Why Money is Important: Podcast

Take your financial confidence to the next level!

Why Money is Important: Podcast

June 28, 2019 101 Level Budget Financial Behavior Podcast 0
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Please be aware. Transcript is for show note purposes only and has not been edited for accuracy. For best experience, I encourage you to listen to the audio version. Transcribed by https://otter.ai

Quote 0:01

When you think about it, you will only have more responsibility moving forward. So it’s not like you can say, well, in my 20s, I can spend all my money because in my 30 years, I’ll be making a lot more and so I’ll be able to save more then. What happens if you end up getting married? Well, that’s a lot of responsibilities. Some of your spending is outside your control, because now there’s two of you deciding on where that money is going to go.

Please be aware. Transcript is for show note purposes only and has not been edited for accuracy. For best experience, I encourage you to listen to the audio version. Transcribed by https://otter.ai

This is techie personal finance boot camp, where I help tech professionals in their 20s and 30s. Balance a great life today without sacrificing their future possibilities. I’m your host Lucas Casarez, certified financial planner and founder of Level Up Financial Planning, where I help educate coach and build strategies with my clients to help them take their financial confidence to the next level.

Why Money Matters 01:01

In this episode of Techie Personal Finance Boot Camp, I’m going to cover Why does money actually matter it and if you’re think about it at all, money just plays such a huge, dramatic role in your life. And it’s just everyday decisions that you’re constantly making that have an impact on your life. And sure some of the decisions are pretty small. But those micro decisions, once you add them up and start to create certain behavior, those things can be compounded. And it really changes your life.

Life Changing Expenses 01:32

You think that buying coffee from Starbucks isn’t life changing, but it is in it not just in how you interact with the people in your day, maybe you’re a nicer person, because your Starbucks. And so that’s how it’s changing your life. But it’s also could potentially be changing it financially. As far as what your future possibilities and opportunities are, and don’t want to pick up pick on Starbucks, or coffee or Luna, it’s any decision you make, it’s really any choice you make is really changing that future opportunity and possibilities.

Money Mindset 02:04

And that’s why I think it’s very important to just reflect on what is actually valuable to you. And there’s, this is still early in my podcast. And I think a lot of the things are still going to be very broad overview just kind of ways of thinking about your money thinking about what’s important to you, then we’ll start dive in a lot more into the nitty gritty like, this is how a 401k works. This is how to approach your your debt and things like that. So I think initially early, I know be a little bit more conceptually and ways of thinking about stuff, and then we’ll start narrowing in.

Money in Your Life 02:32

Let’s think about all the different ways that money plays a role in your life. So you work for money. So you probably do that about 40 hours a week, that’s important and takes up a lot of your life. And I imagine, you may be enjoying what you do. But at the same time, you wouldn’t be doing it for free. In most situations. If you decide to go home and watch TV or Netflix, most the time those things aren’t free, what you’re the device, you’re watching it on, whether it’s on your phone now or your TV, those things are not free. So all these things are financial decisions that you have to make.

Range of Choice 03:15

And there’s a wide range, right, there’s, there’s almost always such a wide range and the different choices you can make, you can do a Netflix subscription, where I don’t know they keep raising my prices there, it’s probably like in the 15 $16 range right now. But when I first started getting it was like $6. And comparing that to a cable bill where it’s like 100, hundred $50, those, those are two very different ends of the spectrum. And then there’s still that choice of doing nothing right, you might be so busy that you don’t do any of those, and you’re just saving $100 a month that every other Americans paying for whether they use it or not. So there’s definitely always going to be a wide range.

Trade-offs 03:54

And you had to choose individually, where you’re placing that value, what’s going to be the most important for you, and then part point in your life. And I think it’s important to to just constantly be checking back on some of these things. Because there’s always so many things that change in your life or guests we we used to be able to watch, Netflix saw a lot that we had children, now we watched a lot less. And so when At what point does the use for things that you’re paying for just really not make sense anymore, where you can just turn them off and just use those funds to do something else. So maybe if we do ever decided to drop Netflix, every two or three months, we can go to movies, and it’s basically the same price of what Netflix would have been for that three month time period. So there’s always different ways to think about trade offs as well. You could go for a walk that’s essentially free, which is nice. But that’s you can always do it if if it’s thunderstorm in or hailing on you, you might not feel go for a walk. So there’s, there’s that’s a choice not to spend money.

Alternatives 04:53

And if you’re just doing it by doing something else, where you live, how you furnish your house, what you decide to eat, think eating is really the biggest weakness, almost all my clients where we had to do a deep dive into stuff and we start to see really where they can start to change their life dramatically. As far as their financial decisions and their financial confidence and control over their financial situation. eating out tends to be a big one, as well as vacations is an important one. But then just again, understanding there’s two different ends of the spectrum, you could go camping for a lot cheaper than you can travel to Italy and stay there for a week or two. So very wide ranging, and differences. And it really just depends on what your financial situation is.

Don’t Forget Saving 05:37

And and don’t forget about the important stuff of saving for emergencies and, and doing the right things that way. Another one too, is just kind of the miscellaneous stuff that you buy, if they can’t really fit into a category and it goes into a miscellaneous category, it’s probably not a need at that point. So that’s another area where people tend to hurt themselves as they like getting those Amazon deliveries, or they like the thrill of going shopping and kind of picking things out. If you do those things too much, those can definitely become a burden for your situation. So there’s always going to be alternatives trade offs. And you have to consider what what is a want and what is a need. And again, it depends on your situation,

Life Gets Busy 06:18

And a lot of times people do get just kind of caught up in busy with life where they don’t keep track of stuff. And then yeah, they are overspending. And so let’s figure out what’s not adding value and start to slowly weed those things out.

The Whole Picture 06:18

I really enjoyed kind of looking at the whole situation, the whole financial situation before I even start digging in to my client situation and saying, hey, you should start making changes here or there. Because sometimes it’s not as bad as they think, or they’re focusing in on the things that aren’t really going to make a big difference. And so we can start to focus on things that really will shift dramatically what their situations and they’ll look like. And so that’s why it’s important to have a good overview, you don’t want to make a change just for change sake. And you may just be stressed out, you might not be thinking in the right mind of what actually is reality. And so if you take a step back, actually look at the whole picture, then you can start to see do you actually need to even adjust anything? Or are you just freaking out. And really, it’s not that big of a deal. So sometimes people are really aggressively saving and, and they spend a little bit of money here. And it’s not nearly as bad as what they think it is, especially when you compare it to what everyone else is doing.

Background on Money 07:29

So let’s give you a little bit of background on money. Like, what is it conceptually anyways, so money has been used for over 3000 years now. And if you think about it before that, like how, how are people exchanging goods and services and doing things and and that’s exactly what they’re doing. They’re exchanging goods and services. They weren’t exchanging currency, they weren’t exchanging money.

Bartering 07:53

So they were bartering, which sometimes you could still do now, if you go to like a thrift store, or whatever those types of things are reading kind of go to a market and just kind of haggle with people. That’s, that’s all they had to do before. And they didn’t have money to haggle with either. So what they were doing is they’re exchanging goats, they’re exchanging fruits, vegetables, tools, different things like that.

Imagine Bartering 08:19

And so imagine if you went to work today and thought about paycheck, they sent you a couple goats? Like, how, what would you do with a goat today, to kind of make sure you’re able to buy food, pay for your mortgage, or rent whatever it is a student loans, like, it’s just really a crazy concept to think about before money existed. So I, as you can guess, not very efficient.

Value Inefficiencies 08:46

And those things are all very subject to to, to value, like, what if, what if you don’t like the way, goat me tasted or goat milk tasted like a goats and that is valuable to you, or the person you’re trying to sell it to, if they don’t like those particular everything. So like, you could be trying to trade with someone that they have something of value, but what you’re trying to give them they don’t value at all. So that’s very tricky. And so there’s no standard value. And it just makes sense, complex, and really hard to navigate, kind of those situations. And things used to be a lot simpler back then to admit.

Standards and Value 09:19

So what money does is it does create a standard acceptance and devalue where if you have $100 bill, someone can look and say, Yep, that’s $100 bill, or now, with debit cards and credit cards, the computers kind of exchange that information up, there’s $100, that we’re going to transfer, it’s all that gets validated. So it’s a standard amount, everyone recognizes as being the real deal, there’s no like, I don’t really value $100 to be $100. That’s not really a concern anymore.

Store of Value 09:47

Another great feature of money, one that I’m very fond of is that it can be stored now. So if you have money instead of destroying goats, which you’d either be eliminated and kind of the ability to kind of wrangle those in a individual area, but then you also have to upkeep dominate, just get to be pretty crazy to store them and make sure that they stayed good long term. With money, it’s a lot easier to do especially in by putting into banks and investments and things like that. And so it does allow you to make larger purchases by saving up and larger investments and things like that. So you can really start now to not have to worry about money start to build it up. So where it can be used for an emergency or long term investments. And I see that as just really a foundation on being able to build wealth before. The only way you could build wealth in the past was truly by acquiring land, other than like charging people to be on your land. Now you can save up your money, you get paid for your skills and services. And now you can start to save that up and build wealth and invest in other things that will work on your behalf.

So it’s really interesting, because money is really just really that concept of being able to agree that something’s worth something and being able to exchange it widely and universally.

First Money Memory 11:06

My first money memory actually isn’t about money at all, actually dates back to when I was in fifth grade, we had a cool teacher and she would actually give us different points based on the grades would get in class. And I’ve always been a pretty high performer, especially in fifth grade before I got distracted by other things. So I was kind of thinking you know, a lot of points, a lot of rewards as far as how they were building up and tracking. And then what you do should raffle off different goodies and prizes, whether it be candy, pencils, toys, like things like that beanie babies were big when I was in fifth grade.

Spend Points 11:41

So all those things. And so what happened is, every time that that opportunity came to do those, and you can use them for cool stuff to like get in at a test or get out of assignments, doing fun stuff. And so those are where I valued like I valued get out of those stuff. Because I thought it was cooler with everyone else was spending their money on the beanie babies on the pencil erasers and things like that, I would just let my point store up, store up store up and all these things were being flashed around that were important to me, I didn’t find value in them. But everyone else is kind of flocking to them. They’re like, Oh, look, my cool eraser and or cool Beanie Baby. I was like, Yeah, like, those things are cool. But there’s not cool enough for me to to use my resources that I got here, here in my rewards and points. And so when those times would come up, where I was able to get out of a test like that was a lot better signal, a lot of stress, see me a lot of time for studying. And so those were the things I would value. And and I was really the only one that was ever able to do that because everyone else is spending their parents that they return. So that’s my first money memory.

What Is Your First Money Memory? 12:46

It’s it’s one of the questions I actually asked my clients pretty often have, like, what’s their first memory of how things work money wise, and, and a lot of times they think about either their first job, or maybe you’re thinking right now, your first first memory from what you remember your parents doing whether they went on a trip or or did something fun like that, too. So there’s Everyone has their own unique money memory. And so that’s why I enjoy asking that question. So how do you approach money? How should you approach money, and what happens is you do start to create these habits.

Money Algorithm 13:25

And if we want to tie this into some type of technically, some tech related comparison, I would say it’s kind of like a code. So you tell your money to do things for you. And that’s kind of the code that you enter in. And basically your behavior start to become a pattern, or an algorithm that creates shortcuts that allow you to just not have to think about things as much. That’s why people are actually really good with money, they didn’t start out being really good with money, they just kind of started building good habits early on. And now they don’t have to think about it, they do a lot of the same stuff that they did early on, that was really hard for them. It’s just now it’s not hard because they created these new algorithm shortcuts in their behavior. And it’s just automatic.

Good Money Algorithms 14:07

Now, good behaviors are mostly good behaviors are going to be the algorithms you’re going to want to create. So obviously, you don’t want to just save all your money, because that you could be missing out on life opportunities there. But I really enjoy helping my clients understand is really that fine line of straddling both living the best life now and then also keeping your door open for opportunities and building your wealth up over time to to give you different opportunities and possibilities that you may have not even thought of yet, it’s important to start creating those good behaviors, because then it gives you those options available,

Bad Money Algorithms14:44

a destructive behavior or behavior that can cause dramatic mistakes. That would be if I had to tie it to something, I’d consider it similar to use them like a new self driving car that has a faulty algorithm. So like the coding bad, the algorithms bad like, it’s not going to be safe for you, or the quality of your life and the possibilities of the future. So and that’s because you’re repeating that algorithms repeating some bad mistakes, or you take three steps forward, but then the algorithm sets you five steps backwards, because of whatever issue it happens to be. Maybe you you go a little bit too crazy when you go on vacations, or maybe you save really well, but you don’t plan for unexpected expenses. And so when those things come up, you weren’t saving enough for that. And so those are very destructive things to that could occur that really impact your long term, ability to create wealth and create possibilities,

Common Good Money Algorithms 15:42

good algorithms that you can start to create for your financial life. And these really could just be considered, like sneak peeks into future potential topics and episodes

Save First 15:51

, but saving first. And so if you’re thinking about how that code in order to be telling your money to hang tight, be ready for further orders. It could be for their orders to protect against an emergency or it could be for further orders to remain investment opportunities. So maybe there’s there’s a cool opportunity came up and now you’re going to now that you have the cash the savings, you’re going to be able to jump on an opportunity to

Participate in 401(k) 16:15

participate in your 401k. So that’s definitely more of a long term type relationship. So maybe you’re telling your money that you really want it to work for you and you don’t, you’re not going to be reliant on it in the short term. So this, when you’re talking about 401k retirement accounts really thinking long term, especially when you’re going to be investing your money in any capacity. If there’s any degree of risk, you really want it to be a long term investment, so that you’re able to have the best opportunity to write out that risk and, and reap the rewards of that opportunity.

Avoid High-Interest Debt 16:50

Avoiding high interest debt would be just another important thing to consider. Because if you think about it, if you have debt, it’s basically that you have an IOU, they’re for someone or for a company. And so you don’t want too many of these floating around out there. Because the higher the interest, the more impacts your ability to build wealth, you’re you’re paying someone else, a lot of money for decisions that you’ve made in the past. And it’s just not it reduces a lot of flexibility. And flexibility is really big for me personally when I’m navigating my financial situation. But as well as approaching my clients, financial strategies, I don’t ever want people to get locked in to certain things that are very long term and really hard to undo. Unless they kind of do all their due diligence. And they really decided like, yep, it’s worth this kind of long term in flexibility by making that decision.

Look for Sales 17:43

I could start looking for sales. So there’s a huge correlation in your frugality. And actually, with my clients, we take an assessment to navigate what their wealth potential is, as well as their financial confidence. And one of those big factors is their frugality. And it’s not necessarily just meaning that they’re cheap, it just means that they’re not in a rush to spend money, it means that they’re more open to the opportunity that Yep, this, this looks cool. I want this thing. But let me see if I do a quick search if there’s a sale for or maybe that’s not a hot pressing item.

Plan Ahead to Avoid Regrets 17:43

So I’ve learned a high interest is going to be huge in just allowing me to keep more of your money and allowing you to use more of your money for things that you actually enjoy, rather than financing it or paying for something that you made a decision of long ago. And a lot of times that comes back to student loans. And credit cards are really the big components, their credit cards, by far the biggest, but even student loans, sometimes people maybe if you’re listening to this, and you have student loans that are not even for your tech career that you’re in now. And you’re just kind of kicking yourself, like I just pay all this interest on student loan debt that didn’t even apply to what I’m doing now. And that’s very common. And I don’t with credit card, you may remember what you spent high 90% of where that credit card debt went. So paying for those old old decisions is definitely a big burden. And and something that you should avoid doing, if at all possible,

Be Frugal 19:08

So right now it is may 27 2019, Christmas is coming up, although there’s some cool stuff that I may want for Christmas. If it’s not on sale right now, why would I rush to to make a purchase now when there’s all these months, between now and then where it could potentially go on sale, and I could save 10 $20 just by waiting a little bit longer. So that’s kind of how that frugality works, it’s not meaning that you’re the cheapest of cheap, it just means that you’re not in a rush to spend money. And you’re gonna think very diligently about those decisions.

Slow Down Purchase Decisions 19:40

And sometimes it’s fun. Some people, once they get to that point, they actually enjoy that slow decision making process. That research sometimes that you have to do I know, I bought the Hue lights back when they were still early, I think I think it was the second generation of the lights when they came out, ended up purchasing the first one because there was a huge sale, part of that frugality and me. But basically, what I did is it took me three or four months to pull the trigger on actually purchasing those. And so as research and there’s starting to be other other choices out there on the smart Internet of Things, light in options, and so I was going back and forth, and then I knew that that new second generation came out. So comparing that to the first generation with a huge discount. And so that was a lot of fun for me, sometimes, you’ll find that if you allow yourself the ability to kind of go on that hunt and and be patient, wait those things out, that purchase ends up being more meaningful, but then you also have more fun while doing and it’s not like I needed that light. It’s not like we’re living in the dark. And so that’s one of the reasons why I was able to constantly push it off, push it off, push it off, and then there’s a huge sale. And so it just made sense and lined up for that decision.

Be Self-Aware 20:54

Another one to be thinking of is just your awareness and of your tendencies and the influence of others on your behavior. So I don’t know if this relates to us specifically, but I know just looking at my wife, her sister, her family, a lot of times when they make certain purchases or decisions, all of a sudden it becomes top a topic of mine of Oh, maybe we should think about getting something like this. Sometimes they get the same things. Sometimes it’s a slightly different. But almost always there’s a conversation of Oh, did you see this and then and then we start researching software, they start researching stuff about what the other one purchase. And they start asking questions. And so it kind of starts to build up a little bit of hype. And so having that awareness of when when people around you are doing certain things, it could be a co worker, it could be family or friends if they’re starting to have babies, and you’re starting to think about having babies or they’re buying a house. And so you’re starting to, to research that just be aware of it. And it’s not to say that you should change your behavior, do anything. But just being mindful and aware of it will allow you to understand, like why you are making some of the decisions, Why all of a sudden, this wasn’t even on your mind. And now it is pretty heavily and this goes as well, for maybe even just your spouse or partner. So maybe maybe it doesn’t happen to you. Or maybe it’s too hard for you to be aware of your own situation, which I think is ultimately needed in order to properly navigate your finances. But maybe it’s a lot easier initially to see it in other people, then you’re able to start kind of thinking back and reflecting on, well, how do I kind of do similar things. So seeing how those different things are going to impact you are definitely huge.

Better Purchase Decisions 22:39

And one way of doing that, and I kind of mentioned it with my process of purchasing those few smart lights was just slowing down the process. So it’s exciting, obviously to see something and then buy something and then have it shipped, show up your the next day. But if you slow it down, you may start to see some of these things are not can be used anyways, once you get it. So that helps you avoid making bad purchasing decisions, things that you’re not actually going to use or value could possibly increase enjoyment. So that’s something that I find in my process. But not everyone’s like me, I’m just saying, that may not be the case for you.

Questions to Think About 23:16

Why do you handle money, a certain ways of thinking about why? Why you do stuff financially. And sometimes it may stem back from how you were raised or some of the different things that happened throughout your life that really changed the way you think about money. So those are some of the questions again, that I go back and ask my questions to my clients when we’re talking through things. Why? Why do you handle money this way? What’s your first money memory? Like? How do your parents handle money, like these types of things, impacts you even if you don’t think about them? Or are aware of them? It is good to start now now that you’re trying to be more intentional about understanding your financial situations.

Understand Your Money Mindset (23:55)

First understand you how do you work? And how do you work around money, and then we could start to go back and change. And that’s why I have this more overview for my first episode ever. What do you enjoy spending money in. So there’s always the enjoyment of just spending money except for like things like medical bills, which we have from our daughter who’s just born for months ago? Yeah, Doctor, bills are not fun pain. mortgages are not fun paying student loans, definitely not fun, pain. So I’m sure if any of you guys have any of those situations, those are not the fun expenses at all. But even just, I can just go online and buy something randomly. And it would still have a little bit of enjoyment, even if it’s not something that I think I’m going to use long term. But if you start to focus in on not just that process of spending money, then but actually what you’re going to enjoy and actually look back on and be like, Oh, that was a great decision. And I like best best money I’ve ever spent, the only times you start to have those thinking is if you really do start to think about what you do enjoy sending money on. I know a lot of times vacations is very popular one.

25:04

What about those vacations, though, because, again, there’s that wide range. So is it the things that make it super expensive that you enjoy? Or is it the fact that you’re with your family, the thing that you enjoy the most, and so we can weed out some of those things, you still get the same benefit or 95% of the benefit for 50% of the cost.

25:23

So having these internal conversations with yourself and and ultimately, if you do have a significant other, you do want to have that money conversation with them. But understanding your own personal thoughts about money and how money impacts you. And how you think about money is all going to be super important into just kind of navigating your financial life and then having those very productive conversations with your spouse, once you kind of take it to that next level.

25:47

looking into the future is also a huge way to kind of build in that algorithm. So not just be thinking about today, next week or next month, that’s not far enough in the future, it also thinking about what you want your future to look like. And what’s important to you, is really going to help you implement some of these behavior changes.

Focus on What Matters (26:06)

So if we get down to it, or you get down to and you decide that you know what I really am not making the best moves financially, I’m not doing the things I should be doing. Like I really, I really wish I could be better, I really wish I could do more understand stuff so that I make the right decisions. It’s not enough to wish and hope it’s enough to get motivated. And actually, that the way you’re going to do that is by tying into things that matter to you. So think about your family, think about what you want your future to look like, and not just in broad strokes. Think about it in as much detail as possible. What are you doing five years from now on that would really make you happy, where were you at family wise, work wise, maybe location wise, if that’s something that’s important for you to change. So how you get to where you want to go three years from now, five years from now, 10 years from now, if you don’t make any changes now. So thinking about those cool opportunities, those cool future possibilities that you really want to open the doors to, is going to be a huge motivational factor into influencing your ability to make any changes over between now and then. So that you start to make those more of a reality. So get excited about your future that will definitely help.

Inflation (27:21)

Not only is money needed in the short term, but the possibilities and opportunities in the future that will also require money, or way more than what they are short term. So there’s a thing called inflation. And if, if you’re not aware of inflation, inflation increases at about 3% a year annually. And so that’s kind of the average, it varies from year to year. But what happens is, if that does hold true, the cost of everything or not everything, but almost everything could double, in just 24 years. So think about that. If you went in the grocery store and bought groceries today, and it came to 100 $50, well, 24 years from now, when you go to the grocery store to be $300 to get the very same items that you purchased today. So that’s one reason why you do want to not have that short term view of your money.

Finding Balance Between Today and Your Future (28:13)

And I know a really common question. And this is actually, like I said, one of the reasons why I started my podcast is to balance your life decisions today. So have an awesome life today, but not sacrifice the future opportunities. A common question I get all the time is how I want to live my best life and like what am i sacrificing by not spending all my money today. So that’s that’s a common question. And it makes sense. And especially with how we’re wired to think we’re wired to think about short term and today and just kind of maximizing your lifestyle.

28:47

And there’s there’s only a few times and there’s something wrong with is if you’re not doing some of the other stuffs first like saving savings, very important investing for long term investments really going to be the only thing that’s going to help offset some that inflation damage that’s going to occur.

29:01

And then also thinking out for some of my listeners way into the future, maybe 40 years from now. But for some of you maybe less, maybe 10 years, or maybe you want to reach early retirement, it’s possible, you have to do a lot of crazy things in order to make early retirement possible. But what happens is, once you retire, whenever that occurs for you, it’s it’s a long retirement. So even if you wait until 65, you could potentially live especially if you have a spouse, one of you could live another 40 years in retirement.

29:35

And so you need money to wise, when your incomes not coming in and Social Security is out there, I don’t know how relevant it’s going to be for a lot of my listeners, but you’ll probably still get something. But if you’re used to working in the tech industry, and you’re used to being paid X amount of dollars, Social Security isn’t going to come nowhere closer, even if it is intact.

29:55

And so you want to make sure that your lifestyle isn’t is not going to be capped at some point in the future because of you just going a little bit too crazy. And I believe there is a way to walk that fine line and really enjoy your life now and, and just actually enjoy it more to by by making these more intentional decisions and living the life the way that you want to live it.

Time Relativity (30:15)

Because you’ll still be able to do probably everything that you want to do. It’s just a matter of saying you know what, I’m going to be the discipline to wait and save, and do the responsible thing for my family, do the responsible thing for for yourself and your career so that you’re not stressed out and not enjoying life, because you’re constantly stressed about the financial situation at home. So all these things are important.

30:40

So making poor financial decisions, and really limiting your possibilities and opportunities. That feature greatly increases your stress later on in life. So you’re probably increasing your stress now too, and you’re just not really acknowledging that you’re probably in denial that you’re stressed out about your finances.

30:57

And sometimes that’s why people spend all their money is because they have a very weird thought process on money where it’s, it’s just going to get spent anyways, if I save it, and emergencies gonna come up and wipe it out. And I’ll just be starting all over. So a lot of times, you can get stuck in really negative ways of thinking about money and just thinking that you’re never going to get ahead. So you might as well spend it all. That’s that’s not a good thing. And if you’re listening to this, that’s that’s not how money works

Starting Early vs. Starting Late 31:24

to the people that are wealthy, a lot of the people that are wealthy, are kind of first generational wealthy. And it’s because they understood early on to do the right things, they could really empower themselves and put themselves in the position where money really helps leverage their life and live in a way that other people are not able to without the stress. And it’s just by prioritizing Stuff and Being more strategic about how they handle their money.

31:50

So having less wiggle room is really going to force you to make mistakes in the future. And if you think about it, you’re only going to have more responsibility moving forward. So it’s not like you can say, well, in my 20s, I can spend all my money because in my 30 years, I’ll be making a lot more and so I’ll be able to save more than I’ll worry about it, then what happens if you end up getting married? Well, that’s a lot of responsibility, some of your spending is outside your control, because now there’s two of you deciding on where that money is going to go. What happens if there’s a third person that shows up, usually, they come in a small package, and they show up in a hospital. And so those things drastically change your responsibilities drastically change your financial situation and, and kind of where your financial obligations are going. So you don’t have time if you waste your 20s. And then you’re spending your 30s, just kind of making sure that everyone’s happy in your family. A lot of times people don’t get in till their 40s and 50s. And by then it’s too late. Or they had to really cut things out and make dramatic dramatic shifts and their lifestyle, which is not easy to do after 2030 years of a certain lifestyle, to dramatically change all that. So that’s why it’s important to get started early.

Your goals will change 33:03

There’s just so many things that happen. And, and thinking about the future to like you don’t always know what’s important to you, I did not know as in a certain level of financial planning, even. So I’ve been open a year and a half now. But three, four years ago, it was a possibility. I would say just because I was always frustrated that I could only work with people that had $500,000 or more. And I felt like I could add more value by helping people earlier on in their careers. But other than that, that kind of disappointment and kind of frustration with the financial services industry kind of ignoring those people in their 20s. And 30s is very comfortable being an employee. So I didn’t think it was going to happen. But it became a huge goal, a huge priority of mine. And then ultimately my wife’s and now we’re really enjoying kind of the the life and opportunity that we set up. But I wouldn’t have been able to do any of that if I wasn’t making some strong financial decisions earlier on. And so not to say that we made perfect financial decisions, but we definitely put ourselves in position to allow me to basically walk away from the six figure income and, and show up, making no money at all just telling people like, Hey, here’s a new concept I’m trying to do, I’m helping people that don’t have any money, figure out how to handle their money, and then really get on the path to success. And so it’s been very fun and enjoyable experience. But this one I wouldn’t have had if I wouldn’t have made some of those stronger moves in my 20s to be able to do that. So you don’t know what your future self is going to want or your future spouse is going to want or your future challenging one, there’s a lot of impacts financially, depending on the decisions that you make. And so it’s very important to just be aware that you don’t know everything today, you don’t know everything that’s important to you today. So doing the right moves now just creates greater flexibility, greater opportunity for you in the future to actually pursue things that you hadn’t even dreamt of yet.

Tip: Rule of 72 (34:59)

Before we close out the show, I do want to give you a fantastic kind of quick calculation that you can do. And it’s called the rule of 72. And it’s pretty amazing, it allows you to quickly calculate the time that you could expect it to take your investment to double. And the reason why it’s so quick and easy is you just take that number 72 and divide it by the expected investment return that you would expect. And I always say, lean on the side of conservative. So don’t don’t think that you’re going to get an ultra high return like a 20% return or even a 10% return maybe a little bit high for kind of current market conditions. But if you use a number like 7%, depending that may be a reliable number to use, or you might want to kind of dial that down even lower. But if you were using a 7% expected return, divided 72 by seven would give you 10.2 years or so before your money would double from that investment. And that doesn’t even include putting a funds into it like you are with your 401k if you have one of those where you’re saving even more, so you’re only to be that much better off. That’s one way that you can combat that inflation is by having investments that give you the opportunity to earn more than the 3% inflation rate. And again, you do want to have a long term approach when you’re thinking about your investments from that aspect.

36:23

So hopefully all this information was helpful. I know we covered a lot of things about money. Hopefully you found some of it interesting and new information for you. But this is definitely more of an intro to personal finance, introduce you to a lot of personal finance concepts and pretty similar to like a boot camp or any type of education that you get anywhere else. This is really just kind of ground zero, you’re just starting now to build that foundation. And so obviously, this isn’t giving you all the answers, this isn’t instant success, you listen to one episode, and you’re automatically know everything that’s that’s impossible. And one of the things I enjoy about working with the tech community is you do tend to be really invested in growth. And so just kind of come back weekly to this with that growth mentality and planning on to gain a little bit of knowledge every single episode and I will be doing the same, I’ll be constantly trying to improve and implement any changes that you recommend as you reach out to me. Um, but yeah, I appreciate you taking the time. And obviously, there’s still a lot to cover a lot to be discovered and built upon. And so feel free to continue doing the research on your own or just kind of stick with me, we’ll continue on the techie personal finance boot camp to provide you information that’s very relevant to where you’re at in your career. And also we’re going to be having a special guests that will give you insight to different career stories and, and backgrounds and different kind of financial aspects of their life and story as well. So hopefully you found this first episode enjoyable.

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