August 18, 2025 • 32 mins
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Money moves beyond theory into action in this deep dive on strategic saving for retirement. Financial strategist John Ezell returns to break down how everyday decisions transform into lasting wealth—no matter your current income or debt situation.
"Savings isn't just about large amounts. It's more important to be consistent," Ezell emphasizes, challenging the common excuses that keep us financially vulnerable. Whether you think you don't make enough or you're waiting for the perfect moment, this episode dismantles those barriers with practical alternatives. Even modest amounts—just $25 weekly—can build significant security with the right approach and time.
The conversation tackles the elephant in many financial rooms: debt. Starting with a basic emergency fund of $500-1,000, then strategically eliminating high-interest obligations creates breathing room for genuine wealth building. As Killfoil shares from personal experience, eliminating $75,000 in debt over two years transformed both his financial picture and peace of mind. Ezell frames debt reduction as an investment, noting that eliminating a credit card charging 25% interest effectively yields that same return through avoided costs.
We explore specific vehicles for growing wealth, from money market accounts and certificates of deposit to IRAs, 401(k)s, and various market investments. Ezell clarifies the differences between traditional and Roth IRAs, explains how employer matching provides "free money," and demystifies stock exchanges and index funds. The guidance is tailored to different life stages—with younger investors encouraged to adopt an appropriate level of risk, while those nearing retirement focus on preservation.
Most valuably, the episode concludes with a step-by-step action plan listeners can implement immediately: track expenses for three months, build an emergency fund, work toward six months of reserves, eliminate high-interest debt, and begin retirement contributions. Ezell reframes the entire conversation by positioning savings as "the most powerful form of self-care"—a practice that builds not just financial security but expanded life choices and opportunities.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Steven Killfoil (00:28):
Crossroads Podcast welcomes you to Money
Moves For those who want to bein the know.
(00:53):
Good morning Crossroads.
Welcome back to Money Movers,where we talk about taking
control of your finances onesmart step at a time.
I'm your host, stephen Kilfoyle, and today we're diving into
(01:16):
part two of our financialwellness series, smart Steps
Toward Retirement.
And this week we're going tofocus on savings the smart way.
If you caught our last episode,we laid the foundation on why
savings matters, but today we'retaking it a little further into
(01:37):
smart saving strategies,tackling debt and understanding
where your money can grow.
In Matthew 25, 14 through 30,jesus told a parable about the
master who gave differentamounts of money talents to his
servants before going on ajourney.
Upon his return, he assesseshow they used the money or
(02:01):
talents.
The servant who invested anddoubled their talents are
praised and rewarded.
The servant who hid his talentout of fear is condemned.
The parable highlights theimportance of using one's gifts
and opportunities for God'spurposes rather than neglecting
(02:22):
them out of fear or laziness.
Well, joining me today is backon the show financial strategist
and educator John Ezell.
John, great to have you back.
John Ezell (02:35):
Thanks, Stephen.
This is exciting to be here anddig deeper into the practical
side of savings and growingwealth.
Let's empower some listenerstoday.
What do you say?
Steven Killfoil (02:46):
Yes, indeed, let's start at the top.
Some people say and everybody'sgot excuses.
There's a little Africanproverb Excuses are like armpits
Everybody has a couple and theyboth stink.
I love that.
But some people say, well, Idon't make enough to save.
Others say, well, I'll juststart later.
(03:08):
You know the procrastinationstation, yes, and then what do
you say to this?
John Ezell (03:15):
Well, that mindset is common, first of all, but
it's also dangerous.
Savings isn't just about largeamounts.
It's more important to beconsistent.
Even a small amount let's justsay $25 a week can add up with
the right tools and time.
(03:36):
Think of savings as freedom andflexibility.
It's your buffer, it's youremergency parachute, it's really
your opportunity fund.
Steven Killfoil (03:47):
Exactly, and savings isn't punishment, it's
future preparation.
That's right, yeah, well, nowlet's talk about the elephant in
the room debt Credit cards,student loans, personal loans,
mortgages.
How do we save when debt ishanging over us?
John Ezell (04:09):
That's a great question, Steve.
Here's a rule of thumb.
It's always a good idea to havea reserve, so we like to call
that an emergency fund.
Start with $500 to $1,000.
Now you might say to yourselfwell, I don't have $500 or
$1,000.
Guess what?
Have a garage sale.
You'll make $500 to $1,000.
Now add to whatever you haveand you'll have your emergency
(04:34):
fund.
Most of us have things thatwe're not really attached to
that might be of interest toother people, so that would be a
way to accomplish that might beof interest to other people, so
that would be a way toaccomplish that.
The next thing would be totackle high interest debt, and I
would do that in aggressiveformat.
And here's why If the interestrate that you are paying on a
(05:02):
debt is 18%, 20%, 25% or 30%,you are really investing in
yourself at that rate of returnby paying it off because of the
savings involved.
So that's one other point.
And then, once that's undercontrol, scale up your savings.
You'll have more disposableincome because you'll have less
debt.
(05:22):
Debt is going to drain yourfuture earnings, and paying it
down is a form of savings, as Imentioned, and you're avoiding
the interest and reclaimingfuture income.
Steven Killfoil (05:36):
Yeah, Dave Ramsey has an amazing way to
tackle that nasty credit carddebt that has so many households
trapped with what appears as noway out.
He calls it snowballing, and Ispeak from experience.
It really works.
Mady and I managed to knock outover $75,000 in debt within the
(05:59):
span of two years, so debtreduction is a financial move.
It's just not as flashy asinvesting.
But getting rid of debt is ahuge relief because when you
begin to see the light at theend of the tunnel, everything
gets clearer.
John Ezell (06:18):
And, if I could add, Steve, you know effectively you
are investing.
You're investing in your future, as we've referenced before.
So it's not that you aren'tbeing proactive, but I have to
tell you, getting rid of thedebt gives you a lot more peace
of mind and emotional securityand it really helps make things
(06:39):
work.
Steven Killfoil (06:40):
Yeah and you breathe better.
John Ezell (06:43):
That's right yeah.
Steven Killfoil (06:45):
Well, let's move into the tools.
So what are some smart savingvehicles people can start using
today?
Bank savings accounts are okay,but not the best for building
capital.
Would you share with ourlisteners out there some tools
that you use?
John Ezell (07:05):
Sure.
I'm going to hit four pointsprobably.
Let's talk about banks.
We'll talk about traditionalIRAs, Roth IRAs and a 401k, or,
if you're an administrator inthe education system, a 403b,
and so, for example, if we startwith banks, they're going to
(07:26):
have a variety of accounts.
When you go to see them,obviously, you can have the
checking account, you can havethe savings account, but they
also have accounts that arecalled money market accounts or
high yield savings accounts.
They pay more than a savingsaccount by itself and it's great
(07:46):
for emergency funds and I'mgoing to examine that just a
little bit different here, or alittle different more in a
second but the best interestthat you might get on a
traditional bank account.
I'll give you an example.
If you were to go into the bankand set up what's called a
money market account, that'sdeemed in the banking world to
(08:09):
be what's called demand deposit,that means, upon demand, you
can have your deposit back.
No waiting period, no risk toyour principal.
In the case of another option,most people have heard of
certificates of deposit Somepeople like to call them
(08:30):
certificates of depreciation,but CDs for short and those are
time deposits.
The primary difference here isthat you are signing up and
agreeing to not needing themoney, whether it's for 30 days,
60 days, 90 days, 180 days, ayear, two, three, four or five.
I wouldn't advocate tying yourmoney up for a long period of
(08:53):
time.
At the beginning, the mostimportant thing is to build from
that base of emergency fund andthen begin to set money aside,
accumulate it, and often themoney market account is the best
way to go.
The only other advantage Iwould say there is to the time
deposit.
You do earn a little moreinterest and if your discipline
(09:15):
factor is low, what's great isyou're less likely to to go
after that money because youknow that you would have to
forego some of the interest ifyou were to take it out early.
So I like that for planning Ona traditional IRA.
First of all, those funds earnin a tax-deferred way.
(09:38):
That's all to say that youdon't pay taxes in the year that
the interest is made.
However, you will pay taxesupon withdrawal of funds from a
traditional retirement account.
Then there's a Roth IRA.
Now, everybody loves the ideaof a Roth because, if they
understand how it works, thoseearnings are tax-free.
(10:02):
However, they are funded withafter-tax dollars.
Therefore, that's why they'retax-free.
However, they are funded withafter-tax dollars.
Therefore, that's why they'retax-free.
I think this is one of thegreatest things that ever came
along, because you can startsocking money away in there and,
over time, just know thatwhatever it grows to, whether
it's a few hundred thousand,whether it's a hundred thousand,
(10:22):
a few hundred thousand, amillion, it's all tax-free at a
later date.
Steven Killfoil (10:28):
Thank goodness for Senator Roth.
John Ezell (10:30):
That's right and so that's under the current law.
Take advantage of it while youcan.
If you work for a company thathas a 401k or you're part of a
program where you can contributeto a 403b, which includes
nonprofit organizations, such asif you're an employee of a
church or what have you, thoseare often available, but these
(10:53):
are employer-sponsored and somein the case of the 401ks,
they're going to have a match.
You should always takeadvantage of that.
For example, if you're allowedto defer 4% of your paycheck
into a 401k, most companies havea match up to 4%.
(11:21):
So imagine you put in 4% andthey match 4%.
Steve, that's 100% return.
That's free money.
That's free money.
Now you have to vest over time,but that's another thing.
The point is the account buildsand you've got something
working for you.
From a timing standpoint, startearly, you'll never be
(11:42):
disappointed.
Steven Killfoil (11:44):
Definitely.
And what about investingdirectly, say, into the NASDAQ?
John Ezell (11:49):
Okay, well, let's talk about that.
So you mentioned NASDAQ.
Besides NASDAQ, just to giveyour listeners a full
perspective, there is anexchange called the New York
Stock Exchange.
Most people have heard aboutthat.
There is the NASDAQ, as youmentioned.
(12:10):
There's the American StockExchange, and all of these
exchanges emphasize differentcompanies with their listing.
Sometimes it's based oncapitalization listing,
sometimes it's based oncapitalization, sometimes it's
more emphasized from a sectorstandpoint, which I'll give you
(12:31):
an example in a minute.
And in the case of the AmericanStock Exchange, maybe those are
smaller companies because thereare capital requirements to
trade with these.
Then, of course, there's thecrypto market.
That's another form of anexchange where you can buy or
sell crypto.
I should say, Steve, by the way,we want to remind the listeners
(12:52):
, none of these indexes are wemaking a recommendation on.
This is strictly educational,and the reason being that to be
in a position where someone wereto advise you, they need to
know a little bit more about you.
Now, the last one is somethingwe're going to have here in
(13:12):
Texas, which I think isfascinating.
I mentioned New York StockExchange, NASDAQ, American Stock
Exchange.
Did you know we're going tohave the Texas Stock Exchange?
Steven Killfoil (13:30):
Yeah, go Texas.
John Ezell (13:34):
In fact they already have an office for operations
down there off of 75 in theKnox-Henderson area, just behind
the Apple Store.
So if you go to the Apple Storeit's not as if you're going to
get to go in the corporateoffice and look around, but I
mean, they're serious about thisand it's coming.
Steven Killfoil (13:52):
I wonder if they're going to put a longhorn
out in front instead of a bull.
John Ezell (13:56):
You know that's a great question Because I went to
Texas A&M.
I'll see what we can do aboutthat.
Steven Killfoil (14:01):
There you go.
John Ezell (14:03):
All right.
So, once you've got yoursavings in place, investing is
how you grow wealth.
So, as we mentioned, there'sthese different exchanges.
Now they aren't limited to thiscapitalization thought process,
(14:32):
because there are plenty ofcompanies on the NASDAQ, for
example, Apple, Amazon, Alphabet, Meta, which was the old
Facebook all of those are verylarge companies, yet they're on
the NASDAQ.
So the capitalization thing isnot what it used to be Used to
be.
The NASDAQ had riskiercompanies, but I got to tell you
they're all risky and thereason is because you have an
auction market taking place.
(14:53):
These prices day to day arebased on what people are willing
to pay and, as a result, if thefuture looks bright to coin a
phrase of Patrick David thenpeople are optimistic and they
will pay more In your ownhousehold.
(15:13):
If you're worried aboutcontinuing to have your job, you
might be less optimistic andtry to cut back on your spending
, just in case you were beingdisplaced.
So I only bring that up becausethe idea behind people saying,
(15:34):
hey, I just want some good, safe, conservative companies Well,
you know, that's important.
The problem is, I wouldn't wantyou to have a false sense of
security about what safety is.
They can all go up, they canall go down.
Some of them stay in businessfor a long time and some of them
go out of business.
(15:55):
But if we break it down to safeand secure investing, let's talk
about bonds, cds, and thenwe'll talk just a second about
the concept of index funds.
So bonds, actual bonds and I'mgoing to use the treasury market
as an example they have threecategories.
They have something calledtreasury bills, treasury notes,
(16:19):
treasury bonds.
If you're watching any of thefinancial programs, when they
talk about bonds they're sayingtreasuries.
In other words, they're usuallyreferencing US government
direct obligation debt.
Here's how they differ A T-bill, a T-note, t-bond they're all
(16:40):
the same in principle.
The difference is the timecommitment.
So T-bills, treasury bills,have a maturity of one year or
less.
Treasury notes have a maturityof a year to 10 years.
Treasury bonds are 11 to 30years.
(17:01):
So those are three categories.
The one thing about bonds is,if they are held to maturity,
then, unless the US governmentgoes out of business, you'll get
your money back.
However, there are some formsof investments that contain
bonds, but if they're alwaystrading the bonds, it does not
(17:21):
work, as I just said, becausethey're trying to trade their
way to a higher yield and that'sa difficult thing.
Cds we talked about that.
Certificates of deposit that'sa secure way to invest.
Sometimes people like to thinkabout index funds having low
volatility and in theory that'strue.
Just imagine an index fund.
(17:43):
It's not the same as the DowJones Industrial Average, for
example, because we think ofaverage but we don't understand
that it's a weighted average.
So if you had 30 companies, theperception of the marketplace
individuals is that they'reprobably all weighted evenly.
(18:07):
That's not really how it works.
If Coca-Cola is part of the DowJones Industrial Average
because of its capitalization,every point it goes up is
dramatically different than amuch smaller company.
So it's a weighted average.
In the case of index, theconcept for index funds, what
(18:31):
you have there and the reason Isay low volatility in theory, is
because people associate oftenthe same thought process index
average, volatility, things likethat with returns, but not
necessarily true.
So if you take one of the mostwell-known indexes out there,
(18:51):
which is the S&P 500 index andthat stands for Standard Poor's
500.
Now, again, not givinginvestment advice, but just to
tell you the mechanics of howit's constructed.
There are 500 companies as partof that index.
That makes sense.
That's why they call it the S&P500.
(19:12):
Most people don't know that thetop 25 companies in terms of
capitalization often have moreimpact on moving that average
than the other 475.
It doesn't mean it's good.
It doesn't mean it's good, itdoesn't mean it's bad, but it
does mean you should understandhow these things are constructed
(19:34):
.
So, again, not advocating anyof these over the other, but I
want you to know that.
The other thing I would say isthat, in the world of stocks or
crypto, you have to understandthat, as I mentioned before,
these are auction markets interms of pricing.
(19:54):
So it's really based on whatthe market will bear and that
can change rather quickly basedon an optimistic or a
pessimistic economic scenario ora pessimistic economic scenario
.
So, as a rule of thumb, ifyou're young and you've got some
time, consider taking morerisks than you would if you were
(20:19):
much older, and what riskactually looks like, that's
another conversation for anothertime, and best done in front of
your financial professional,who can help you understand the
nature of the risk that you'retaking, because there are
various types.
The other thing I would say isthat, if you're nearing
(20:40):
retirement, consider stickingwith safer investment vehicles.
There's something called thesequence of returns, which we
won't get into today, but justin a nutshell, you have to
understand that, as long as thefinancial markets are doing well
, if something were to happen,you could go in and pull money
out, no issue.
But what if the financialmarkets are not doing well and
(21:03):
you have an emergency beyondyour emergency fund and you
haven't finished paying downyour debt?
Well, you don't want to betaking money out with the
financial markets down becauseall you've done there is lock in
a loss from an accountingstandpoint.
What I often encourage peopleto do is consider making part of
(21:28):
that portfolio as they getolder volatility buffers, which
we won't go in today because ofthe specificity of that.
But in other words, just likeit sounds, you're trying to
buffer the volatility associatedwith an equity portfolio.
Steven Killfoil (21:49):
Yeah.
So it's not about avoiding risk, it's about knowing your risk
tolerance and time horizon.
So can you give our listeners asimple strategy, something they
can implement, like, say, thisweek
John Ezell (22:03):
Sure, that's a great place to start.
So the first thing I would tellyou, from a fiscal
responsibility standpoint, juststart tracking your expenses Now
most people feel like they havefor the next 30 days.
Take them out, add them up,identify what they were spent on
(22:38):
.
I promise you you're going tobe surprised.
That's the first thing, so youwant to know where your money is
going.
The second thing is get thatemergency fund up to at least
$1,000.
And you can do that byperiodically making deposits
into your local account at thebank.
(22:59):
Again, money market accountsmight be best for that, although
they're not limited to optionsthat are available.
The next thing I would say isyou need to build at least.
So once you mastered those two,then build at least, and I
should go back on the track inyour expenses.
Steve, I didn't say this.
Most people will do it one timeand think they've got it
(23:21):
figured out.
The problem is there's aseasonality to our spending
often.
That's why it's a good thing todo it at least three months.
For example, if you get paidevery two weeks instead of twice
a month, you actually have fouradditional paychecks per year
outside of the two each month.
(23:43):
In other words, there's a lagthere in time, and so what I'm
saying about that is that you'regoing to have more income.
You may have more expenses.
Your homeowner's insuranceisn't necessarily due every
month.
It might be due once a quarter,every six months, or you might
be paying it on your own once ayear, not through an escrow
(24:04):
account.
So that's another example.
But start with the tracking, theexpenses.
Do it for three months, buildthe emergency fund.
Then your goal is to take theamount of money that you
normally would have in the formof income.
Multiply it out I'm talkingabout net income.
Multiply it out times six.
(24:26):
Why?
Because you wanna work to whereyou have in the neighborhood of
at least six months of reserveequivalent to your income.
It's not as prevalent right nowin the economy, but every once
in a while people get thrown acurve, they get displaced.
Every once in a while peopleget thrown a curve, they get
(24:46):
displaced.
Maybe they got injured,whatever, maybe they were sick,
they weren't protected undertheir employer plan.
You've got to have a reserve,and six months is a great place
to really give yourselfemotional security, and not just
for yourself but for yourfamily.
If you're married one spouse orthe other that's going to be
(25:10):
more important too.
I promise you it's going to beimportant to your kids as well.
All right, then start payingdown the debt.
Often, people will want to paydown the highest interest rate
first and, as I said, if you'vegot debt at 30% and for some of
you you might be cringingthinking who would pay 30% more
(25:30):
Well, look and see what you arepaying.
That's step one.
You can tackle it from one oftwo ways Either pay the highest
interest rate interest first oryou can take the lowest debt and
accelerate that and once you'redone with that, take at least
half of what you were paying onthat debt and apply it to the
(25:53):
next one.
That's the snowballing effect,and that is one of the
principles that I think DaveRamsey does do a good job with.
The next thing I would sayconsider opening up a Roth IRA
or to contribute to the 401kthrough your employer, if you're
(26:14):
available excuse me, if it'savailable to you.
And the next thing is, youmight consider putting a small
amount in a low or no costgrouping in the market.
It could be in mutual funds ingeneral, whether they're open
mutual funds, closed mutualfunds or exchange-traded funds.
(26:39):
So there's so many options outthere.
We wouldn't have time by thisevening to finish up explaining
what those are.
Just know they exist and again,connect with your investment
professional, because they'regoing to give you an accurate
representation of what is what.
Steven Killfoil (26:57):
Okay, yeah, it's not rocket science, it's
commitment Automate your savings, set clear goals and check in
monthly.
John Ezell (27:06):
That's right.
Steven Killfoil (27:07):
All right, John .
Before we go, any finalthoughts.
John Ezell (27:11):
Absolutely.
It occurred to me recently thatthis idea of saving is really
the most powerful form ofself-care.
Now that terminology self-careisn't normally attached to
financial markets or savings,but in fact, if you value your
(27:33):
psychological welfare, if youevaluate and consider your
emotional well-being important,then by getting these things in
place, it is a self-care program.
The difference is you're payingyourself, you're investing in
yourself by getting rid of thisdebt.
(27:55):
So don't wait for perfectconditions, because that may
never happen.
Start now, build somesuccessful habits, because I can
tell you that consistency isthe key to all success, and if
you're not just saving money,you're building life in the form
of choices that are availableto you.
(28:16):
So I think that makes sense.
Steven Killfoil (28:19):
Wonderfully said and this episode.
If it's helped you rethink yoursavings plan, make sure to
share it with a friend or familymember and remember every smart
money move starts with a singlestep.
So thanks again, John, forjoining us and thank you out
(28:41):
there for listening.
John Ezell (28:42):
It's my pleasure.
Thank you, Steve.
Steven Killfoil (28:44):
Awesome.
Well, a few news andannouncement things.
The Town Council meeting willbe meeting tonight at 6 pm, and
let's not forget that every digcounts.
Gus the Gopher reminds you tocall 8-1-1.
Whether it's a fence to plant atree or anything else that
requires digging, you must call8-1-1 and have the underground
(29:08):
utilities owned lines markedAlso coming up soon.
At the end of the month, onAugust 30th, we have Chrome Fest
.
Mady and I are going to cruiseup there on Saturday morning.
We'll be there bright and earlyat eight when it starts, so we
hope to see you there for that,definitely.
So again, thanks again forjoining us, John, and if anybody
(29:31):
wants to get a hold of you, howcan they do that?
John Ezell (29:35):
The best way would be one of two, or the two best
ways, I should say.
So you could call 214-929-0961,or you're welcome to email me
at john, that's J-O-H-N, so johnwith an H.
@ cprwm.
(29:55):
com.
That's C for Charlie, P forPapa, R for Romeo, W for Whiskey
, M for Mike.
com.
Steven Killfoil (30:09):
Excellent.
So thank you, listeners outthere who emailed in your
questions, and if you have anymore, reach out to us at
crossroadspodcast2023@ gmailcom.
On the website it'scrossroadspodcastbuzzsprout.
com, click any episode and youcan link for questions or
(30:34):
comments.
Send us a text message or youcan become a sponsor by clicking
on the link support of the show.
And don't forget to go toAmazon and get that wonderful
book by Stefan McDermott,"Achieve Optimal Brain Health
with Nutrition.
That's Achieve Optimal BrainHealth with Nutrition by Stefan
(30:54):
McDermott.
You can get that on AmazonUntil next time.
This is Stephen Kilfoyle andyou've been tuned in to Money
Moves.
Stay tuned in next week formore amazing guests.
I'll see you at the top.
(Music) Money moves.
(31:33):
For those who want to be in theknow.
Who's your daddy?
Crossroads Podcast welcomes you to Money
Moves For those who want to bein the know.
(00:53):
Good morning Crossroads.
Welcome back to Money Movers,where we talk about taking
control of your finances onesmart step at a time.
I'm your host, stephen Kilfoyle, and today we're diving into
(01:16):
part two of our financialwellness series, smart Steps
Toward Retirement.
And this week we're going tofocus on savings the smart way.
If you caught our last episode,we laid the foundation on why
savings matters, but today we'retaking it a little further into
(01:37):
smart saving strategies,tackling debt and understanding
where your money can grow.
In Matthew 25, 14 through 30,jesus told a parable about the
master who gave differentamounts of money talents to his
servants before going on ajourney.
Upon his return, he assesseshow they used the money or
(02:01):
talents.
The servant who invested anddoubled their talents are
praised and rewarded.
The servant who hid his talentout of fear is condemned.
The parable highlights theimportance of using one's gifts
and opportunities for God'spurposes rather than neglecting
(02:22):
them out of fear or laziness.
Well, joining me today is backon the show financial strategist
and educator John Ezell.
John, great to have you back.
John Ezell (02:35):
Thanks, Stephen.
This is exciting to be here anddig deeper into the practical
side of savings and growingwealth.
Let's empower some listenerstoday.
What do you say?
Steven Killfoil (02:46):
Yes, indeed, let's start at the top.
Some people say and everybody'sgot excuses.
There's a little Africanproverb Excuses are like armpits
Everybody has a couple and theyboth stink.
I love that.
But some people say, well, Idon't make enough to save.
Others say, well, I'll juststart later.
(03:08):
You know the procrastinationstation, yes, and then what do
you say to this?
John Ezell (03:15):
Well, that mindset is common, first of all, but
it's also dangerous.
Savings isn't just about largeamounts.
It's more important to beconsistent.
Even a small amount let's justsay $25 a week can add up with
the right tools and time.
(03:36):
Think of savings as freedom andflexibility.
It's your buffer, it's youremergency parachute, it's really
your opportunity fund.
Steven Killfoil (03:47):
Exactly, and savings isn't punishment, it's
future preparation.
That's right, yeah, well, nowlet's talk about the elephant in
the room debt Credit cards,student loans, personal loans,
mortgages.
How do we save when debt ishanging over us?
John Ezell (04:09):
That's a great question, Steve.
Here's a rule of thumb.
It's always a good idea to havea reserve, so we like to call
that an emergency fund.
Start with $500 to $1,000.
Now you might say to yourselfwell, I don't have $500 or
$1,000.
Guess what?
Have a garage sale.
You'll make $500 to $1,000.
Now add to whatever you haveand you'll have your emergency
(04:34):
fund.
Most of us have things thatwe're not really attached to
that might be of interest toother people, so that would be a
way to accomplish that might beof interest to other people, so
that would be a way toaccomplish that.
The next thing would be totackle high interest debt, and I
would do that in aggressiveformat.
And here's why If the interestrate that you are paying on a
(05:02):
debt is 18%, 20%, 25% or 30%,you are really investing in
yourself at that rate of returnby paying it off because of the
savings involved.
So that's one other point.
And then, once that's undercontrol, scale up your savings.
You'll have more disposableincome because you'll have less
debt.
(05:22):
Debt is going to drain yourfuture earnings, and paying it
down is a form of savings, as Imentioned, and you're avoiding
the interest and reclaimingfuture income.
Steven Killfoil (05:36):
Yeah, Dave Ramsey has an amazing way to
tackle that nasty credit carddebt that has so many households
trapped with what appears as noway out.
He calls it snowballing, and Ispeak from experience.
It really works.
Mady and I managed to knock outover $75,000 in debt within the
(05:59):
span of two years, so debtreduction is a financial move.
It's just not as flashy asinvesting.
But getting rid of debt is ahuge relief because when you
begin to see the light at theend of the tunnel, everything
gets clearer.
John Ezell (06:18):
And, if I could add, Steve, you know effectively you
are investing.
You're investing in your future, as we've referenced before.
So it's not that you aren'tbeing proactive, but I have to
tell you, getting rid of thedebt gives you a lot more peace
of mind and emotional securityand it really helps make things
(06:39):
work.
Steven Killfoil (06:40):
Yeah and you breathe better.
John Ezell (06:43):
That's right yeah.
Steven Killfoil (06:45):
Well, let's move into the tools.
So what are some smart savingvehicles people can start using
today?
Bank savings accounts are okay,but not the best for building
capital.
Would you share with ourlisteners out there some tools
that you use?
John Ezell (07:05):
Sure.
I'm going to hit four pointsprobably.
Let's talk about banks.
We'll talk about traditionalIRAs, Roth IRAs and a 401k, or,
if you're an administrator inthe education system, a 403b,
and so, for example, if we startwith banks, they're going to
(07:26):
have a variety of accounts.
When you go to see them,obviously, you can have the
checking account, you can havethe savings account, but they
also have accounts that arecalled money market accounts or
high yield savings accounts.
They pay more than a savingsaccount by itself and it's great
(07:46):
for emergency funds and I'mgoing to examine that just a
little bit different here, or alittle different more in a
second but the best interestthat you might get on a
traditional bank account.
I'll give you an example.
If you were to go into the bankand set up what's called a
money market account, that'sdeemed in the banking world to
(08:09):
be what's called demand deposit,that means, upon demand, you
can have your deposit back.
No waiting period, no risk toyour principal.
In the case of another option,most people have heard of
certificates of deposit Somepeople like to call them
(08:30):
certificates of depreciation,but CDs for short and those are
time deposits.
The primary difference here isthat you are signing up and
agreeing to not needing themoney, whether it's for 30 days,
60 days, 90 days, 180 days, ayear, two, three, four or five.
I wouldn't advocate tying yourmoney up for a long period of
(08:53):
time.
At the beginning, the mostimportant thing is to build from
that base of emergency fund andthen begin to set money aside,
accumulate it, and often themoney market account is the best
way to go.
The only other advantage Iwould say there is to the time
deposit.
You do earn a little moreinterest and if your discipline
(09:15):
factor is low, what's great isyou're less likely to to go
after that money because youknow that you would have to
forego some of the interest ifyou were to take it out early.
So I like that for planning Ona traditional IRA.
First of all, those funds earnin a tax-deferred way.
(09:38):
That's all to say that youdon't pay taxes in the year that
the interest is made.
However, you will pay taxesupon withdrawal of funds from a
traditional retirement account.
Then there's a Roth IRA.
Now, everybody loves the ideaof a Roth because, if they
understand how it works, thoseearnings are tax-free.
(10:02):
However, they are funded withafter-tax dollars.
Therefore, that's why they'retax-free.
However, they are funded withafter-tax dollars.
Therefore, that's why they'retax-free.
I think this is one of thegreatest things that ever came
along, because you can startsocking money away in there and,
over time, just know thatwhatever it grows to, whether
it's a few hundred thousand,whether it's a hundred thousand,
(10:22):
a few hundred thousand, amillion, it's all tax-free at a
later date.
Steven Killfoil (10:28):
Thank goodness for Senator Roth.
John Ezell (10:30):
That's right and so that's under the current law.
Take advantage of it while youcan.
If you work for a company thathas a 401k or you're part of a
program where you can contributeto a 403b, which includes
nonprofit organizations, such asif you're an employee of a
church or what have you, thoseare often available, but these
(10:53):
are employer-sponsored and somein the case of the 401ks,
they're going to have a match.
You should always takeadvantage of that.
For example, if you're allowedto defer 4% of your paycheck
into a 401k, most companies havea match up to 4%.
(11:21):
So imagine you put in 4% andthey match 4%.
Steve, that's 100% return.
That's free money.
That's free money.
Now you have to vest over time,but that's another thing.
The point is the account buildsand you've got something
working for you.
From a timing standpoint, startearly, you'll never be
(11:42):
disappointed.
Steven Killfoil (11:44):
Definitely.
And what about investingdirectly, say, into the NASDAQ?
John Ezell (11:49):
Okay, well, let's talk about that.
So you mentioned NASDAQ.
Besides NASDAQ, just to giveyour listeners a full
perspective, there is anexchange called the New York
Stock Exchange.
Most people have heard aboutthat.
There is the NASDAQ, as youmentioned.
(12:10):
There's the American StockExchange, and all of these
exchanges emphasize differentcompanies with their listing.
Sometimes it's based oncapitalization listing,
sometimes it's based oncapitalization, sometimes it's
more emphasized from a sectorstandpoint, which I'll give you
(12:31):
an example in a minute.
And in the case of the AmericanStock Exchange, maybe those are
smaller companies because thereare capital requirements to
trade with these.
Then, of course, there's thecrypto market.
That's another form of anexchange where you can buy or
sell crypto.
I should say, Steve, by the way,we want to remind the listeners
(12:52):
, none of these indexes are wemaking a recommendation on.
This is strictly educational,and the reason being that to be
in a position where someone wereto advise you, they need to
know a little bit more about you.
Now, the last one is somethingwe're going to have here in
(13:12):
Texas, which I think isfascinating.
I mentioned New York StockExchange, NASDAQ, American Stock
Exchange.
Did you know we're going tohave the Texas Stock Exchange?
Steven Killfoil (13:30):
Yeah, go Texas.
John Ezell (13:34):
In fact they already have an office for operations
down there off of 75 in theKnox-Henderson area, just behind
the Apple Store.
So if you go to the Apple Storeit's not as if you're going to
get to go in the corporateoffice and look around, but I
mean, they're serious about thisand it's coming.
Steven Killfoil (13:52):
I wonder if they're going to put a longhorn
out in front instead of a bull.
John Ezell (13:56):
You know that's a great question Because I went to
Texas A&M.
I'll see what we can do aboutthat.
Steven Killfoil (14:01):
There you go.
John Ezell (14:03):
All right.
So, once you've got yoursavings in place, investing is
how you grow wealth.
So, as we mentioned, there'sthese different exchanges.
Now they aren't limited to thiscapitalization thought process,
(14:32):
because there are plenty ofcompanies on the NASDAQ, for
example, Apple, Amazon, Alphabet, Meta, which was the old
Facebook all of those are verylarge companies, yet they're on
the NASDAQ.
So the capitalization thing isnot what it used to be Used to
be.
The NASDAQ had riskiercompanies, but I got to tell you
they're all risky and thereason is because you have an
auction market taking place.
(14:53):
These prices day to day arebased on what people are willing
to pay and, as a result, if thefuture looks bright to coin a
phrase of Patrick David thenpeople are optimistic and they
will pay more In your ownhousehold.
(15:13):
If you're worried aboutcontinuing to have your job, you
might be less optimistic andtry to cut back on your spending
, just in case you were beingdisplaced.
So I only bring that up becausethe idea behind people saying,
(15:34):
hey, I just want some good, safe, conservative companies Well,
you know, that's important.
The problem is, I wouldn't wantyou to have a false sense of
security about what safety is.
They can all go up, they canall go down.
Some of them stay in businessfor a long time and some of them
go out of business.
(15:55):
But if we break it down to safeand secure investing, let's talk
about bonds, cds, and thenwe'll talk just a second about
the concept of index funds.
So bonds, actual bonds and I'mgoing to use the treasury market
as an example they have threecategories.
They have something calledtreasury bills, treasury notes,
(16:19):
treasury bonds.
If you're watching any of thefinancial programs, when they
talk about bonds they're sayingtreasuries.
In other words, they're usuallyreferencing US government
direct obligation debt.
Here's how they differ A T-bill, a T-note, t-bond they're all
(16:40):
the same in principle.
The difference is the timecommitment.
So T-bills, treasury bills,have a maturity of one year or
less.
Treasury notes have a maturityof a year to 10 years.
Treasury bonds are 11 to 30years.
(17:01):
So those are three categories.
The one thing about bonds is,if they are held to maturity,
then, unless the US governmentgoes out of business, you'll get
your money back.
However, there are some formsof investments that contain
bonds, but if they're alwaystrading the bonds, it does not
(17:21):
work, as I just said, becausethey're trying to trade their
way to a higher yield and that'sa difficult thing.
Cds we talked about that.
Certificates of deposit that'sa secure way to invest.
Sometimes people like to thinkabout index funds having low
volatility and in theory that'strue.
Just imagine an index fund.
(17:43):
It's not the same as the DowJones Industrial Average, for
example, because we think ofaverage but we don't understand
that it's a weighted average.
So if you had 30 companies, theperception of the marketplace
individuals is that they'reprobably all weighted evenly.
(18:07):
That's not really how it works.
If Coca-Cola is part of the DowJones Industrial Average
because of its capitalization,every point it goes up is
dramatically different than amuch smaller company.
So it's a weighted average.
In the case of index, theconcept for index funds, what
(18:31):
you have there and the reason Isay low volatility in theory, is
because people associate oftenthe same thought process index
average, volatility, things likethat with returns, but not
necessarily true.
So if you take one of the mostwell-known indexes out there,
(18:51):
which is the S&P 500 index andthat stands for Standard Poor's
500.
Now, again, not givinginvestment advice, but just to
tell you the mechanics of howit's constructed.
There are 500 companies as partof that index.
That makes sense.
That's why they call it the S&P500.
(19:12):
Most people don't know that thetop 25 companies in terms of
capitalization often have moreimpact on moving that average
than the other 475.
It doesn't mean it's good.
It doesn't mean it's good, itdoesn't mean it's bad, but it
does mean you should understandhow these things are constructed
(19:34):
.
So, again, not advocating anyof these over the other, but I
want you to know that.
The other thing I would say isthat, in the world of stocks or
crypto, you have to understandthat, as I mentioned before,
these are auction markets interms of pricing.
(19:54):
So it's really based on whatthe market will bear and that
can change rather quickly basedon an optimistic or a
pessimistic economic scenario ora pessimistic economic scenario
.
So, as a rule of thumb, ifyou're young and you've got some
time, consider taking morerisks than you would if you were
(20:19):
much older, and what riskactually looks like, that's
another conversation for anothertime, and best done in front of
your financial professional,who can help you understand the
nature of the risk that you'retaking, because there are
various types.
The other thing I would say isthat, if you're nearing
(20:40):
retirement, consider stickingwith safer investment vehicles.
There's something called thesequence of returns, which we
won't get into today, but justin a nutshell, you have to
understand that, as long as thefinancial markets are doing well
, if something were to happen,you could go in and pull money
out, no issue.
But what if the financialmarkets are not doing well and
(21:03):
you have an emergency beyondyour emergency fund and you
haven't finished paying downyour debt?
Well, you don't want to betaking money out with the
financial markets down becauseall you've done there is lock in
a loss from an accountingstandpoint.
What I often encourage peopleto do is consider making part of
(21:28):
that portfolio as they getolder volatility buffers, which
we won't go in today because ofthe specificity of that.
But in other words, just likeit sounds, you're trying to
buffer the volatility associatedwith an equity portfolio.
Steven Killfoil (21:49):
Yeah.
So it's not about avoiding risk, it's about knowing your risk
tolerance and time horizon.
So can you give our listeners asimple strategy, something they
can implement, like, say, thisweek
John Ezell (22:03):
Sure, that's a great place to start.
So the first thing I would tellyou, from a fiscal
responsibility standpoint, juststart tracking your expenses Now
most people feel like they havefor the next 30 days.
Take them out, add them up,identify what they were spent on
(22:38):
.
I promise you you're going tobe surprised.
That's the first thing, so youwant to know where your money is
going.
The second thing is get thatemergency fund up to at least
$1,000.
And you can do that byperiodically making deposits
into your local account at thebank.
(22:59):
Again, money market accountsmight be best for that, although
they're not limited to optionsthat are available.
The next thing I would say isyou need to build at least.
So once you mastered those two,then build at least, and I
should go back on the track inyour expenses.
Steve, I didn't say this.
Most people will do it one timeand think they've got it
(23:21):
figured out.
The problem is there's aseasonality to our spending
often.
That's why it's a good thing todo it at least three months.
For example, if you get paidevery two weeks instead of twice
a month, you actually have fouradditional paychecks per year
outside of the two each month.
(23:43):
In other words, there's a lagthere in time, and so what I'm
saying about that is that you'regoing to have more income.
You may have more expenses.
Your homeowner's insuranceisn't necessarily due every
month.
It might be due once a quarter,every six months, or you might
be paying it on your own once ayear, not through an escrow
(24:04):
account.
So that's another example.
But start with the tracking, theexpenses.
Do it for three months, buildthe emergency fund.
Then your goal is to take theamount of money that you
normally would have in the formof income.
Multiply it out I'm talkingabout net income.
Multiply it out times six.
(24:26):
Why?
Because you wanna work to whereyou have in the neighborhood of
at least six months of reserveequivalent to your income.
It's not as prevalent right nowin the economy, but every once
in a while people get thrown acurve, they get displaced.
Every once in a while peopleget thrown a curve, they get
(24:46):
displaced.
Maybe they got injured,whatever, maybe they were sick,
they weren't protected undertheir employer plan.
You've got to have a reserve,and six months is a great place
to really give yourselfemotional security, and not just
for yourself but for yourfamily.
If you're married one spouse orthe other that's going to be
(25:10):
more important too.
I promise you it's going to beimportant to your kids as well.
All right, then start payingdown the debt.
Often, people will want to paydown the highest interest rate
first and, as I said, if you'vegot debt at 30% and for some of
you you might be cringingthinking who would pay 30% more
(25:30):
Well, look and see what you arepaying.
That's step one.
You can tackle it from one oftwo ways Either pay the highest
interest rate interest first oryou can take the lowest debt and
accelerate that and once you'redone with that, take at least
half of what you were paying onthat debt and apply it to the
(25:53):
next one.
That's the snowballing effect,and that is one of the
principles that I think DaveRamsey does do a good job with.
The next thing I would sayconsider opening up a Roth IRA
or to contribute to the 401kthrough your employer, if you're
(26:14):
available excuse me, if it'savailable to you.
And the next thing is, youmight consider putting a small
amount in a low or no costgrouping in the market.
It could be in mutual funds ingeneral, whether they're open
mutual funds, closed mutualfunds or exchange-traded funds.
(26:39):
So there's so many options outthere.
We wouldn't have time by thisevening to finish up explaining
what those are.
Just know they exist and again,connect with your investment
professional, because they'regoing to give you an accurate
representation of what is what.
Steven Killfoil (26:57):
Okay, yeah, it's not rocket science, it's
commitment Automate your savings, set clear goals and check in
monthly.
John Ezell (27:06):
That's right.
Steven Killfoil (27:07):
All right, John .
Before we go, any finalthoughts.
John Ezell (27:11):
Absolutely.
It occurred to me recently thatthis idea of saving is really
the most powerful form ofself-care.
Now that terminology self-careisn't normally attached to
financial markets or savings,but in fact, if you value your
(27:33):
psychological welfare, if youevaluate and consider your
emotional well-being important,then by getting these things in
place, it is a self-care program.
The difference is you're payingyourself, you're investing in
yourself by getting rid of thisdebt.
(27:55):
So don't wait for perfectconditions, because that may
never happen.
Start now, build somesuccessful habits, because I can
tell you that consistency isthe key to all success, and if
you're not just saving money,you're building life in the form
of choices that are availableto you.
(28:16):
So I think that makes sense.
Steven Killfoil (28:19):
Wonderfully said and this episode.
If it's helped you rethink yoursavings plan, make sure to
share it with a friend or familymember and remember every smart
money move starts with a singlestep.
So thanks again, John, forjoining us and thank you out
(28:41):
there for listening.
John Ezell (28:42):
It's my pleasure.
Thank you, Steve.
Steven Killfoil (28:44):
Awesome.
Well, a few news andannouncement things.
The Town Council meeting willbe meeting tonight at 6 pm, and
let's not forget that every digcounts.
Gus the Gopher reminds you tocall 8-1-1.
Whether it's a fence to plant atree or anything else that
requires digging, you must call8-1-1 and have the underground
(29:08):
utilities owned lines markedAlso coming up soon.
At the end of the month, onAugust 30th, we have Chrome Fest
.
Mady and I are going to cruiseup there on Saturday morning.
We'll be there bright and earlyat eight when it starts, so we
hope to see you there for that,definitely.
So again, thanks again forjoining us, John, and if anybody
(29:31):
wants to get a hold of you, howcan they do that?
John Ezell (29:35):
The best way would be one of two, or the two best
ways, I should say.
So you could call 214-929-0961,or you're welcome to email me
at john, that's J-O-H-N, so johnwith an H.
@ cprwm.
(29:55):
com.
That's C for Charlie, P forPapa, R for Romeo, W for Whiskey
, M for Mike.
com.
Steven Killfoil (30:09):
Excellent.
So thank you, listeners outthere who emailed in your
questions, and if you have anymore, reach out to us at
crossroadspodcast2023@ gmailcom.
On the website it'scrossroadspodcastbuzzsprout.
com, click any episode and youcan link for questions or
(30:34):
comments.
Send us a text message or youcan become a sponsor by clicking
on the link support of the show.
And don't forget to go toAmazon and get that wonderful
book by Stefan McDermott,"Achieve Optimal Brain Health
with Nutrition.
That's Achieve Optimal BrainHealth with Nutrition by Stefan
(30:54):
McDermott.
You can get that on AmazonUntil next time.
This is Stephen Kilfoyle andyou've been tuned in to Money
Moves.
Stay tuned in next week formore amazing guests.
I'll see you at the top.
(Music) Money moves.
(31:33):
For those who want to be in theknow.
Who's your daddy?
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