The Personal Finance Podcast - 9 Hidden Money Mistakes That Could Cost You MILLIONS

Episode Date: March 10, 2025

In this episode of the Personal Finance Podcast, we're going to talk about about the nine hidden money mistakes that could cost you millions. How Andrew Can Help You:  Don't let another year pass by without making significant strides toward your dreams. "Master Your Money Goals" is your pathway to a future where your aspirations are not just wishes but realities. Enroll now and make this year count! Join The Master Money Newsletter where you will become smarter with your money in 5 minutes or less per week Here! Learn to invest by joining  Index Fund Pro! This is Andrew’s course teaching you how to invest!  Watch The Master Money Youtube Channel! , Ask Andrew a question on Instagram or TikTok.  Learn how to get out of Debt by joining our Free Course  Leave Feedback or Episode Requests here.  Car buying Calculator here Thanks to Our Amazing Sponsors for supporting The Personal Finance Podcast. Shopify: Shopify makes it so easy to sell. Sign up for a one-dollar-per-month trial period at  shopify.com/pfp Chime: Start your credit journey with Chime. Sign-up takes only two minutes and doesn’t affect your credit score. Get started at chime.com/ Thanks to Fundrise for Sponsoring the show! Invest in real estate going to fundrise.com/pfp Thanks to Policy Genius for Sponsoring the show! Go to policygenius.com to get your free life insurance quote. Go to joindeleteme.com/pfp20 for 20% off! Indeed: Start hiring NOW with a SEVENTY-FIVE DOLLAR SPONSORED JOB CREDIT to upgrade your job post at Indeed.com/personalfinance Turn your business dream into reality! Apply now at www.oneday.org/pfp  Go to Acorns.com/pfp and start automating your investments and get a $5 bonus today! Delete Me: Use Promo Code PFP for 20% off!  Links Mentioned in This Episode:  Term VS. Whole Life: Do you NEED Life Insurance? How to Open an HSA (and Why You Should Consider it!) - Money Q&A Should You Max Out Your Roth IRA or HSA? (Money Q&A) What Do I do With an HSA at an Old Employer?! (Plus How to Avoid RMD's) - Money Q&A How to Protect Your Finances Online (And Prevent Getting Scammed!) Connect With Andrew on Social Media:  Instagram  TikTok Twitter  Master Money Website  Master Money Youtube Channel   Free Guides:   The Stairway to Wealth: The Order of Operations for your Money  How to Negotiate Your Salary  The 75 Day Money Challenge  Get out Of Debt Fast  Take the Money Personality Quiz Learn more about your ad choices. Visit megaphone.fm/adchoices

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Find your advisor at IG Private Wealth.com. On this episode of the Personal Finance Podcast, nine money mistakes that could cost you millions. What's up, everybody? Welcome to the personal finance podcast. I'm your host, Andrew founder of MasterMoney.com. And today on the Personal Finance Podcast, we're going to be talking about nine hidden money mistakes that could cost you millions. If you guys have any questions, make sure you join that Master Money newsletter by going to Mastermoney.com slash newsletter. And we teach you about money in five minutes or less per week on that newsletter, but you can respond to any of those that come out every single week, and we will answer your

questions there and or you may get your question answered on the show. And don't forget to follow us on Apple Podcast, Spotify, YouTube, or whatever your favorite podcast player is. And if you're getting value out of this episode, consider leaving a five-star rating and review on Apple Podcast, Spotify, or your favorite podcast player. Now, you can also watch this on YouTube, search my name, Andrew Jankola, and you will find this on YouTube. Now, today, we're going to be talking through a bunch of different mistakes that I want you to avoid when it comes to your wealth-building journey. Because we truly believe that anybody in this world can become a multimillionaire.

We want to make as many multimillionaires as possible from this podcast. But at the same time, you need to make sure you know the mistakes to avoid so that your wealth building does not get interrupted. Now, you may have heard me talk about this in the past. the last thing that you want to do is interrupt compound interest unnecessarily, meaning once you get your dollars started investing, you do not want to interrupt that. And so what we're going to be talking about is nine things that you need to avoid or nine mistakes that a lot of people make that can't interrupt their wealth building journey because that's the last thing we want for each and

every single one of you. And these mistakes are very avoidable. You just have to take the right steps in order to avoid them. So in this episode, we're going to be talking about mistakes that a lot of people make when they invest. We're going to be talking about ways to preserve your wealth over time and protect your wealth over time. In addition, we're going to talk about some things that a lot of people do that make them miss out on millions of dollars of opportunity costs. So, this is going to be a huge impact episode. There's going to be action items that you can take away and implement right away

if you're making these mistakes. Without further ado, let's get into it. Number one comes down to investing, and number one is panic selling. This is one of the worst things that you can do as a long-term investor. Now, in 2007 and 2008, we had something called the Great Recession. It was one of the biggest downturns that ever happened in the stock market. And when that recession happened, so many people sold at the bottom. And the reason why they sold, and honestly, it was understandable.

It felt like the financial world was falling. But the reason why they stole was because of one emotion. And it was because of fear. And what we're going to talk about in this first one is how to avoid this fear. And number one is you need to understand and have a financial education. A financial education is the most. powerful thing to reduce the quick trigger emotions that a lot of people have when it comes to money. Now, having these emotions is very normal. Every single person in this world is going to have

emotions of fear or stress or anxiety surrounding their money. But the last thing you want to do is act on those emotions without thinking it through rationally and having a full understanding of what is going on. And when you sell during a market crash, if there is a market decline, maybe the market decline 20% like it did last year for a couple of days. If there is a market decline and you sell, that is when you are realizing those losses. But if you are a long-term investor and you stay invested for the long run and you do not sell during a market decline and then the market goes back up over time, that means you did not have any losses whatsoever. In fact, long-term investors typically will see gains.

So if you go and take out your stock market app and you turn it to the longest time horizon that it can go to. In what direction does that market go? Pull up the S&P 500. You could pull up the NASDAQ, you can pull out whatever you want. Take it 10, 20, 30, 40, 50 years. And in what direction does that chart go? It goes in one direction, which is up. And so historically, we have seen over the long run, the market go in one direction. And people still will panic sell because of short-term problems. The market is always, and I repeat, always, always going to have short-term problems. Things are going to happen. The president is going to. to say this, the market is going to go down. There's going to be some sort of economic issue and the

market is going to go down. The Federal Reserve is going to change rates and the market is going to go up or down. In the short run, the stock market is a voting machine. But in the long run, the stock market is a weighing machine. That is one of my favorite Warren Buffett quotes, because what it talks about basically is in the short run, people are just going to be voting on what they think is going to happen. But in the long run, it is an indicator of good business. and we want to make sure that we are investing for the long run in good business. So us as long-term investors, we don't care what happens in the short term. We don't care what happens day-to-day, week-to-week, month to month, or even what happened

over the course of the last year. What we care about is what will happen over decades, 10 years, 20 years, 30 years, 40 years, those are the big impacts to our financial lives. And so we have to stay invested as long-term investors. Most of the market's best days happen right after the worst days. And if you sell, you are going to absolutely miss that recovery. So if you have a market down to turn of 20%,

and you decide to panic sell because fear set in and you sell. Most people who sell during those days typically will regret it. If you invested $10,000 in the S&P 500 from 2003 to 2003, it would have grown to $64,844. Now, if you missed just the 10 best days over that time frame, over that 20 year period, if you just missed the 10 best days because you sold for whatever specific reason, your return would be cut to $29,708. That's more than cut in half just because you missed the 10 best days.

Now, if you miss the 30 best days, which is typically people who like to panic sell whenever the market starts to go down, you'd have about $13,466. So barely above your original investment. just because you started to panic some. Now, if that's not an indicator that you need to stay invested for the long run, I don't know what else is. You cannot miss a certain select amount of days. You need to stay invested typically as a long-term investor.

So here at the Personal Finance Podcast and here at Master Money, we are long-term investors. So we think in decades. We do not think in days. And if you think in days, that's what day traders do. And that's what people who like to gamble do. Short-run investors are just gamblers. They have no idea what's going to happen.

they don't have a crystal ball. Technical indicators do not matter, and that is not something that is actually real. So if you think there's a stochastic line that is going to cross this line and that's we need to sell or buy, none of that is real. You need to make sure that you are a long-term investor. That is the most powerful way to do that. So how do you do this? Well, first, you commit to being a long-term investor. You start to learn more about long-term investing. There's so many great books out there about this, but pretty much all the greatest investors of all time are long-term investors. Secondly, though, and this was a big one for me early on, because when I was very young and I didn't know much about investing, I would start to buy in and out of trades and I turn on

the news. And when I would turn on the news, all of a sudden they would say, oh, the market's going to go down today or the market's going to go up today. And the news's job is to try to hook you in and get you to watch more. But once you turn off that financial news, that's going to be one of the best things that you ever do. Because most media, specifically financial media, is designed to create fear. So what it's going to cause you to do is panic sell more and more and more. And I guarantee just because you watch financial media, what is going to happen is that one day you are going to panic sell and you're going to regret it. That just is what they do. They invoke emotion. They are very good at it in the financial media. Every single headline if you look at it is

typically negative. Avoid it as much as possible. Instead, if you want to learn more, try to learn more from books. You can learn more from financial media, but try to find articles on websites like Morningstar that are trying to educate you. Do not look at fear-based articles. They are not something that you should be interested in. Three is to have cash reserves. So when there are downturns, instead of having to panic sell, you have cash reserves on hand, which we'll talk more about that here later on in this episode, but you have cash reserves on hand to protect you on the back end. And then number four is to automate your investing. Set it and forget it so that you don't have to rely on your emotions to remember to invest or maybe your emotions are going to hold you back. Instead, just automatically

keep investing every single month. Consistency is the key when it comes to investing and making sure that you stick to your investment plan is going to be the most powerful thing that you can do. Lastly, is make sure you have a written down and create a investment plan. That is going to be something that is really, really helpful for a lot of people because then in times of uncertainty, you can go back, review your investment plan and it should have a section that states, hey, here's why I'm doing this. Here's why I believe in this and why long term we are going to stick to this plan. That has always, always helped me is if you ever have. have emotions come up, you can go back to your investment plan. But the number one thing,

truly for me, is having a financial education. In fact, when the market goes down, I actually get a little bit excited sometimes because you can buy more on sale. Stocks are on sale when the market goes down. And so that's how my mindset has shifted over time because I have a financial education. Now, the second hidden money mistake that you need to avoid, and this is a multi-million dollar decision is having a low rate of return. So if you have the wrong asset allocation, Meaning if you have the wrong mix of stocks and bonds in your portfolio and you have a consistent low rate of return because you don't know what you're doing, this can be something that can truly have a major impact on financial independence. So people who invest too conservatively

when they are young and they have too much bonds typically or too much cash can miss out on the power of compound interest. The younger you are, the more stock allocation you should most likely have. Now, if you have a risk tolerance that is just so shaky that it would cause you to panic, Excel, if you were in stocks, that is one thing. But for most people who are young, you have so much time for compound interest to get working that having an asset allocation, that majority of it is in stocks is going to be really beneficial for you. In fact, for me, because I had this financial education, the majority of my portfolio, over 90% is in stocks. And the reason why I do that is because I want the maximum amount of growth over time. Now, here's the difference between this.

I'm going to give you a couple of examples so you can see how powerful this can actually be. is if you invested $500 a month over the course of 30 years and you got a 4% rate of return, you'd have about $349,000 after 30 years. If you got a 6% rate of return because you had a balanced portfolio, so at 4% rate of return, you're most likely just having it in like a high yield savings account, maybe some bonds, and that's where you get that return. At a 6% rate of return, $502,000 is what would be in your portfolio. And at a 10% rate of return, here's the massive difference here, $1.14 million.

So something like the S&P 500 has historically returned 10% to investors. That's $500 a month for 30 years, $1.14 million. $1,000 a month for 30 years. If it was at 4%, it would be $698,000. That's still amazing. I mean, at least your money is growing over time at $1,000 per month over the course of 30 years. If you had a 6% rate of return, it would be $1.02 million. And at a 10% rate of return, $2.28 million.

Now, at $2,000 per month, over the course, course of 30 years. If you got a 4% rate of return, it'd be $1.39 million. At a 6% rate of return, it'd be $2.04 million. And at a 10% rate of return, it'd be $4.57 million dollars. Literally a $3 million difference at $2,000 a month just because your rate of return has changed. This is a multi-million dollar decision that you need to make is learning just how to invest and learning how to build up an asset allocation. And so this is really, really power. Now, how to avoid this at all cost is first learning how to invest. Your financial education is going to really, really matter. If you don't have no idea how to invest, if you're brand new to this,

we have something called investing for beginners. It's a masterclass that is completely free. So if you want to join that, you can go to mastermoney.com slash investing for beginners. And we can take you there. So learning is going to be one of the most powerful things that you can do. And that class will help get you started. But secondly, is learning that stocks specifically are going to help you grow over time, specifically if you're going to be. you're young, having a larger allocation in stocks is really, really helpful. And then bonds are great to limit volatility. So bonds are something that are going to help you reduce your risk over time, and they're going to limit the ups and downs of the stock market. But you want to have more bond

exposure as you start to approach retirement age. It is not something when you're in your growth stage that you want a ton of bonds on hand. Unless you are a nervous Nelly and really are worried about some of the market shifts. And then utilizing tax advantage accounts is, going to really, really help you here because you can get some tax efficiency in your portfolio. So your Roth IRAs, your 401ks, your HSAs, those types of accounts are going to really, really help you when it comes to your total rate of return because they help you with some of that tax efficiency. So that is going to be a huge one as well.

Now, let's get into number three. All right, number three is being underinsured. So part of your wealth protection plan should be having the right insurance in place. And now this is something that over time we are going to be talking more and more about. In fact, we have an episode coming out on, hey, what insurance do you actually need? What don't you need? And what might you need depending on your situation? And we want to talk through that a little bit more.

We actually have done zero insurance episodes on this podcast, and that's for a very specific reason. And I will talk about that in that episode. But if you are under insure, it can be an absolute wealth killer. The reason why is medical bills are actually the number one cause of bankruptcy in the U.S., which was a fascinating stat as I was going through the research for this podcast. It was a fascinating stat for me to read. And one in four workers will face long-term disability before retirement, which is another fascinating stat.

40% of Americans don't have enough auto insurance for a serious accident, meaning that they don't have enough coverage that if they got into a serious accident, they would not be able to cover the entire bill, and they would have to either go into debt or pull from cash reserves in order to cover that bill. And most homes are underinsured by 20 to 30%. leaving homeowners on the hook for rebuilding costs. Now, partially, when we look at underinsured homes, we have seen this over and over the course of the last year.

There were a bunch of hurricanes that hit Florida over the past year, and they hit North Carolina and some of the southern coastline. And we saw all of these people who were underinsured who cannot afford to fix up their home. In fact, one of the hurricanes hit my hometown. My mother-in-law's entire house had eight feet of water inside of that house. And if she didn't have flood insurance for that house, she would have to pull out of pocket hundreds of thousands of dollars in order to cover the damage.

She is actually still rebuilding from that, and it happened over the course of last summer. And so this is something I think most people need to understand is in order to protect your wealth. In order to be able to continuously build wealth, you need to make sure you have the proper insurance coverage. This is a huge portion of making sure your financial plan is in place. And we're working on a brand new community for all of you to kind of enter into. and it's going to take you from point A to point Z on an entire financial plan. You're going to be able to put it together your entire financial plan. So stay put for that.

We're going to be talking a lot about this kind of stuff in there as well. But let's go through some of these insurance coverages. First is health insurance. If health care costs is the number one cause of bankruptcy in the U.S., we need to make sure that we have proper health insurance. So first of all, this prevents that medical bankruptcy from major bills. Or if you feel like you are pretty healthy, you can also utilize something like a high deductible health plan

and pair it up with an HSA for those tax benefits. you can utilize that HSA in the long term to be able as a super retirement account. If you don't know anything about the HSA, we actually have a new HSA episode coming out, but you could check out our HSA episode. It's called the Super Retirement Account. I think it was one of the first 25 episodes we ever did in this podcast. And so I think it's going to be a really, really interesting one for you. So health insurance is going to be a huge one.

Number two is disability insurance. So if you are the main breadwinner of your household or if you are someone who your entire household relies on your income, disability insurance, may be something that you want to consider. Because typically the way that it works is it covers 60 to 70% of your income if you can't work due to illness or injury. So you can think of a bunch of scenarios you may need to do this. Maybe you get hurt and you can't go into work anymore or you can't perform your job

at the highest level. Then that's going to be a great reason to have disability insurance. Blue collar workers out there. If you're an electrician or if you're a plumber or if you're someone who has to work with your hands or you need to be out in the field in order to get work done, you need to have disability insurance. This is something that's very important for your specific situation. Or anybody else out there who is the main breadwinner. Say, for example, that you go out and you go play pickup basketball with some friends and maybe, you know, you're playing in a 35 and up league or a

40 in up league. And let's just say that you go up for a layup, get fouled really hard, fall on your head, and you can't work for a long period of time because you had some injury. Well, that's another reason why disability insurance will help cover you depending on the coverage. Obviously, there's a lot of nuances here. I'm just giving an example, but that could help you in that specific situation. So disability is another one to consider. Three, is term life insurance. So term life insurance is going to cover you for a specific term if anything were to happen to you. And pretty much anybody who has somebody who depends on them needs to have term life insurance. So one of our sponsors here is PolicyGenius. The reason why they're a sponsor of this podcast is because I use PolicyGenius.

That is who I utilize to find my term insurance provider. And they were, absolutely fantastic for my situation. And term life insurance is really cheap. So there's other policies out there like whole life and some of these other policies. But term life insurance is the cheapest. And the way that it works is this is how I want you to think about it, is you buy it for a certain period of time. So let's say, for example, you're 30 years old. You buy term life insurance between the ages of 30 to 60. And so during that time frame, if anything were to happen to you, then that policy would pay out to your beneficiary, you know, whatever amount that you bought. Okay. So let's say you bought a half a million dollars. It would pay it out to your

spouse or your kids or whoever else you made a beneficiary of that policy. Now, it terms or is no more after the age of 59 or 60 or however long you bought that policy for. And so then it terms and it's done. It's over with. But the thought process here is that they're going to make it way, way cheaper for you during that time frame. It's going to term after a certain amount of time. And by that time, you're going to have wealth built up and you're not going to need that life insurance policy anymore. Instead, you're going to have your retirement accounts. You're going to have the wealth you built up with your investment accounts. And so that is why this is an amazing policy for most people, because you're paying, you know, 30 bucks a month, somewhere around there, maybe 40 bucks,

50 bucks. It depends on your age. But you're paying somewhere in that range to have your family covered, if anything were to happen to you. It is a very important thing to have. I mean, you can get half a million dollars of coverage for like 30 bucks, depending on how old you are. So it's very important to have that. Auto insurance. So your liability coverage needs to help you avoid major out-of-pocket costs. People nowadays are driving while they're on their phone at the same time. Let's just get real about this. Drivers are more distracted than never before. If you're listening to this podcast in your car right now and email me if this is happening and you look to your left and you look to your right and tell me if you see someone on their phone at the next stoplight,

you're absolutely going to see somebody within that intersection on their phone. The reason is everybody is distracted. Now, one positive thing is that cars have so much. much more safety technology. Now, they will beep if anything gets close to you whatsoever if you have a newer car. I bought a 222 car over the course of the last year. So about a two to three year used car for my wife. We had a third baby. And so we had to get a bigger SUV. And when we did that, I was amazed at some of the technology inside of this car. Because if you know me, I like to buy cars that are a couple of years used and I like to drive them for 10 years or longer. And so when I do this, every single time, I'm so amazed at some of the the safety technologies around these vehicles. And this one is awesome. I mean, the back of cameras

is amazing. I could see so many different angles, whereas the backup camera in my truck is like smaller than my iPhone screen. And so this is just like a huge advancement for me to even be able to drive safer. So safety is increasing, but our drivers are more distracted. And so as time goes on here, we want to make sure that we have the correct auto policy if you get distracted and or if somebody around you get distracted. Homeowners and renters policy. So if you rent, you should probably have a rental policy. They're pretty cheap. But the homeowners policy needs to ensure replacement cost coverage for full rebuilding value, especially those of you who are in the South or those of you who are in territory of natural disasters like fires, like earthquakes,

you need to have that coverage. If you are in Tornado Alley, you need to have that coverage. But pretty much everybody needs to think about it this way because that can make you start all over. And that's the last thing I want for you because we don't want to be starting over financially when we are midway through our wealth building journey. It's going to be a lot harder to have a cushy A, but B, it's just so much harder to build wealth because you are starting from the beginning again. And so having the right coverage is important. And then lastly, is one thing you consider is umbrella insurance. So it provides a $1 million plus in extra liability protection in case of lawsuits. And so if you ever get sued, you have an umbrella policy that's going to help you with

some additional liability protection. Very, very good stuff if you want to have that extra protection. We're going to actually do a separate episode just kind of talking through some of these and telling you which ones you should really, really consider. But those are some of my big ones that I think you should consider for most people. So make sure you're subscribed to this podcast for that one to come out. Number four is having too much debt. Now, there is good debt, there is bad debt. You can build wealth with debt. But if you have way too much debt, it is an absolute wealth killer that is going to slow down your wealth building ability. Why? Because your extra dollars are going towards the debt collector, or going towards the

bank, or going towards whoever lent you that money, the credit card company, instead of going towards your future. And debt is robbing you of financial independence. So what do we need to do? We need to make sure that if we have any high interest debt whatsoever, that we try to pay off that debt as fast as we possibly can. It steals away from your future well. So a $5,000 credit card balance with a 22% interest rate with only minimum payments can take 30 years to pay off. So if you had a $5,000 credit card balance and it had that 22% interest, it could take 30 years to pay off, it would cost you $17,000 if you only made those minimum payments. That, my friends, alone is just robbing you of your wealth building ability. But imagine there are so many people out

there who have $50, $60,000 in credit card debt and they just do not understand why they cannot pay this balance down. And the reason why they cannot pay this balance down is because it is absolutely destroying their wealth building ability. So here's how to get out of this. First, I want you to prioritize high interest debt. So any debt with an interest rate, above 6% we need to take a look at it and see do we need to pay this down now if you have a bunch of different debts maybe you have a car payment that's 8% maybe you have a personal loan that's 9% and maybe you have a credit card debt that is 20% we want to list these debts in order we want to do it in two ways one is by interest rate two is by balance because if you have one with a really small balance

let's just get that quick win really quick pay that one off then you have two left that you need to attack and you can get after those as well but we need to make sure that we are getting rid of this debt as fast as we possibly can. Secondly, is you need to try to earn more to get this debt paid off as well. Find different ways to make money. Sell some things on Facebook marketplace, put it all towards your debt. The faster we can get this paid off, the sooner we can get on track to building wealth. But the longer we have this debt in our life, the harder it is going to be to build wealth. Debt is sucking the life out of your wealth building opportunities, and you need to make sure that you are getting rid of it as fast as you possibly can.

Now, we have a free debt course that is going to teach you how to get out of debt if you want to. It takes about an hour to go through the entire course. So if you go to mastermoney.com slash courses, we have a free debt course there that will take you step by step on how to get out of debt. Number five is only investing when the market is up. So there is a group of people who will only invest when the market is going up. And then when the market starts to go down, they have this fear that we talked about in number one. And panic starts to set in and they stop investing. This is not the best way to think about investing because you could be missing out on massive opportunities.

And again, you could be missing out on those 10 best days over the course of multiple decades. And if you miss out on those big days, if you miss out on the best days, your returns are going to drastically, drastically change. So instead, what we want to do is we want to stay invested and we want to continuously invest whether the market is up or whether the market is down. We are not looking at what the market is going to be doing day to day, week to week, month to month. we care what it is doing over the course of decades. Now, the best buying opportunities are typically going to happen during crashes. We don't really care and we don't think about that all the time, but they are going to happen when the market is down. Why? Because they're on sale, whether it's stocks or whether it's stocks, you need to like to buy things on sale. And that's where it's going to be

a very powerful way to get in there. Now, what I do not want you to do is long-term investors, I don't want you to wait for the right time in order to start investing. Instead, we should be dollar cost averaging every single month into the investment plan that we have. So maybe your investment plan is first investing into a Roth IRA. So every single month, you are just putting, you know, $500, $600, whatever you are putting into your Roth IRA until you get that maxed out. Then you move over back to your 401k or your HSA or whatever else, and then you move on from there. But we need to make sure we are just automatically contributing every month and automatically investing into our investment plan so that we do not have to think about it. Automation will solve this

problem for you. Now, let's get into number six. I remember when I needed to hire someone fast, but finding the right person quickly felt impossible. And if you've ever been there, you know how stressful this can be. That's where Indeed comes in. When it comes to hiring, Indeed is all you need. Instead of struggling to get your job post noticed, Indeed's sponsor jobs help you stand out and hire faster. Your post jumps up to the top of the page, making sure it reaches the right candidates. And it makes a huge difference. Sponsored jobs on Indeed get 45% more applications than non-sponsored ones. And there's no need to wait any longer. Speed up your hiring right now with Indeed. And listeners of this show will get a $75 sponsored job credit to get your jobs more visibility

at Indeed.com slash personal finance. Just go to Indeed.com slash personal finance right now and support our show by saying you heard about Indeed on this podcast. Indeed.com slash personal finance. finance. Terms and conditions apply. Hiring, indeed is all you need. So lately, I've been noticing how fast things are changing at home. The kids are growing like crazy, clothes don't fit anymore, and routines are changing. And it just hits you. Life is expanding. And when your life grows, your responsibility grows with it. That's something I've been thinking about more this spring, making sure the safety net we have in place actually matches the life that we're building. And that's where PolicyGenius comes in. PolicyGenius isn't an insurance

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That's policygenius.com. Let's talk groceries, specifically your groceries. With Instacart, you want your groceries just the way you like them, right? Well, the Instacard app lets you do just that. They have a new preference picker that lets you pick how ripe or unripe you want your bananas. shoppers can see your preferences up front, helping guide their choices. Instacard, get groceries just how you like. All right, number six is raising your lifestyle too quickly. So every single time you get a raise, say, for example, your income starts to increase, maybe you get a promotion, maybe you get a raise, maybe you get a big bonus,

but your spending also increases at the same exact rate. This is going to be a problem for you. What you want to do is make sure that as your income increases, is you also take a portion of that increase and put it towards future you. You want to make sure that you are putting it towards your financial freedom. That means investing it in things like your retirement account or your brokerage account or building up your emergency fund. And by doing this, this is going to allow you long term to continuously be able to build wealth. But if you allow your lifestyle to creep up more and more and more without taking a portion of that and putting

it towards wealth building, you will be in the same exact spot as when you started this journey. and you will never get ahead financially. So we need to make sure that we are also taking a portion and putting it towards our future. Now, I want you spending more on things that you love. I want you to get the nicer car or the nicer house or being able to put your kids in that private school or doing all those different things. But let's also take a portion of it so that we can preserve some of our hard work and put it towards our future.

So how do we do this? Number one is we always talk about the 50-50 rule. So the 50-50 rule is you take 50% of every single. single race or every single bonus and you put it towards future you and the other 50% can go towards raising your lifestyle or guilt-free spending or however you want to think about it. Now, secondly, is if you feel like your lifestyle is increasing too rapidly, wait a longer period of time before any big purchases whatsoever. So if you want to make a big purchase, you know, that's a couple thousand dollars. Wait six months before you actually make that big purchase. Do your research. Make sure you

actually want that item. So if you want to upgrade your car, for example, then just wait a longer period of time, start to think through how you want to buy that car, start to think through your negotiation strategies, but just continuously wait a little bit longer to make sure that's what you actually want to do. It prevents you from impulse spending. And then cap fixed expenses at about 60% or less of your income. Make sure your fixed expenses or your needs are at 60% of your less your income so that your lifestyle does not raise too quickly. Really, really important to make sure that you keep it in that range. Number seven, this is a huge one if you want to protect your wealth. the big money mistake is not having an emergency fund.

Now, this is something that is so incredibly important, which is why we harp on it so much in this podcast. If you do not have an emergency fund, something is going to happen in life where it's going to make you go backwards on your wealth building journey. Your emergency fund protects your wealth building journey. It allows you to continuously keep on building wealth

because you have cash reserves in place. It is not if something is going to happen in life, but when will something happen in life? your car will break down at some point in time and life. You will have some sort of issue with your house if you own a house. You will have some sort of medical emergency, either a pet or a kid or a family member. Somebody will have some sort of medical emergency where you're going to have to pay extra dollars and that emergency fund helps protect you against that specific thing. It is not if an emergency is going to happen, but when will an emergency happen? Now, we have something called the

136 rule here at the Personal Finance Podcast where it is, say, giving up one month of expenses first. That's going to be the beginning of your emergency fund journey, is you have one month of expenses saved up. Then you're going to pay off all that high interest debt that we just talked about. Then you get to three months of expenses saved up, and then you are going to start investing. Then you get to six months of expenses, which is the ultimate goal. And then you can go beyond that if you want to, but six months is the ultimate goal. That is the minimum that we talk about here in having an emergency fund. Really, really important stuff. Now, where to keep your emergency fund? You want to keep that in a high yield savings account.

That's going to help you get some rate of return. You know, rates go, down every time the Fed lowers rates, but over time, that is going to be the best place to put it. Number eight, and this is a big one for a lot of people who do not have a financial education, is polling from retirement accounts too early. This is a huge mistake that you absolutely want to avoid at all cost. So first of all, most retirement accounts, if you pull from them too early, you're going to face a 10% penalty. So things like the 401k or the traditional IRA, if you pull from those before age 59.5, you will face a 10% penalty. But on top of that, because you did not pay taxes on this money or you got a tax deduction on this money, you will also

have to pay taxes. And so you'll have to pay a 10% penalty in addition to taxes. Now, here's how powerful this can be because every 50,000 withdrawn at age 40, for example, could have grown to $335,000 by age 65 and $872,000 by age 75. So every $50,000 that you pull early from your retirement accounts means that you are robbing yourself of a significant portion of your retirement. So you need to think about the future and how impactful that can be. Now, other people do things like they put up 401K loans, for example. And these also have risks, because if you leave your job with an unpaid 401k loan, you must repay it immediately. And a lot of people don't know this about the fine print, or it counts as a taxable withdrawal, and it has penalties. And so that's another huge thing that you need to note is borrowing

against some of these retirement accounts can also be something that is very dangerous and you're playing with fire there. So make sure you understand the loan completely. Make sure you read that fine print and ensure that you are doing this correctly. Now, if you need to pull from something early, one thing you can do is you can withdraw your contributions, meaning the money that you put into something like a Roth IRA can be withdrawn, but I don't recommend it. I don't recommend interrupting compound interest unnecessarily unless you need to. So avoid at all costs pulling from retirement accounts too early. because those are meant for future you and building up your wealth. Number nine, here's the last one we're going to talk about,

is not having a financial protection plan. And so one big thing that's happening as of late is something that can massively interrupt compound interest for you is financial fraud online. So people have had their money stolen. People have had their money, you know, they do a wire transfer, for example, and there's been a bunch of transfer issues

where people have gotten their money stolen during a wire transfer. People have gotten their money stolen from fraud or scams. And so we've got to make sure that we are protecting ourselves. against that as well. So how do you do that? One is you want to freeze your credit. Now, we've talked about how to do this in the past. But the way that you freeze your credit is you go to the three major credit bureaus and you tell them, hey, I'm not going to be taking out any loans right now. So you go into their portals and you freeze your credit, meaning nobody can take out a loan. Nobody can open up a credit card unless you unfreeze your credit. Then when you're ready to go

take out a loan or if you want to open a credit card or whatever else, you unfreeze your credit. Fill out of the paperwork. Once you get approved, then you freeze your credit again. This is going to protect you against any fraud within your name that could happen out there. Secondly, is to remove your personal information online. So all these data brokers online, they're going to have your personal information. A lot of them will sell your personal information to people who want to go out and buy them. There's not a lot of laws around how they have to handle this personal information, which is one of the most frustrating things out there, which is why we need to make sure that we are protecting our information online. Now, the best way to do this is to get that information removed from these data

brokers and the service that I use is a service called Delete Me. And Delete Me will go to these data brokers and get your information removed. Now, when I first did this, I talked about this all the time in this podcast, they removed my personal information from over a thousand data brokers. And I cannot recommend this service enough because it saves you hours and hours and hours. So if you go to join DeleteMe.com slash PFP20, you can get 20% off of any of their plans. That's our link if you want to check that out. But their plans are absolutely amazing and it's really affordable. And they will continuously check in on other data brokers and continuously remove your personal information from those data brokers. And so it is one of my favorite services that I have had over the

course of the last couple of years. I cannot recommend them enough, which is why I talk about them all the time in this podcast because they do some amazing, amazing stuff. Now, the third thing that you can do is you can enable two-factor authentication. So this is something you should be doing on every single website where they send you a text or they send you a text message or you use some sort of authentication app, which is my favorite way to do it, like Microsoft Authenticator. Google has a great one as well. I use both of them, but you can use an authentication app, which is even more secure over time. Also, using something like a password manager is going to help you just kind of store super unique passwords all in one place. If you want to do just a bunch of jumbled

letters and numbers, that's going to help you store it all there so nobody can hack in that way. And then monitoring your credit report. So you can go to annual credit report.com or you can go to free credit report.com. Try to find some of the free credit report agencies. You should never pay for a credit report. It should be free. And go check those out and see if you can make sure that you are monitoring those regularly. You can do it once a quarter, once a year, but just make sure you're monitoring them

to ensure there's nothing weird or janky on your credit report. Because if there is, then you need to make sure that we start to secure up the fortress a little more. This is happening more and more and more, which is why we talk about this a lot. And I want you to protect your information online because if something happened to your banks or anything

else and they swiped your money, it could be a huge, massive headache to even get it back. And in some instances, you don't get it back. And so I want you to make sure that you are protecting your information online. And so that is part of it. If you want an entire episode on this, we have a couple of them on how to protect your financial information online. So make sure you check out those episodes as well. So listen, these are nine hidden money mistakes that could cost you millions. There should be some things that you are taking action on after listening to this episode. If you guys have any questions, make sure you, again, join that master money newsletter, shoot me an email, ask me a question when you have.

have it. And if you're getting value of this episode, please share it with a family member or share it with a friend who could benefit from learning more about how to build well. Thank you guys so much for being here and we will see you on the next episode. Rosen lasagna, medium power, 15 minutes. Sounds like Ojo time. Let's play. Feel the fun with Play Ojo, the online casino with all the latest slot and live casino games. What you win is yours to keep with no wagering requirements, instant payouts and no minimum with trots. Hey, I just won.

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