Money Rehab with Nicole Lapin - "What Should I Invest In?" (Listener Intervention)

Episode Date: September 24, 2023

Originally aired 2.16.22 Today’s Money Rehabber has had some major wins and huge losses by making risky investments. Now he just wants to know: can I (and should I) be more boring with my investing choices? Today, Nicole focuses on helping this listener make his financial rollercoaster a little less bumpy. Want to start investing, but don't know where to begin? Go to moneyassistant.com and meet Magnifi, your AI money assistant, designed to help you make a plan for your financial goals. Want one-on-one money coaching from Nicole? Book a meeting with her here: intro.co/moneynewsnetwork 

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I always want to line up a reservation for my house when I'm traveling for work, but sometimes I just don't get around to it because getting ready to travel always feels like a scramble, so I don't end up making time to make my house look guest-friendly. I guess that's the best way to put it. But I'm matching with a co-host so I can still make that extra cash while also making it easy on myself. Find a co-host at airbnb.com slash host. One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no

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Wall Street has been completely upended by an unlikely player. GameStop. And should I have a 401k? You don't do it? No, I never have. You think the whole world revolves around you and your money. Well, it doesn't. Charge for wasting our time. I will take a check.

Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin. Today, one of our producers is instigating a money rehab intervention for a friend. So, Mike, producer Mike, why did you think your pal Mike, let's call him intervention-y Mike, not sure if that's a word, but we're going with it, needed said intervention? So my friend Mike McLaughlin, otherwise known as McLaugh, we've joked on this show before about the real Wall Street bets, which is the group chat that exists amongst my friends. Oh, hold on. It's bets with a Z.

With bets with a Z. Right. Just to be clear. Okay. Yeah. Right. So when I first started working on the show, that was my extent of financial knowledge. It was me talking to my friends about what we knew about finance and the stock market and all that stuff. And as it turns out, after working with you for almost a year now, we were wrong about a lot of things. And Mike McLaugh has been kind of the ringleader on that because Mike is, he's sort of the senior of our friend group. And he has had sort of the most life

experience. And I would also argue he's taken the most chances with his money. We're very tight. I know a lot about Mike's life. And I think Mike is really like, just like a lot of our friends, is sort of a home run hitter with his finances. And he takes a lot of chances. And I think that a lot of our friends try to make 50 cents into a million dollars. I just think overall, Mike is in a place right now where finding a real level of stability and consistency is super important, as opposed to hey, Nicole, help me make a million dollars like right now. I think that like teaching people and starting with somebody like Mike, who obviously has a level of financial literacy. I've done it before. I know. And that's the thing. So it ebbs and flows. And have I said anything wrong? No. Everything's probably been correct.

So, Mike, producer Mike, you want me to money rehab the real Wall Street bets with a Z. Yeah, I think I think Mike is in a place where he finally, you know, he has he has some ideas of what he wants to do with sort of like the money that he has right now. And I think that, you know, I just want my friends to sort of think through some of their... And Mike does. I don't want to make it sound like Mike is like not smart or like that he's thoughtless or anything like that. No, it's cool.

Keep going. Can I clarify this group chat? How it happened? Yeah. So this is what happened. Pandemic hit, right? I'd worked in finance before as an executive assistant. But I was there for like three

years count so i had a little bit of like you know literacy with it they gave us all this free money the government you know and i didn't need it the stimulus check the stimulus check yep and then i got my job i got furloughed from my position in manhattan so i got a nice something from them and then something from the government. And then I decided like, well, the market sounds so low. Some of these tech growth companies got to move up. And I took long calls like six to 12 months out, way outside the money. And almost all of them hit in that first year first year at the peak of it my friends caught wind of it because i was telling them so they started a group chat and had about five of us

on there the moment that group chat started dude i knew it was over yeah everyone's like sending in this and in that i was like it's over okay But how much money are we talking about? To us working class? Not that much. You know, we're talking like around just under six figures. But in, you know, a few months from going where from it was like, it was pretty intense. But then I ended up losing at least half of it the next year. So how well I took out a bunch and I paid off a bunch of debts and then i bought a car and then i traveled around the country and then and then i just kept letting it ride with these guys and then every every single thing we did we just kept losing and losing and losing and just losing and losing worse and then i just took took out the measly you know 10 15 grand at the end like all right well you know

we did it we i made well more than what i make it a year in stock options and i took that and then i had to pay the government that was nice so you know okay so you guys have created kind of a knock off the reddit group pretty much very much so yeah yeah and your name has to be mike in order to join and you have to be from jersey and you have to in the end you have to lose money got it so you guys have a group chat you throw out wild sort of get rich quick trading tips to each other and some of you partake and some of you don't and these tips or these ideas don't need to be verified you could have heard them like verified from who verified mike like through actual fundamentals of companies i don't know yeah go. Yeah, yeah. We just love that, Nicole. I hit on Macy's, I'll tell you that. So there's an addiction, it sounds like,

to getting rich quick, to somehow you're going to find lightning in a stock call option bottle and you are going to have all of your dreams come true in one fell swoop. That's the goal. I guess that sounds kind of ridiculous when you say it like that. Because the goal really isn't like... I know that you're not going to be any happier even if that were to happen. But it will alleviate the misery that having no money has. So I don't really... Yeah, I guess that kind of sounds ridiculous when you say you say it like that that i'm just trying to shoot a bet to make

a ton of money um yeah it's not it's not well thought out i don't think well there's an old adage in wall street dad jokes that goes something like the easiest fastest way to double your money is to fold it in half. And barring that, you have a lot of too good to be true, get rich quick books and tips and perhaps even group threads that go on, hope and promising something that, you know, requires some sort of luck or the insider knowledge that's gonna, you know, turn 50 cents into a million dollars. First time I've ever heard that. It's just not possible. It's just, and even if it is possible, like you heard an anecdote for somebody who somehow did turn 50 cents into a million dollars, or even if you turned your stimulus check into some money that you then lost and paid taxes on, and you want that to happen again, it's really, really unlikely.

And I know you guys aren't big fans of like actual fundamentals and charts and things, but if you do look at the probabilities, it's just not on your side. That's the reality. It's like, you know, going to Vegas. And I hate the gambling analogies with Wall Street, because I think there's actually a way to be a long term investor that has no analogy or no similarity to Vegas and crazy gambling, because it is well thought out. There's a difference, though, between trading and investing. So you guys are seem to be into is trading, day trading even. Yes. Yeah yeah to piggyback what you just said about the uh the gambling analogy i mean this group text long ago stopped with the finance stuff and now we just make fun of each other but in the last three weeks it's become sports betting because it's all got

legal in new york and everyone's putting up their bets and stuff like that. So the gambling, that's exactly the emotion we're doing. We are just trying to have fun and gamble, but with money that we probably should be looking to build wealth with. Hold on to your wallets, boys and girls. Money Rehab will be right back. on Airbnb. It's a great way to bring in some extra cash, but I totally get it that it might sound overwhelming to start or even too complicated if, say, you want to put your summer home in Maine on Airbnb, but you live full time in San Francisco and you can't go to Maine every time you need to change sheets for your guests or something like that. If thoughts like these have been holding you back, I have great news for you. Airbnb has launched a co-host network, which is a network of high quality local co-hosts

with Airbnb experience that can take care of your home and your guests. Co-hosts can do what you don't have time for, like managing your reservations, messaging your guests, giving support at the property, or even create your listing for you. I always want to line up a reservation for my house when I'm traveling for work, but sometimes I just don't get around to it because getting ready to travel always feels like a scramble, so I don't end up making time to make my house look guest-friendly. I guess that's the best way to put it. But I'm matching with a co-host so I can still make that extra cash while also making it easy on myself. Find a co-host at Airbnb.com slash host.

One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com. When you check out Chime, you'll see that you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story.

Make your fall finances a little greener by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime. Feels like progress. Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A. Members FDIC. SpotMe eligibility requirements and overdraft limits apply.

Boosts are available to eligible Chime members enrolled in SpotMe and are subject to monthly limits. Terms and conditions apply. Go to Chime.com slash disclosures for details. Now for some more money rehab. Okay, so I am not the fun police at all. I really am not. And if you do want to have fun and have, you know, a group thread that is all about gambling and all about risky stuff, whatever, cool. But make sure that that is with fun money and that's not with your rent money, right? Because growing long-term wealth is actually not super fun and sexy. And like, if you want fun and sexy, go on Tinder. Otherwise, your wealth and growing it, I think really, it's boring. And I kind of like it boring because it means that my money is still there and it means

that I can sleep. Now now if you want to take one percent of your net worth if you get to a place where well first of all do you have an emergency fund uh no do you know what a emergency fund is not really no so like three to six months six to nine months of savings in the bank so like if you lost you have a job now yes yeah i do have that i do have that though but like it would be probably five months would be as much as i could make it okay and then after that are there tax advantage accounts that you have uh i have a 401k that i could take stuff out of so no no no no we're not taking stuff out of it i'm just like trying to get an overall picture of what's happening um yeah i yeah i would say so your assets beyond that are what i'd say i need to be here sorry cool you're in the right place

first step to any recovery is admitting you have a problem. We're only as sick as our secrets, mics. So you have a 401k. You have five-ish months of savings in the bank or in the market? In the market, but off, like not in play, just in cash. And then some- Like in your Schwab account or something. Yeah, yeah. Chilling. And then some in checking Schwab account or something. Yeah. Yeah. Chilling. Yeah. And then some in checking and savings.

I see. And then beyond that, there's no IRA. There's no like. No, I own a car. Portfolio of mutual funds and index funds. No. Are you guys allergic to index funds? I mean, I used to like vanguard and that was nice

and would grow like some sort of like you know there's like a mutual fund that would grow all the time and uh i got i sold that during during this to play uh with it options trade that became macy's options so when you were looking at your Vanguard, slow and steady, but growing mutual funds that included S&P 500 index funds that track the market, you were like. Boring. Okay. I see. But it was still growing at a, you know, inflation adjusted seven trusty percent. Probably even more than that.

Yeah. Okay. So you lost the five grand and then you put, you know, what? Five more grand in. No, I never added in after that. Everything had gone off that initial investment from into the Robin Hood account that i had from from the uh including your checks and my little severance package and all that went in there and then during the next years when i sold out i had um uh fidelity so i sold that and then moved it to robin hood and lost some there

yeah that's what i want to do i want to move more to like more stable growing and i'll have my fun stuff on the side if i want to sports gamble or if i want to run options here's a few you know here's 500 a month i get to have fun yes yes so you know what to do you just don't want to do it yeah yeah yeah i see and and why do you think you don't want to do it honestly i think what i'm suffering from this 2021 is because i lost so much and i'm like damn i want to catch you want to get back like i want to yeah i'm i feel like i'm it's the end of the night i'm playing blackjack and i'm down three grand i'm like i want to get this so like the whole second half of the year, I was like, I'll buy this option. I'll buy trying to get back those losses. So and now I've sort of realized that it's kind of just I got lucky, to be honest, I just got lucky. And I have to realize that I really don't have like an exceptional talent for choosing

different options. It's I kind of just got lucky. And I need to like curb it and go with more like sound stuff and have my fun like on the side. So hold on. When you are trying to get the money back and the losses back, you mean paper losses? Yeah. I see. So this is your morning, your paper losses. Yeah. You didn't even realize these losses.

No. You just saw your options or whatever go up on the screen and that's what you're trying to get back you're not trying to get back like the gold bars that you actually saw in your own personal vault that are now missing yeah there was no like labor that got i didn't like work for this money and then lose it. And you didn't even materialize it. Well, I did still take out... I think I ended up net profit like $38,000, something like that. Right. In the end. So that's actually...

The only days that matter when you're investing or trading in this case, the day you bought and the day you sold. And all the other shit is noise. And it can clearly cause an emotional toll on you if you're looking and refreshing nonstop. But that's not real. There's no, I mean, there's no real Wall Street bets in the non-reality of paper losses. There's nothing real about that. Other than the agony. I was trying to do a pun and I was like, I'm not working right now. So there's something there.

We'll figure it out. We'll fix it in post. But there's nothing real that you're actually mourning. You actually made money, Mike. Intervention-y Mike. Thank you. So can we let it go? Yeah. Like you're not a guy who walked into on to the blackjack tables and put down 100 bucks and lost that 100 bucks. You're a guy who went to the tables and put down a hundred bucks and left with 150 bucks even though at one point in the night you're up to a thousand bucks and you're upset exactly so i think i can let it go and the thing is now it's like it's a year later since the high point i have a nice job i i i'm happier. Even though a year ago I was up.

Mazel tov. 60, 70, you know? So I'm sort of realizing like I don't need to keep chasing it. But I do. But I bought options this morning because I'm afraid. All right, Mike. I bought some options this morning. Just nothing.

Just a couple hundred bucks. Fun money, right? And because I don't want to miss. Just nothing. Just a couple hundred bucks. Fun money, right? And because I don't want to miss. Because I have FOMO. If I miss on the ones that I've been thinking are going to return. And you know what I mean? You don't want to miss out on the party in a way. I don't want all that stock I was going to buy at $6.

And then in two months, it's $17. And I'm like, oh, I could have gotten in there. So maybe, yeah. maybe I just got to like let it all go full stop yes yes yes you do because what is your normal job right now I had a job

in the city but I lost that during the pandemic so now I'm actually managing a restaurant right now bartending so when you're when you're watching these stocks you're not doing this full time right no you're not like a you know quant high frequency trader in his basement whatever watching like little baby blips and try to find some arbitrage there. No. Exactly. I watch their YouTube clips.

I watch those guys' YouTube clips and then I go off of that. Gotcha. It is so freaking hard, guys, to beat the market. It's hard.com. It really is. We know. We lose a lot. Actually getting more returns than what you're going to see in the market.

And when people talk about the market, you know this, Mike, intervention-y Mike, from being the executive assistant on Wall Street. The market is basically, you know, the S&P 500. So just, you know, we can have that grow. We love some compound interest. of some compound interest. So just, you know, the money that you're saving now, the $1,400, $1,500, that is my suggestion for where you do it. And my suggestion is also to participate in the real Wall Street bets. Like, I don't want to be Debbie Downer. I don't want, like, my photo to go up on the real Wall Street bets thread with, like, an arrow in my head or like an X across my face. Like, this is not my goal. But can you take like a nominal amount, like a hundred bucks a week even

and put it in your Robinhood account and play with it? Yes. Yeah. Mess around. But I think you need to change your mindset from a place of this is where I'm going to grow wealth to a place of like, this is where I have fun. And if it does well, cool. But also, if it doesn't, I can afford to lose this money. Yeah. I mean, that's kind of what I want to do. But what I tend to do, and I'm not doing it now, but I like, oh, man, I could be like, I hit on that. What i had what if i instead of putting 100 i put 2000 then you know i have to like i think i just got to fight that mental what that that idea like if it does hit oh i could have made so much more and like this weird

feeling of like not being a part not making as much as i possibly could it's like it's a greed i guess i'm definitely not saying this in a um patronizing way i am a huge huge fan obviously all my books are 12-step plans do you feel like there is something more here like an addiction to yeah there is a gamblers anonymous by the way yeah i mean i wouldn't say i'm like i don't i don't know i. I did play poker for years throughout the world, like in Europe and Australia. I forgot about that. I made a living at that for a while.

I did forget about that. That was when I was in my early mid-20s. I mean, gambling and not having a total respect for money is definitely a part of me. But I've never thought I've ever had an issue with it that it ever affected my life ever negatively. It just holds me back maybe from actually gaining more like real wealth you know because every time i have a bunch of kind of thing oh let's go to vegas let's go here let's go have fun so yeah

maybe there is there could be something aligned there but i never i there's always like i always know like 10 15 other people that are just a mess with it. And I always know when to like cut it off. You know, I've never been, you know. Yeah, I think that's like in shambles or anything. Well, that's like sometimes the misconception that you have to get your life to a place of homelessness to have a problem. And and I think that oftentimes there is an excuse that you can afford it. So it's have a problem. And I think that oftentimes there is an excuse that you can afford it, so it's not a problem. I mean, that is not true.ation around this FOMO that, you know, like could actually benefit from getting to the source and like working through some of that and sort of letting it go so that

you can focus on some of those other things. Like truly there, my suggestion, and again, this is not, this is intended from the kindest place, is to check out one of my favorite apps. And I've talked about this before is called In the Rooms, which is just something you can download and you can look at like different meetings. I like going to meetings when I feel like I'm having a shitty time. And it's just a bunch of people talking about stuff like this. You don't, you know, investigate it if you'd like. Take it.

The interest in the risk taking, the excitement of it is there. So you have a point about the thing looking at meetings. I think actually that wouldn't be a bad thing. I don't actually think I have an issue because many times I've just not gambled or done any of this for years, like three, four years ago, but I don't even go. It's just but when I get into it, I kind of get into it. And that's the truth. Yeah, it is. For today's tip, you can take straight to the bank. A friend that you talk to about money isn't automatically an accountability buddy. Like intervention Mike says, even though he's found a group of friends he's comfortable talking to money about, which

is a good thing, those friends also give him validation when he makes risky investment decisions, which is not so good. You need to make sure that you have an actual accountability buddy like Producer Mike, someone who will raise their hand when they feel like you're doing something that's going to hurt your financial life in the long run and get your ass on Money Rehab when you need it. Money Rehab is a production of iHeartRadio. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Mike Coscarelli. Executive producers are Nikki Etor and Will Pearson.

Our mascots are Penny and Mimsy. Huge thanks to OG Money Rehab team Michelle Lanz for her development work, Catherine Law for her production and writing magic, and Brandon Dickert for his editing, engineering, and sound design. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.