BiggerPockets Money Podcast - 463: How to Teach Your Kids About Money (Saving, Investing, Spending, and FIRE)

Episode Date: October 30, 2023

Teaching your kids about money is one of the most CRUCIAL parts of parenting. So why do so many Americans completely neglect financial literacy for kids? Is it too awkward of a subject? Do parents feel like they don’t even grasp personal finances themselves? What happens if YOUR kid goes into the world with zero money mastery? If you have children, grandchildren, nieces, nephews, or loved ones with kids, THIS is what you MUST teach them. Instead of Mindy and Scott telling you what they taught their kids, Katie Trautman comes on the show to share what her FIRE father taught her about money. You may recognize Katie’s name; her father, Mark, was on the show just a few months ago. Mark was able to retire at age fifty, get Katie through college debt-free, and travel to his heart’s desire. He taught Katie some crucial personal finance lessons many of us never learned. From saving to spending, investing, retirement accounts, and more, Katie goes through some of the top lessons her father taught her about finances before she left the house. Katie is about to start her first full-time job, and with a healthy emergency reserve, full retirement accounts, and the right money mindset, she’ll show you how she plans to retire earlier than her father even though she JUST started working. In This Episode We Cover Financial lessons you MUST teach your children before it’s too late How to fund your child’s college through tax-advantaged investing accounts Allowances and how to entice your child to save more than they spend The “20%” rule that Katie has ALWAYS followed to set herself up for financial success Why your kids SHOULD know how much money you make, save, and spend The one thing Katie wishes she could change about growing up in a FI family And So Much More! Links from the Show BiggerPockets Money Facebook Group BiggerPockets Forums Finance Review Guest Onboarding Join BiggerPockets for FREE Scott's Instagram Mindy on BiggerPockets Grab Scott’s Book, “Set for Life” Listen to All Your Favorite BiggerPockets Podcasts in One Place Apply to Be a Guest on The Money Show Podcast Talent Search! Money Moment FIRE by 50: How to Have FUN on Your Journey Toward Early Retirement with Mark Trautman Tracy Coenen (Forensic Accountant) Part 1 Tracy Coenen (Forensic Accountant) Part 2 5 Ways to Teach Your Kids About Finance & Investing Click here to check the full show notes: https://www.biggerpockets.com/blog/money-463   Interested in learning more about today's sponsors or becoming a BiggerPockets partner yourself? Email us: [e-mail] Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Bigger Pockets Money podcast, my favorite listeners, where we interview Katie Troutman, daughter of Mark Troutman, and talk about her upbringing in a Phi family, second generation and how she has implemented these principles in her adult life. Hello, hello, hello. My name is Mindy Jensen. And with me, as always, is my wants to teach his little one financial literacy co-host, Scott Trench. That's right, Mindy. I'm looking for some fire playbooks on how to read. raise a little one to ego with money. She, you got a little bit of time, Scott.

What is she like almost one? It's time. It's time. Yes, she can't read yet. Her grasp on the English language is not quite 100%. But yes, go ahead and teach her complex mathematical computations. That's a great parenting skill. She's going to look at you like she always does.

Huh? 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 apparently how young you start those kiddos. 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 start your little ones early on the journey to financial independence. We'll help you reach your financial goals and get money out of the way so you can launch yourself towards your dreams. Scott, I am so excited to talk to Katie Troutman today.

She has such a great story of not only from her perspective of listening to money and money conversations her whole life, but also a success story in what can happen when you talk to your kids about money their whole lives and how successful they can become simply because you've given them the tools that they aren't getting at school. Yeah. Look, family and money is always difficult. There's no right approach. We're not going to claim that Mark had the perfect approach.

But I have been wondering, like, what is a good starting framework that really introduces a kid to money and helps them become financial illiterate, maybe move towards fire at an early age? And this is the best example I've ever come across. And I think you're going to be fascinated, inspired, illuminated. And, you know, I think you're going to be really excited for what Katie is going to achieve in her life with the foundation. and starting point that she has right now.

Katie has a very bright financial future. Thanks in large part to her dad and her mom constantly talking about money. Maybe constantly isn't the right word, but continuously talking about money throughout her life. So next up is our segment of the show 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, if you have a car that you're looking to sell, don't go to the dealer, sell it privately. Think about it. A dealer has to get a deal on the car to resell it. But if you sell it privately,

you can get that higher price and save tax for the buyer. Do you have a money tip for us? Email MoneyMoment at BiggerPockets.com. 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 refund can make the biggest impact. Because the goal isn't just to look backward, it's to actually make progress. Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier. It brings your entire financial

life, including budgeting, accounts and investments, net worth, and future planning together in one dashboard on your phone or your laptop. Feel aware and in control of your finances this tax season and get 50% off your Monarch subscription with the code pockets. What I personally, like is that Monarch keeps you focused on achieving, not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place. So every decision actually moves the needle. Achieve your financial goals for good with Monarch, the all in one tool that makes money management simple. Use the code pockets at Monarch.com for half off your first year. That's 50% off at Monarch.com Code pockets. I love Matt, said no one ever. Nobody starts a business thinking, you know what would

make this more fun, calculating quarterly estimated taxes? But somehow, every small business owner ends up doing it. Your dreams of creating, selling, and growing get replaced by late nights chasing receipts, juggling invoices, and wondering if that bad sushi lunch with Scott counts as a write-off. Change all that with Found. Found is a business banking platform built to take the pain out of managing money. It automatically tracks expenses, organizes invoices, and even preps you for tax season without you doing the heavy lifting. You can set aside money for business goals, control spending with virtual cards, and find tax write-offs you didn't even know existed. It saves time, money, and probably a few years of life expectancy. Found has over 30,000 five-star reviews,

from owners who say, found makes everything easier, expenses, income, profits, taxes, invoices even. So reclaim your time and your sanity. Open a found account for free at found.com. That's F-O-U-N-D dot com. Found is a financial technology company, not a bank. Banking services are provided by lead bank, member FDIC. Don't put this one off. Join thousands of small business owners who have streamlined their finances with Found. Audible has been a core part of my routine for more than a decade. I started listening years ago to make better use of drive time and workouts, and it stuck. At this point, I've logged over 229 audiobook completions on Audible alone, and I still regularly re-listen to the highest impact titles.

Lately, I've been listening to Bigger Leaner Stronger, For Fitness, the Anxious Generation for Parenting Perspective, and several Arthur Brooks' audiobooks that have been excellent for mental 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. Katie Troutman is a recent graduate of CSU Colorado State University.

Go Rams! With a master's in accounting. She grew up at a five family. Maybe you remember her father, Mark, on episode 446. and she is well on her way towards financial independence also. Katie is here to tell us about how growing up in a financially conscious household has helped her out as a young adult. Katie, welcome to the Bigger Pockets Money podcast.

I'm so excited to talk to you today. Thank you. I'm so excited to be here and happy to be talking on the show. Katie, let's start off with a little bit about your money history. Sure. So in terms of my money history, as you said, I grew up in a five family. So pretty much money was a topic of conversation since I, you know, came into the household. I'm an only child, so we were able to talk a lot about money without any other distractions or me being off in a playroom.

So I kind of had to talk to my parents, which was both, you know, good and bad. But I loved it either way. Growing up, my parents took me to Berkshire Hathaway meetings. I think it was 13. I got my first job. It was eighth grade. I was a receptionist at a nail salon, so, you know, something really small. But a little income in the door got my step, put step into the work environment. And then through high school, I held summer jobs. I wasn't, I didn't work during school because school was my job at the time, but I always, you know, needed some free money to have for things that I wanted to do. So I always worked during the summer. And then come, come,

college. It was a very similar platform. I also worked during the summer. And then my senior year, yeah, summer before my senior year, I got a job on campus, which I worked for about two years, so up until I graduated with my master's. That's kind of my, you know, income journey, if you will. Love it. So let's go back to the beginning of this and kind of dive through a lot of the experiences and influence that growing up in a FI household had on you. What do you, what do you your first money memory that you had when you're a kid? My first money memory. All right. So this is one of my favorite stories to tell. So I was around, I want to say four. So my parents took me to Disney World. We were living on the East Coast of the time. And in true five fashion, you know, we drove our

motor home down so we could stay at the campgrounds because it was cook our own meals. It was much less expensive than, you know, paying for those Disney hotels and eating out every day. So during that trip, that was kind of my first introduction to an allowance. So my parents said, you know, you get a little bit of money every day to spend on however you want. You know, it's your money. You make your decision with it. And so the first day, my mom and I go into a gift shop and I walk around and I find this,

you know, tunnel vision as kids do on this Tigger backpack. That is all I wanted, all I could think about. I desperately wanted this Tigger backpack. And my mom was like, well, you know, you don't have the money for it now. But if you save up your allowance for a couple days, four days, something like that, you can afford it. So without another word, we walked right out of that store. And a few days later, I went back and got that backpack and I still have it. So that was my fun little introduction to money and saving, if you will.

That's an awesome lesson. I love that. Yeah, it was pretty creative. I was like, oh, that was a good lesson. teach. Katie is the wait for the second marshmallow kid in the in the marshmallow study. She is not the give me a marshmallow now kid. We did that test with both of my kids and my older daughter waited for the second marshmallow. My younger daughter took the first marshmallow and then 15 minutes later said, I want my second marshmallow. So that lesson teaching, you know,

hey, we got to save up for the things they want to buy here. What about in a general ongoing savings with a long-term view. Was there any experiences that you had there that might have encouraged that? Yeah. So around, probably around the same age, maybe a little bit older, my parents bought me a like a little, you know, lockbox with a code on it. And I started, I was expected to, I don't think I was getting an allowance of that time, but anytime I got any sort of money, whether it was gifts or, you know, whatever, I was expected to save 20%. And we discussed why I saved 20% what that could be used for in the future. And I was expected to put it in that little box. And then through the years, I was expected to do the same once the allowance came in,

did the same thing. And then at about eight, my dad and I went into Wells Fargo and got me a savings account. So I moved from, you know, a physical box to an online, you know, account. And I was still expected to contribute that 20% all the way up until now, if not more. How meaningful was, like, did you kind of, you know, go into college being like, or, you know, that first job maybe with like, oh, I had thousands of dollars in there or tens? Yeah, I mean, it was definitely, it's, you know, really meaningful and something that is entirely implemented into my life. I don't exist without 20% in my savings.

There's not even a thought to it now, which is nice that it, you know, it started so young. So it became just so natural and normal that I don't even really think about it. Versus, you know, if I had started a position or a job, got a big paycheck or even just, you know, a couple hundred dollars, it would be harder to say, okay, I need to put, you know, some of this money away. And I can't spend it on, you know, whatever I want. What were you saving money for? What did your parents tell you this money was for the 20? I think, you know, young, it was, you know, bigger things. It was, you want this big toy or, you know, something that costs a little bit more money. I couldn't make it within a week or, you know,

whatever. Come, I, fifth grade, I think, I moved into wanting an iPhone. So that's what my savings became for. And then usually it's moved up to electronic. is at that point. I bought the computer I'm talking on right now. Actually, that was with my 529. Never mind. Next time. But so, yeah, I was mainly the bigger things.

But I was also, you know, once I was then shelling out that money, we also discussed, okay, well, we still need to keep some in there. And that kind of translated into a differentiation between like savings and emergency fund. That's where that conversation started to come in when I started buying those bitter products but needed money to still kind of stay in the account at the same time. Awesome. So, you know, look, a lot of us growing up money was not talked about in the household very much. There wasn't a big understanding of, you know, incomes and savings and those types of things. Do you kind of look around and talk to your friends and see a very different

dynamic around money? Like, did you know things about your family's finances, for example, that your friends never knew or wouldn't have had access to? Oh, yeah. Absolutely. Absolutely. I mean, like I said, you know, money was not taboo in our household. And I honestly did not know that until I like went over to friends' houses or had sleepovers. And, you know, we're at the dinner table and they're not talking about what they're invested in or, you know, how they're spending their money. They're talking about, you know, a football game or whatever. So and then, you know, you start asking questions. Why do my friends not talk about this, you know, at the dinner table? And then just came the discussion of, okay, so money is actually. generally, really awkward and uncomfortable to talk about. But yeah, it was a completely swapped mindset in our household. Like, I remember sitting down at a pretty young age, maybe 10 and viewing, you know, sitting down with the annual meeting or whatever for my household, if you will, to kind of discuss, okay, where are we sitting?

This is what mom and dad has. This is what's funding this. This is how we pay for that. And I saw, you know, the Quicken for so long. And I think in my adult life, that has translated so much into prepping for my future and the household's future as well. Like once my mom passed, I became the treasure of the estate if my dad passes. And that was a much easier transition for me to move into knowing and having these conversations for a multitude of years versus like my best friend. She's just now sitting down with her parents and being like, okay, I'm the oldest daughter.

I'm going to have to be in charge of this account when this comes time and I know, you know, little to none about it or how my parents are even, you know, moving through life or spending money. So making, having, being able to really talk about, not just about finances, but also sit down and really know my parents' finances and the numbers exactly was, I think, put me leaps and bounds ahead of in terms of our future. family planning than my peers, I would say. When did you start looking at the stock market? When did you start investing in the stock market? And how did that go about? Yeah. So my dad opened a brokerage account for me so long ago. And he asked, you know, we talked about,

you know, he was a mutual fund manager. So the stock market was always something that I knew about. I knew that there were individual stocks and there were, you know, clusters of stocks. But it was, you know, on a very, very little, little kid level. And so he opened a brokerage account for me and said, you know, all right, this is your account. This is, you know, going to fund a lot of things in your future. What would you like to invest in? And, you know, me as a child, I said, oh, Disney, that's what I want because I love Disney. I want to be a princess or whatever, whatever my reasoning was.

And so that was my initial first introduction to it. And I still hold that stock to this day. I don't invest in a lot of individual stocks, but that is one that I will, you know, hold on principle just because it's funny, you know, and it's gone up a lot in the years. So I think young Katie made a somewhat of a good decision. And then when I grew up a little, as I said, my family and I, you know, our vacation in the spring was to go to Omaha for the Berkshire Hathaway meetings. So that's when I was, you know, a little bit. And then we started talking about, you know, okay, Berkshire Hathaway is a conglomerate of a bunch of companies. And then, okay, let's talk. about index funds and mutual funds because that's somewhat similar. So it was able to kind of bridge that gap into the more complex territory in an example that I had experienced in my own life. And obviously, I was bribed by, you know, the dilly bars and all the convention stuff that they have at the meetings. But, you know, over the years, I found myself more in the meeting room than I did

in the convention room, which, you know, was a nice progression, I think, and I think my parents like to see it for sure. And then even though I wasn't, you know, a lot of it went over my head still does to this day. You know, I don't think I could sit through one of those meetings and fully understand everything that Warren and Charlie are talking about. But I think just sitting there and hearing those words open the realm for questions for me for my parents. Okay, what was this one thing that they talked about? I didn't really get that. So, you know, obviously I'm not sitting they're bored out of my mind not paying attention or fully absorbing everything. But I somewhere found a happy medium that worked for our family. So I would say those were the two introductions

to the stock market investing, I would say. I understand that you didn't understand everything at the Berkshire Hathaway shareholder meetings, but you weren't afraid to ask questions, it sounds like. And you literally were unafraid to ask a question at one point. Would you mind sharing that experience with us? Yeah, yeah. So we actually, I went up to my dad one day and I said, okay, so I know about Berkshire Hathaway and I know all these things. But, you know, one, I'm, I think I was 13 at the time or maybe a little younger. I can't compile this into my own words, let alone translate it into how I would explain it to my peers. Because, you know, whatever I'm learning at home, I want to share with my peers. So I'm sure they didn't really want to hear about my finance talks, but I was happy to talk to them about. Anyway, so I went up to my dad and I was like, okay, I know all these things. How do I tell someone what this is when they ask me when I'm talking about it? Like one of my friends.

And he was like, okay, he gave me an answer, an immediate answer. And then we moved it into, okay, let's write this in and see what the, you know, people that run the company would say. So we wrote it in and that was the first question asked at one of the, the meetings and Warren actually did not have an answer and Charlie got to answer my question, which was, I felt a little honor because Charlie doesn't always talk. So it was nice that he got to answer my question. So that was a really cool experience. What was the question, literally? It was literally, I don't remember the specifics because my dad tweaked it a little bit. But my main point of the question was how do I express and explain Berkshire?

Hathaway to a fellow 12, 13-year-old. That's a great question. Love it. Warren should have been able to, Warren Buffett. I know. I was like, I don't know, but he was like, Charlie, do you want to answer this? And Charlie went off. Love it.

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 refund can make the biggest impact. Because the goal isn't just to look backward, it's to actually make progress. Simplify your finances with Monarch.

Monarch is the all-in-one personal finance tool designed to make your life easier. It brings your entire financial life, including budgeting, accounts and investments, net worth, and future planning together in one dashboard on your phone or your laptop. Feel aware and in control of your finances this tax season and get 50% off your Monarch subscription with the code pockets. What I personally like is that Monarch keeps you focused on achieving, not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place. So every decision actually moves the needle.

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Okay, so we have this concept of saving, investing, discussions around money. We have, I presume, some allowances every once in a while. We have gifts from family members. And at 13, you start working and having a job here. We set aside 20% of whatever you're having for savings. Is there a distinction between saving and investing? And when does the pattern of investing get started for you? Sure.

So my investing generally was kind of just done behind the scenes via my parents. I don't technically invest any of my own fluctuating income directly into investments. but I did have, like I said, when my mom passed, I was a beneficiary year on her life insurance. So we put a majority of that money into my brokerage account to continue to invest. So I saved the 20% that goes into my savings account. I make that I was originally using it to fund my emergency fund. I got that fully funded via a little help from my mom's life insurance policy. And then the rest of my savings is broken into various goal buckets such as car, travel,

and just general. And then my brokerage itself was fully funded by my parents as I was growing up. And then via that rest of that, it was quite a large life insurance policy. We funded that back into my brokerage to continue investing, reinvest dividends, things like that. And that is now, as that's self-investing on top of itself and compounding, that also is now funding my Roth IRA fully each year, so I don't have to take individual fluctuating income and put that towards my Roth and then continue to pay and save. I can just fund it through my brokerage account. So that's kind of my setup. I hope that makes sense. That's helpful. What other accounts besides, you mentioned a Roth, what other accounts besides the brokerage account did you have set up here?

What do that look like? Yeah. So I had, so for school, my parents funded me a UTMA account and a $529 account. They put, I think, $500 a month in since I was born. So I was thankfully fully funded for college once I got there. So those were those two accounts for me. I said the Roth, I have the brokerage, savings. I have Discover Savings. That's my emergency fund.

And then an ally where I have those individual goal buckets. And then I just have a checking account that I just used to pool. and then pay my credit cards and bills. But that's pretty much the extent of my portfolio. Awesome. Can you define 529 in UTMA for folks who are not familiar with those accounts? So 529 is a tax advantage savings account, and it's mainly used or solely used for education expenses.

So mine was used to fund my college. So the tax advantages are that as long as you're using the money for educational purposes, and it stays in the account, the income will not be, the earnings will not be taxed as far as I know. And then the qualified expenses include, goodness, room board, tuition, books, and computer equipment. So very specifically school related. I also remember some caveats where you could only take out the amount that you would be paying if you were living on campus. At least that was my situation. So if I lived off campus and it was more.

more than what room and board should be. I couldn't take out more without any tax deductions. So that's what I know as a 529 account and a UTMA account is the uniform transfer to minors Act, which is an account created under state law to hold gifts and transactions for minors. So that's why my parents were able to fund it for me. And then it became, that also went into my brokerage, now that I'm remembering, that went into my brokerage as I've turn 21 because I didn't use any of that for school. I used fully my 529. Awesome. And I have another question about the Roth. Was that set up right when you were 13 and got your first job? Or how did that work? You know, I honestly don't remember. I know there's

no age limit on a Roth. So I'm not sure if I had it. And then we started contributing to it once I started making money or if we made it at 13. That's a question for my dad. But definitely had it by the time mine was 13 and was fully funding up to the amount that I could. So, you know, I usually only made two, three grand a summer. So I never was able to make it, max it out to that five grand. But I am now. So that's nice. You mentioned that you have a fully funded emergency fund. So let's talk in terms of monthly spending. How many months of spending do you have in your emergency fund? What does fully funded? Six months. Okay. So that's, and you're newly graduated. from college. So where did these, where did this spending estimate come from? Yeah. So my dad and I kind of

sat down and did some hypothetical numbers. So last summer, I did an internship with the company that I'm starting to work for. And after that, I was given an offer letter for this October. So with that salary, I was able to, we were able to kind of say, okay, so this is what's going to come out in taxes. We're going to have X left over. We need 20% in blah, blah, blah, blah, you know, in 401k versus ally or wherever else I'm putting the money, obviously not in the emergency fund anymore. And then I think from there we did a little bit of kind of researching on like what housing kind of looked like in Denver, where I was looking. So we kind of just came up with a number. in that way it was kind of a guess and it's just kind of going to be adjusted as I truly get

bills as I'm now in this new apartment and new place and start doing groceries and gas and you know whatever so that might have to be adjusted with time but we also did it in a pretty conservative way so it might be slightly overfunded based on my actual numbers but that's hard to tell but we was just kind of just sat down and said all right these you know you're obviously going to have to pay rent. You're obviously going to have to pay car insurance, blah, blah, blah, and said, okay, these are the expenses that we know so far. Let's make a understanding about how much you would about need. Okay, groceries is going to be maybe $300 a month, something like that. So kind of just sat down with some rough numbers and gave it that. I love it. And if you have

underestimated, you haven't grossly underestimated. You can just top it off as opposed to, well, I don't know what I'm going to spend. So I'm just not going to save anything. And then I'll just figure it out later. So I love the pre-preparation. Thanks. I appreciate that. It's, you know, it's good to know that, you know, if I lose my job tomorrow, I can, you know, have a little bit of balance. And, I mean, you studied accounting. I bet there's another job available for you. Yes. That's what I've been told. So what's this, what's this job and where you're moving to? Yeah. So I am in Denver now. And I will be working for KPMG as an audience. Audit. God. for KPMG as an audit associate in downtown Denver.

All right. That's fantastic. Big four. Yeah. You must have not only accumulated a lot of money into your Roth IRA and maintained a really wonderful budget and continue to invest, but also gotten stellar grades to get a job like that coming out of college. Yeah.

I graduated cum laude. Fantastic. And so now that you're about, you're getting your first paycheck sometime by the end of the month, we're here recording this in early October. What's the goal now? What's next for you? Honestly, just really feel out this new position, see what kind of opportunities it gives me. You know, come in the Big Four, it's kind of either you move up to the partner path or you kind of get pulled away from individual companies that you've worked with within the

big four, the Big Four accounting firms. So that's kind of my plan just to kind of feel it out. I also have somewhat of an interest in possibly working for the FBI or the IRS. as a forensic accountant, which could be cool. I have not looked into it much, but based on the people I've talked to, it could be something that's interesting for me. So that's a thought, but, you know, way far in the future. So yeah, just kind of just feeling out the adult work world is my plan for the future.

Awesome. Love that. We just chatted with Tracy Conan, who is a forensic accountant and has a lot of experience, you know, dealing with financial crime. dealing with, you know, recently divorced couples, for example, and looking in through how folks can hide money and all that kind of stuff. And so that would seem like a really, really interesting profession that she had. And she had a lot of really good tidbits and tips as a result of that. One question I would also have here is, what is, is there a journey

to financial independence that you're undertaking? And if, you know, if so, how long do you think it will take you to get there, regardless of how long your working career might be? Yeah, so I am on the phi path. I don't have a number or a date. I'm kind of in that, you know, coastfi, slow-fi side versus more like, you know, hard and fast fi. I'm really, you know, shape my finances around creating experiences rather than, you know, saving for later to experience them then. I'd rather, you know, save little now to, you know, be safe later, but experience those memories and events as they come up. So that's kind of my journey.

And my goal is to retire by no later than 49 because my dad retired at 50, so I have to beat him. Whether it's sooner than 49 or at 49, I do not care as long as this before 50. But yeah, that's kind of my plan. Okay. So I am particularly interested in how you are structuring your finances and your bucket list items and your, just your plan in general, your rich life, Ramit, to... I'm reading his book right now, actually. To make sure that you are doing this. We just spoke with Robert Brokamp from The Motley Fool.

and he referenced the interview with your dad about how he did such a great job of, you know, spending during his life instead of waiting to the end. And, you know, how you've got some experience. You did lose your mom young. And you've got some experience with understanding that, you know, live in the now is important, but also saving for the future is important. So how are you going to balance that? out. Yeah, it is an interesting balance that I've come to find and still working on through my journey. I would say that my main push to, you know, make sure I spend that money within the timeframe is kind of like a fun bucket like my dad, but I don't have as much, you know,

flying around money as he might have extra to put into that fun bucket as a young adult. So I have, like I said, my ally savings accounts where I've started those buckets. My plan is to put about 10% into that per paycheck, the other 10% into the 401k to, you know, a little bit of later for the 401k and a little bit of now with the savings because my current buckets are updates on my car. Travel is a really big one for me, something that I am very passionate about and would like to experience in the now. And then I'm also hoping to expand. those buckets and been kind of tinkering with what I want. But I'm thinking about maybe like an entertainment, which could encompass for me,

things that I enjoy like a ski pass or concert tickets, things like that. So that's kind of how I take my 20% and split it into both present and future. So there's no book on how to teach your kids money or anything like that. This is all stuff that your parents really kind of just did. naturally or, you know, I started doing it because that was a good idea. And, you know, there's a lot, there's a ton of things that are awesome here. You have little lessons that you remember from an early age around saving up for a toy over four days. Like, what a great little simple lesson. Like surely, you know, I can relate to that. Ingraining the habit of saving, getting accounts

set up for you with investments, understanding, hey, what do you want to invest to Disney? We're going to buy a share of Disney. We don't care about the returns. We just care that you have a connection between between those things. And then making this a part of the discussion in perpetuity throughout all of your time growing up, being involved in family planning, really a great degree of transparency that I think a lot of families don't have here. What I'd like to ask you is all that sounds awesome to someone who's, you know, I have a one-year-old. Her name is also Katie. And so, you know, I'm starting to think about these things. But what I want to ask is, okay, there's a great plan here, a lot of things to emulate. is there anything you would have changed? Is there anything improvements you go around with now,

you know, looking back and saying, hmm, we could have done this better. Or we could have, I would have made this, this adjustment over here or built on this great foundation with a couple of extra things over there. I would say, honestly, the only thing that I would probably change is that it was so free to talk about and money and finances are such an extensive concept to talk about and there's so many realms and alleys that you could dive into that it definitely somewhat overtook our conversations at times where it was kind of, you know, come, you know, bratty teenage years, I was like, I'm so freaking tired of talking about money. Like, I'm just like, let's talk about something else. Let's talk about, you know, the Formula One race

or like anything else other than money. So I would say just, you know, finding a balance where, yes, you should be able to talk to your kids about it and in a free form and at any time they want to, but it should not be your entirety of conversation. And it shouldn't feel like you're sitting down at the dinner table to have a lesson. I think that was I pushed back the most as a kid when I felt like I was in a classroom. We're sitting down and being taught about these things versus when they came up more organically, I was much more interested to ask questions or continue the conversation than when I was more being talked at. if you will. Awesome. Okay, Katie, one last question. What would you tell someone in your similar age group who is thinking about financial independence, who is, who's heard about it and wants to

experience this? What advice would you give them trying to reach financial independence themselves? Sure. So I would say the biggest for me, I mean, I'm a big reader, but I would say reading, if not, you know, listen to podcasts like this one. But I, you know, my dad gives me a lot, so many financial books. I'm pretty sure the majority of the books in my household are financial books. And I, you know, I read every single one of them. And honestly, you know, reading this information is, you know, not the most exhilarating for me. You know, I'm not waking up every morning like, oh, I'm going to read, you know, this book in a day or whatever.

So, you know, I take it small bites at a time. I try to do about 15 to 20 pages a day. just, you know, say, okay, I did my little bit of knowledge. And then I also have, like, a fiction book on the side that I can be like, okay, let's move into a more fun realm, if you will, a little bit less information overload. Because it might feel like that because it's a lot of similar information, different information, depending on who you're reading, things can contradict. So, you know, I find value in reading all these books, whether I retain all of the information

or not. I'm at least, you know, getting some exposure to it and, you know, maybe 10% that stay in my brain or the main topics, you know, pushed me on my way and push others. I try to implement this on my friends. I'm slowly getting them there. And then also, you know, as a, like I said, I've experienced this much sooner than most people, but I've come to realize that as an adult, you will at some point be most likely in charge of your parents' finances.

So I would suggest, and I suggest this to all my friends, is indicate the money conversation with your parents, whether they're interested in talking. about it or not. Learn from learn what they have, but also that's an easy way. If you don't like me have a lot of diversification, I can look at my dad's portfolio and see all these different things that he did or opportunities that are possible for me that I may not be able to see through my realms because I'm not invested as much or involved as much as he is. And in that way, you know, kids can learn to learn from their parents, mistakes and triumphs, you know, okay, this investment really worked out for them? Why did that work out for them? Or, wow, you lost a lot of money

on blah, blah, blah. Like, maybe I shouldn't take that approach. So having that real life understanding both for your parents' future and for your own, I think is very beneficial. And then the last thing I would say is track your money. I have so many friends that are like, oh, I spent four grand on this credit card this month. And I'm like, on what? And they're, I don't know, like dinner. I don't know, I guess it just added up. I'm like, did you even look at the transactions? Are they even correct?

First of all, review your financial statement. Second of all, second of all, track your expenses to know how much you're spending. Like, mine are all, you know, you don't have to be as diligent as me, but I, you know, write in every single at least transaction on my credit card. And then I do itemize them to say, okay, I spent this much on eating out. I spent this much on groceries. I spent this much on clothing.

So like at the end of the month, I get a quick snapshot of what I'm spending on. I'm like, maybe I didn't need to spend $500 on clothing last month or whatever it is. Not that I spent $500 on clothing. But I felt that was a really easy way for me to get my hands around my own finances. And then also, again, just fostered a platform for more questions that I could go to my parents or someone more knowledgeable or a book about. I love it. It is so easy. and free. You don't have to buy an app. You can literally get a piece of paper and a pen. You can get

an envelope from all that junk mail that comes into your house. Get a piece of paper and a pen and track down every receipt you have, write down how much you're spending just to see where it's going because it is very easy to have a $4,000 credit card bill at the end of the month and not know what is comprising that $4,000. That's not a shocking statement at all. I have a $4,000 credit card bill. I don't know what's on it. Well, of course, because it's a dollar here and $20 there and $50 here and, oh, I'll get drinks and this rounds on me. And then all of a sudden, you've got $4,000 unaccounted dollars. But if you're tracking it and adding it up every single day or every single time you're spending money, all of a sudden it's in your head. Oh, it's the 10th of the month. And I've already spent $2,000. But I only spend $3,000 in a month or I'm only supposed to. So I need to be a little more cautious the next 20 days of the month. Or I only spend $1,000 so I can be a little more freewheeling because it's already the 20th and I have $2,000 left for the month. You don't have to always spend $3,000. It seems like such a no-brainer. And I keep harping on you have to track your

spending. You have to track your spending. But it's an easy way to understand what is going out. And if you don't do it, you're not going to know where it's going. Katie, this has been so much fun to talk to you. I really love the, from the horse's mouth conversation about the, you know, the realities of growing up in a FI household. You're literate with money. And yes, sometimes you didn't want to hear it. But look, now you're literate with money. So to all the parents out there that are listening who are like, oh, my kid doesn't want to hear it, I guess I'll pull back. I'm right there with you. My kids are in that same frame where they don't want to, They don't want to listen and I already know this all mom.

My kid is in her financial literacy class right now and she's like, I can be teaching the class. I'm like, well, you better get 100 then. Shouldn't you, darling sweetheart. So keep at it. Keep educating your child. Keep listening to this show in the car with the kids. That's the reason there aren't any profanities on this show is so you can listen to it with the kids in the car. They will learn a little bit here, a little bit there.

and all of a sudden they're going to be parenting things back to you. So, Katie, thank you so much for sharing that you can successfully teach your kids about money from the time therefore. Thank you so much for having me. I really appreciate it. And so excited for your new job. I know you're going to love Denver. Always hit us up with anything you need. Scott's just down the street from you.

Awesome. Yeah, we'll have to do lunch. And I'm just north. So come up and visit anytime. Always. All right, Katie. Thank you so much for your time today. And we will talk to you soon.

Thank you guys. Holy Canoli, Scott. That was Katie Troutman. And she's so awesome. I love her story. I love how Mark and Marge raised her. And I'm so excited and like reinvigorated to continue to shove money down my kids' throats. That's one way to take away.

Yeah, I walked away from today's interview feeling really inspired about, wow, there's a playbook there to unpack. in terms of instilling, you know, giving a child starting from an early age, a really great opportunity to start life well along on the path to financial independence, but still, you know, but not having done it for them, having done it with them, teaching them the lessons over time, building those habits from an early age, and allowing them to manifest them over time. And what you're left with is just a wonderful human being who's got a bright career ahead of her, started at KPMG, awesome job. That's like one of the best possible jobs you can get coming out of school with an accounting degree. You got somebody who has a big investment portfolio,

fully funded emergency plan, no debt, and, you know, a really level-headed approach to thinking about how to pursue the next stage of life. That balance is both appropriate amount of investing and, you know, enjoying her 20s and the opportunities to have fun and, and enjoy Denver in the world that lie before her. So I just love it. You know, really want to take a leaf out of Mark's playbook here. And for my Katie, put in place some of those lessons over time. Scott, I like what you said.

Don't do it for them. Do it with them. And by showing them, showing your children how to do money correctly, emulating what they should be doing is such a good approach. to parenting because you can talk at your children all you want, but by showing them and just having it be surrounding them listening to this podcast every time they're in the car with you is also a really great way to get them to more financial literacy. So Scott, I expect your darling, Katie, to be listening to this show. Yeah, we'll bring it on the podcast next week.

Yes, that'll be awesome. Right after she turns one. Yes, she will have so many amazing things to contribute. It'll be fabulous. All right, Scott, should we get out of here? Let's do it. That wraps up this fantastic episode of the Bigger Pockets Money podcast. He is Scott Trench and I am Mindy Jensen saying nothing is impossible. If you enjoyed today's episode, please give us a five-star review on Spotify or Apple. And if you're looking for even more money content, feel free to visit our YouTube channel at YouTube.com slash Bigger Pockets Money. Bigger Pockets Money was created by Mindy Jensen and Scott Trench. by Kaylin Bennett. Editing by Exodus Media. Copywriting by Nate Weintraub. Lastly, a big thank you to the

Bigger Pockets team for making this show possible.