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

Episode Date: May 13, 2022

Do you want to invest in the stock market but don’t know how? Are you intimidated by all the financial jargon and worried about the marker’s ups and downs? You’re not alone! In this YAPLive, experts in the financial space Andrew Sather, David Ahern, and Rachel Podnos O'Leary share how investing in the stock market doesn’t have to be intimidating! You can use simple investment strategies and grow your wealth. Start improving your financial health and literacy today! In this episode, Hala, Andrew, David, and Rachel educate listeners about the stock market, talk about simple strategies like dollar-cost averaging, dive deep into obstacles and opportunities for millennials, and get into best practices to reduce debt! Topics Include: - Overcoming excuses to not invest  - Importance of financial literacy in the US - Credit cards and emergency funds  - Advice for new investors - Simple strategies to get started  - Dollar-cost averaging  - Obstacles and opportunities for millennials  - Best debt reduction tips  - Tips for attracting money with mindset - And other topics…  Andrew Sather is the co-host and co-founder of The Investing for Beginners Podcast (iTunes Top 40 for investing), and the founder of einvestingforbeginners.com, where he publishes their daily email newsletter, The Sather Research eLetter. David Ahern is a self-taught investor. He is the co-host and co-founder of The Investing for Beginners Podcast (iTunes Top 40 for investing). He is passionate about helping people learn to invest, and making it relatable in everyday language. Rachel Podnos O'Leary is a Certified Financial Planner. She is the author of 21st Century Wealth: The Millennial’s Guide to Achieving Financial Independence. Rachel is also a licensed attorney and member of the Florida Bar.  Sponsored By: Shopify - Go to shopify.com/profiting, for a FREE fourteen-day trial and get full access to Shopify’s entire suite of features Jordan Harbinger - Check out jordanharbinger.com/start for some episode recommendations Constant Contact - To start your free digital marketing trial today, visit constantcontact.com Peloton - Visit onepeloton.com to learn more. Resources Mentioned: Full YAPLive Episode: https://podcasts.apple.com/us/podcast/yaplive-take-control-your-financial-future-andrew-sather/id1368888880?i=1000529792448  Andrew and David’s Website: https://einvestingforbeginners.com/  Andrew and David’s Podcast: https://einvestingforbeginners.com/the-investing-for-beginners-podcast-episode-list/ Investing for Beginners’ Facebook: https://www.facebook.com/e.investingforbeginners/  Investing for Beginners’ Instagram: https://www.instagram.com/e.investingforbeginners/ Investing for Beginners’ YouTube: https://www.youtube.com/channel/UC4TXiSS6QqcXVVhwsCqjuVw   Andrew’s LinkedIn: https://www.linkedin.com/in/asather/  Andrew’s Twitter: https://twitter.com/ValueTrapBlog  David’s Twitter: https://twitter.com/IntrinValue  Rachel’s Book: https://www.amazon.com/21st-Century-Wealth-Millennials-Independence/dp/1544515057   Rachel’s LinkedIn: https://www.linkedin.com/in/rachel-podnos-o-leary-jd-cfp%C2%AE-a6084845/  Rachel’s Twitter: https://twitter.com/rachelpodnos  Connect with Young and Profiting: YAP’s Instagram: https://www.instagram.com/youngandprofiting/     Hala’s LinkedIn: https://www.linkedin.com/in/htaha/     Hala’s Instagram:https://www.instagram.com/yapwithhala/     Hala’s Twitter: https://twitter.com/yapwithhala  Clubhouse: https://www.clubhouse.com/@halataha   Website: https://www.youngandprofiting.com/  Text Hala: https://youngandprofiting.co/TextHala or text “YAP” to 28046 Learn more about your ad choices. Visit megaphone.fm/adchoices

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Welcome to the show. I'm your host, Halla Taha, and on Young and Profiting Podcast, we investigate a new topic each week and 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 enhanced and productivity, had again influenced 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 and Profiting Podcast. This week on YAP, I'm sharing an episode that's full of actionable advice that will literally help you become more young and profiting.

We're diving deep into how you can take control of your financial future, and I'm joined by experts Andrew Sather, David Aherne, and Rachel Pognos-Oleary. David and Andrew are the co-Oleary. David and Andrew are the co-hosts and co-founders of the Investing for Beginners podcast. Andrew is also the founder of e-investingforbeginners.com and David is a self-taught investor who is passionate about helping people learn to invest in an easy to understand way. Rachel is a certified financial planner and the author of 21st century wealth, the Millennials Guide to Achieving Financial Independence.

This episode was recorded live on Clubhouse, and we've condensed the live version so you can listen, learn, and profit even faster. In this episode, we app about how you can gain financial freedom. We'll learn the ins and outs of investing and some simple strategies to get you started. We'll also chat about the obstacles and opportunities for millennials looking to invest and tips for debt reduction. If you want to build your wealth, reduce your debt, and achieve financial independence, this is an episode you want to listen closely to. Now enjoy my conversation with David, Andrew, and Rachel. 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 listen to

this episode. So let's make it as engaging and educational as possible. And here's how it's gonna work. The first hour is gonna be a guided interview where I'm gonna 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 gonna be inviting my friends up. My podcaster friends always end up joining me on these stages as well.

So that's how it's gonna go. And just quick reminder, this is 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, top 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 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.

As you move on and become more comfortable, you can put more money in. But the key really is to get started because it is a long-term game. That's not about what you're going to do next week or what you're going to 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. Over time, 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 use 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 you're going to, 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, 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 what Rachel and Andrew were 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 as little as 10 bucks.

I think Charles Schwab offers five dollar trades. So you can buy a company 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 board 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. 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 save 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 a need for this shift in Americans to change the way that they manage and invest their money? Who wants to kick that off? I think a big, big issue is that there's a real lack of financial literacy in the U.S. 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 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. That would be useful to learn in high school before 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 overrelying 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. And now a quick break from our sponsors. Young and profitors, do you have a brilliant business idea

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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 those conversations

actually do happen with real people and it's it's kind of staggering and I just think that the financial illiteracy of the country is kind of scary. 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 before B 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. 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 the impacts that learning to use money to help you in the long run is really what it's therefore 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 going to go out and buy that Xbox, but they don't realize that when they max out their card and it takes some seven years to pay it off, they have over double for paying for that Xbox. 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. 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 you, 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. You know, I don't, 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 going to 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 know, you got to 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'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, I learned the hard way that I thought I could 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. Other than that, you know, I don't use it ever. Basically, it's it's there if I need it, but I don't use it because I know how easy it is to get wrapped up. And, well, let me just charge you here. I'll pay it at the end of the month, and I'm collecting these rewards. Yeah, the other, the other. It's dangerous to sneak up on you,

and then before you know it, you're an amethyst 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. 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. I think the biggest thing that I learned that if we can impress upon anybody and Andrew and then Rachel. I think the biggest thing that I learned that if we can impress upon anybody and 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 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 buy a piece of Apple, for example, Apple stock, you're buying a piece of that company. You are a company owner of Apple.

It's not a ticker, it's not a piece of paper, it's not some electronic symbol on your phone, on an app. You're actually owned at the business. Once you start to 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 of things that'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. If you keep working at it, you're going to start can understand it. And 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.

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.

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 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 you know 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, 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 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 gonna trade at 220 next week and then you know Can I sell it make a $20 profit and you can certainly try 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 You know, I don't want any of your stocks. They're worthless and so if 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 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, you know, because I might think Apple is a great company and somebody else might think that the iPhone is 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 understand that some companies are obviously doing very well and 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 is going to be emotional. I know it's going to 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. I definitely want to touch on your perspectives in terms of 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 planning what it means to be a stock investor and explaining 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, but by market cap. So, 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, 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 all of a certainly to do very well. 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. It can be really scary when there's market volatility. Like we saw back in March of 2020. And many times before that markets are cyclical and there is volatility.

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. And that requires, you know, kind of some emotional distance and discipline and kind of a sticking to the strategy. But that would be kind of my advice to beginners.

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app listener you can get 15% off when you go to masterclass.com slash profiting. That's masterclass.com slash profiting for 15% off an annual membership. Masterclass.com slash profiting. 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 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 now when stocks crash 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. 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 really need to have a deep understanding of why am I going to just let it, why am I going to just 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 just casino, it's not a game. It's the fact that there are businesses behind these stocks. You know, As long as I'm confident that businesses are going to continue to grow and 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 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 just kind of completely eliminates that. And it gives you that nice benefit where if you have this set amount you're putting in

every month, you're automatically going to buy more stocks when the market's down and you're automatically going to buy less stocks when the market is up because you've really said I'm going to put this amount of money So something that has been like my 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 Rance the 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 S&P 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 $1 million. 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 come down and how big that balance in your account will be if you just keep at it. Like Dave said, water dripping on a 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'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 for 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 context. 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 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 a lot of my friends who graduated in 08, in 09, 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 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. in a worse position than they did, but they're not in a good position now. I think that we should look to that and say, how did they get there and how can we end up in a better position? 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.

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 well. And the second thing is, we can learn from their mistakes.

And despite kind of starting out in the worst position, I think we can end up in a much better position. I wanna get into debt reduction and retirement. Rachel touched on both of those topics. 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,

oh, a total of 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 love 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.

Sure. I, you know, 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 people they like the apps that kind of do that kind of stuff for you. I think mince 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. 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 that's really the ballgame so if you 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 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 pay it 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 gonna 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-owned 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, you know, we all just kind of want to push aside anything that's stressful

or painful, but in the case of debt, especially, you know, 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, where, 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. 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, 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 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. All right, young and profitors, way to tune in and take the first step to improve your financial literacy. I loved this gap live with Andrew, David, and Rachel. I feel like it was so easy to understand and informative. It really makes topics like investing and getting out of debt seems so much less intimidating. And I dare say, fun.

And I think the biggest takeaway from this episode is that it's never too early or too late for you to invest in the stock market. Now is the time, no matter what age you are, it's not too late, and you better get started as soon as you can. And I know that when I first started investing, I was constantly worrying about the ups and the downs. I was constantly monitoring everything,

and it was really stressful. I would always want to wonder, like, is it time to sell, is it time to buy? And I think all of our guests agreed today that when it comes to the stock market, you've got to think long term. It's not about buying and selling. It's not day trading. It's a long term strategy to invest in the stock market. And you've got to think about how your money might grow and compound over the next 10, 20 years, not the next, you know, 10, 20 months. And remember, if you're still feeling really overwhelmed

about getting into this space, there are some simple and really risk-free approaches to investing. For example, S&P 500 index funds, they're a really great way to grow your money in a really risk-free way. I mean, if you think the American economy is gonna tank, then don't invest in an S&P 500. But if you believe that the American economy is going to tank, then don't invest in an S&P 500.

If you believe that the American economy is here to stay, then on average, the S&P 500 grows 8 to 10% a year. You're definitely going to make more money than if you put your money in a savings count. S&P 500s are really safe ways to invest your money. You also want to invest in different things that are high-risk high reward. Definitely don't just put your money in an SMB 500 because there is low-risk, low reward, which is an SMB 500. It's better than a savings account, so definitely do that. But there's high-risk high reward, and that is cryptocurrency, investing in stocks, things like that. And the other thing that I felt was really, really insightful

was this dollar cost averaging concept. So dollar cost averaging is a method used to determine when to invest your money as a long-term investor. You don't try to time the market with dollar cost averaging. Instead, you invest a set amount of money evenly throughout the year on a regular schedule. So for example, you could put aside $200 a month, and that might sound counterintuitive, because why would you invest regardless of the price of the investment?

Well, the thing is, is that the math works out over long periods of time. With dollar cost averaging, you buy both at times when the market is high, as well as when the market is low, and it forces you to get into a routine and put that money aside. And you don't have to start huge. You can allocate what you can. So even a hundred to five hundred dollars a month can really benefit you years down the road. Financial literacy is so important.

These are topics that I wanna keep covering on YAP, getting out of debt and investing in this job market are actionable things that we can do today to help us profit tomorrow. And I wanna help you improve in all aspects of your life and that includes being smart with your money. So follow along with YAHP to keep going deeper on these topics and go ahead and hit that subscribe button if you're not yet subscribed to the show.

And if you enjoyed this episode, make sure you drop us a five star review and let's keep learning and profiting together. You guys can connect with me on Twitter and Instagram at YAHP with Hala or you can find me on LinkedIn by searching my name, Hala Taha. And I wanna get to know and hear your thoughts about financial literacy, getting out of debt, and what you're doing today to profit tomorrow.

Make sure you guys hit me up in the DMs. And if you'd rather text me, you can text yeah, to 2,8, 0, 4, 6, and text me anytime. I check my text messages every single day. You can ask me anything. We're actually gonna start a new series called Ask Hala Anything. If you guys have questions about any of these shows, whether I'm interviewing someone or in a solo episode, whatever it is, text me your question. In some instances, I will even pose your question to the guest who came on the show. I will read that answer out loud in a future young and profiting episode and text you back. So again, if you want to join the text community text YAP to 28046. Thanks

so much for listening to this episode and shout out to my amazing YAP team. This is Halas signing off. Are you looking for ways to be happier, healthier, more productive and more creative? I'm Gretchen Ruben, the number one best-selling author of the Happiness Project. And every week we share ideas and practical solutions on the Happier with Gretchen Ruben podcast. My co-host and Happiness Guinea Pig is my sister Elizabeth Kraft. That's me, Elizabeth Kraft, TV writer and producer in Hollywood.

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