BiggerPockets Money Podcast - 414: Nicole Lapin's Money Hacks to Rehab Your Finances & Say Goodbye to Bad Debt

Starting point is 00:00:00 Welcome to the Bigger Pockets Money Podcast, where we interview Nicole Lapin from Money Rehab and talk about rehabing your finances. Hello, hello, hello. My name is Mindy Jensen. And with me as always is my financial Mr. Fixit co-host, Scott Trench. Thanks, Mindy. Great to be here. And we're going to hammer home a lot of financial tips today. I nailed it, right? All right. Scott and I are here to make financial independence less scary, less just for somebody else. to introduce you to every money story because we truly believe financial freedom is attainable for everyone, no matter when or where you're starting or how much you love a good dad joke. That's right. Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate, start your own business, or just become a little bit more financially

Starting point is 00:00:50 literate. We'll help you reach your financial goals and get money out of the way so you can launch yourself towards those dreams. All right, Scott, you know me. You know I love a good rehab project and you know I love money. So of course, I'm going to be in love with this show today. We talked to Nicole Lapin from Money Rehab and we talk about fixing your finances, getting your finances in order and all things money. I love it. It was a great episode. We really learned a lot from Nicole and what a treat to have her on the show today. It was a treat. Before we bring in Nicole, we have a new segment called The Money Moment where we share a money hack, tip, or trick to help you on your financial journey. Today's money moment is, are you done with a book or a book or

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Starting point is 00:04:10 well-being. What makes Audible so powerful as its breadth. Beyond audiobooks, you also get Audible originals, podcasts, and a massive back catalog across business, health, parenting, and more, all accessible in one app. If you're looking to turn everyday moments into real progress, Audible has been indispensable for me over over 10 years. Kickstart your well-being journey with your first audiobook free when you sign up for a free 30-day trial at audible.com slash BP Money. Nicole Lapin is a New York Times bestselling author, the host of the podcast Money Rehab, and the only financial expert you don't need a dictionary to understand. You may have seen her as a news anchor on CNBC, CNN, and

Starting point is 00:04:50 Bloomberg as well as a financial correspondent for Morning Joe and the Today Show. Nicole, welcome to the Bigger Pockets Money podcast. I'm so excited to talk to you today. I'm more excited. Mindy, thanks so much for having me. If we're going to have an excite off, I'm going to win. Okay, Carol, it's your show. You win.

Starting point is 00:05:08 I'm always excited about everything, and I am excited about your money story. Let's look at where your journey with money begins. Well, I'm the least likely person to be a money expert or, you know, to have my own money together, much less teach other people about money. I grew up in an immigrant family. So first generation American, like no discussion about the Wall Street Journal or stocks or bonds or any of that. My family just used cash. We didn't have a lot of it, but that was the idea that if you didn't have money, you didn't buy something. And so I was super scared of all traditional money concepts. My boyfriend in high school said he wanted to be a hedge fund man.

Starting point is 00:05:50 and I thought he wanted to be in gardening. So I was like the most clueless. And I just needed a job. And when I was 18, I was offered a job on the floor of the Chicago Merck, which at the time I thought was a mall. It's not a mall. It's the, it's a stock exchange in Chicago. And I lied and said that I knew about money news. And I figured it out.

Starting point is 00:06:18 And so what I realized is that money is language like anything else. We just don't have a Rosetta Stone for this language growing up. I didn't in my family. If you guys are like me, some families do, and that's awesome. But we don't learn this stuff in school. So I learned it at the school of Hard Knocks. And, you know, if you go to Wall Street and you don't speak the language of money, you'll be confused, right?

Starting point is 00:06:41 If you go to Japan and you don't speak Japanese, like you will be confused until you learn the language. And then you're like, oh, yeah, duh. all those words that I thought were so complicated. Like, obviously I know what that means, but only after you learn it. How about the world of personal finance? Did you find that that was foreign to you as well? Like maybe you learned corporate finance or the language of stocks and trading.

Starting point is 00:07:02 But maybe what did you find that that correlated to personal finance or that was a separate journey in addition to that? Oh, great question. Scott, a totally separate journey. So while I was covering business news, my personal finances were totally in shambles. And I say this, oh gosh, 20 years later. with a badge of honor, but at the time I was so embarrassed, right? Because I was talking about money news to the world and I had a boatload of debt myself. Once I finally got a credit card,

Starting point is 00:07:30 because my family didn't believe in debt or credit cards or mortgages or anything, I went, balls to the wall, like, racked up a bunch of credit card debt and was still saving green cash under the sink like my parents did. And yeah, I had to figure out how to get out of it the hard way. Once I did, I came up with a little plan for myself. I said, I'm never going back. And when I was on those news networks talking to a lot of old rich white dudes about money, which is not an editorialization, it's just like what the Nielsen numbers show, I wasn't talking to the people who needed that information most, which were my former self, you know,

Starting point is 00:08:10 the girl that was freaked out, didn't know what hedge funds were, super clueless, got in a bunch of debt, and that became my mission. So what was your journey to paying off this debt and getting your financial act together and those types of things? Like what how did that, what transformed? What lifestyle components or career items changed? Totally. I came up with a plan and I love alliteration. So I actually started as a poetry major, fun fact. You know, so I often say like, really, if I could do this, anyone can do this. Like, you know, the whole thing of saying that you don't know math or you're not a numbers person. And like, I was a poetry major to start out. And, you know, I love alliteration.

Starting point is 00:08:52 So I came up with a lot of, you know, financial tools around alliteration. So prioritized to pulverize was how I got out of debt specifically. And so, you know, there are two methods that experts will talk about when getting out of personal debt. The avalanche method and the snowball method. So the avalanche method just means like paying off the highest interest rate debt first. The snowball method is like, oh, you have little. you know, bills, cut those up, that will give you more momentum to, you know, pay off the bigger bills. And so I use the avalanche method, which was for me prioritizing to pulverize it. And I ranked my highest interest

Starting point is 00:09:30 rate debt, which was my credit card debt. And I broke it down into baby steps because I think anything with personal finance, super overwhelming. The only way to tackle that is to break it down into baby steps and then those little baby steps into like even baby year steps. And so I came up with, I think it was $7 a day. Like even the year goal was too overwhelming for me. And the month goal was too overwhelming. So I literally broke it down to the smallest number possible. And I was like, seven bucks a day, I can do that. And that's what I did until it was done. How much debt did you have? And how long did it take you to pay this off? You know, this was 20 years ago. So, I had about $5,000 of debt, and I think it took me two years to pay it off.

Starting point is 00:10:16 Do you think there's a lack of financial literacy in this country? A thousand percent. Don't you? I think it's an epidemic, Mindy. This is what I get excited about. I'm going to win this excitement battle, by the way, because it really works me up. I think it's a total epidemic. I think it's actually the thing that is standing in the way of us fixing a lot of macroeconomic issues.

Starting point is 00:10:41 the gender wage gap, the racial wage gap, the wealth gap, the homeownership gap that, you know, you guys are all about. You know, I think that the answer to fixing these issues is through financial literacy. And if I were in charge of the world, financial literacy would be taught in schools. Also like emotional wellness, but that's a whole other podcast. Instead of geometry or the Pythagorean theorem or like how to dissect a frog or all this be a stuff that is not, helpful. So yeah, I mean, I said this so often that I ended up creating the money school because I was like, gosh, I keep saying like if I were in charge of the world, I'd teach a class on it. So I ended up doing that. But truly, I think it's the biggest issue standing in the way of, you know, us closing a lot of those gaps. So what is the, what do we,

Starting point is 00:11:32 how do you define financial literacy? What does Dunn look like in terms of someone's education on financial literacy, at least maybe in the context of good coming out of high school, college, or entering adulthood. Also a really good question. I don't think there's done. I don't think, I think it's constantly evolving, you know, in the same way that I think about balance, you know, oftentimes balance vis-a-vis work is used as a noun. And so back to my poetry, it's like balance can be a noun or a verb, right?

Starting point is 00:12:00 And oftentimes we use it as a noun. Like, we found balance and we're done, right? I think of it more as a verb. Like, it's constantly in motion. It's something you constantly have to cultivate. I think the same thing applies to financial literacy. I mean, guys, like when I was learning financial literacy, there was no NFTs, right? Or crypto. Like, it's constantly evolving. In the back of my books, I rewrite financial dictionaries. This is maybe why I'm also single, because this is like what I do for fun on a Friday night is rewrite financial dictionaries in real English. You know, in Rich Bitch, I didn't embossed bitch, I did in Miss Independent. You know, I think I squeezed in like NFTs as we were going to the printer. But it's a language that keeps evolving. And so I don't think there's done. Maybe done is when you want to go work at a hedge fund and actually clip shrubbery.

Starting point is 00:12:54 Yeah. You make the right decision. I think that, yeah, if you leave your clippers at home, then you're good enough. But you're never done. So who is responsible for teaching financial literacy? Is it the parents or is it the schools? Well, I think it's the schools, but that doesn't happen. I mean, we're actually doing a financial literacy effort with the states that has to go state by state.

Starting point is 00:13:16 I mean, I could tell you more about these sort of lobbying efforts, which I think are being done in parallel with parents needing to teach their kids about it. I think it's incumbent on parents, unfortunately, because they're not learning it in school. So, like, you could cry about it or you could just, you know, do it yourself, right? And it's also not an excuse for adults to say, like, you know, my parents didn't teach me. I didn't learn it at school. Like, you know what? That doesn't pay the bills. So like put your big girl boy pants on and figure it out yourself.

Starting point is 00:13:46 And that's, it's not an excuse. I think there's a combination when you're thinking about this because most of not getting your financial life together is like the enemies between your ears. So if you tell the mean girl or the mean guy to take several seats, then you can approach it with a combination of what I think is compassion. and tough love. So compassion for your former self for what he or she didn't know. Like, okay, I'm compassionate. We didn't learn it in school. Like my family was cuckoo bananas. They used cash and got into a bunch of, you know, I bailed my mother out of jail using cash underneath the

Starting point is 00:14:21 sink behind the maxi pads. For instance, growing up, these were like my early financial moments. And that's like a lot of trauma that I just threw down on you guys. But a lot of our money story is is around how we grew up with money, right? And so it's saying I have compassion for that girl who went through those financial traumas or had that experience, but also it's not okay moving forward now that you have the resources, now that you have the opportunities to do better. Well, there is a point where, yes, you have to have compassion because this is scary and we didn't learn it in school.

Starting point is 00:14:58 And we didn't, like, I remember my mom taught me how to pay, bills by just this is where you put the name on the check and this is where you put the amount and here's how you balance your checkbook. But she didn't talk about how much was coming in. And we didn't talk about how much was going out. It was just this is this week's bills. And they, you know, led by example. But there was not a lot of like don't spend more than you earn because of this reason. It was just don't spend more than you earn. And it wasn't really invest in the stock market. It was just, you know, you should say for your future, I don't want to throw her under the

Starting point is 00:15:38 bus, although I know she doesn't listen to this show because she can't figure out podcasts. So that's okay, too. Bless her heart. Bless her heart. But, you know, there's compassion. And I want to have compassion for people who are still trying to figure it out. But there's also this like, hey, if you want to get your financial self together, get your financial self together.

Starting point is 00:16:00 Why do you think people find rehabbing their finances so scary? Because of all of those stories that we've told ourselves. I think the most common ones are, I don't have enough money to start. I'm not a math person or I'm not a numbers person. And I can't do it for whatever reason. And so, you know, I think that tackling those stories and recognizing that those are just, stories we tell ourselves is like the first step, right? The reason that I have money rehab and the reason that all of my books are 12 step plans is because I truly believe the first step to any recovery

Starting point is 00:16:41 is admitting you have a problem. So that, you know, let your problem speak. Like they are probably taunting you or haunting you. Like, you know, once you let that narrative come out, you can, you can confront it. And I think, you know, and I've thrown out a lot of kind of emotional wellness tactics and I'm going to throw down some philosophy right now, which, you know, forgive me, but I think that it's all connected, right? I don't think you can get financial literacy and wellness together without emotional wellness. I think it's very intertwined. And I believe that stoicism plays a big role in getting your financial life together, too, because we suffer more in imagination, I believe, than in reality. And so once we let like that worst case scenario,

Starting point is 00:17:29 um, uh, have a voice, have a platform, it's oftentimes that we can then take the necessary steps to confront it. Right. So like this happens with taxes a lot. You know, what is your biggest fear? Just like say it, right? People think they're going to go to jail. And so, you know, it's like playing out that worst case scenario and debunking it, right? most folks do not go to jail. It's just not a thing. And most folks that don't have under a certain amount of money, like, don't get audited. Just look at, you know, look at the numbers. Look at the reality there. And then let's say, like, somehow you do get in trouble with the IRS. What's going to happen next, right? Like, play out those steps. Or if you, and the answer ultimately is it's going to

Starting point is 00:18:14 be okay, right? Same thing happens. Like, I used to catastrophize a lot if I lost a gig or if I, didn't have money. I still have an irrational fear of being broke alone and homeless and dying in the gutter. And it still exists. It will never be done, Scott. Like, it will not shut up. But I know it's there. And when it comes out, I'm like, I see you. I see you thought about being homeless. Like, and you know what? If I did not get this job or this project, I will not be homeless. Like, I will go live with Sarah, my best friend, right? Like, it will be okay. I will not be in the gutter. And so I think some of those exercises are really important to, you know, to calm the mind, you know what, that we do to ourselves around money. I love that. I think it's, I think everyone

Starting point is 00:19:07 feels that way. I'm sure, Mind, do you feel the same way from time to time. I certainly do, and I'm supposed to be good at this, just like you, Nicole. I do wonder, however, your books are all, many of them are targeted towards women, like Miss Independent, Rich Bitch, Boss Bitch. Do you think that- You can read them too, Scott. Of course. Yeah, of course. I'm sure they're for everyone. But do you feel that women maybe feel these, perhaps experience some of these feelings more acutely or that they have less access to financial literacy? Is that one of the reasons why you particularly emphasize women in finance in your work? Yeah, there's a couple reasons. First, I think, with the book,

Starting point is 00:19:45 medium in particular. And a lot of media, you can't be all things to all people or you're nothing to anyone. Like, I needed to really know who that person was and like get her. And I'm not for everybody. And that's okay. Like, I wish I actually had more controversy around the launch of Rich Bitch. Like, I wanted more people to hate it because of the title and like, whatever. But you know what? It's not, it's not for everyone. I knew who I was. reaching and I wanted to like go deep with her. She was my former self. You know, I knew everything about her. And so I wanted to like make an impact on a smaller group of people than trying to go wide. I actually, um, it took me 10 years to get my first book published. I went through

Starting point is 00:20:33 four agents. Um, I talk about this, I think in boss bitch. Um, four false starts. Like I sold manuscripts and then weird things happen like over the holidays, the editor got fired. And then like, come new year, the book was gone. You know, stuff. And I just thought it was never going to happen for me. And the book before Rich Bitch That I sold and the holiday thing happened was called Making Bank. I recently found this proposal. It was like all things to all people, cool, fun, finance.

Starting point is 00:21:06 That book would have been terrible. It would have been dead on arrival. Like who wants to read a like vague book line? like that, right? And so, um, so that's part of it. You know, to answer the, the question around, uh, do women have less access? I think there's just more fear. Studies have shown, and I put some of these in Miss Independent, um, that little boys and little girls associate different words with money. Little boys associate like ambitious words, aspirational words, little girls associate scarcity words, just fear words when it comes to money. And so I think we've been socialized a lot around

Starting point is 00:21:48 that. And that's, it just is what it is. Like, it's just a different conversation. And I wanted to go first because I think that money is still one of our last taboos in society. Like, we'll talk about sex at the dinner table, no problem. We'll talk about politics, no problem with our girlfriends. Like, I talk about wild sex stuff with my girlfriends. all the time. And then I'll ask them about what's in their bank account and it's crickets. And I'm like, hey, sister, you just told me about your bikini wax. And this is taboo. Like asking you what you make is taboo. You know, if we don't open up this conversation, we're not going to be able to fix these problems. And I get that it's hard to have it. So that's why I said I'll go first. Somebody has to

Starting point is 00:22:36 go first with hard money talks. So let that be me. Well, let's talk about investing. Let's talk about your new book, Miss Independent and your 12-step plan to start investing and grow your own wealth. What are you investing in? So I have a cup. I just put it away, but it's part of our merch that's index funds and chill. And I advocate index funds and chilling a lot. This is what Warren Buffett himself put in his will for his own family to invest in, low-cost S&P 500 index funds. And I think that especially if you're a first-time investor picking individual stocks is not awesome.

Starting point is 00:23:14 Like during the pandemic, people would slip into my DMs and listen, guys, like, these are the fun, sexy DMs I get. Like, should I buy Zoom? What about Peloton? You know, everybody, you know, was becoming an investor. We saw the first-time brokerages accounts open at record levels. But, you know, it was this idea that still folks think, like, there is a get rich quick plan. There is not. You know, I do like a, you know, a fun, sexy conversation.

Starting point is 00:23:46 When it comes to my money, I don't actually want it to be fun and sexy. I want it to be so boring, like the most boring possible. You know, I get asked about like, how about like gamification for blah la la and like, you know, all this exotic stuff. I'm like hard pass. Like I don't, you want a game or like you want a fun, go on Tinder. Like go get a weekly magazine. I don't know.

Starting point is 00:24:12 Like go read page six. If I want to look at my Schwab account, like I want it to be so basic, boring, slow, steady. And I think that's like the best way to grow long term wealth. Okay. I have two things for you. First is a hot stock tip. It's this little tiny company. Maybe you've heard of it.

Starting point is 00:24:30 It's called Berkshire Hathaway. they sell A and B shares. I want you to get at least one share of B. So you can then go to the most boring meeting ever, the Berkshire Hathaway annual meeting. Yes. No, it's fun. Have you been to Omaha? Multiple times.

Starting point is 00:24:48 Oh, awesome. I'm going again this year. And you can listen to Mr. Warren Buffett, talk in person, potentially ask him a question, and listen to him and Charlie, talk about financial staff. It's fascinating unless you're my 16 and 13 year old and they're like, oh, my God, mom, do I have to go? It's so boring. But yeah, if you want to talk about like a world class financial seminar for the bargain price of, I don't know what a B share is, 100, 200 bucks. And then you can sell it afterwards.

Starting point is 00:25:24 So I just looked up A shares. A shares are $492,000. it's one of the most expensive individual stocks there are. And yeah, Berkshire Hathaway B shares are $317. You're right. You know what? I'll go with you on that one. Buy a Berkshire Hathaway B share. And then go to the annual meeting. It is live and in person again this year in Omaha, Nebraska. Yeah, shareholder meeting. Charlie Munger, his, yeah, partner, super smart dudes. That's just a great tip. I've never been to the conference, but my portfolio, my stock portfolio is VOO and then one share of Berkshire B. That's the pie chart.

Starting point is 00:26:06 I love this. I'm done with this portfolio. I think VO is even better than SPY now. It's just looking at my portfolio. These are, so for anyone listening, VOO is a ticker symbol for an ETF that's an S&P 500 index fund, essentially. SPY is another one. There are a bunch. You can also find, you know, tickers that associate with mutual fund index funds. There are two varieties.

Starting point is 00:26:28 you know, of index funds, the ETF varietal and the mutual fund varietal. Yeah, this is a great example, right? I just threw out jargon, VO. Thank you for clarifying that. I can't help myself. But that's it.

Starting point is 00:26:40 That's it. One of the things that you do better than maybe anybody else is making finance feel this accessible. So like we just went into a very tactical VO. What's that? That's going to be overwhelming just as one point to somebody who's brand new to finance. What is the first thing you'd recommend for someone just starting to rehab their finances. Where do they begin to dive in and immerse themselves in this world? Yeah, I think we're all in different places. Yeah, and thank you for saying that. It's something that I can't help myself

Starting point is 00:27:08 but to just, you know, decode as I go because I was that person who would like, you know, my eyes would glaze over and it would totally go over my head when any of this conversation would come up. And I just like remember what that was like. And so I'm not embarrassed at all of like even asking questions about acronyms because there's so many. There's new ones. If I don't know it, and I did this when I was on the news, much to others dismay, I think, because people like to hide behind jargon and sound smart. And I just don't. I just, I'm like, I don't understand. I'm a really smart person. I have good self-awareness. And if I don't know whatever that thing is, like, I don't think other people watching are going to know either. So, so yeah, I just, I love

Starting point is 00:27:55 the decoding. So thank you for that. I think when you're getting your financial life together, you need to know and take inventory of where you are. So like RichBitch, my first book was the 12-step plan to get your financial life together. And that was like basic personal finance, budgeting, you know, buying a house or renting and sort of tips and thoughts around that. If you're doing it for the first time, you know, car leasing, buying whatever, basic retirement, basic, you know, estate planning and things like that. And so, and then Ms. Independent went into actual investing once you got, that was like part two, right? Once you got your basic, infrastructure in place. Like, you kind of can't skip steps. I get questions a lot and I irrelevance,

Starting point is 00:28:42 especially. Like, how do I buy a house? And I'm like, hold on, sister, often. It's like a woman. And I say, do you have debt? Like, I need to know, I have more. I have more. I have. a thousand more questions, right? And so I think that knowing where you're starting from, it's going to be different. I know that sounds like a cop-out answer, but, you know, I like the choose-your-own-adventure books. I don't know if you guys read those back in the day. But that's how I have set up a lot of my, well, especially my books, but a lot of my content. It's like, yeah, at different points, you'll go back to this when you need something else. And that's how a financial journey really looks. I don't think it's like a ladder, just like I don't think there's a career

Starting point is 00:29:28 ladder. I think it's more of like a rope swing or a rock climbing. No, I love it. What we see, and maybe this is the same for some folks in personal finance, but we see in real estate investing, for example, is folks just need to like start immersing themselves, kind of passively at first and just like absorbing information for dozens or even in some cases hundreds of hours before they feel fully comfortable with the ins and outs of real estate investing. And maybe that's the parallel that you're kind of getting towards in personal finance wherever you're starting. Just dive in and start absorbing and the direction will become clearer after, you know, a couple, a couple dozen podcasts, for example, or book or three. Yeah, totally. I think that, um, yes, and, right? Like, you don't

Starting point is 00:30:10 want to, you don't want to say, okay, on Saturday, I'm going to just sit down and let's binge, listen to bigger pockets and money rehab and like, you know, and at the end of the day, I'm going to get my financial life together, right? I did this around my taxes for the first time where I was like, okay, I was just going to do it on Saturday, like get it done and here's all the receipts and here's all the blah. And then it will all be good. And what happened at the end of that Saturday was I ended up drinking like an entire bottle of wine and I think a whole thing of maybe Hog and does at the time with my nothing was done. And so I because I was so overwhelmed by this idea of like I need to do all of these things in one day. And so I tackled that by like the baby steps thing. I just one day,

Starting point is 00:30:57 I only gave myself the task of uncrinkling my receipts. That was it. And like, if I uncrinkled my receipts, I checked it off, right? That's all. The next day, I was like, put them in little bundles. That's it. And so I think it's like, you know, smaller manageable goals that you can actually stick to, right? And also to your point of listening to a podcast, obviously, you know, we, we all love ourselves of financial podcasts for obvious reasons and we are biased around it. But there is always time. Like, there truly is, if you take an inventory of your time like P&L, right, you will, you will see where you can cut. People spend more time, researching boots that they're going to buy or like the vacation that they're about to take,

Starting point is 00:31:51 then they do researching a mutual fund or an index fund or, you know, whatever around this. I love when people say, oh, does anybody have a mutual fund recommendation or an index fund recommendation? I'm like, no, do your own research. I'm investing in this because we've done a lot of research or this is what we are interested in or this is, you know, where we feel is a good fit for our money. But what works for me might not work for you or might not work for Scott. It doesn't matter what I'm doing. My risk tolerance is different than your risk tolerance. And it's different than Scots. My goals are different. I'm way older than Scott. So my needs are different. It's what you need for your situation and your specific set of circumstances.

Starting point is 00:32:44 at this exact time. I love that you suggest to break it down into baby steps, but that name has already been taken, Nicole, you need to come up with a new name. Oh, oh yeah. Dave Ramsey has the baby stuff. Yeah, my least favorite person. I'm not trying to step in his territory. Yeah, little toddler steps. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going, and more importantly, where your tax

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Starting point is 00:36:21 Tap the banner to order your groceries online at voila.ca. Enjoy in-store prices without leaving your home. You'll find the same regular prices online as in-store. Many promotions are available both in-store and online, though some may vary. Maybe diving one level deeper here. I know you do a lot of live Q&A on your show. What are some of the questions that you get most frequently from folks that are new to personal finance? So many.

Starting point is 00:36:47 I mean, usually it's like around the stock pick stuff because they think, you know, people just want a secret. And the secret is, I think there's this dad joke. If you want to double your money quickly, just fold it in half. I'm like, I love a dad joke. It was one of my, I think, most popular TikToks. I just folded money in half. And I was like, easiest, quickest way to like double your money. money, right? It's a joke, and I do love a dad joke, but these people are on a tear with their

Starting point is 00:37:13 money. I tried. Thank you for the pity applause there. Yeah, can we put it in sound effect? Yeah, I think that that's often the question I get because we're just conditioned to want to skip steps, right? When I used to be on these morning shows, like the Today Show, I remember producers would say, like, our audience wants to get fit without working out, you know, make gourmet meals without cooking, and get rich without doing anything, right? Like, you're a kind of conditioned to think that there's a cheat code. And the cheat code that I give is like, you might not love it. Like, it might not be a quick fix, but the cheat code is, you know, take advantage of compound interest. It's often used against.

Starting point is 00:38:06 just in the financial system with debt. That same cool force can be used in your favor, right? And so I think it's more about time in the market than timing the market and picking a stock, right? You don't need a lot of money to start. You need the more time possible to take advantage of this beauteous, glorious force of compound interest. That is like literally your money makes money for you while you're sleeping while you're doing nothing while you're listening to bigger pockets while you're buying real estate but you have to have some of that money set aside so it can start growing for you you can't just spend it all well that's the thing i mean it's like you know that also the adage i like to rethink conventional financial wisdom across the board and help well because i did this myself

Starting point is 00:38:53 and to think for myself and help others think for themselves and it's not really like living within your means it's living below your means nobody wants to hear that but living within your means doesn't And then you have this lifestyle creep. So when you make more money, then you're, you know, nice to haves become your need to haves. And like it's this lifestyle creep thing that, you know, ultimately people that get raises, they increase their, you know, lifestyle more. And so they don't actually keep more money. It's really not how much you make, but how much you keep, how much you save, how much you invest,

Starting point is 00:39:23 that matters the most. I love the answer around this is about the fundamentals. Spend less than you earn. Invest in index funds. You can't get fit without working out. That said, I'm going to go there and say, I think you also champion a large number of money hacks and tips and tricks. And you do have some shortcuts and good strategies that help people move ahead with their money. Would you mind sharing a few of your favorite tactical items that are powerful levers that people can pull in the context of those great fundamentals you mentioned?

Starting point is 00:39:56 Yeah, in like personal finance investing. Yeah, let's start with personal finance. Yeah. So with, you know, coming up with a basic budget for the first time I break it down into the three E's, which is essentials end game and extras, where 70% of your overall, I call it a spending plan because it feels easier to stick to you than a budget in the same way as an eating plan feels more likely that you're going to continue it than a crash diet, right? You allow yourself a small piece of chocolate so you don't end up notching on a big old hungry. good chocolate cake in the middle of the night because you're so hungry and deprived on a crash diet. And so that spending plan allows for extras, so 15% to the extras, which is whatever does it for you, the latte that people will tell you not to buy. I think that's ridiculous. That's not sustainable.

Starting point is 00:40:47 And then 15% to the end game. So your future self, your savings, your retirement, you're investing all of that good stuff. Awesome. How about investing? What are some of the ones on the investment side that you have there? What are some of your frameworks there? Yeah, I think that it depends first on your risk tolerance, Mindy, as you so smartly noted, like everybody has a different risk tolerance and everybody has a different, you know, balance to, you know, how long they need the money, you know, how long it's going to be until retirement and all of that stuff. But I think that there are low risk ways to start. CDs are really good right now. So what happens, I was just explaining this to somebody with interest rates going up,

Starting point is 00:41:35 you know, mortgages are higher, right? And so that sucks if you are getting debt. But if you're saving, it's awesome because like interest rates are up. So on the flip side, you're getting way higher rates. Then we have been for, you know, the last more than decade, right? We got nothing in a savings account. Well, that's changing. CDs are changing.

Starting point is 00:41:57 Like some are four and five percent right now. right? That's great. So I think that the lower cost ways are good gateways into like higher risk, right? Even if you're just starting to get into bonds, you can look into tips, which are Treasury Inflation Protected Securities, which are like, you know, super basic from the government, bonds from the government or T bills or T-notes or T-bonds. They're all the same treasuries from the government. And so I think that there are a lot of different options. It's not a hack. It's just kind of like know your fighter. Ooh, I have one quick comment on that. I've been thinking, hey, interest rates are rising. That has problems for so many asset classes.

Starting point is 00:42:45 Real estate is not a fan of rising interest rates, for example, right? Neither are stocks nor our private businesses nor our bond funds because that decreases the value of bonds when interest rates rise. But one kind of obvious conclusion is like what's like the lowest risk investment you can think of in a practical sense? Well, it's maybe your friend or family member who has an 800 credit score, makes $100,000 in household income and just bought a house and is paying their mortgage, right? That mortgage is at 7%, 6.5%, 7%. So there's a way to get 7% return right there. Now that may not be achievable, but that begins to open it up like, oh, bonds are back, debt's back. How can I take advantage of that?

Starting point is 00:43:24 and your thoughts around treasuries or other very safe debt instruments, I think are great. And I don't think enough people are thinking about this very, very simple, logical way to just rebalance their portfolio. You shouldn't, in my opinion, have had a lot of money in bonds the last 10 years at 2, you know, 0% federal funds rate. But now maybe they're back. So I completely agree and think it's a great way to think about it. Nicole, this was so much fun.

Starting point is 00:43:51 And I really appreciate your time today. please share with our listeners where they can find more about you. You can subscribe to Money Rehab daily personal finance podcast advice show wherever you get your favorite podcasts or any of the other shows on our network, Money News Network. We have seven shows in the slate that cover a lot of different personal finance topics in a deeper dive. So find those where if you get your favorite podcasts or find me on the Instagrams, slip into my DMs with those nerdy questions at Nicole.

Starting point is 00:44:22 lap in or you can find our network at Money News. Yeah, that is our handle. It's super cool. At Money News. What a great handle is that. That's an awesome handle. And easy to remember. If you know how to spell money and who doesn't, sometimes I'll be spelling Mindy and I type out money instead. Look at that subconscious at work. Yeah. Sometimes that happens and sometimes I feel rather silly doing that because I've known Mindy a lot longer than I've known money. All right. Nicole, thank you so much for your time today. And we will talk to you soon. All right, Scott, that was Nicole Lapin from the Money Rehab podcast. That was so much fun. Yeah, that was great. I really think she's doing a lot to really spread the message of financial literacy in a fun and engaging way. And if you haven't already, go check out her show at Money Rehab.

Starting point is 00:45:09 Yep, the only financial expert, you don't need a dictionary to understand. All right, Scott, should we get out of here? Let's do it. That wraps up this episode of the Bigger Pockets Money podcast. He is Scott Trench and I am Indy Jensen saying, Asta manana, Savannah, Savannah. Bigger Pockets Money was created by Mindy Jensen and Scott Trench, produced by Kaelin Bennett, editing by Exodus Media, copywriting by Nate Weintraub. Lastly, a big thank you to the Bigger Pockets team for making this show possible.

BiggerPockets Money Podcast - 414: Nicole Lapin's Money Hacks to Rehab Your Finances & Say Goodbye to Bad Debt

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