Young and Profiting with Hala Taha - YAPLive: Take Control Of Your Financial Future with Andrew Sather, David Ahern and Rachel Podnos O'Leary

Episode Date: July 23, 2021

Join Hala for a Live episode of Young and Profiting Podcast featuring Andrew Sather and David Ahern, hosts of Investing For Beginners Podcast and Rachel Podnos O’Leary, Financial Planner and Author of 21st Century Wealth. They will share actionable advice on making all of the best money moves in order to achieve financial independence, stability, and freedom.     Meet The Moderators:    Rachel Podnos O'Leary is a Certified Financial Planner and the author of 21st Century Wealth: The Millennial’s Guide to Achieving Financial Independence. While her clients span a variety of ages and backgrounds, Rachel is particularly passionate about working with other millennials to help them achieve financial independence through wealth building. Rachel is also a licensed attorney and member of the Florida Bar.  David Ahern is the Co-host of the ‘Investing For Beginners Podcast’, a Self-taught investor who focuses on companies he can invest in and hold for a long time. He is also inspired by and eager to find the intrinsic value of companies, and uses that to calculate a margin of safety into any company that he buys. Andrew Sather is the co-host of ‘The Investing for Beginners Podcast’, which has received over 1.5 million total downloads. A self-taught investor with nine years of experience, he specializes in identifying value traps and avoiding stock market bankruptcies. He is also the publisher of eInvestingforbeginners.com and the daily email newsletter, The Sather Research eLetter.       Social Media:   Follow YAP on IG: www.instagram.com/youngandprofiting Reach out to Hala directly at [e-mail] Follow Hala on Linkedin: www.linkedin.com/in/htaha/ Follow Hala on Instagram: www.instagram.com/yapwithhala Follow Hala on ClubHouse: @halataha Check out our website to meet the team, view show notes and transcripts: www.youngandprofiting.com Learn more about your ad choices. Visit megaphone.fm/adchoices

This episode of YAP is sponsored in part by Shopify. Shopify simplifies selling online and in-person so you can focus on successfully growing your business. Sign up for a $1 per month trial period at Shopify.com-profiting. You can crush your fingers and all your toes during a data center migration. You can knock on wood, pluck a dozen four leaf clovers or look to your lucky stars for a successful office expansion.

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interview some of the brightest minds in the world. My goal is to turn their wisdom into actionable advice that you can use in your everyday life, no matter your age, profession or industry. There's no fluff on this podcast, and that's on purpose. I'm here to uncover value from my guests by doing the proper research and asking the right questions. If you're new to the show, we've chatted with the likes of XFBI agents, real estate moguls, self-made billionaires, CEOs, and bestselling authors. Our subject matter ranges from enhancing productivity,

how to gain influence, the art of entrepreneurship, and more. If you're smart and like to continually improve yourself, hit the subscribe button because you'll love it here at Young & Profiting Podcast. Welcome to a live episode of Young & Profiting Podcast. I'm your host Halasaha and today we are exploring how to take control of your financial features and achieve financial freedom. In this episode we're going to discuss the ins and outs of investing, the obstacles and opportunities for millennials when it comes to wealth building, top tips for debt reduction, and how to best prepare for retirement. And my guests are

uniquely qualified to talk about all these different topics. Joining me today is Rachel O'Leary. Rachel is a certified financial planner and she's also the author of 21st century wealth building. Rachel is passionate about working with millennials to help them achieve financial independence through wealth building. We also have Dave a heron on the panel. He's the co-host of investing for beginner's podcast. He's a self-taught investor who focuses on companies he can invest in and hold for a long time. And lastly, we have Andrew Sather, and he's the co-host of Investing for Beginners Podcast, which has reached over 1.5 million total downloads.

He's also a self-taught investor with nine years of experience, and he's also the publisher of einvestingforbeginners.com. So super excited for all of you guys to be joining with me today and we're going to be covering a lot of great topics that I know my audience here on clubhouse is interested in as well as my young and profiting audience which thousands of people are going to work. The first hour is going to be a guided interview where I'm going to ask you guys some questions I might direct it to the panel as a whole. I might direct it to you guys individually and I'm going to be inviting my friends up. My podcast or friends always end up joining me on these stages as well. So that's how it's going to go and just quick reminder this conversation and podcast episode is not a substitute for financial advice and the content shared in this room is for informational purposes only if you're

looking for financial advice please reach out to a financial services professional. This is for informational purposes only okay guys so really excited to get started thank you everybody for tuning in. If you're in the room, ping your friends in, tap that plus sign at the bottom of the screen. Let's make sure that we are the number one room tonight in Clubhouse. Let's do it.

And I'd like to get started today by debunking myths around investing. There's so much anxiety around this topic from people believing that they don't have enough money to get started, to believing that their age is a barrier. There's so many different concerns. I'd love to hear from the panel about what you guys think some of the excuses people have in terms of not investing. And what would you say to encourage someone to get started with investing today? So let's start off maybe with Andrew. I don't know if you feel comfortable answering this question

and then we can kick it to whoever wants to just flash your mic. Yeah, awesome. The rabbit hole of the stock market is really endless. And you know, it can be intimidating. You look at the whole game stop situation and you know, it seems like you have these huge hedge funds that are betting against the average person. And you know, you just have a lot of money being

put around and it's very intimidating, it's very tough. But you know, what I find to be interesting about the stock market is it's really a lifelong journey. And so, you know, remember the first time you tried to ride a bike, I'm sure it looks scary, I'm sure it felt scary and you probably bruised yourself a couple times. Similar thing with investing. Similar thing with managing your own money. And so to me, if you can just take little baby steps and get your feet in the water, and you know, if that means maybe I'm just going to buy one stock and even just one share of one stock, one company I'm interested in. And you know, as you move on and become more comfortable you can put more more money in but the key really is to get started

because it is a long-term game and that's not about what you're gonna do next week or what you're gonna do next month. It really is about how can I learn as much as I can and just take steps to get better and better and then over time you know all of that will compound and it can become something really great. But, you know, it's not going to come if you don't go for it. Yeah, I totally agree. Dave Rachel, I'd love to hear your thoughts around some of the excuses that people have when it comes to not investing and what you would say to someone to encourage them to get started with investing and growing their wealth today?

Yeah, I think Andrew made some great points. It really is kind of a lifelong journey. It's a marathon. The earlier you start, the easier it is to build wealth through investing. Time is such a powerful thing when it comes to building wealth through investing. So, and I think a lot of people think I'm too young or I'm so young, I have plenty of time, I'll start later. I have too much going on to worry about that now, but time really is the most

powerful advantage we have as young investors. So, starting now is what will affect your overall returns in the long term really more than almost anything else you do. So I would say being young is kind of an excuse some people used to not get started and I think of anything that is the reason that you should get started. Yeah, I would totally agree with that. And I think as somebody who is probably the oldest person on the stage today, it's never too late to start and starting as soon as you can is going to benefit you. Because one thing that's, if you don't start early and you get to my age, I'm 54, and you get to my age,

then all of a sudden that endpoint starts to become a lot more real. And all of a sudden you're like, oh, why didn't I start when I was 25? And so the earlier you could start the better because compound interest is your friend. And as Rachel was saying, time is your biggest friend. And the longer that you can do this. And the thing is, I think a lot of people think that they have to have thousands and thousands of dollars to start. You don't. In today's world, especially with the apps that you have on your phone,

as well as the online brokerages, i.e. fidelity, Charles Schwab, in particular, they offer no fee trading. They also offer stock slices. So, for example, if you're dying to buy Amazon, you don't have to save up $3,400 to buy a share. You can, with $50 by a percentage of the company granted, it's not going to be a huge percentage, but if you put $50 in a month, at the end of the year, that's $60, and then whatever return the company gets over the year, that's additional money you've earned for just adding $50 a month. And I think the thing that people get bogged down in

are a combination of Rachel and Andrew we're talking about where there's an overwhelm, there's an information overwhelm, there's I can't do this, I'm too young, I don't need to start now, but I think the sooner that you can start and there's so many options now, it doesn't have to even be buying individual stocks, if you think that I just don't know enough to buy Tesla or Amazon or Apple or whatever company it is, there's ETFs, there's index funds, there's so many different options now and with the technology available to us to be able to learn a little something about what it is that you're buying, that you can start any time and again, it doesn't have to be millions

of dollars. You can start with this little is ten bucks I think Charles Schwab offers five dollar trades So you can buy a company for as little as five dollars less than a coffee at Starbucks to get started So I think once people realize that and I think the hardest part is dipping the toe in is taking the plunge I remember in 2012 when I bought Microsoft, which was my first investment. I was scared to death. That was terrified. And once I pulled the trigger, it became a lot more real, but it also became really exciting. And I think once you jump off that diving boarding and get into the water, it's maybe a little chilly at first, but you warm up quickly.

And it's a lifelong thing that you can pursue quite easily. Oh my gosh, such great points. And I completely agree. I mean, I was really into investing in stocks about two years ago, and I had such great returns. And actually, when you mentioned the stock price of Amazon today, it's over $3,000. I sold mine about, it was $1,200, and I'm kicking myself.

Like, man, I wish I was back in the stock market. But like you said, you just gotta try and not be afraid. So I'd love to continue to kind of go over the landscape, so to speak, of what we're dealing with. And when I was researching for the show, I found out that 60% of Americans don't even have $1,000 safe retirement and less than 40% of Americans don't even have $1,000 safe for retirement. And less than 40% of Americans couldn't even handle

a $500 emergency. And I read those stats and I felt so bad. So I'd love to just understand and help our listeners understand why there's like a need for this shift in Americans to change the way that they manage and invest their money. Who wants to it that off. I think a big, big issue is that there's a real lack of financial literacy

in the US today. And that's been a problem for a really long time. And I think a really easy way to change that is to teach it in high schools. When I finished high school, really, honestly, when I finished college, I didn't know what a stock was. I didn't know what a stock was. I didn't know what a bond was. I barely knew how to use a bank, which is pretty shameful. I mean, I managed to get through life just fine,

but I think that having some basic financial education in high school would probably serve us far better later in life than almost anything else that we are taught then and Just teaching people about what is debt? How does debt work and actually what is the true cost of borrowing money? How does interest work to make debt in some cases very expensive? You know that would be useful to learn in high school before you you maybe make a decision about taking on debt to finance your higher education. How do credit cards work?

What's it deductible? All these things are things that a lot of us kind of we learn later in life the hard way. And I think just kind of having, you know, standard financial literacy courses in schools would go a long way towards preventing, you know, the kind of behavior that leads people to end up in these really precarious financial situations later on. I think a lot of people get there because they just maybe they're over relying on credit cards that they're not paying off or maybe, you know, clearly they don't have an emergency fund, which again, that's something teaching people to have an emergency fund.

That would be a number one thing that I would think they should teach people in high school, you know, having some money set aside for a job loss or a large medical bill or whatever it is. So you don't get wiped out when those things kind of inevitably happen. So I really hope that schools in the US start focusing more on that. I think it would go a long way. Yeah, I agree. I mean, we learn stuff like calculus and geometry.

We never end up using any of that stuff. And all this financial planning or tax knowledge, we don't learn any of that in school. We have to learn it on our own. I think it's so backwards. Dave, I know you had something to add here, so I'd love to hear your thoughts. Yeah, I would agree with everything the Rachel was saying.

The education system in this respect, I think has failed us. And I think, from my own experience, I learned to solve a hard way. My parents really frankly didn't talk to me much about this. So like everybody else, I'm sure I just kind of got thrown to the wolves and had the word and as I went. And luckily I'm a conservative guy, so I didn't go crazy and do a lot of things like taking on a lot of credit card data and things of

that nature. But in hindsight, I wish I would have learned about investing in the stock market and the benefits of that at a much earlier age because then I would have been able to start putting money aside. There are so many resources now out there. I worked in the banking industry and so I saw firsthand everything that you are mentioning about the lack of savings and the lack of knowledge. I can't tell you how many times I had somebody sit at my desk and tell me that they were building credit because they're using their debit card or that what do you mean I don't have any money?

I still have checks. I mean those conversations actually do happen with real people and it's kind of staggering and I just think that the financial illiteracy of the country is kind of scary. And I just think that the financial illiteracy of the country is kind of scary. And we were talking the other day with a financial advisor from another company. And we were talking about the the oncoming financial crisis that we think the retirement of the my generation and the generation that before me and after me, I think it's going

to be a big impact. And I think that I don't think it's talked about enough and it's kind of a scary thing. But any of the younger people that are on here, go out there and try to find out as much as you can about finances and how to balance a checkbook. It's not something that's taught anymore, but those kinds of things of understanding how your money works and how you can use it to work for you. Andrew and I talk a lot about this kind of subject on our show about the impacts that

learning to use money to help you in the long run is really what it's there for. And credit cards are a great thing, but they can also be kind of a scary thing because a lot of people think that, hey, I got a credit card, I got free money, I'm gonna go out and buy that Xbox, but they don't realize that when they max out their card and it takes them seven years to pay it off, they have over double for paying for that Xbox. And so I just think that you know I agree that teaching in schools is something that has to happen. I try to teach it to my daughter, it's not easy, but I try to teach it to my daughter, it's not easy, but I try to teach it to my daughter.

I have a younger daughter, and I try to teach her and teach her the ways of the force if you will, but it's not easy, and I just think that this is something that really needs to be addressed. It ranks right up there with some of the other social issues that have been going on in the country for sure. I would just add on to, I mean, to talk about credit cards and really what Rachel was saying about having an emergency fund,

it sounds so small and it sounds so simple. But really, credit cards can be one of the worst financial instruments of destruction that you could have. I mean, you're talking about paying 20%, 25% interest on money or borrowing. I like to think I'm a good stock market investor, even some of the best investors of all time. They can't make 25% a year reliably, year after year after year.

So why are you gonna pay that on the credit card? And the problem with credit cards a lot of time, yeah, you do get that unexpected bill, the unexpected repair. You gotta fly here, fly there. And if you don't have an emergency fund set for that, then of course you're going to put it on the credit card, and then you can start to get down this like never-ending spiral downwards of always paying minimum payments and wrecking

a more and more credit card debt, and it's sad, and at some point you have to put a stick in the sand and say, that's it, I'm done with credit cards. I mean, for me, I've always considered myself kind of like a smart guy like I can be somebody who can beat the system. And I learned the hard way that I thought I can manage the whole credit card rewards game. And it's just like playing with fire. And I've gotten burned too many times, all right? I keep a credit card for a credit score,

but other than that, I don't use it ever. Basically, it's there if I need it, but I don't use it because I know how easy it is to get wrapped up. Well, let me just charge it here. I'll pay it at the end of the month, and I'm collecting these rewards. It's dangerous to sneak up on you, and then before you know it, you're in a mess you can't get out of. Oh my gosh, such great points. And I definitely want to get into tips in terms of debt reduction later on, because I know it's a huge problem, especially in this country with student loans

and everything like that. So let's get into stocks. I really want to dive deep on stocks and get everybody's best actionable insights in terms of stock investing. So let's start with David. I'm sure so many of my listeners tonight are finding themselves in a similar position

to how you were back in 2012 when you first started investing. They don't know much about it and they want to get started. So what is some advice you can give to newbies looking to get started with investing? Let's go to Dave, then Andrew, and then Rachel. For me, I am a reader.

I love to read, I love to learn. I'm a curious person, and I've always been very inquisitive about information and gathering information. So I was very lucky. So when I really started to go down this whole rabbit hole of stocks and learning how the stock market works and investing, I was working at a bank at the time and we had a financial advisor that worked in my branch and he and I became friends and he helped me

really kind of start down this path. And so he suggested several websites that I could go to that would give me kind of the basics of learning how to invest. I went to the library and started checking out books like Stock Market for Dummies. Just very basic simple things how to invest. I went to the library and started to invest, checking out books, like stock market for dummies, you know, just very basic simple things that really can start to help you get a grasp around the idea of how to invest. But I think that the biggest thing is,

you have to understand that like anything else, I really believe that investing or the stock market is like a language. And you have to learn the language. And to learn the language, you have to dive into the source material and learn as much as you can. And I've done that with just about everything I've ever done in my life, whether it's learning to be a good, learning music, whether it's learning about wine, learning about finance, is just reading as much as you can. I listen to podcasts quite a lot. I watch YouTube videos. I watch movies. I read books.

I read blogs. I read magazines. I just, I really dived into this as much as I could to really start to familiarize myself with the terminology as well as how all these things work. And I think the biggest thing that I learned that if we could impress upon anybody in Andrew and I talk about this a lot, is the stock market is a compounding machine and knowledge is as well.

And the more that you learn, the more that you learn. So as you grow in your financial knowledge, you'll learn more and more, and you'll be able to pick up more and more. And other things that you may not have quite understood at the beginning will start to become more, they'll start to make more sense, and you'll start to understand it better. But when you're buying a stock, you're really buying a piece of a company. And I think that's one thing that people, I think, sometimes miss, is that when you'd

buy a piece of Apple, for example, a stock, you're buying a piece of that company. You are a company owner of Apple, and it's not a ticker, it's not a piece of paper, it's not some electronic symbol on your phone, on an app, it's an actually own of the business. And once you start to kind of get your mind around that, then you can start to understand what it is to own a business and how the business functions, how they make money, how they could possibly lose money. And all those things kind of start to make sense. And it could be overwhelming at first. And I have this analogy that I like to share on the show and root things.

It's kind of comical. But I always think of learning these things like eating a pizza. Everybody loves pizza and I love pizza. It's one of my favorite things in the entire world. You can't eat the whole thing at once. You have to eat it piece by piece. That's the only way that you can get through the whole pizza. I think learning to invest or learning the stock market is the same idea.

You have to start with the first piece and you have to eat that and then work around the pizza before you can understand it. Also remember this, that knowledge is like anything else. You're going to compound on it. And if you keep working at it, you're going to start to understand things. It's kind of like water dripping on a stone. Eventually, it's going to make an impression. And if you keep working at it, you can figure it out. At Trust Me, I'm not the smartest guy in the world. I'm smart in spots, but I'm not the smartest guy in the world. So I've been able to figure some of this out. And it's just by doing some work and really paying attention.

And I really encourage people to do this. And if I can do it, everybody can do it. Absolutely. Absolutely. Yeah, I absolutely love what you said about just learning the terminology. It's actually something that I learned about on my podcast. A long time ago, I don't remember who told me,

but basically the number one reason people have in posture syndrome is, I don't remember who told me, but basically the number one reason people have in posture syndrome is because they don't know the terminology of the space. And so they walk into a situation and they hear acronyms and they don't know what it stands for. And it makes them feel like they just know so much less than everyone else. When really, it's like 10 or 20 words you need to understand

and then things start to click. So I love that. Learn the terminology. Do the work. I think that's really smart. Andrew, I'd love to hear your top tips when it comes to newbies looking to get started with investing. Yeah, I mean, let me, let me, let me provide the second slice of pizza, if you will. So Dave mentioned that stock ownership is partial ownership of a business, and that's super,

super key because at the end of the business and that's super super key because at the end of the day that's what it is. The problem with most people who buy stocks is they don't view it that way and so what they might do is you know they see Apple trading at 200 today and then they hope it's going to trade at 220 next week and then you know can I sell it make a $20 profit and you can certainly try to do that and that's kind of what the stock market game has become, but that's not how you can sustainably build wealth from the stock market over the long term. And so what we need to understand about the stock market itself is that it's very, very emotional.

One of the investors we follow is named Benjamin Graham. He calls it Mr. Market, and Mr. Market's basically like this bipolar maniac, who one day he says I want to buy all the stocks you have. The next day he says, I don't want any of your stocks, they're worthless. And so if you follow the stock market, you'll see how it can move very drastically in short periods of time. And other times it's calm, you know. And so what you need to understand, what we need to understand as investors,

is that to have success in the stock market, we need to find great businesses. And that does eventually take some jargon, because I might think Apple's a great company and somebody else might think that the iPhone's stupid. So who's really the right, who's going to be right here? And so you need to learn about the basic numbers of businesses. And eventually you understand that some companies are obviously

doing very well in making profits and some aren't, some could and some couldn't. But it does take some jargon to get there. But at the end of the day, if I have a group of stocks in my portfolio, and I hold them for the long term, I know the stock market's gonna be emotional, I know it's gonna be a maniac and I know sometimes it crashes,

but if you were the graph, the stock market's price over the long term, which by the way, this might blow somebody's mind, hopefully maybe one person. The stock market was open in 1792 in the United States. So if you really think about how far along it's gone, it survived a couple of pandemics, it survived the Civil War, it survived two world wars. And so all along, it's been a very wild ride and it's been a roller coaster, but all along the business world has advanced and companies have provided

enormous wealth for their shareholders, but it's really the shareholders who hold for the long term and they're willing to hold through the huge swings. The only way you get hurt if you're riding a roller coaster is if you jump off. And so if you're really going to be a part owner in the business and you're willing to ride the ups and downs, that's how you can make owner in the business and you're willing to ride the ups and downs. That's how you can make wealth in the stock market. That's how these businesses that grow from little bitty businesses, maybe they have a market that takes over a city and then one day they take over the world.

That's how wealth is built and you can build wealth all along if you buy and you hold. But it's so hard to do because it's so easy to get caught up in the numbers and the games and the emotions that a lot of people frankly fail and they get turned off by it and it's sad because if you're approaching this game with the wrong rulebook, you're going to strike out and you're going to miss out on one of the greatest weapons for building wealth that there is today. I definitely want to touch on, you know, your perspectives in terms of like when we should actually pull out of the stock market and when we should stay, let's hold that thought for a second. I want to go to Rachel. I know that in your book, you say that in terms of investing, you suggest a path of long-term buying hold

in a portfolio of diversified stocks. Rachel, I'd love to understand your top tips for newbies when it comes to investing and your approach to investing that you recommend. Well, even Andrew, they did a great job of explaining what it means to be a stock investor and explaining, you know, kind of generally how the market moves. So I'll just add that if you're a beginner and you're just getting started, it doesn't

have to be complicated. It can actually be very simple. If you do have the time and interest to dive deep and learn and read and research, then do that. That's great. And if, you know, after doing that, you come up with a complex strategy for investing, then okay. But I think a lot of people are hesitant to start because they either don't have the

time or don't have the interest to dive deep. And they think that they don't know what they're doing. Maybe they don't know the jargon. And that kind of creates inertia. And it keeps them from ever getting started. So I think I would just say to those people, if there are any of you out there, it doesn't have to be complicated.

And you don't have to do a ton of reading and research if you're not interested because most people will do just fine with a very simple strategy, which is just long term buy and hold investing into a passive index fund. So an index fund is like a basket of stocks. And so, you know, a very well-known index is the S&P 500. It's a basket of the 500 largest American companies at any given time by market cap. And so, you know, if you're just getting started, you will almost certainly do very well. If you simply, for example, invested in an S&P 500 fund and then just left it alone

for a very long time, you know, all you need to ask yourself early on is, do I think the US market will be worth more in 10 years, in 20 years, in 30 years than it is today? I mean, if it's not, then we probably have way bigger problems. But if you say yes, then just doing that, just investing in the US market in a diversified passive way and letting it sit and letting it grow, you are almost certainly to do very well. And if you consistently add more money over time, even better.

But I would just say, that's the strategy pretty much in a nutshell. It's very simple. Now, simple doesn't mean easy. It can be really hard to do, by and hold investing. You know, it can be really scary when there's market volatility. Like we saw, you know, back in March of 2020. And you know, many times before that markets are cyclical and there is volatility. You know, yesterday, for example, we had a market sell-off that was all over the headlines. Today, it's up again. That's just how markets work.

So I think that while you can have a simple strategy that's successful, it can be hard to stick to it. That requires some emotional distance and discipline and a sticking to the strategy, but that would be my advice to beginners. Man, I wish I had you guys with me back in March of 2020, because I literally pulled out all of my stocks. I had 50% gains and then it went down to 30%. I got scared I pulled out all my money and I had 50% gains and then it went down to 30% I got scared, I pulled out all my

money and I still have not put my money back into the stock. So I bet you there's a lot of people like me who took out their money during COVID and are wondering should they get back in, what's your perspective? Should I go back to investing in stocks or things kind of calm down? Now I know I should have never taken them out to begin with, but what are your thoughts there? If people took out their money, should we be putting it back in ASAP? So it's interesting.

So there's a strategy called dollar cost averaging. And it's also another simple thing. Basically, the idea is you're going to put a little bit of money in every single month. And so what that does for one, it creates a habit. And so if you want to get in shape, an easy way is just to make a habit to at least get in the door of a gym. So a similar thing, you know, your stocks to go up,

they could go down. But if you're dedicated to doing this every single month, then when the March 2020 hits, yeah, your portfolio might go down, but you're also able to pick up more stocks at a bargain because you're constantly putting money into it. And so, you know, to Rachel's point where you want to have a long-term focus and a long-term mindset and you want to be able to let the stocks do the work for you, a big part of that is being humble enough to say, look, I'm not smart enough to be able to time the market. I don't know because really nobody knows. And if somebody's trying to

tell you that they know when the market's going to crash, they're either deceiving you or they're deceiving themselves or both. And so really the only thing that we can be sure of with the stock market is that it's going to go through ebbs and flows. It has seasons just like you can depend on spring, summer, winter, and fall. You can depend on the stock market crashing. We don't know when, but it's going to crash and it's going to rise. I mean, the sad part of missing out when stocks crashed in 2020 is they just came roaring back and they did so well.

And the recovery happened so, so fast. I think that's what gets lost a lot with investors and the stock market is you think everybody kind of thinks, well, I'll get out and then when things come down is when I'll get back in. But all the recovery comes just as fast as it crashed. And so really the only way that you're able to take advantage of the recoveries in the stock market

is if you're invested in the long term for the stock market, which is why I said and forget it is such a key strategy, but it's so, so hard to do because, you know, you really need to have a deep understanding of, why am I gonna just let it, why am I gonna just let it sit, why am I gonna trust that let it sit, why am I going to trust that the stock market will come back and it goes back to our first couple of slices of pizza. It's because it's not

this casino, it's not a game, it's the fact that there are businesses behind me stocks. And so as long as I am confident that the stock market is going to, as long as I'm confident that businesses are going to continue to grow and the economy is going to, you know, as long as I'm confident that businesses are going to continue to grow and, and, you know, the economy is going to continue to innovate and we're going to have a brighter future, then I should totally be investing in the stock market. And so, you know, to answer your question, dollar cost averaging is great because instead of trying to figure out, man, I'm going to put all my money into the stock market this month, take it out this month, and then put it in this month, dollar cost averaging is kind of trying to figure out, man, I'm gonna put all my money into the stock market this month, take it out this month, and then put it in this month.

Dollar cost averaging just kind of completely eliminates that. And it gives you that nice benefit where if you have this set amount, you're putting it in every month, you're automatically gonna buy more stocks when the market's down, and you're automatically gonna buy less stocks when the market is up,

because you've already said, I'm gonna put this amount of money. So something that has been like my crusade of my life has been to say look, I understand how hard it is to save an invest. I've totally been there. I've been loaded with student debt, like I said, I've had credit cards before. And so I ran some numbers, me being like a numbers nerd. I ran some numbers and I said look, if you start at the age of 25, you put $150 into

the market each month. And if you were to get just average stock market returns, okay? And like, you're not like Warren Buffett, you're not able to pick the next Apple or Amazon, you're just buying an SMK 500 and you're just invested in the market. If you were to do that, starting at age 25, $150 a month. By the time you retired, you would be close to a million dollars. If you've got 11%, which is just 1% higher, you'd have a million dollars, you'd be a millionaire. So, really, that small amount, just sticking to something that's even as small as like $150 a month, I mean, that's like, that's less than a phone bill for some people, right?

So just having a dollar cost average and sticking to it and being like, you know what, I'm gonna put this in and not worry about what the stock market does or how it performs, and I'm just gonna keep putting it in. And you'll be amazed how much your wealth will compound and how big that balance in your account will be if you just keep at it. And like Dave said, water dripping on the stone eventually it makes an impression and it's

so, so true and investing. Oh my gosh, such great points, Andrew. Thank you so much. I'm just going to quickly reset the room. You guys are listening to a live episode of Young and Profiting Podcast. Thank you so much to the panelists who have joined us today. If you haven't yet, make sure you follow them here on Clubhouse and on Instagram. Show them some love.

Barbara raised her hand and has a really relevant question. We talked about this very lightly in the beginning in terms of the different reasons. People are kind of scared to invest. So, Barbara, I'd love to hear your question. It's super relevant to the conversation. Hi, my name is Barbara and I'm over 50 years old and I do have my state and I don't have any problems with credit cards. I'm a mess at that one but I'm afraid because I'm older to invest. Dave was talking about learning more and so on so that was good for me. I think

I'll go to the library and try, but I'm afraid to invest. Does anybody on stage want to give Barbara some words of encouragement or advice in terms of investing at her age? She said she's 50 years old. Yeah, I'd love to talk to Barbara. Barbara, so I guess first of all, it's understandable to be afraid.

It's scary, it's nerve-wracking. And I think that the first thing that you should do is pick anything, a company, or you could pick something like Rachel was talking about, an ETF, something simple, and just buy one thing. The hardest step is the first step. And once you get over the first step, then it starts to become, as Andrew was talking about, a habit. And it's never too late to start. And the sooner that you start, the bigger the impact it's going to have on your life.

And the biggest thing is, I think people worry about losing money. And I think the thing you have to think about is, for me, like I bought Microsoft, for example, because I thought it was a stable company, a great company at the time. It wasn't the monster that it is now. But at the time, I thought, hey, this is a well-known, respectable, stable company that I may buy a couple shares. And it's not a huge investment.

If I lose some of that money, no big deal. It helped me start to down the path. You can absolutely do this. Rachel was talking about, you don't have to go the path that I'm talking about where you have to learn all the ins and outs of the stock market and all this jargon and terminology and financial numbers. If you're not comfortable with that, like Richel was saying, there are a million different kinds of other options that are very easy to use.

If you work in a business, for example, let's say that you work at a bigger company and they offer a 401k, you're already investing in ETFs and index funds and mutual funds with your 401k. And it's the same idea and you could do it on your own individually if you want. And, but the biggest thing is not timing the market, it's time in the market. So the sooner that you can get money into the stock market and have it start working for you, instead of you working for it, the better off you're going to be. And it could be as simple as buying one share of one company. It could be as simple as buying one ETF, which has low cost fees.

They generally match the returns of the market and the stock market over the last 100 years has returned between eight to 10%, which blows away anything you can get in a savings account. And it's absolutely something you can do. It doesn't matter if you're 50 or, you know, 22 or 71. This is something you can start any time, and you absolutely can do it.

And you can make it as simple or as hard as you want to. And the options are open to you. And I just really encourage you to try to do it. I hope that helps a little bit, Barbara. If it doesn't, let me know. That helps a lot. And my other concern was I didn't want to go to like companies and stuff because I wasn't knowledgeable and they would probably talk over my head.

So I was wondering, can you go online and just buy your stocks like that or do you have to go with someone like Edward Jones and all of that. No, you can absolutely go online. Depending on who you bank with, they might have a brokerage account through your bank. That is an option.

You also have the ability to open a brokerage account. I mentioned fidelity, a charge swab. Those are two that I have used in the past and I love them. They're very easy to use. You can open them online just like anything else. There's also apps that you can download. Probably getting trouble for this, but I'm not a huge fan of Robinhood, but that's for

a whole other conversation. But there are lots of different ways to invest and you can do it as simply as opening an account on your phone or you can do it online. The process takes maybe five minutes and then you can transfer money into your account which could take a few days. And once that's done, you can start buying stocks, whatever, again, whatever you want to do.

There's unlimited options for sure. Thank you so much, thank you. Could I add to you, I think, you know, when you talk about investing significant amount of your life savings and kind of thinking about dipping the tow versus jumping all the way in, if you're first learning to drive a car, I don't think it's smart to go and try to drive

in the, you know, formula one race or a NASCAR race. And so, you know, similar thing with your money, probably don't want to put a significant amount of all the time that you saved and, you know, worked for and put it all in at once without knowing what you're doing. And so, my favorite advice is what Dave talked about with going to the library. And there's a lot of good books that we'll teach you. You know, you don't have to learn about stocks, but you should definitely learn about how the stock market works. If you're going to put money in the stocks, that's a huge part. There's also a lot of information about bonds and some of the ways where if you're drawing from your savings and retirement,

those are all factors too. It is overwhelming. There is a lot of jargon, but at the same time, it is something that you're going to have to do with the rest of your life, right? So, to at least get like, if we could have had like a high school class to at least teach the basics, so everybody could understand like diversification and you know long term returns, like certain jargon just needs to be taught and it needs to be learned. And that's the only way that you can have adequate returns from your money and to be able to use that to sustain and build wealth. And so I think having that curiosity

and having that drive to wanna educate yourself is probably most important out of anything else. Thank you all. I've helped a lot. Great. I'm so happy that it helped Barbara, and I'm really proud of you for thinking about this and having the courage to ask this question. And while we're on the topic of age, I'd love to hop to Rachel because I know that you're passionate about working with younger generations, like millennials and Gen Z to help them create more financially independent futures. And when I was studying for this interview, I found a NPR article that was published last April.

And it said that the net worth of a millennial household was 40% lower than previous generations. And to me, that was really shocking. So from your perspective, Rachel, what are some of the obstacles when it comes to financial independence from millennials? And then what are some of the opportunities that we should keep in mind? As a millennial, you know, I'm very aware, I'm sure you're very aware, we're all very aware of these statistics, you know, they're in the headlines all the time, kind of put different ways or in different contexts. And kind of the general message is that millennials are worse off than our parents were at our age, kind of overall.

And you know, we haven't had the easiest time. A lot of us, we came of age in the midst of pretty pervasive economic uncertainty, and we faced a lot of headwinds. For a lot of us, we became adults at a time of high unemployment and under-employment, tuition inflation, and crazy increases in the cost of housing, stagnant wages. It wasn't easy, I know, you know, when I came out of school, so I came out of, finally finished like all school in 2012.

And even then, a few years years really after the financial crisis, it was a really tough job market. It wasn't a good time to kind of be coming out into the world. And you know, for for a lot of my friends who graduated in no eight, no nine, it was even harder. And so we're all very familiar with that. And then when we compare that experience to that of the baby boomers, our parents' generation,

they came of age for the most part in the 80s. And they enjoy a couple of decades of great economic growth and low unemployment. And I think this is really important, kind of a lot of optimism, just generally. And I think that goes a really long way. And that's all pretty much true. But I think what's not discussed as much when

we talk about the plight of millennials is what Dave touched on earlier, which is the baby boomer retirement crisis that is kind of impending. And if you start kind of watching the headlines, you'll start to see that there are, you know, headlines about that too, and statistics about that that are coming up more and more and kind of the bottom line is that the baby boomers are retiring, you know, every day more and more of them are retiring and 90% of them aren't financially prepared to cover their expenses for the rest of their their life at least for their life expectancy, you know,

a lot of them are retiring in their early 60s and they're going to live for another 30 plus years potentially. And when they were young and earning, they weren't prepared to spend 30 years in retirement. That just wasn't the expectation. And I also think a lot of them were very reliant on social security to kind of provide for them later in life. And now, you know, that's in trouble. So kind of just bottom line, they're not in a great position.

And I think that millennials shouldn't really look to them and say, we're so much worse off than they are. Maybe we started out in a worse position than they did, but they're not in a good position now. And I think that we should kind of look to that and say, how did they get there? And how can we end up in a better position? And so, you know, kind of the broad strokes are,

they under-saved, they relied on debt too much to finance consumption. And they really underestimated how far their money would go. Their savings would go later in life. And I don't know how that's going to play out for them. I, you know, it's so early on, but I think we can just look to that and say two things. One, we have a lot of time on our side.

And like we talked about before, that is the single greatest resource we have as young earners and savers and investors. And if we exploit that, it's a very powerful thing for building wealth. And the second thing is we can learn from their mistakes. And despite kind of starting out in a worse position, I think we can end up in a much better position. So that's kind of how I look at it. Young and profitors, do you have a brilliant business idea but you don't know how to move forward with it?

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so let's start with debt reduction. So, from my understanding, there's a big problem when it comes to debt, specifically student loan debt. It looks like 42.9 million Americans owe a total of 1.57 trillion dollars in student loans. The average person who has student loans carries about 36,000 dollars in federal loans. So I'd left to hear everybody's thoughts in terms of your best debt reduction tips and how we should get started if we have student loan debt. Where do we start, what do we do, who feels best equipped to answer that question?

I don't know about best equipped, but I could run the mood for a minute. Let's do it. There is unfortunately no secret whether you're paying credit card debt or you're paying student loan debt. It's really the same thing. And what it comes down to is just spending less than you make.

And so just from the start you really got to be honest with yourself and be honest with how much am I really spending and how much am I am I really making and is that lining up in them? Is there even any wiggle room? And you know it's really tough I mean depending on what area of the country you live in, you know I used to live in Southern California and Rents are just outrageous. And you talk about like starting a career, having to deal with that, having to deal with debts and other obligations. It's really, really tough, but you know, you just, you don't know where you're bleeding money and where it's going down the drain until you really take that honest assessment. So I know for some people, they like the apps

that kind of do that kind of stuff for you. I think Mins, one of them, I'm not really much of an app type person, I'm more of like a spreadsheet person. So I've got spreadsheets for days. And I realize that's probably not most people. But you know, there's apps, there's, you know, another great resource is podcasts. Again, just going back to what Dave was saying

about learning the language. There's a ton of personal finance focused podcasts, and they're going to help you if they get you on plan where, you know, they're telling you that guess what, you make this much, you're spending this much, and you're going to figure out how to increase how much you make, and how to lower how much you spend, and that's really the ballgame. So if you find resources like that, you can give you different tips and tricks, but that's really where you need a story. You gotta be transparent.

You gotta know what's going on. If you don't know what's going on, you can't fix the problem. That makes sense. Rachel, Dave, do you have anything to add in terms of ways to reduce debt? Yeah, I think I would echo what Andrew was saying. It really comes down to spending less than you make. And I think one thing that I know that what Andrew was saying. It really comes down to sending lots that you make.

And I think one thing that I know that when I graduated from school, I went to school to be a musician. And so that qualified me basically to work in a restaurant. So I had student-wold debt when I graduated and I had to learn how to paint off with the bigger income that I was making. So one of the things that I did as guidance that I got from one of my teachers at school was to contact my student loan people and consolidate the loans, which helped reduce the amount that I owed each month. And it also helped reduce the amount

of interest that I was going to pay. And so by doing that it helped me make the payments a little more manageable and to learn to deal with that and pay them off faster. The other thing that I learned along the way was gentleman that I worked with used to work for student loan companies and he noticed through his working with people on their student loans, a lot of people would just ignore it and would hope that that problem would just go away and it doesn't go away and it follows you in an affection credit and it can be an even worse burden than it may be. And so his advice to me and to other customers that he worked with was to try to work with with the student-willing people as much as you can to try to, there's programs out there that can help you get some sort of debt relief that can help you in certain circumstances. And there's options to help you figure out a way to do that. And you know, there's other options like learning to have a side hustle to make extra

income that you can learn to pay towards that. There's also strategies of accelerating your payments. So let's say that you're in a position where you actually can pay more than what you're owe. So instead of paying $150 a month, you pay $300 a month. And you request that $150 codes those towards the primary debt instead of just the interest. And that will help reduce the overall interest that you pay on the loan over time. And so some of those things can help, but it really comes back to you,

unfortunately, the unsexy thing, which is learning to spend less than you make. And I think Rachel would probably have some great ideas as well. I think Dave, you made a great point that I see a lot in my work. And that's that a lot of people get into trouble because they ignore the loans.

And I get why. We all just want to push aside anything that's stressful or painful. But in the case of debt, especially relatively high interest rate debt, like a lot of student loans are, that is so problematic and it'll really get you screwed in the long run. And like Andrew said, if you don't know what's going on, you can't fix the problem.

And that's another big thing that I find is that a lot of people with student loans either because they're ignoring them or they're just unaware. They don't know what's going on with the loans. They don't know what kind of loans they have, what payment plan they're on, or even what their balance or interest rate is. So I would say, you know, if you have student loans and you can't answer those questions, you don't know the details of exactly how much you owe at what interest rate, how many loans to who, you know, who's the service or all these things, figure that out, get intimately familiar with your current situation as a first step, and that's a huge step. And then figure out what your payment options are.

a huge step and then figure out what your payment options are. That can be very complicated, but there are a lot of great sources on the internet. One of my favorites is studentloanhero.com. That is a great site for figuring out what your different options are and learning about how all these different options work. So I recommend anyone in that situation go there as a resource.

And once you figure all that out, I would say, you know, for most people, the best strategy if you're aiming for financial independence is to get rid of debt, all debt as quickly as possible. And that means just, you know, throwing money at the loans. But like I said, there are a ton of different options in the case of student loans like there are certain forgiveness programs and other payment strategies and so you'll have to just figure out really what's optimal for you and that would be my advice. Thanks Rachel. These were all such great insights when it comes to debt reduction. So I know that

a bunch of people on stage have questions for you all and we're going to start going into our open Q&A. So Melissa, I know you had a question, Jonas, I saw you flash as well. So let's start with Melissa and then Jonas. Thank you so much, Hala. And thanks everybody on the stage Dave Rachel, Andrew, this has really been an insightful conversation. I have a general question for the panel. As a first-time investor in the stock market, how much time is required in terms of looking at the market or is it wherever we invest our money? Is there a guide person?

Who's managing the accounts or watching it and deciding or helping us decide if we should either pull out, if we should stay? Or is that entirely up to us, right? What's your feedback on that? Yeah, I guess I'll start. So it is up to you, but I would say that there is definitely a couple hurdles you want to jump over.

And it's really, as much as we're really pounding the table, it comes down to education. And so there's just so many different ways that you can invest and so many ways that you can buy stocks. You know, some people find that they like to spend a bunch of time in day trade. I'm not really that type of person. I'm somebody who I just want to find good businesses and let the businesses do the work. You know, I don't want to work for the money. I want to have the money work for me. And so for me, personally, you know, since I do this fulltime, obviously, so I'm researching the stocks, but once I've purchased the stock, because my timeframe is long-term, I put minimal effort into monitoring.

And a stock could go down, and I'm not concerned if it goes down, because I don't really truthfully care what the stock market does. What I care about is if my business continues to grow. But to get to that point, it did take me time to understand why can I rely on that? It goes back to some of the basics of what is a stock? What kind of stocks do I want to buy? And why is it likely to work? Going back to the example of the stock market average return, it's been about 10% a year for decades. I mean, going back to like the 1920s even, you could count on that. But again, the road was rocky. And so to be a good long-term investor, you need to

understand that that's the nature of the beast and you're not gonna get that kind of return unless you can hold through peaks and valleys. And so, you know, really internalizing that, you know, I know we hear things and there's some study out there, but they say like it takes you six, seven, or eight times to hear something before you actually internalize it. And so, you know, as you learn the language of investing, it applies equally to the stock market, but you got to start first with investing.

And it's all intertwined, but it goes back to that, having a long-term mindset and letting compound interest do its work. I mean, compound interest is extraordinary. I like to think of it like, if you were to look at the tree, so I'm in Raleigh, North Carolina, so it's easy for me to look at the tree and see the branches, because when the winter comes,

all the leaves fall off and you're gonna see branches everywhere. But if you're to look at the tree and you looked at the way a tree grew, it started with a small little seed and then it grew into like a stump. And then if you look closely at the way the branches go, the branches will have branches that branch out and make more branches and so the way

that that multiplies, that's what happens to your wealth when you invest it and when you get returns. But that doesn't happen if you're jumping in and out and if you're freaking out about the stocks you're going to buy. And so that's why understanding compound interest and understanding the things that Dave and I talk about all the time on our podcast, whether you're interested in the stock market or not, it really applies to investing because all those principles hold true.

Any business could get wiped out tomorrow and so that's why you need to not have all your eggs in one basket, but your eggs in many baskets, right? And so diversification, long-term approach, dollar cost averaging, like we talked about before, making it a consistent habit, so you're not trying the time. What's going on with the market?

Those are all key things that apply to both the stock market and for investing. So as a first-time investor, again, it's a lot, and again, you probably don't want to jump into the deep end. But that's why you learn a little bit over time and you start to understand how it all works. And then from there, once you cross those hurdles of like, okay, I know and I've mentally prepared myself that the next time a pandemic crash happens in the stock market, I'm not

going to freak out and pull my hair out, you know, and cry about it. I'm going to understand that this was to be expected. And so to get there, it means crossing those hurdles, but eventually you can get to a point where, you know, whether you're trusting somebody else to pick the stocks for you, you're just going with a completely passive index fund, or you find researching business is fun and you're doing it for yourself. Once you get to that point, it doesn't need to take hours and hours and hours. You can do it with very little time investment

because it's a long-term game. It's not happening overnight. Great advice, Andrew, and fantastic question, Melissa. Thank you guys so much for your contributions. If you are on stage, Paulina, Amelia, Jonas, Mark, if you have a question to splash your mic, I know Jonas, you had a question, so I'm gonna head over to you.

What is your question for the panelists? Sure, thank you, Hulla. My question is for the panelists, I'm curious about alternative investment strategies and passive income strategies. So stuff outside of the stock market it seems a little frothy right now. And I'm wondering, you know, sort of,

if there are a few ideas that you have that you can share with us about thinking more broadly. You mentioned a diversified portfolio. Give us some examples. So what are the categories? Do you like real estate, specific aspects of real estate? Are there other types of maybe overlooked areas that folks who are in a position to do so should look at? I love this question. Great job for bringing this up, Jonas. Thank you. Dave Rachel,

Andrew, who wants to kick it off? All right. So Jonas, that's a fantastic question. So here's, I guess here's some of my thoughts. So the diversification game is an important game to play for a variety of reasons. So the first reason is not all of us have the time or the inclination to become experts in a specific field, whatever that may be. And the greats that Andrew and I talk about all the time on our show, the Warren Buffets, the Charlie Mungers, and those kinds of guys, they have spent their lifetime studying particular businesses, and they have insights and information and ways of thinking that they're beyond me.

They're the Michael Jordan's of investing. And so their ability to pile into one particular company or asset or different kind of sector is beyond my skill set. So I have to use, I have to kind of pick and choose my spots and find different kinds of investments. I'm going to be honest with you, I'm not super hip or hip to the alternative investments if you're talking about some of the crypto and some of those things that's really outside of my expertise area. When you're looking at different things like real estate and things of that nature, I tend to stick to stocks personally. That seems to be the

area that I can operate to the best in. And looking at stocks, for me, if I'm looking at real estate, for example, one of the things that I would look at is REITs. And those are real estate investment trusts. And those are, they function like stocks, but they allow you to buy real estate without having the money or the effort to buy an individual property. And so you can get into things like apartments or you can buy health care, you can buy shopping malls, you can buy just by anything, apartments, whatever you want.

There's a different readout, there's information centers out there that house all the cloud servers for Amazon, for example. So there's lots of different avenues in that regard. Some of the unlooked and unloved sectors out there, one of the things about investing is there tends to be certain areas of the market that are loved in certain areas that are unloved. And some of the unloved areas, if you will, right now are things like banks. You could look at utilities. For example, some of those things are not the most attractive right now, but the returns over a long period of time have always

done well. And I'm more of an old school kind of value investor and I try to find companies that sell for a discount and buy them at a good price. And it's not, I'm not looking for cheap companies, but I'm looking at the way I like to describe it. I'm looking for an iPhone 12 for 800 bucks instead of 1200 bucks. And if I can't find it, then I'll wait and try to find something else. But there are lots of opportunities out there if you sift it through the dishes. And I would be curious to hear what everybody else has to say about this. Yeah, Rachel, let's go to you.

And Rachel, I have a question. I'll let you answer this, but then I have a question for you afterwards. So go ahead and answer this question, and then I have a follow up for you as well. Yeah, sure. So I'll just add to what Dave said. So I'm also a stock investor. Stock investing is by no means the only investment strategy that people can successfully use to build well.

But I think that a lot of the alternative strategies to that for most people are just not great options because these alternative strategies be it real estate or crypto or commodities or whatever it is come often with more risk and with more complication and a lot of times less liquidity. So I would say that if you're a beginner or an average person, if you're not a subject matter expert on, you know, a specific alternative strategy, then I think stock basic long term, buy-in-hold stock investing really is the best strategy

for you if you're looking to build wealth over the long term, you know. So we can say, Jonas, like you said, okay, I think the stock market's looking a little frothy right now. Maybe but relative to what? Do we think that I think we have to kind of zoom out and take the long term perspective and say, do we think that the market will be worth more in 10 years, 20 years, 30 years, than it is today? And I say, you know, with total confidence, the answer to that is yes.

And so I kind of take this long-term view as a young investor. And I'm kind of, don't look at the short-term valuations because whatever it's at now, I know it's going to be worth more later. I'm not going to sell. I'm buying hold. And that's kind of, it's just very simple. That's my approach. But again, if you have subject matter expertise in real estate investing, it's not a bad way

to build wealth, but I just find that a lot of people who kind of try to dip their toes into alternative strategies because, for whatever reason, they're turned off by stock investing. A lot of times, they kind of know enough just to be dangerous, but not enough to kind of successfully execute that, you know, with all the complications they can bring and over a long period of time. So that would be my answer. Your dog is an important part of your family. Don't settle when it comes to their health. Make the switch to fresh food made with real ingredients that are backed by science with NOM NOM. NOM NOM delivers fresh dog food that is personalized to your dog's individual needs. Each portion is tailored to ensure your dog gets the nutrition they need

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Yeah, and you were just touching on something I want to dig deeper on or just get more of a definition around it. And that's speculative investing. And I read in a recent interview that you had that you're actually pretty against that. And you think people should avoid any sort of speculative investing. So I'd love for you to define that for us. What does that mean and why do we need to avoid it? Yeah, I think that's a really important distinction to make. When we talk about investing is kind of the difference between speculating and investing. So investing is when you put money into something, let's say a company, because you truly believe

that that company's internal sources of return, like growth in the company's assets and earnings and income will make your investment profitable. Feculating on the other hand is when you put money into something because you're counting on external sources of return. So like in the case of meme stocks, for example, you know, you're counting on that it'll just keep going up because everyone's buying it or because it's getting hyped on social media. You're kind of it's like the greater fool. You're hoping that a greater fool will come along and just pay more than you did regardless of the fundamental value of that company, the GameStalker or AMC or whatever. So, and kind of to speak to that, to all the meme stock trading, which I think is a really good

example of speculative behavior in a really large group of people that drove these companies up to just crazy prices that I think, you know, most people look at those companies and say, these prices don't reflect the fundamental value of these companies. And I think that, you know, a lot of the people who were buying them either knew that and didn't care because they were speculating and just hoping, you know, it would keep getting hyped and other people would keep buying it and they would keep going up or they were unaware. So kind of speculating is like gambling. It's like going to Vegas and you know putting it all on on red. And in the long run, I would say most people end up getting screwed through

speculative invest through not investing through speculative trading. So my advice would be to avoid that. And again, not to go back to what I keep saying, but really it just being a long term buy and hold investor, if you can do that, you will come out ahead of just about every short term speculator that is almost guaranteed. Thank you for breaking that down. And Jonas, a really great topic to have brought up. And since we're on this topic, we have to touch on NFTs and at least define what an NFT is. I've been personally hearing a lot about sports card investing in the NFT space. I feel like so many people that I know

are investing in these sports card NFTs. And I feel like it's the silliest thing. I just don't understand how you would put your money into that personally. I just can't see it. So I'd love for somebody to break that down. Dave, Andrew, can you define what an NFT is for us? And maybe give your perspective?

Let's go to Andrew. Well, Hall, I completely agree with you because I don't understand it either and so I don't to be honest, I don't spend my time worrying about it because similar the Rachel, the way I look at an investment versus a speculation is an investment is when you risk some money and you receive an income for risking it. And a lot of times when you do that, you also, if you're buying stocks, you hope to get, you hope to get growth along with that. But you know, if you're a bank and you loan to somebody, that's also an investment and you receive principal and interest back, right? And so that's what

investing is all about. And I just, I don't see that with NFT. There's no income stream and, and it's so brand new. And so it is very, very speculative. And the thing is, if you do go down the rabbit hole like Dave and I have, you start to learn about the history of the stock market. I know history can turn some people off, but guess what? The speculative stuff is nothing new. It always takes new forms. So back in 2000, you know, every day people were having second mortgages, third mortgages, four mortgages. The real estate boom was insane.

People were doing the speculative investments, like you wouldn't believe. Today we would laugh at them. But back then, that's what everybody was doing. And it was because the real estate market never went, it never went down, it always went up until that one day when it didn't. And then in the late 90s, it was the internet stocks, anything that had a dot com on it, you literally just had to make a company and put a dot com in your company name and you could IPO and make millions and millions of dollars.

And so again, the same thing happened there where it worked until one day it didn't. And so I'm not trying to imply that NFT is like, you know, going to be like those two things, what my point is, is that speculative investing is not something that's new. And so you really have to be wary when you see new kind of investments that haven't been tested over time. If you look at long established track records, again, over decades, the stock market wins every time, and it's because I can't think of anything more reliable than businesses that are around us.

I mean, if you're employed, you work for a business. And so, you know, these are the primary profit generators. And so I want to be invested in the primary profit generators. And so I want to be invested in the places that are employing people and making money. And that's why I invest in the stock market. Yeah. I guess something I like to take on to what Andrew was saying is one of the things that I think a lot of people don't think about when they think about an investor like Warren Buffett, probably one of the most successful investors of our generation certainly may ever arguably.

And he's been doing this for, I don't know, 60, 70 years now and he's still going strong, but he did really start to become the gozillionaire he is until about his 70s. He's, I believe, 90, 91 now. And so it took time for him to build up his wealth. And I think a lot of people think that in the stock market, you have to be active to make money. And he sometimes would go years without buying new companies. And he would just basically sit on his hands

and wait for something to come along that would be attractive for him to buy. And so it was just a matter of being consistent and finding the companies that he liked and holding them for a very long time, just like Rachel and Andrew have been talking about the entire time we've been on the show tonight. And that's really where wealth generation comes from.

And I think sometimes people think that they have to buy the newest, hottest, weightest, greatest thing to get rich quick. And unfortunately, with the meme-stastic, Rachel was talking about earlier, there have been a few people that hit it big. And then media blows that completely out of proportion. And makes it sound like all of us can participate in that

and become rich quickly. And unfortunately, it doesn't turn out that way. Most of us are on the losing end of those kinds of trades. And the stats will show you that, the numbers will show you that, and it proves out time and time again. And so I think the NF key thing is, it's not something that I personally invest in.

I like Andrew, I've spent literally zero. I've now spent more time talking about it than I've thought about it. And it's just not something that enters my radar. It's buying and holding companies for a long period of time and that's how you make money in the stock market. Awesome. Jonas, any follow ups or it looks like Rachel has something to add?

Yeah, yeah, I was just gonna add. So if we break it down, NFT for non-fungible token. So, fungible means interchangeable or replaceable. Non is obviously the opposite of that. It's not replaceable. And the token in this case is like your stake to the digital asset. It's like your share. So, these non-fungible, non-replaceable tokens,

once they are minted or created, they're the only ones. And there is a lot of hype around them now, especially in the context of art or hollow, like you said, in collectibles, it sports cards and things like that. And I think it's highly possible that down the road we'll see much broader applications of this technology. And a lot of times, so technology usually starts out kind of in little niche areas, or little niche parts of the market before you really understand the true ramifications or broader uses of it.

And I wouldn't be surprised if we're sitting here years from now and they're common and well understood and there's very broad uses. But the reality right now is that 95% of people, me and myself included, don't understand them. And if you don't understand them, I think you should be honest with yourself. And you're putting money into them, then you're speculating. And so I would just kind of say, if you're not a subject matter expert on NFTs or

or blockchain in general, you shouldn't be putting your life savings into this. That would be speculative and not investing. And that would be my advice to, you know, the 95% of people who just don't understand these. And it's great advice. Anybody on the stage have a question for the panelist? Fasher, Mike, okay, let's go to Paulina. Hi everyone. Thank you so much for sharing this great information. I'm not a new investor. I spent quite a few years in Wall Street. My question is a little bit different and I hope that it serves other people. How does the panel feel about infinite banking, which for people that don't know, which is investing money into life insurance and using that as a wall generating tool?

Oh, we can go to Michelle at the bottom. Michelle is a financial educator and has something to contribute. Hi, thanks for having me. So your question, Polina, was on life insurance and whether or not it was a good investment. I didn't catch if you named a specific type of life insurance. Yeah, I named it Infinite Banking. It's a specific way of investing into life insurance and using that as leverage specifically for investment purposes and for tax purposes. Not a lot of people are familiar with it. And I was wondering if anybody is familiar with it and how they fault about it. Gotcha. Gotcha. Okay. So no, I'm not familiar with that particular aspect.

Like you're talking about infinite banking. There are different types of life insurance. Usually what I have found is that there's new names for products that come out, but the concepts are all the same. So I'm not sure if maybe somebody else on the panel knows about that particular name, but if there's kind of an underlying concept that I could understand a little bit better, it's because I might be able to talk to it a little bit better. But typically, if you have life insurance and you've got investments inside of that, whether it's savings or actual stock investments

for bond investments or whatever, a portion of the premium that you're paying is gonna go to the actual insurance premium. And then a portion of it is gonna go to the investment. And then some of that's gonna go to the actual insurance premium and then a portion of it is gonna go to the investment and then some of that's gonna go to the costs that are going to be needed by the insurance company, like administrative costs and then there's commissions for brokers.

So usually with life insurance investments, just generally speaking, I haven't found that it's been like the best investment. You have to be really careful with how you're going about doing it because you need to be looking at the underlying investment to make sure that there's enough return because life insurance policies do have the ability to, you can accumulate wealth and it's not, it's tax deferred. Well, it's not technically tax deferred.

It's actually, it's tax-free, but at age 100 it matures and then you've got a state issue and stuff like that. So most people will invest into life insurance policy because of tax advantages, but you kind of just have to weigh out if the amount of money that you're putting into the policy itself, because anytime you're putting money into a life insurance policy, you're paying for both the insurance part of it and the administrative cost and the commission cost to whoever sells it to you and then also the investment. So you really have to kind of do an apples to oranges, comparison around, should I just take that money and put it strictly into investments

and then maybe use some of that extra money to, you know, some of the money that I wouldn't be putting into the insurance policy, do I buy a low cost insurance policy? So there's kind of a couple different ways to look at it. So I'm not sure if that's helpful for you, but I just wanted to kind of talk about sort of the general concept around life insurance and using it as an investment vehicle. Thanks, Michelle. Rachel, it seemed like you had something to add there. Yeah, well, I was just going to say kind of what Michelle said,

actually. I think she put it really well. If I don't know the specifics of infinite banking, but I will say that kind of as a financial planner, we see a lot of insurance scams that come our way and that are pitched to our clients. And a lot of insurance scams that come our way and that are pitched to our clients, and a lot of them have clever names. And I would just say kind of generally any sort of insurance-based scheme that's pitched as a sound investment is likely a scam and is likely not

to be a good investment. Kind of like Michelle said, a lot of life insurance in particular, whole life insurance, not term life insurance is, you know, the returns are low, the fees are high. You pay high commissions to the person that sold to you in most cases. And it's very illiquid. And so I would say all of these things

make it a very bad investment for most people. And I would be really weary of any life insurance-based investment schemes. Awesome. Paulina, hopefully that helps to answer your question. And with that, we only have a couple minutes left of this panel session, which I think was excellent. The last question I wanna leave Dave, Rachel and Andrew, our panelists for tonight is a question about mindset. So, you know, we always hear this question, or we always hear this phrase, like you need to get in the mindset to attract money, right? So I'd love to hear what you guys think

is the right mindset to attract money and how we can get in that right mindset so we can make smart investment decisions. Let's go to Dave, Rachel, and Andrew. And this is your last opportunity to give any gem of wisdom to the audience, both here live on Clubhouse and on the podcast. Okay, so I'm first, all right. So I guess the mindset for me with money is I'm the boss.

And I have the right to make the decisions that I need to make to do what I want to do. And I have taken the time to write down what my goals are and have a plan. And once I have that plan, it's easier for me to execute on that plan. I find that when I do not have a plan just in general in life, that I tend to get frazzled and a little bit uncomfortable about where I want to go or what I want to do. And so I guess I'm kind of a list person. And so by having a plan, it helps me feel like I'm in control and I understand what my goals are and where I'm trying to go with my money.

And so that's really, I guess, my mindset is I'm in control on the boss. I'm going to do what I need to do to go where I want to go. And that helps me a lot. I love that. I'm the boss. Rachel, what is your best tip for getting in the right mindset to attract money? I guess I would kind of frame it as be aware of what mindsets to avoid. And that would be, you know, an emotional mindset as an investor. I think emotions and money are very intertwined. And if you let your emotions dictate your investment decisions, that's a way to end up way underperforming the general markets. And you'll end up speculating or selling it in and out at in opportune times. So yeah, I would just say to try to be stoic. That would be a

better way to put it. I would say be stoic. Awesome. Angie, what are your final thoughts in terms of getting into the right mindset to attract money? Well, I can't remember where I heard this and it was quite a while ago, but it was basically asked for money and get advice, asked for advice, and get money. And so, you know, it all really is power when it comes to money. So, whether that's, you know, how am I going to side hustle to make more money, whether it's, you know, how am I going to learn to be better at my job so I can make more money, whether it's, how am I going to learn to budget so I can have more money, whether it's how am I going to learn to budget so I can have more money,

whether it's how am I going to invest so I can have more money. It really is a learning thing and before you can get the behavior right, you got to get the learning right. And you just take those steps from there and it's an exciting process and I commend everybody for making it this far because this is very, very important knowledge to have. But if you're here and you've shown you the interest, then just keep going and keep going down that path because it's worth it. Awesome.

Well, guys, this was such an incredible conversation. I want to thank everybody who joined us today, Dave, Rachel, Andrew, for all of your wisdom and your insights that you've shared. I think that so many people are going to take away actionable insight and steps that they can actually implement in their daily lives to create more wealth for themselves. So thank you guys so much for all the service that you provided today. And for everybody in the audience, if you haven't yet, make sure you follow Dave, Rachel, and Andrew on Clubhouse and on Instagram. So with that, this is Hala and friends signing off. Thanks everybody, have a great night.

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