May 7, 2025 • 32 mins
Think you need to be debt-free or have a fat savings account before you invest? That myth is keeping you broke. In this episode, Jess and Brandon break down why starting now—even with just $5—is more powerful than waiting for the "perfect" moment.
They call out outdated advice that tells you to wait, and show you how to grow wealth while paying off debt. You’ll learn why index funds are your low-risk, high-impact secret weapon, and exactly how to start investing—even if you're overwhelmed or on a tight budget.
This isn’t about hype. It’s about time, math, and using both to your advantage.
Hit play and take the first step toward financial freedom—imperfect action beats perfect planning every time.
Visit prenups.com/sugardaddy to learn more about fair prenups that help couples plan for a healthy financial relationship.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
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(00:44):
Think investing is only forpeople with six figures in the
bank.
That's what they want you tobelieve.
Today we're breaking down howto start building wealth with
what you have and why waitinguntil you're rich enough is the
fastest way to stay broke.
We hope you tune in Sugar DaddyPodcast yo Learn how to make
them pockets grow.
(01:06):
Financial freedom's where we go.
We hope you tune in.
Speaker 2 (01:12):
Hey babe, what are we talking about today?
Speaker 1 (01:22):
Today we are talking about why you need to start
investing right now or yesterday, instead of waiting until you
can invest hundreds or thousandsof dollars.
Speaker 2 (01:27):
Yeah, I would say that's one of the biggest things
that I do come across forpeople is that they are waiting
till they're completely out ofdebt, waiting till they have
more money saved up.
Speaker 1 (01:36):
Waiting for the raise , the promotion, the bonus.
Speaker 2 (01:39):
Always waiting for a quote unquote the perfect
opportunity to start investingwhen there is no perfect
opportunity to start investing,Just today.
Speaker 1 (01:47):
Today is the day right.
Speaker 2 (01:48):
Yeah, and I would also say that was one of the
main gripes that I have when itcomes to Dave Ramsey's method.
Speaker 1 (01:54):
Oh, we're going there early.
Speaker 2 (01:56):
Yeah, I mean Dave Ramsey's method has you pay off
all of your debt outside of yourmortgage before he recommends
that you start investing, and Ithink that's a huge miss.
Why.
Well, as we've talked aboutbefore, one of the biggest
benefits to investing is timetime in the market.
The more time you have on yourside for investing, the better
(02:17):
the outcome is going to be,because you have compound
interest on your side and youhave a longer period for it to
work for you.
Speaker 1 (02:22):
Right.
We've even seen models onlinewhere people will show okay, if
you start investing less, butyou have more time, versus
doubling or even tripling thatamount, but you have less time,
your outcomes are always goingto be more favorable when you
started earlier, even with lessmoney.
Speaker 2 (02:41):
Oh yeah, like I said, the number one benefit is time.
The longer time that you haveto be in the market, the better
the outcome is going to be, themore money you're going to have
at the end of the day.
Speaker 1 (02:52):
Okay, so why do you think people wait to invest?
Speaker 2 (02:57):
Well, honestly, this is what we've been told for
years on end.
Is that?
Oh, you know, we need to waitto invest.
Also, you know, prior totechnology becoming better, you
know, don't do a lot of hurdlesin order to just invest it
wasn't quite as simple as it isnow, where you can simply do
this online, as compared tobefore, you actually had to do
it through a person.
Speaker 1 (03:18):
Right.
Speaker 2 (03:19):
So our parents experiences at a younger age
when it comes to investing isall that they have.
Parents' experiences at ayounger age when it comes to
investing is all that they have.
So, essentially, when we'reasking them about investing at a
younger age, this is wherethey're coming from and this is
why they think it's a lot harderof a hurdle for you to start
investing.
Speaker 1 (03:34):
Well, and then let's not even forget to mention women
when it comes to finances andinvesting, owning our own things
right.
Like you couldn't open a creditcard by yourself, or a line of
credit until what was it like1974?
Speaker 2 (03:49):
I think it was 1974, 1975 was when women could have
credit cards.
Yeah, it was only about 50years ago.
Yeah, I mean that's insane.
Which is crazy because that'sonly nine years before I was
born.
Speaker 1 (03:59):
Right that women could go and open their own bank
accounts.
I mean that's without thesignature of their husband or
father.
I mean that's mind blowing.
Speaker 2 (04:08):
And I'm not going to glaze over the truth that
financial services has not madeit easy for people.
You know, I would even saytoday, a good portion of the
financial services industrydoesn't focus on the everyday
person.
You know they focus on the rich, the wealthy because they make
more money that way.
So you know they are going tofocus more on them when there
(04:30):
should be more of a focus on theeveryday person because that's
the largest demographic.
On how you can invest, what arethe strategies, what is the you
know easy way to get just intodoing it to begin with.
So a good portion of it is alsoon the financial services
industry itself.
Speaker 1 (04:46):
Well, and we've even had guests on the podcast who've
said hey, the reason I know howto do this now is because I was
turned away from a financialadvisor or from a wealth advisor
, or whatever we want to callpeople like you, right, which is
I mean.
Yes, there are obviously firmsand people who only work with
(05:07):
individuals who have a certainnet worth, but that's so
discouraging, like you said, forthe average person who's like
no, I want to figure this out, Iwant to do better, I want to
build my family's wealth, butI'm literally getting turned
away.
Speaker 2 (05:24):
All right, real quick .
I want to speak to the personlistening who feels like they
can't work with a financialplanner yet because they're
carrying a lot of debt.
First of all, I see you and Ineed you to know.
You're not broken, you're notbehind.
You're just in a tough season.
I created something just foryou because I've had people
reach out who are serious aboutchanging their money story.
But the full financial planningpackage just wasn't the right
(05:46):
fit yet.
So I built a new servicethrough Oak City Financial
that's focused completely ondebt reduction no fluff, no
shame.
You'll get a one-time planningsession, a personalized payoff
strategy, your own financialdashboard and monthly coaching.
If you want extra support whileyou climb out, it's $300 to get
started and $100 a month.
If you want that ongoingguidance, that's it.
(06:08):
This is about helping you getunstuck, not making you feel
like you failed.
If this sounds like what you'vebeen needing, go ahead and
schedule a call with me.
The link is in the show notes.
Let's take the first steptogether.
Speaker 1 (06:23):
So that's something to consider too.
Speaker 2 (06:25):
I mean, that's part of why I have my service model,
because the traditional servicemodel for financial advisors is
the assets under management, sothey get paid AUM.
So they get paid a percentagebased upon how much of that
individual's assets they'remanaging from an investment
standpoint.
So if they're most people, kindof the rule of thumb is a 1%
(06:45):
asset under management fee.
So if someone has a milliondollar portfolio that the person
that the advisor isn't theadvisor is managing, then they
get $10,000.
If the person has a $500,000investment portfolio, then the
financial advisor is getting$5,000.
So you can see where it's moreadvantageous to work with those
individuals with higherinvestment portfolios for them
(07:08):
to manage because you get moremoney.
But that's why my service modelis different, so that you have
individuals that can still paythese certain fees, but I don't
have to manage these largeportfolios in order to work with
them.
Speaker 1 (07:21):
Well, and that's where I think the internet goes
crazy.
And it's like never pay afinancial advisor a percentage
of your portfolio.
You're getting scammed.
I mean, there's all thosethings, too, where it's like,
well, you could be spendinghundreds of thousands of dollars
over the quote unquote lifetimeof your portfolio in 1% asset
under management fees.
(07:42):
Don't do that.
And then people are like, well,I guess I can't work with an
advisor, but then they don't doit themselves.
So then you're back to squareone, which is you're not
investing.
Speaker 2 (07:52):
Yeah, so I don't you know me.
I don't like when people sayall or none.
Speaker 1 (07:55):
Right.
Speaker 2 (07:55):
So I would never say don't you know me?
I don't like when people sayall or none Right, so I would
never say don't work with aasset under management advisor,
don't pay for crappy advice iswhat I'm focused on.
So a person could be charging a1% asset under management and
it equates to the same, as youknow me charging you a monthly
fee, but they're just chargingit differently, even though the
outcome is the same.
The biggest thing you want tofocus on is do you believe that
(08:17):
what you're paying for, do youvalue?
Speaker 1 (08:18):
it Justifies the cost Correct.
Speaker 2 (08:20):
Are you getting out of this what you believe you
should, based upon what you arepaying, and that's what should
be the metric, because I think alot of people could miss out
like, oh, I'm not going to workfor this person because they do
an AUM fee, and this personcould be providing you above and
beyond service of what they'reactually charging you based upon
their AUM.
So I think the focus needs tobe on what is the end product
(08:41):
that you're getting, what is theend results, the guidance that
you are receiving, based uponwhat you're paying, not how it's
being paid per se.
Yeah.
And then also, too, is like withthe whole like starting to
investing once again.
It kind of the same thing we'vetalked about when it comes to
saving.
People feel some shame if theycan't save or invest a certain
(09:01):
amount of money.
So if you're like, oh, I wantto be able to invest $500 a
month, $400 a month, but youdon't have that, then these
people just wait until they havethat and you're missing out on
the biggest component.
That's in your favor and that'stime.
So, biggest component, that'sin your favor and that's time.
So, even if it's only $5, $10,that is better than zero, and I
cannot stress that enough.
Speaker 1 (09:26):
Well, and one of the things that I think you've
repeatedly talked about on thepodcast is building the habit of
either you know you set a timer, you set a calendar invite for
yourself and you go in on youknow the first Saturday of of
the month and you move somemoney over into your investment
accounts, or, even better, youautomate it so you get in that
habit of you're not going tomiss that $5 coming out of your
account.
Right, you're just not going tomiss it, but in a few months
(09:50):
when you look at it and it'sgrowing, you're going to be
reminded of oh, $5 does dosomething.
$5 is better than nothing.
Speaker 2 (09:59):
Oh, 100%.
And, as you said before, onceyou've been doing $10 a month
for two or three months you'relike, oh, I don't miss that, let
me up at the 20.
Another few months pass, Idon't miss 20.
Let me go in and up at the 40.
And you don't have to have thisdrastic increase.
It can be a gradual increasebut, like you said, it's getting
the habit started.
That's the biggest thing.
Speaker 1 (10:19):
Yeah, what else do you want people to know?
Because there's so much noisearound investing, right, you
have some platforms that arelike it's so easy, you can do it
yourself, you don't need to payanybody.
And then other people are likeno, there's so much risk, you
can mess it up, you need to paysomebody.
So there's a lot of just twosides of the aisle and I think
(10:40):
it's overwhelming for people whoare like okay, everybody keeps
telling me it's easy to getstarted, but I literally do not
know how.
Speaker 2 (10:47):
So technology definitely changed the game.
Having improvements intechnology has definitely
lowered the barrier of enteringfor the majority of people, but
then also, just you know, moreaccess to information has helped
people to understand theiroptions that are available to
them a little bit more.
But then also it can be a bitof noise where it's hard to
(11:08):
decipher what is true, what isfalse and what is applicable to
your situation.
So, with you know newtechnologies such as
robo-advisors, I think.
I think robo advisors can beused for a very early on person
in their career.
You know, you just got out ofcollege, your first full time
job, and you don't have a ton ofassets, but you do want to
(11:28):
start the process of investing.
I think a robo advisor can bevery helpful for you because
your financial situation is notvery complicated.
You, because your financialsituation is not very
complicated, a lot of the roboadvisors will provide you with
some basic education when itcomes to investing in index
funds, etfs, and help you topick a portfolio that will
perform decent based upon youknow, your age and your risk
(11:51):
tolerance.
Speaker 1 (11:53):
And where do I find these robo advisors?
Speaker 2 (11:55):
I mean you can find them at a lot of the you know
large financial institutions.
So you know Fidelity, charlesSchwab, I think most people out
here you know heard aboutRobinhood.
I wouldn't necessarily go withRobinhood, I'm not the biggest
fan of them.
I think their user interface isdone very well and the reason
for it being done very well isthat's their draw.
They make it very easy forpeople to do things.
(12:18):
But I think you could getbetter service, lower fees at
you know, like a Charles SchwabFidelity places like that.
Speaker 1 (12:26):
Okay, what do you say to the people twofold who have
debt?
I think we kind of addressed itat the beginning, right Of like
yes, you have debt.
Speaker 2 (12:36):
Yes, Before we hop into that, remember you were
talking about, like the peoplethat are DIY and stuff like that
that maybe can't do itthemselves.
Like I said before, I thinkvery few people are DIY and I
think if you are a true DIYwhere you are going to be able
to check all the boxesconsistently throughout the
course of your life from afinancial standpoint, more than
likely you've done this or youare doing this as your
(12:57):
profession.
Most people that's not whatthey're doing.
Speaker 1 (13:02):
You're going to miss something.
Speaker 2 (13:03):
Yes.
So even if you want to be a DIYperson, I still think you can
benefit from at least havingsome check-ins with a financial
planner to make sure that you'renot missing in your blind spots
, because I can tell you thatI've met with several DIYers and
they're missing things and, inall honesty, they're very basic
things.
Like I look at their financialsituation, within two seconds I
(13:24):
could point out five or sixthings that they missed that are
very basic.
So that's why I said that mostpeople can't be a DIY fully on
their own.
Be honest.
Speaker 1 (13:32):
But the DIYers that you have encountered are DIYing
because they have an interest,but also because they just want
to save money.
Speaker 2 (13:39):
Oh, that's the main reason people DIY.
No one says that like, oh, Idon't mind spending a bunch of
money, but I'd rather do itmyself.
Speaker 1 (13:51):
Well, but here's the thing vastly underinsured when
it comes to their life insurance, people who are, you know,
making decisions to cancel lifeinsurance policies or different
things because they want to savea little bit more money right
now, and you know, like there'sjust decisions that I know we've
talked about that are beingmade or not being made, because
(14:13):
when you're looking at yourfinances from one singular lens,
you're you have blind spots,right, you've you're looking at
your finances from one singularlens, you have blind spots,
right, you're focused on thosenumbers in a very emotional way
and you can't step back farenough to see the full picture.
Speaker 2 (14:29):
It's also hard because there's a lot of
different disciplines withinfinancial planning, and so you
might be able to oh, I can DIYmy investment portfolio from a
very basic standpoint of usingindex funds.
Yeah you could probably do that, but that's just one area and
they all overflow into eachother, and that's the hardest
thing I think people have theability to do is take a step
(14:51):
back and see how each pieceinterconnects.
Speaker 1 (14:54):
Yeah, no, that's a great call out because it is a
portfolio, for a reason, right,that term indicates that there's
various segments.
Right, you need your what doyou call them?
Not your protections, but yourdifferent insurances.
What are they called?
(15:14):
You call them something, Idon't know.
Okay.
Risk mitigation no no no, it's,it'll come to me, but that's
okay.
I mean, it's just a lot oftimes, you know, you say that
everybody knows what they needto do, but you're also the
person holding people's hands,making sure things get across
the finish line.
Speaker 2 (15:32):
Yeah, and I think everyone can benefit from
working with an advisor.
However, you know there is anentry level from a fee
standpoint to work with anadvisor and some of these people
are not at that point where itmakes sense to pay that fee to
do the full planning.
So, you know, the robo advisorcan work for you in certain
aspects to at least get youstarted and get a portion of the
(15:53):
plan in place.
Because, let me understand, therobo-advising is not financial
planning.
The robo-advising is helpingyou with your investing.
Speaker 1 (16:01):
That's it, and we had a whole episode on
comprehensive financial planningversus AI and robo-advisors and
we break down the pros and thecons and how financial advisors
like Brandon can use AI to helpthem in their practice.
So, we're not against AI androbo advisors, but there are
limitations and it's notcomprehensive financial planning
.
Speaker 2 (16:21):
Yeah, For example, the robo advisors aren't going
to ask you what is your goals intwo years, five years, 10 years
?
How much student loan debt doyou have?
How much credit card debt doyou have?
Speaker 1 (16:30):
Do you want to start a family?
Are you looking to buy a house?
Speaker 2 (16:34):
What is your current?
How much do you have in youremergency fund?
They're really not going to askyou those questions.
It really is focused on theinvestment portfolio only, and I
just want to make sure thatpeople understand that that is a
piece of the financial planningpuzzle, but it's not all of it.
Speaker 1 (16:50):
Right, all right.
Where do you want to go?
Speaker 2 (16:52):
We can go into the debt part now, sorry, Okay,
that's fine.
Speaker 1 (16:56):
So for people who are saying, well, I have debt, I
really want to pay off my debtbefore I start investing, we
kind of touched on it at thebeginning.
But what do you say to thosepeople?
Speaker 2 (17:05):
You can do both, as we said before.
For example, obviously, if youhave credit card debt or any
other type of debt, you do wantto be focused on paying that off
.
However, even if you're justdoing five, 10, $20 towards
investing, it makes a difference, and I think people often think
(17:27):
that they have to focuseverything on their debt and
wait.
They're going to miss out onyears of possibly investing.
And one of the biggest thingsthere is just to say, like if
you're employed at a companythat has a 401k plan and you're
not investing your 401k planbecause you're focused solely on
paying off debt, Now you'realso possibly missing off,
missing out on an employer match.
Speaker 1 (17:45):
Don't miss on your employer match.
Speaker 2 (17:47):
So let's just say, hypothetically, your employer
provides a 3% match.
Okay, so if you're just, youjust do the 3%, so you're taking
full advantage of the match,because now you're getting free
money and that free money beinginvested over years, allowing
compound interest to do itsthing, it's going to pay off for
you so much more in the end.
Now I'm not saying don't focuson paying off the debt.
(18:10):
That is definitely a focuspoint, but it shouldn't be the
only focus.
Speaker 1 (18:14):
What about the people who are just?
You know, the stock market'sgoing crazy and everybody's like
do I move my money, Do I not?
This is, you know, these areunprecedented times, the amount
of unprecedented times we, asmillennials, have been through.
Can I just say I'm over theunprecedented times?
But what would you say to thepeople who are just like I,
(18:37):
can't put.
It's like gambling.
I don't want to put my money inthe market because it's
gambling.
I'd rather put it in the bank.
Speaker 2 (18:42):
It's not gambling I can.
It's not gambling at all.
Speaker 1 (18:46):
But there's risk.
So what do you say to thepeople?
Speaker 2 (18:49):
But the risks are minimum when you're focused on a
long-term investing strategy.
If you were to cause, we'retalking about like 20 plus years
here.
So if you look at investing inthe stock market, no, no, as
long as the stock market hasexisted, if you invested for a
20 year period, at any point intime you are up over that period
.
You can start at any year themarket has existed and then go
(19:12):
20 years out and you are, youare, you're going to have growth
in the market.
So it's not gambling.
Speaker 1 (19:20):
I mean, I know last year we were at almost 25%
growth.
Speaker 2 (19:23):
You're going to have up and down days, up and down
years, but over the long term iswhat we are focusing on, is the
long term investing.
You are going to be up, so itis not gambling by any means.
Well, and we're not talkingabout day trading and picking
individual stocks and so theaverage individual should not be
(19:43):
picking individual stocks toinvest in, especially when
you're starting out, because onethat is a much more complicated
process in regards to analyzinga stock and there's multiple
ways to analyze a stock and youknow it's much easier to simply
focus on, you know, index fundsand also it's a less.
You know it's less expensive todo index funds from a
(20:05):
diversification standpoint, soyou're able.
Part of diversifying yourportfolio is part of the risk
mitigation aspect as well, sothat helps with lowering the
potential of losing money.
So that helps with lowering thepotential of losing money.
Speaker 1 (20:15):
I mean, I think when people talk about investing
right, you're thinking of theWolf of Wall Street, the crazy I
hope you're not thinking of theWolf of Wall Street that is
illegal In suits on the tradingfloor.
Everybody's shouting into theirphones, yelling at the screen
right Like that's not what we'retalking about.
Speaker 2 (20:34):
Yeah, most people.
When you're starting outhonestly even not just starting
out you know a core portion ofyour portfolio should be just
index funds, like when I'mworking with clients, I'm not
looking to beat the market.
That's not what I'm, that's notwhat I'm aspiring to do, because
if I could consistently beatthe market, then I'd be a hedge
fund manager and I'd be abillionaire.
(20:55):
But that's I'm, not WarrenBuffett.
And so a basic portfolio ofindex funds based upon your age
and your risk tolerance worksperfectly fine, and that's where
most people should start, andthat should also still be the
bulk of your portfolio, movingforward.
Speaker 1 (21:12):
What is an index fund ?
People always talk about howgood they are, how little they
cost, like, what is it and whyis it important?
Speaker 2 (21:21):
The easiest way for me to describe what an index
fund is is that there'sdifferent indexes that we use to
measure the performance of themarket.
The most common index thatpeople have heard of even though
maybe you haven't heard itmentioned this way is the S&P
500 index, and that is made upof the 500 largest US companies
on the stock market.
Okay, and when you hear themarket is up or the market is
(21:44):
down, this amount, normallythey're referring to the S&P 500
.
And it's kind of just amicrocosm to measure the broad
perspective of how the market isperforming.
So, once again, instead ofinvesting in a single stock,
when you're investing in an Sand P 500 index fund, you are
investing in all those 500companies a little portion of
(22:05):
yes as compared to.
I'm just going to invest inApple, I'm just going to invest
in Microsoft and by investing inan index fund, you are lowering
your risk because you arediversifying the potential of
losing money across 500, youknow essentially companies as
compared to if you were investedin maybe two or three
individual stocks.
Speaker 1 (22:25):
Okay, so you're you're kind of buying little
pieces in bulk instead ofpicking one company.
Correct yeah.
Mitigating risk.
Yeah, okay, what do you thinkis keeping kind of the average
person from moving forward withtheir investing journey?
Speaker 2 (22:45):
Analysis by paralysis .
I think that is the number onething that keeps a lot of people
from doing anything in life and, more specifically, a lot of
changes in their financial life.
They are overthinking andthey're not getting started.
Speaker 1 (23:00):
Or they're waiting for it to be perfect, or for me
to have the right amount ofmoney, or for me to do it this
way versus that way.
Speaker 2 (23:07):
Yeah, and the biggest thing there is that there's no
perfect time and you're notgoing to get it correct all the
time, but getting started is astep forward and as you get
started and if you do make anerror, it's okay, we all make
errors the biggest thing is thatnow that you've gotten started
and you've made an error, youlearn from it and then you make
changes accordingly and try tomake sure that you don't repeat
(23:29):
the same error if it'spreventable.
So that's the number one thing Iwould say.
And then social media doesn'thelp.
So that's the number one thingI would say.
And then social media doesn'thelp because once again, kind of
taking a step back to we weretalking about, you know, with
the index funds versus investingin individual stocks,
individual stocks sound sexier.
That's what you hear a lot ofpeople talking about and you
know that's what's all oversocial media.
(23:50):
Or day trading all over socialmedia.
Oh, you can do day trading, youcould do this, you know like
you can do those things, but themajority of people lose money
doing them and that's time.
Yes, Cause like so, for example,if I was making so much money
as a day trader.
Speaker 1 (24:08):
I'm not going to be posting, I'm not selling you a
course.
I'm not.
Speaker 2 (24:11):
I don't.
I'm not creating a course tosell to you and spending all my
time on social media trying tosell this course because I made
a bunch of money day trading.
I don't need to do that Now.
I'm not saying that anyone thatsells a course isn't doing what
they're saying.
That's not what I'm saying.
However, I would say a majorityof people on social media that
are selling a course aren'tnecessarily doing what they're
(24:33):
trying to tell you they're doing.
Speaker 1 (24:39):
And I think anyone that's successful, that sells a
course, will tell you the samething.
I mean, we know a lot of peoplethat sell courses Not on day
trading.
Speaker 2 (24:44):
But what I'm saying is we know a lot of people who
sell courses.
We know people that sellcourses.
Now I'm talking about everyoneon social media the millions
that everybody has a course, the20, 50, say 50 people that we
know that sell courses out ofthe millions of people that are
on social media is less than 1%.
Speaker 1 (25:01):
Yeah Well, I mean, take everything with a grain of
salt.
Social media is only thehighlight reel.
I mean, you know people are notout here rolling in dough.
That's just the bottom line.
Speaker 2 (25:13):
And also, like I said , depending on the course,
there's a difference betweenteaching someone how to a
successful strategy to pay offdebt as compared to teaching
someone a successful strategy today trade to become a day
trader.
Speaker 1 (25:24):
Yeah, so the investing that we are talking
about is not day trading.
Speaker 2 (25:29):
No, and if you want to do that, fine.
I'm not here to tell peoplewhat to do, I'm just going to
tell you.
The statistics are thatmajority of people that day
trade lose money.
Speaker 1 (25:37):
There you go.
Yeah, what can people do to getstarted?
Speaker 2 (25:40):
Well, also the thing is, too is.
One more thing here is that wetalked about the 401k plan, and
our platform is all about havingmore open conversations with
your friend circle.
So, for example, why most peoplehave a 401k plan through their
employer.
Why don't we talk about thatwith our friends?
Now?
We talk about it because, also,people ask me a lot of
(26:00):
questions about it.
But those should beconversations that you should
have with your friends so thateveryone has a better
understanding of their 401k plan, because I can tell you that is
one of the most misunderstoodaccounts that everyone has them,
but they don't know all thefull functions and details of
their plan.
I've never sat down withsomeone that fully understood
their plan.
Speaker 1 (26:22):
Well, and we did an entire episode on it for that
exact reason, right, because youcan do your traditional
contributions, you can do yourRoth, you can do after tax.
Yep I mean we break all of thatdown.
So and then again the timehorizon even if you do like a
target date fund, which is whatit oftentimes will, kind of auto
(26:42):
, put you into, you can stillmake adjustments.
401k I get a four percent match.
And we sat down and made anadjust, a big adjustment,
because it had me in 83 percentstocks and, I guess, 17 percent
(27:02):
bonds, and you were like, nope,we're gonna go 100 percent
stocks, here's what we'repicking.
Um, and there are, you know,everybody's 401k plan is what I
say differently.
Speaker 2 (27:11):
Just to clarify, when we, when she is saying stocks,
we're talking about index funds.
Speaker 1 (27:15):
Yeah, we picked.
They were what?
Vanguard index funds?
Yeah, we picked Vanguard indexfunds.
Speaker 2 (27:18):
Yeah, because you can't invest in individual
stocks in your 401k plan unlessit's your company's stock, which
also is not in your 401k plan.
It's in a separate accountoften.
Speaker 1 (27:31):
Well, and I even posted exactly what we chose.
So, if that's of interest,that's not the advice we're
giving you to choose what I'mchoosing, but to know what your
options are and to maximizethose so that you can have an
optimized 401k.
Because I mean before this biglast dip, I mean my 401k was
(27:53):
looking really nice, and that'sI mean mostly in part because of
the company match that I'vebeen getting.
Speaker 2 (27:59):
And also, since you brought that up, for those
people that are afraid andthey're trying to like wait
until the market quote unquotegets better, don't do that,
because when the market getsbetter, what that actually means
is that prices have started toincrease, so now you're
purchasing funds at a higherprice.
Speaker 1 (28:16):
Yeah, that's when people say buy low, that's when
the market is not doing well.
You see the red lines goingdown on all of the charts.
Speaker 2 (28:25):
When these times like this are happening in the
market, where there'suncertainty, you need to think
back to the original plan.
That's why I always say it'simportant to have a plan in
place, because things get rocky.
You've reverted back to yourplan.
You're like, hey, we talkedabout these things before.
We, you know, plan for thesethings to occur.
So we have a plan in place, solet's stick with it.
(28:45):
That is the biggest thing,because don't wait to invest in
your, you know, in the market.
Just go ahead and start.
Do it now.
Speaker 1 (28:53):
Yeah, so what are your final thoughts here?
Well, people, getting started.
That's the biggest thing,that's the overarching thing.
Speaker 2 (29:01):
That's the whole purpose of this podcast episode
Get started today, and theeasiest way to get started are
in accounts that are easilyaccessible to you that you may
already have, number one being a401k, 403b, whatever retirement
plan that you maybe have foryour employer.
That's the easiest way to getstarted.
Okay.
All right Now.
Some of the other accounts youmay have access to are an HSA.
(29:23):
If you are enrolled in a highdeductible health plan, A lot of
people don't realize that youcan invest the money that's in
your HSA.
Speaker 1 (29:30):
Triple tax advantaged .
Speaker 2 (29:31):
So you can do that there.
But then also you maybe alreadyhave a Roth IRA or a
traditional IRA, Utilizing thoseyou know, opening those.
Speaker 1 (29:39):
They should not be sitting in separate places A,
(30:01):
it's going to make it easier foryou to forget about where they
are and what's in them.
So, instead of having a 401kover here and a 401k over here,
et cetera, et cetera and youdon't know what's going on, roll
those into a IRA or into yournew 401k and optimize those.
Speaker 2 (30:13):
Yeah, and next thing I would say you need to do is
automate.
Make things easier for yourself.
Now, if you are investing inyour 401k plan, the nice thing
is that that's already automatedfor you, so you don't have to
worry about that.
But if you're going to beinvesting into like a
traditional or Roth IRA, thenyou do need to actually do that
yourself.
It's not automatically, so Iwould recommend automating the
(30:35):
amount on like a monthly basisthat you're going to be
attributing to these accounts.
But then also that second stepof automating the investing into
a fund.
Remember, there's two steps toinvesting You're putting the
money into the account and then,once the money's in the account
, you have to choose which fundsyou want to invest in.
Speaker 1 (30:52):
Don't let it sit there in cash.
Speaker 2 (30:53):
Yeah, don't just do step one, you have to do step
two and you can automate both ofthose steps also.
Speaker 1 (30:58):
Yeah.
So just remember to get started, even if it's messy, even if
it's a small amount, even ifit's not perfect, even if you
need to make changes down theline.
But start today, becausethere's no better day than today
to get started in yourinvesting journey.
We hope this was helpful.
(31:19):
Tune in next time.
We'll talk to you soon, don'tforget.
Benjamin Franklin said aninvestment in knowledge pays the
best interest.
You just got paid Until nexttime.
Thanks for listening to today'sepisode.
We are so glad to have you aspart of our sugar daddy
(31:45):
community.
If you learned something today,please remember to subscribe,
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Don't forget to connect with uson social media at the sugar
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(32:06):
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Speaker 2 (32:10):
Our content is intended to be used, and must be
used, for informationalpurposes only.
It is very important to do yourown analysis before making any
investment based upon your ownpersonal circumstances.
You should take independentfinancial advice from a licensed
professional in connection with, or independently research and
verify any information you findin our podcast and wish to rely
upon, whether for the purpose ofmaking an investment decision
or otherwise.
This episode is sponsored by Prenupscom.
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Think investing is only forpeople with six figures in the
bank.
That's what they want you tobelieve.
Today we're breaking down howto start building wealth with
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(01:06):
Financial freedom's where we go.
We hope you tune in.
Speaker 2 (01:12):
Hey babe, what are we talking about today?
Speaker 1 (01:22):
Today we are talking about why you need to start
investing right now or yesterday, instead of waiting until you
can invest hundreds or thousandsof dollars.
Speaker 2 (01:27):
Yeah, I would say that's one of the biggest things
that I do come across forpeople is that they are waiting
till they're completely out ofdebt, waiting till they have
more money saved up.
Speaker 1 (01:36):
Waiting for the raise , the promotion, the bonus.
Speaker 2 (01:39):
Always waiting for a quote unquote the perfect
opportunity to start investingwhen there is no perfect
opportunity to start investing,Just today.
Speaker 1 (01:47):
Today is the day right.
Speaker 2 (01:48):
Yeah, and I would also say that was one of the
main gripes that I have when itcomes to Dave Ramsey's method.
Speaker 1 (01:54):
Oh, we're going there early.
Speaker 2 (01:56):
Yeah, I mean Dave Ramsey's method has you pay off
all of your debt outside of yourmortgage before he recommends
that you start investing, and Ithink that's a huge miss.
Why.
Well, as we've talked aboutbefore, one of the biggest
benefits to investing is timetime in the market.
The more time you have on yourside for investing, the better
(02:17):
the outcome is going to be,because you have compound
interest on your side and youhave a longer period for it to
work for you.
Speaker 1 (02:22):
Right.
We've even seen models onlinewhere people will show okay, if
you start investing less, butyou have more time, versus
doubling or even tripling thatamount, but you have less time,
your outcomes are always goingto be more favorable when you
started earlier, even with lessmoney.
Speaker 2 (02:41):
Oh yeah, like I said, the number one benefit is time.
The longer time that you haveto be in the market, the better
the outcome is going to be, themore money you're going to have
at the end of the day.
Speaker 1 (02:52):
Okay, so why do you think people wait to invest?
Speaker 2 (02:57):
Well, honestly, this is what we've been told for
years on end.
Is that?
Oh, you know, we need to waitto invest.
Also, you know, prior totechnology becoming better, you
know, don't do a lot of hurdlesin order to just invest it
wasn't quite as simple as it isnow, where you can simply do
this online, as compared tobefore, you actually had to do
it through a person.
Speaker 1 (03:18):
Right.
Speaker 2 (03:19):
So our parents experiences at a younger age
when it comes to investing isall that they have.
Parents' experiences at ayounger age when it comes to
investing is all that they have.
So, essentially, when we'reasking them about investing at a
younger age, this is wherethey're coming from and this is
why they think it's a lot harderof a hurdle for you to start
investing.
Speaker 1 (03:34):
Well, and then let's not even forget to mention women
when it comes to finances andinvesting, owning our own things
right.
Like you couldn't open a creditcard by yourself, or a line of
credit until what was it like1974?
Speaker 2 (03:49):
I think it was 1974, 1975 was when women could have
credit cards.
Yeah, it was only about 50years ago.
Yeah, I mean that's insane.
Which is crazy because that'sonly nine years before I was
born.
Speaker 1 (03:59):
Right that women could go and open their own bank
accounts.
I mean that's without thesignature of their husband or
father.
I mean that's mind blowing.
Speaker 2 (04:08):
And I'm not going to glaze over the truth that
financial services has not madeit easy for people.
You know, I would even saytoday, a good portion of the
financial services industrydoesn't focus on the everyday
person.
You know they focus on the rich, the wealthy because they make
more money that way.
So you know they are going tofocus more on them when there
(04:30):
should be more of a focus on theeveryday person because that's
the largest demographic.
On how you can invest, what arethe strategies, what is the you
know easy way to get just intodoing it to begin with.
So a good portion of it is alsoon the financial services
industry itself.
Speaker 1 (04:46):
Well, and we've even had guests on the podcast who've
said hey, the reason I know howto do this now is because I was
turned away from a financialadvisor or from a wealth advisor
, or whatever we want to callpeople like you, right, which is
I mean.
Yes, there are obviously firmsand people who only work with
(05:07):
individuals who have a certainnet worth, but that's so
discouraging, like you said, forthe average person who's like
no, I want to figure this out, Iwant to do better, I want to
build my family's wealth, butI'm literally getting turned
away.
Speaker 2 (05:24):
All right, real quick .
I want to speak to the personlistening who feels like they
can't work with a financialplanner yet because they're
carrying a lot of debt.
First of all, I see you and Ineed you to know.
You're not broken, you're notbehind.
You're just in a tough season.
I created something just foryou because I've had people
reach out who are serious aboutchanging their money story.
But the full financial planningpackage just wasn't the right
(05:46):
fit yet.
So I built a new servicethrough Oak City Financial
that's focused completely ondebt reduction no fluff, no
shame.
You'll get a one-time planningsession, a personalized payoff
strategy, your own financialdashboard and monthly coaching.
If you want extra support whileyou climb out, it's $300 to get
started and $100 a month.
If you want that ongoingguidance, that's it.
(06:08):
This is about helping you getunstuck, not making you feel
like you failed.
If this sounds like what you'vebeen needing, go ahead and
schedule a call with me.
The link is in the show notes.
Let's take the first steptogether.
Speaker 1 (06:23):
So that's something to consider too.
Speaker 2 (06:25):
I mean, that's part of why I have my service model,
because the traditional servicemodel for financial advisors is
the assets under management, sothey get paid AUM.
So they get paid a percentagebased upon how much of that
individual's assets they'remanaging from an investment
standpoint.
So if they're most people, kindof the rule of thumb is a 1%
(06:45):
asset under management fee.
So if someone has a milliondollar portfolio that the person
that the advisor isn't theadvisor is managing, then they
get $10,000.
If the person has a $500,000investment portfolio, then the
financial advisor is getting$5,000.
So you can see where it's moreadvantageous to work with those
individuals with higherinvestment portfolios for them
(07:08):
to manage because you get moremoney.
But that's why my service modelis different, so that you have
individuals that can still paythese certain fees, but I don't
have to manage these largeportfolios in order to work with
them.
Speaker 1 (07:21):
Well, and that's where I think the internet goes
crazy.
And it's like never pay afinancial advisor a percentage
of your portfolio.
You're getting scammed.
I mean, there's all thosethings, too, where it's like,
well, you could be spendinghundreds of thousands of dollars
over the quote unquote lifetimeof your portfolio in 1% asset
under management fees.
(07:42):
Don't do that.
And then people are like, well,I guess I can't work with an
advisor, but then they don't doit themselves.
So then you're back to squareone, which is you're not
investing.
Speaker 2 (07:52):
Yeah, so I don't you know me.
I don't like when people sayall or none.
Speaker 1 (07:55):
Right.
Speaker 2 (07:55):
So I would never say don't you know me?
I don't like when people sayall or none Right, so I would
never say don't work with aasset under management advisor,
don't pay for crappy advice iswhat I'm focused on.
So a person could be charging a1% asset under management and
it equates to the same, as youknow me charging you a monthly
fee, but they're just chargingit differently, even though the
outcome is the same.
The biggest thing you want tofocus on is do you believe that
(08:17):
what you're paying for, do youvalue?
Speaker 1 (08:18):
it Justifies the cost Correct.
Speaker 2 (08:20):
Are you getting out of this what you believe you
should, based upon what you arepaying, and that's what should
be the metric, because I think alot of people could miss out
like, oh, I'm not going to workfor this person because they do
an AUM fee, and this personcould be providing you above and
beyond service of what they'reactually charging you based upon
their AUM.
So I think the focus needs tobe on what is the end product
(08:41):
that you're getting, what is theend results, the guidance that
you are receiving, based uponwhat you're paying, not how it's
being paid per se.
Yeah.
And then also, too, is like withthe whole like starting to
investing once again.
It kind of the same thing we'vetalked about when it comes to
saving.
People feel some shame if theycan't save or invest a certain
(09:01):
amount of money.
So if you're like, oh, I wantto be able to invest $500 a
month, $400 a month, but youdon't have that, then these
people just wait until they havethat and you're missing out on
the biggest component.
That's in your favor and that'stime.
So, biggest component, that'sin your favor and that's time.
So, even if it's only $5, $10,that is better than zero, and I
cannot stress that enough.
Speaker 1 (09:26):
Well, and one of the things that I think you've
repeatedly talked about on thepodcast is building the habit of
either you know you set a timer, you set a calendar invite for
yourself and you go in on youknow the first Saturday of of
the month and you move somemoney over into your investment
accounts, or, even better, youautomate it so you get in that
habit of you're not going tomiss that $5 coming out of your
account.
Right, you're just not going tomiss it, but in a few months
(09:50):
when you look at it and it'sgrowing, you're going to be
reminded of oh, $5 does dosomething.
$5 is better than nothing.
Speaker 2 (09:59):
Oh, 100%.
And, as you said before, onceyou've been doing $10 a month
for two or three months you'relike, oh, I don't miss that, let
me up at the 20.
Another few months pass, Idon't miss 20.
Let me go in and up at the 40.
And you don't have to have thisdrastic increase.
It can be a gradual increasebut, like you said, it's getting
the habit started.
That's the biggest thing.
Speaker 1 (10:19):
Yeah, what else do you want people to know?
Because there's so much noisearound investing, right, you
have some platforms that arelike it's so easy, you can do it
yourself, you don't need to payanybody.
And then other people are likeno, there's so much risk, you
can mess it up, you need to paysomebody.
So there's a lot of just twosides of the aisle and I think
(10:40):
it's overwhelming for people whoare like okay, everybody keeps
telling me it's easy to getstarted, but I literally do not
know how.
Speaker 2 (10:47):
So technology definitely changed the game.
Having improvements intechnology has definitely
lowered the barrier of enteringfor the majority of people, but
then also, just you know, moreaccess to information has helped
people to understand theiroptions that are available to
them a little bit more.
But then also it can be a bitof noise where it's hard to
(11:08):
decipher what is true, what isfalse and what is applicable to
your situation.
So, with you know newtechnologies such as
robo-advisors, I think.
I think robo advisors can beused for a very early on person
in their career.
You know, you just got out ofcollege, your first full time
job, and you don't have a ton ofassets, but you do want to
(11:28):
start the process of investing.
I think a robo advisor can bevery helpful for you because
your financial situation is notvery complicated.
You, because your financialsituation is not very
complicated, a lot of the roboadvisors will provide you with
some basic education when itcomes to investing in index
funds, etfs, and help you topick a portfolio that will
perform decent based upon youknow, your age and your risk
(11:51):
tolerance.
Speaker 1 (11:53):
And where do I find these robo advisors?
Speaker 2 (11:55):
I mean you can find them at a lot of the you know
large financial institutions.
So you know Fidelity, charlesSchwab, I think most people out
here you know heard aboutRobinhood.
I wouldn't necessarily go withRobinhood, I'm not the biggest
fan of them.
I think their user interface isdone very well and the reason
for it being done very well isthat's their draw.
They make it very easy forpeople to do things.
(12:18):
But I think you could getbetter service, lower fees at
you know, like a Charles SchwabFidelity places like that.
Speaker 1 (12:26):
Okay, what do you say to the people twofold who have
debt?
I think we kind of addressed itat the beginning, right Of like
yes, you have debt.
Speaker 2 (12:36):
Yes, Before we hop into that, remember you were
talking about, like the peoplethat are DIY and stuff like that
that maybe can't do itthemselves.
Like I said before, I thinkvery few people are DIY and I
think if you are a true DIYwhere you are going to be able
to check all the boxesconsistently throughout the
course of your life from afinancial standpoint, more than
likely you've done this or youare doing this as your
(12:57):
profession.
Most people that's not whatthey're doing.
Speaker 1 (13:02):
You're going to miss something.
Speaker 2 (13:03):
Yes.
So even if you want to be a DIYperson, I still think you can
benefit from at least havingsome check-ins with a financial
planner to make sure that you'renot missing in your blind spots
, because I can tell you thatI've met with several DIYers and
they're missing things and, inall honesty, they're very basic
things.
Like I look at their financialsituation, within two seconds I
(13:24):
could point out five or sixthings that they missed that are
very basic.
So that's why I said that mostpeople can't be a DIY fully on
their own.
Be honest.
Speaker 1 (13:32):
But the DIYers that you have encountered are DIYing
because they have an interest,but also because they just want
to save money.
Speaker 2 (13:39):
Oh, that's the main reason people DIY.
No one says that like, oh, Idon't mind spending a bunch of
money, but I'd rather do itmyself.
Speaker 1 (13:51):
Well, but here's the thing vastly underinsured when
it comes to their life insurance, people who are, you know,
making decisions to cancel lifeinsurance policies or different
things because they want to savea little bit more money right
now, and you know, like there'sjust decisions that I know we've
talked about that are beingmade or not being made, because
(14:13):
when you're looking at yourfinances from one singular lens,
you're you have blind spots,right, you've you're looking at
your finances from one singularlens, you have blind spots,
right, you're focused on thosenumbers in a very emotional way
and you can't step back farenough to see the full picture.
Speaker 2 (14:29):
It's also hard because there's a lot of
different disciplines withinfinancial planning, and so you
might be able to oh, I can DIYmy investment portfolio from a
very basic standpoint of usingindex funds.
Yeah you could probably do that, but that's just one area and
they all overflow into eachother, and that's the hardest
thing I think people have theability to do is take a step
(14:51):
back and see how each pieceinterconnects.
Speaker 1 (14:54):
Yeah, no, that's a great call out because it is a
portfolio, for a reason, right,that term indicates that there's
various segments.
Right, you need your what doyou call them?
Not your protections, but yourdifferent insurances.
What are they called?
(15:14):
You call them something, Idon't know.
Okay.
Risk mitigation no no no, it's,it'll come to me, but that's
okay.
I mean, it's just a lot oftimes, you know, you say that
everybody knows what they needto do, but you're also the
person holding people's hands,making sure things get across
the finish line.
Speaker 2 (15:32):
Yeah, and I think everyone can benefit from
working with an advisor.
However, you know there is anentry level from a fee
standpoint to work with anadvisor and some of these people
are not at that point where itmakes sense to pay that fee to
do the full planning.
So, you know, the robo advisorcan work for you in certain
aspects to at least get youstarted and get a portion of the
(15:53):
plan in place.
Because, let me understand, therobo-advising is not financial
planning.
The robo-advising is helpingyou with your investing.
Speaker 1 (16:01):
That's it, and we had a whole episode on
comprehensive financial planningversus AI and robo-advisors and
we break down the pros and thecons and how financial advisors
like Brandon can use AI to helpthem in their practice.
So, we're not against AI androbo advisors, but there are
limitations and it's notcomprehensive financial planning
.
Speaker 2 (16:21):
Yeah, For example, the robo advisors aren't going
to ask you what is your goals intwo years, five years, 10 years
?
How much student loan debt doyou have?
How much credit card debt doyou have?
Speaker 1 (16:30):
Do you want to start a family?
Are you looking to buy a house?
Speaker 2 (16:34):
What is your current?
How much do you have in youremergency fund?
They're really not going to askyou those questions.
It really is focused on theinvestment portfolio only, and I
just want to make sure thatpeople understand that that is a
piece of the financial planningpuzzle, but it's not all of it.
Speaker 1 (16:50):
Right, all right.
Where do you want to go?
Speaker 2 (16:52):
We can go into the debt part now, sorry, Okay,
that's fine.
Speaker 1 (16:56):
So for people who are saying, well, I have debt, I
really want to pay off my debtbefore I start investing, we
kind of touched on it at thebeginning.
But what do you say to thosepeople?
Speaker 2 (17:05):
You can do both, as we said before.
For example, obviously, if youhave credit card debt or any
other type of debt, you do wantto be focused on paying that off
.
However, even if you're justdoing five, 10, $20 towards
investing, it makes a difference, and I think people often think
(17:27):
that they have to focuseverything on their debt and
wait.
They're going to miss out onyears of possibly investing.
And one of the biggest thingsthere is just to say, like if
you're employed at a companythat has a 401k plan and you're
not investing your 401k planbecause you're focused solely on
paying off debt, Now you'realso possibly missing off,
missing out on an employer match.
Speaker 1 (17:45):
Don't miss on your employer match.
Speaker 2 (17:47):
So let's just say, hypothetically, your employer
provides a 3% match.
Okay, so if you're just, youjust do the 3%, so you're taking
full advantage of the match,because now you're getting free
money and that free money beinginvested over years, allowing
compound interest to do itsthing, it's going to pay off for
you so much more in the end.
Now I'm not saying don't focuson paying off the debt.
(18:10):
That is definitely a focuspoint, but it shouldn't be the
only focus.
Speaker 1 (18:14):
What about the people who are just?
You know, the stock market'sgoing crazy and everybody's like
do I move my money, Do I not?
This is, you know, these areunprecedented times, the amount
of unprecedented times we, asmillennials, have been through.
Can I just say I'm over theunprecedented times?
But what would you say to thepeople who are just like I,
(18:37):
can't put.
It's like gambling.
I don't want to put my money inthe market because it's
gambling.
I'd rather put it in the bank.
Speaker 2 (18:42):
It's not gambling I can.
It's not gambling at all.
Speaker 1 (18:46):
But there's risk.
So what do you say to thepeople?
Speaker 2 (18:49):
But the risks are minimum when you're focused on a
long-term investing strategy.
If you were to cause, we'retalking about like 20 plus years
here.
So if you look at investing inthe stock market, no, no, as
long as the stock market hasexisted, if you invested for a
20 year period, at any point intime you are up over that period
.
You can start at any year themarket has existed and then go
(19:12):
20 years out and you are, youare, you're going to have growth
in the market.
So it's not gambling.
Speaker 1 (19:20):
I mean, I know last year we were at almost 25%
growth.
Speaker 2 (19:23):
You're going to have up and down days, up and down
years, but over the long term iswhat we are focusing on, is the
long term investing.
You are going to be up, so itis not gambling by any means.
Well, and we're not talkingabout day trading and picking
individual stocks and so theaverage individual should not be
(19:43):
picking individual stocks toinvest in, especially when
you're starting out, because onethat is a much more complicated
process in regards to analyzinga stock and there's multiple
ways to analyze a stock and youknow it's much easier to simply
focus on, you know, index fundsand also it's a less.
You know it's less expensive todo index funds from a
(20:05):
diversification standpoint, soyou're able.
Part of diversifying yourportfolio is part of the risk
mitigation aspect as well, sothat helps with lowering the
potential of losing money.
So that helps with lowering thepotential of losing money.
Speaker 1 (20:15):
I mean, I think when people talk about investing
right, you're thinking of theWolf of Wall Street, the crazy I
hope you're not thinking of theWolf of Wall Street that is
illegal In suits on the tradingfloor.
Everybody's shouting into theirphones, yelling at the screen
right Like that's not what we'retalking about.
Speaker 2 (20:34):
Yeah, most people.
When you're starting outhonestly even not just starting
out you know a core portion ofyour portfolio should be just
index funds, like when I'mworking with clients, I'm not
looking to beat the market.
That's not what I'm, that's notwhat I'm aspiring to do, because
if I could consistently beatthe market, then I'd be a hedge
fund manager and I'd be abillionaire.
(20:55):
But that's I'm, not WarrenBuffett.
And so a basic portfolio ofindex funds based upon your age
and your risk tolerance worksperfectly fine, and that's where
most people should start, andthat should also still be the
bulk of your portfolio, movingforward.
Speaker 1 (21:12):
What is an index fund ?
People always talk about howgood they are, how little they
cost, like, what is it and whyis it important?
Speaker 2 (21:21):
The easiest way for me to describe what an index
fund is is that there'sdifferent indexes that we use to
measure the performance of themarket.
The most common index thatpeople have heard of even though
maybe you haven't heard itmentioned this way is the S&P
500 index, and that is made upof the 500 largest US companies
on the stock market.
Okay, and when you hear themarket is up or the market is
(21:44):
down, this amount, normallythey're referring to the S&P 500
.
And it's kind of just amicrocosm to measure the broad
perspective of how the market isperforming.
So, once again, instead ofinvesting in a single stock,
when you're investing in an Sand P 500 index fund, you are
investing in all those 500companies a little portion of
(22:05):
yes as compared to.
I'm just going to invest inApple, I'm just going to invest
in Microsoft and by investing inan index fund, you are lowering
your risk because you arediversifying the potential of
losing money across 500, youknow essentially companies as
compared to if you were investedin maybe two or three
individual stocks.
Speaker 1 (22:25):
Okay, so you're you're kind of buying little
pieces in bulk instead ofpicking one company.
Correct yeah.
Mitigating risk.
Yeah, okay, what do you thinkis keeping kind of the average
person from moving forward withtheir investing journey?
Speaker 2 (22:45):
Analysis by paralysis .
I think that is the number onething that keeps a lot of people
from doing anything in life and, more specifically, a lot of
changes in their financial life.
They are overthinking andthey're not getting started.
Speaker 1 (23:00):
Or they're waiting for it to be perfect, or for me
to have the right amount ofmoney, or for me to do it this
way versus that way.
Speaker 2 (23:07):
Yeah, and the biggest thing there is that there's no
perfect time and you're notgoing to get it correct all the
time, but getting started is astep forward and as you get
started and if you do make anerror, it's okay, we all make
errors the biggest thing is thatnow that you've gotten started
and you've made an error, youlearn from it and then you make
changes accordingly and try tomake sure that you don't repeat
(23:29):
the same error if it'spreventable.
So that's the number one thing Iwould say.
And then social media doesn'thelp.
So that's the number one thingI would say.
And then social media doesn'thelp because once again, kind of
taking a step back to we weretalking about, you know, with
the index funds versus investingin individual stocks,
individual stocks sound sexier.
That's what you hear a lot ofpeople talking about and you
know that's what's all oversocial media.
(23:50):
Or day trading all over socialmedia.
Oh, you can do day trading, youcould do this, you know like
you can do those things, but themajority of people lose money
doing them and that's time.
Yes, Cause like so, for example,if I was making so much money
as a day trader.
Speaker 1 (24:08):
I'm not going to be posting, I'm not selling you a
course.
I'm not.
Speaker 2 (24:11):
I don't.
I'm not creating a course tosell to you and spending all my
time on social media trying tosell this course because I made
a bunch of money day trading.
I don't need to do that Now.
I'm not saying that anyone thatsells a course isn't doing what
they're saying.
That's not what I'm saying.
However, I would say a majorityof people on social media that
are selling a course aren'tnecessarily doing what they're
(24:33):
trying to tell you they're doing.
Speaker 1 (24:39):
And I think anyone that's successful, that sells a
course, will tell you the samething.
I mean, we know a lot of peoplethat sell courses Not on day
trading.
Speaker 2 (24:44):
But what I'm saying is we know a lot of people who
sell courses.
We know people that sellcourses.
Now I'm talking about everyoneon social media the millions
that everybody has a course, the20, 50, say 50 people that we
know that sell courses out ofthe millions of people that are
on social media is less than 1%.
Speaker 1 (25:01):
Yeah Well, I mean, take everything with a grain of
salt.
Social media is only thehighlight reel.
I mean, you know people are notout here rolling in dough.
That's just the bottom line.
Speaker 2 (25:13):
And also, like I said , depending on the course,
there's a difference betweenteaching someone how to a
successful strategy to pay offdebt as compared to teaching
someone a successful strategy today trade to become a day
trader.
Speaker 1 (25:24):
Yeah, so the investing that we are talking
about is not day trading.
Speaker 2 (25:29):
No, and if you want to do that, fine.
I'm not here to tell peoplewhat to do, I'm just going to
tell you.
The statistics are thatmajority of people that day
trade lose money.
Speaker 1 (25:37):
There you go.
Yeah, what can people do to getstarted?
Speaker 2 (25:40):
Well, also the thing is, too is.
One more thing here is that wetalked about the 401k plan, and
our platform is all about havingmore open conversations with
your friend circle.
So, for example, why most peoplehave a 401k plan through their
employer.
Why don't we talk about thatwith our friends?
Now?
We talk about it because, also,people ask me a lot of
(26:00):
questions about it.
But those should beconversations that you should
have with your friends so thateveryone has a better
understanding of their 401k plan, because I can tell you that is
one of the most misunderstoodaccounts that everyone has them,
but they don't know all thefull functions and details of
their plan.
I've never sat down withsomeone that fully understood
their plan.
Speaker 1 (26:22):
Well, and we did an entire episode on it for that
exact reason, right, because youcan do your traditional
contributions, you can do yourRoth, you can do after tax.
Yep I mean we break all of thatdown.
So and then again the timehorizon even if you do like a
target date fund, which is whatit oftentimes will, kind of auto
(26:42):
, put you into, you can stillmake adjustments.
401k I get a four percent match.
And we sat down and made anadjust, a big adjustment,
because it had me in 83 percentstocks and, I guess, 17 percent
(27:02):
bonds, and you were like, nope,we're gonna go 100 percent
stocks, here's what we'repicking.
Um, and there are, you know,everybody's 401k plan is what I
say differently.
Speaker 2 (27:11):
Just to clarify, when we, when she is saying stocks,
we're talking about index funds.
Speaker 1 (27:15):
Yeah, we picked.
They were what?
Vanguard index funds?
Yeah, we picked Vanguard indexfunds.
Speaker 2 (27:18):
Yeah, because you can't invest in individual
stocks in your 401k plan unlessit's your company's stock, which
also is not in your 401k plan.
It's in a separate accountoften.
Speaker 1 (27:31):
Well, and I even posted exactly what we chose.
So, if that's of interest,that's not the advice we're
giving you to choose what I'mchoosing, but to know what your
options are and to maximizethose so that you can have an
optimized 401k.
Because I mean before this biglast dip, I mean my 401k was
(27:53):
looking really nice, and that'sI mean mostly in part because of
the company match that I'vebeen getting.
Speaker 2 (27:59):
And also, since you brought that up, for those
people that are afraid andthey're trying to like wait
until the market quote unquotegets better, don't do that,
because when the market getsbetter, what that actually means
is that prices have started toincrease, so now you're
purchasing funds at a higherprice.
Speaker 1 (28:16):
Yeah, that's when people say buy low, that's when
the market is not doing well.
You see the red lines goingdown on all of the charts.
Speaker 2 (28:25):
When these times like this are happening in the
market, where there'suncertainty, you need to think
back to the original plan.
That's why I always say it'simportant to have a plan in
place, because things get rocky.
You've reverted back to yourplan.
You're like, hey, we talkedabout these things before.
We, you know, plan for thesethings to occur.
So we have a plan in place, solet's stick with it.
(28:45):
That is the biggest thing,because don't wait to invest in
your, you know, in the market.
Just go ahead and start.
Do it now.
Speaker 1 (28:53):
Yeah, so what are your final thoughts here?
Well, people, getting started.
That's the biggest thing,that's the overarching thing.
Speaker 2 (29:01):
That's the whole purpose of this podcast episode
Get started today, and theeasiest way to get started are
in accounts that are easilyaccessible to you that you may
already have, number one being a401k, 403b, whatever retirement
plan that you maybe have foryour employer.
That's the easiest way to getstarted.
Okay.
All right Now.
Some of the other accounts youmay have access to are an HSA.
(29:23):
If you are enrolled in a highdeductible health plan, A lot of
people don't realize that youcan invest the money that's in
your HSA.
Speaker 1 (29:30):
Triple tax advantaged .
Speaker 2 (29:31):
So you can do that there.
But then also you maybe alreadyhave a Roth IRA or a
traditional IRA, Utilizing thoseyou know, opening those.
Speaker 1 (29:39):
They should not be sitting in separate places A,
(30:01):
it's going to make it easier foryou to forget about where they
are and what's in them.
So, instead of having a 401kover here and a 401k over here,
et cetera, et cetera and youdon't know what's going on, roll
those into a IRA or into yournew 401k and optimize those.
Speaker 2 (30:13):
Yeah, and next thing I would say you need to do is
automate.
Make things easier for yourself.
Now, if you are investing inyour 401k plan, the nice thing
is that that's already automatedfor you, so you don't have to
worry about that.
But if you're going to beinvesting into like a
traditional or Roth IRA, thenyou do need to actually do that
yourself.
It's not automatically, so Iwould recommend automating the
(30:35):
amount on like a monthly basisthat you're going to be
attributing to these accounts.
But then also that second stepof automating the investing into
a fund.
Remember, there's two steps toinvesting You're putting the
money into the account and then,once the money's in the account
, you have to choose which fundsyou want to invest in.
Speaker 1 (30:52):
Don't let it sit there in cash.
Speaker 2 (30:53):
Yeah, don't just do step one, you have to do step
two and you can automate both ofthose steps also.
Speaker 1 (30:58):
Yeah.
So just remember to get started, even if it's messy, even if
it's a small amount, even ifit's not perfect, even if you
need to make changes down theline.
But start today, becausethere's no better day than today
to get started in yourinvesting journey.
We hope this was helpful.
(31:19):
Tune in next time.
We'll talk to you soon, don'tforget.
Benjamin Franklin said aninvestment in knowledge pays the
best interest.
You just got paid Until nexttime.
Thanks for listening to today'sepisode.
We are so glad to have you aspart of our sugar daddy
(31:45):
community.
If you learned something today,please remember to subscribe,
rate, review and share thisepisode with your friends,
family and extended network.
Don't forget to connect with uson social media at the sugar
daddy podcast.
You can also email us yourquestions you want us to answer
for our past the sugar segmentsat the sugar daddy podcast at
(32:06):
gmailcom, or leave us avoicemail through our Instagram.
Speaker 2 (32:10):
Our content is intended to be used, and must be
used, for informationalpurposes only.
It is very important to do yourown analysis before making any
investment based upon your ownpersonal circumstances.
You should take independentfinancial advice from a licensed
professional in connection with, or independently research and
verify any information you findin our podcast and wish to rely
upon, whether for the purpose ofmaking an investment decision
or otherwise.
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