More Money Podcast - 198 A Beginner's Guide to Investing - Erin Lowry, Author of Broke Millennial Takes on Investing

Episode Date: May 15, 2019

It’s been a few years since I first had Erin Lowry on the show to talk about her first book Broke Millennial (that’s episode 109 if you want to listen), and she’s back with a brand new book called Broke Millennial Takes on Investing! She’s still on her book tour, but we recently teamed up to co-organize our Level Up Your Money Torontoevent last week, and while she was in town I got to do an in-person interview for this episode of the podcast. Since her new book is about investing, but specifically a guide for beginner/millennial investors, that’s what we talk about in-depth in this episode. As we shared, we often get asked investing book recommendations, and there isn’t a whole lot out there as a good starter book. You can find some of mine on my recommendations page, but still many of those books can seem too advanced and thus do more harm than good. Investing shouldn’t feel intimidating or scary, and the only way to feel more comfortable with investing is to educate yourself. It took me several years to feel confident even having certain guests on the show because I was afraid I’d say something wrong or use the wrong term. Here’s the thing, investing is simple. But it can also be as complex as you want it to be. The key thing is to start by learning the foundations, then continue educate yourself by learning more advanced topics in investing. And as a little self-promo, that’s literally why I created my Investing Foundations for Canadians course. It’s the perfect place to start to build that foundation and grow from there. Fiduciaries in Canada This was a topic we touched on and there’s so much confusion about fiduciary duty in Canada. If you pick up any American investing book, it’ll tell you to make sure you work with a fiduciary to get unbiased advice. In Canada, we don’t have the same regulations. Here are some articles that go more in-depth: Are You a Fiduciary – Wealth Professional Canada What Is a Fiduciary Standard?  – PWL Capital Fiduciary Duties and Financial Advisors Different Ways to Invest in Canada Another thing that’s important to make clear is although there are a lot of similarities between Canada and the U.S. in terms of investing, there are some differences too. In Canada, there are three different ways to invest: work with an advisor through an investment firm or financial institution, use a robo-advisor, or go self-directed (DIY) using a discount brokerage. The biggest difference between Canada and the U.S. is of course the different regulations of our advisors, but also how our robo-advisors work. For all robo-advisors in Canada, there is always an investment professional behind the scenes. It’s not just an algorithm, there are people monitoring portfolios, rebalancing, and giving advice to clients. Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, hello, hello, and welcome to episode 198 of the Momentary Podcast. I'm your host, Jessica Morehouse, and I'm excited to share this episode because this is one of the very few episodes that I've recorded live, like with the person, not over the internet. It's hard to, I would love to be able to have the budget to fly people out to a special recording to my home, you know, recording office type thing. But yeah, I don't got that. I got to use a thing called Zengaster to get my guests because they're all over the country and the world. But I was lucky that my next guest, Erin Lowry, the author of Broke Millennial and the new book, Broke Millennial, takes on investing. Well, she was in Toronto because we were doing an event together last week. And so the day before the event, I went over to her hotel and recorded

this live with her. And it was so much fun. She's the best. I'm so excited that she has her second book out already. It's only been a few years and she already has her second book. And it's all focused on investing. And it's awesome because honestly, and I think we mentioned this in the episode, when you think about investing books, and I get this question a lot, when I get asked, what's a good investing book? I can give you some options, but there's a very good chance you will think they are too dry or hard to understand or just like bleh. There's not a lot of exciting or just really digestible investing books, believe me. And I think part of the reason is, let's be honest here, when you look at the authors of these books, they're kind of older

white men and they've been in the industry for maybe too long. And so they, they like to use jargon instead of plain language, not the issue with Aaron. She likes to use plain language, not jargon, which is why we get along so well. Cause I'm trying, we're doing the same thing. We're trying to break it down for regular folks like you and me. It's like, don't talk to me. Like you're trying to intimidate me with your crazy words that mean nothing. Tell me what you mean. And so that's what we're going to be talking about in this episode. We're going to be kind of talking about some of the topics that she broaches in her book. Also, obviously, I'm going to give away some copies of her book. So stick around to the end of this

episode to learn how you can get a copy. But let's get to that interview. But before, of course, just a few words about this episode's sponsor. This episode of the Mo Money Podcast is supported by TD Direct Investing. What are you investing for? Retirement? Sure, that's a common investment goal. But what about a major purchase or simply building wealth? With TD Direct Investing's new goal assist tool, you can build your confidence as a DIY investor by setting investment goals and creating a plan to help you reach them. Once you open your TD Direct Investing account, or maybe you already have one, navigate to the Goals tab on the top menu. That's where you can use Goal Assist to help define your investment goal, validate your plan, and monitor your progress all in one place.

You can even set up multiple goals with different time horizons and investment profiles. Want to learn more? Visit the show notes for this episode or go to jessicamorehouse.com slash goal assist to watch my video tutorial. TD Direct Investing is a division of TD Waterhouse Canada Inc., a subsidiary of the Toronto Dominion Bank. Welcome back to the show, Erin. It's only been a few, two, three years maybe since Broke Millennial came out. Two years? Almost exactly. May 2nd. And we are recording this on May 6th. Whoa. And you're already with your second book. How exciting is that? I love Broke Millennial.

It's still one of the top books that I tell millennials to read, especially when they're like, where should I start? And quite honestly, there's not a lot of books for millennials that are interesting to read. So yours is one of my go-tos. So now it's great because I get also a lot of questions about what's a great investing book. And I can tell them all day long, Millionaire Cheer Cheer is great. I do feel like it's not necessarily for beginners. I understood it because I understood things already. And then some of my favorites are like, oh, the Little Book of Common Sense Investing. Super dry, but I absolutely loved it. So this is a good actual entry point to investing. Yeah. You don't have to know anything, including terms like stock, brokerage, index fund, mutual fund.

I don't assume you know those words coming into this book. Which is really good because I feel like, and now I feel like I'm in that space where I know all that stuff. So you kind of take it for granted that you know that stuff. And when you're talking to someone, because I do remember like, you know, several, not that long ago, maybe four years ago, I was, I have this very like vivid memory of being in a conversation with a couple of guys that were in the field and they were talking about index funds or like, oh, you know, the best way to invest is blah, blah, blah. And I'm like, ah, for sure. I'm like, oh my God, I have no idea what they're talking about. I'm going to Google this right when I get home. But like such a fraud idiot, because I'd been blogging for so many years, but I'd never actually learned about investing because it terrified me,

so I just kind of wanted to just put my head in the sand. That's part of the reason I wanted to write this book is it forced me to confront questions that I had too because I went out and did the research. And that was a fun part about doing it because there would be certain times I'd be speaking to someone who would use a word, and I would go, I'm sorry, you have to pause and explain this word. And at the time I could hide behind like, I don't know that the average reader is going to know this, but in my head I'm like, what the heck does that mean? Please

explain tax loss harvesting for me in a way that like a fourth grader can explain it back to you. Also, that's just like, does that not sound like farming to you? For me, it does. Like that is what I think about when I'm like harvesting. And it's about as thrilling, no offense to any farmers who might be listening. But probably, probably though. So what, I guess, inspired you to really get this book out as soon as possible? Because two years is a pretty quick turnaround. Well, I had a deadline from my publisher. So that was probably the biggest reason.

But the topic specifically, in book one, there is a small investing chapter towards the end. Primarily focuses on retirement. And full disclosure, I am American. It is written with Americans in mind. We Canadians are so used to that. I know. But I just like to throw it out there in the beginning. Just so you know, things are a little bit different here.

A little bit. And it was interesting because at the end of that chapter, I recommended a couple of books. Like, hey, if you want to learn more, here's a few options. And then I started getting DMs and tweets and emails where people said, hey, I checked out those options and I got to be honest with you, still feel a little too complicated. Any other suggestions? And I was like, uh, no. So I will write it. Yeah, it's true. Yeah, there's not a lot of good beginner investing books. And even when I tried to get into that, I mean, in my mid-20s, I read books that were like kind of above my comprehension. And I had a few takeaways, but I'm like, I don't actually know what that means. I feel dumber are not smart enough and competent enough to do this ourselves,

which I have a conspiracy theory is deliberate. Okay, let's talk about that first because I have had a lot of people on the show over the past few years talked about lots of different types of investing strategies. They all have very different levels of experience. And I feel like some people believe it's very complex. Some people believe And I feel like some people believe it's very complex. Some people believe it's very simple, or they believe it's both. It depends. And then even that conversation is a bit convoluted. What do you say? I like the perspective that investing is simple because then it's less intimidating. And I feel like if we can manage our money and we earn our money, why can we not learn how to invest it?

I think you can make it as complicated as you want to a degree. There's nothing in my book where I'm out there advocating that you should be a day trader buying individual stocks or trading on margin or any of these terms that it's totally okay if you don't understand them because I don't think it's important. And if you want to learn it for your own self-education, great. But in order to be just a standard investor who wants to net over a million dollars at some point in your life, tried and true principles, looking at index funds, mutual funds, keeping fees low, diversifying, making sure you have your goals in mind. These are all the tried and true techniques that you do need to learn some of the language, which is why an entire early chapter of

my book is dedicated to that. And mostly you need to learn the language just so you can communicate with people properly about it. I liken it to math class. I have very vivid memory of being in math class and not being able to figure out what I was being asked to solve for because I didn't know what the terms the algebra teacher was telling me meant. So if you don't understand the terms, you can't solve the equation. Pretty much the same thing with investing. If you do't understand the terms, you can't solve the equation. Pretty much the same thing with investing. If you do not understand time horizon, asset allocation, risk tolerance, which are foundational terms you need to build your portfolio, you're not going to know how to build it.

They're all pretty basic and easy terms to eventually understand. Yeah, and it's one of those things where I think the more you read those and learn, like I've just read so many books now that basically say the exact same thing. You're like, oh, I finally get it. So sometimes you're like, why are there so many investing books out there? It's like lots of them are saying the same thing. They are. And I also feel like this is one of the first books that do have millennials at the forefront of my mind because I bring in aspects about technology. We talk about robo-advisors. We talk about micro-investing apps. Talk a whole heck of a lot about student loans and whether or not you should even be

investing if you have debt. And those kind of nuanced conversations have not really been had before, primarily because of the foundational classic text, the random walk down Wall Street, the common sense investor, were penned way before these were even issues and or options. Well, even in the little book of common sense investing, I remember his section on ETFs. He's like, I'm not a fan. And I'm like, what? It's like, okay, maybe this needs, it just has an older perspective because ETFs are great. And yeah, I mean, part of it is also, I'm a lot younger. I'm not the end all be all voice of this book though. I like to call myself an investing translator. I like that. I'm 29 years end-all be-all voice of this book though I like to call myself an investing translator I'm 29 years old I've almost exclusively been investing in a bull market

Anyone who is young and never been through a down market Cannot call themselves an expert in my opinion Because you've never truly experienced what it's like to seriously lose some money And I interviewed a lot of people with a lot more experience Who are far more experienced, is the gentle way to say it, older than I am. They have wisdom. Yes.

There was a lot of wisdom to be imparted. And I also, I don't have any of the exams and credentials. I didn't even have any sort of mediocre experience or career on Wall Street. So I am my average reader. And that's really what the book was born out of. I think that's important because sometimes the investing experts out there that are talking, they come from a very specific point of view based on what their experience was. Maybe they were a financial advisor, hedge fund manager, day trader, whatever the case is. And so they have a very specific point of view and are very passionate about this point of view. So I think coming at it from the perspective of, okay, well,

I talked to a lot of millennials. I am also a millennial. What do we want to know? And yeah, like you said, there's hardly any books that talk about robo-advisors. And still to this day, even though they've been around in the States for a lot longer, only in 2014 did they come to Canada. And still people are like, I don't know, seems kind of crazy. I'm like, yeah, it's been a while. It's fine. It's actually totally fine. And it's also important, and I dig into this in the book, to understand that you're not investing in the robo-advisor.

You're investing through it. So if something happens to the robo-advisor, you haven't lost all of your investments. They just in-kind transfer is the term for getting moved to another brokerage or firm. Exactly. And that's been an interesting question. People go, oh, are they safe?

Like I answer a lot of those kind of questions. Any kind of fintech, the first question is like safety. Yep. And there's a lot. I try to be very, I guess, not middle of the road isn't necessarily the right term, but I do try to look at both sides on a lot of different issues. Kind of say, if you feel this way about one thing, here's a way to do it. If you have a higher risk tolerance or feel differently, here's another option. I try to shades of gray a lot of things in personal

finance because it's personal. Yeah. Yeah. I love that. Another thing, and I see that there is a very topical chapter called robo-advisor or human advisor, which is better. This is also a question I get a lot. I have done both. I've used a human advisor and used robo-advisors and I do some DIY investing. And so I've kind of tested out all the things. But what do you kind of share in that chapter? Because I feel like a lot of people are like, they either they want to take control or they want maybe the robo-advisor is kind of a little more hands-off, but it's still like you're kind of in control. You need to know what you're doing. You need to understand it. But I think a lot of people also like, can I just give this to somebody to deal

with? And you can. I also think it's important to acknowledge most robo-advisors have a human advisor element if you want it as an add-on. So that is an option for a lot of them. To me, it really just kind of depends on what you are looking for, the level of maybe hand-holding you need. And that doesn't mean to say hand-holding in the sense of you don't know anything about investing. It could be maybe you have a really low risk tolerance, and as soon as the market goes down, you're going to panic and sell.

Well, you probably want a line of defense there. So whether that's your robo or whether that's a human, that could be a good thing to know about yourself. To me, it really does come down to fees. I think there's true value both with robos and with humans. You need to thoroughly vet both of them. You need to understand exactly how people are getting paid or companies are getting paid. You need to know how much they are charging you for the service. And ultimately, you are the only one that can decide if there's actual value there for yourself. I really try to dig, dig, dig into fees multiple times throughout the book, but especially in that chapter to help illuminate, well, does this or does this not bring

you value? And I'm not making a judgment call because I think it's very specific per person. I pretty much exclusively do my own investing right now. But I think eventually I will hand it over either to a robo or to a human. Maybe not in full. Maybe kind of a 50-50 split. And some of that, honestly, is I'm married now. If something were to happen to me, I'm the one that exclusively handles investments in my household. I want to make sure that my husband does not have to be stressed about where they are, how to get access to them, making sure they continue to be invested appropriately. Having a wealth management

advisor, should I earn enough money to get to that level, might be a good strategy as kind of a defensive measure. Well, and that's the other thing you bring up. A lot of people are like, oh yeah, I definitely want to hire somebody. And it's like, it is actually very difficult to find someone to actually manage your portfolio when you do not have half a million dollars. Like it just is. Believe me, I've looked and it's shocking. You're like, okay. And the people that do seem like they will take you on, you have to be very careful and understand their fee structure because sometimes it is, they take a percentage of your portfolio as growth as or just the yeah maybe assets under management thank you thank you so much and also they might have commissions they might there's a lot of different things so I think a

lot of people they think it oh this seems like the easier way I just get a human to do for me it's like you have to be fully informed before you even work with a human too and you need a date around and figure out who you want to work with before you just sign on the dotted line. I would really caution anyone against just going into a bank branch that they work with and signing up with someone there. I would say you definitely, specifically if you're in the US, you need to make sure you're working with a fiduciary. I don't know what the standards are here. It's very different here. Because yeah, I've read like so many books that are, you know, from American authors, and they talk about fiduciary, fiduciary. And so Canadian is like, okay, well, I want a fiduciary. I'm like, guess

what? It is not that simple. You can find a fee only advisor. But in order to have that specific credential fiduciary, it's, you do have to have a specific title. And so you can find a fee only planner that will not actually manage your portfolio, but they can do an audit of it and kind of give you some guidance. I think those are kind of great. Usually they will kind of point you in the direction of a robo-advisor, or if you're into DIY, they can kind of set you straight. This is how you do that. But they, again, won't manage your portfolio for you. But yeah, if you want someone that is non-biased to manage your portfolio, you are going to A, have to find a fee-only portfolio manager, and you're probably

going to have to have a portfolio of $500,000, if not more. Yeah, which is, I think, pretty ubiquitous across the border there. In the States, I think we have easier access to CFPs, certified financial planners, who are therefore required to be fiduciaries. And investing is part of the overall picture, but it's not them exclusively being a portfolio manager. They are really kind of taking a slightly more holistic approach of creating an overall financial plan, which can include things like estate planning and sort of even down to figuring out your budget on kind of a high- level element. So yeah, but if you want to go to play with wealth management specifically, you need some money. It's not as easy as you might think. Let's talk a little bit about the market crashing. I feel like I'm pretty,

I've actually become more of an aggressive investor as I've become more educated about it, which is very exciting to see. And because I always thought that being conservative was safe and who doesn't love safety, but then you're like, actually, is it really safe if I'm not earning as much as my potential? And also, I just remember the crash, the 2009 crash so vividly. I'm like, oh, wow. Okay. Again, I didn't have any money in the game. My parents did and their parents, their friends did. And I know they've talked about, you know, friends losing money. They lost money because they sold. I think the only thing that I've really experienced is those market corrections. And I, you know, had lots of conversations with people over, I think it was like kind of end of December, January when there's that market dip and everyone panicked. Oh my gosh,

they panicked. And then guess what happened? Went back up and everything's just fine and dandy. So I feel like, like what are, what are your kind of, I guess, pieces of advice for people who haven't experienced something like that? Well, first know it's coming. And this isn't me with a crystal ball being able to tell you exactly when. It's just a natural part of the market cycle. What goes up must come down, and then it hopefully goes back up. And I do a couple of things in the book. One, I'm a bit of a history lover.

So I like to walk people back through the history of the stock market and showing you that, listen, there have been booms and busts, and it comes back up and around. This is part of how it works. And I think having that to kind of ease our minds is really actually helpful when it comes to feeling a little bit panicked as you see the numbers going down. I also think there are a couple strategies that you can put in place for yourself. One, it could be outsourcing to a robot or a human if you think that you 100% would sell in a panic. That's something to consider. But more so, I would say ignore the media.

Yes. And what I mean by that is, listen, I was a journalism major. If it bleeds, it leads. It's very real. So if there's an option to go with a negative clickbaity headline, yeah, they're going to do it. And that's why we see things like back in December of 2018, when there was a little bit of a correction, there were headlines that would say things like Dow Jones drops 1,100 points, biggest drop in history. Okay, factually, that is accurate. It was the largest point drop in

history. But contextually, it was not accurate. Because while it was the largest point drop in history, but contextually it was not accurate because while it was the largest point drop, it was by no means the most significant point drop. Because 1,100 points less that day was still up from when it had been six weeks prior because the market was at an all-time high. So things like that, you don't know unless you're a news junkie with financial news, and you can't necessarily put that in perspective. All you're going to see are words like plunge, free fall, biggest drop in history, which is actual words that I pulled from headlines. Oh my gosh. And also I find they always use that photo of these white guys. Screaming.

Yeah. They're just with their hands over their eyes, panicking, like, where did they get this photo? They keep using it everywhere. Also, I have been on the floor of the New York Stock Exchange multiple times. There are very few humans actually on the floor these days. Yeah, same with the TSX. I'm like, there's no one there. Yeah.

Like, I don't know where you grabbed that photo, but it's from a couple years ago, I think. I think we should examine the outfit and, like, time stamp it. I know, it's like, was this in 2009? How large are those ties? Mm-hmm. Mm-hmm. I think we should examine the outfits and timestamp it. Was this in 2009? How large are those ties? So the big thing, too, is contextualize the media. The other thing is don't look for a little bit. One of my favorite quotes in the book came from a woman who works at Vanguard

who talks about the fact that when 08 happened, she was a very experienced investor. She had been working for Vanguard for a very long time, and she, for a full year, did not look at her portfolio. She knew she wasn't going to like what she saw. She didn't want to freak herself out. So she just kept with her automatic contributions. She knew she had invested in a way that aligned with her time horizon, which is a fancy way of saying when she needs access to her money, and her risk tolerance. She's like, nope, I'm just not going to look because it's going to freak me out. And she didn't. And she held steady and didn't lock in her losses by selling, as you mentioned earlier. And you got to say people

who did that in 08, 09 made out like bandits on the back end because they kept putting money in when the market was down and they got a good deal. And then the sucker just took off. Yep, exactly. And she also makes a really good point about you have to make three different decisions at that point. So it's when to sell, what to do in the meantime, and when to get back in. And timing all three of those and actually still making a nice profit is very, very difficult. That's another thing I see a lot in Facebook groups. There's so many like investing Facebook groups or Reddit or anything. People like, I want to get started investing, but I'm waiting for the right time. And I know there's going to be a, you know,

a correction or a crash sometime because everyone is constantly talking about when the next crash or correction is going to happen. No one can predict these things though. And they're waiting for that moment. And so many times that I see kind of more experienced people being like, when that moment happens, you may not know it. And then it's happened and then you missed your chance. It's like, just do it now. A hundred percent. And you're also losing the chance to be compounding your money for future growth by holding out.

So if we looked back at, we're in 2019 now, and let's say in 2017 people were saying that and they're still holding out. That's two years. That is two years that your money could have been growing and compounding for you. And I just feel like just human psychology, we kind of forget that aspect. For me, I understood what was going on in December. I'm like, this would be a great time to buy. I'm like, I just can't. I just physically couldn't. So I'm like, the most I can do is just not stop. I'm just not going to touch it. I'm not going to really look.

I'm just going to like move on. And then it worked out. But I'm like, yeah, could I have made more money if I invested heavily during that period? For sure. But psychologically, like I just could not hit that trigger. And so I feel like even if you know all of the things and everything makes sense logically, there's that thing inside you that may not, may be like, no, but don't do it. We are 100% emotional creatures who react emotionally to everything.

And I think that that's one of the most interesting things about writing this book is basically saying you're constantly having to play defense against your psychology when it comes to investing. Part of that is educating yourself. But even when you know all the information... It's still like, yeah, I know. Let's talk a little bit about student loans because you mentioned that at the beginning. That's also a common question I hear from people. I have student loans. They're very expensive. I also know it's important to start investing soon. What to do? Well, the number one thing is retirement being your first foray into investing.

And I think that we often forget that when you are putting money into retirement accounts, you are investing. And I believe that it's an issue with the language that we use. We say save for retirement. Yes. And you're like, does that mean cash? It's so annoying. Exactly. You're investing for retirement. So I am on a campaign to change the language we use. So that is really what your priority should be whilst paying down student loans is this idea of making sure you're putting money away for retirement. Now, let's say America specifically, if you have access to an employer matched 401k plan, great, at least to be trying to take advantage of that employer match so you

get the full amount. If you're self-employed or you don't have access, be putting money into an IRA as much as you can that you comfortably are still meeting your other financial goals as well as paying down your student loans. But that's not really the question people are asking. No. So first, I think it's really important to look at the difference between taxable investments and retirement investments. When we say taxable, what we're referring to are investments that you can buy and sell at any point. When you put money away into a retirement account, that money is locked away, in the US specifically, until you're 59 and a half. There are some loopholes. I don't like to get into them because I don't like to encourage people to raid their retirement accounts. But more or less,

you are locking that money away. And if you get it out early, you're going to pay a big penalty on top of having to pay taxes. So when you put money into taxable investments, you could put them in today, sell it tomorrow if you want. You're going to still have to pay tax. U.S. government always wants its cut at the bottom, as does the Canadian government. They certainly do. Governments always want their cut.

They want their money. But you're not going to be hit with a penalty for doing so. So that's what a taxable investment account is. That is generally what people are actually referring to when they ask this question. I asked almost every expert I interviewed, and by and large, the answer came back with this magic number of 5%. Now, what does that mean? They're referring to interest

rates. So if the interest rate on your student loans are 5% or higher, don't be thinking about taxable investing. Focus on retirement and paying off your student loans. If it's under 5%, mathematically, it could work out in your favor. No guarantee that it will, but it could, slightly more likely to. And if you have both the risk and debt tolerance to balance in taxable investing in addition to paying down your student loans, okay, sure. But also, no one regrets paying off their student loan debt quickly. So just keep in mind that if you're putting money away for retirement, you are investing for retirement, your money is still doing some of the heavy lifting, compound interest is still working for you, you are not sitting idle whilst paying down your student loans. If you want to dabble in taxable, magic number of 5% interest rate or higher means no, under 5% means yes.

I like that. It doesn't mean you should. Yeah, I don't think I've heard that rule. I mean, that makes sense. I don't know if I've heard that new rule. It is a new rule of thumb. I don't know. I like it. And some people say seven. And I think that that's because we generally will say like seven percent average return in the stock market. That's a number you hear a lot. I'm like, no, I it's not. I like the five percent. It's just it just makes more sense. And also like from all those, you know, I'm not sure about Warren Buffett, but I know at least John C. Bogg,

he kind of always said 5% was kind of like that. That's just like a good average return. He was very pessimistic about the future. I'm like, man, he probably knows what he's talking about. He does, and also better to play conservative. I do use 7%, a fair amount, doing calculations in the book. It just makes for sexier numbers.

Yeah, it does look nicer, doesn't it? It does. And I acknowledge that you should play around with 5% and 6% too for if you're feeling super pessimistic because that way you are making triple, triple sure that you're going to have enough money. You have a chapter called Sniffing Out a Scam. What is that one about? That's really kind of going back to that first thing about how do you know you can trust someone fiduciary kind of those words. It gets into how do you vet people and products. Very difficult to do, I'd say, because I mean, and I'm coming from a place of I am a quote unquote influencer. Don't like that word, but you know what I mean.

And I work with brands and I it's always like I am giving people financial education, but again, you know, I do make money by working with brands and promoting their services and products. Always ones that I use or like or would tell a friend, but still it is hard to be like, who, how can I vet this information? How can I make the right decision for me and know it's the right information I'm getting and all this kind of stuff. I think a big thing too is going just beyond a basic Google search because I think that's what a lot of us do. Now, it's a good first step to put the name of either the person or the company in and hit review or scam or is it legit? Yes, actually.

It comes up. Always helpful. I also reference a bunch of other options, stateside specifically, things like FINRA's broker check, which will pull up if the person you're planning to work with, A, if they're registered, because if they say they are and they're not in there, uh-oh, red flag. And two, it's a good option for it'll show if they have any disciplinary actions, if they've had any reports of misconduct in the past, that's all going to be noted in there. If you want to make sure that broker check works, put in the name Bernard Madoff and see what happens. It is all detailed. So that is just a good example of an easy tool to use. It goes into different ways of the whole idea of

trusting your gut. Yes, it's important, but what does that mean? What are we listening to? And also just understanding what different signifiers in the investing world mean, like SPIC insurance, kind of like FDIC insurance with bankings, U.S. specifically. Like, okay, so this robo-advisor that I'm interested in is only five years old. How do I know I can trust it? Well, if it has this type of insurance, then that also means, one, it's getting audited on a regular basis, and two, that if something goes wrong, my investments will just get transferred over to a different brokerage. So I am protected. Interesting. I don't think we have anything like that in Canada. They're certainly not insured by CDIC, which is our FDIC. Interesting. I want to

look into that. I don't think there is anything. I think what all the robo-advisors do have in common in that usually they are backed by some big investment firm or bank. And so they're like, if something happens, then we'll just take over kind of thing. Yeah, which is kind of the equivalent. The thing really is your returns are not guaranteed. So different than FDIC insurance, where in that case it's like, hey, up to $250,000, the U.S. government is backing your money. You have to have $250,000 in there to get it all. I think sometimes people misunderstand.

It's like, wait, if I have $5,000 in my account and my bank goes down, it's like, no, no, you just get $5,000 back. Yeah, you just get your money. You don't get like a payout. Everyone gets a quarter of a million dollars. And I think it's important to know how to vet, especially investing apps, brokerages, robo-advisors in that way. And another great point that gets made in that chapter too, is I think sometimes people get

scared of some of the big names when it comes to either wealth management or investing because maybe they heard them during 2008, 2009. And that was in a negative context. So I think it's important to recognize, especially post-Bernie Madoff type world, the kind of crackdown and regulation that did end up happening in the US. There should be more. But there is some there now.

So honestly, you're probably going to always be slightly more protected, slightly being a keyword here, than if your best friend next door gives you some investing advice and you're going to try to invest in their harebrained scheme, that's where you kind of got to watch out. I know.

The other thing too are not only unprotected, but kind of untested asset classes that are popping up. I think two biggies right now for us are cryptocurrency and cannabis. Yeah, cannabis is huge. Welcome to Canada. Thank you. So a lot of signs about declaring your cannabis products on the way in.

Oh, yeah. No, it's really big in Canada investing. And I've got to say, I got on the train last year. At the end of the day, I haven't really made that much money. I didn't put a lot in. I put $1,000 into this one weed ETF.

But yeah, people love it here. And I think what's important to consider is one, okay, that you can more fundamentally understand what's happening. I don't think cannabis and crypto are remotely the same. Oh no, they're not correlated at all in my mind. It's important to recognize that they are both relatively untested because of how short term this has been. Absolutely. But what's the legalization or lack thereof of these products? If a government changes its mind, what does that mean for these products? And at least we on a fundamental level, I understand what they're doing and what it is. Someone still needs to explain cryptocurrency and blockchain to me like I'm a fourth grader.

And very few people can actually do that, which also makes me like, ugh, about it. Yeah, yeah. Crypto is, well, luckily no one's really, I don't feel like anyone's really talking about it as much as they did maybe a year or two ago when it was at like the height, like people were just like crazy. I remember me and Josh getting off a flight from Vancouver to Toronto after the holidays. And there's some guy on this phone ahead of us talking, bragging to his friend and be like, oh man, my buddy got me into crypto and I made so much money. And I'm like, oh my God, he's going to lose all that money because he has no idea what he's doing. And then I think a month later it crashed. I don't know. It was

just like, oh gosh. And yeah, there's not a lot of clarity or information. It's all smoke and mirrors. It's like, who created this? Who's behind this? And then there's the whole thing that happened a few months ago or whatever, where there was one crypto and then the guy died and he didn't give anyone the password. You can't get to it. Yeah. And I'm like, what is going on over there? Like, no, I can't. Well, I think what's interesting is blockchain, I don't think as a technology is going anywhere, but there's going to be so many iterations, in my opinion, of how that's going to end up getting used that if you got in and got out of Bitcoin or any other crypto early,

you probably made some cash. Oh, for sure. But if it was a buy and hold, you could also lost a lot. Now that's not to say certain things will not come back around. Hard to call it. But my point being,

both crypto and cannabis are speculative at this point. So that shouldn't be 80, 90, 100% of your portfolio. That should be like 5, 10. What are you comfortable losing? Exactly. That's the amount you're allowed to invest in those. It's fine to play around with things because I think you do get more comfortable. And that's the reason I bought that weed ETF.

And I had some weed stocks that I sold. And I realized, oh, I do not have the stomach for individual weed stocks. It was just so painful every day. And then my husband was really into it for a while. And then I'm just like, I need to live my life again. I can't keep on looking at my discount brokerage account. But I think it's helpful because I got more familiar with how these things work. And I'm like, okay, okay, this is interesting. So dabbling is all right. It is. And I think that that's actually a really interesting point that you bring up is that you got interested in how it worked because something

else sparked that interest. Exactly. And that is one of the few arguments I would almost allow for individual stock picking. Again, not a huge fan or advocate of that, especially for a rookie. But it also makes sense that it's the sexier thing to do than just buying a fund. I get it. So I understand why for some people it's kind of a good, I'll say a gateway drug into investing. That should not be the dominant way that you invest. But it is fun and interesting. And you have to do your research and got to be checking on different things all the time.

It can take up all of your life. We have friends that are all in. And they've made a lot of money. But they spend so many hours per day on it. But they love it. They get up when the stock market opens up. I'm like, that's not something I can do. But if you love it, go ahead. Go crazy. Yeah, there is a lazy man's way to this, though. Yeah, I like the lazy version. Those are fun.

Yeah, that's what I like to do. Same. You clearly have done a lot of research and talked to a lot of people in this book who are, I guess, in your mind, some of your favorite interviews, the things that you learned the most from some of these people? Oof. I know. I don't know that. Well, one of my favorites, and I had the pleasure of having her on my panel in New York City,

is a woman named Ashley Fox. And not only is she just so magnetic and energetic when you are speaking to her in person, but she worked in high wealth management, like 25 million plus wealth management for the beginning of her career. And her stories, because one of my favorite chapters is one of the last about tactics that the wealthy use to preserve their money. Man, she's got some good stories. And that was just more of a, I'll say almost voyeuristic look into what it's like when people are that level of rich and the legal loopholes that they are taking advantage of to protect their money. And that was just so interesting. Not necessarily tactics that us regular folk can be using. Yeah, other than find all the ways to legally minimize your taxes. That's kind of the big takeaway. And I just had the privilege to speak to a lot of really

big, heavy hitters in the industry. And it was very nice that someone on Twitter noticed recently, it is a lot of women. That's awesome. Was that conscious or unconscious? Well, I always make a conscious effort with everything that I write to make sure that multiple voices are heard. But what I found interesting, and maybe it's because I am a woman asking for the interviews, but a lot of people offered me women to speak with and high ranking women within their companies. So that was really cool. And just a wonderful opportunity also. Trying to think who would be, I mean, there's just so many good and interesting interviews. One of my favorite

quotes from the entire book is from Jill Schlesinger, who is a CFP, CBS News business analyst. And she wrote the books, Dumb Things Smart People Do With Their Money. And she has this whole line about how your money when you invest Things Smart People Do With Their Money. And she has this whole line about how your money, when you invest it, does the heavy lifting for you. And the way that she describes it is basically, and this is to very heavily paraphrase, but if you do not have the stomach to invest, you don't have to do it, but you're going to have to save so much more money to reach the same goal. And when you invest, your money is doing some of the work and some of the heavy lifting. So let it. Yeah, just do it. Oh man, I am so excited that

this book is out. Can't wait to share it to everybody. And thank you so much for taking the time to chat with me. Thanks for having me. And that was episode 198 with Erin Lowry. Make sure to check out her website, BrokeMillennial.com. Check out the show notes for this episode, jessicamorehouse.com slash 198. And highly recommend also to follow her on Instagram and Twitter because she is highly entertaining. I wish I was that entertaining on my social media platforms. I'm just not. I just like, you know, how do people think of such clever things to say? I just don't know. I'm just not, I just like, you know, how do people think of such clever things to say? I just don't know. I'm trying to follow more people that are clever and interesting to see if it'll rub off on me, but I just don't know if it's working, but she, she knows what's

going on. And so highly recommend it. You follow her. I think her handles are just broke millennial. So easy to find. Um, oh yeah. So I've, I've got several very important things to share with you. So stick around. Just want to share a few words about this episode's sponsor. This episode of the Momany podcast is supported by TD Direct Investing. You know what I hear often from listeners like you? I want to try out DIY investing, but it kind of scares me. Totally. It can be scary and overwhelming, even if you've listened to all my episodes on investing and read all the investing books you've been recommended. When you're a DIY investor, you're in the driver's seat, and you have to make all the

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Bank. Okay, most important, obviously, I'm giving away some copies of aaron's book um go to jessica morales.com slash contest or just check out the show notes for a link to uh this fabulous contest page i'm giving away tons of books uh this yeah podcast season um and and speaking of that i want to congratulate keith Mallett from Ontario. Hey, friend, because you have just won a copy of one of the books I've been giving away, Happy Go Money by Melissa Leong. That's right. I am finally choosing winners. So make sure to get your votes in or whatever.

Just go to jessicamorese.com slash contest. You'll find out all the active contest book giveaways that I'm doing. And I'll announce your name on a future episode. I'll of course, email you individually. So you don't just find out this way, but you know, props to Keith winning that copy. It's in the mail. Hope you enjoy it. Also, I have a special thing to share. So tomorrow, a special episode. If you weren't able to attend me and Aaron's event last week, that's okay. I recorded it all and it is going to be up on the podcast tomorrow. So it's going to be the live panel discussion of the event and I hope you will enjoy it. Speaking of other events though, I have a lot of them coming up and I want to share them with you. So hopefully I can see you

if you're in the area. Okay. First and foremost, the one that is coming right up is on May 16th. It's in Toronto. It's held by the Toronto Region Board of Trade and the Young Professional Network. It's a panel that I will be on with a number of other experts. It's called Millennial Money, How to Plan for Financial Freedom. And you can find more information in the show notes, but also for all of the events that I do. A, I always tell people on my email list. But B, I also post them on the community section of my website, jessicamorehouse.com slash community. So that's how you can find the link to buy tickets and hope to see you there. I have another event, Toronto event called How to Become a Side Hustler. I've been doing this presentation for, I think, a few years now. It's kind of a popular one,

if I must say. It's on May 19th. It is at the Evelyn Gregory Branch of the Toronto Public Library. So make sure to also check that out. It's free. You just have to register to save your seat, but I think also you can just kind of walk in, but they like to know numbers in advance. Okay. So hope to see you there on May 19th. If you haven't been to that presentation, or if you just want to hang out and come say hi, I always appreciate that. On May 22nd, I will be doing a presentation called how to run a successful business from anywhere. So if you're, um, wanted to learn more about side hustles or entrepreneurship, how I specifically run my business completely online. That is what I'm going to be doing this presentation at. And you can find

more information about where that is in the city on that website, jessicamorehouse.com slash community. Or you can also just like check my Twitter. I always post all this stuff on my Twitter account. And this just in another event this May, because I'm crazy. So this one is on May 29th. It'll be specifically about buying your first home. So if you want to learn more about kind of just like the most important things you need to know before you jump into, you know, finding a realtor, looking at homes. I've been there. I've done that. I did a ton of research and I've done a lot of presentations on this and it'll be a good time. So this one is happening on May 29th. It is happening at the BMO branch in Stacked, which is, if you've never heard of it, it's brand

new. It's in Toronto. Again, check out those links that I mentioned or my Twitter for more info about this. But basically, there's a whole area called Stacked in Toronto that is this little mini community or village that is built completely out of shipping containers. And there's a ton of different businesses. Like pretty much this is like hipster or millennial paradise. I know that sounds like good or bad, but whatever. Like there's like cute like coffee shops. And I think there's like a bunch of other like there's a brewery and there's also a BMO. And so I'm going

to be doing a done of, uh, free presentations at the stacked location, uh, BMO branch. And, uh, it's going to be a series of, uh, talks I'm going to be doing there for free. So it'll be pretty cool. So I hope to see you there. If you want to learn more about home ownership and, uh, all that kind of stuff, uh, this will be the place to be and hope to see you there. Okay. That is a lot. I know. Um, I, uh, thank you for listening. Uh, make sure to check back on the podcast tomorrow for that live recording of the event. And, uh, yeah, on that note, I will see you tomorrow. Have a great rest of your day. This podcast is distributed by the Women in Media Podcast Network. Find out more at womeninmedia.network.