March 6, 2024 • 45 mins
This one we go over financial independence vs security and cover some very basics of finances. Do you know what your net worth is? Assets-Liability= Net Worth... Do you know how much you spent last month? Remember your net worth and personal worth aren't a direct result for each other. However, at times we do understand how we assume they are! Great discussion on the first steps of finance. Keep us posted on any questions!
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Episode Transcript
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Dad (00:00):
According to a 2023 survey by USA Today, 28 percent of
Americans say they arecompletely financial secure.
That's an interesting concept.
Completely financial secure.
What's
Gid (00:12):
the definition of financially secure?
Like in their opinion, they'relike, I'm safe or what?
Dad (00:18):
It's a great question Gideon Jean Ashton any thoughts
on that My guess
Gene (00:22):
would be to give it like a common team or Bar I guess to it
I'd say maybe would you be goodfor three months without any
income how far you could go withthat?
Okay, I'm secure.
I have this much wiggle room.
I guess is
Dad (00:36):
how I'd Define it.
Okay.
Interesting.
Welcome to Adulting Decrypted.
We are your hosts.
I'm Gene, and I'm starting myfirst year of college.
I'm Ashton.
I'm a music performer, composer,and educator.
I'm Dean, a high school senior.
I'm Roscoe, the dad.
Those are my three sons, andthis is Adulting Decrypted,
(00:58):
where we discuss ways to becomeadults and the things we need to
know to be successful in life.
Today.
We're going to talk aboutfinancial literacy.
This is going to be the one onone course.
So we've talked about financesat different times in different
areas.
We've talked about budgets.
We've talked about, high levelinsurance and health insurance
and car insurance.
This is going to take more of astraightforward.
(01:21):
You're sitting in a classconcept.
We're going to walk throughfinancial.
What that means what that lookslike and then we're going to
take some time and we'll deepdive that in like 102 103 our
next episodes.
We'll go in a little bit moredetail.
Not necessarily in series.
But listener, you can alwayslook at our website and see
where it's broken down infinancials.
This will be financial basics101.
(01:43):
So this is sitting around thetable.
I'm going to ask the question,what is financial independence
mean to you?
Gene, you mentioned it was oneor two months worth of savings
where you didn't have to work.
Yeah.
I was saying, if all
Gene (01:54):
of a sudden you lost your job or something happened, you'd
be good for
Dad (02:00):
Three or four months.
Gene (02:01):
And be able to have enough time to get back on your feet or
get back healthy to where youneed it to be so you're
Ashton (02:08):
secure in
Dad (02:09):
that area.
It's kind of like a safety net.
Okay.
Interesting.
Good.
Ashton Gideon.
I think,
Ashton (02:15):
A good definition of security could also be just seen
as a place where you're able tobuild everything, your month to
month is a net positive onaverage.
So you don't have like there'spaycheck to paycheck But then
there's paycheck to paycheckwith just a little enough left
over to Put stuff aside likeit's just a constant building.
(02:39):
I think is what I'd
Dad (02:39):
I'd think of Thank you
Ashton (02:41):
Gideon, I
Gid (02:42):
mean when you say to the question you said that it's an
opinion based question ouranswers our opinions and I think
that also as part of thefinancial stability is what you
think it is I think it could bedefined as not being worried
about your financial state andbeing comfortable, whatever that
Dad (03:00):
means for you.
So it's awesome that I asked thequestion.
Do you guys remember what myactual initial first question
was?
What is financial independenceand where did we take it from
there as a group?
Stability.
Financial security.
Interesting, isn't it?
We, I asked what financialindependence was and we turned
it to security and it's notwrong.
(03:21):
But it's the way I've raised usand it might be wrong.
I want you to step back andthink of financial independence
is a little bit different thanthat.
Financial independence still isa emotion based decision.
For example, it might be forone, finding financial
independence means I don't haveto work a day in my life.
(03:41):
I can go sit on a beachsomewhere drinking virgin
daiquiris or virgin pinacoladas.
Maybe it's diet coke.
Virgin olive oil.
Yeah, exactly.
Whatever you want to drink aslong as it's not alcoholic for
me You guys choose you you doyou like action would say but
the financial Independence couldmean that I want to retire and
(04:02):
have thirty six thousand dollarsa year that comes in and I don't
ever have to Work it just showsup in my in my bank account and
I'm able to live off that nowthirty six thousand dollars a
year What does that lifestylelook like?
Probably not the same assomebody who has, let's say 150,
000 coming in every month.
They're not every month as well,which is possible.
Ashton (04:22):
I think that's okay.
I mean, I would, I think I'dfeel a little stable.
Dad (04:24):
Yeah.
I mean, 150 a month is close.
Well, the reality of that actionis some people probably think
that's not enough.
Yes.
Ashton (04:32):
Grant Cardone, you're making 500, 000.
It's not
Dad (04:35):
enough.
Yeah.
No, you're not wrong.
And so that financialindependence really comes down
to an individual based of whatyou want.
But financial security is alsobased upon what you want.
So the big difference for me asfinancial independent means I've
hit a spot where it's not asecurity metrics.
It becomes a repetitive metrics.
And I think that that is thebiggest differences, financial
(04:58):
independent, it's going tohappen no matter what financial
security might be more of whatyou talked about earlier, Jean,
for your definition is I've gotan emergency fund.
I could quit work and I'd stillbe okay for a little bit.
You know, that's a securitybased, but financial
independence is more noninvesting and how it's going to
(05:18):
come back and how it's going tobe there.
Regardless of what's happening.
So here's the question.
Maybe it's a two part because Iwould be very curious to see
where you guys feel like you'reat.
And I asked you before westarted the episode, if you had
access to your bank accounts.
And so this is just somethingfor you to open up and look at,
not necessarily to share withthe listener, but where are you
currently at?
(05:39):
And do you know where you'refinancially, where you're
currently at?
Are you financially secure?
Are you financially independent?
Are you financially a mess orare you just financially
confused?
Anybody willing to venture acomment or a thought on that?
I
Gene (05:53):
would say for me currently, I'm financially
secure.
Cause right now I don't haveanything else coming back.
I have stuff that I.
Have to work with but it's
Dad (06:01):
not like what's the money's making money.
Oh, okay And so when you say youhave stuff to work with you
haven't find you have cash Whatwe'd call cash like in a bank
account, correct or a CD.
Gene (06:13):
Yeah, I think my CD closed but
Dad (06:16):
could open up Need to or want to.
Yes.
Okay.
Okay.
So, so you've got a little bit,so you're saying you're secure
based on your definition.
I think,
Ashton (06:28):
If we're going off of off of genes descriptor, I'd say
I'm, no, I would say I'mfinancially wanting, I think.
So, it's like, I'm fortunate ina situation where I'm not in
trouble, but I don't feelcomfortable where I'm at, if
that makes sense.
Like, in the sense that, there'smore that I want to be able to
(06:50):
do, there's more that I thinkthat I am capable of getting in
the essence of security,stability, what have you.
So, I think financially wantingis fair for me.
Gideon?
Gid (07:04):
Yeah, I think I stand in the same boat as Ashton where
it's boat buddy.
Yay.
Boat buddies.
Who's going to carry the boat?
So I think that like, I guessyou said financially confused.
Cause it's like you can alwaysmake work with what you have,
but you always want more.
So financially wanting, I guess.
Dad (07:23):
Well, I don't know that you always can make do with where
you're at.
And we'll talk about that in alittle bit.
But, but your point is validsaying where you're at, you can
always make do with where you'reat, but you're saying I want
more than what I currently have.
Is that a fair statement?
Because, and the reason why I'masking that Gideon, you're 17.
Ashton, if he stopped workingtomorrow, stop bringing in
money, what would happen?
I'd run out of money.
(07:44):
Fairly fast, right?
And so it comes a point whereyou can't feed yourself and
can't take care of yourself.
So I'm not trying to pick on youGideon.
I'm just thinking sometimes youdon't have, not you, Sometimes
the listener might not haveanything, right?
They might be negative, right?
And that's a real place peoplefind themselves at for whatever
reason whether it be life Youguys were born fortunate in a
(08:06):
household where I made enoughwhich is a debatable term and
given you some opportunitiesWell, I would say
Ashton (08:12):
that, like, just recently in college I was just
about as close to zero or beyondas you could get when I was at
college, and so, right now, Ifeel better about where I'm at
but, like, if you had asked methis same question a year, a
year and a half ago, I probablywould just be like, no, it
sucks, I hate this, this isawful.
(08:33):
But then, you know, a couple ofcrazy long shifts and, you know,
actually finishing college laterand not having to pay tuition
every month, you know, that
Dad (08:45):
helps.
Good.
So then this is, this is thatyour definition, I, as the dad,
I'm going to own this a hundredpercent.
I don't think I've taught youguys to dream big enough and
what I mean is financialindependence and financial
freedom is so Different to somany different people, I think
there's times.
And I just said it, what did Isay?
(09:05):
Just a second ago, you'refortunate to be born in a house
that what we made enough,enough, what does that really
mean?
Well, we always had food, right?
Never once have we relied on,we, as a family relied on
anybody else to bell us out onany of my screw ups.
It's always been me and mom,right?
And I say, right, a lot, doesthat make sense?
Ashton (09:28):
Right.
Right.
Dad (09:30):
Thank you.
I got you.
But some of the parts that Ihaven't dreamt big enough on is,
how do I want to travel?
My father in law retired at 55and he's happy to tell everybody
that, but the other day when Iwas talking to him on his phone
for his 85th birthday, he said,you know, I've never traveled
anywhere.
I didn't do much.
I retired at 55 and stayed in asmall town in Southern Utah.
(09:51):
Because I'm pretty happy with mylife.
Gideon, I think you and I hadthis conversation, didn't we?
Yeah, we did.
What did we talk about?
Gid (09:59):
It's actually from a video that I was watching.
It was a episode recap of theshow Wife Swap.
Ashton (10:06):
And part of it That's one of those conversations.
No,
Dad (10:09):
it's a different Different than what you and I thought.
Gid (10:12):
One of the wives came from like this wealthy family that
had this like military dad thatwas always super intense on
everything and then the otherone was your relaxed family and
so the wealthy wife or Alwayspushing to be a better wife came
over to the other family andshe's like You guys need to make
more money.
You need to do all this stuffand he's like I'm poor and happy
(10:35):
i'm not poor and sad You'rewealthy and sad i'm poor and
happy Like, I don't need moneyto be happy.
Dad (10:42):
Yeah, thank you, Gideon.
That was exactly a recap.
And my statement on that is, I'mall for that guy.
Makes sense to me.
And he's pushing his kids in adifferent direction.
In the sense that they'relearning how to build crash up
derby cars.
They're doing some fun stuff.
He actually is working prettyhard.
To be, what did he say?
He actually said fat.
I think he said fat and, and,fat and happy or finance.
(11:04):
You know, anyways, he, he alsomentioned he's just happy.
He's happy with where he's at.
The only, the only caveat I haveon that, as long as you're not
taking from others, right?
If I was on social relying onother people to take care of me,
I would say, Hey, hold on asecond.
It's not enough just to behappy.
Happy is okay.
As long as you're taking care ofyourself.
And so what you have to do isyou have to look at what we're
(11:26):
going to get into next, which iswhere are you really currently
at and what's your net worth.
But one more thing I wanted tojust bring up real quick is take
this time, this next iterationbetween when we meet next and
say, what do I want out of mylife?
Where do I want to be in five,15, 25, 35 years from now,
(11:48):
because what's weird.
And it, and it's mind bogglingto me.
Ashton, how old are you?
25.
How old am I?
50.
Good math.
Ashton (11:56):
And I, I wouldn't have been able to answer that
question
Dad (11:59):
a couple months ago.
We're exactly 25 years apart.
And so when I look at Ashton, Irealized that 25 years ago I was
where he was at.
I had just barely graduatedcollege.
I was just barely starting tofeel my own way about where am I
at financially and what I didn'trealize is some of the
principles we'll teach about ininvesting.
We're just going to do a realhigh level course, how much
investing now affected me in thefuture.
(12:21):
And by defining a little bit ofwhat mom and I wanted, helped, I
wish we would have spent thetime to dig a little bit deeper.
And we'll talk more aboutexactly how to open up accounts
and different accounts in one Ohtwo.
So just, bear with us until weget to 102, but, now's the time
to dream, write down what youwant.
Gideon says, I want to be downby the van by the river.
(12:43):
That's awesome.
How long do you want to work?
Do you want to work?
And, and cause you can workreally, really hard.
I've worked with ski instructorsand you work really, really hard
to act like you're barelyworking at all.
And, and you have to askyourself, which one am I doing?
Am I working really, really hardto look like I'm independent or
am I truly independent?
Am I really financiallyindependent?
(13:04):
So what, and I asked thisquestion a little bit premature,
but where are you at now?
And you guys all kind ofanswered if I could, Ashton if I
can recap what you said, yousaid you're financially.
Want wanting Gideon saidprobably the same financially
wanting gene said he'sfinancially secure at this point
in time So I just want toremember reiterate that we're
gonna talk about financialindependence Later and in more
(13:27):
detail and some definitions in102, but let's talk about
currently where you're at Andhow do we really find out where
we're at?
Well, the first thing that tofigure out is what's your net
worth?
Does everybody here know theirnet worth a real quick while
you're thinking about this.
I want to be real clear.
Your net worth, which is afinancial number is not, once
(13:48):
again, I say is not correlatedwith your personal worth.
Okay.
Cause we get talking about thisand sometimes we go into church
area where we're like, what'syour calling?
Oh, you're not important enough.
You know, what's your, you know,what's your degree and oh,
you're, you didn't, you didn'tgraduate college.
Your self worth is independentof any of this.
Okay, you're loved and you'recared for you're important Does
(14:12):
everybody get it?
Okay.
Now what's your net worth?
This is is this rhetorical or isthis?
No, this is a this is a factnumber.
Okay, this is not an opinion.
This is a fact number Do
Gid (14:24):
I include bikes that I could sell?
Dad (14:27):
Good question.
Do you guys want to know how tofigure this out?
You take all your assets.
That's, I would consider that abike, right?
Because you have mountain bikes.
I would look at my computerequipment, Ashton, your
recording equipment.
And I would look at all myassets and then you take away
all your liabilities.
Who do I owe?
What?
Who do I owe a credit card?
Do I own a house?
(14:48):
Do I own a car?
Do I own a, Oh get in 38 and 50cents from get filling up my
car.
The answer is yes.
You just bailed me out cause Ileft my wallet at home.
So I'd look at, it's a good
Ashton (15:00):
thing.
The buggy is not running oryou'd be even now.
Dad (15:02):
No, these kids will never be even for how much hours I
spent on that buggy.
or for all the time I spent onkeeping all these other cars
running.
Oh, mine would
Ashton (15:13):
have just been one to one the amount of times I had to
get saved without
Dad (15:16):
gas.
That's fair.
Gideon, I don't think you evergot bailed out of gas once.
Yeah.
Ashton (15:22):
Once is what we'll
Dad (15:23):
remember on that one.
So going back.
So It's a real quick formula.
I'm going to pause and let thelistener think about it as well.
Your asset minus any liabilityequals your net worth.
So what are some more assets?
Gideon, you mentioned bikes.
I mentioned computer equipment.
For me, it's a home, for me,it's my cars.
What else would be an asset?
(15:43):
Would my, would my, would thedune buggy be an asset?
I think any sort of
Ashton (15:47):
property that you could sell for any.
I guess, an amount of
Dad (15:53):
money.
Yeah, I like this and I'll bereal careful.
Any accountant that's listeningto this and I mean, somebody
that's taking the series, yourcars are liabilities.
We understand that.
Do you have to do something tokeep them running?
We understand that this ispurely an exercise of net worth.
This is not.
Right.
Because I would say a car is aliability 90 percent of the
time, but in this equation.
(16:13):
If you run your own
Ashton (16:15):
business, that's that you can have, you know, stocks
or investments that you couldliquidate.
Dad (16:23):
It have.
Love
Ashton (16:24):
it.
I think that's kind of
Dad (16:25):
it.
Kids?
No, I'm just kidding.
I can't sell you, so.
Those are liabilities.
Well, the,
Ashton (16:30):
That's just
Dad (16:30):
harder to sell.
And, and, and really.
Especially if they'rechallenged.
And so what is that asset worth,right?
So if it's cash, what's an assetof the cash worth?
It's a one to one.
Yeah, cash equivalent, right?
What about your bike?
Mark it down a little bit.
it's
Ashton (16:45):
how much it's worth whatever someone's worth.
Yeah, whatever someone's willingto pay
Dad (16:49):
when when you sell it That's it.
And and you guys I've hammeredthis probably into you way too
much too But what's what'sanything worth what somebody's
willing to pay me when I want tosell it So yeah, I like your
bike bike example is a greatexample if you're looking at it
as a purely accounting number,you would say, okay the bike I
paid four grand for And itdepreciates over 10 years and it
(17:12):
would take that number off andit would reduce it down to
whatever that is at the end of10 years.
And that's how accountants lookat it.
For this math, you kind of haveto decide with you and your
significant other and maybe afinancial planner if you have a
lot of assets, what that'sworth.
Ashton (17:28):
Well, and yeah, and something like a bike is, is
more of a ballpark, I bought itfor, you know, a thousand
dollars.
I beat it pretty hard, but Ikept it up to date.
I think top dollar is probablyabout 800 right now.
Oh, but I put new tires on some,you know, but like if something
like a car, you can get Kellyblue book and that'll give you a
(17:49):
pretty accurate representationof what the market is
Dad (17:51):
saying about your vehicle.
So then I go one step further.
I get on like my localclassifieds.
Right.
And I say, what would I, whatcould I really sell it for?
Facebook marketplace.
Yeah,
Ashton (18:01):
exactly.
But then you could also get withsomething like your home or your
property, you can get anevaluator to come check it out.
Dad (18:08):
Correct sort of stuff.
Yep.
So correct.
So, so do you guys know whatyour net worth is?
So asset we covered liabilities.
What are some liabilities?
We covered liabilities, I think.
What's a debt?
What do you owe on?
Ashton (18:20):
So, go ahead.
Loans, credit cards,
Dad (18:23):
owing Gideon 38?
Yeah.
Yeah, we covered that prettygood, I think.
Yeah.
And then, the equal is your networth.
Okay, so let's pause and let'sthink about that real quick.
Does everybody know their networth?
Have you done that exercise?
I don't
Ashton (18:35):
have an exact number off the top, but I know where it's
at.
Dad (18:39):
Yeah, I have generals.
Do we want to pause and do thatexercise or do you think it
matters?
Are you close enough?
I've done it in the past year.
I'm close
Ashton (18:46):
enough.
Yeah.
I, I don't know what otherassets
Gene (18:48):
I'd have that is not put into account by my wonderful
banking
Ashton (18:52):
yet.
You could probably sell a prettygood wig.
Honestly,
Dad (18:58):
I would not count that as something.
Okay.
And 20 bucks.
So, so my question is, is who inhere tracks what their net worth
is?
Regularly?
Ashton (19:07):
No, but like I've done the math.
So
Dad (19:10):
you've done the math.
Yeah, I look at my bank accounta lot.
Okay, that's good.
And do you know what your debtis?
Yes.
Do you mind sharing with thelistener?
Zero.
Okay, just curious.
Do you know what your net worthis?
I do know what it is around andhere's okay.
We'll ask that question later,but thank you I just want to
know if you're financiallyindependent or financially
(19:32):
secure You know, based on that,your number would say yes.
Yes.
Right.
Because I never would say no,right.
You say wanting, because youlooked at your liabilities and
said, I can live for threemonths without having a job.
So I'm, I'm financially secure.
So anyways, so net worth's areally interesting number.
So about two and a half yearsago, mom and I started tracking
(19:52):
our net worth monthly.
I love it.
I used to say budget and I'm,I'm getting away from that.
And I'm going to teach youabout.
A new principle that I learnedfrom a financial guru that I
started following next time inone Oh two and dig a little bit
deeper so we can all build itout on our spreadsheets and
spend some time.
But mom and I would getconfused.
we would argue over thestupidest things, you know, of
(20:16):
what our net worth was.
So now in this sheet we can justlook at it and I say I have 26,
000 worth of toys.
Do we agree?
Yes or no.
And they're, they're in thereand I'm like, yeah, I think so,
but I depreciate it prettyrapidly.
I depreciate it two and a halfpercent a month.
And the reason I do that isbecause this is houses on fire
(20:37):
and I need this money.
I need to pay for food nextweek.
I need to pay my healthinsurance.
I need a, you know, it's a firecell.
So I want to look at it and say.
That bike, I think I could get800 for, I'm probably going to
put it on my asset sheet at 300,you know, just because that
makes me feel comfortable givesyou a little cushion.
Yeah.
So I have a Google docs that Ikeep it in mom and I can both
(20:59):
see it and we keep track of, andthe way I've got it is I've got
cash up top.
I've got what I'd called semiliquid and we'll go into what
that means later.
And then I go into what myinvestments are, like my
longterm investments, what my.
Current real estate is justbecause I think that's a little
bit harder to move.
So I've got that down there asits own line item.
(21:20):
Then I have my debt and I dohave a small debt because we're
paying off our cabin.
And so I know what my net worthis.
And if you told me at your age,Ashton, that I would have my net
worth that I have today, I thinkyou're full of garbage.
I'd be like, there's no way.
I'll be that close to my goal.
When I was 17, sitting acrossthe table, I thought if I had a
million dollars, I would berich.
(21:44):
I thought, man I would not belacking or wanting anything
because it seemed like such afar outlandish number.
That's why this is somethingthat you have to evaluate
always.
Is that clear?
Ashton (21:56):
Clear is rain.
Dad (21:58):
Perfect.
Okay, so now my next questionis, or statement, three in five
Americans don't know what theyspent last month.
That's a high percentage.
Do you guys fall in that?
Do you know what you spent lastmonth?
I do.
The second?
No, I mean, just something youcould pull up.
Yes, right now, but I can pullit up.
Yeah, you could find it.
Yeah.
Gene (22:17):
I could find it, but like if you told me like, Oh yeah,
how much did you spend lastmonth?
Like just in casualconversation, I
Dad (22:22):
could not, but my question would be if somebody said, Jean,
can you, could you tell me whatyou spent last month?
Would you, how would you answerthat question?
I would open up
Gene (22:32):
the banking app previously mentioned and look cause it has
it broken down the month andthen like, Oh, This is how much
Dad (22:37):
I spent.
Okay.
And to me that, that, that's thequestion that's being asked,
right?
Do you know what you spent lastmonth?
Doesn't mean, do I know righthere in the top of my head?
Do I know what I spent lastmonth, but do I, and do I check
it regularly would probably bethe second question.
And a 2023 study found that 51percent of Americans have no
clue how to calculate theirassets to get a true value of
(22:57):
their money.
And nearly a third of thembelieve they have a zero or
negative net worth.
Gene (23:03):
So, is that third the part of the 51 percent that don't
know?
You know, that's just 100percent like
Dad (23:10):
that's two different statements.
Okay.
So that third is, if you had ahundred people in here, 33
percent of them, 33 of them.
Yeah.
Thank you.
Yeah.
Not a percentage.
33 of them would actually saythey have a zero or negative net
worth.
My question to you is, isthere's four of us.
Yeah.
So that means that one of us hasa negative net worth.
Do you have a negative networth?
(23:30):
Yeah.
You're pretty sure of that?
Almost certain.
Well, I mean, yes.
Yeah, I do.
But you don't believe it.
You know it.
Yes.
Okay.
I've
Ashton (23:39):
done the math.
Dad (23:40):
Okay.
So this is good.
This is where we get to our nextstep is the first thing we need
to figure out then if we findourselves in that scenario is
what, what do you think yourfirst step is?
Ashton (23:52):
Well, I think the first step is the classic Gordon
Ramsey,
Dad (23:55):
snowball Dave Ramsey, or yeah.
Oh, did I say Gordon?
Ashton (24:02):
That's funny.
I've, I've actually, I've beenwatching some of his stuff
recently.
He's a killer teacher.
So it's Gordon or Dave
Dad (24:08):
Gordon.
Ashton (24:10):
Dave is cool too.
I've been actually seeing someof his stuff too.
Yeah.
No, Dave Ramsey's debt.
Snowball, I think is probablythe first because like, well,
that's assuming though thatyou've done all the math and you
know the situation you're in.
So then you've got to do themath of how to start moving in a
positive direction.
Which then includes, taking thatequation that you've done and
(24:30):
adding your income versusexpenses over
Dad (24:32):
time.
So that would be, yeah, that's agood point.
I like it.
To say, am I making enough rightover what my expenses are?
Right?
That's that same ease.
It's a different equation, butit's easy, right?
Yeah.
Well, do you remember what Icalled that?
And I called it earlier in adifferent financial episode
income minus your expenses
Ashton (24:52):
equals.
Dad (24:53):
Your ability to save or your ability to grow because net
worth is to Ashton's point overtime.
But if you did your monthly, ifyou knew your monthly number,
okay.
You should be able to say, let'skeep it real simple for the
listener.
I make 1, 500 a month.
My cash outlay, I have to spendevery month is 2, 000.
Am I going to be saving orlosing money?
(25:14):
Losing money by how much?
500.
And if you don't have a safetynet, what happens?
You lose.
You go into debt, right?
Yeah.
I mean, that's the only placeyou can do it.
So what is that snowball effectAshton?
You were talking about snowball.
Well, so so Gordon
Ashton (25:29):
Ramsay's debt snowball.
So you're in debt I'm gonna keepdoing that too.
I know it's gonna you're gonnahave to get like an AI voice and
edit it in just like Dave So mygood friend Dave
Dad (25:41):
Or mr.
Ramsey.
Ashton (25:42):
Yeah, see then everyone will assume the chef.
So funny Don't feel scared soDave Ramsey talks about the debt
snowball, so once you've figuredout what you've got to do once
you've figured out all thismath, when you get to the debt
stuff, the first thing that youdo is you look at all the debts
(26:02):
you owe, you find the one withthe highest interest rate, You
pay off the minimums foreverything and then with your
budget, with any spare room youhave, take what you're willing
to put into the largest amountof money that you owe or the one
with the highest interest rate,excluding something like a house
payment you pay that off first.
(26:24):
And then what happens is thenonce that debt's paid off, you
have the monthly payment thatyou owe plus the extra that
you've been paying with that,you then take those and put
those towards the next one.
And then once that one's paidoff, you put that to the next
one.
And in theory, those all startaccumulating.
So then once you're out of thedebt snowball, you can keep
moving forward then into apositive financial state.
Dad (26:48):
Perfect.
That's a great explanation of,of the debt snowball from Dave
Ramsey.
Yes.
Yep.
And so my question to you,listener.
And maybe it's Ashton.
Have you done that math?
Do you know where all your debtlies?
Where all the bodies are?
Like, do I
Ashton (27:05):
know all of the places that I owe debt to?
Dad (27:08):
Correct.
Yes.
And do you know your interestrate on all of them?
Yes.
Ish.
Yeah.
So what I would ask you to dofor the next episode, and this
is for the listener, not justAshton, right?
Because we know that there's atleast a third in here that will
be in your situation.
Probably more because of wherewe're at.
Right.
You guys are just.
Starting life and school.
(27:28):
It could be a student loan.
It could be a car loan becauseyou started your car.
It could be other, it could becredit card debt.
It could be, let's hope it'snot, let's hope it's a student
loan, you know, just causethey're more forgiving.
It's, it's a little bit lowerinterest rate, but find out
where they're at and have it ona spreadsheet.
So the next time you're, we'redoing this, you can step back
(27:49):
and look at where my money is.
And then the other thing I'dchallenge you as the listener is
to know.
What your monthly expenses now,Ashton, you're in a unique
situation and you're probablynot the only one you're in this
gig economy gig economy.
For those who don't know whatthat means.
It just means you, you
Ashton (28:06):
gig or you, you contract, you find work and you
do all these odd jobs maybe asanother way to think
Dad (28:13):
of it too.
I like that.
And so what does that do to yourincome?
Makes it really freaking weird.
It is weird versus just showingup at a job.
Nine to five job, I know thatI'm going to make 15 an hour
after taxes.
It's going to be like eight 50.
And I know that that's where Ican start planning on all my
money and where it goes and howto divide it up as a gig
(28:34):
economy.
We're going to have to look atthat a little bit different.
So we'll build that into theepisode.
So thank you for, for sharingthat.
And how do we account for that?
Thanks for being so candid withthe listener.
Kate, so then let's say that wecan get our debt figured out.
Then you have this decisionyou're going to have to make.
And this is where I wanted to gowith the next is you build this
emergency fund.
An emergency fund is what, whathave we talked about in the past
(28:56):
about emergency fund besidesnecessary?
Is that the
Gene (29:00):
how much you need to pay for a certain amount of time?
Is that what I was kind ofreferring to before
Dad (29:06):
Yeah.
Gene would call that financialsecurity, right?
Because to you, you've gotsomething that can cover you
through a gap for me as anindependent Contractor and have
been for a lot of times.
My emergency fund looked verydifferent than other people's my
emergency fund I've been out ofwork almost for for a real year
and then I found some other workSo it really isn't like five
months of truly out of work Andthen I've been underemployed for
(29:26):
a while as I'm launching my newbusiness And so that emergency
fund is what's built bridge thisgap so that I haven't had to go
into debt And so that's that'swhat that emergency fund But if
I was a college student, I'dsay, Hey, 500 bucks is for an
emergency.
Well, what kind of emergency?
I blew a tire, got a rock in thewindshield.
Teacher said I needed new books.
(29:47):
The hot girl finally said yes ona date.
That is an emergency.
I know I've had these.
I'm trying to think of more.
Yeah, you've had a lot ofemergencies, right?
Oh, you got to go to the doctorall of a sudden.
Yeah.
Out of nowhere.
You know, you weren't planningon.
You needed to do an extra tripsomewhere that you weren't
planning on.
You know, like even home gas,you know, all the emergency is
truly you build it above andbeyond.
(30:09):
Okay.
Sorry, go ahead.
Just, I think
Ashton (30:11):
this kind of applies to the situation.
cause sometimes the issue, likeone of the things I work at a
school and they pay monthly,which sucks.
But when it comes to runninginto emergencies, you're going
to have that money and there'scompanies and businesses.
That offer, they say, well justtell us how much you're going to
make on your next paycheck.
(30:32):
And you can just get it now.
And when you get it, just, justgive it to us.
So you can live with that money.
Would you advise individuals togo for that sort
Dad (30:42):
of thing?
Absolutely not.
Right.
Because?
They're very predatory innature.
So if you go to somebody likethat and you take out what they
call a payday loan.
They have a lot of fees andtheir interest compounds daily.
And so if they say, Oh, look,but your credit card's at 18%,
but we only charge 15 percent an18 percent compounded monthly is
(31:06):
very different than a 15 percentcompounded daily.
So daily, if it was a hundreddollars, it'd be, you know, a
dollar 50 versus a dollar 80 atthe end of this, this month.
Well, that's 1.
15 or 1.
50 on the first day and thenit's 3.
25 because they get to add thatextra 3 that you owe them.
So before you know it, beforeyou get your paycheck, you're
(31:28):
deeper in debt and then you goto try and pay that off.
And the problem is your paycheckdoesn't cover even sometimes,
let's say they do compound upmonthly and they're very fair
with their interest becausethey've been, they've been
looked at and scrutinized by thefederal government.
The problem is going to be theoriginate the origination fee.
(31:48):
They're going to say, Hey,Ashton, yeah, that's great.
I'll do that for you.
I'll pay that, but it's a 25percent origination fee.
And so all of a sudden you'vedropped your paycheck by 25%.
Right.
So that, that would be the lastplace I'd get money.
The first place I'd get moneywould be, trying to pick up an
extra job.
Right.
A little bit more of a hustle,right?
So you're like, Oh crap, theschool's not going to pay me now
(32:09):
for another month.
I'm going to go drive Uber, I'mgoing to go work at McDonald's
for two weeks, or I'm going to,then the second place I would go
ask family to, Hey, I'm in atough spot.
Here's my paper, can you help meget out of this trouble?
Right?
And then my third would be, youknow, if you didn't have an
asset, I need to think throughthat.
(32:30):
Then I'd maybe use a credit cardand then a fourth might be that
option.
Yeah, but I, but no, absolutelynot.
So.
You're not in that trouble, areyou?
No.
Okay.
You scared me for a second.
No, I was just thinking aboutit.
Your face was a genuinequestion.
I got concerned.
No.
It's a fair question.
I'm glad you asked.
Because it is advertised.
Ashton (32:50):
Well, in like a lot of the businesses, like, like
you'll drive past something likea Wendy's or McDonald's and on
the sign it'll say when you geta job here, like this is
different I guess, but it's likethey do daily pay
Dad (33:03):
now as well.
And I would take daily pay in aheartbeat.
So like, and that's
Ashton (33:08):
just another version of it.
And it made me think aboutbusinesses where it's like you
can get, there, there was awhile there where I was getting
tons of ads for an app that youcould install that was
essentially like, like payingyour money before you got it
sort of stuff.
Dad (33:24):
Oh, that's wild.
Yeah.
You know, and the other onejust, and this is not that, but
if you go to checkout.
Oh, don't worry about paying thefull price.
It's four payments at 25, youknow, and you're like, Oh
really?
And then you read the fineprint.
They're like, well, really thefirst two are 25 and then the
interest kicks in and it's, youknow, they'll, they'll break it
down.
(33:44):
I can't remember what the nameof that company is.
Ashton (33:46):
Those, some of those are honest though.
Like I know there's a, there's amusic audio company.
Called Sweetwater and they knowmusic gear is not cheap and it's
not something you always want topay for So like I've had times
where I've wanted or needed gearto use but it's been I could buy
this all out right now But Idon't have to so I can space it
(34:08):
out and I can subscribe to mypurchase for three months and
it'll be
Dad (34:11):
fine Yeah, and if you pay on time and that's how it's
written.
It's great.
It's just a risk, right?
You need to make sure thatpaychecks gonna come So we've,
we've hammered debt pretty hard.
So emergency fund, what you fundnext.
And then you talked about longterm investment and that's going
to, we're going to talk a lotmore about long term investment
and why you need to start now.
Get in and you should really dosome before you leave.
(34:33):
Gene, you should do it now.
Ashton, as soon as we can rightside that, you should do some.
Go ahead.
This isn't today's
Ashton (34:39):
conversation, right?
Correct.
Are you planning on talkingabout investing apps
Dad (34:43):
like Robin Hood and stuff?
I'm going to talk about RobinHood.
I'm going to talk aboutFidelity.
I'm going to talk about 401ksand IRAs.
Cool.
And why if you had a real a bigjob like Sabrina, I'd say get
into your 401k.
And I shouldn't say a real job,just a government sponsored
401k.
If if that's kind of teacherdoing why you'd want to get into
that.
So we'll talk about investingand that's more like 1 0 3, but
(35:08):
Robin hood will be 1 0 2.
We'll cover that and some of theupsides and downsides and
concerns of that.
Okay.
So let's, but, but let's justtake, so the listener wants to
come back.
Let's look at some investingscenarios just for fun.
So let's say that Gideon, you'regetting ready to go on your
mission, but you're like, Hey, Ihave 2000 bucks.
I can throw into an investment.
(35:29):
Okay.
You're not going to contributeany more of that.
You're sorry.
You're just going to, and thisis nerd wallet.
com.
We'll throw it in thedescription.
Let's say that you're not goingto put any more money into that.
Like, that's all you're going toget that.
That's all you're going to putin.
You're going to re you're goingto grow that until how old are
you now?
17 you're going to retire at 67.
(35:50):
How many years is that anybody?
Okay.
Quick math is 50.
And let's say that that onlygrows at the 8%, which is pretty
average.
How much money do you think that2, 000 gets you?
8 percent a year annually.
Gid (36:08):
Is it compounding?
Ashton (36:10):
Yeah.
Cause interest is based off ofwhat's in the account.
Yeah.
Gid (36:14):
So that's why I was wondering if it was, yeah, I
have no idea, but I'm going toguess like,
Ashton (36:22):
Eight.
Am I
Dad (36:23):
allowed to do math?
Can you tell, can you tell thelistener what that number was?
Gid (36:28):
171, 465.
40
Dad (36:34):
Off a 2, 000 initial investment.
And that's not including if youadd stuff.
Correct.
So let's say that you throw thatin there now.
And, and let's say that youcould only, let's say you could
only come up with 50 a month toinvest.
But you are able to do thatforever.
Let's see if that willrecalculate that.
(36:57):
Do you want to, do you want toguess what 50 a month added to
your 2000, your 2000
Gid (37:02):
on top of the 2000, so 2000 initial, and then, and then you
just 50 a month with an 8percent
Dad (37:09):
annual and you have 50 years to let it grow.
You were at 170 just it's half amillion.
Is it really?
Because 50 a month isn't a lotmore money, it's, it's 600 more
years all.
But it's, but it's compounding.
Yeah.
So it's still, where do you getall your money is right there at
(37:30):
the end.
Right.
That's where the growth.
It's an exponential curve.
I'm sharing this story isgrandma Birch was the first one
to ever tell me, Hey, you shouldlook at investing grandma
McReynolds, Birch, whatever, youknow, her name was when you guys
remember her by, you rememberwho, do you know who I'm talking
about?
Okay.
Hmm.
Hmm.
We were sitting around talkingone time and she goes, Roscoe, I
(37:50):
had no clue what an IRA would dofor me.
Michelle and I just got married.
We're just sitting there and Igo, what do you mean, grandma?
She goes, even if you have likea hundred dollars, just put it
in there.
You'll never miss it.
I'm like, grandma, how can yousay that?
I'm a broke college student.
I've, I felt a lot like Ashtonprobably does right now where
I'm going, look, I didn't knowwhere up is.
(38:11):
I waited a little bit.
I started my job with Ford at 26at 26 and then I got there and
they had a 401k and I was hergrandma's voice in the back of
my mind.
Hey, put some money in there.
So I thought 10%, I can livewithout 10 percent and I put it
in there and I let it grow overtime.
And that little 26, 000investment that I was with them
has grown substantially.
(38:31):
Now I need another 20 years.
For it to really make to hitthat tell right it's still in
this the shallow part And itneeds to grow because I just
left it alone.
I didn't know what to do with itSo that's why we're going to
talk about investing, but that'swhy I wanted to say we want to
start early Okay, so the realityof it the reality of it is most
(38:52):
Americans aren't willing to lookat their finances why because
it's It's scary.
It's a little bit It's a littlebit awkward to sit around and
talk about finances.
I think it's also
Gid (39:05):
overwhelming.
Dad (39:07):
Like you said Gideon, it's a little overwhelming.
In 2023 CBS News did a thingthat says some generations of
American began saving much laterin their careers.
They, for instance, babyboomers, the generation that's
retiring now, my dad, you know,in that group, they started
saving.
At 35 while generation x beganto start saving at 30 The hope
(39:33):
is that more millennials willstart saving at age 25 Gen z
it's time in your 20s to startsaving and investing for the
future And what i've done wrongAs a dad and i'm just going to
tell the listener i'm going totell everybody I've talked way,
way, way too much about savings.
I've had a cash sitting in mysafe for probably 20 years that
(39:59):
if I would have thrown somewherewould have made me a lot of
money, but I felt safe.
I felt secure.
Sometimes it's okay to feelinsecure and have investments.
And we'll talk about some ofthose options, but I challenge
the listener to look at, take ahard look right now at the areas
that we just covered.
(40:20):
Look at what.
Your financial independent lookslike figure out where you're
currently at.
Do the numbers, do the math,figure out how to get out of
debt.
And we're going to talk a littlebit about whether you go into
debt or whether you, or youworry about your emergency fund.
Cause I promise no matter howmuch avocado toast you cut out,
(40:41):
I don't care how many monstersyou don't drink.
You're not going to befinancially independent without
investing for the future.
And there's a way to get there.
Gid (40:51):
Thanks, dad.
And for the listener, if youever have any questions or want
to talk DMS on any of the socialmedias, or email us adult and
encrypted at gmail.
com, you can find all those onour website or just look us up
adult and encrypted.
We are always happy to talk andwant to hear your stories.
And if you need any help, we arehere for you.
Dad (41:11):
So thank you, Ashton financial payday loans.
Great question.
Thanks.
That was fantastic.
What do you guys think is a 101?
Did that seem like it was basicenough, but you had enough
detail?
According to a 2023 survey by USA Today, 28 percent of
Americans say they arecompletely financial secure.
That's an interesting concept.
Completely financial secure.
What's
Gid (00:12):
the definition of financially secure?
Like in their opinion, they'relike, I'm safe or what?
Dad (00:18):
It's a great question Gideon Jean Ashton any thoughts
on that My guess
Gene (00:22):
would be to give it like a common team or Bar I guess to it
I'd say maybe would you be goodfor three months without any
income how far you could go withthat?
Okay, I'm secure.
I have this much wiggle room.
I guess is
Dad (00:36):
how I'd Define it.
Okay.
Interesting.
Welcome to Adulting Decrypted.
We are your hosts.
I'm Gene, and I'm starting myfirst year of college.
I'm Ashton.
I'm a music performer, composer,and educator.
I'm Dean, a high school senior.
I'm Roscoe, the dad.
Those are my three sons, andthis is Adulting Decrypted,
(00:58):
where we discuss ways to becomeadults and the things we need to
know to be successful in life.
Today.
We're going to talk aboutfinancial literacy.
This is going to be the one onone course.
So we've talked about financesat different times in different
areas.
We've talked about budgets.
We've talked about, high levelinsurance and health insurance
and car insurance.
This is going to take more of astraightforward.
(01:21):
You're sitting in a classconcept.
We're going to walk throughfinancial.
What that means what that lookslike and then we're going to
take some time and we'll deepdive that in like 102 103 our
next episodes.
We'll go in a little bit moredetail.
Not necessarily in series.
But listener, you can alwayslook at our website and see
where it's broken down infinancials.
This will be financial basics101.
(01:43):
So this is sitting around thetable.
I'm going to ask the question,what is financial independence
mean to you?
Gene, you mentioned it was oneor two months worth of savings
where you didn't have to work.
Yeah.
I was saying, if all
Gene (01:54):
of a sudden you lost your job or something happened, you'd
be good for
Dad (02:00):
Three or four months.
Gene (02:01):
And be able to have enough time to get back on your feet or
get back healthy to where youneed it to be so you're
Ashton (02:08):
secure in
Dad (02:09):
that area.
It's kind of like a safety net.
Okay.
Interesting.
Good.
Ashton Gideon.
I think,
Ashton (02:15):
A good definition of security could also be just seen
as a place where you're able tobuild everything, your month to
month is a net positive onaverage.
So you don't have like there'spaycheck to paycheck But then
there's paycheck to paycheckwith just a little enough left
over to Put stuff aside likeit's just a constant building.
(02:39):
I think is what I'd
Dad (02:39):
I'd think of Thank you
Ashton (02:41):
Gideon, I
Gid (02:42):
mean when you say to the question you said that it's an
opinion based question ouranswers our opinions and I think
that also as part of thefinancial stability is what you
think it is I think it could bedefined as not being worried
about your financial state andbeing comfortable, whatever that
Dad (03:00):
means for you.
So it's awesome that I asked thequestion.
Do you guys remember what myactual initial first question
was?
What is financial independenceand where did we take it from
there as a group?
Stability.
Financial security.
Interesting, isn't it?
We, I asked what financialindependence was and we turned
it to security and it's notwrong.
(03:21):
But it's the way I've raised usand it might be wrong.
I want you to step back andthink of financial independence
is a little bit different thanthat.
Financial independence still isa emotion based decision.
For example, it might be forone, finding financial
independence means I don't haveto work a day in my life.
(03:41):
I can go sit on a beachsomewhere drinking virgin
daiquiris or virgin pinacoladas.
Maybe it's diet coke.
Virgin olive oil.
Yeah, exactly.
Whatever you want to drink aslong as it's not alcoholic for
me You guys choose you you doyou like action would say but
the financial Independence couldmean that I want to retire and
(04:02):
have thirty six thousand dollarsa year that comes in and I don't
ever have to Work it just showsup in my in my bank account and
I'm able to live off that nowthirty six thousand dollars a
year What does that lifestylelook like?
Probably not the same assomebody who has, let's say 150,
000 coming in every month.
They're not every month as well,which is possible.
Ashton (04:22):
I think that's okay.
I mean, I would, I think I'dfeel a little stable.
Dad (04:24):
Yeah.
I mean, 150 a month is close.
Well, the reality of that actionis some people probably think
that's not enough.
Yes.
Ashton (04:32):
Grant Cardone, you're making 500, 000.
It's not
Dad (04:35):
enough.
Yeah.
No, you're not wrong.
And so that financialindependence really comes down
to an individual based of whatyou want.
But financial security is alsobased upon what you want.
So the big difference for me asfinancial independent means I've
hit a spot where it's not asecurity metrics.
It becomes a repetitive metrics.
And I think that that is thebiggest differences, financial
(04:58):
independent, it's going tohappen no matter what financial
security might be more of whatyou talked about earlier, Jean,
for your definition is I've gotan emergency fund.
I could quit work and I'd stillbe okay for a little bit.
You know, that's a securitybased, but financial
independence is more noninvesting and how it's going to
(05:18):
come back and how it's going tobe there.
Regardless of what's happening.
So here's the question.
Maybe it's a two part because Iwould be very curious to see
where you guys feel like you'reat.
And I asked you before westarted the episode, if you had
access to your bank accounts.
And so this is just somethingfor you to open up and look at,
not necessarily to share withthe listener, but where are you
currently at?
(05:39):
And do you know where you'refinancially, where you're
currently at?
Are you financially secure?
Are you financially independent?
Are you financially a mess orare you just financially
confused?
Anybody willing to venture acomment or a thought on that?
I
Gene (05:53):
would say for me currently, I'm financially
secure.
Cause right now I don't haveanything else coming back.
I have stuff that I.
Have to work with but it's
Dad (06:01):
not like what's the money's making money.
Oh, okay And so when you say youhave stuff to work with you
haven't find you have cash Whatwe'd call cash like in a bank
account, correct or a CD.
Gene (06:13):
Yeah, I think my CD closed but
Dad (06:16):
could open up Need to or want to.
Yes.
Okay.
Okay.
So, so you've got a little bit,so you're saying you're secure
based on your definition.
I think,
Ashton (06:28):
If we're going off of off of genes descriptor, I'd say
I'm, no, I would say I'mfinancially wanting, I think.
So, it's like, I'm fortunate ina situation where I'm not in
trouble, but I don't feelcomfortable where I'm at, if
that makes sense.
Like, in the sense that, there'smore that I want to be able to
(06:50):
do, there's more that I thinkthat I am capable of getting in
the essence of security,stability, what have you.
So, I think financially wantingis fair for me.
Gideon?
Gid (07:04):
Yeah, I think I stand in the same boat as Ashton where
it's boat buddy.
Yay.
Boat buddies.
Who's going to carry the boat?
So I think that like, I guessyou said financially confused.
Cause it's like you can alwaysmake work with what you have,
but you always want more.
So financially wanting, I guess.
Dad (07:23):
Well, I don't know that you always can make do with where
you're at.
And we'll talk about that in alittle bit.
But, but your point is validsaying where you're at, you can
always make do with where you'reat, but you're saying I want
more than what I currently have.
Is that a fair statement?
Because, and the reason why I'masking that Gideon, you're 17.
Ashton, if he stopped workingtomorrow, stop bringing in
money, what would happen?
I'd run out of money.
(07:44):
Fairly fast, right?
And so it comes a point whereyou can't feed yourself and
can't take care of yourself.
So I'm not trying to pick on youGideon.
I'm just thinking sometimes youdon't have, not you, Sometimes
the listener might not haveanything, right?
They might be negative, right?
And that's a real place peoplefind themselves at for whatever
reason whether it be life Youguys were born fortunate in a
(08:06):
household where I made enoughwhich is a debatable term and
given you some opportunitiesWell, I would say
Ashton (08:12):
that, like, just recently in college I was just
about as close to zero or beyondas you could get when I was at
college, and so, right now, Ifeel better about where I'm at
but, like, if you had asked methis same question a year, a
year and a half ago, I probablywould just be like, no, it
sucks, I hate this, this isawful.
(08:33):
But then, you know, a couple ofcrazy long shifts and, you know,
actually finishing college laterand not having to pay tuition
every month, you know, that
Dad (08:45):
helps.
Good.
So then this is, this is thatyour definition, I, as the dad,
I'm going to own this a hundredpercent.
I don't think I've taught youguys to dream big enough and
what I mean is financialindependence and financial
freedom is so Different to somany different people, I think
there's times.
And I just said it, what did Isay?
(09:05):
Just a second ago, you'refortunate to be born in a house
that what we made enough,enough, what does that really
mean?
Well, we always had food, right?
Never once have we relied on,we, as a family relied on
anybody else to bell us out onany of my screw ups.
It's always been me and mom,right?
And I say, right, a lot, doesthat make sense?
Ashton (09:28):
Right.
Right.
Dad (09:30):
Thank you.
I got you.
But some of the parts that Ihaven't dreamt big enough on is,
how do I want to travel?
My father in law retired at 55and he's happy to tell everybody
that, but the other day when Iwas talking to him on his phone
for his 85th birthday, he said,you know, I've never traveled
anywhere.
I didn't do much.
I retired at 55 and stayed in asmall town in Southern Utah.
(09:51):
Because I'm pretty happy with mylife.
Gideon, I think you and I hadthis conversation, didn't we?
Yeah, we did.
What did we talk about?
Gid (09:59):
It's actually from a video that I was watching.
It was a episode recap of theshow Wife Swap.
Ashton (10:06):
And part of it That's one of those conversations.
No,
Dad (10:09):
it's a different Different than what you and I thought.
Gid (10:12):
One of the wives came from like this wealthy family that
had this like military dad thatwas always super intense on
everything and then the otherone was your relaxed family and
so the wealthy wife or Alwayspushing to be a better wife came
over to the other family andshe's like You guys need to make
more money.
You need to do all this stuffand he's like I'm poor and happy
(10:35):
i'm not poor and sad You'rewealthy and sad i'm poor and
happy Like, I don't need moneyto be happy.
Dad (10:42):
Yeah, thank you, Gideon.
That was exactly a recap.
And my statement on that is, I'mall for that guy.
Makes sense to me.
And he's pushing his kids in adifferent direction.
In the sense that they'relearning how to build crash up
derby cars.
They're doing some fun stuff.
He actually is working prettyhard.
To be, what did he say?
He actually said fat.
I think he said fat and, and,fat and happy or finance.
(11:04):
You know, anyways, he, he alsomentioned he's just happy.
He's happy with where he's at.
The only, the only caveat I haveon that, as long as you're not
taking from others, right?
If I was on social relying onother people to take care of me,
I would say, Hey, hold on asecond.
It's not enough just to behappy.
Happy is okay.
As long as you're taking care ofyourself.
And so what you have to do isyou have to look at what we're
(11:26):
going to get into next, which iswhere are you really currently
at and what's your net worth.
But one more thing I wanted tojust bring up real quick is take
this time, this next iterationbetween when we meet next and
say, what do I want out of mylife?
Where do I want to be in five,15, 25, 35 years from now,
(11:48):
because what's weird.
And it, and it's mind bogglingto me.
Ashton, how old are you?
25.
How old am I?
50.
Good math.
Ashton (11:56):
And I, I wouldn't have been able to answer that
question
Dad (11:59):
a couple months ago.
We're exactly 25 years apart.
And so when I look at Ashton, Irealized that 25 years ago I was
where he was at.
I had just barely graduatedcollege.
I was just barely starting tofeel my own way about where am I
at financially and what I didn'trealize is some of the
principles we'll teach about ininvesting.
We're just going to do a realhigh level course, how much
investing now affected me in thefuture.
(12:21):
And by defining a little bit ofwhat mom and I wanted, helped, I
wish we would have spent thetime to dig a little bit deeper.
And we'll talk more aboutexactly how to open up accounts
and different accounts in one Ohtwo.
So just, bear with us until weget to 102, but, now's the time
to dream, write down what youwant.
Gideon says, I want to be downby the van by the river.
(12:43):
That's awesome.
How long do you want to work?
Do you want to work?
And, and cause you can workreally, really hard.
I've worked with ski instructorsand you work really, really hard
to act like you're barelyworking at all.
And, and you have to askyourself, which one am I doing?
Am I working really, really hardto look like I'm independent or
am I truly independent?
Am I really financiallyindependent?
(13:04):
So what, and I asked thisquestion a little bit premature,
but where are you at now?
And you guys all kind ofanswered if I could, Ashton if I
can recap what you said, yousaid you're financially.
Want wanting Gideon saidprobably the same financially
wanting gene said he'sfinancially secure at this point
in time So I just want toremember reiterate that we're
gonna talk about financialindependence Later and in more
(13:27):
detail and some definitions in102, but let's talk about
currently where you're at Andhow do we really find out where
we're at?
Well, the first thing that tofigure out is what's your net
worth?
Does everybody here know theirnet worth a real quick while
you're thinking about this.
I want to be real clear.
Your net worth, which is afinancial number is not, once
(13:48):
again, I say is not correlatedwith your personal worth.
Okay.
Cause we get talking about thisand sometimes we go into church
area where we're like, what'syour calling?
Oh, you're not important enough.
You know, what's your, you know,what's your degree and oh,
you're, you didn't, you didn'tgraduate college.
Your self worth is independentof any of this.
Okay, you're loved and you'recared for you're important Does
(14:12):
everybody get it?
Okay.
Now what's your net worth?
This is is this rhetorical or isthis?
No, this is a this is a factnumber.
Okay, this is not an opinion.
This is a fact number Do
Gid (14:24):
I include bikes that I could sell?
Dad (14:27):
Good question.
Do you guys want to know how tofigure this out?
You take all your assets.
That's, I would consider that abike, right?
Because you have mountain bikes.
I would look at my computerequipment, Ashton, your
recording equipment.
And I would look at all myassets and then you take away
all your liabilities.
Who do I owe?
What?
Who do I owe a credit card?
Do I own a house?
(14:48):
Do I own a car?
Do I own a, Oh get in 38 and 50cents from get filling up my
car.
The answer is yes.
You just bailed me out cause Ileft my wallet at home.
So I'd look at, it's a good
Ashton (15:00):
thing.
The buggy is not running oryou'd be even now.
Dad (15:02):
No, these kids will never be even for how much hours I
spent on that buggy.
or for all the time I spent onkeeping all these other cars
running.
Oh, mine would
Ashton (15:13):
have just been one to one the amount of times I had to
get saved without
Dad (15:16):
gas.
That's fair.
Gideon, I don't think you evergot bailed out of gas once.
Yeah.
Ashton (15:22):
Once is what we'll
Dad (15:23):
remember on that one.
So going back.
So It's a real quick formula.
I'm going to pause and let thelistener think about it as well.
Your asset minus any liabilityequals your net worth.
So what are some more assets?
Gideon, you mentioned bikes.
I mentioned computer equipment.
For me, it's a home, for me,it's my cars.
What else would be an asset?
(15:43):
Would my, would my, would thedune buggy be an asset?
I think any sort of
Ashton (15:47):
property that you could sell for any.
I guess, an amount of
Dad (15:53):
money.
Yeah, I like this and I'll bereal careful.
Any accountant that's listeningto this and I mean, somebody
that's taking the series, yourcars are liabilities.
We understand that.
Do you have to do something tokeep them running?
We understand that this ispurely an exercise of net worth.
This is not.
Right.
Because I would say a car is aliability 90 percent of the
time, but in this equation.
(16:13):
If you run your own
Ashton (16:15):
business, that's that you can have, you know, stocks
or investments that you couldliquidate.
Dad (16:23):
It have.
Love
Ashton (16:24):
it.
I think that's kind of
Dad (16:25):
it.
Kids?
No, I'm just kidding.
I can't sell you, so.
Those are liabilities.
Well, the,
Ashton (16:30):
That's just
Dad (16:30):
harder to sell.
And, and, and really.
Especially if they'rechallenged.
And so what is that asset worth,right?
So if it's cash, what's an assetof the cash worth?
It's a one to one.
Yeah, cash equivalent, right?
What about your bike?
Mark it down a little bit.
it's
Ashton (16:45):
how much it's worth whatever someone's worth.
Yeah, whatever someone's willingto pay
Dad (16:49):
when when you sell it That's it.
And and you guys I've hammeredthis probably into you way too
much too But what's what'sanything worth what somebody's
willing to pay me when I want tosell it So yeah, I like your
bike bike example is a greatexample if you're looking at it
as a purely accounting number,you would say, okay the bike I
paid four grand for And itdepreciates over 10 years and it
(17:12):
would take that number off andit would reduce it down to
whatever that is at the end of10 years.
And that's how accountants lookat it.
For this math, you kind of haveto decide with you and your
significant other and maybe afinancial planner if you have a
lot of assets, what that'sworth.
Ashton (17:28):
Well, and yeah, and something like a bike is, is
more of a ballpark, I bought itfor, you know, a thousand
dollars.
I beat it pretty hard, but Ikept it up to date.
I think top dollar is probablyabout 800 right now.
Oh, but I put new tires on some,you know, but like if something
like a car, you can get Kellyblue book and that'll give you a
(17:49):
pretty accurate representationof what the market is
Dad (17:51):
saying about your vehicle.
So then I go one step further.
I get on like my localclassifieds.
Right.
And I say, what would I, whatcould I really sell it for?
Facebook marketplace.
Yeah,
Ashton (18:01):
exactly.
But then you could also get withsomething like your home or your
property, you can get anevaluator to come check it out.
Dad (18:08):
Correct sort of stuff.
Yep.
So correct.
So, so do you guys know whatyour net worth is?
So asset we covered liabilities.
What are some liabilities?
We covered liabilities, I think.
What's a debt?
What do you owe on?
Ashton (18:20):
So, go ahead.
Loans, credit cards,
Dad (18:23):
owing Gideon 38?
Yeah.
Yeah, we covered that prettygood, I think.
Yeah.
And then, the equal is your networth.
Okay, so let's pause and let'sthink about that real quick.
Does everybody know their networth?
Have you done that exercise?
I don't
Ashton (18:35):
have an exact number off the top, but I know where it's
at.
Dad (18:39):
Yeah, I have generals.
Do we want to pause and do thatexercise or do you think it
matters?
Are you close enough?
I've done it in the past year.
I'm close
Ashton (18:46):
enough.
Yeah.
I, I don't know what otherassets
Gene (18:48):
I'd have that is not put into account by my wonderful
banking
Ashton (18:52):
yet.
You could probably sell a prettygood wig.
Honestly,
Dad (18:58):
I would not count that as something.
Okay.
And 20 bucks.
So, so my question is, is who inhere tracks what their net worth
is?
Regularly?
Ashton (19:07):
No, but like I've done the math.
So
Dad (19:10):
you've done the math.
Yeah, I look at my bank accounta lot.
Okay, that's good.
And do you know what your debtis?
Yes.
Do you mind sharing with thelistener?
Zero.
Okay, just curious.
Do you know what your net worthis?
I do know what it is around andhere's okay.
We'll ask that question later,but thank you I just want to
know if you're financiallyindependent or financially
(19:32):
secure You know, based on that,your number would say yes.
Yes.
Right.
Because I never would say no,right.
You say wanting, because youlooked at your liabilities and
said, I can live for threemonths without having a job.
So I'm, I'm financially secure.
So anyways, so net worth's areally interesting number.
So about two and a half yearsago, mom and I started tracking
(19:52):
our net worth monthly.
I love it.
I used to say budget and I'm,I'm getting away from that.
And I'm going to teach youabout.
A new principle that I learnedfrom a financial guru that I
started following next time inone Oh two and dig a little bit
deeper so we can all build itout on our spreadsheets and
spend some time.
But mom and I would getconfused.
we would argue over thestupidest things, you know, of
(20:16):
what our net worth was.
So now in this sheet we can justlook at it and I say I have 26,
000 worth of toys.
Do we agree?
Yes or no.
And they're, they're in thereand I'm like, yeah, I think so,
but I depreciate it prettyrapidly.
I depreciate it two and a halfpercent a month.
And the reason I do that isbecause this is houses on fire
(20:37):
and I need this money.
I need to pay for food nextweek.
I need to pay my healthinsurance.
I need a, you know, it's a firecell.
So I want to look at it and say.
That bike, I think I could get800 for, I'm probably going to
put it on my asset sheet at 300,you know, just because that
makes me feel comfortable givesyou a little cushion.
Yeah.
So I have a Google docs that Ikeep it in mom and I can both
(20:59):
see it and we keep track of, andthe way I've got it is I've got
cash up top.
I've got what I'd called semiliquid and we'll go into what
that means later.
And then I go into what myinvestments are, like my
longterm investments, what my.
Current real estate is justbecause I think that's a little
bit harder to move.
So I've got that down there asits own line item.
(21:20):
Then I have my debt and I dohave a small debt because we're
paying off our cabin.
And so I know what my net worthis.
And if you told me at your age,Ashton, that I would have my net
worth that I have today, I thinkyou're full of garbage.
I'd be like, there's no way.
I'll be that close to my goal.
When I was 17, sitting acrossthe table, I thought if I had a
million dollars, I would berich.
(21:44):
I thought, man I would not belacking or wanting anything
because it seemed like such afar outlandish number.
That's why this is somethingthat you have to evaluate
always.
Is that clear?
Ashton (21:56):
Clear is rain.
Dad (21:58):
Perfect.
Okay, so now my next questionis, or statement, three in five
Americans don't know what theyspent last month.
That's a high percentage.
Do you guys fall in that?
Do you know what you spent lastmonth?
I do.
The second?
No, I mean, just something youcould pull up.
Yes, right now, but I can pullit up.
Yeah, you could find it.
Yeah.
Gene (22:17):
I could find it, but like if you told me like, Oh yeah,
how much did you spend lastmonth?
Like just in casualconversation, I
Dad (22:22):
could not, but my question would be if somebody said, Jean,
can you, could you tell me whatyou spent last month?
Would you, how would you answerthat question?
I would open up
Gene (22:32):
the banking app previously mentioned and look cause it has
it broken down the month andthen like, Oh, This is how much
Dad (22:37):
I spent.
Okay.
And to me that, that, that's thequestion that's being asked,
right?
Do you know what you spent lastmonth?
Doesn't mean, do I know righthere in the top of my head?
Do I know what I spent lastmonth, but do I, and do I check
it regularly would probably bethe second question.
And a 2023 study found that 51percent of Americans have no
clue how to calculate theirassets to get a true value of
(22:57):
their money.
And nearly a third of thembelieve they have a zero or
negative net worth.
Gene (23:03):
So, is that third the part of the 51 percent that don't
know?
You know, that's just 100percent like
Dad (23:10):
that's two different statements.
Okay.
So that third is, if you had ahundred people in here, 33
percent of them, 33 of them.
Yeah.
Thank you.
Yeah.
Not a percentage.
33 of them would actually saythey have a zero or negative net
worth.
My question to you is, isthere's four of us.
Yeah.
So that means that one of us hasa negative net worth.
Do you have a negative networth?
(23:30):
Yeah.
You're pretty sure of that?
Almost certain.
Well, I mean, yes.
Yeah, I do.
But you don't believe it.
You know it.
Yes.
Okay.
I've
Ashton (23:39):
done the math.
Dad (23:40):
Okay.
So this is good.
This is where we get to our nextstep is the first thing we need
to figure out then if we findourselves in that scenario is
what, what do you think yourfirst step is?
Ashton (23:52):
Well, I think the first step is the classic Gordon
Ramsey,
Dad (23:55):
snowball Dave Ramsey, or yeah.
Oh, did I say Gordon?
Ashton (24:02):
That's funny.
I've, I've actually, I've beenwatching some of his stuff
recently.
He's a killer teacher.
So it's Gordon or Dave
Dad (24:08):
Gordon.
Ashton (24:10):
Dave is cool too.
I've been actually seeing someof his stuff too.
Yeah.
No, Dave Ramsey's debt.
Snowball, I think is probablythe first because like, well,
that's assuming though thatyou've done all the math and you
know the situation you're in.
So then you've got to do themath of how to start moving in a
positive direction.
Which then includes, taking thatequation that you've done and
(24:30):
adding your income versusexpenses over
Dad (24:32):
time.
So that would be, yeah, that's agood point.
I like it.
To say, am I making enough rightover what my expenses are?
Right?
That's that same ease.
It's a different equation, butit's easy, right?
Yeah.
Well, do you remember what Icalled that?
And I called it earlier in adifferent financial episode
income minus your expenses
Ashton (24:52):
equals.
Dad (24:53):
Your ability to save or your ability to grow because net
worth is to Ashton's point overtime.
But if you did your monthly, ifyou knew your monthly number,
okay.
You should be able to say, let'skeep it real simple for the
listener.
I make 1, 500 a month.
My cash outlay, I have to spendevery month is 2, 000.
Am I going to be saving orlosing money?
(25:14):
Losing money by how much?
500.
And if you don't have a safetynet, what happens?
You lose.
You go into debt, right?
Yeah.
I mean, that's the only placeyou can do it.
So what is that snowball effectAshton?
You were talking about snowball.
Well, so so Gordon
Ashton (25:29):
Ramsay's debt snowball.
So you're in debt I'm gonna keepdoing that too.
I know it's gonna you're gonnahave to get like an AI voice and
edit it in just like Dave So mygood friend Dave
Dad (25:41):
Or mr.
Ramsey.
Ashton (25:42):
Yeah, see then everyone will assume the chef.
So funny Don't feel scared soDave Ramsey talks about the debt
snowball, so once you've figuredout what you've got to do once
you've figured out all thismath, when you get to the debt
stuff, the first thing that youdo is you look at all the debts
(26:02):
you owe, you find the one withthe highest interest rate, You
pay off the minimums foreverything and then with your
budget, with any spare room youhave, take what you're willing
to put into the largest amountof money that you owe or the one
with the highest interest rate,excluding something like a house
payment you pay that off first.
(26:24):
And then what happens is thenonce that debt's paid off, you
have the monthly payment thatyou owe plus the extra that
you've been paying with that,you then take those and put
those towards the next one.
And then once that one's paidoff, you put that to the next
one.
And in theory, those all startaccumulating.
So then once you're out of thedebt snowball, you can keep
moving forward then into apositive financial state.
Dad (26:48):
Perfect.
That's a great explanation of,of the debt snowball from Dave
Ramsey.
Yes.
Yep.
And so my question to you,listener.
And maybe it's Ashton.
Have you done that math?
Do you know where all your debtlies?
Where all the bodies are?
Like, do I
Ashton (27:05):
know all of the places that I owe debt to?
Dad (27:08):
Correct.
Yes.
And do you know your interestrate on all of them?
Yes.
Ish.
Yeah.
So what I would ask you to dofor the next episode, and this
is for the listener, not justAshton, right?
Because we know that there's atleast a third in here that will
be in your situation.
Probably more because of wherewe're at.
Right.
You guys are just.
Starting life and school.
(27:28):
It could be a student loan.
It could be a car loan becauseyou started your car.
It could be other, it could becredit card debt.
It could be, let's hope it'snot, let's hope it's a student
loan, you know, just causethey're more forgiving.
It's, it's a little bit lowerinterest rate, but find out
where they're at and have it ona spreadsheet.
So the next time you're, we'redoing this, you can step back
(27:49):
and look at where my money is.
And then the other thing I'dchallenge you as the listener is
to know.
What your monthly expenses now,Ashton, you're in a unique
situation and you're probablynot the only one you're in this
gig economy gig economy.
For those who don't know whatthat means.
It just means you, you
Ashton (28:06):
gig or you, you contract, you find work and you
do all these odd jobs maybe asanother way to think
Dad (28:13):
of it too.
I like that.
And so what does that do to yourincome?
Makes it really freaking weird.
It is weird versus just showingup at a job.
Nine to five job, I know thatI'm going to make 15 an hour
after taxes.
It's going to be like eight 50.
And I know that that's where Ican start planning on all my
money and where it goes and howto divide it up as a gig
(28:34):
economy.
We're going to have to look atthat a little bit different.
So we'll build that into theepisode.
So thank you for, for sharingthat.
And how do we account for that?
Thanks for being so candid withthe listener.
Kate, so then let's say that wecan get our debt figured out.
Then you have this decisionyou're going to have to make.
And this is where I wanted to gowith the next is you build this
emergency fund.
An emergency fund is what, whathave we talked about in the past
(28:56):
about emergency fund besidesnecessary?
Is that the
Gene (29:00):
how much you need to pay for a certain amount of time?
Is that what I was kind ofreferring to before
Dad (29:06):
Yeah.
Gene would call that financialsecurity, right?
Because to you, you've gotsomething that can cover you
through a gap for me as anindependent Contractor and have
been for a lot of times.
My emergency fund looked verydifferent than other people's my
emergency fund I've been out ofwork almost for for a real year
and then I found some other workSo it really isn't like five
months of truly out of work Andthen I've been underemployed for
(29:26):
a while as I'm launching my newbusiness And so that emergency
fund is what's built bridge thisgap so that I haven't had to go
into debt And so that's that'swhat that emergency fund But if
I was a college student, I'dsay, Hey, 500 bucks is for an
emergency.
Well, what kind of emergency?
I blew a tire, got a rock in thewindshield.
Teacher said I needed new books.
(29:47):
The hot girl finally said yes ona date.
That is an emergency.
I know I've had these.
I'm trying to think of more.
Yeah, you've had a lot ofemergencies, right?
Oh, you got to go to the doctorall of a sudden.
Yeah.
Out of nowhere.
You know, you weren't planningon.
You needed to do an extra tripsomewhere that you weren't
planning on.
You know, like even home gas,you know, all the emergency is
truly you build it above andbeyond.
(30:09):
Okay.
Sorry, go ahead.
Just, I think
Ashton (30:11):
this kind of applies to the situation.
cause sometimes the issue, likeone of the things I work at a
school and they pay monthly,which sucks.
But when it comes to runninginto emergencies, you're going
to have that money and there'scompanies and businesses.
That offer, they say, well justtell us how much you're going to
make on your next paycheck.
(30:32):
And you can just get it now.
And when you get it, just, justgive it to us.
So you can live with that money.
Would you advise individuals togo for that sort
Dad (30:42):
of thing?
Absolutely not.
Right.
Because?
They're very predatory innature.
So if you go to somebody likethat and you take out what they
call a payday loan.
They have a lot of fees andtheir interest compounds daily.
And so if they say, Oh, look,but your credit card's at 18%,
but we only charge 15 percent an18 percent compounded monthly is
(31:06):
very different than a 15 percentcompounded daily.
So daily, if it was a hundreddollars, it'd be, you know, a
dollar 50 versus a dollar 80 atthe end of this, this month.
Well, that's 1.
15 or 1.
50 on the first day and thenit's 3.
25 because they get to add thatextra 3 that you owe them.
So before you know it, beforeyou get your paycheck, you're
(31:28):
deeper in debt and then you goto try and pay that off.
And the problem is your paycheckdoesn't cover even sometimes,
let's say they do compound upmonthly and they're very fair
with their interest becausethey've been, they've been
looked at and scrutinized by thefederal government.
The problem is going to be theoriginate the origination fee.
(31:48):
They're going to say, Hey,Ashton, yeah, that's great.
I'll do that for you.
I'll pay that, but it's a 25percent origination fee.
And so all of a sudden you'vedropped your paycheck by 25%.
Right.
So that, that would be the lastplace I'd get money.
The first place I'd get moneywould be, trying to pick up an
extra job.
Right.
A little bit more of a hustle,right?
So you're like, Oh crap, theschool's not going to pay me now
(32:09):
for another month.
I'm going to go drive Uber, I'mgoing to go work at McDonald's
for two weeks, or I'm going to,then the second place I would go
ask family to, Hey, I'm in atough spot.
Here's my paper, can you help meget out of this trouble?
Right?
And then my third would be, youknow, if you didn't have an
asset, I need to think throughthat.
(32:30):
Then I'd maybe use a credit cardand then a fourth might be that
option.
Yeah, but I, but no, absolutelynot.
So.
You're not in that trouble, areyou?
No.
Okay.
You scared me for a second.
No, I was just thinking aboutit.
Your face was a genuinequestion.
I got concerned.
No.
It's a fair question.
I'm glad you asked.
Because it is advertised.
Ashton (32:50):
Well, in like a lot of the businesses, like, like
you'll drive past something likea Wendy's or McDonald's and on
the sign it'll say when you geta job here, like this is
different I guess, but it's likethey do daily pay
Dad (33:03):
now as well.
And I would take daily pay in aheartbeat.
So like, and that's
Ashton (33:08):
just another version of it.
And it made me think aboutbusinesses where it's like you
can get, there, there was awhile there where I was getting
tons of ads for an app that youcould install that was
essentially like, like payingyour money before you got it
sort of stuff.
Dad (33:24):
Oh, that's wild.
Yeah.
You know, and the other onejust, and this is not that, but
if you go to checkout.
Oh, don't worry about paying thefull price.
It's four payments at 25, youknow, and you're like, Oh
really?
And then you read the fineprint.
They're like, well, really thefirst two are 25 and then the
interest kicks in and it's, youknow, they'll, they'll break it
down.
(33:44):
I can't remember what the nameof that company is.
Ashton (33:46):
Those, some of those are honest though.
Like I know there's a, there's amusic audio company.
Called Sweetwater and they knowmusic gear is not cheap and it's
not something you always want topay for So like I've had times
where I've wanted or needed gearto use but it's been I could buy
this all out right now But Idon't have to so I can space it
(34:08):
out and I can subscribe to mypurchase for three months and
it'll be
Dad (34:11):
fine Yeah, and if you pay on time and that's how it's
written.
It's great.
It's just a risk, right?
You need to make sure thatpaychecks gonna come So we've,
we've hammered debt pretty hard.
So emergency fund, what you fundnext.
And then you talked about longterm investment and that's going
to, we're going to talk a lotmore about long term investment
and why you need to start now.
Get in and you should really dosome before you leave.
(34:33):
Gene, you should do it now.
Ashton, as soon as we can rightside that, you should do some.
Go ahead.
This isn't today's
Ashton (34:39):
conversation, right?
Correct.
Are you planning on talkingabout investing apps
Dad (34:43):
like Robin Hood and stuff?
I'm going to talk about RobinHood.
I'm going to talk aboutFidelity.
I'm going to talk about 401ksand IRAs.
Cool.
And why if you had a real a bigjob like Sabrina, I'd say get
into your 401k.
And I shouldn't say a real job,just a government sponsored
401k.
If if that's kind of teacherdoing why you'd want to get into
that.
So we'll talk about investingand that's more like 1 0 3, but
(35:08):
Robin hood will be 1 0 2.
We'll cover that and some of theupsides and downsides and
concerns of that.
Okay.
So let's, but, but let's justtake, so the listener wants to
come back.
Let's look at some investingscenarios just for fun.
So let's say that Gideon, you'regetting ready to go on your
mission, but you're like, Hey, Ihave 2000 bucks.
I can throw into an investment.
(35:29):
Okay.
You're not going to contributeany more of that.
You're sorry.
You're just going to, and thisis nerd wallet.
com.
We'll throw it in thedescription.
Let's say that you're not goingto put any more money into that.
Like, that's all you're going toget that.
That's all you're going to putin.
You're going to re you're goingto grow that until how old are
you now?
17 you're going to retire at 67.
(35:50):
How many years is that anybody?
Okay.
Quick math is 50.
And let's say that that onlygrows at the 8%, which is pretty
average.
How much money do you think that2, 000 gets you?
8 percent a year annually.
Gid (36:08):
Is it compounding?
Ashton (36:10):
Yeah.
Cause interest is based off ofwhat's in the account.
Yeah.
Gid (36:14):
So that's why I was wondering if it was, yeah, I
have no idea, but I'm going toguess like,
Ashton (36:22):
Eight.
Am I
Dad (36:23):
allowed to do math?
Can you tell, can you tell thelistener what that number was?
Gid (36:28):
171, 465.
40
Dad (36:34):
Off a 2, 000 initial investment.
And that's not including if youadd stuff.
Correct.
So let's say that you throw thatin there now.
And, and let's say that youcould only, let's say you could
only come up with 50 a month toinvest.
But you are able to do thatforever.
Let's see if that willrecalculate that.
(36:57):
Do you want to, do you want toguess what 50 a month added to
your 2000, your 2000
Gid (37:02):
on top of the 2000, so 2000 initial, and then, and then you
just 50 a month with an 8percent
Dad (37:09):
annual and you have 50 years to let it grow.
You were at 170 just it's half amillion.
Is it really?
Because 50 a month isn't a lotmore money, it's, it's 600 more
years all.
But it's, but it's compounding.
Yeah.
So it's still, where do you getall your money is right there at
(37:30):
the end.
Right.
That's where the growth.
It's an exponential curve.
I'm sharing this story isgrandma Birch was the first one
to ever tell me, Hey, you shouldlook at investing grandma
McReynolds, Birch, whatever, youknow, her name was when you guys
remember her by, you rememberwho, do you know who I'm talking
about?
Okay.
Hmm.
Hmm.
We were sitting around talkingone time and she goes, Roscoe, I
(37:50):
had no clue what an IRA would dofor me.
Michelle and I just got married.
We're just sitting there and Igo, what do you mean, grandma?
She goes, even if you have likea hundred dollars, just put it
in there.
You'll never miss it.
I'm like, grandma, how can yousay that?
I'm a broke college student.
I've, I felt a lot like Ashtonprobably does right now where
I'm going, look, I didn't knowwhere up is.
(38:11):
I waited a little bit.
I started my job with Ford at 26at 26 and then I got there and
they had a 401k and I was hergrandma's voice in the back of
my mind.
Hey, put some money in there.
So I thought 10%, I can livewithout 10 percent and I put it
in there and I let it grow overtime.
And that little 26, 000investment that I was with them
has grown substantially.
(38:31):
Now I need another 20 years.
For it to really make to hitthat tell right it's still in
this the shallow part And itneeds to grow because I just
left it alone.
I didn't know what to do with itSo that's why we're going to
talk about investing, but that'swhy I wanted to say we want to
start early Okay, so the realityof it the reality of it is most
(38:52):
Americans aren't willing to lookat their finances why because
it's It's scary.
It's a little bit It's a littlebit awkward to sit around and
talk about finances.
I think it's also
Gid (39:05):
overwhelming.
Dad (39:07):
Like you said Gideon, it's a little overwhelming.
In 2023 CBS News did a thingthat says some generations of
American began saving much laterin their careers.
They, for instance, babyboomers, the generation that's
retiring now, my dad, you know,in that group, they started
saving.
At 35 while generation x beganto start saving at 30 The hope
(39:33):
is that more millennials willstart saving at age 25 Gen z
it's time in your 20s to startsaving and investing for the
future And what i've done wrongAs a dad and i'm just going to
tell the listener i'm going totell everybody I've talked way,
way, way too much about savings.
I've had a cash sitting in mysafe for probably 20 years that
(39:59):
if I would have thrown somewherewould have made me a lot of
money, but I felt safe.
I felt secure.
Sometimes it's okay to feelinsecure and have investments.
And we'll talk about some ofthose options, but I challenge
the listener to look at, take ahard look right now at the areas
that we just covered.
(40:20):
Look at what.
Your financial independent lookslike figure out where you're
currently at.
Do the numbers, do the math,figure out how to get out of
debt.
And we're going to talk a littlebit about whether you go into
debt or whether you, or youworry about your emergency fund.
Cause I promise no matter howmuch avocado toast you cut out,
(40:41):
I don't care how many monstersyou don't drink.
You're not going to befinancially independent without
investing for the future.
And there's a way to get there.
Gid (40:51):
Thanks, dad.
And for the listener, if youever have any questions or want
to talk DMS on any of the socialmedias, or email us adult and
encrypted at gmail.
com, you can find all those onour website or just look us up
adult and encrypted.
We are always happy to talk andwant to hear your stories.
And if you need any help, we arehere for you.
Dad (41:11):
So thank you, Ashton financial payday loans.
Great question.
Thanks.
That was fantastic.
What do you guys think is a 101?
Did that seem like it was basicenough, but you had enough
detail?
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