putting money into it every single month, the fact that you take this measured approach toward achieving your life goals that makes you a great investor, and you just need to embrace that. And maybe you need a little bit of education and how to talk the language.
Jean makes a great point, a lot of good people who do good things tend to undervalue the goodness and the good things they do. We get so focused on what we DON’T know, we don’t stop to think about what we DO know, and we don’t focus on what we NEED to know, to take that next step, and move forward financially.
One more point…feeling inadequate is an emotion. When it comes to emotions – it’s OK to think emotionally about your goals, but you can’t be emotional about your money moves. BUT, your goals should stir you up – if not, get new goals!
You’ve probably read at least one of David Bach’s 9 New York Times best-selling books – an all-time favorite is The Automatic Millionaire. David is one of the world’s most trusted financial experts, and he’s got a new book called “The Latte Factor,” where he shares the secrets to financial freedom.
Here’s another interesting tidbit…whenever you hear someone tell you to cut out the daily latte from your budget – that’s the Latte Factor and David Bach is the one who popularized it!
BUT, in Episode #968, David tells us the Latte Factor was never about the latte or about money…
The Latte Factor came about because I was teaching a class years ago where a young woman named Kim said to me that she can’t afford to save any money and she was sipping a latte at the time.
And so we started running the math for her on a blackboard. I literally took the math and I started showing her what she was spending at Starbucks, and what she’s spending a Jamba Juice, and we calculated all the numbers. We do this in the book too..you see that $5 a day in five years is worth $11,616 at a 10% rate of return. But then we show in 30 years it’s worth over $339,000. In 40 years it’s worth over $948,000 And that’s without Kim’s company providing a match.
And so all the sudden, she says, “Are you trying to tell me my lattes are costing me over a million dollars?” And I was like, “Well yeah, actually I am”. But the funny thing is – it’s really not about the coffee.
We love David’s point – you don’t need to deprive yourself to become a millionaire. You just need to be really careful about your priorities and be sure that how you spend your money is in line with what’s most important to you. That you keep your goals ever-present in your mind so that every expenditure gets you closer to your goal – not further away from it.
Join us next time to hear the full interview with Broke Millennial, Erin Lowry, for tips on how to start investing to gain wealth.
Until then – here’s to your BIGG Success.
George “The Professor” & Mary-Lynn
Co-Founders, BIGG Success
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