January 26, 2021 • 48 mins
This week, OOD talks financial literacy with lauded wealth advisor, Sara Rajo-Miller. They chat goal setting, taking inventory of your finances and sharing pertinent info to better prepare for your future. Let’s get this schmoney y’all.
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Episode Transcript
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Speaker 1 (00:00):
Welcome to you Down, a production of Shonda Land Audio
and partnership with I Heart Radio. And if I can
recommend against anything, if you get one of those store
credit cards, Victoria's secret, don't push yourself. And then for
some lingerie and for fume at eighteen years old, because
they give you too much credit at eighteen years old.
Let me tell you that right now. So I had
American Eagle. You know how sad I was to be
(00:22):
twenty something years old with American Eagle credit cards that
said too many double pop collars? What's up everybody? And
welcome back to you Down a podcast wherefore funny honeys
come together to talk about what's going on in the culture.
(00:43):
I'm Ashley Holstim, I'm say, I'm Mommy a A oh,
and I'm Yasma Walking. But collectively, together as a unit,
we are known as Obama's Other Daughter. And today we
(01:03):
are asking are you down with financial literacy? Only of
millennials demonstrate basic financial literacy, according to the study from
the National Endowment for a Financial Education. Perhaps that's why
about seventy seven million Americans with credit have debt and collections,
(01:24):
and according to the f I n R A fin
rook National. Nearly one third of Americans pay just the
minimum amount do on their credit card bills each month.
That's one third, one out of three only paying the minimum. Today,
we've asked one of Forbes top listed financial advisors, Sarah
(01:46):
rajol Miller, to help us get out of debt and
secure the bag. On today's episode. Okay, we'll go to
first a group check in which I love. Which'll Oh, guys,
I'm having such a good day. Oh yeah, good, so good.
(02:07):
I've been in my routine. I've been pulling tarot cards
and they have been telling me where to go and
they've been right. Wow. And today I took a piano class.
That is I was so excited. I bought a keyboard
at the beginning of the pandemic and just thought I
was going to practice and I didn't. So I finally
(02:28):
paid for someone to teach me. And it feels good
to be picking up a skill that's so fun. Yeah.
So I'm loving good days. Yeah, and your skin is
very glowing as well. You could see the glow shining
from Ashley right now. What y'all love me? Um? I
(02:50):
think similarly, right before we podcasted, I went for a
skate and I do really love Like I'm more so
in this space of like how can I CULTI e joy?
I know that it brings me joy, So like just
getting into a good place before coming to work or
like doing anything feels really good. And today there's a
skater d Upshaw. He's like a part of the original
(03:12):
Venice eight. He posted a video about military turns and
it's just like such a small thing and maybe even
sort of something that I thought I was trying to do,
but having direction and guidance on how to be a
little bit better felt really good to like try something
new and practice. So yeah, I'm then a pretty joy.
(03:34):
Growth always feels good. That's growth. I mean Dr pimple
pop Mom, I'm coming down if it's that booty. If
it's that booty growing. Have you watched Dr pimple Popper.
(03:57):
I watched it with my hands over my eyes, like peeking.
But yeah, you're right, growth not growth. Uh. What's you
loving this week? Mom's Shakira? What's you guys on? Mm hmm,
(04:17):
there's a few things. Pick the funniest one. It was love.
Oh you know what I am loving? Getting my second
wind is what I call it. I've been getting back
to running, and yeah, and for a while, like three
miles was feeling like it was brutal. It was brutal,
(04:39):
and I got up to seven yesterday and it was great.
So now I'm just fighting a mental I'm not fighting
a body anymore. That's good. Yes, Yeah, so I felt
and that's like flying probably like it feels like, I mean,
you know what. I love a lot of artists, but
Beyonce Loki. While I've been on the runs, um that
(05:02):
one song. If you're feeling significant, you better think again.
Like I started singing it bigger, yes, and it's just
so encouraging, like while I'm on my little run and
I'm like, yes, it's so much bigger than this. Yes,
(05:22):
I need to get my hot cardio checked, that's for sure.
Between the two things, I was deciding today good days
or mine was recommitment because I took a torque class
last night and I haven't moved in a while. Guys,
where are you taking these classes? Actually? Because I told
you all the internet is a resource, use her, use her. Um. Yeah,
(05:47):
I took a torque class and it's hard. I'm not
at the point where I'm fighting my mind I'm still
fighting my body. Sure you're gonna have to teach us
at some point. How did you work? Yes? Great, got
to get on that class kind of ways to go.
I feel like we've tried. Yeah, you don't. My cheeks
don't be moving neither here nor there, mommy or what
(06:08):
love um nothing to do with cheeks. But this week
I'm working on this documentary in d C and which
thank you. I'll tell you about it later, but it's
about HBC US, very historical. I'm excited about it. But
(06:29):
I got Dr Greg Carr, who's like a lauded Africanist
studies professor, to be a part of it this week,
and I just feel like I tracked him down and
I just feel so accomplished. So I'm proud of myself
for that. That's the high I'm on in this current second.
(06:49):
When you said tracked him down us that like paparazzi,
like not gonna somebody stool? Are you here? Yes? We
like waiting outside of hotel. Her mask on just being
like Greg car is that you don't you come to
this coffee shop too. I didn't put a tracker on
the bottom of your car. I used Twitter and a
(07:15):
lot of emails, but much more similar. Well, you were
going to say something that. Oh, I just was gonna say.
I love that we're all just creating healthy habits and
it just feels good to like follow through and figure
things out. Mommy, and you figured out how to find
that man. I don't know how hard it was. Why
(07:36):
did I look at you like I found the Mommy
was like, like, I didn't mean a man like that.
She was like, wait, wait, just about I couldn't remember
that man Dr Gregory. Okay, Mommy found Dr Gregory. Shout
(07:57):
out to him. But anyway, let's talk a little more
about what we're getting into this week. So it's time
for us to get into our main topic. Oh yeah,
we talked about money today. Okay, we talked about that money.
According to the two thousand nineteen Survey of Consumer Finances,
the average household debt among those who had any debts
was a hundred and forty K who while the median
(08:20):
was six K. What's a meaning? It was a meeting? Look,
I know I knew this at one point. One of
the mean is the sum of all them? Because I
used to think it was mean that you had to
add all of them. The middle like the halfway from
(08:41):
least to highest in the middle one, but you don't
add them up. Thank you, mommy, and there, thank you
for bringing that out deep. But basically that includes a
wide range of debt from mortgage to personal loans, credit cards,
student as we all know and more, debt is seemingly
inevitable for all of us, and that probably has a
(09:02):
lot to do with the fact that a lot of
us don't have a clear understanding of money, savings, taxes, investments,
and so much more. Helping walk us through this combo
is special guest Sarah Rajo Miller. But first a quick break.
(09:25):
Welcome back today we have special guests Sarah Rajo Miller.
She has been listed as one of Forbes's Top Women
Wealth Advisors two thousand, seventeen to twenty nineteen, one of
Forbes Best in State Wealth Advisors, Forbes Top Next Gen
Wealth Advisors seventeen nineteen, and an investor PDIA Top one
(09:48):
hundred Financial Advisor. Y'all, dang girl, you got hell of credit.
I understand what your money is looking like, Sarah, mom A,
you're not supposed to ask about her money, my that listen.
The credits go on and on for the wonderfully talented
Sarah Raju Miller. Welcome to the podcast. Sarah, Thanks. I'm
(10:13):
excited to be here. Truly, it's like where do we
even begin, Like we're all millennials here, and so it's
like especially exciting to have someone who's young and understands
our generation and the unique financial challenges we're facing. And
we're gonna get into all of it. Let's listen to it. Yeah,
So Sarah, first question, UM, can you share with us
(10:35):
how you got into this world of managing millions and
millions of dollars before you turn thirty? Um? And also
your background? What kind of led you to this expertise? Yeah, definitely. Um. Look,
I'd love to say that I always dreamed of being
a financial advisor and this is kind of what my
life had been leading up to, but that's not really
(10:58):
my story at all. I honestly kind of fell into
this industry. I had a little bit of an interesting
upbringing since my parents are both international journalists. So I
grew up moving around the world and have lived in
five different countries where I was born in Mexico, and
I lived in Mexico, Germany, Jerusalem, London, and now I
(11:20):
live in l A. Yeah, we grew up moving every
two or three years, so experiencing different parts of the
world and meeting all different types of people was something
that was part of who we were growing up. And
I love meeting people, learning about who they are and
what they enjoy and what they're kind of life values
(11:42):
and goals are. So that's always been something I've been
interested in. But wealth management is something that I kind
of fell into while I was at U C l A.
And my undergrad at U C l A and I
started an internship for a financial advising firm and that
was nine years ago and it's the firm that I
am still at today, Miracle Mile Advisors. So it was
(12:02):
kind of just one of those like right place, right
time I met the partners. It was a tiny firm
at the time. There was four of us at the
firm and we were managing about a hundred million dollars,
which for a financial advising firm is relatively small, and
now there's a lot of money. It is a lot
of money, but there's lots of clients. Um. Anyways, nine
(12:24):
years later, there's thirty five employees and we're managing about
two billion UM and I'm one of the senior advisors,
so it's been really fun. That is amazing. Wow, they
are lucky to have you. For sure, you glowed them up.
(12:45):
Can you tell us exactly what a financial advisor does? So,
as a financial advisor, I work with my clients to
understand their values and goals and create a roadmap to
help them meet those financial goals. On top of them,
I helped my clients invest their money. So, for example,
(13:08):
I could have a client who is a millennial who's
working at a job. They're starting to make enough money
that they're saving into some company retirement accounts, and they
also have a goal over the next five years to
maybe buy a house. So I create a plan for
(13:28):
them that says, Okay, based on these goals, you should
be saving X into your emergency fund, Y into your
retirement account, Z into your house fund. The rest can
be invested in a variety of stocks and bonds for
long term growth, whatever the combination of scenarios might be.
I help them create a roadmap to meet their financial goals.
(13:50):
You're like a money therapist. Like a money therapist, how
does one know if they need a money therapist? I
think we all need a money therapist, and we all
need a normal therapist. And even look, if you can
take the staff to hire a financial advisor or meet
with a financial planner, great, I obviously would recommend that.
(14:13):
But even before you get to that point, you can
do your own financial check up. I call them money meetings.
Set money meetings with yourself, and this can be something
I would recommend doing this once a month. Sit down
every month and take an inventory of what happened. Take
a look at your credit card statements, take a look
at your debit transactions. Are there any unknown fees that
(14:35):
you aren't sure about or didn't know that you were
being charged. Are you accidentally signed up for some sort
of renewing subscription that you haven't used in the last
six months? Did you know that? Yeah? Did you know
that you spent three hundred dollars on T shirts in
the last two months. It's important to sit down and
(14:56):
just take a look at these things and take an
inventory every month and look at what's happening. You have
a money meeting with yourself, but I'd like to have room,
but you can be intentional. Look, maybe your birthday is
coming up in February and you say, okay, for my
birthday in February. I want to treat myself. I'm going
(15:18):
to set aside x amount of dollars for my birthday
to treat myself. That's fine. It doesn't mean that all
of your student debt is paid off and all of
your credit cards are paid off and everything is fine.
It doesn't have to be that serious. Of course, we
want to deal with these larger issues, and we can
talk about credit card doubt and student loan and investing
in all of those things. But it is important to
(15:40):
set goals for yourself. And they can be small goals
or they can be large goals. Let's say we set
our goals and we got a little extra money, what
are some sound investments people can make? And we know
what people talk about houses all the time, what are
some other investments people can make? I mean, investing in
the stock market is a great idea. So there are
(16:01):
a variety of ways to do that. And you know,
we don't necessarily need to get into the details of
every single stock and options out there. But one thing
I will say is as a millennial, the biggest thing
to remember is that time is on our side. Time
is one of our biggest assets. And the power of
compounding is so real, and you hear that terminology and
(16:23):
finance all the time, and it really works. I'll give
you an example. Let's say that you're twenty five years
old today and you have a thousand dollars and you
put that thousand dollars into an investment account, and you
decide that every month you're going to add an extra
hundred dollars to that and you're going to invest that money.
Assuming that you invest in the stock market, and let's
(16:44):
assume you're a combination of stocks that has an average
return of six percent a year, which is very reasonable.
By the time that you're sixty five years old, you'll
have over two hundred and sixty thousand dollars in that
investment account that started with one thousand dollars and contributed
an extra hundred dollars a month. That is a lot
that's not doable for everyone, depending on your income situation,
(17:06):
But just to give you a high level idea of
compounding and investing. At sixty five in that example, you'd
have over two d sixty dollars. That's real money. My
dad is always talking about. He teaches financial literacy at
high school, so He's always talking about this and it's
very complicated. Even though my father tells me, I'm still
like what calmount um? But I found an online calculator
(17:28):
that really like laid out the numbers for me. And
when I did it, I was like, I gotta sign
up for a wrong. I all right, right now I
need to figure out how to get this money compounded.
So I I really suggest that everyone out there go
out there and look at an online calculator so you
can really see the numbers that Sarah is talking about
right now, because it really helps you to get some
fire under your but to start saving for your and
(17:48):
it's it's it's become so much more accessible to invest.
You don't need to have, you know, hundreds of thousands,
tens of thousands of dollars. You and go online. You
can open an account. You can go to the trade
dot com, Schwab dot com, t D Marrior trade dot com.
You can open an account in your name. It takes
(18:09):
five minutes and you can transfer money from your bank account.
Once you have the money in there, you can go
in and you can invest it. And the way you
can invest it is you can go pick a variety
of options. You can go buy stock. You can go
buy Apple stock, Disney stock, Netflix stock, or you can
buy A really common way to invest these days is
(18:30):
through e t s. E t s are basically a
basket of stocks. So instead of saying I'm going to
go pick Netflix or Apple or Google, you can go
buy an e t F that gives you a bundle
of all of the technology stocks as an example. So
my recommendation for someone just getting started in investing is
(18:52):
to go online to one of these online trading platforms
Schwab Trade, et cetera, open an account in your name,
transfer some money from your bank account, and go invest
in one of these diversified e t f s that
give you instant exposure to hundreds of underlying stocks. Then
you don't have to be an expert. You don't need
to know if stock A is going to outperform stock B.
(19:15):
You're getting broad based, diversified exposure to the markets. Oh man,
this is this is a wonderful major keys. Okay, so
what are your thoughts on credit cards. I come from
a family that buys everything in cash or we don't
buy it, and I don't want to get a credit
(19:36):
card ever. But also that's dumb because you're supposed to
get a credit card. I currently don't have one, and
I know that I need to get one to build
my credit. So can you talk to a crazy person
like me who wants to act like a child when
it comes to credit cards. I mean, look, it's great
you don't have a lot of credit card dot and
piling on a bunch of death isn't necessarily a good thing.
(20:00):
There are different kinds of debt, and some debt is
more expensive than others. Credit cards are typically the most
expensive type of debt. So you are right and that
you don't want to have a bunch of credit card debt.
And if you are someone who does have a variety
of debt, so for example, student loans and credit cards,
(20:20):
credit card debt is the type of debt you would
want to pay down first, because when you have debt,
you're borrowing money and you're paying to borrow that money.
State you're paying to borrow money. Yeah, there's interest associated
with that. Credit cards are charging you a lot of
money to borrow that money. Student loans, maybe it depends.
(20:42):
We can talk about the different types of interest rates,
but the point is typically a student loan interest rate
will be lower than a credit card debt, So you
would want to pay off your credit card first. Get
a credit card, but pay it in full every month.
That's the most important thing. It's a real least slippery slope.
I see with a lot of people where you've got
(21:02):
a credit card and they're like, oh, I only have
to make the minimum payment. This is great. Every month
you only make the minimum payment, but all of a
sudden you're underwater and you don't actually have enough in
your savings accounts or even an upcoming income to pay
off the credit card in full. So just only put
on as much as you can cover every month. But
it is important to build credit. That is really something
(21:25):
that I would encourage mm hmm. But you don't want
them collections calling you. You don't want to not be
able to answer you, or if you're having lunch with
your friend and constantly declining that who's calling you? And
if I can recommend against anything, if you get one
of those store credit cards until your secret, don't push
yourself and then Lingerie and Perfume at eighteen years old
(21:48):
because they give you too much credit at eighteen years old.
Let me tell you that right now, I had American Eagle.
Oh you had American Eagle credit card? You know how
sad I was to be twenty some years old. American
Eagle credit card said too many double pop colums. I remember.
I think it was in high school and I, God,
(22:09):
this is really embarrassing. But I got like an old
Navy credit card on accident, Like I didn't even know.
They told me it was checking out and they're like,
do you want to get twenty percent off? Sign up
for our program. The next thing you know, I got
a bill at my house. Navy knew what she was doing.
She knew she was going to get to sell you that,
(22:30):
and you would figure it out after when it was
I don't think they should prey on young people like
that because it's not okay, we don't know. I think
it's just even young people. I feel like sometimes you
don't even know, Like Sarah just said, you want to say,
they're like, you don't even have to get approved. Yeah,
I just got a hard inquiry on my cred on there.
(22:54):
That's the part. They don't tell you that every inquiry
affects your credit. Can you speak a little to that, Yes,
every inquiry affects your credit. So you want to be
careful to ding your credit a k. Don't go set
up a bunch of credit cards. I mean, there are
other scenarios where you encounter these things that you probably
(23:14):
aren't dealing with as much. For example, when you're looking
at buying your first house and you need to get
pre approved for a mortgage, they do go and check
your credit. Other than that, just be cautious and do
check it yourself. You don't get dinged when you check
it yourself. And banks, credit card companies, Chase, Bank of America,
there are several have their own little online feature where
you can check your credit score. And this is the
(23:36):
same idea back to my first point of don't let
this be an out of sight, out of mind situation.
If you don't have great credit, that's okay, but keep
an eye on it. Look every month, if you didn't
pay off a bill, did it hurt it? If you
didn't pay off your credit card, did it go down?
Take a look and understand why it goes up or
down every month. It's really really important to be informed.
(23:57):
You know, you just talked about houses, and as I
feel like millennials or you know, I think the statistic
is that we're buying houses less and less. Is that
still a sound investment for folks these days? And what
will we need to know before making the jump from
like renting to homony. Yeah, there's a lot of factors
to consider there, and I think there's definitely not one
(24:19):
size fits all. Like way back in the day, it
was like you grow up and then you get married
and you buy a house and that's just kind of
the thing that you have to do, And that's definitely
not the case anymore. One consideration when you're buying a
house is, so you just said, is it a sound investment?
There really is a difference between buying a piece of
(24:41):
property as an investment versus buying a piece of property
that's your primary residence that you're planning on living in
for a long time. And I know it doesn't sound
like those are necessarily very different, but they are very different.
If you're looking to invest in real estate or make
a real estate and investment, you may be looking for
(25:03):
an up and coming neighborhood or a duplex or multi
unit apartment where you can have income coming off of that.
That's different from a house that you're going to live in. Yes,
you're not going to be flushing rent down, you know,
paying your landlord rent, but you're not receiving income off
of that. That isn't necessarily an investment. Sure, maybe you
(25:26):
end up picking a great property in a neighborhood that
you didn't know is going to appreciate a lot, But
I would be cautious about buying your primary residence because
you think it's a great investment. It isn't necessarily an investment.
It may be something that you want as part of
your larger plan, but I think it's important to differentiate those.
(25:47):
Is that because the house depreciates as soon as you
move into it, Yeah, that and also because when you're
living in the house, it doesn't produce any income, So
it's a lot of capital that you're tying up in
order to buy a house. Yeah, in order to buy
a house, you need to put it down payment. So
(26:08):
mortgage rates are really low right now, meaning back to
that borrowing and paying interest rates. And you can borrow
money right now to go buy a house, and the
interest rate is really low, So it is a great
time to buy a house. A lot of people are
going and getting mortgages. You still need a down payment
regardless of the size of the house. Down payments are
pretty large, so it's a large sum of money that
you're locking up and putting into your house, and then
(26:29):
a lot of people end up living in the house
for many, many years. Again, this totally depends on everyone's situation.
But you aren't necessarily like flipping this house every three
years to appreciate, appreciate and get your money out of it.
This could be somewhere you're living for a long time.
It is a difference between like investing in it to
maybe have income and have a rate of return versus
the primary residence that you might live in for a
(26:51):
long time. The second thing is if you are just
moving to buy your first house, what should you consider.
You really really want to create excel sheet or a
budget that shows all the expenses, and there are a
lot of great mortgage calculators online that can do this
for you. But a lot of people think, like, Okay,
I need to buy a house. All I need to
(27:13):
do is take a mortgage and I'm going to borrow
at dollars in the bank and it's going to cost
me whatever it is every month. But they forget that
there are a lot of other expenses that are associated
with owning a home that are not associated with renting,
So you have to have homeowners insurance, you have to
pay property taxes. So all of these other items are
things that are now laid out really easily. If you
(27:34):
literally google mortgage calculator, it will show you all of
those expenses, but make sure you understand what all of
the month the expenses are going to be. You don't
want to be one of those Atlanta housewives in a
mansion with no furniture because you didn't plan to put
anything in the house exactly. So how do you even
(27:54):
get to the point where you could buy home? Or
like invest how do you save and grow your money
when you have student loans at your back and hospital
bills just stop picking up every time? Like, how do
you save and grow your money when the odds are
(28:15):
stacked against you totally? It can be really overwhelming, and
buying a house can seem like something that will never
be a realistic option, but it can be. And what
I would suggest is automate your savings process. So maybe
right now you can only save ten dollars a month
into your savings account or into an emergency fund, and
(28:37):
everything else needs to go to pay expenses. If you
are in a position where you can save ten dollars
a month right now, automatically set it up so that
ten dollars a month is pulled from your checking account
into your savings account or into another account that's totally separate.
Maybe it sounds small, and it sounds like, how is
that ever going to equate to something I can use
(28:59):
to pay off debt or to buy a house. But
it will over time, and if you can make saving
a habit, it's something that you'll keep with you for
the rest of your life. So set up something automatic.
And this isn't a situation where you have to be
so decisive, like I'm either going to pay off my
student loans or I'm going to start seeing If you
(29:20):
have student loans, evaluate the loans, take an inventory of
the loans, understand how much you're paying for those loans.
A lot of times people have multiple different student loans,
some private loans and federal loans. Some have higher expenses,
some have lower expenses. The ones that have higher interest
rates pay those off sooner. The ones that have lower
interest rates. It's okay to carry some debt. That's not
(29:43):
a problem. You can pay it off over time, while
you also start saving a small amount every month. My
next piece of advice, if you do work for a
company that offers a four oh one K or any
sort of retirement account, sign up for it. A lot
of times they offer employee matching, which basically means that
(30:03):
they're giving you free money, like they're literally just matching
your contributions up to a certain amount. So if you
don't sign up and don't contribute, you're giving up the
opportunity to have free money given to you from your company.
And then the last thing is if you don't have
a four oh one K or you are self employed,
don't have opportunity to contribute to a four oh one K,
you can set up your own type of account. I
(30:25):
know one of you mentioned a roth ira. I love
rath iras. There are a type of retirement account that
you can set up on those platforms I talked about
the trade Swab you can go on. You can open
a roth ira. It's a retirement account that you can
have if you don't have an employer. You just have
to have income, some sort of income to contribute to it,
and you can contribute to it yourself. They are amazing.
(30:47):
I have been saying that so wrong, feel so stupid
when you're like roth Ira, it's not oh you can
say all right, I don't know, you're fine. I've talked
to so many people you can totally. I was thinking
of opening a sep ira. Any pointers on that, Yeah,
definitely sep iras are great as well. Sep iras are
(31:11):
if you're self employed. I don't know exactly how you
had yours with your lost employer, but you probably had
some sort of self employed situation. Bottom line is it's
an individual retirement account. It just allows you to contribute
up to a different amount and it's generally more than
a raw iris. So if you're self employed and you
have the option to set up a sep ira, absolutely
(31:31):
do it. I think part of this is not even
knowing what does it look like to save for retirement?
Where do we even start? I mean, we know it's important,
like I saw with like Karen for my dad, the
way that you just need a lot of money, especially
towards the end of your life, and if you're by yourself,
what do you do and can you like break down
what the different options are for retirement? Yeah, So first
(31:53):
step is have an emergency fund, So that's three to
six months of cash in a non retirement accoun out.
That in and of itself can be pretty overwhelming for
some people. But step one try and get three to
six months into your bank account so that if you
lose your job or stop having income, which a lot
of people did last year and are still in that
(32:14):
same situation, you're able to hopefully continue to pay rent
and feed yourself for a couple of months while you
figure out another way to make income. Once you have
your emergency fund, you want to evaluate your debt. So
if you have a bunch of credit card debt that
you're paying ridiculous interest rates for, that would be goal
number two is start paying down that credit card debt.
(32:36):
If you have student loans with really low interest rates
that have a really long time rise and to pay
off you think you're gonna make money over the next
decade and whatever job you're doing, cool, you don't need
to pay that all down right at once. Third, look
at opening a retirement count. If you work for a
company that has a four oh one K, sign up
for their four o one K it's the easiest path
of least resistance. You don't have to do anything. If
(32:59):
they don't have a four one K, you will open
an ira for yourself. There are a couple of different
types of iras. Three very basic ones are a traditional ira,
a raw th ira, and a sap ira. If you're
self employed, you want to open likely a sap ira
because they allow you to contribute more than the other two.
(33:21):
The contribution limits are a little higher, so if you
do have the flexibility to add more, great that just
gives you more flexibility. If you aren't self employed, you'll
look at either an ira or a rath ira. The
differences between a raw th ira and an ira are
basically the way the taxes work. So when you're contributing
to a roth ira, you're contributing after tax money, so
(33:43):
it's money that you made working, you already pay taxes
on it, and now you contribute it to a raw ira.
The benefit of a raw i ira is once the
money is in there, you never pay taxes on it again.
It grows tax free, and when you take it out,
it's tax free. A traditional ira is tax deferred, meaning
you put money into it that you haven't paid taxes
(34:05):
on yet. So, for example, if you make fifty dollars
in a year and you contribute five thousand into a
traditional IRA, your only taxable income is forty five thou dollars,
so it reduces your taxable income. It also grows tax free,
but the differences when you take it out, you have
to pay taxes on it. I know that was probably
(34:26):
way more information than you wanted. That was perfect. Literally
all of o d is over here, like writing down notes,
like every kind. The bottom line is that's why you
need to have that money meeting or you know, intention
and goal setting meeting and figure it out because it
is a little bit of a decision tree. I could
sit down with each and every one of you and
if we followed the like yes no, yes, no, it
(34:47):
would lead to a different part of the tree. So
it is really customized. There isn't a one size fits all.
But in general, if you can follow that path of
emergency fund, paying down expensive debt and then coming up
with a plan for the rest of your debt and
then moving on to retirement savings, those are really the
first steps and then we could lead off into you know,
houses and other goals. But that's a good framework. So
(35:09):
really quickly, how do you know that you're going to
the right person, Like Wesley Snipes thought he was going
to the right person, you know what I mean, And
then I mean, okay, maybe he didn't. But how do
you know who to go to or like, who's trustworthy? Yeah,
it's hard. The financial services industry has a lot of
(35:29):
conflicts of interest. By finding out how your financial advisor
gets paid, you can uncover a lot of these potential
conflicts of interests. A big recommendation is to work with
a fiduciary. That's a word that if you're in the
financial services world you've heard a lot. If you're not,
you might have never heard of it. But a fiduciary
(35:51):
is a term in the financial services industry, and if
your financial advisor is a fiduciary, they have a legal
obligation to always make investment decisions that are in your
best interest, which sounds silly because that should be all
financial advisor, right, But not all financial advisors are helped
(36:12):
to the fiduciary standard. Some financial advisors are held to
a suitability standard, which means they only have to recommend
something that is suitable for you. It does not have
to be the best thing for you. So you want
the best thing for you, not something that's just suitable
for you. So that's at the top of the line.
You're saying, go find you a fiduciary. Yes, yes, fiduciary.
(36:34):
Just wanted to say it as well. But again, you
can start on this without hiring a financial advisor. You
really can. You can open your IRA, we can talk
about how to invest your MARYL. Lynch sap BYRA that's
sitting in cash. You can go online. You can do
this yourself. You don't necessarily need to pay someone to
(36:56):
advise you quite yet. If you're just getting started. Are
there online programs that um are like financial advisors or fiduciaries.
There are, So there are something that's come up over
the last couple of years or what are called robo advisors,
and they are platforms where you can go on open
(37:17):
one of these accounts that we're talking about, an I
RA A or just a normal individual account in your name.
You can put money into it and they will invest
the money for you. So there are companies and example
is Betterment, Another example is wealth Front and those make
it really easy for you to go online, open an account,
(37:37):
deposit whatever you want to deposit, and they'll invest the
money for you. So that's a great solution if you're
just getting started. I don't necessarily want to do it yourself,
but don't want to pay for a full on kind
of boutique hands on financial advisors. I feel like one
of the biggest deterrence is just like the language, and
it's just a lot to take in. And something that
helped me was just to succumbed to the fact that
(38:00):
I don't know. I don't know a lot of stuff,
and I'm gonna have to ask a lot of questions.
So I opened my accounts with Fidelity. And this is
not an ad for them, but their customer service has
always been off the charts, and I'll call and I'll
ask a question and they always take time to answer. Really,
just just let people know you don't know what you
do and ask people who do. It's so helpful. So
(38:23):
what's a common mistake people make with their money? Strip
Club just kidding you're gambling? That doesn't make sense to me.
Cats very specific, Yes, I mean, I think the biggest
one is just not creating a plan. You know, it's
(38:48):
not the Oh, you get frauded and someone steals all
your money and goes to jail, Like, of course they're
the burning maid offs, and that happens in this world.
But if we're just looking at like your average kind
of millennial, I would say that a lot of people
like we've just talked about, feel overwhelmed, and the mistake
that they make is thinking I'm so overwhelmed or I'm
(39:11):
so behind that I couldn't possibly be the type of
person who should be investing, or I can't even think
about investing when I'm barely paying my rent or figuring
out how to get a new job, whatever the scenario.
Maybe just sit down, look at your self and your
values and say, what am I trying to accomplish here?
(39:31):
And what are my financial goals? What are my short
term goals, what are my midterm goals, and what are
my long term goals? And write them down and then
create a plan to start to get there. But don't
ignore it. Yeah, I feel like too when I think
about people be like I don't hand no money, but
then Christmas rolls around and somehow you got that extra
(39:52):
money to eat out to buy gifts. So even if
you think of it like, well, when I need the money,
I have the money, you put that away. I mean
This is me trying to make logic with how do
you guys think you have any idea how much money
you spent last year? No, a lot, maybe a range,
(40:14):
but I have no idea, which is disturbing. After sitting
in the face of a financial adviser, I know it
was less than what I made, so I'll just say
off top I could have done better spending. The fact
that you're aware of that is huge. I mean that
you don't need to create a fifty page Excel document
(40:34):
like every single line item. But the cash is pretty simple.
You have money that comes in, you pay taxes, and
then you have a net inflow. So don't forget. If
you work at a job that said they're paying you
fifty dollars a year, you're not taking home fifty dollars
a year. You're paying taxes and netting whatever it is
after tax, So that's your net inflow. Then you have
(40:56):
your outflows, hopefully your outflows are less than you're inflows,
and you have not savings. How do you spend money?
You don't have credit cards? It's like, don't most people
do their credit cards? Unfortunately, oh do you? Is over
your process and y'all I have one more question, actually
(41:18):
go for it. Um, do you know where the money reside?
Wait the money to send that video around your office?
Because you would very much enjoy it. We'll pay it
to you perfect, all right, Sarah, thank you for helping
(41:42):
us get our money right and open our listeners. Could
they money right? And where should people find you? Sarah?
And you know, if I'm balling out and I want
you to be my financial advisor, how do I make
that happen? That's where to find you through my company,
Miracle Mile Advisors to you go to Miracle Mile Advisors
dot com. You will see me all over the website. Great,
(42:06):
thank you so much, Thank you guys. Bye Sarah. Okay,
so it's time for us to give some advice and
for everybody trying to get back out there, you will
definitely want to hear this advice letter. But first a
word for most sponsors. Welcome back. Y'all got questions and
(42:40):
we might maybe have to answers. So right now it's
time for us to give some advice. Mom Ya kick
us off, all right. Today's letter reads, Dear O D
I'm divorcing my husband of five years and I couldn't
be more thrilled. Okay, girl, I'm thrilled for you too,
(43:01):
right damn they write on life is short and I
just can't do it anymore. I'm excited to be rid
of him, but I haven't been in the dating scene
in years. Any advice on how to get my feet
wet or something else wet? If you catch my drift,
signed single and very ready to mingle with a winky base,
(43:22):
I suggest you go to church especially, and you need
to get your spirit wet. That's what I'm from the heaven. No, girl,
get yours. That's fun. I hope your husband doesn't listen
to this because damn you and you could use it
(43:44):
in court against you. Um, oh my god, wait words, um,
but no, this is a good thing you out in
the dating world. It is so exciting. I would say,
get COVID tested, you know, with each partner. I think
that's maybe a good place to start. Yeah, as someone
(44:04):
who was out of the dating scene for a while
and then eight years and then got back into it,
practice your flirting. You don't got it like that anymore.
Probably if you've been out for five flirting change, Yeah,
get on the apps and play. I would say take
it all with a grain of salt. It's not that
deep pedo message you back boo, who what a loser? Anyway,
(44:24):
onto the next have fun, make jud you know, literally
curious relationship advice for everything now because these dudes we
are here trying to play you, and let me tell
you right now, play me, you play your seon um
I I go. What the ladies have said, get out there. Really,
(44:48):
the only way in the pandemic to meet people you
don't know is like on an app or on social
media and yeah, get tested. Maybe meet up socially distance
for coffee outside wherever you are. It might be nice
to meet someone in the line. In the COVID line,
they take care of help just hang out by the
(45:11):
results table. But I also feel like really like a
part of you know, kind of what Ashley said, like
finding who you are now because you're a different person
than you were five years and you've learned things, you're
non negotiables or whatever from this relationship that didn't work out.
So just take an inventory of who you are and
(45:33):
what you want before you get out there, because you
don't get all kinds of tomatoes thrown in your face.
You can tell that I love dating this is factual.
But someone shared with me. They were like, what I'm
looking for is already searching for me and someone. My
(45:55):
affirmation for you is that you know when the energy
is and it clicks, that person is for you. You
know what I mean, It's for you. It's for you,
and they might not always be for you, but there
for you. In that moment, I saw a psychic for
and she said that somebody was looking for me and
I was like, what, Hello, Yeah, when did you start
(46:17):
your psychic line? Call me now someone is looking for you,
somebody and his name has a CA in it, And
I said, oh my god. Details. Yeah. She said, you
know he's ready and I was like what. Okay, Well,
kiras about to get love. Hopefully you, too single and
(46:39):
very ready to mingle, will find the person who's looking
for you. Until then, keep it light girl, you just
got out of something fun. Yeah safelly, Yes, yes, of
course was applied for me. Maskon face shield style love. Yeah,
get wet girl. We appreciate y'all tuning in. Please remember
(47:03):
to subscribe and let us know what you love and
rate and review this podcast. Yes, please, and you absolutely
know where to find us. Come find us on the Internet.
You know where Obama's other daughters on Insta, O D Improvence, Twitter,
and Facebook. It's Obama's other daughters. What else would it be?
Come hang out and if you need some advice, or
(47:26):
you know someone who does need some advice, send us
a letter. O D podcast at gmail dot com. Mama,
colonel Sah, you call me? You called? Oh? I was
in here eating some friend. I didn't think anybody would see.
I got grease on my lips. Baby, take that back,
(47:46):
mom my teeth. Just sell up. So sorry, Mama, I
told you used to good d You know I don't
like them dance to say her my mouth real bay.
You know what, everyone, we're gonna see you next week,
and specifically, we're gonna see you where the money as
I where the money that's on you Foo bye bye bye.
(48:17):
You Down is a production of Shawnda land Audio and
partnership with I Heart Radio. For more podcasts from Shawnda
land Audio, visit the I Heart Radio app, Apple podcast,
or wherever you listen to your favorite show.
Welcome to you Down, a production of Shonda Land Audio
and partnership with I Heart Radio. And if I can
recommend against anything, if you get one of those store
credit cards, Victoria's secret, don't push yourself. And then for
some lingerie and for fume at eighteen years old, because
they give you too much credit at eighteen years old.
Let me tell you that right now. So I had
American Eagle. You know how sad I was to be
(00:22):
twenty something years old with American Eagle credit cards that
said too many double pop collars? What's up everybody? And
welcome back to you Down a podcast wherefore funny honeys
come together to talk about what's going on in the culture.
(00:43):
I'm Ashley Holstim, I'm say, I'm Mommy a A oh,
and I'm Yasma Walking. But collectively, together as a unit,
we are known as Obama's Other Daughter. And today we
(01:03):
are asking are you down with financial literacy? Only of
millennials demonstrate basic financial literacy, according to the study from
the National Endowment for a Financial Education. Perhaps that's why
about seventy seven million Americans with credit have debt and collections,
(01:24):
and according to the f I n R A fin
rook National. Nearly one third of Americans pay just the
minimum amount do on their credit card bills each month.
That's one third, one out of three only paying the minimum. Today,
we've asked one of Forbes top listed financial advisors, Sarah
(01:46):
rajol Miller, to help us get out of debt and
secure the bag. On today's episode. Okay, we'll go to
first a group check in which I love. Which'll Oh, guys,
I'm having such a good day. Oh yeah, good, so good.
(02:07):
I've been in my routine. I've been pulling tarot cards
and they have been telling me where to go and
they've been right. Wow. And today I took a piano class.
That is I was so excited. I bought a keyboard
at the beginning of the pandemic and just thought I
was going to practice and I didn't. So I finally
(02:28):
paid for someone to teach me. And it feels good
to be picking up a skill that's so fun. Yeah.
So I'm loving good days. Yeah, and your skin is
very glowing as well. You could see the glow shining
from Ashley right now. What y'all love me? Um? I
(02:50):
think similarly, right before we podcasted, I went for a
skate and I do really love Like I'm more so
in this space of like how can I CULTI e joy?
I know that it brings me joy, So like just
getting into a good place before coming to work or
like doing anything feels really good. And today there's a
skater d Upshaw. He's like a part of the original
(03:12):
Venice eight. He posted a video about military turns and
it's just like such a small thing and maybe even
sort of something that I thought I was trying to do,
but having direction and guidance on how to be a
little bit better felt really good to like try something
new and practice. So yeah, I'm then a pretty joy.
(03:34):
Growth always feels good. That's growth. I mean Dr pimple
pop Mom, I'm coming down if it's that booty. If
it's that booty growing. Have you watched Dr pimple Popper.
(03:57):
I watched it with my hands over my eyes, like peeking.
But yeah, you're right, growth not growth. Uh. What's you
loving this week? Mom's Shakira? What's you guys on? Mm hmm,
(04:17):
there's a few things. Pick the funniest one. It was love.
Oh you know what I am loving? Getting my second
wind is what I call it. I've been getting back
to running, and yeah, and for a while, like three
miles was feeling like it was brutal. It was brutal,
(04:39):
and I got up to seven yesterday and it was great.
So now I'm just fighting a mental I'm not fighting
a body anymore. That's good. Yes, Yeah, so I felt
and that's like flying probably like it feels like, I mean,
you know what. I love a lot of artists, but
Beyonce Loki. While I've been on the runs, um that
(05:02):
one song. If you're feeling significant, you better think again.
Like I started singing it bigger, yes, and it's just
so encouraging, like while I'm on my little run and
I'm like, yes, it's so much bigger than this. Yes,
(05:22):
I need to get my hot cardio checked, that's for sure.
Between the two things, I was deciding today good days
or mine was recommitment because I took a torque class
last night and I haven't moved in a while. Guys,
where are you taking these classes? Actually? Because I told
you all the internet is a resource, use her, use her. Um. Yeah,
(05:47):
I took a torque class and it's hard. I'm not
at the point where I'm fighting my mind I'm still
fighting my body. Sure you're gonna have to teach us
at some point. How did you work? Yes? Great, got
to get on that class kind of ways to go.
I feel like we've tried. Yeah, you don't. My cheeks
don't be moving neither here nor there, mommy or what
(06:08):
love um nothing to do with cheeks. But this week
I'm working on this documentary in d C and which
thank you. I'll tell you about it later, but it's
about HBC US, very historical. I'm excited about it. But
(06:29):
I got Dr Greg Carr, who's like a lauded Africanist
studies professor, to be a part of it this week,
and I just feel like I tracked him down and
I just feel so accomplished. So I'm proud of myself
for that. That's the high I'm on in this current second.
(06:49):
When you said tracked him down us that like paparazzi,
like not gonna somebody stool? Are you here? Yes? We
like waiting outside of hotel. Her mask on just being
like Greg car is that you don't you come to
this coffee shop too. I didn't put a tracker on
the bottom of your car. I used Twitter and a
(07:15):
lot of emails, but much more similar. Well, you were
going to say something that. Oh, I just was gonna say.
I love that we're all just creating healthy habits and
it just feels good to like follow through and figure
things out. Mommy, and you figured out how to find
that man. I don't know how hard it was. Why
(07:36):
did I look at you like I found the Mommy
was like, like, I didn't mean a man like that.
She was like, wait, wait, just about I couldn't remember
that man Dr Gregory. Okay, Mommy found Dr Gregory. Shout
(07:57):
out to him. But anyway, let's talk a little more
about what we're getting into this week. So it's time
for us to get into our main topic. Oh yeah,
we talked about money today. Okay, we talked about that money.
According to the two thousand nineteen Survey of Consumer Finances,
the average household debt among those who had any debts
was a hundred and forty K who while the median
(08:20):
was six K. What's a meaning? It was a meeting? Look,
I know I knew this at one point. One of
the mean is the sum of all them? Because I
used to think it was mean that you had to
add all of them. The middle like the halfway from
(08:41):
least to highest in the middle one, but you don't
add them up. Thank you, mommy, and there, thank you
for bringing that out deep. But basically that includes a
wide range of debt from mortgage to personal loans, credit cards,
student as we all know and more, debt is seemingly
inevitable for all of us, and that probably has a
(09:02):
lot to do with the fact that a lot of
us don't have a clear understanding of money, savings, taxes, investments,
and so much more. Helping walk us through this combo
is special guest Sarah Rajo Miller. But first a quick break.
(09:25):
Welcome back today we have special guests Sarah Rajo Miller.
She has been listed as one of Forbes's Top Women
Wealth Advisors two thousand, seventeen to twenty nineteen, one of
Forbes Best in State Wealth Advisors, Forbes Top Next Gen
Wealth Advisors seventeen nineteen, and an investor PDIA Top one
(09:48):
hundred Financial Advisor. Y'all, dang girl, you got hell of credit.
I understand what your money is looking like, Sarah, mom A,
you're not supposed to ask about her money, my that listen.
The credits go on and on for the wonderfully talented
Sarah Raju Miller. Welcome to the podcast. Sarah, Thanks. I'm
(10:13):
excited to be here. Truly, it's like where do we
even begin, Like we're all millennials here, and so it's
like especially exciting to have someone who's young and understands
our generation and the unique financial challenges we're facing. And
we're gonna get into all of it. Let's listen to it. Yeah,
So Sarah, first question, UM, can you share with us
(10:35):
how you got into this world of managing millions and
millions of dollars before you turn thirty? Um? And also
your background? What kind of led you to this expertise? Yeah, definitely. Um. Look,
I'd love to say that I always dreamed of being
a financial advisor and this is kind of what my
life had been leading up to, but that's not really
(10:58):
my story at all. I honestly kind of fell into
this industry. I had a little bit of an interesting
upbringing since my parents are both international journalists. So I
grew up moving around the world and have lived in
five different countries where I was born in Mexico, and
I lived in Mexico, Germany, Jerusalem, London, and now I
(11:20):
live in l A. Yeah, we grew up moving every
two or three years, so experiencing different parts of the
world and meeting all different types of people was something
that was part of who we were growing up. And
I love meeting people, learning about who they are and
what they enjoy and what they're kind of life values
(11:42):
and goals are. So that's always been something I've been
interested in. But wealth management is something that I kind
of fell into while I was at U C l A.
And my undergrad at U C l A and I
started an internship for a financial advising firm and that
was nine years ago and it's the firm that I
am still at today, Miracle Mile Advisors. So it was
(12:02):
kind of just one of those like right place, right
time I met the partners. It was a tiny firm
at the time. There was four of us at the
firm and we were managing about a hundred million dollars,
which for a financial advising firm is relatively small, and
now there's a lot of money. It is a lot
of money, but there's lots of clients. Um. Anyways, nine
(12:24):
years later, there's thirty five employees and we're managing about
two billion UM and I'm one of the senior advisors,
so it's been really fun. That is amazing. Wow, they
are lucky to have you. For sure, you glowed them up.
(12:45):
Can you tell us exactly what a financial advisor does? So,
as a financial advisor, I work with my clients to
understand their values and goals and create a roadmap to
help them meet those financial goals. On top of them,
I helped my clients invest their money. So, for example,
(13:08):
I could have a client who is a millennial who's
working at a job. They're starting to make enough money
that they're saving into some company retirement accounts, and they
also have a goal over the next five years to
maybe buy a house. So I create a plan for
(13:28):
them that says, Okay, based on these goals, you should
be saving X into your emergency fund, Y into your
retirement account, Z into your house fund. The rest can
be invested in a variety of stocks and bonds for
long term growth, whatever the combination of scenarios might be.
I help them create a roadmap to meet their financial goals.
(13:50):
You're like a money therapist. Like a money therapist, how
does one know if they need a money therapist? I
think we all need a money therapist, and we all
need a normal therapist. And even look, if you can
take the staff to hire a financial advisor or meet
with a financial planner, great, I obviously would recommend that.
(14:13):
But even before you get to that point, you can
do your own financial check up. I call them money meetings.
Set money meetings with yourself, and this can be something
I would recommend doing this once a month. Sit down
every month and take an inventory of what happened. Take
a look at your credit card statements, take a look
at your debit transactions. Are there any unknown fees that
(14:35):
you aren't sure about or didn't know that you were
being charged. Are you accidentally signed up for some sort
of renewing subscription that you haven't used in the last
six months? Did you know that? Yeah? Did you know
that you spent three hundred dollars on T shirts in
the last two months. It's important to sit down and
(14:56):
just take a look at these things and take an
inventory every month and look at what's happening. You have
a money meeting with yourself, but I'd like to have room,
but you can be intentional. Look, maybe your birthday is
coming up in February and you say, okay, for my
birthday in February. I want to treat myself. I'm going
(15:18):
to set aside x amount of dollars for my birthday
to treat myself. That's fine. It doesn't mean that all
of your student debt is paid off and all of
your credit cards are paid off and everything is fine.
It doesn't have to be that serious. Of course, we
want to deal with these larger issues, and we can
talk about credit card doubt and student loan and investing
in all of those things. But it is important to
(15:40):
set goals for yourself. And they can be small goals
or they can be large goals. Let's say we set
our goals and we got a little extra money, what
are some sound investments people can make? And we know
what people talk about houses all the time, what are
some other investments people can make? I mean, investing in
the stock market is a great idea. So there are
(16:01):
a variety of ways to do that. And you know,
we don't necessarily need to get into the details of
every single stock and options out there. But one thing
I will say is as a millennial, the biggest thing
to remember is that time is on our side. Time
is one of our biggest assets. And the power of
compounding is so real, and you hear that terminology and
(16:23):
finance all the time, and it really works. I'll give
you an example. Let's say that you're twenty five years
old today and you have a thousand dollars and you
put that thousand dollars into an investment account, and you
decide that every month you're going to add an extra
hundred dollars to that and you're going to invest that money.
Assuming that you invest in the stock market, and let's
(16:44):
assume you're a combination of stocks that has an average
return of six percent a year, which is very reasonable.
By the time that you're sixty five years old, you'll
have over two hundred and sixty thousand dollars in that
investment account that started with one thousand dollars and contributed
an extra hundred dollars a month. That is a lot
that's not doable for everyone, depending on your income situation,
(17:06):
But just to give you a high level idea of
compounding and investing. At sixty five in that example, you'd
have over two d sixty dollars. That's real money. My
dad is always talking about. He teaches financial literacy at
high school, so He's always talking about this and it's
very complicated. Even though my father tells me, I'm still
like what calmount um? But I found an online calculator
(17:28):
that really like laid out the numbers for me. And
when I did it, I was like, I gotta sign
up for a wrong. I all right, right now I
need to figure out how to get this money compounded.
So I I really suggest that everyone out there go
out there and look at an online calculator so you
can really see the numbers that Sarah is talking about
right now, because it really helps you to get some
fire under your but to start saving for your and
(17:48):
it's it's it's become so much more accessible to invest.
You don't need to have, you know, hundreds of thousands,
tens of thousands of dollars. You and go online. You
can open an account. You can go to the trade
dot com, Schwab dot com, t D Marrior trade dot com.
You can open an account in your name. It takes
(18:09):
five minutes and you can transfer money from your bank account.
Once you have the money in there, you can go
in and you can invest it. And the way you
can invest it is you can go pick a variety
of options. You can go buy stock. You can go
buy Apple stock, Disney stock, Netflix stock, or you can
buy A really common way to invest these days is
(18:30):
through e t s. E t s are basically a
basket of stocks. So instead of saying I'm going to
go pick Netflix or Apple or Google, you can go
buy an e t F that gives you a bundle
of all of the technology stocks as an example. So
my recommendation for someone just getting started in investing is
(18:52):
to go online to one of these online trading platforms
Schwab Trade, et cetera, open an account in your name,
transfer some money from your bank account, and go invest
in one of these diversified e t f s that
give you instant exposure to hundreds of underlying stocks. Then
you don't have to be an expert. You don't need
to know if stock A is going to outperform stock B.
(19:15):
You're getting broad based, diversified exposure to the markets. Oh man,
this is this is a wonderful major keys. Okay, so
what are your thoughts on credit cards. I come from
a family that buys everything in cash or we don't
buy it, and I don't want to get a credit
(19:36):
card ever. But also that's dumb because you're supposed to
get a credit card. I currently don't have one, and
I know that I need to get one to build
my credit. So can you talk to a crazy person
like me who wants to act like a child when
it comes to credit cards. I mean, look, it's great
you don't have a lot of credit card dot and
piling on a bunch of death isn't necessarily a good thing.
(20:00):
There are different kinds of debt, and some debt is
more expensive than others. Credit cards are typically the most
expensive type of debt. So you are right and that
you don't want to have a bunch of credit card debt.
And if you are someone who does have a variety
of debt, so for example, student loans and credit cards,
(20:20):
credit card debt is the type of debt you would
want to pay down first, because when you have debt,
you're borrowing money and you're paying to borrow that money.
State you're paying to borrow money. Yeah, there's interest associated
with that. Credit cards are charging you a lot of
money to borrow that money. Student loans, maybe it depends.
(20:42):
We can talk about the different types of interest rates,
but the point is typically a student loan interest rate
will be lower than a credit card debt, So you
would want to pay off your credit card first. Get
a credit card, but pay it in full every month.
That's the most important thing. It's a real least slippery slope.
I see with a lot of people where you've got
(21:02):
a credit card and they're like, oh, I only have
to make the minimum payment. This is great. Every month
you only make the minimum payment, but all of a
sudden you're underwater and you don't actually have enough in
your savings accounts or even an upcoming income to pay
off the credit card in full. So just only put
on as much as you can cover every month. But
it is important to build credit. That is really something
(21:25):
that I would encourage mm hmm. But you don't want
them collections calling you. You don't want to not be
able to answer you, or if you're having lunch with
your friend and constantly declining that who's calling you? And
if I can recommend against anything, if you get one
of those store credit cards until your secret, don't push
yourself and then Lingerie and Perfume at eighteen years old
(21:48):
because they give you too much credit at eighteen years old.
Let me tell you that right now, I had American Eagle.
Oh you had American Eagle credit card? You know how
sad I was to be twenty some years old. American
Eagle credit card said too many double pop colums. I remember.
I think it was in high school and I, God,
(22:09):
this is really embarrassing. But I got like an old
Navy credit card on accident, Like I didn't even know.
They told me it was checking out and they're like,
do you want to get twenty percent off? Sign up
for our program. The next thing you know, I got
a bill at my house. Navy knew what she was doing.
She knew she was going to get to sell you that,
(22:30):
and you would figure it out after when it was
I don't think they should prey on young people like
that because it's not okay, we don't know. I think
it's just even young people. I feel like sometimes you
don't even know, Like Sarah just said, you want to say,
they're like, you don't even have to get approved. Yeah,
I just got a hard inquiry on my cred on there.
(22:54):
That's the part. They don't tell you that every inquiry
affects your credit. Can you speak a little to that, Yes,
every inquiry affects your credit. So you want to be
careful to ding your credit a k. Don't go set
up a bunch of credit cards. I mean, there are
other scenarios where you encounter these things that you probably
(23:14):
aren't dealing with as much. For example, when you're looking
at buying your first house and you need to get
pre approved for a mortgage, they do go and check
your credit. Other than that, just be cautious and do
check it yourself. You don't get dinged when you check
it yourself. And banks, credit card companies, Chase, Bank of America,
there are several have their own little online feature where
you can check your credit score. And this is the
(23:36):
same idea back to my first point of don't let
this be an out of sight, out of mind situation.
If you don't have great credit, that's okay, but keep
an eye on it. Look every month, if you didn't
pay off a bill, did it hurt it? If you
didn't pay off your credit card, did it go down?
Take a look and understand why it goes up or
down every month. It's really really important to be informed.
(23:57):
You know, you just talked about houses, and as I
feel like millennials or you know, I think the statistic
is that we're buying houses less and less. Is that
still a sound investment for folks these days? And what
will we need to know before making the jump from
like renting to homony. Yeah, there's a lot of factors
to consider there, and I think there's definitely not one
(24:19):
size fits all. Like way back in the day, it
was like you grow up and then you get married
and you buy a house and that's just kind of
the thing that you have to do, And that's definitely
not the case anymore. One consideration when you're buying a
house is, so you just said, is it a sound investment?
There really is a difference between buying a piece of
(24:41):
property as an investment versus buying a piece of property
that's your primary residence that you're planning on living in
for a long time. And I know it doesn't sound
like those are necessarily very different, but they are very different.
If you're looking to invest in real estate or make
a real estate and investment, you may be looking for
(25:03):
an up and coming neighborhood or a duplex or multi
unit apartment where you can have income coming off of that.
That's different from a house that you're going to live in. Yes,
you're not going to be flushing rent down, you know,
paying your landlord rent, but you're not receiving income off
of that. That isn't necessarily an investment. Sure, maybe you
(25:26):
end up picking a great property in a neighborhood that
you didn't know is going to appreciate a lot, But
I would be cautious about buying your primary residence because
you think it's a great investment. It isn't necessarily an investment.
It may be something that you want as part of
your larger plan, but I think it's important to differentiate those.
(25:47):
Is that because the house depreciates as soon as you
move into it, Yeah, that and also because when you're
living in the house, it doesn't produce any income, So
it's a lot of capital that you're tying up in
order to buy a house. Yeah, in order to buy
a house, you need to put it down payment. So
(26:08):
mortgage rates are really low right now, meaning back to
that borrowing and paying interest rates. And you can borrow
money right now to go buy a house, and the
interest rate is really low, So it is a great
time to buy a house. A lot of people are
going and getting mortgages. You still need a down payment
regardless of the size of the house. Down payments are
pretty large, so it's a large sum of money that
you're locking up and putting into your house, and then
(26:29):
a lot of people end up living in the house
for many, many years. Again, this totally depends on everyone's situation.
But you aren't necessarily like flipping this house every three
years to appreciate, appreciate and get your money out of it.
This could be somewhere you're living for a long time.
It is a difference between like investing in it to
maybe have income and have a rate of return versus
the primary residence that you might live in for a
(26:51):
long time. The second thing is if you are just
moving to buy your first house, what should you consider.
You really really want to create excel sheet or a
budget that shows all the expenses, and there are a
lot of great mortgage calculators online that can do this
for you. But a lot of people think, like, Okay,
I need to buy a house. All I need to
(27:13):
do is take a mortgage and I'm going to borrow
at dollars in the bank and it's going to cost
me whatever it is every month. But they forget that
there are a lot of other expenses that are associated
with owning a home that are not associated with renting,
So you have to have homeowners insurance, you have to
pay property taxes. So all of these other items are
things that are now laid out really easily. If you
(27:34):
literally google mortgage calculator, it will show you all of
those expenses, but make sure you understand what all of
the month the expenses are going to be. You don't
want to be one of those Atlanta housewives in a
mansion with no furniture because you didn't plan to put
anything in the house exactly. So how do you even
(27:54):
get to the point where you could buy home? Or
like invest how do you save and grow your money
when you have student loans at your back and hospital
bills just stop picking up every time? Like, how do
you save and grow your money when the odds are
(28:15):
stacked against you totally? It can be really overwhelming, and
buying a house can seem like something that will never
be a realistic option, but it can be. And what
I would suggest is automate your savings process. So maybe
right now you can only save ten dollars a month
into your savings account or into an emergency fund, and
(28:37):
everything else needs to go to pay expenses. If you
are in a position where you can save ten dollars
a month right now, automatically set it up so that
ten dollars a month is pulled from your checking account
into your savings account or into another account that's totally separate.
Maybe it sounds small, and it sounds like, how is
that ever going to equate to something I can use
(28:59):
to pay off debt or to buy a house. But
it will over time, and if you can make saving
a habit, it's something that you'll keep with you for
the rest of your life. So set up something automatic.
And this isn't a situation where you have to be
so decisive, like I'm either going to pay off my
student loans or I'm going to start seeing If you
(29:20):
have student loans, evaluate the loans, take an inventory of
the loans, understand how much you're paying for those loans.
A lot of times people have multiple different student loans,
some private loans and federal loans. Some have higher expenses,
some have lower expenses. The ones that have higher interest
rates pay those off sooner. The ones that have lower
interest rates. It's okay to carry some debt. That's not
(29:43):
a problem. You can pay it off over time, while
you also start saving a small amount every month. My
next piece of advice, if you do work for a
company that offers a four oh one K or any
sort of retirement account, sign up for it. A lot
of times they offer employee matching, which basically means that
(30:03):
they're giving you free money, like they're literally just matching
your contributions up to a certain amount. So if you
don't sign up and don't contribute, you're giving up the
opportunity to have free money given to you from your company.
And then the last thing is if you don't have
a four oh one K or you are self employed,
don't have opportunity to contribute to a four oh one K,
you can set up your own type of account. I
(30:25):
know one of you mentioned a roth ira. I love
rath iras. There are a type of retirement account that
you can set up on those platforms I talked about
the trade Swab you can go on. You can open
a roth ira. It's a retirement account that you can
have if you don't have an employer. You just have
to have income, some sort of income to contribute to it,
and you can contribute to it yourself. They are amazing.
(30:47):
I have been saying that so wrong, feel so stupid
when you're like roth Ira, it's not oh you can
say all right, I don't know, you're fine. I've talked
to so many people you can totally. I was thinking
of opening a sep ira. Any pointers on that, Yeah,
definitely sep iras are great as well. Sep iras are
(31:11):
if you're self employed. I don't know exactly how you
had yours with your lost employer, but you probably had
some sort of self employed situation. Bottom line is it's
an individual retirement account. It just allows you to contribute
up to a different amount and it's generally more than
a raw iris. So if you're self employed and you
have the option to set up a sep ira, absolutely
(31:31):
do it. I think part of this is not even
knowing what does it look like to save for retirement?
Where do we even start? I mean, we know it's important,
like I saw with like Karen for my dad, the
way that you just need a lot of money, especially
towards the end of your life, and if you're by yourself,
what do you do and can you like break down
what the different options are for retirement? Yeah, So first
(31:53):
step is have an emergency fund, So that's three to
six months of cash in a non retirement accoun out.
That in and of itself can be pretty overwhelming for
some people. But step one try and get three to
six months into your bank account so that if you
lose your job or stop having income, which a lot
of people did last year and are still in that
(32:14):
same situation, you're able to hopefully continue to pay rent
and feed yourself for a couple of months while you
figure out another way to make income. Once you have
your emergency fund, you want to evaluate your debt. So
if you have a bunch of credit card debt that
you're paying ridiculous interest rates for, that would be goal
number two is start paying down that credit card debt.
(32:36):
If you have student loans with really low interest rates
that have a really long time rise and to pay
off you think you're gonna make money over the next
decade and whatever job you're doing, cool, you don't need
to pay that all down right at once. Third, look
at opening a retirement count. If you work for a
company that has a four oh one K, sign up
for their four o one K it's the easiest path
of least resistance. You don't have to do anything. If
(32:59):
they don't have a four one K, you will open
an ira for yourself. There are a couple of different
types of iras. Three very basic ones are a traditional ira,
a raw th ira, and a sap ira. If you're
self employed, you want to open likely a sap ira
because they allow you to contribute more than the other two.
(33:21):
The contribution limits are a little higher, so if you
do have the flexibility to add more, great that just
gives you more flexibility. If you aren't self employed, you'll
look at either an ira or a rath ira. The
differences between a raw th ira and an ira are
basically the way the taxes work. So when you're contributing
to a roth ira, you're contributing after tax money, so
(33:43):
it's money that you made working, you already pay taxes
on it, and now you contribute it to a raw ira.
The benefit of a raw i ira is once the
money is in there, you never pay taxes on it again.
It grows tax free, and when you take it out,
it's tax free. A traditional ira is tax deferred, meaning
you put money into it that you haven't paid taxes
(34:05):
on yet. So, for example, if you make fifty dollars
in a year and you contribute five thousand into a
traditional IRA, your only taxable income is forty five thou dollars,
so it reduces your taxable income. It also grows tax free,
but the differences when you take it out, you have
to pay taxes on it. I know that was probably
(34:26):
way more information than you wanted. That was perfect. Literally
all of o d is over here, like writing down notes,
like every kind. The bottom line is that's why you
need to have that money meeting or you know, intention
and goal setting meeting and figure it out because it
is a little bit of a decision tree. I could
sit down with each and every one of you and
if we followed the like yes no, yes, no, it
(34:47):
would lead to a different part of the tree. So
it is really customized. There isn't a one size fits all.
But in general, if you can follow that path of
emergency fund, paying down expensive debt and then coming up
with a plan for the rest of your debt and
then moving on to retirement savings, those are really the
first steps and then we could lead off into you know,
houses and other goals. But that's a good framework. So
(35:09):
really quickly, how do you know that you're going to
the right person, Like Wesley Snipes thought he was going
to the right person, you know what I mean, And
then I mean, okay, maybe he didn't. But how do
you know who to go to or like, who's trustworthy? Yeah,
it's hard. The financial services industry has a lot of
(35:29):
conflicts of interest. By finding out how your financial advisor
gets paid, you can uncover a lot of these potential
conflicts of interests. A big recommendation is to work with
a fiduciary. That's a word that if you're in the
financial services world you've heard a lot. If you're not,
you might have never heard of it. But a fiduciary
(35:51):
is a term in the financial services industry, and if
your financial advisor is a fiduciary, they have a legal
obligation to always make investment decisions that are in your
best interest, which sounds silly because that should be all
financial advisor, right, But not all financial advisors are helped
(36:12):
to the fiduciary standard. Some financial advisors are held to
a suitability standard, which means they only have to recommend
something that is suitable for you. It does not have
to be the best thing for you. So you want
the best thing for you, not something that's just suitable
for you. So that's at the top of the line.
You're saying, go find you a fiduciary. Yes, yes, fiduciary.
(36:34):
Just wanted to say it as well. But again, you
can start on this without hiring a financial advisor. You
really can. You can open your IRA, we can talk
about how to invest your MARYL. Lynch sap BYRA that's
sitting in cash. You can go online. You can do
this yourself. You don't necessarily need to pay someone to
(36:56):
advise you quite yet. If you're just getting started. Are
there online programs that um are like financial advisors or fiduciaries.
There are, So there are something that's come up over
the last couple of years or what are called robo advisors,
and they are platforms where you can go on open
(37:17):
one of these accounts that we're talking about, an I
RA A or just a normal individual account in your name.
You can put money into it and they will invest
the money for you. So there are companies and example
is Betterment, Another example is wealth Front and those make
it really easy for you to go online, open an account,
(37:37):
deposit whatever you want to deposit, and they'll invest the
money for you. So that's a great solution if you're
just getting started. I don't necessarily want to do it yourself,
but don't want to pay for a full on kind
of boutique hands on financial advisors. I feel like one
of the biggest deterrence is just like the language, and
it's just a lot to take in. And something that
helped me was just to succumbed to the fact that
(38:00):
I don't know. I don't know a lot of stuff,
and I'm gonna have to ask a lot of questions.
So I opened my accounts with Fidelity. And this is
not an ad for them, but their customer service has
always been off the charts, and I'll call and I'll
ask a question and they always take time to answer. Really,
just just let people know you don't know what you
do and ask people who do. It's so helpful. So
(38:23):
what's a common mistake people make with their money? Strip
Club just kidding you're gambling? That doesn't make sense to me.
Cats very specific, Yes, I mean, I think the biggest
one is just not creating a plan. You know, it's
(38:48):
not the Oh, you get frauded and someone steals all
your money and goes to jail, Like, of course they're
the burning maid offs, and that happens in this world.
But if we're just looking at like your average kind
of millennial, I would say that a lot of people
like we've just talked about, feel overwhelmed, and the mistake
that they make is thinking I'm so overwhelmed or I'm
(39:11):
so behind that I couldn't possibly be the type of
person who should be investing, or I can't even think
about investing when I'm barely paying my rent or figuring
out how to get a new job, whatever the scenario.
Maybe just sit down, look at your self and your
values and say, what am I trying to accomplish here?
(39:31):
And what are my financial goals? What are my short
term goals, what are my midterm goals, and what are
my long term goals? And write them down and then
create a plan to start to get there. But don't
ignore it. Yeah, I feel like too when I think
about people be like I don't hand no money, but
then Christmas rolls around and somehow you got that extra
(39:52):
money to eat out to buy gifts. So even if
you think of it like, well, when I need the money,
I have the money, you put that away. I mean
This is me trying to make logic with how do
you guys think you have any idea how much money
you spent last year? No, a lot, maybe a range,
(40:14):
but I have no idea, which is disturbing. After sitting
in the face of a financial adviser, I know it
was less than what I made, so I'll just say
off top I could have done better spending. The fact
that you're aware of that is huge. I mean that
you don't need to create a fifty page Excel document
(40:34):
like every single line item. But the cash is pretty simple.
You have money that comes in, you pay taxes, and
then you have a net inflow. So don't forget. If
you work at a job that said they're paying you
fifty dollars a year, you're not taking home fifty dollars
a year. You're paying taxes and netting whatever it is
after tax, So that's your net inflow. Then you have
(40:56):
your outflows, hopefully your outflows are less than you're inflows,
and you have not savings. How do you spend money?
You don't have credit cards? It's like, don't most people
do their credit cards? Unfortunately, oh do you? Is over
your process and y'all I have one more question, actually
(41:18):
go for it. Um, do you know where the money reside?
Wait the money to send that video around your office?
Because you would very much enjoy it. We'll pay it
to you perfect, all right, Sarah, thank you for helping
(41:42):
us get our money right and open our listeners. Could
they money right? And where should people find you? Sarah?
And you know, if I'm balling out and I want
you to be my financial advisor, how do I make
that happen? That's where to find you through my company,
Miracle Mile Advisors to you go to Miracle Mile Advisors
dot com. You will see me all over the website. Great,
(42:06):
thank you so much, Thank you guys. Bye Sarah. Okay,
so it's time for us to give some advice and
for everybody trying to get back out there, you will
definitely want to hear this advice letter. But first a
word for most sponsors. Welcome back. Y'all got questions and
(42:40):
we might maybe have to answers. So right now it's
time for us to give some advice. Mom Ya kick
us off, all right. Today's letter reads, Dear O D
I'm divorcing my husband of five years and I couldn't
be more thrilled. Okay, girl, I'm thrilled for you too,
(43:01):
right damn they write on life is short and I
just can't do it anymore. I'm excited to be rid
of him, but I haven't been in the dating scene
in years. Any advice on how to get my feet
wet or something else wet? If you catch my drift,
signed single and very ready to mingle with a winky base,
(43:22):
I suggest you go to church especially, and you need
to get your spirit wet. That's what I'm from the heaven. No, girl,
get yours. That's fun. I hope your husband doesn't listen
to this because damn you and you could use it
(43:44):
in court against you. Um, oh my god, wait words, um,
but no, this is a good thing you out in
the dating world. It is so exciting. I would say,
get COVID tested, you know, with each partner. I think
that's maybe a good place to start. Yeah, as someone
(44:04):
who was out of the dating scene for a while
and then eight years and then got back into it,
practice your flirting. You don't got it like that anymore.
Probably if you've been out for five flirting change, Yeah,
get on the apps and play. I would say take
it all with a grain of salt. It's not that
deep pedo message you back boo, who what a loser? Anyway,
(44:24):
onto the next have fun, make jud you know, literally
curious relationship advice for everything now because these dudes we
are here trying to play you, and let me tell
you right now, play me, you play your seon um
I I go. What the ladies have said, get out there. Really,
(44:48):
the only way in the pandemic to meet people you
don't know is like on an app or on social
media and yeah, get tested. Maybe meet up socially distance
for coffee outside wherever you are. It might be nice
to meet someone in the line. In the COVID line,
they take care of help just hang out by the
(45:11):
results table. But I also feel like really like a
part of you know, kind of what Ashley said, like
finding who you are now because you're a different person
than you were five years and you've learned things, you're
non negotiables or whatever from this relationship that didn't work out.
So just take an inventory of who you are and
(45:33):
what you want before you get out there, because you
don't get all kinds of tomatoes thrown in your face.
You can tell that I love dating this is factual.
But someone shared with me. They were like, what I'm
looking for is already searching for me and someone. My
(45:55):
affirmation for you is that you know when the energy
is and it clicks, that person is for you. You
know what I mean, It's for you. It's for you,
and they might not always be for you, but there
for you. In that moment, I saw a psychic for
and she said that somebody was looking for me and
I was like, what, Hello, Yeah, when did you start
(46:17):
your psychic line? Call me now someone is looking for you,
somebody and his name has a CA in it, And
I said, oh my god. Details. Yeah. She said, you
know he's ready and I was like what. Okay, Well,
kiras about to get love. Hopefully you, too single and
(46:39):
very ready to mingle, will find the person who's looking
for you. Until then, keep it light girl, you just
got out of something fun. Yeah safelly, Yes, yes, of
course was applied for me. Maskon face shield style love. Yeah,
get wet girl. We appreciate y'all tuning in. Please remember
(47:03):
to subscribe and let us know what you love and
rate and review this podcast. Yes, please, and you absolutely
know where to find us. Come find us on the Internet.
You know where Obama's other daughters on Insta, O D Improvence, Twitter,
and Facebook. It's Obama's other daughters. What else would it be?
Come hang out and if you need some advice, or
(47:26):
you know someone who does need some advice, send us
a letter. O D podcast at gmail dot com. Mama,
colonel Sah, you call me? You called? Oh? I was
in here eating some friend. I didn't think anybody would see.
I got grease on my lips. Baby, take that back,
(47:46):
mom my teeth. Just sell up. So sorry, Mama, I
told you used to good d You know I don't
like them dance to say her my mouth real bay.
You know what, everyone, we're gonna see you next week,
and specifically, we're gonna see you where the money as
I where the money that's on you Foo bye bye bye.
(48:17):
You Down is a production of Shawnda land Audio and
partnership with I Heart Radio. For more podcasts from Shawnda
land Audio, visit the I Heart Radio app, Apple podcast,
or wherever you listen to your favorite show.
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