March 19, 2025 • 50 mins
Dive into the world of financial literacy as we chat with Stephanie Carchia, a financial advisor-turned-real estate agent who shares invaluable insights on managing money effectively. In this engaging episode, we explore how financial conversations are often sidelined and the impact they have, especially on women's confidence in their financial decisions. Stephanie discusses her transformative journey from the hedge fund industry to helping individuals navigate their financial futures, emphasizing accessibility and demystifying money.
You will discover the importance of conducting annual financial reviews, understanding the necessity of having legal documents in place, and the critical role of life insurance. We decode the intimidating aspects of money management into digestible pieces that empower individuals to take charge. Stephanie encourages everyone to challenge their fears and build awareness about financial health.
With practical tips and motivational advice, this episode equips you to transform your relationship with money. Tune in to learn the first steps you can take to start managing your finances better. Don't forget to join the conversation by sharing your financial goals and experiences! You can seize control of your financial future starting today!
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Episode Transcript
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Speaker 1 (00:00):
Welcome in everyone and thank you so much for
joining me again this week.
This week, we're going to talkabout some amazing and necessary
topics.
We're going to talk about theapproachability and the
necessity of money.
My guest this week is StephanieKarsha, and she is an amazing,
accomplished financial advisorturned real estate agent.
(00:24):
Stephanie is dedicated toempowering individuals,
specifically women, with theknowledge and tools they need to
take control of their financialfutures.
She's driven with a passion forspreading financial literacy
and she takes practical approachto building wealth and making
complex topics simple andrelatable for everyone, and
today she's going to give us amini masterclass on navigating
(00:47):
these intricacies of moneymanagement and real estate.
It is my pleasure and my honorto introduce to you Stephanie.
Stephanie, thank you for beinghere and welcome to the show.
Thank you so much for having me.
Speaker 2 (01:01):
It's a real honor.
Speaker 1 (01:02):
Stephanie, I am really excited for you to be
here.
We've talked about money acouple of different times, but
not quite in this manner.
Money is still intimidating forpeople.
It still feels like it's out ofreach, it's not approachable
and for some reason that alwaysseems to hit women particularly
(01:26):
hard.
But give us a background as towhat drew you into the industry
of money and why it is yourpassion.
Speaker 2 (01:38):
Yeah, absolutely, and I think you hit the nail on the
head.
Even the most educated peopledoctors, lawyers finances are
just not as approachable forthem, it's just a concept that
they kind of want to stay awayfrom.
But getting back to mybackground, so I grew up right
outside of New York City.
When I graduated college, thething to do was work at a hedge
(01:58):
fund.
So that is what I did, and itwas 2008.
So got a quick life lessonthere, what I did, and it was
2008.
So got a quick life lessonthere.
And then you know, going throughthe hedge fund industry, it's
very you're working withinstitutions, not individuals,
so it's very cold and moretransaction based, and it just
didn't sit well with my soul.
I didn't know why, but it justdidn't feel like the right fit.
(02:19):
And so I had a couple differentjobs in that arena and then I
ultimately landed as a financialadvisor, and that was working
directly with individuals,helping them save for retirement
, purchase homes, pay for kids'college education, and that just
really felt so much morefulfilling to me.
And I did that for about six orseven years after my initial
(02:40):
seven years in the hedge fundworld.
And then, when COVID hit, Ijust said.
You know, I don't want to sitin an office anymore and the
market really became susceptibleto every little tweet and that
was so hard for me to try toexplain to clients.
You know, this is a viablecompany but because someone
tweeted about it, it's downtoday, and so I kind of just
thought about what made sense,given, just you know, my
(03:02):
family's history in real estateand my experience in finance,
and so I came to become a realestate agent and it's very
similar to the role I wasplaying as a financial advisor,
where I get to help individualsin such a crucial point in their
lives.
And it's even more personal thanthe financial advisory, because
when you have real estatetransactions it's usually around
(03:24):
someone passing away, someonegetting married, someone having
a child, you know, downsizingfor whatever reason, maybe
they're empty nesters or theylost their job.
So it really is focused aroundpeople's most important life
events and it's just such anhonor for me to be able to
navigate them and, you know,especially having this
background, which is a littlemore unique for someone in real
(03:45):
estate to have, and so throughthat process I become sort of
their overall advisor, not justtheir real estate advisor,
because once you purchase realestate and you want to, you know
, make sure it's in a trust, andthen you have the correct life
insurance to cover the mortgageshould something happen.
There's all these differentthings, and I'll stop there,
because I could go on and on,but that's how we got here.
Speaker 1 (04:06):
And what you have found through this different
kind of journey is that you haveengaged with women that are at
a crossroads in their lives,Sometimes that they are a lot of
times they're on their own forwhatever reason.
They've been divorced, They'vebeen widowed and they're at this
(04:35):
point where they have notmanaged money before, For
whatever reason.
They have not managed moneybefore that their husband took
care of all the money and thatcould be, and people always
assume that that is the oldergeneration and you're like no,
no, no, no, no.
That is a falsehood.
These are women that are of allages, all educations, of all
(04:58):
accomplishments.
There is no discrimination inwhat type of women don't handle
their own money.
Speaker 2 (05:20):
Or they're just single and maybe they're not.
You know they're busy andthey're accomplished in their
careers and they're just notaddressing it and you know when
they would come to us sometimes,especially, you know I don't
want to generalize, but ithappened where you know it'd be
myself and a male counterpart inthe meetings and they're really
using all kinds of financialjargon and the women don't want
to ask questions.
There's some sort of shamearound it which there, just
(05:41):
there shouldn't be right.
These are basic financialconcepts that we should all
understand, and if you don'tunderstand something, just like
anything else you're, you'repaying for a service.
You should be able to askquestions and feel comfortable
and understand it.
But for some reason it was morecommon that women just didn't,
you know, didn't want to ask thequestions, or sometimes they
would even call me a day laterand say, hey, did I understand
this correctly?
(06:02):
And when I started noticingthat was really when I just felt
, you know, I have to startgetting out there and getting
this information out there to asmany people as I thought,
especially women as possibly Ican.
Speaker 1 (06:14):
So where do we start?
And you used when you and Ifirst met, you said I want to
make this accessible, I want tomake this easy and I want to
lower the intimidation bar.
Because this is so important tome?
Because all women should knowhow to manage their money.
They should know how to investtheir money and know that it's
(06:37):
never too late to start, Even ifthey are in their 50s, their
60s does not matter, it's nevertoo late to start and it's never
too early to start.
Everybody should know how tomanage their money and what the
science of money is.
So we are ready.
I've got pen and paper ready togo.
(06:58):
Let's start and go slow.
Let's make it easy anddigestible and give us into
bite-sized pieces.
Speaker 2 (07:07):
Okay, well, first of all, you are spot on that.
You're never too young, that'sfor sure, even if you can get
children into this, it's greatto do but also never too old as
well.
But in terms of a place tostart, it's really just
awareness, right.
Whether you're single andyou're just not really looking
at your bills, you're just like,oh, there's money in the
account, there's more than Ineed to pay the rent and other
(07:28):
things this week, so it's cool,right, and there's some money in
my retirement account.
I don't know if that's going togrow to be enough of what I
really need or not, but it'sthere.
Or if you're in a partnershipand maybe one partner is taking
care of the finances, that'scompletely fine, but you need to
be aware.
So, first thing is you know youwant to have an accounting of
(07:51):
where all the accounts are, justso that you can check in there
and then have a plan and youknow again whether you're with
yourself or with your partner.
Sit down at least annually.
Now some people will probablytell you oh, you should be doing
it weekly or monthly.
Sure, that's the ideal, but'sthe ideal.
But the idea here is not forperfection.
It's progress If you weren'tdoing it at all before.
Annually is 150% better, right?
(08:12):
So just being aware of yourspending, of what your debts are
, of what kind of assets youhave and when I say assets,
anything that is of value, right.
Most importantly, it wouldprobably be your home, for most
people, maybe your car, butthat's something that really
kind of goes down over time.
But if you have investmentaccounts, just having an
accounting of how much you haveand then you know again, taking
(08:37):
into account your spending goalsand where you want to be in the
future, right.
So you're getting by right now,but how much do you need to
retire?
Right, and so these things youknow.
Ideally, you would sit downwith a financial planner, and a
good financial planner willprobably cost about $1,200.
And I'm sure so many people willsay I don't have that kind of
(08:57):
money, but this is yourfinancial future.
I tell people all the time go,look at your Postmates bill for
the last six months or yourAmazon bill for the last six
months.
I'm sure you could find $1,200that you could have used to sit
down with a financial plannerand get all this done Right.
So if you can do that, that'sideal.
But at least just having abaseline and understanding where
(09:18):
you are and an accounting ofall your accounts and how much
you're spending is certainly thefirst place to start all your
accounts and how much you'respending is certainly the first
place to start.
Speaker 1 (09:33):
So, as a baseline, as we're gathering information,
let's pretend that we've neverdone this before.
Like I said, we're going tostart slow Gathering accounts,
gathering your bank accounts, asfar as paperwork is concerned.
Gather your bank accounts.
Gather your 401k paperworkmaybe.
Sure, yeah, any retirementaccounts, retirement accounts If
you get stock shares, somecompanies, if you get to work
(09:55):
for a company and they offer youstock that you get to buy stock
at a discount or whatever thecase may be.
Or they maybe they gift youstock, whatever it is.
Gather that paperwork.
So, maybe get that paperworkand then your credit card bills
or your, if you have a car loanor student loan or that kind of
stuff.
Gather all that stuff togetherand put it in a pile and maybe
(10:21):
have your computer with aspreadsheet or, if you do it,
old school, on a yellow pad,whatever it is.
Gather it all, sit down at thekitchen table and go over it all
together, all at the same time.
Am I tracking?
Speaker 2 (10:36):
Yes, you are.
So I would say there's a fewmajor categories and they
encompass pretty much everythingyou just said.
So one is your income how muchare you bringing in every year?
Two is your expenses.
Now, that's just you know.
From whatever your housingcosts, are your any of your
daily spending costs?
And then also you know, likeyou said, your liabilities, any
(10:57):
car payments and anything likethat.
So that's the second column,income and expenses, and then
beyond that is going to be againyour assets.
And your assets are things likeyour checking account, your
retirement account, if you haveany other investment accounts,
and then, as I was mentioningbefore, like your real assets,
like your home.
Speaker 1 (11:17):
Okay, so annually, that's a good start.
Yes, so once you getcomfortable with that, maybe
quarterly, bump that up toquarterly maybe.
Speaker 2 (11:27):
That's absolutely ideal, because what you want to
do in your annual meeting withyourself or with your partner is
establish okay, did I spendmore than I earned this year?
That's a problem.
How can we course correct that?
Right, so now you've set thatgoal for yourself, but how do
you go through the whole?
Next year you might get off thetrack again.
Right, so to be able to sitdown quarterly and say, ok, in
(11:48):
this quarter I actually, youknow, spent less than I earned,
we're in good shape.
How can I replicate that forthe following quarter and just
keep kind of checking in withyourself or your partner?
Speaker 1 (12:00):
So how do you fix that kind of stuff?
Speaker 2 (12:14):
Just as a practical example, say, like I've
overspent, how do you fix that?
Where do you identify theproblem and how do you fix those
problems?
Money is one of the onlinetools.
Maybe even your AmericanExpress bill will kind of
categorize.
You know where your expensesare and then you're going to see
.
You know which ones are thelargest and do they need to be
the largest?
Right Again, it's you know ifyou're ordering out at Postmates
(12:36):
too much, you know, maybe it'slike, hey, this quarter we're
going to make an effort to eatin more, right, and so sometimes
it's adjustments for smallexpenses that really add up over
time.
Or maybe there's large expenseslike, hey, you know, the car
insurance seems to have gone upquite a bit in the last few
years.
Can we go and call around andsee if we can get a better quote
(12:57):
from somebody else, and maybeyou can take a couple hundred
dollars off of your monthlyexpenses, right?
Or even just all thesubscription services.
I think we talked about thisand we were laughing about it.
You probably have subscriptionservices that you're not using,
that you're not even aware of,that.
You have anymore Cancelingthose can easily get you a
hundred dollars plus a month,right, and that's $1,200 a year
(13:20):
right there.
Speaker 1 (13:21):
Well, just as a side note, when Stephanie and I met I
went huh, I wonder how much I'mspending.
I took a day, went through myaccount and I went what's that?
Well, what's that?
I went through and looked atall these subscriptions and
they're small.
They're small that you justdon't even notice and I canceled
(13:46):
probably oh my gosh, like $75 amonth of things that I didn't
even use, but they're so smallthat you don't even pay
attention to them.
But that $75 a month adds upover a year, which then adds up
over time.
But that's something I don'thave to spend Exactly.
(14:10):
And it was because Stephanie waslike well, how much are you
spending on subscriptions?
I'm like I don't really know.
So that was a life lesson.
It was easy, it was a piece ofcake.
It took some time, it took anafternoon to go through and look
at it and I was like but I'mnot using that.
I don't even know what that is.
And it's easy to sign up forthis stuff because they do that
(14:34):
on purpose.
They make it easy Absolutely,and then you forget about it.
Speaker 2 (14:40):
Yep, and to our original point, you are a very
successful, accomplished,organized woman, but it was just
escaping you because you'rebusy.
Speaker 1 (14:49):
Yes, I am no shame.
Yeah, super busy and I hadforgotten about it Forgotten,
and it wasn't until you saidsomething that I went.
I don't know.
Speaker 2 (15:02):
Exactly so, even you know.
Obviously that may not, youknow, change you into a
millionaire overnight, but thesesmall changes are, you know
again, progress, not perfection.
Every little bit helps.
Speaker 1 (15:15):
So I'm doing that.
This is, this is progress.
These are progress, forwardsteps.
We're doing good.
What's next on our checklist?
Speaker 2 (15:24):
Yep.
So once you sort of have thatfinancial picture down, you also
really want to make sure youhave all of your legal documents
in place.
This one I cannot stress enough, because everyone thinks they
don't need it.
Everyone thinks they're goingto live forever.
Or I don't have kids, or I'm asingle person, or I don't own
real estate.
I don't need a will, I don'tneed a healthcare directive,
(15:45):
which is the complete wrongattitude to have.
Okay, First of all, just even ifyou are a single person and you
have no children and you don'town any property, if you are
over 18, HIPAA laws do not allowanybody else access to your
medical records.
So if a college student or asingle person in their 30s is in
the hospital and their parentsneed to understand what's going
(16:06):
on or make a medical decision,if you don't have a document in
place that gives them the powerto do that, they might not be
able to do that, which is I justgot chills saying that because
it's the scariest thing and it'sso easy to do.
Again, there's I think it'sRocket Lawyer.
They have easy templatesbecause you don't have a
complicated situation.
You don't have to pay thousandsof dollars to get these
documents in place.
(16:28):
And the same thing goes for yourfinancials, right?
If you're in the hospital andincapacitated?
You know your parents don'thave access to your financials.
You know, if you're?
I mean, this is extremesituation, right?
If you're in a coma for monthsand you own a home and no one's
paying your mortgage and allthese different things.
This is something that peoplejust don't think about and it's
so super easy to do.
Speaker 1 (16:50):
This is stuff that we don't want to think about.
I don't want to think aboutthis stuff.
I really don't, but I will tellyou that there are
circumstances that happen, as Ishared with you before.
Our kids are out of the house.
They are in their mid-20s now,but my husband and I are in our
(17:12):
early 50s.
We're young empty nesters, butwe have now watched.
I watched my best friend loseher mom this year and then my
husband just lost his mom andwe've just we've watched the
paperwork that is involved.
That happens and we're like wedon't want to put our kids
(17:36):
through the paperwork.
Speaker 2 (17:38):
Yep, when they're grieving, you know, yes, when
they're grieving, the worst time.
Speaker 1 (17:42):
It is such a mess.
The paperwork is a disaster.
Yep, if it's not planned forahead of time.
We're actually putting thingsin place well ahead of time so
that the paperwork is dealt with, so they don't have to worry
(18:02):
about that.
This is actually a gift forthem.
Yes, exactly, so they don'thave to worry about it.
It's taken care of.
They don't have to deal withthis for, hopefully, decades,
but it's one less thing thatthey're going to need to deal
with and it's the only way I canthink of is that it's a gift
(18:23):
for them in the future.
Speaker 2 (18:25):
You're absolutely right.
And not only the paperwork, butif you have to run all of that
through the probate courts Idon't know about other states,
but California takes 5%.
If you own a million dollarhome, they take $50,000 just to
push the paperwork through thecourt system, and that's even if
you have a will.
So my number one recommendationagain, if you go to a state
(18:48):
attorney or if you even go onone of these websites, they're
going to tell you all thedifferent documents that you
need.
We talked about the healthcare,power of attorney for finances
and everything, and then there'ssomething called a living trust
.
So certainly anyone who ownsreal estate or has children
everything should be in a trust,because that skirts around the
probate courts.
It happens instantly.
You don't have to go throughthe court system, which is one.
(19:11):
It takes time, it's paperworkand they take so much of the
assets that are left over, whichis just.
These people worked hard.
They want this to go to theirheirs, not to the court system,
not to the county.
Speaker 1 (19:24):
Wow, so California takes 5% right off the top.
Speaker 2 (19:29):
Yep, wow, I wonder how much I think it costs like
maybe $2,000, $3,000, to get avery basic estate planning
package with all these documentstogether.
You do that one time, you know,and the only time you'd ever
have to change it is if you youknow you had more children and
you want to put them in, orwhatever the case is, but they
don't charge you that samecharge to edit it, you know, in
the future.
So for a couple thousanddollars you're saving tens, if
(19:52):
not hundreds of thousands ofdollars.
Speaker 1 (19:55):
Wow, I wonder how much it varies from state to
state.
Probably a lot, I'm sure, yes,I mean, and with the values of
homes, how much they have risenfrom state to state.
I'm in Arizona and the cost ofour houses have risen so much,
even over the last four years.
I don't know what that wouldcost.
(20:17):
I don't know what the state ofArizona takes, but it's probably
a lot With the cost of ourhouses, as much as they have
risen over the last four years.
5% is a lot of money to takeoff the top Exactly.
Speaker 2 (20:30):
Yeah, and one other tidbit on that note if you
really haven't done thedocuments yet, the best thing
that you can at least do,especially as a couple, but even
as a single person for any ofyour, if you have your
retirement accounts, you have adesignated beneficiary, but for
something like a checkingaccount or even just a regular
investment account with stocksin it, you can designate a
(20:52):
beneficiary.
It's called a transfer on deathaccount, and so at least that,
I believe, can also skirt aroundthe system.
It gets transferred directly tothe beneficiary rather than
having to go through everything.
Speaker 1 (21:06):
Good to know.
Good to know.
I did not know that that wasalso the same for stocks.
Speaker 2 (21:13):
Yes, it's a different .
They call it like an individualstock account.
This is a an individual TODtransfer on death.
So you can do that in any sortof like Fidelity or E-Trade kind
of thing.
Speaker 1 (21:24):
OK, so on our checklist, we have at least an
annual financial review withyour, with yourself and or your
partner.
We have your documents, getyour paperwork and in in
alignment, which means um, your,your directive, you need a
directive.
You need a health directive,guys, even if you're, even if
(21:46):
you're 19, you need one,especially if you're don't live
near your parents, you need one.
And you need some paperwork ifyou own property, so your heirs
can know what to do and not haveto have all of that burden on
top of them.
Okay, all right, I'm on thechecklist.
Sounds like a lot, but if youchip at it a little bit at a
(22:10):
time, it probably isn't thatmuch correct Exactly.
Speaker 2 (22:13):
And a lot of this stuff again is sort of a one and
done, set it and forget it, andunless you have a major change
in your life circumstances, youdon't have to go back and amend
these things frequently.
Speaker 1 (22:24):
Okay, all right.
What's next on our list?
Next is life insurance.
Speaker 2 (22:29):
Life insurance, yes.
Now again, everyone thinks youknow they're never going to pass
away and they don't need it.
And there's two types of lifeinsurance.
There's whole life insurance,which covers you for your whole
life, and then there's term lifeinsurance, which just covers
you for a term.
Term life insurance isobviously a lot less expensive
because they're insuring you fora much shorter period of time,
(22:51):
right, and you really probablycan't get a life insurance
policy when you're older becausethey won't insure you.
You know, from 60 to 80.
They're like no, you'reprobably going to go soon, so
we're not insuring you, right.
But going back to, especially ifyou own real estate and you own
it with a partner, and even ifyou don't have children, but
especially if you have children,if you have two incomes, the
chances are if something were tohappen to one of those partners
(23:14):
, the other person might not beable to carry the weight of that
mortgage for the rest of thosechildren's lives, right?
And the last thing you want, ifa child loses a parent, to
displace them from their home or, you know, worry about paying
for their college or literallyanything in their daily lives,
right?
And so what you want to do isget a term life insurance policy
(23:34):
that would essentially beenough to supplement that
person's income for the nextcall it you know 20 years, right
From when they're born to thenthey're 18, 20, but leave the
nest right To be able to youknow supplement that income
should something happen to oneof you.
Speaker 1 (23:49):
But whole life insurance is that covers them
for their whole life?
Is that something you pay forall the time?
Is it you pay for one at onetime?
I mean, how does that work?
Speaker 2 (24:05):
Sure, so in both scenarios you pay a monthly
premium, or maybe you can set itup to be semi-annually,
quarterly, whatever it is, butyou will pay for it on an
ongoing basis in both cases.
But for whole life insurance itactually becomes more of an
investment account.
But what happens there isinsurance companies are
businesses too, so what they'regoing to do is they're going to
(24:28):
take your money and they'regoing to invest it and they're
gonna maybe earn 7% andguarantee you 4%.
So if you are someone who has ahard time saving, this can be a
good sort of forced savingsmechanism.
And then you have this extrabucket of cash down the road,
should you ever need it, becauseyou can also, down the road,
(24:51):
cash it out before you pass away.
You're not going to get thefull value.
Maybe it'll give you 70% of youknow what you've contributed,
plus the earnings or somethinglike that, and at some point it
can start paying the premiumsitself through dividends that
you earn.
So if you can manage to save$100 a month on your own and
invest it and not touch it,that's a much better scenario,
(25:12):
because you get to keep all theearnings that you get.
But if you can't, the wholelife is not a bad scenario and
then, should something Godforbid happen to you in these
years, you do have that policy.
Sometimes people like to takeout small ones to just cover the
cost of their funerals.
Sometimes they like to do itfor very wealthy.
(25:33):
People use it as a strategybecause they know they're going
to have to pay tons of estatetaxes and and they don't want
that taken out of their you know, their children's inheritance.
So they have a separate policyjust to cover the taxes that
will have to be paid.
So all the money that they didhave can go to their children.
So there's various differentways to use the whole life
insurance, but generally it'snot something I would recommend
(25:54):
to the masses.
Term life insurance is reallythe thing that you want, just to
make sure that your family andtheir home are protected in the
event of your passing.
Speaker 1 (26:04):
And this is something that you can do even outside of
your employer as well, becausesome employers will offer life
insurance to their employees,but you can also get this
outside of your employer too,correct?
Yes?
Speaker 2 (26:19):
because usually what the coverage that they're
offering is probably not thatgreat or not that large of an
amount.
So you definitely want to makesure, like maybe it's, you know,
$60,000.
But you know again, if you'rean earner of $100,000 a year for
, again, 18 years of yourchildren's life, you need a
large policy.
So usually what they're givingyou you're going to be very
underinsured.
(26:40):
You want to have another policyoutside of it and you know any
insurer, like a state farm orwhomever you know.
It's pretty easy to get and,again, the term life insurance
premiums are pretty reasonablefor, you know, with the value
that you're getting.
Speaker 1 (26:54):
Okay.
So, what's next on our?
Speaker 2 (26:56):
checklist.
Now let's talk aboutinvestments, right?
So when you are sitting downand you're looking at what you
have and you're thinking about,you know what you need in the
future.
It really should be goaloriented.
What are your short-term goals?
You know, maybe it's purchasinga home, so you're saving for a
down payment.
What are your medium-term goals?
Hey, we need to pay for college, you know, in 10 years.
(27:17):
And then your long term goals,which is most likely retirement,
or maybe you, you know, want tobuy a vacation home or
something like that, right?
So those are the buckets thatyou should be thinking about.
And that's what we call riskbuckets, right?
Because anything that's shortterm you want to be taking very
little risk on because you needit immediately.
If you haven't invested in thestock market, that can go up and
(27:38):
down drastically, not moneythat you want in the stock
market.
Medium term, you can have someconservative and then some in
the stock market and then youget the mix there.
And then your retirement,especially if you're on the
younger side retirement's 30years away you can be pretty
aggressive with that bucket.
So we like to think about it inrisk buckets.
Also tax buckets, which I thinkmost people understand the risk
(28:01):
buckets Tax buckets are thingsthat people don't talk about.
So if you are contributing toyour 401k most people do that on
a pre-tax basis you get thededuction from your income right
now Everybody loves that andthen the idea is long-term you
will pay taxes on it when you goto withdraw it.
Well, again, you know we alllive pretty expensive lives and
(28:23):
I think there's a commonmisconception that it goes down
in retirement.
But if you're healthy inretirement now, you're not
working.
You have all the time in theworld to travel or go out to eat
.
You're spending money, right.
So you probably need $100,000 ayear, maybe more, right?
And so if you're paying taxes,that's a high amount.
Everything that you take out ofyour retirement accounts is just
like if you were earning thatin your job, right.
(28:45):
So if you're earning $100,000,how much you get taxed in your
job today is how much you'd gettaxed then if you go to take it
out.
So you want to havediversification there as well.
So you want to have some moneythat's just your savings that
you've put in a regularinvestment account.
That's after tax money, orthere's something called a Roth
401k and a Roth IRA, which isyou pay the taxes now and then
(29:09):
it grows completely tax-free andwhen you go to take it out in
retirement you don't pay taxesHuge benefit.
However, you want to do thatwhen you're younger, because the
taxes that you take out nowcall it 30% that's a large chunk
, right?
So you want to have time toinvest that to not only make
back that 30% but then earn alot more on it so let's see.
Speaker 1 (29:32):
I want to make sure that I understand this correctly
.
So if you're investing, do youhave to have a lot of money to
invest?
Speaker 2 (29:39):
you do not you can invest with very little money.
There's so many different umplatforms now where you can, you
know, buy a fraction of a shareor a fraction of a piece of
real estate, or you know, to buysome.
There's stocks that are five,$10, right, so you don't have to
have a lot of money.
But the it's really about thetime.
(29:59):
In the market, compounding is abeautiful thing, so I hope
everybody knows you know the S&P500.
If you don't, it's the 500largest or most lucrative
companies in that are in thecountry right now and it's it's
a fund that you can buy into.
So I had a chart on my deskwhen I was in finance and it was
something like if you put$10,000 into the S&P 500 in, I
(30:23):
think like 1938 or something inthe 30s I'm not going to get the
date right but and then you letthat grow and never touched it
and just reinvested anydividends that those stocks paid
out in 2016, that $10,000turned into $46 million without
touching it, just putting it inand leaving it there.
(30:45):
So you don't need a lot ofmoney as long as you start doing
it early and you just let itgrow.
Speaker 1 (30:53):
So you just need a little nest egg and just leave
it alone and be smart about it,correct?
Speaker 2 (31:00):
Yes, it's more about yes, you want to invest wisely,
but also you want to be spendingwisely because that's how you
can add to your investments.
And again, starting early.
And it's a self-fulfillingprophecy it grows on its own.
Speaker 1 (31:15):
And, again, starting early.
And it's just, it's aself-fulfilling prophecy.
It grows on its own.
And you also mentioned abouttaxes, because taxes are
complicated.
Taxes are really complicatedand they change depending on the
tax code.
Yeah, because they they canfluctuate and change, and they
(31:39):
can change every six, eightyears depending, and so you need
to keep an eye on those as welland be really on top of that,
because what benefited you thelast tax code may hurt you this
tax code.
Speaker 2 (31:47):
That is correct and this is why I do think
professionals do come in handyfor whatever their fee might be,
especially as a financialadvisor.
That was one of my biggestvalue adds.
I would tell people sure, I caninvest your money in the stock
market, but so can you right?
It's really about how do I saveyou on taxes and so, and well,
(32:07):
myself, in combination with theCPA I'm not a CPA, I was not a
CPA but that's a huge value addfor these types of service
providers that they can reallylook at your specific situation,
because you know I can give youcertain tips.
Yes, if you own property, youget deductions for that and
things.
But everybody's circumstancesare different depending on if
you own your own business or ifyou're, you know, a W-2 employee
(32:30):
.
There's various differentthings that you know you could
get benefits from.
But it really it's based onyour personal situation.
But by and large, with taxes,any deductions that you get, you
have to lose the money.
There's no like secret thatyou're just you know somehow
work the tax code and you justget out of paying taxes.
(32:51):
If you get deductions, it'sbecause you spent money
somewhere else, right, but maybeyou're spending it in an asset
that's growing and earning foryou, right?
So you'd rather put it thereand get the tax deduction than
just pay the taxes and give itto the government, and then that
money is not working for youright, which is why real estate
is it is a great investment.
There's a lot of different taxbenefits for owning real estate.
Speaker 1 (33:14):
I mean it's, there's a lot of different tax benefits
for owning real estate.
I mean you have to paysomewhere.
You might as well pay yourself.
Exactly, no one gets out ofthis free.
Speaker 2 (33:25):
Yes, you might as well find a way to pay you 100%.
I completely agree.
I do want to get into realestate and all those benefits.
But one other thing on thetopic of just thinking about
your goals Now, if you're notgoing to go to a financial
planner, the best way to thinkabout your retirement goal is
(33:49):
the 5% rule.
So 5% rule says whatever sum ofmoney that you have when you
hit retirement, you can withdraw5% of that per year to live on.
And if your money is invested,you can assume the money will
continue to grow.
And essentially, by continuingto withdraw the 5%, you're just
(34:09):
withdrawing the earnings part ofit and you're maintaining the
original balance.
So let's say you retire with amillion dollars that's $50,000 a
year that you can take outevery single year and just feel
good about You're going to stillhave that million dollars there
, because right now and this issomething too that's a great tip
you can get 5% in a savingsaccount or in a CD, right,
(34:32):
that's?
It's a risk-free asset.
You're not putting it in themarket, it can't fluctuate, it's
cash and it's earning you 5%.
Now, that may not go on forever.
There was times when youcouldn't earn anything on your
cash.
Not so long ago, butparticularly right now, you can
earn 5% on just cash, so you canfeel good about that.
So if you can't afford to liveon $50,000 a year on retirement,
(34:54):
maybe you need 100, then youneed $2 million.
So how can you get there?
Starting now, how do you savethat amount of money?
Okay, and again, you want toconsider that 2 million.
If it's all in a 401k, thenit's not 2 million, it's less,
because you're going to pay thetaxes, right?
That's humbling, exactly,exactly Now.
(35:18):
So I don't want to overwhelmanybody because they're going to
.
You know, if you're in yourfifties and you're like I have
$500,000, how am I going to getto 2 million in just a couple of
years?
This is why I love real estateas an investment, because in
real estate, you can useleverage, and when I say
leverage, I mean debt.
People think debt is a badthing, it's a scary thing.
(35:38):
It is a tool.
All of the richest people inthe world have tons and tons of
debt because, whatever they'repaying on the interest, they're
earning more on whatever theypurchased, and so they're making
money in the long run.
Let's say, you're paying 7% butyou're earning 10%.
You're still getting that 3%extra right, and that's money
(35:59):
you didn't have.
So, for example, when peoplethink about should I rent or
should I own Again, I'm gonnause big numbers.
This is California.
A million dollar house issomewhat average, right, but you
can tailor this down to yourown circumstances.
If you want to purchase amillion dollar home, you
probably have a $200,000 downpayment, right, so you can
(36:19):
purchase that home.
And now let's say the realestate goes up by even let's use
low numbers, conservativenumbers 5%, which has been much
better than that last few years.
But if it goes up 5%, 5% onthat million dollars is $50,000
of earnings for you.
If you put $200,000 into themarket and let's say you're
(36:43):
earning 10%, which is anaggressive, probably unrealistic
number and you're going to betaking on a lot of risks to do
that 10% of 200,000 is 20,000.
So you can make.
You can earn less.
You're earning 5% on the realestate, but because it's a
million dollars that youotherwise wouldn't have if you
didn't get to borrow that fromthe bank, now you get to use the
(37:04):
bank's money to earn money foryourself.
That's how you get to thesehigher numbers quicker.
Speaker 1 (37:11):
Because real estate is still how you build wealth.
It's still where it's at.
Even at these big high pricepoints, even at these higher
interest rates, it's still whereit's at.
Speaker 2 (37:25):
Everybody needs shelter.
That's never going away, right,just like I mean I hate to be
morbid, but like funeral homesare a great business because
they're never going away.
Accounting firms great businessYou're always going to have to
do your taxes.
In a recession or not, you haveto do your taxes right.
Same thing with real estate.
People are always going to needshelter and you know to be a
(37:47):
landlord and to have somebodyelse paying for your work, you
know you're borrowing money fromthe bank and a renter is paying
for your mortgage.
That's how people get rich.
So I heard a statistic that theaverage millionaire has seven
different streams of income.
They can have all differenttypes.
Maybe they own a PR company,maybe they've got Bitcoin,
(38:08):
whatever, they all own realestate.
Speaker 1 (38:11):
That's kind of universal Of some sort.
It could be commercial, itcould be residential, it could
be something.
Yeah, but they own propertysomehow some way.
Yeah, you didn't say that theywere debt free.
Speaker 2 (38:27):
Not at all.
They're definitely not.
Like I said, the richest peoplelove debt, right?
I think there was somethingJay-Z and Beyonce bought, like
the highest praise house inMalibu, right, they bought it
cash to get themselves a gooddeal because they can, and then
they refinanced and got amortgage on it because they
don't want $100 million of theircash that they could be
(38:47):
utilizing somewhere else andmaking more money just sitting
in this home.
So now they've got the homethat's earning on the bank's
money and then they're usingthat cash that they had earning
somewhere else.
Speaker 1 (38:58):
Probably investing it somewhere else, probably on
some other real estate, probably.
Speaker 2 (39:03):
Wow.
Speaker 1 (39:04):
See, you promised some nuggets of wisdom and to
make this easy, Is thereanything else that we missed?
I mean, you hit some really keyareas of all the areas of our
life and I'll admit that if welooked at this all at once I'd
(39:25):
be overwhelmed.
But you're not saying do thisall at once.
You're saying, Chuck, you know,make this list and attack it a
little at a time, Exactly.
Speaker 2 (39:38):
Progress, not perfection.
The last thing I would add isjust, if you do have children,
like I was saying earlier,getting them started younger is
always better because you justget that time on your side.
Like I was telling you aboutthe, you know the over the 40
something years of the S&P 500,or I think it was 70 years.
(39:58):
You know that account grew somuch and so the earlier you can
get your children started, thebetter, even if it's a small
amount.
And so I recommend and there'sdifferent schools of thought on
this, but I recommend a 529account, because if you do just
a regular brokerage you know,investment account, savings
account when they turn 18, theyhave access to that money and
(40:19):
maybe you have a reallyresponsible 18 year old who
won't touch it and will save itfor retirement.
But most 18 year olds I know Ididn't make the wisest decisions
at that age.
So the 529 account in somestates you'll, even as a parent
contributing to it, will get taxbenefits for it, and they've
changed, they've loosened therestrictions.
It used to be just something topay for college.
(40:41):
Now you can pay starting fromkindergarten all the way to
college age education, and then,if they don't use it one, they
can transfer it to a sibling, soyou don't necessarily have to
have it for multiple children ifyou didn't want to, but they
can also turn it into aretirement account.
If you know them or theirsiblings haven't used it all up
(41:02):
for their education, by the timethey're done with all their
education it can turn into aretirement account.
So that's one of the best thingsto do and in terms of investing
that my best recommendationagain would be this S&P 500 fund
.
It's some of the largest andmost lucrative companies in this
country.
Investing doesn't have to becomplicated, right?
(41:24):
Warren Buffett?
I don't know if everyone knowswho he is.
He is one of the most famous,most successful investors in the
world investors in the world.
His estate plan says when hepasses away, 90% of his wealth
that goes to his.
The 100% goes to his wife, but90% of her inherited wealth is
(41:45):
going in the S&P 500 and theother 10% is going into cash.
If it's good enough for WarrenBuffett's wife, it's good enough
for me.
Speaker 1 (41:53):
Yeah, and he still lives a very humble life.
He still lives in the housethat he grew up in.
Speaker 2 (42:01):
Yep Again, he's spending wisely and he's
investing wisely.
It's a combination of the two.
You can't just do one withoutthe other, right, Because you
can save a bunch, but if it'snot earning anything, it's not
really working for you, it's notgrowing for you, but you can't
really invest wisely if youdon't have the savings.
But just to be clear on thatlast point, the S&P 500 is a
(42:23):
riskier investment, right.
It does go up and down daily.
So that is something I wasreferring to children and a long
term goal there, or if it'syour retirement, that's what you
want.
You know, just like I said,Warren has 10% in cash so she
can use it to pay her day-to-dayexpenses and then the remainder
goes into the riskier asset tobe invested long-term.
So I just wanted to make thatclear.
I'm not definitely.
(42:44):
If you're looking to save for adown payment or a new car or
something you don't want to putit in the S&P 500, that's going
to go into that high yieldsavings account.
That's, you know, hopefullypaying you 5% these days.
Speaker 1 (43:05):
Yeah, that's.
The benefit of interest ratesrising is that your savings
account yields also rose.
I mean, that's the flip side tothat.
I mean, but you actually get areturn on your interest on your
savings accounts now, on yourmoney markets account now.
So there is a flip benefit tothat.
So it's not all bad news.
Speaker 2 (43:27):
Exactly so.
It's actually better becausehere so when you could get a
mortgage at two and a halfpercent but you were getting
zero in your checking account,you're paying two and a half
percent.
If you can get a mortgage nowat seven percent but you're
getting five in your savings,you're only paying two percent.
It's actually better, butpeople just don't.
(43:47):
Again, it's not in people'sawareness and it's not something
to be shameful of.
But now you know, if I canscream this from the rooftops
and hopefully other people willdo the same, get the message out
there and there's no reason whywe all can't be, you know,
incredibly wealthy and living onour own private islands.
Speaker 1 (44:03):
It's not a zero sum game and what I and what I love
about this.
Because when I first spoke withStephanie, I was like, okay, we
all made all the mistakes inthe world.
She said there's no reason whyyou you could have made all the
mistakes financial mistakes allin the world you couldn't start
right now where you're atCorrect.
(44:23):
Course correct that, regardlessof how old you are, how many
mistakes you've made, you cancourse correct right now and
have a fantastic financialfuture.
All you got to do is coursecorrect and make better
decisions in the future and youcan be fine, regardless of your
age, what mistakes you've made,as long as you have a plan
(44:46):
moving forward.
That's it Exactly.
That's why she's here.
That's why she contacted me isbecause she says I just want to
help and I want to raiseawareness and I'm so glad you
did.
Speaker 2 (44:58):
Thank you, I'm so glad I did too, and you know to
your point about how this canall be overwhelming.
I am going to provide a prettydetailed checklist of all the
stuff that we reviewed, andmaybe a few more nuggets in
there, so we can make thatavailable to the listeners and
they can download it and so theyhave some sort of guide to
follow to start this journey.
Speaker 1 (45:20):
And, stephanie, I'm so glad that you're doing that,
making this easy and digestibleand so that people won't be
overwhelmed and that they can go.
Yeah, I can do this.
I can do this.
This is possible for me,regardless of all my dumb
mistakes in my Post-its bill youknow my Postmates bill, not my
(45:40):
Post-its bill, my Postmates billand that I spend too much on
Amazon or whatever the case maybe.
I can fix this.
So, stephanie, if people wantto get in touch with you,
wanting to know more about you,talk to you about real estate,
where would they connect withyou?
Speaker 2 (46:00):
So lots of different ways.
So you can go on my Instagramit's Steph sells SoCal.
I'm sure we'll have this in theshow notes, but it's Steph with
a PH.
Or my email is sc at sc realestate, grpcom.
But yeah, so very easilyaccessible.
And I am actually starting tooffer a very limited number of
(46:21):
financial coaching sessions,just to again, if someone's
super overwhelmed and thechecklist even seems
overwhelming, I know it's easyto just you want someone there
to just tell you you don't wantto have to Google everything all
the time, right, and there's somany options and you get
nervous, and so I am opening upmyself for some limited coaching
sessions.
So if you find yourself feelinglike you need that and you
(46:43):
don't want the full sort offinancial planning scope of
everything, I am available forthat as well.
Speaker 1 (46:50):
I highly encourage you.
Reach out to her.
She is accessible, she is warm,she is a wealth of knowledge
and, like I said, I learnedsomething from her.
Just talking to her for an hour, I save myself 75 bucks a month
just from saying wait, how mucham I spending on subscriptions?
Reach out to her.
She's wonderful.
(47:11):
She will teach you so much andmake all of this so much more
less intimidating.
So give it a shot.
You've got nothing to lose andeverything to gain.
Stephanie, before I let you go,I want to give you an
opportunity to leave one lastnugget of knowledge with the
guests without me interrupting,so show that the mic is yours
(47:37):
guess, without me interrupting.
Speaker 2 (47:39):
So show that the mic is yours.
Oh gosh one.
There's so many nuggets, Ithink.
Just don't be intimidated, Juststart.
You know, it's probably one ofthe hardest things to confront.
It's like it really is, it's atrue fear.
Sometimes I don't even likeopening the MX myself, you know.
But just do it.
It's a lot less scary than youthink it is.
But just start.
Even one little step in theright direction is progress.
Speaker 1 (48:00):
Stephanie, thank you so much for being here.
So thank you so much forputting together this checklist,
making it easy and digestibleand just lowering the bar on the
intimidation.
Thank you so much for doingthis with me.
I so appreciate it.
Speaker 2 (48:14):
Thank you so much for the opportunity and I will just
give my legal disclaimer,because I definitely shared a
lot of information today.
So I am not an attorney, I amnot a CPA or accountant.
I am no longer a formalfinancial advisor or licensed
with a financial institution.
This is purely informationsharing.
Anybody can look this stuff upon the Internet.
(48:34):
I'm just here to share it andmake it, as you said, more
digestible.
Speaker 1 (48:39):
She's just very passionate in making sure that
we all have a fair shot at beingmillionaires and having our own
island.
Yeah, why not?
And I want to once again thankall of you for listening and
we'll see you again next time.
Welcome in everyone and thank you so much for
joining me again this week.
This week, we're going to talkabout some amazing and necessary
topics.
We're going to talk about theapproachability and the
necessity of money.
My guest this week is StephanieKarsha, and she is an amazing,
accomplished financial advisorturned real estate agent.
(00:24):
Stephanie is dedicated toempowering individuals,
specifically women, with theknowledge and tools they need to
take control of their financialfutures.
She's driven with a passion forspreading financial literacy
and she takes practical approachto building wealth and making
complex topics simple andrelatable for everyone, and
today she's going to give us amini masterclass on navigating
(00:47):
these intricacies of moneymanagement and real estate.
It is my pleasure and my honorto introduce to you Stephanie.
Stephanie, thank you for beinghere and welcome to the show.
Thank you so much for having me.
Speaker 2 (01:01):
It's a real honor.
Speaker 1 (01:02):
Stephanie, I am really excited for you to be
here.
We've talked about money acouple of different times, but
not quite in this manner.
Money is still intimidating forpeople.
It still feels like it's out ofreach, it's not approachable
and for some reason that alwaysseems to hit women particularly
(01:26):
hard.
But give us a background as towhat drew you into the industry
of money and why it is yourpassion.
Speaker 2 (01:38):
Yeah, absolutely, and I think you hit the nail on the
head.
Even the most educated peopledoctors, lawyers finances are
just not as approachable forthem, it's just a concept that
they kind of want to stay awayfrom.
But getting back to mybackground, so I grew up right
outside of New York City.
When I graduated college, thething to do was work at a hedge
(01:58):
fund.
So that is what I did, and itwas 2008.
So got a quick life lessonthere, what I did, and it was
2008.
So got a quick life lessonthere.
And then you know, going throughthe hedge fund industry, it's
very you're working withinstitutions, not individuals,
so it's very cold and moretransaction based, and it just
didn't sit well with my soul.
I didn't know why, but it justdidn't feel like the right fit.
(02:19):
And so I had a couple differentjobs in that arena and then I
ultimately landed as a financialadvisor, and that was working
directly with individuals,helping them save for retirement
, purchase homes, pay for kids'college education, and that just
really felt so much morefulfilling to me.
And I did that for about six orseven years after my initial
(02:40):
seven years in the hedge fundworld.
And then, when COVID hit, Ijust said.
You know, I don't want to sitin an office anymore and the
market really became susceptibleto every little tweet and that
was so hard for me to try toexplain to clients.
You know, this is a viablecompany but because someone
tweeted about it, it's downtoday, and so I kind of just
thought about what made sense,given, just you know, my
(03:02):
family's history in real estateand my experience in finance,
and so I came to become a realestate agent and it's very
similar to the role I wasplaying as a financial advisor,
where I get to help individualsin such a crucial point in their
lives.
And it's even more personal thanthe financial advisory, because
when you have real estatetransactions it's usually around
(03:24):
someone passing away, someonegetting married, someone having
a child, you know, downsizingfor whatever reason, maybe
they're empty nesters or theylost their job.
So it really is focused aroundpeople's most important life
events and it's just such anhonor for me to be able to
navigate them and, you know,especially having this
background, which is a littlemore unique for someone in real
(03:45):
estate to have, and so throughthat process I become sort of
their overall advisor, not justtheir real estate advisor,
because once you purchase realestate and you want to, you know
, make sure it's in a trust, andthen you have the correct life
insurance to cover the mortgageshould something happen.
There's all these differentthings, and I'll stop there,
because I could go on and on,but that's how we got here.
Speaker 1 (04:06):
And what you have found through this different
kind of journey is that you haveengaged with women that are at
a crossroads in their lives,Sometimes that they are a lot of
times they're on their own forwhatever reason.
They've been divorced, They'vebeen widowed and they're at this
(04:35):
point where they have notmanaged money before, For
whatever reason.
They have not managed moneybefore that their husband took
care of all the money and thatcould be, and people always
assume that that is the oldergeneration and you're like no,
no, no, no, no.
That is a falsehood.
These are women that are of allages, all educations, of all
(04:58):
accomplishments.
There is no discrimination inwhat type of women don't handle
their own money.
Speaker 2 (05:20):
Or they're just single and maybe they're not.
You know they're busy andthey're accomplished in their
careers and they're just notaddressing it and you know when
they would come to us sometimes,especially, you know I don't
want to generalize, but ithappened where you know it'd be
myself and a male counterpart inthe meetings and they're really
using all kinds of financialjargon and the women don't want
to ask questions.
There's some sort of shamearound it which there, just
(05:41):
there shouldn't be right.
These are basic financialconcepts that we should all
understand, and if you don'tunderstand something, just like
anything else you're, you'repaying for a service.
You should be able to askquestions and feel comfortable
and understand it.
But for some reason it was morecommon that women just didn't,
you know, didn't want to ask thequestions, or sometimes they
would even call me a day laterand say, hey, did I understand
this correctly?
(06:02):
And when I started noticingthat was really when I just felt
, you know, I have to startgetting out there and getting
this information out there to asmany people as I thought,
especially women as possibly Ican.
Speaker 1 (06:14):
So where do we start?
And you used when you and Ifirst met, you said I want to
make this accessible, I want tomake this easy and I want to
lower the intimidation bar.
Because this is so important tome?
Because all women should knowhow to manage their money.
They should know how to investtheir money and know that it's
(06:37):
never too late to start, Even ifthey are in their 50s, their
60s does not matter, it's nevertoo late to start and it's never
too early to start.
Everybody should know how tomanage their money and what the
science of money is.
So we are ready.
I've got pen and paper ready togo.
(06:58):
Let's start and go slow.
Let's make it easy anddigestible and give us into
bite-sized pieces.
Speaker 2 (07:07):
Okay, well, first of all, you are spot on that.
You're never too young, that'sfor sure, even if you can get
children into this, it's greatto do but also never too old as
well.
But in terms of a place tostart, it's really just
awareness, right.
Whether you're single andyou're just not really looking
at your bills, you're just like,oh, there's money in the
account, there's more than Ineed to pay the rent and other
(07:28):
things this week, so it's cool,right, and there's some money in
my retirement account.
I don't know if that's going togrow to be enough of what I
really need or not, but it'sthere.
Or if you're in a partnershipand maybe one partner is taking
care of the finances, that'scompletely fine, but you need to
be aware.
So, first thing is you know youwant to have an accounting of
(07:51):
where all the accounts are, justso that you can check in there
and then have a plan and youknow again whether you're with
yourself or with your partner.
Sit down at least annually.
Now some people will probablytell you oh, you should be doing
it weekly or monthly.
Sure, that's the ideal, but'sthe ideal.
But the idea here is not forperfection.
It's progress If you weren'tdoing it at all before.
Annually is 150% better, right?
(08:12):
So just being aware of yourspending, of what your debts are
, of what kind of assets youhave and when I say assets,
anything that is of value, right.
Most importantly, it wouldprobably be your home, for most
people, maybe your car, butthat's something that really
kind of goes down over time.
But if you have investmentaccounts, just having an
accounting of how much you haveand then you know again, taking
(08:37):
into account your spending goalsand where you want to be in the
future, right.
So you're getting by right now,but how much do you need to
retire?
Right, and so these things youknow.
Ideally, you would sit downwith a financial planner, and a
good financial planner willprobably cost about $1,200.
And I'm sure so many people willsay I don't have that kind of
(08:57):
money, but this is yourfinancial future.
I tell people all the time go,look at your Postmates bill for
the last six months or yourAmazon bill for the last six
months.
I'm sure you could find $1,200that you could have used to sit
down with a financial plannerand get all this done Right.
So if you can do that, that'sideal.
But at least just having abaseline and understanding where
(09:18):
you are and an accounting ofall your accounts and how much
you're spending is certainly thefirst place to start all your
accounts and how much you'respending is certainly the first
place to start.
Speaker 1 (09:33):
So, as a baseline, as we're gathering information,
let's pretend that we've neverdone this before.
Like I said, we're going tostart slow Gathering accounts,
gathering your bank accounts, asfar as paperwork is concerned.
Gather your bank accounts.
Gather your 401k paperworkmaybe.
Sure, yeah, any retirementaccounts, retirement accounts If
you get stock shares, somecompanies, if you get to work
(09:55):
for a company and they offer youstock that you get to buy stock
at a discount or whatever thecase may be.
Or they maybe they gift youstock, whatever it is.
Gather that paperwork.
So, maybe get that paperworkand then your credit card bills
or your, if you have a car loanor student loan or that kind of
stuff.
Gather all that stuff togetherand put it in a pile and maybe
(10:21):
have your computer with aspreadsheet or, if you do it,
old school, on a yellow pad,whatever it is.
Gather it all, sit down at thekitchen table and go over it all
together, all at the same time.
Am I tracking?
Speaker 2 (10:36):
Yes, you are.
So I would say there's a fewmajor categories and they
encompass pretty much everythingyou just said.
So one is your income how muchare you bringing in every year?
Two is your expenses.
Now, that's just you know.
From whatever your housingcosts, are your any of your
daily spending costs?
And then also you know, likeyou said, your liabilities, any
(10:57):
car payments and anything likethat.
So that's the second column,income and expenses, and then
beyond that is going to be againyour assets.
And your assets are things likeyour checking account, your
retirement account, if you haveany other investment accounts,
and then, as I was mentioningbefore, like your real assets,
like your home.
Speaker 1 (11:17):
Okay, so annually, that's a good start.
Yes, so once you getcomfortable with that, maybe
quarterly, bump that up toquarterly maybe.
Speaker 2 (11:27):
That's absolutely ideal, because what you want to
do in your annual meeting withyourself or with your partner is
establish okay, did I spendmore than I earned this year?
That's a problem.
How can we course correct that?
Right, so now you've set thatgoal for yourself, but how do
you go through the whole?
Next year you might get off thetrack again.
Right, so to be able to sitdown quarterly and say, ok, in
(11:48):
this quarter I actually, youknow, spent less than I earned,
we're in good shape.
How can I replicate that forthe following quarter and just
keep kind of checking in withyourself or your partner?
Speaker 1 (12:00):
So how do you fix that kind of stuff?
Speaker 2 (12:14):
Just as a practical example, say, like I've
overspent, how do you fix that?
Where do you identify theproblem and how do you fix those
problems?
Money is one of the onlinetools.
Maybe even your AmericanExpress bill will kind of
categorize.
You know where your expensesare and then you're going to see
.
You know which ones are thelargest and do they need to be
the largest?
Right Again, it's you know ifyou're ordering out at Postmates
(12:36):
too much, you know, maybe it'slike, hey, this quarter we're
going to make an effort to eatin more, right, and so sometimes
it's adjustments for smallexpenses that really add up over
time.
Or maybe there's large expenseslike, hey, you know, the car
insurance seems to have gone upquite a bit in the last few
years.
Can we go and call around andsee if we can get a better quote
(12:57):
from somebody else, and maybeyou can take a couple hundred
dollars off of your monthlyexpenses, right?
Or even just all thesubscription services.
I think we talked about thisand we were laughing about it.
You probably have subscriptionservices that you're not using,
that you're not even aware of,that.
You have anymore Cancelingthose can easily get you a
hundred dollars plus a month,right, and that's $1,200 a year
(13:20):
right there.
Speaker 1 (13:21):
Well, just as a side note, when Stephanie and I met I
went huh, I wonder how much I'mspending.
I took a day, went through myaccount and I went what's that?
Well, what's that?
I went through and looked atall these subscriptions and
they're small.
They're small that you justdon't even notice and I canceled
(13:46):
probably oh my gosh, like $75 amonth of things that I didn't
even use, but they're so smallthat you don't even pay
attention to them.
But that $75 a month adds upover a year, which then adds up
over time.
But that's something I don'thave to spend Exactly.
(14:10):
And it was because Stephanie waslike well, how much are you
spending on subscriptions?
I'm like I don't really know.
So that was a life lesson.
It was easy, it was a piece ofcake.
It took some time, it took anafternoon to go through and look
at it and I was like but I'mnot using that.
I don't even know what that is.
And it's easy to sign up forthis stuff because they do that
(14:34):
on purpose.
They make it easy Absolutely,and then you forget about it.
Speaker 2 (14:40):
Yep, and to our original point, you are a very
successful, accomplished,organized woman, but it was just
escaping you because you'rebusy.
Speaker 1 (14:49):
Yes, I am no shame.
Yeah, super busy and I hadforgotten about it Forgotten,
and it wasn't until you saidsomething that I went.
I don't know.
Speaker 2 (15:02):
Exactly so, even you know.
Obviously that may not, youknow, change you into a
millionaire overnight, but thesesmall changes are, you know
again, progress, not perfection.
Every little bit helps.
Speaker 1 (15:15):
So I'm doing that.
This is, this is progress.
These are progress, forwardsteps.
We're doing good.
What's next on our checklist?
Speaker 2 (15:24):
Yep.
So once you sort of have thatfinancial picture down, you also
really want to make sure youhave all of your legal documents
in place.
This one I cannot stress enough, because everyone thinks they
don't need it.
Everyone thinks they're goingto live forever.
Or I don't have kids, or I'm asingle person, or I don't own
real estate.
I don't need a will, I don'tneed a healthcare directive,
(15:45):
which is the complete wrongattitude to have.
Okay, First of all, just even ifyou are a single person and you
have no children and you don'town any property, if you are
over 18, HIPAA laws do not allowanybody else access to your
medical records.
So if a college student or asingle person in their 30s is in
the hospital and their parentsneed to understand what's going
(16:06):
on or make a medical decision,if you don't have a document in
place that gives them the powerto do that, they might not be
able to do that, which is I justgot chills saying that because
it's the scariest thing and it'sso easy to do.
Again, there's I think it'sRocket Lawyer.
They have easy templatesbecause you don't have a
complicated situation.
You don't have to pay thousandsof dollars to get these
documents in place.
(16:28):
And the same thing goes for yourfinancials, right?
If you're in the hospital andincapacitated?
You know your parents don'thave access to your financials.
You know, if you're?
I mean, this is extremesituation, right?
If you're in a coma for monthsand you own a home and no one's
paying your mortgage and allthese different things.
This is something that peoplejust don't think about and it's
so super easy to do.
Speaker 1 (16:50):
This is stuff that we don't want to think about.
I don't want to think aboutthis stuff.
I really don't, but I will tellyou that there are
circumstances that happen, as Ishared with you before.
Our kids are out of the house.
They are in their mid-20s now,but my husband and I are in our
(17:12):
early 50s.
We're young empty nesters, butwe have now watched.
I watched my best friend loseher mom this year and then my
husband just lost his mom andwe've just we've watched the
paperwork that is involved.
That happens and we're like wedon't want to put our kids
(17:36):
through the paperwork.
Speaker 2 (17:38):
Yep, when they're grieving, you know, yes, when
they're grieving, the worst time.
Speaker 1 (17:42):
It is such a mess.
The paperwork is a disaster.
Yep, if it's not planned forahead of time.
We're actually putting thingsin place well ahead of time so
that the paperwork is dealt with, so they don't have to worry
(18:02):
about that.
This is actually a gift forthem.
Yes, exactly, so they don'thave to worry about it.
It's taken care of.
They don't have to deal withthis for, hopefully, decades,
but it's one less thing thatthey're going to need to deal
with and it's the only way I canthink of is that it's a gift
(18:23):
for them in the future.
Speaker 2 (18:25):
You're absolutely right.
And not only the paperwork, butif you have to run all of that
through the probate courts Idon't know about other states,
but California takes 5%.
If you own a million dollarhome, they take $50,000 just to
push the paperwork through thecourt system, and that's even if
you have a will.
So my number one recommendationagain, if you go to a state
(18:48):
attorney or if you even go onone of these websites, they're
going to tell you all thedifferent documents that you
need.
We talked about the healthcare,power of attorney for finances
and everything, and then there'ssomething called a living trust
.
So certainly anyone who ownsreal estate or has children
everything should be in a trust,because that skirts around the
probate courts.
It happens instantly.
You don't have to go throughthe court system, which is one.
(19:11):
It takes time, it's paperworkand they take so much of the
assets that are left over, whichis just.
These people worked hard.
They want this to go to theirheirs, not to the court system,
not to the county.
Speaker 1 (19:24):
Wow, so California takes 5% right off the top.
Speaker 2 (19:29):
Yep, wow, I wonder how much I think it costs like
maybe $2,000, $3,000, to get avery basic estate planning
package with all these documentstogether.
You do that one time, you know,and the only time you'd ever
have to change it is if you youknow you had more children and
you want to put them in, orwhatever the case is, but they
don't charge you that samecharge to edit it, you know, in
the future.
So for a couple thousanddollars you're saving tens, if
(19:52):
not hundreds of thousands ofdollars.
Speaker 1 (19:55):
Wow, I wonder how much it varies from state to
state.
Probably a lot, I'm sure, yes,I mean, and with the values of
homes, how much they have risenfrom state to state.
I'm in Arizona and the cost ofour houses have risen so much,
even over the last four years.
I don't know what that wouldcost.
(20:17):
I don't know what the state ofArizona takes, but it's probably
a lot With the cost of ourhouses, as much as they have
risen over the last four years.
5% is a lot of money to takeoff the top Exactly.
Speaker 2 (20:30):
Yeah, and one other tidbit on that note if you
really haven't done thedocuments yet, the best thing
that you can at least do,especially as a couple, but even
as a single person for any ofyour, if you have your
retirement accounts, you have adesignated beneficiary, but for
something like a checkingaccount or even just a regular
investment account with stocksin it, you can designate a
(20:52):
beneficiary.
It's called a transfer on deathaccount, and so at least that,
I believe, can also skirt aroundthe system.
It gets transferred directly tothe beneficiary rather than
having to go through everything.
Speaker 1 (21:06):
Good to know.
Good to know.
I did not know that that wasalso the same for stocks.
Speaker 2 (21:13):
Yes, it's a different .
They call it like an individualstock account.
This is a an individual TODtransfer on death.
So you can do that in any sortof like Fidelity or E-Trade kind
of thing.
Speaker 1 (21:24):
OK, so on our checklist, we have at least an
annual financial review withyour, with yourself and or your
partner.
We have your documents, getyour paperwork and in in
alignment, which means um, your,your directive, you need a
directive.
You need a health directive,guys, even if you're, even if
(21:46):
you're 19, you need one,especially if you're don't live
near your parents, you need one.
And you need some paperwork ifyou own property, so your heirs
can know what to do and not haveto have all of that burden on
top of them.
Okay, all right, I'm on thechecklist.
Sounds like a lot, but if youchip at it a little bit at a
(22:10):
time, it probably isn't thatmuch correct Exactly.
Speaker 2 (22:13):
And a lot of this stuff again is sort of a one and
done, set it and forget it, andunless you have a major change
in your life circumstances, youdon't have to go back and amend
these things frequently.
Speaker 1 (22:24):
Okay, all right.
What's next on our list?
Next is life insurance.
Speaker 2 (22:29):
Life insurance, yes.
Now again, everyone thinks youknow they're never going to pass
away and they don't need it.
And there's two types of lifeinsurance.
There's whole life insurance,which covers you for your whole
life, and then there's term lifeinsurance, which just covers
you for a term.
Term life insurance isobviously a lot less expensive
because they're insuring you fora much shorter period of time,
(22:51):
right, and you really probablycan't get a life insurance
policy when you're older becausethey won't insure you.
You know, from 60 to 80.
They're like no, you'reprobably going to go soon, so
we're not insuring you, right.
But going back to, especially ifyou own real estate and you own
it with a partner, and even ifyou don't have children, but
especially if you have children,if you have two incomes, the
chances are if something were tohappen to one of those partners
(23:14):
, the other person might not beable to carry the weight of that
mortgage for the rest of thosechildren's lives, right?
And the last thing you want, ifa child loses a parent, to
displace them from their home or, you know, worry about paying
for their college or literallyanything in their daily lives,
right?
And so what you want to do isget a term life insurance policy
(23:34):
that would essentially beenough to supplement that
person's income for the nextcall it you know 20 years, right
From when they're born to thenthey're 18, 20, but leave the
nest right To be able to youknow supplement that income
should something happen to oneof you.
Speaker 1 (23:49):
But whole life insurance is that covers them
for their whole life?
Is that something you pay forall the time?
Is it you pay for one at onetime?
I mean, how does that work?
Speaker 2 (24:05):
Sure, so in both scenarios you pay a monthly
premium, or maybe you can set itup to be semi-annually,
quarterly, whatever it is, butyou will pay for it on an
ongoing basis in both cases.
But for whole life insurance itactually becomes more of an
investment account.
But what happens there isinsurance companies are
businesses too, so what they'regoing to do is they're going to
(24:28):
take your money and they'regoing to invest it and they're
gonna maybe earn 7% andguarantee you 4%.
So if you are someone who has ahard time saving, this can be a
good sort of forced savingsmechanism.
And then you have this extrabucket of cash down the road,
should you ever need it, becauseyou can also, down the road,
(24:51):
cash it out before you pass away.
You're not going to get thefull value.
Maybe it'll give you 70% of youknow what you've contributed,
plus the earnings or somethinglike that, and at some point it
can start paying the premiumsitself through dividends that
you earn.
So if you can manage to save$100 a month on your own and
invest it and not touch it,that's a much better scenario,
(25:12):
because you get to keep all theearnings that you get.
But if you can't, the wholelife is not a bad scenario and
then, should something Godforbid happen to you in these
years, you do have that policy.
Sometimes people like to takeout small ones to just cover the
cost of their funerals.
Sometimes they like to do itfor very wealthy.
(25:33):
People use it as a strategybecause they know they're going
to have to pay tons of estatetaxes and and they don't want
that taken out of their you know, their children's inheritance.
So they have a separate policyjust to cover the taxes that
will have to be paid.
So all the money that they didhave can go to their children.
So there's various differentways to use the whole life
insurance, but generally it'snot something I would recommend
(25:54):
to the masses.
Term life insurance is reallythe thing that you want, just to
make sure that your family andtheir home are protected in the
event of your passing.
Speaker 1 (26:04):
And this is something that you can do even outside of
your employer as well, becausesome employers will offer life
insurance to their employees,but you can also get this
outside of your employer too,correct?
Yes?
Speaker 2 (26:19):
because usually what the coverage that they're
offering is probably not thatgreat or not that large of an
amount.
So you definitely want to makesure, like maybe it's, you know,
$60,000.
But you know again, if you'rean earner of $100,000 a year for
, again, 18 years of yourchildren's life, you need a
large policy.
So usually what they're givingyou you're going to be very
underinsured.
(26:40):
You want to have another policyoutside of it and you know any
insurer, like a state farm orwhomever you know.
It's pretty easy to get and,again, the term life insurance
premiums are pretty reasonablefor, you know, with the value
that you're getting.
Speaker 1 (26:54):
Okay.
So, what's next on our?
Speaker 2 (26:56):
checklist.
Now let's talk aboutinvestments, right?
So when you are sitting downand you're looking at what you
have and you're thinking about,you know what you need in the
future.
It really should be goaloriented.
What are your short-term goals?
You know, maybe it's purchasinga home, so you're saving for a
down payment.
What are your medium-term goals?
Hey, we need to pay for college, you know, in 10 years.
(27:17):
And then your long term goals,which is most likely retirement,
or maybe you, you know, want tobuy a vacation home or
something like that, right?
So those are the buckets thatyou should be thinking about.
And that's what we call riskbuckets, right?
Because anything that's shortterm you want to be taking very
little risk on because you needit immediately.
If you haven't invested in thestock market, that can go up and
(27:38):
down drastically, not moneythat you want in the stock
market.
Medium term, you can have someconservative and then some in
the stock market and then youget the mix there.
And then your retirement,especially if you're on the
younger side retirement's 30years away you can be pretty
aggressive with that bucket.
So we like to think about it inrisk buckets.
Also tax buckets, which I thinkmost people understand the risk
(28:01):
buckets Tax buckets are thingsthat people don't talk about.
So if you are contributing toyour 401k most people do that on
a pre-tax basis you get thededuction from your income right
now Everybody loves that andthen the idea is long-term you
will pay taxes on it when you goto withdraw it.
Well, again, you know we alllive pretty expensive lives and
(28:23):
I think there's a commonmisconception that it goes down
in retirement.
But if you're healthy inretirement now, you're not
working.
You have all the time in theworld to travel or go out to eat
.
You're spending money, right.
So you probably need $100,000 ayear, maybe more, right?
And so if you're paying taxes,that's a high amount.
Everything that you take out ofyour retirement accounts is just
like if you were earning thatin your job, right.
(28:45):
So if you're earning $100,000,how much you get taxed in your
job today is how much you'd gettaxed then if you go to take it
out.
So you want to havediversification there as well.
So you want to have some moneythat's just your savings that
you've put in a regularinvestment account.
That's after tax money, orthere's something called a Roth
401k and a Roth IRA, which isyou pay the taxes now and then
(29:09):
it grows completely tax-free andwhen you go to take it out in
retirement you don't pay taxesHuge benefit.
However, you want to do thatwhen you're younger, because the
taxes that you take out nowcall it 30% that's a large chunk
, right?
So you want to have time toinvest that to not only make
back that 30% but then earn alot more on it so let's see.
Speaker 1 (29:32):
I want to make sure that I understand this correctly
.
So if you're investing, do youhave to have a lot of money to
invest?
Speaker 2 (29:39):
you do not you can invest with very little money.
There's so many different umplatforms now where you can, you
know, buy a fraction of a shareor a fraction of a piece of
real estate, or you know, to buysome.
There's stocks that are five,$10, right, so you don't have to
have a lot of money.
But the it's really about thetime.
(29:59):
In the market, compounding is abeautiful thing, so I hope
everybody knows you know the S&P500.
If you don't, it's the 500largest or most lucrative
companies in that are in thecountry right now and it's it's
a fund that you can buy into.
So I had a chart on my deskwhen I was in finance and it was
something like if you put$10,000 into the S&P 500 in, I
(30:23):
think like 1938 or something inthe 30s I'm not going to get the
date right but and then you letthat grow and never touched it
and just reinvested anydividends that those stocks paid
out in 2016, that $10,000turned into $46 million without
touching it, just putting it inand leaving it there.
(30:45):
So you don't need a lot ofmoney as long as you start doing
it early and you just let itgrow.
Speaker 1 (30:53):
So you just need a little nest egg and just leave
it alone and be smart about it,correct?
Speaker 2 (31:00):
Yes, it's more about yes, you want to invest wisely,
but also you want to be spendingwisely because that's how you
can add to your investments.
And again, starting early.
And it's a self-fulfillingprophecy it grows on its own.
Speaker 1 (31:15):
And, again, starting early.
And it's just, it's aself-fulfilling prophecy.
It grows on its own.
And you also mentioned abouttaxes, because taxes are
complicated.
Taxes are really complicatedand they change depending on the
tax code.
Yeah, because they they canfluctuate and change, and they
(31:39):
can change every six, eightyears depending, and so you need
to keep an eye on those as welland be really on top of that,
because what benefited you thelast tax code may hurt you this
tax code.
Speaker 2 (31:47):
That is correct and this is why I do think
professionals do come in handyfor whatever their fee might be,
especially as a financialadvisor.
That was one of my biggestvalue adds.
I would tell people sure, I caninvest your money in the stock
market, but so can you right?
It's really about how do I saveyou on taxes and so, and well,
(32:07):
myself, in combination with theCPA I'm not a CPA, I was not a
CPA but that's a huge value addfor these types of service
providers that they can reallylook at your specific situation,
because you know I can give youcertain tips.
Yes, if you own property, youget deductions for that and
things.
But everybody's circumstancesare different depending on if
you own your own business or ifyou're, you know, a W-2 employee
(32:30):
.
There's various differentthings that you know you could
get benefits from.
But it really it's based onyour personal situation.
But by and large, with taxes,any deductions that you get, you
have to lose the money.
There's no like secret thatyou're just you know somehow
work the tax code and you justget out of paying taxes.
(32:51):
If you get deductions, it'sbecause you spent money
somewhere else, right, but maybeyou're spending it in an asset
that's growing and earning foryou, right?
So you'd rather put it thereand get the tax deduction than
just pay the taxes and give itto the government, and then that
money is not working for youright, which is why real estate
is it is a great investment.
There's a lot of different taxbenefits for owning real estate.
Speaker 1 (33:14):
I mean it's, there's a lot of different tax benefits
for owning real estate.
I mean you have to paysomewhere.
You might as well pay yourself.
Exactly, no one gets out ofthis free.
Speaker 2 (33:25):
Yes, you might as well find a way to pay you 100%.
I completely agree.
I do want to get into realestate and all those benefits.
But one other thing on thetopic of just thinking about
your goals Now, if you're notgoing to go to a financial
planner, the best way to thinkabout your retirement goal is
(33:49):
the 5% rule.
So 5% rule says whatever sum ofmoney that you have when you
hit retirement, you can withdraw5% of that per year to live on.
And if your money is invested,you can assume the money will
continue to grow.
And essentially, by continuingto withdraw the 5%, you're just
(34:09):
withdrawing the earnings part ofit and you're maintaining the
original balance.
So let's say you retire with amillion dollars that's $50,000 a
year that you can take outevery single year and just feel
good about You're going to stillhave that million dollars there
, because right now and this issomething too that's a great tip
you can get 5% in a savingsaccount or in a CD, right,
(34:32):
that's?
It's a risk-free asset.
You're not putting it in themarket, it can't fluctuate, it's
cash and it's earning you 5%.
Now, that may not go on forever.
There was times when youcouldn't earn anything on your
cash.
Not so long ago, butparticularly right now, you can
earn 5% on just cash, so you canfeel good about that.
So if you can't afford to liveon $50,000 a year on retirement,
(34:54):
maybe you need 100, then youneed $2 million.
So how can you get there?
Starting now, how do you savethat amount of money?
Okay, and again, you want toconsider that 2 million.
If it's all in a 401k, thenit's not 2 million, it's less,
because you're going to pay thetaxes, right?
That's humbling, exactly,exactly Now.
(35:18):
So I don't want to overwhelmanybody because they're going to
.
You know, if you're in yourfifties and you're like I have
$500,000, how am I going to getto 2 million in just a couple of
years?
This is why I love real estateas an investment, because in
real estate, you can useleverage, and when I say
leverage, I mean debt.
People think debt is a badthing, it's a scary thing.
(35:38):
It is a tool.
All of the richest people inthe world have tons and tons of
debt because, whatever they'repaying on the interest, they're
earning more on whatever theypurchased, and so they're making
money in the long run.
Let's say, you're paying 7% butyou're earning 10%.
You're still getting that 3%extra right, and that's money
(35:59):
you didn't have.
So, for example, when peoplethink about should I rent or
should I own Again, I'm gonnause big numbers.
This is California.
A million dollar house issomewhat average, right, but you
can tailor this down to yourown circumstances.
If you want to purchase amillion dollar home, you
probably have a $200,000 downpayment, right, so you can
(36:19):
purchase that home.
And now let's say the realestate goes up by even let's use
low numbers, conservativenumbers 5%, which has been much
better than that last few years.
But if it goes up 5%, 5% onthat million dollars is $50,000
of earnings for you.
If you put $200,000 into themarket and let's say you're
(36:43):
earning 10%, which is anaggressive, probably unrealistic
number and you're going to betaking on a lot of risks to do
that 10% of 200,000 is 20,000.
So you can make.
You can earn less.
You're earning 5% on the realestate, but because it's a
million dollars that youotherwise wouldn't have if you
didn't get to borrow that fromthe bank, now you get to use the
(37:04):
bank's money to earn money foryourself.
That's how you get to thesehigher numbers quicker.
Speaker 1 (37:11):
Because real estate is still how you build wealth.
It's still where it's at.
Even at these big high pricepoints, even at these higher
interest rates, it's still whereit's at.
Speaker 2 (37:25):
Everybody needs shelter.
That's never going away, right,just like I mean I hate to be
morbid, but like funeral homesare a great business because
they're never going away.
Accounting firms great businessYou're always going to have to
do your taxes.
In a recession or not, you haveto do your taxes right.
Same thing with real estate.
People are always going to needshelter and you know to be a
(37:47):
landlord and to have somebodyelse paying for your work, you
know you're borrowing money fromthe bank and a renter is paying
for your mortgage.
That's how people get rich.
So I heard a statistic that theaverage millionaire has seven
different streams of income.
They can have all differenttypes.
Maybe they own a PR company,maybe they've got Bitcoin,
(38:08):
whatever, they all own realestate.
Speaker 1 (38:11):
That's kind of universal Of some sort.
It could be commercial, itcould be residential, it could
be something.
Yeah, but they own propertysomehow some way.
Yeah, you didn't say that theywere debt free.
Speaker 2 (38:27):
Not at all.
They're definitely not.
Like I said, the richest peoplelove debt, right?
I think there was somethingJay-Z and Beyonce bought, like
the highest praise house inMalibu, right, they bought it
cash to get themselves a gooddeal because they can, and then
they refinanced and got amortgage on it because they
don't want $100 million of theircash that they could be
(38:47):
utilizing somewhere else andmaking more money just sitting
in this home.
So now they've got the homethat's earning on the bank's
money and then they're usingthat cash that they had earning
somewhere else.
Speaker 1 (38:58):
Probably investing it somewhere else, probably on
some other real estate, probably.
Speaker 2 (39:03):
Wow.
Speaker 1 (39:04):
See, you promised some nuggets of wisdom and to
make this easy, Is thereanything else that we missed?
I mean, you hit some really keyareas of all the areas of our
life and I'll admit that if welooked at this all at once I'd
(39:25):
be overwhelmed.
But you're not saying do thisall at once.
You're saying, Chuck, you know,make this list and attack it a
little at a time, Exactly.
Speaker 2 (39:38):
Progress, not perfection.
The last thing I would add isjust, if you do have children,
like I was saying earlier,getting them started younger is
always better because you justget that time on your side.
Like I was telling you aboutthe, you know the over the 40
something years of the S&P 500,or I think it was 70 years.
(39:58):
You know that account grew somuch and so the earlier you can
get your children started, thebetter, even if it's a small
amount.
And so I recommend and there'sdifferent schools of thought on
this, but I recommend a 529account, because if you do just
a regular brokerage you know,investment account, savings
account when they turn 18, theyhave access to that money and
(40:19):
maybe you have a reallyresponsible 18 year old who
won't touch it and will save itfor retirement.
But most 18 year olds I know Ididn't make the wisest decisions
at that age.
So the 529 account in somestates you'll, even as a parent
contributing to it, will get taxbenefits for it, and they've
changed, they've loosened therestrictions.
It used to be just something topay for college.
(40:41):
Now you can pay starting fromkindergarten all the way to
college age education, and then,if they don't use it one, they
can transfer it to a sibling, soyou don't necessarily have to
have it for multiple children ifyou didn't want to, but they
can also turn it into aretirement account.
If you know them or theirsiblings haven't used it all up
(41:02):
for their education, by the timethey're done with all their
education it can turn into aretirement account.
So that's one of the best thingsto do and in terms of investing
that my best recommendationagain would be this S&P 500 fund
.
It's some of the largest andmost lucrative companies in this
country.
Investing doesn't have to becomplicated, right?
(41:24):
Warren Buffett?
I don't know if everyone knowswho he is.
He is one of the most famous,most successful investors in the
world investors in the world.
His estate plan says when hepasses away, 90% of his wealth
that goes to his.
The 100% goes to his wife, but90% of her inherited wealth is
(41:45):
going in the S&P 500 and theother 10% is going into cash.
If it's good enough for WarrenBuffett's wife, it's good enough
for me.
Speaker 1 (41:53):
Yeah, and he still lives a very humble life.
He still lives in the housethat he grew up in.
Speaker 2 (42:01):
Yep Again, he's spending wisely and he's
investing wisely.
It's a combination of the two.
You can't just do one withoutthe other, right, Because you
can save a bunch, but if it'snot earning anything, it's not
really working for you, it's notgrowing for you, but you can't
really invest wisely if youdon't have the savings.
But just to be clear on thatlast point, the S&P 500 is a
(42:23):
riskier investment, right.
It does go up and down daily.
So that is something I wasreferring to children and a long
term goal there, or if it'syour retirement, that's what you
want.
You know, just like I said,Warren has 10% in cash so she
can use it to pay her day-to-dayexpenses and then the remainder
goes into the riskier asset tobe invested long-term.
So I just wanted to make thatclear.
I'm not definitely.
(42:44):
If you're looking to save for adown payment or a new car or
something you don't want to putit in the S&P 500, that's going
to go into that high yieldsavings account.
That's, you know, hopefullypaying you 5% these days.
Speaker 1 (43:05):
Yeah, that's.
The benefit of interest ratesrising is that your savings
account yields also rose.
I mean, that's the flip side tothat.
I mean, but you actually get areturn on your interest on your
savings accounts now, on yourmoney markets account now.
So there is a flip benefit tothat.
So it's not all bad news.
Speaker 2 (43:27):
Exactly so.
It's actually better becausehere so when you could get a
mortgage at two and a halfpercent but you were getting
zero in your checking account,you're paying two and a half
percent.
If you can get a mortgage nowat seven percent but you're
getting five in your savings,you're only paying two percent.
It's actually better, butpeople just don't.
(43:47):
Again, it's not in people'sawareness and it's not something
to be shameful of.
But now you know, if I canscream this from the rooftops
and hopefully other people willdo the same, get the message out
there and there's no reason whywe all can't be, you know,
incredibly wealthy and living onour own private islands.
Speaker 1 (44:03):
It's not a zero sum game and what I and what I love
about this.
Because when I first spoke withStephanie, I was like, okay, we
all made all the mistakes inthe world.
She said there's no reason whyyou you could have made all the
mistakes financial mistakes allin the world you couldn't start
right now where you're atCorrect.
(44:23):
Course correct that, regardlessof how old you are, how many
mistakes you've made, you cancourse correct right now and
have a fantastic financialfuture.
All you got to do is coursecorrect and make better
decisions in the future and youcan be fine, regardless of your
age, what mistakes you've made,as long as you have a plan
(44:46):
moving forward.
That's it Exactly.
That's why she's here.
That's why she contacted me isbecause she says I just want to
help and I want to raiseawareness and I'm so glad you
did.
Speaker 2 (44:58):
Thank you, I'm so glad I did too, and you know to
your point about how this canall be overwhelming.
I am going to provide a prettydetailed checklist of all the
stuff that we reviewed, andmaybe a few more nuggets in
there, so we can make thatavailable to the listeners and
they can download it and so theyhave some sort of guide to
follow to start this journey.
Speaker 1 (45:20):
And, stephanie, I'm so glad that you're doing that,
making this easy and digestibleand so that people won't be
overwhelmed and that they can go.
Yeah, I can do this.
I can do this.
This is possible for me,regardless of all my dumb
mistakes in my Post-its bill youknow my Postmates bill, not my
(45:40):
Post-its bill, my Postmates billand that I spend too much on
Amazon or whatever the case maybe.
I can fix this.
So, stephanie, if people wantto get in touch with you,
wanting to know more about you,talk to you about real estate,
where would they connect withyou?
Speaker 2 (46:00):
So lots of different ways.
So you can go on my Instagramit's Steph sells SoCal.
I'm sure we'll have this in theshow notes, but it's Steph with
a PH.
Or my email is sc at sc realestate, grpcom.
But yeah, so very easilyaccessible.
And I am actually starting tooffer a very limited number of
(46:21):
financial coaching sessions,just to again, if someone's
super overwhelmed and thechecklist even seems
overwhelming, I know it's easyto just you want someone there
to just tell you you don't wantto have to Google everything all
the time, right, and there's somany options and you get
nervous, and so I am opening upmyself for some limited coaching
sessions.
So if you find yourself feelinglike you need that and you
(46:43):
don't want the full sort offinancial planning scope of
everything, I am available forthat as well.
Speaker 1 (46:50):
I highly encourage you.
Reach out to her.
She is accessible, she is warm,she is a wealth of knowledge
and, like I said, I learnedsomething from her.
Just talking to her for an hour, I save myself 75 bucks a month
just from saying wait, how mucham I spending on subscriptions?
Reach out to her.
She's wonderful.
(47:11):
She will teach you so much andmake all of this so much more
less intimidating.
So give it a shot.
You've got nothing to lose andeverything to gain.
Stephanie, before I let you go,I want to give you an
opportunity to leave one lastnugget of knowledge with the
guests without me interrupting,so show that the mic is yours
(47:37):
guess, without me interrupting.
Speaker 2 (47:39):
So show that the mic is yours.
Oh gosh one.
There's so many nuggets, Ithink.
Just don't be intimidated, Juststart.
You know, it's probably one ofthe hardest things to confront.
It's like it really is, it's atrue fear.
Sometimes I don't even likeopening the MX myself, you know.
But just do it.
It's a lot less scary than youthink it is.
But just start.
Even one little step in theright direction is progress.
Speaker 1 (48:00):
Stephanie, thank you so much for being here.
So thank you so much forputting together this checklist,
making it easy and digestibleand just lowering the bar on the
intimidation.
Thank you so much for doingthis with me.
I so appreciate it.
Speaker 2 (48:14):
Thank you so much for the opportunity and I will just
give my legal disclaimer,because I definitely shared a
lot of information today.
So I am not an attorney, I amnot a CPA or accountant.
I am no longer a formalfinancial advisor or licensed
with a financial institution.
This is purely informationsharing.
Anybody can look this stuff upon the Internet.
(48:34):
I'm just here to share it andmake it, as you said, more
digestible.
Speaker 1 (48:39):
She's just very passionate in making sure that
we all have a fair shot at beingmillionaires and having our own
island.
Yeah, why not?
And I want to once again thankall of you for listening and
we'll see you again next time.
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