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Money Mastermind Show
33 minutes | 5 years ago
MMS088 - Getting The Most Out Of Your Credit Cards
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MMS086 - What Does Wealth Mean to You?
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MMS085 - How To Use Side Hustles To Increase Your Income
Are you hoping to increase your income? The good news is that you can always make more money. With the help of side hustles, you can increase your income and work toward your most important money and life goals. David Carlson, the author of Hustle Away Debt joins us to talk about the side hustles you can start today to boost the amount of money in your life. You'll learn how to turn wasted time into profits, and what it really takes to be successful if you want to make money outside your 9-to-5.
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MMS084- Rapid Debt Reduction: Can You Pay Off $50,000 in 18 Months?
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28 minutes | 5 years ago
MMS083: How To Save Money By Meal Planning
Executive Summary Are you looking to save money over time? You might be surprised at how much you can save with the right meal planning. You don’t have to spend a lot of time putting together a meal plan, either. You may not even have to clip coupons. Erin Chase from $5 Dinners joins us to share her strategies for saving money and eating healthy with the help of meal planning. Click to read full transcript EPISODE 83 [INTRODUCTION] ANNOUNCER: Welcome to the Money Mastermind Show. Let’s Talk Money. [EPISODE] [0:00:18] MM: Welcome to this week’s episode of the Money Mastermind Show. Tonight, we have Erin Chase from $5 Dinners. She’s going to talk to us about meal planning. Hi Erin, how are you? [0:00:30] EC: Hey, great. I’m so excited to talk with you all tonight. [0:00:32] MM: Yeah, it’s exciting. We’re going to learn how to save some money by planning our meals, which is something I need because I am not a big meal planner. Also here with us tonight, we have Kyle Prevost of youngandthrifty.ca, Peter Anderson from Bible Money Matters, Tom Drake from the Canadian Finance Blog and normally we also have Glen Craig here from Free from Broke, but he was unable to join us tonight and I am Miranda Marquit from Planting Money Seeds. Let’s get into it, Erin when we’re talking about planning meals, we about saving money planning meals, we think of clipping 50 cent coupons and going to the store with our fistful of coupons and maybe saving five bucks. This is not what we’re talking about right? [0:01:17] EC: No, I do not think meal planning and couponing are the same thing at all. I think of them as two completely different strategies, when it comes to saving money on groceries. So yeah, meal planning I would say just in meal planning alone if you really start to think about it and stick to it and not throwing away food and have to run back to the store and not falling into some of the traps that you just fall in as you move through the week and have to worry about meals and dinners all that. I think you can save, I don’t have any hard data on this, but I think you can save anywhere between 25 and 35% just by planning what you’re going to eat and I say that in terms of groceries. I think it would be even more if you’re lump in out for dinner or take out or drive through into your overall food. It could be like 40 maybe even 50 depending on how much you eat out and then if you’re going to transition that into more eating at home and planning your meals to eat at home. I have heard some crazy amounts of money that people spend on grocery and not out to eat. Not high cost of living area. A family of four or five, two grand a month and I’m like, “Can I come live with you for a month? And let’s undo this,” because that’s crazy. That’s a mortgage — two, three mortgage payments, right? So that’s insane and it’s a lack of planning. If you don’t plan, what is failure to plan? It’s planning to fail. That totally applies to meals and dinner. I think for me, I have four kiddos and I don’t like to think of myself as in the trenches anymore. I think like — the toddler trenches anyways, we’re kind of out of that but I still feel like I’m somewhat in the trenches because my boys, they never stop eating. They never stop, they do not stop, right? So it is a, like constant “you have to be a step ahead of them or I’m screwed”, right? I’m going to be spending way too much money on keeping them stuffed and all that. So I think for me, it’s more planning and not just to save on my groceries but also to not lose my mind. [0:03:45] MM: So what about the rest of you? Do the rest of you do any sort of meal planning at all at home? Or your partner’s doing the meal planning at home or is someone doing the meal planning at your homes? [0:03:58] TD: I got into it halfway. We went to a place here where they prepare the ingredients and you go there, you put it all together, you bring your bags home and stick them on the freezer. Just going that half distance to what Erin does is already been a big help because not only is it cheaper certainly than going out, but it’s healthier too but whenever we don’t have a meal idea ready, normally we would pick something that’s not as good like, “Let’s eat some McDonald’s.” Yeah, saving money is one perk but just having an actual healthy meal without having to actually think about it too much. Just reach into the freezer and pull our something all the better if it’s in the slow cooker, because then I barely have to put effort into cooking it. [0:04:50] MM: Yeah, that’s a good point. I am a huge fan of slow cooker meals as well. Peter or Kyle, do you have any experience with meal planning? [0:04:59] PA: No but this show comes at a good time for us because we were looking at our budget a little bit and just kind of being just shocked at how much money we were spending on food every month from eating out and buying all of these pre-prepared meals and everything else. I think was looking at the USDA said that the average family spends, for a liberal budget, spends over $15,000 a year on food and some are even spending more than that. But I think our family actually reached that last year. It was kind of eye opening for us so we are looking for some east strategies that we can use to start going down that road. I guess maybe that’s one question I have for Erin too, are there easy ways for people to get into this without going full force into it? Maybe just trying it out a few days a week or something like that? Is there something you would suggest? [0:05:53] EC: I have all kinds of ideas. Okay, so first of all just talking about finance in general, because you guys are the finance gurus, I think and this might be slightly different but I’ve read and heard like we just had it on, that groceries are the third largest discretionary expense in your budget, right? They have the mortgage, they pay a mortgage, maybe car payment or maybe a debt payment and then groceries that ring in, for an average family of four, between six to $800 a month. So that’s a big chunk of change so all this to say is that when you go and if you’re spending $15 grand a year, that’s way too much and you ultimately have control of that. We all ultimately have control over our personal finances but where I’m going with this is that grocery spending and food, you have a lot more control over than you think you do if you’re willing to put a little time and energy into it, if that makes sense? So what are those strategies, what is that time and energy look like? So I think the very first thing is let’s not get overwhelmed. I think people think, “Meal planning,” and they maybe have seen something on Pinterest or they think they need to be producing or plating meals like they do on Food Network shows and putting them all out for dinner for their toddlers who just going to take it throw them on the floor, right? No, that is silly and don’t try to do that. You’re going to overwhelm yourself so be simple, start simple. So I would suggest starting with writing down five meals that you can have this week at home. Just five, no breakfast, no lunch, don’t plan any of that just plan five dinners that you can eat at home this week. The sixth one can be the leftover, you go out twice right? If you are already going out five times a week, you’re going to flip flop that and you’re going to stay home and you’re going to just have five meals and it doesn’t matter. It could be spaghetti, tacos, spaghetti, lasagna and tacos. As long as you’re going to have those five things and you’re going to eat them that week, right? So things you know you’re going to like, things you know your family is going to like and just keep it really simple and just make this five meals, make yourself do it and you will see it will feel strange and it will feel awkward and you’ll be like, “What’s going on?” But as you force yourself and condition yourself through, this little simple, you will see the benefit. You will see that, “Oh I don’t need to run to McDonald’s because I’m just going to have spaghetti because spaghetti is easier to make.” Peanut butter and jelly sandwiches, I don’t really care. It doesn’t have to be this amazing gourmet meal or this fantastic freezer meal that you made two weeks ago that you’re pulling out of the freezer. No, five. Just keep it simple, right? and then from there, once you get comfortable with adding into that habit, you can add in more. Maybe you want to tweak up breakfast on the weekends where you’re going to make a quiche instead of having another bowl of cereal or whatever. So you can kind of expand and bring in more instead of going out for brunch at the Magnolia Pancake House, which is right down the street from us. Don’t ever going to do that by the way but we’re going to go and stay in and I’m going to make my own breakfast tacos. How hard is it to scramble eggs and put it in a tortilla with cheese and salsa, right? That’s set is easy so yeah, I would say just keep it really simple. Start with five meals and then build into that. Another thing that I like to suggest for newbies is to, and even that night be a little strange for your brain. Let’s say we don’t organize the same way but plan the same way is do theme nights. This is a way to structure to get a little more variety but structured a little more long term is to just five meals for this day. Let’s think like, “Okay for this month, every Monday night it’s going to be chicken and rice night.” So whatever variety or form of chicken and rice and then you can get a little more creative. Maybe you could do a chicken and cheesy broccoli skillet dinner one night. Then the other night you are baking, we had balsamic chicken tonight. It was baked and I just ate it with rice. So it allows you to bring in a little more variety if you are an adventurist or home chef and then Tuesday night, so taco — okay so let’s really go with the themes; Meatless Monday, Taco Tuesday, Pasta Night can be Wednesday, Chicken and rice Thursday, homemade pizza night with popcorn for movie date night, whatever. So kind of theme it out so that way it gives you a little bit more structure as you go to write things down and write out those five or six meals that you will have that week. Is that helpful? [0:10:39] PA: Yeah. [0:10:40] MM: Interesting. [0:10:41] EC: Keep it simple and theme it out. [0:10:44] PA: Theme it out. And you are talking about writing stuff down here. I assume it’s pretty important to you writing everything down on some sort of a calendar or something and then you’re using that in order to come up with a grocery list is that fair? [0:10:56] EC: Oh yeah, this is just the meal planning. We haven’t even gotten to the money saving strategies or list writing strategies. That’s a whole other conversation but yeah, so first it’s just writing it down, yes whether that’s putting it into your Google calendar at 6 PM every day, that’s your dinner spot and you just put whatever you’ll need that day. If you are a digital person, it can be a planner app or I’m a pencil and paper girl so I write it down on my big old paper blog work calendar, it’s all one so I have it written there every day and that I think is really helpful writing it down. If I don’t do it like post it on the fridge, my kids aren’t super picky like, “Mom, what’s for dinner? What’s for dinner?” They don’t really do that which is kind of nice. But if you do have kids that are always asking you or they’re maybe complaining about what they’re going to have for dinner, write it in a place where they can see it. So on your fridge, on a chalkboard, posted on like a bulletin board or whatever near your kitchen and they can see and if they don’t like what they see, tell them to do it. My eight year old could plan meals, she can tell me what she wants to eat right? My six year old probably could too. Thankfully, I don’t have picky eaters, but if you do, having them do the meal planning and maybe even making a meal would be helpful and they’re maybe picky at eating but that again is another whole other conversation. So okay, write them down and then from there, I would double check the ads first. I make my meal plans based on what’s on sale, right? Generally the meat and produce, so chicken breast and the pork tenderloin is on sale. I’ll probably plan two chicken meals, maybe one pork roast and I’ll go to spice up chops and the save them for next week. Probably get a couple of extra packages of chicken for the next couple of weeks so that I don’t have to pay full price for chicken, right? I only have one main grocery here. So it’s hard to play store sale cycles off of each other. I have to be a little more strict with my meat but anyways, so plan your meals based on what’s on sale if you really want to see the differences, especially at meat because if you’re paying, okay let’s just do rough math. You guys are math nerds I think. Can say that without offending everybody? Okay, so let’s say that you’re buying meat across the board, $5 a pound, right? And let’s say that you need to eat eight pounds a week maybe that’s high, maybe that’s low, whatever. That’s $40 a week just on meat. Well what if you, instead of paying that $5 a pound, what if you happen to pay $1.99 to $2.99 on a pound for — what did I say? Eight pounds? Do that math. [0:13:46] KP: You are saving about $1,000 bucks a year. [0:13:48] EC: Thank you, see you guys are math nerds. I should be writing these down because I’m like thinking faster than I’m talking. I’m like, “Well, what did I just say?” Okay, so yeah how much is that? Just right there, shopping the sales alone and those are very rough, sale price to regular price is probably even higher than that in certain areas. What did you say a thousand? [0:14:08] KP: Oh well, $250 if you’re cutting there in half, you’re a little bit a thousand a year. [0:14:11] EC: There you go, just that right there, just planning your meals on what you’re saving on groceries, we just went from $15 grand to $14 grand and that’s one change that you made in what you’re shopping, right? So it’s planning based on what’s on sale and part of it is to keep stocking up so you don’t have to pay the full meat price especially in between the sales cycles. Does that make sense? And then from there yeah, you made a solid shopping list. You need to write everything down. That is probably my number two or three tip for grocery shopping in general is do not walk into the grocery store with half written grocery list on the back of an envelope that you just got out of a mail box. Don’t do it. It’s not effective. You’re going to miss stuff, you’ll end up back in stores, spending more money than you needed to or you’re going to buy stuff that you already had in your pantry because you were in a rush and ends up throwing stuff in your cart. So if you can be disciplined and take that extra eight, ten minutes maybe to write out that full list based on your meal plan, you will save yourself a lot of money as well. [0:15:18] PA: I found something on your site today actually that was extremely helpful. My wife and I are always running out these grocery list and we can never get the grocery list in the right order. We always forget things and we add it to the end of the list and we end up running back and forth across the store. But I found one of your list on your site today. I think it was even free on there as far as a grocery list maker based on department or whatever which is extremely helpful. I mean I actually downloaded it already and I’m going to start using that I think. [0:15:45] EC: Oh good. Yeah, we have all kinds of free plannables for meal plans. I have one that’s really awesome that helps going back to that really simple idea. On the right of the paper — I’m trying to mirror myself here — on the right of the paper it’s just seven days for your dinner and if you want to draw up breakfast and snacks on the tray, you write down on the side and then your main shopping list is the full one and then there’s a spot for your budget. How much you’re wanting to spend, how much you actually spend. That one is really cool as well but yeah, I just write my own shopping list starting with produce at the top and then I just write it out and I’ll just leave space so that I can add something to it but yeah, I’m glad you found that. That will be really helpful. [0:16:36] PA: So what’s your whole process then for doing this every week? Do you do it all starting on Sunday, you get the newspaper ads and just kind of go from there? [0:16:46] EC: Yeah, I usually do it Sunday. Sometimes I do it Saturday nights because I had a party on Saturday nights. I usually do it Sunday and sometimes Monday morning if we were out of town or something, but first thing is getting out my new plan paper, the ads and I usually have paper ads because I get them in the mail. Seeing that everyone is a little bit different, you can get them online, you can get them e-mailed to you, you can get them in the newspaper usually but we get them in the mail and so I put out my meal plan page and most of the time I use that one that I just described with the meal plan on the side and then the shopping list and so I check the ads, make sure I am not missing anything I need to stock up on meat wise especially but other things as well, pasta if it’s on sale. So I will do the meal plan and the list based on the ads and then I will go and see if there are any coupons for those particular things that I need so I could stack that additional savings later onto my other well planned list, well planned out meal plan and great shopping list ‘cause then I can stack the coupons onto that. I think when you do those three things together, you see all of these like, “Cut your grocery bills in half and save 50%,” or whatever, that’s how you do that. You have to stack all those layers together so that you really start to see those big discounts and the big savings. [0:18:12] MM: So let’s talk about freezing meals a little bit. I know that Tom had talked about it a little bit but you do that a lot too, right? Just freeze some meals or freeze portions? [0:18:26] EC: Yes, my freezer cooking meal plans is almost broke the Internet, last year. So we do a lot — no I’m not kidding. We do a lot of that — not really but maybe? We do a lot of that and the way that I generally do it is warehouse shopping so I buy in bulk and then it becomes this mix and match game of the big packs of chicken, the big giant thing of six pounds of ground beef like what the heck do you do with that right? The pork chops come in huge things. You can usually get three meals out of one tray of pork chops, so what do you do with that? So that’s what ended up being so crazy on our dinners because I put together these sets of recipes that use up all of those things, the ingredients that you buy in bulk. Eight cans of tomatoes, eight cans of black beans, you don’t want to use two and sit in there for six months. So how do you use all of that up or most of it? We don’t use all up perfectly but so I set up some recipes that will go through in that bulk. At this point, I feel like I can just set up like 20 baggies and just literally start opening stuff like this and it will all be fine. That’s the beauty of these recipes that these plans use is that they’re very forgiving and mix and match kind of style. So I’m not kidding. Maybe I do that sometimes? Maybe I should Periscope that and see what kind of crazy meals we end up with like just randomly throwing things at the bag but it’s super, super effective on both sides. As Tom already mentioned, right? The front side is you spend two hours and you’ll get 20 meals into your freezer. There’s hardly any cooking involved in that. You are literary putting chicken breast in the bag. You do need to brown the ground beef if you’re going to use ground beef, put pork chops in the bag, put roast in the bag and then you just add marinades and veggies and sauces or whatever and you put them in your freezer. It’s so fast to do. And then on the flip side, on the “Oh my gosh, let’s not go to McDonald’s today. I like home instead,” it saves you time, sanity and you’re not hitting up the drive through. That’s what I think is so effective about freezer cooking is both sides. You can get a lot done in a short amount of time and then you don’t have to worry about what you’re going to eat on those crazy afternoons or whatever. [0:21:09] MM: So one of the things I have started doing and it’s not really meal planning-meal planning because I am making somebody else do it but I started using Blue Apron. [0:21:18] EC: Oh yeah. [0:21:19] MM: Because then I don’t have to plan my meals and I don’t even have to go to the store half the time. It all just kind of comes to my door and that’s one way for me. [0:21:27] PA: What is Blue Apron? I’m sorry I don’t know. [0:21:31] PA: So it’s a service where you pay and they send you all the ingredients for meals plus the recipe and you just cook it yourself at home using the recipe and they just send you whatever the plan is for that week but it’s not going to save you much money. It’s kind of expensive. It's not cheap. [0:21:48] EC: Yeah, it’s not cheap but it is very convenient. Yeah, okay I may ask you something. I know you all feel this idea because I know you are all food blogger wanabees. So I have a hack to that, that wouldn’t be any more expensive but there’s problems to the hack. So my hack would be to create a meal plan based on Amazon’s prime pantry. So all of the shelf stable stuff gift sent to you or you add those things, ideally I would have it pre-loaded in Amazon. Literally, I would fill up the box like 80% and you can add a few more things that you would like, that would save you way more and then you would obviously have to either be a vegetarian meal or you would have to go by the produce and I would tell you, if you’re going to do this, these are the things you get from pride pantry into your interior prime pantry box. And then you need to buy eight pounds of chicken and two pounds of ground beef, a thing of carrots and a thing of celery and two onions. You would have to go buy produce because Amazon’s not gonna send you produce although I wouldn’t and if this is clear for a business model sits around, I wouldn’t be surprised if Amazon picked up on it. They already have Fresh but I don’t think it’s really taken off because it hasn’t expanded like I was thinking it might. But Blue Apron and Amazon Fresh, if they got together and had a kid, that could be really cool, so yeah. Any who, I thought about doing that I just haven’t gotten around to doing it yet. That would be my savings hack to that where it could be mostly done and mostly delivered to you and then you just have to grab like six to eight things in the grocery store. [0:23:38] MM: Yeah and if you have a service like PeaPod nearby that will bring you your produce or whatever that works as well but yeah, I go to the store. I may have to get my lunch stuff because clearly Blue Apron isn’t sending me my lunch stuff but I get that stuff at the store but I only spend 15 to 20 minutes at the store now because I am just running in and getting a few things because I get milk delivery and everything from the dairy. So I really think it depends on your style. We haven’t heard much from you Kyle. What’s your style with meal planning? [0:24:15] KP: I should probably use this time to just thank my brilliant and gorgeous wife for all her many talents one of the many is meal planning and we live obviously rurally as I stated on the show before. So I guess meal planning has become a part of my life because it had to be in a lot of ways or there’s not really a ton of fancy eating out options or even fast food options at all where we live. So Erin’s whole bulk of examples, I was paying particular attention to there, and maybe I can cook with my wife. Start slow or at least give her the URL for Erin’s site or give her her Pinterest page even though that’s a major thing. But that’s why I’m not contributing a lot simply because I have no expertise to add and I am an avid listener at this point. [0:25:11] EC: No, I think you and your wife need to get together and do what I just described. Lay out like 20 bags and literary just start to throwing stuff in. [0:25:19] KP: Shown. [0:25:20] EC: She’s already meal planning, she’s already a good cook, she’ll be able to handle that I know it, so I want to hear how that goes for you. [0:25:27] MM: Well I think that we’ve managed to get it pretty covered pretty well on this episode, we’d like to do a final word here. So we’ll go around and do the final word and we’ll end up with Erin at the end and she can tell us a little bit more about what she does but let’s go ahead and start with you Kyle, it’s your last word in here. [0:25:48] KP: So, I guess building on what Tom said earlier on the episode, any meal more or less that you eat at home, you have to try very, very hard to probably cook a meal at home and probably spend the equal amount of money and get the equivalent on the high calories that you get if you eat out. So probably starting almost anywhere cooking at home is probably better than eating out as much as you do unless you make a very, very serious effort to eat cheap and going to eat out which most people don’t. [0:26:14] MM: And what about you Peter, what’s your final word? [0:26:18] PA: My final word is don’t be like our family and spend thousands and thousands of dollars. We could probably bought a rental house by now, if we’ve been doing a little bit better eating out and all that kind of stuff. So I’m going to try to put together some of these ideas here especially maybe some of these freezer meals, it sounds like a great idea to just get together and spend a couple of hours on Sunday and put together a bunch of meals for the next couple of weeks. I think that being that we don’t like to spend a lot of time cooking and all that kind of stuff, I think doing it all in one big chunk like that is a great idea. [0:26:54] MM: Okay, what about you Tom, what’s your final word? [0:26:55] TD: On the show a few times, we’ve advocated for things like budgeting and financial planning and I think this is the same. If you’re planning and preparing, you’re going to find those opportunities to save money and in this case, eat healthier as well. [0:27:10] MM: Great and Erin, what is your final word? [0:27:14] EC: Yeah, I totally want to tag onto that. You have to be strategic. I still am like that. So my husband likes key lime flavored Jovanni yogurt, that’s what he likes so I buy it right? And I didn’t even realized that there was a store brand that tastes virtually identical. He didn’t complained when I bought it but it’s a $1.40 less. Hello? I mean and I am buying that every week and I obviously use the coupons for that but there are no coupons often for that brand but still, that’s a big difference, right? But all those little things that you’ve got to go looking for now. If you do, you’ll unearth quite a bit of savings. So I’m tagging onto that one. [0:28:08] MM: Awesome. All right Erin, why don’t you tell us where our audience can find you? [0:28:14] EC: You can find me in a bunch of places but the main, can I say four? [0:28:18] MM: Sure, go for it. [0:28:20] EC: Okay, so the main website is 5DollarDinners.com and then I have 5DollarMealPlan.com where we do the meal planning for you and I have a course, The Grocery Budget Makeover, where we talk a lot about what we just talked about and then more in depth than that and I also just, like three weeks ago, launched a freezer cooking only meal planning website and that is called FreezeEasy.com and so yeah, I’m super into freezer cooking right now. We have a lot of exciting things planned for Freeze Easy. [0:28:52] MM: Awesome, very cool. Well thank you so much for joining us tonight. If you’re listening, go out and check out Erin’s site, some great resources on learning how to plan your meals and do it with saving money and be sure to check out Moneymastermindshow.com, go ahead and subscribe to us on iTunes and Stitcher and until next week, be good with your money. ANNOUNCER: Thanks for joining us on the Money Mastermind Show, get more information at Moneymastermindshow.com. Don’t forget to subscribe to the show on iTunes and YouTube and follow us on Google Plus. [END] Important issues discussed in this episode: Do you have to clip coupons to save money on food? Simple strategies for meal planning. How to coordinate your schedule to work with saving money on meal planning. Ways to plan way ahead, including creating freezer meals. Tips for finding simple meals that your whole family will love. Panelists In This Episode: Erin Chase | $5 Dinners Glen Craig | Free From Broke Kyle Prevost | Young and Thrifty Miranda Marquit | Planting Money Seeds Peter Anderson | Bible Money Matters Tom Drake | MapleMoney For a quick bio of each of our show participants, head on over to our panelist page. Follow Us Join us around the interwebs for more money-related goodness! Twitter: https://twitter.com/MoneyMstrmind Facebook: https://facebook.com/MoneyMastermindShow/ Google +: https://plus.google.com/+MoneyMastermindShow/ YouTube: https://www.youtube.com/user/moneymastermindshow MMS083: How To Save Money By Meal Planning appeared first on Money Mastermind Show.
27 minutes | 5 years ago
MMS082: What Do Millennials Need To Know About Money?
Executive Summary A lot has been said about millennials and how they handle money. In this episode, the crew talks about what millennials need to know about money today. Drawing from some of our own mistakes with money, we talk about ways that the following generation can avoid falling into the same traps. We may not always agree with the way millennials handle money. But we sure have opinions about what they should be doing. What do you think millennials need to know about money? And what are some of the tools millennials can use in order to make their lives better? Let us know what you think. Click to read full transcript EPISODE 82 [INTRODUCTION] ANNOUNCER: Welcome to the Money Mastermind Show. Let’s Talk Money. [EPISODE] [0:00:18.5]MM: Welcome to this week’s episode of The Money Mastermind Show. Today, we will be talking about millennial and the state of their finances and what you need to know about money, whether you’re a millennial or even whether you’re a Gen X’er or a baby boomer. Today, we have the Money Mastermind Show Panelist, we have Kyle Prevost from Young and Thrifty.ca, we have Peter Anderson from Bible Money Matters, and we have Tom Drake from the Canadian finance blog. Glen Craig from Free from Broke is not with us today and I am Miranda Marquit from Planting Money Seeds. I will be filling in as moderator, so let’s see how this goes shall we? Okay, one of the more interesting items that have come across here in recent days is that there was a study done from Price Waterhouse Cooper and they surveyed 5,500 people between the ages of 23 and 35 about their financial, their personal finance knowledge, the state of their savings and the state of their debt and their overall satisfaction with their financial lives. What they found out was that Millennial are not happy with where they stand with their money. According to a Forbes article about this subject, it says, “Millennials owe a lot and they know too little.” She said that Millennials also struggle with debt and that may eventually become our problem and I think one of the biggest debt problems is probably student loans. But here are some of the stats from the survey: it says 50% of those survey said they couldn’t come up with $2,000 if an unexpected need arose and 54% were worried about their ability to repay their student loans. So I thought that was a good place to start, let’s start with debt and let’s start with savings. Tom, let’s start with you today and what do you think is probably one of the biggest reasons that millennials are having this problem? [0:02:27.8] TD: Well the interesting thing about debt though, is it really just millennials or is it everybody? Know this study is only focused on certain age but I think debt’s probably become a bit of a problem and I know here in Canada the percentage or the dollar amount of debt that people are in has been rising quite a bit. I don’t know if it’s necessarily the millennial problem or maybe for just picking on them a little bit? [0:02:53.7] MM: That’s a good point, who among us has not been in debt? What about you Peter? What do you think about this new survey? [0:03:04.1] PA: Well, I think it is student loans, I think that’s one of the bigger issues that they’re dealing with. They come out of college with, I forget what the average was, with 25 or $30,000 worth of student loan debt just to get started. You go from there, I was reading another study, it said, millennial generation has a larger delinquency rate on their bills compared to all our age groups. Really, that just speaks to the fact that they are in debt and they’re having a hard time paying those bills. [0:03:39.2] MM: One of the things that I find interesting about that delinquency number though is, how many of them have practiced paying their bills and understand what they need to do because I know somebody personally in my life who was like, “Well, I’ve secured an apartment and I’ve secured this apartment in December but I’m not going to be there for December because I’m going to be home for Christmas. So I don’t actually need to pay for my apartment until January because I’m not living there.” Yeah, think about that for a minute, I’m like, “No, no, no. It’s your apartment, even if you’re not there, you still have to pay rent.” I wonder how much of that delinquency it is a little bit not practice paying for these things. I don’t know. What about you Kyle, what do you see, I know that you’re a teacher, what are you kind of seeing with these trends? [0:04:37.4] KP: I think just, and as a teacher I’m bias of course, but I think it’s overall just a complete lack of education. I think that’s not necessarily unique to millennials, I just think it bites millennials harder because the post-secondary stakes are higher, the buying the first home at least in Canada at this point is higher stakes as well. These initial financial decisions are just maybe we were all dumb when we were 17, 18, 19, 20, but they just have more severe repercussions now maybe. The job market is pretty bad, I’ve heard different variations of how to measure job market and that it was worse in such a time and I don’t want to get in to comparing generations because I’ve heard too much of that lately but suffice to say that at least again in Canada right now, the job market for youth is bad. It’s bad for a lot of people with post-secondary credentials. [0:05:35.8] MM: I don’t’ know Kyle, I mean I think you’re the only millennial here, I think the rest of us are Gen X [0:05:41.8] KP: Three on one here. [0:05:43.7] MM: Maybe we need to gang up on you a little bit. [0:05:46.9]PA: I kind of wonder how much of it is, they don’t have the education in order to make the right decisions. Compounded by the fact of the time we’re living in, a lot of them grownups, seeing their parents lose their homes to foreclosure and the market’s dropping and tanking and people losing their retirement accounts and so forth. Once — Wells Fargo showed that millennials show that 45% of them were not even saving for retirement at all. The ones that are saving, I think I mentioned this in another episode, but ones that were saving, a lot of them were saving it, their money, in fixed income and cash type investments as supposed to maybe what they should be in stocks and in more long term investments. So it kind of seem like they’re a little gun shy, compounded by the fact that maybe they don’t have the right education or be making the right decisions. [0:06:44.8] MM: I think you made a good point. All of us kind of messes together. You’ve got these high student loan debt rates because across the college has been sky rocketing recently. I mean I remember when I graduated from college and the average amount of debt at that time for a student loan debt was right around $15,000. It’s almost doubled since then and it’s only been, oh never mind. It’s been a while, but it’s only been like 11 years since I graduated from college and already that average number is much higher than it was before. I think that that kind of it, combines with, like you said, they’re gun shy, it’s a very tough time I think to be coming out because you’ve immersed in media, they’re constantly consuming this news about, “Oh my gosh, the stock market dropped.” We all know that nobody pays attention to the so called stock market except for the DOWE and that’s not even representative and just sort of compound. But one of the things I found interesting was, the study indicates that millennials have a retirement account in about the same number as American brokers who are automatically enrolled and were to place savings accounts. Some of them have been taking hardship withdrawals from their retirement accounts. While we’re talking about investing, what is one of the biggest problems about taking that withdrawal? You think you need the money. Tom, what do you think about that? [0:08:27.4] TD: I did something, I’ll call it similar, but it’s actually better. In Canada I was able to take money out for the home buyer’s plan, the RRSP and in my case it’s something that’s a little less frowned upon but you’re still taking money out that you could be earning, that kind of opportunity cost of when you pull money out. At least in my case you can put it back, I’m not sure about how you're talking about works but can you put the money back? [0:08:56.2]MM: Yeah, yeah. Well you can, you can take a loan and if you take a loan you have to pay it back and you pay interest back into it but if you take an early withdrawal, that’s different, you have to pay taxes on it. [0:09:09.3]PA: Taxes and penalties. [0:09:10.9] MM: Yup. [0:09:11.9] TD: Yeah, here in Canada with RSP, you lose the contribution room if that were the case. What I did at least, it was something I can pay back in to without losing that contribution room but the opportunity cost for sure, it’s kind of a missed. [0:09:26.4] MM: What are some of the other issues though that any of you might see when it comes to, not just millennials, I know we’re kind of picking on Kyle and his generation a little bit but what are some of the other issues that maybe we see in money, whether they’re in their 20’s or their 30’s. [0:09:47.4] KP: I think compounding further, the gun shyness on the investing front is the severe distrust in institutions, it seems to be like one of the defining characteristics of the millennial, and by the way, it’s not an illogical position frankly when you see what’s going on in both the American major institutions and some of the Canadian institutions as well. I don’t think that’s an illogical position to lose trust in some of those former touch stones. That being said, it doesn’t manifest itself well when talking about banking. If you don’t trust then there’s no reason to save for retirement, you're not trusting that this major banks or institutions will sort of take care of your savings and grow your savings and you have no trust in sort of the way that you traditionally manage things. Then you never engage with it, it’s easier to just push it to the back burner, take early returns from your retirement account because who cares if you get taxed on them, you’re not earning enough to pay taxes anyway in many cases. It just becomes very easy sort of logical loop to fall in to of sort of defeatism and non-trust and it can sort of rapidly lead to this weird open letter war that we are talking about before the show that maybe Miranda you can give us some background on what I’m talking about here. I’ll just start swearing soon. [0:11:09.5] MM: We could use a little more swearing actually — no I’m kidding. [0:11:12.6]PA: No. [0:11:13.9] MM: Someone has to edit that out. [0:11:14.8]PA: I have to edit that out, please no. [0:11:18.8] MM: I just remember, there was yeah, somebody wrote an open letter to her CEO about — I can’t remember what, I thought it was stupid that I thought all the responses were like you, like all the responses were stupid and I said, “I don’t have time for this anymore.” But yeah, let’s see, why don’t you tell us about it Kyle? [0:11:43.2] KP: Yeah well essentially, this girl thought that her boss had done her wrong and wasn’t good and so then she was fired for non-related reasons apparently, soon after which, “Hello, yeah you were, of course you were, what did you think was going to happen to that point?” This other millennial comes on and takes her on and they both get a ton of followers on social media, I’m sure it worked out great for both of their freelance writing careers and maybe I should start writing open letters, I don’t know. Anyhow, all of a sudden now I see popping up every bloggers got their own take on this and there’s a martyrdom complex and my general impression is, there’s really nothing substantial to be gained from either belly aching about the fact that you seem to lack experiences or sort of condemning that. I just don’t understand the motivation behind either of this, I don’t feel like successful people are doing either of these things. And yeah, I don’t feel like it behooves millennials to sit there and say, “Well we’re obviously the first generation that works this hard for this amount of money, here’s a cherry picked stat to support what I’m trying to say.” It sure doesn’t behoove other people to be like, “Well, here’s four cherry picked stats that show you’re full of it and by the way I made it on nothing. I lived on minus $5 for the first three years of my life and look at me now.” I don’t understand this whole back and forth and I feel like it’s really unproductive and I’ve really seen a lot of minds changed on Facebook. I see it all the time that people change their minds, they go on there, no one has ever changed their mind on social media. I’m fairly certain of this, whether it’s politics or who is more hard done by, no one, I have yet to see anyone be like, “Oh good point. I’ve completely changed my mind now.” [0:13:40.1] PA: I kind of wonder how much this too is the unreasonable expectations that a lot of millennials come out of school with. They’ve been promised the world by their schools that they’re going to, they have to justify these huge student loans that they’re taking out or that they’re giving to this kids and so they promise them a world and, “You’re going to be making a lot of money.” They come out with this unreasonable expectations of what they’re going to be starting out at. They come out with 30 or $40,000 worth of debt and they decide, “I’m going to work at an expensive city, I’m going to work at San Francisco at a starting salary of $30,000 a year or something,” and you just can’t live on that, this unreasonable expectations of what they’re going to be doing. It’s kind of a compounded thing, there’s blame to go around to the institutions, ‘cause students themselves are having this unreasonable and crazy expectations of what they’re going to see in the job market and yeah, it’s just kind of a snowball effect. [0:14:44.5] KP: I think social media is contributed to that too Peter. Because I’ve read a lot on sort of the mentality and psychology behind it, we tend to all post what we’re like most proud of or sort of the persona that we want to project on social media often. Then the keeping up with the Jones factor, I imagine it gets like exponentially raised when you can always see, “Oh my goodness, look at the engagement ring that they got.” Now there’s pressure, everyone knows now how big the engagement is right? Or, “Man, look at the house they just got, that’s a beautiful house,” and everyone’s got housing envy. I feel like that’s always been there to some degree obviously, the phrase predates Facebook and Twitter but I think it’s made it worse. I don’t know, everything I’ve read seems to be in that direction. [0:15:30.1]PA: It’s part of the “everybody gets a trophy generation”, everybody wants to have it and have it now. Whether they deserve it or not. [0:15:39.3] MM: Well and one of the things I found interesting with this story was not only did she — she’s complaining about, “Well, I’m not making enough money to pay for housing and food and everything else in San Francisco,” which is a really expensive city and it is very hard to get by. Then she posted her donation stuff because, “I’m having a hard time, now come donate to my cause.” There was that aspect of it too. That’s the thing. There are some days that I’m just sitting here and going, “What am I doing? Maybe I should just…” [0:16:16.8]PA: It goes back to this idea too of nobody wants to sacrifice anything they get ached these days, they want everything handed to them. I kind of remember hearing about this story and they were going through this girl’s instagram or something along this lines. Here she is, living in this apartment that was $2,000 a month or something. Her starting salary it was like $3,200 a month and then she’s eating out sushi every other night and she’s doing all these expensive things. She wants to live the lifestyle but she doesn’t want to have to pay for it basically. [0:16:52.3] KP: Well and here’s the thing I didn’t understand and truthfully I don’t understand about whether you’re talking about San Francisco or Vancouver is okay, so she’s got a side gig as a freelance writer and again now I’m piling on picking on this poor girl. Let’s hypothetically, you’re a freelance writer since we have a few of those in our line of work. Miranda, your lifestyle as a freelance writer, I’m going to go out on a limb here and say it would be a little bit crammed if you moved into the middle of San Francisco and started paying for a loft apartment and wanting to live life, and frankly you don’t need to live in San Francisco to do your job right? [0:17:29.2] MM: No, and that’s actually kind of a funny story because I really like living in Philly and living an hour train ride from New York city and it made me happy to live there. When I got the divorce, when my husband asked for the divorce, I looked at the situation and I said, “Well one, I need support, I need my family support and two, I will be better able to care for my son if I move back to Idaho Falls and have half the costs.” And so that’s what… [0:18:02.6] KP: Philly isn’t San Francisco. [0:18:04.7] MM: No. My rent is exactly half what I was paying before and the house that I live in is almost twice the size of the apartment I had before. And so I’m paying half the price and I have twice the space for my rent. My food costs are lower and my transportation costs are lower and my power costs are lower. So yeah, that’s one of the interesting things is you kind of have this weird conflict because on the one hand, you do have quite a few millennials who are minimalists and they are frugal and you can see that they’re — you know, look at you Kyle. And you can see that they’re not spending but on the other hand you have others who are different I guess, I don’t know? [0:18:59.0] KP: Yeah, I mean like Peter said, there’s a sacrifice that has to be made at some point. Very few people can have it all right away and then if you can have it all right away, you’re probably are working a job that’s 80 or 90 hours a week and then you don’t have it all. A lot of these folks like yeah, they’re thriving downtowns in San Francisco. I’m sure it’s a great fun place to be, I’m sure downtown Vancouver is gorgeous and it’s a fun place to be but like I truthfully, I don’t understand the premise of, “I need to live right here. Oh my god my rent’s too high to live.” I don’t know, I guess it’s because I’ve always lived outside the mainstream so I have a completely skewed view and they probably think I’m insane living like a caveman I suppose. There is a world outside of these sort of meccas of hipsterdom that does exit, there’s great way to be had and even if they’re moderately just to be had, there’s a great standards of living to be had. I think that’s overlooked a lot. So I know that I’ve revisited this point a few times on a couple of shows but looking outside of these sort of down town, very millennial fun lifestyles can really help you build for that future, whatever you want that future to be, it can really help I think. [0:20:24.2] MM: So what are some things then — let’s move away from bagging on the millennials all the time and… [0:20:31.5]PA: Oh but it’s so much fun. [0:20:33.1] MM: I know right? It helps us ignore the own problems with us Gen X’ers right? The slacker generation. [0:20:42.3] KP: I need to point out, guess what? The millennials didn’t raise themselves or maybe they did and that’s the problem, but someone is responsible for those guys, they didn’t just fully develop into 20 year old people that were obsessed with sushi and $2,000 rentals. That came about, someone projected that onto them. [0:21:02.0] MM: Are you telling me that Gen X’ers are bad parents? [0:21:07.2] KP: I don’t know if “bad” is the word? Mad that your kid didn’t get a trophy, what did you think was going to happen there young baby boomer, old gen X’er, like hello? That one’s going to have repercussions. [0:21:22.2] MM: Let’s shift gears a little bit. What can you do to improve your money situation? Tom, what is the first thing that you think millennials ought to be doing to improve their financial situations? [0:21:32.9] TD: Well one thing I actually read today, like just came out today that’s kind of a good sign is that millennials are increasingly turning to things like Betterment and Wealthfront or here, Wealthsimple. They’re turning to the robo-investors and it’s a good sign that partly because they don’t trust the big banks and everything like Kyle said earlier but also they’re just more tech savvy anyways. So something like a robo-advisor is a perfect fit for them. Certainly if they don’t want to even deal with that kind of stuff then it really is a good fit and they are turning there, there is some hope, it’s not that they may not trust the big banks and everything but it’s not that they’re completely oblivious, they are catching on. [0:22:23.6] MM: Yeah, for sure. One of the things that’s great about these new kind of robo-advisors and new investment opportunities is the thermal cost and you don’t need a lot of money to start. You can invest with your first job, you can get started investing and that’s one of the nice things about them. What about you Peter, what do you think something that millennials can do or really anyone honestly can do to start improving our finances? [0:22:53.0]PA: One thing they can do is just start cracking away at that debt as fast as they can. It seems like that’s really one of the big issues that’s kind of holding millennials and everybody else back these days. In the past decade, this student loan indebtedness has gone up by 85% or something. Really, start even before you get to that point and think about maybe trying to pay for your education in a different way or paying for it as you go or something along those lines. Once you get out of college, just start working on that debt as fast as you can, get it paid off as fast as you can. Otherwise it’s going to be an anchor that’s just holding you back. [0:23:35.3] MM: Yeah, that’s one of the depressing things about the student loan debt is they’ve done the studies, say that people are putting off buying homes because of their student loan debts, they’re putting off marriage, they’re putting off children, they’re putting off things that you know, not everybody wants these things but people who do want them are putting them off because they feel like they can’t afford them because of all of that student debt. I know in the past, I’ve been like, “Oh well, I’m not worried about my student debt and I’m not paying off my student debt fast,” but I was able to consolidate my student debt at a 1.9% interest rate. That’s not really an option for most of the kids getting out of school right now. The interest rates are much higher now than they were when I got off school. That’s a big deal. What do you think Kyle, what do you think is something that millennials should be doing to improve their finances? [0:24:29.3] KP: I think millennials really need to leverage their tech savvy and just their comfort level with the Internet and just read. I’m going to name drop here a little bit. I was at a conference in Canada here and I got a chance to talk to David Chilton who wrote The Wealthy Barber which I think even got some traction in the US as well as Canada. I said, “If you had one piece of advice for my students Mr. Chilton what would it be?” He said, “Just to read, read,” which is of course my students weren’t really too keen on following that advice. But suffice to say, there is more great information out there than at any point in human history and it’s so easily accessible. I know that we all have a lot of demands on our time, you can spare a couple of hours every once in a blue moon to catch up and benefit from reading, learning from other people’s mistakes, learning from other people’s reading. You can read their summaries of books if you want and get 70% of the good information. I hate advocating for that as a teacher but I really think that’s so key that there’s just so much good stuff out there and if you put in a little bit of time, man you can see a massive benefit. [0:25:38.2] MM: Yeah, that’s a very good point and I think too, the knowing your information and reading and getting to know that stuff can actually help you feel more confident in your money decisions. I think there is, especially when it comes to investing, we’re always talking about how important it is to invest. I think when we’re talking about investing, confidence is a real, real issue. So yeah. So I think we’re about ready to wrap up here and we go around and we do our final word and let’s go ahead and do that now, let’s start with you Peter, what is your final word on millennials and money? [0:26:23.3]PA: Well, final word is this: Millennials they don’t have everything going against them, they do have things going, not as many of them have credit cards as some of the other generations do. I think study in bank rate that 60% of millennials don’t even have a credit card at this point. Part of that maybe because they’re less trustful of big banks and stuff like that. What they can do is harness that credit adverse nature and use it to their advantage and pay off their debts. Do your best to not try to live in the moment and spend money at everything that comes your way because we’re in such a consumer culture this days, it’s so hard to get away from that. Have some sacrifice, don’t do everything, don’t spend money on everything, do some sacrifice and think about your future. [0:27:19.4] MM: Okay, and what about you Tom? What is your final word? [0:27:23.2] TD: Well here in Canada I see a lot of bad things coming, the real estate is starting to go down, employment rate’s getting worse. Whether it’s advice to millennials or maybe to everybody, if you have high debt, that’s certainly something you should take care of first. Certainly don’t feel entitled to your job because it could be gone the next day. Just take care of your money, get that debt down and be prepared because yeah, it might get a little rocky here in Canada for the next few years. [0:27:53.4] MM: What about you Kyle, what’s your final word? [0:27:56.1] KP: I’m going to strike a might blow back on behalf of the millennials here and say, statistically speaking, what you should do is look at what your parents did and if you do the opposite, more often than not, you should probably be okay. So if they bought a large house, buy the small house, if they got a new car and leased it or they bought a new one every five years which they statistically probably did, do the opposite of that. And if you just do the opposite, most of you will probably be better off. [0:28:22.3] MM: Great point. All right, well thank you for joining us today on The Money Mastermind Show, you can check us out at moneymastermindshow.com. Don’t forget to go ahead and subscribe to us on iTunes and Stitcher and tweet at us, send us a question, whatever and we’ll try and pay attention to it and maybe answer it someday. But yeah, so go ahead and check us out, we also have a Facebook page and until next week, be good with your money. ANNOUNCER: Thanks for joining us on the Money Mastermind Show, get more information at Moneymastermindshow.com. Don’t forget to subscribe to the show on iTunes and YouTube and follow us on Google Plus. [END] Important issues discussed in this episode: What are some of the money millennial trends? Are there some general mistakes that millennials are making with their money? Mistakes we made when we were younger. How millennials can change their habits to make a difference in their long-term finances. The good and bad of millennials with money. Panelists In This Episode: Glen Craig | Free From Broke Kyle Prevost | Young and Thrifty Miranda Marquit | Planting Money Seeds Peter Anderson | Bible Money Matters Tom Drake | MapleMoney For a quick bio of each of our show participants, head on over to our panelist page. Follow Us Join us around the interwebs for more money-related goodness! Twitter: https://twitter.com/MoneyMstrmind Facebook: https://facebook.com/MoneyMastermindShow/ Google +: https://plus.google.com/+MoneyMastermindShow/ YouTube: https://www.youtube.com/user/moneymastermindshow MMS082: What Do Millennials Need To Know About Money? appeared first on Money Mastermind Show.
22 minutes | 5 years ago
MMS081: What To Know When You Start Investing
Executive Summary Are you concerned about getting started as an investor? You know that you need to invest if you want to build wealth over time. But do you have the tools you need to start investing? Stuart Ritter, VP of T. Rowe Price Investment Services, talks to us about how simple it can be to start investing, and what you can do to begin building wealth today. Click to read full transcript EPISODE 81 [INTRODUCTION] ANNOUNCER: Welcome to the Money Mastermind Show. Let’s Talk Money. [EPISODE] [0:00:18] MM: Welcome to this week’s episode of the Money Mastermind Show. This week we have Stuart Ritter. He is a senior financial planner with T. Rowe Price, did I get that all right? [0:00:30] SR: You did. [0:00:31] MM: Welcome to the show Stuart. [0:00:33] SR: Thank you for having me. [0:00:34] MM: The members of the Money Mastermind Show, our panel are Peter Anderson from Bible Money Matters and Tom Drake from Canadian Finance Blog. Our usual moderator Glen Craig from Free from Broke is not here today and Kyle Prevost from youngandthrifty.ca was unable to make it as well. So we’re kind of running with a skeleton crew but it’s going to be fun anyway, right? [0:01:02] SR: We’ll make it happen. [0:01:04] MM: All right, so one of the things that many people worry about is investing. Many of us know that we should be investing whether it’s investing in a retirement fund or investing in something else. We know that we should be investing but it seems really hard to get started. So in your experience Stuart, what are some of the reasons that people have a hard time? What’s holding people back from getting started with investing? [0:01:32] SR: There could be a couple of things. One is the misconception that it’s somehow complicated when in reality, it’s pretty straight forward. Another one could be people aren’t sure where to start and thirdly, a lot of people will often let perfect be the enemy of the good. They are so worried they are not picking exactly the right thing that they’re supposed to do that they end up doing nothing and it’s much better to get started sooner, get things going. That gets you the opportunity to start learning a little bit by taking advantage of the potential compound that you can get by having started earlier. [0:02:08] MM: So one of the things that you mentioned was stock picking and worrying about picking just the right stock. So I’m an indexer, I’m a huge fan of indexing, do you think that maybe getting started, perhaps stock picking isn’t the way to go? Maybe you should try indexing? [0:02:27] SR: If you’re getting started make it as simple for yourself as you possibly can. The example I always use is, there are people who really want to get into the gear ratios of their transmission. The rest of us normal people don’t care how the darn thing works, we just want to drive. So there are investments you can use that are the automatic transmission of investing. You pick one mutual fund, it gives you a collection of stocks and that gets you started. It’s much simpler than trying to do the whole all by yourself right from the beginning. [0:03:00] MM: Yeah, so what about you Peter? Why don’t you tell us a little bit about how you invest? What is your investing style? How do you get started? How do you make it easier? [0:03:09] PA: Like you, I am also an indexer. I prefer to just keep things simple and get into an index fund. I’ve still got pretty good time horizon for how long I’m going to be investing. So I’m going to be one of those people that’s not going to try to beat the market and pick individual stocks and that type of thing. I’m invested in a few couple different index funds. I’ve got it set, my asset allocation, based on my age and a couple of things and I’m just going from there. So keeping it simple. I’m smart enough to know what I don’t know and what I don’t want to get involved with and I really don’t want to get too deep into the details and into the weeds with investing. So for me doing the index fund investing is perfect. [0:03:57] MM: And what about you Tom? Where are you at and what are your options out there in Canada? [0:04:03] TD: Pretty similar. I am big on ETF’s but there’s one area where I do go into individual stocks and that being in Canada, we just don’t have as many companies so you don’t necessarily need to own a lot of different stocks to actually come pretty close to some of the indexes. We’ve got five major banks, four different real estate investment trusts almost makes up the entire index for that. Some of the things you can buy the individual stocks then and save on the expense ratio but otherwise, I do all ETF’s. [0:04:34] MM: Nice and that is one of the nice things about ETF’s is they’re pretty low cost comparatively speaking even when you compare them to an index fund and what makes some a little bit easier than an index fund is you can trade them like stocks but are there pitfalls to that Stuart? I mean you talked about, “Let’s get a mutual fund and get your money in there.” What’s the difference there between the mutual fund and the ETF and what are some of the pitfalls of being able to just maybe trade an ETF like you could a stock? I mean I love ETF’s too. I am with Tom, I’m all about the ETF but I can see where it could be problematic. [0:05:11] SR: We’re talking about lots of different tools that ultimately get people to the same place. Let me piggyback on something Peter said earlier about having a long time horizon. Let’s say someone wants to get started investing for retirement. The most important decision you make is how much you have in stocks, how much you have in bonds and how much you have in short term investments. So if you’ve got that longtime horizon, you want the collection of stocks. Now whether that comes from something you mentioned earlier, a retirement fund that gives you the collection all at once, whether you assemble your own portfolio of ETF’s, what’s far more important is to make sure that A, you’ve gotten started, B, you’re saving the right amount and then C, that you got the right asset allocation. You’ve got the right amount in stocks, which is when you’re younger and saving for retirement, probably going to be all of it. Nail those pieces and you’re well on your way to getting to that retirement you’re looking for. The last piece being diversification. You want different kinds of stocks. Large companies, small companies, well, I was going to say international companies but I guess that depends on what nation you’re starting from. But you want companies from all over the world, and how you put that collection together, that’s up to your individual situation which is a conversation we’ve been having. [0:06:33] MM: Right, so what do you think then about one of the things that makes investing a little bit easier is the robo-advisers and that’s kind of big. I personally use one myself. I investment in Betterment, but I know that there are plenty of other robo-advisers out there and it works for me because I am a set it and forget it kind of person and I just want to throw the money in and move on. But that doesn’t always work for everybody. So how do you know when is the right time to use a robo-adviser and when is the right time to go to somebody like yourself and do some professional financial planning to get your investment plan together? [0:07:14] SR: A lot of it depends on how involved you want to be personally on this. You mentioned setting it and forgetting it, at the same time I’m going to guess you’re probably a little more engaged with your investing than the average person out there. So some people — I’ll go back to my transmission analogy — some people want to drive a manual transmission car. They want to be the ones that are in control, deciding when to shift, making changes overtime. There are other people who say, “Look, you know what? Rebalancing every quarter and shifting from stocks to bonds overtime and all the other things that go into it, you know what? That’s not for me so I am either going to use a product that does a lot of that for me.” Something like as you mentioned, a retirement date fund, “Or I’m going to get somebody to help me or I’m going to go to a robo adviser.” You make that decision based on how involved you want to be and not just now, we have a lot of people with a lot of enthusiasm in the beginning to get started but we’re all living busy lives and it may not be something you want to pay attention to every single quarter. That might lead you to take an approach that does a lot of it for you instead of requiring you to staying. [0:08:25] MM: Tom, what made you feel a little bit more comfortable with investing when you start? We’re you a little bit worried about it? What made you get over maybe a little bit of nervousness before you started? [0:08:42] TD: I think it’s really intimidating because you hear these stories people making millions on penny stocks or you see these stock brokers in movies and everything. It always just seems like something you can’t do but so yeah, I took it really slowly. I started with a mutual fund that really wasn’t a great mutual fund to begin with it’s just through my bank. Then once I got rid of that here in Canada, I went to an index fund called TDE series funds, which can be a little complicated to get into but for any sort of mutual fund in Canada, it’s pretty much the best expense ratio you’re going to get. So it was a complicated process for sure but much easier than what you’d think just watching movies and everything. [0:09:29] MM: Nice, what about you Peter? What was your first introduction into investing and just getting started and feeling more comfortable with it? [0:09:37] PA: I think my first investing experience was investing with my company’s 401(k) when I first started working out of college. The company that I was working for, they just had a company 401(k) and they said, “Hey, we suggest you start putting money in there. It’s a good idea to do this.” I later found out that the plan they were on was not a very good plan. It was kind of an annuity type strange thing that really wasn’t that great but it did get me thinking about investing and from there, I didn’t know a whole lot about it at the time but I took that opportunity to start learning more about these types of things, maybe reading a few books here and there. I’ve read John Bogle’s, Little book of Common Sense Investing along with a bunch of other books as well. I just started educating myself and really, that can be one of the key things that you do when you’re first getting started is taking away some of the mystery behind investing and just realizing that it isn’t this crazy mystical thing that only certain people can do. It’s something that everybody can do. [0:10:43] MM: Yeah and I think that’s a good point. I like what you said about you just started and you got started and then you found out later that maybe it wasn’t your best option and that happened to me as well when I first opened my IRA. I did it through my insurance agent and I bet you can guess what the administrative fees on that were. It was super fantastic, but what I learned was that I was invested in a dividend. It was a dividend heavy index fund and so when I looked at it, it’s like “Oh, well I’m still getting this dividend payments and I’m still doing okay even though the stock market is doing crappy. Where are these dividends coming from? What is this? What does this mean?” That got me going, “Oh, well I can still make money even if the market is down? And it got me really thinking about it and that’s how I started as well trying to get comfortable about it. I want to kind of circle back to what Stuart said earlier about a long time horizon and compounding interest and if you could talk about that a little more Stuart? And explain how that can help people feel better about investing if they focus on that long term because part of I think the fear everybody gets is they’re always getting this message of short term volatility and what is the market doing today and so if you could talk a little bit more about that Stuart, about long term and compounding interest, that would be great. [0:12:17] SR: Absolutely and I’m glad you brought that up. What people hear, primarily especially when the market is going down, it’s that short term market volatility, “Oh my gosh people are losing money,” and lose sight of the fact that if you’re in your 20’s, if you’re in your 30’s, if you’re in your 40’s and you’re saving for retirement, we are talking about decades before you are spending this money. So it’s important to focus on the time it is until you’ll start spending the money and then the time period over which you’ll be spending it. You hit 65, 67, you’re not spending all of your money on that day. So here is a way to think about it. Let me do an analogy and then some numbers and the analogy is, if you get on an airplane in New York and you’re going to San Diego, you look at the weather in San Diego and you pack a bathing suit and sunscreen. When you’re flying over Pennsylvania, it starts getting bumpy because it’s raining. You don’t say, “Oh my gosh, I don’t have an umbrella. I’ve got to go out of the airplane and go buy one,” because you’re not getting out. You wait until you get to San Diego. So if you’re in your 20’s or 30’s and you’re not using the money for 50 years and some bald guy on TV starts yelling about what the stock market is doing today, just remind yourself you’re not getting out of the airplane. When you look at the S&P 500, which is a collection, a list of 500 large US companies, if you look at the way those companies have performed since 1926, they have never had a negative 15 year period. So you look at every 15 year period since 1926 that includes the great depression that includes the things that your parents and grandparents talked about in the 70’s with gas lines and inflation. It’s the tech boom and bust, it’s the 2008 down turn, all of those every 15 year period has been positive. If you look at 30 year periods, the worst 30 year period since 1926 has been an average annual return of 8.5%. It’s as if you were in 8.5% every year for 30 years, and it was the worst that you did. So yeah, sometimes the headlines are screaming, “Oh my gosh, short term volatility,” but when you are saving for a long period of time historically, you’ve had wonderfully positive returns. [0:14:47] PA: Yeah, you talk about having the long time horizon and how it’s so important to get started investing when you’re young but I was reading a study of millennials and how they’re much more conservative investors that some previous generations and I was reading that many of them are saving cash and fixed income investments much higher than previous generations. In some surveys, between 40 and 75% of their holdings and I wonder if maybe they’re seeing the 2008 crash, they’ve seen their parents losing their homes and stuff like that when we have those downturns that really could have a damping effect on a lot of these people. They’re a little bit too conservative especially when they’re getting started. [0:15:36] SR: Absolutely and if you are not investing in stocks, then what you’ve done is taken some of that future potential growth out of your portfolio and that means you have to save more to make up for that growth that you’re not giving yourself a chance to get because you’re not in the stock market. [0:15:59] MM: Oh yeah, for sure and one of the things to consider as well, when you’re in these cash products, the problem that you run into of course is you could lose money because we’re talking about inflation here and a lot of the times, what you’re coming in is not going to be enough to help you beat inflation and that’s a real problem when you start moving up here because prices are always going to go up. They may not go up as fast as they did the year before like right now, we’re in a low inflation environment, but at some point, it’s going to start accelerating again and that gets rid of the spending power that you have and you really need to be aware of that. So what is one of the first things that somebody needs to do? Now somebody’s decided, “Okay, I’m not afraid of investing anymore. I’m ready to do these index fund thing. I’m going to try these crazy ETF’s that Tom is talking about.” What is the first thing that somebody needs to do if they want to get ready to begin investing and do they need to have a lot of money to do it? Do you need to have a lot of money to get started? [0:17:15] SR: Of course, that depends on what you mean by “a lot”. It depends on whether you’re opening up a regular account or a retirement account. Let me start with something that makes it really easy for people and it’s what Peter mentioned earlier and that’s if your employer offers a retirement plan. Then you can get started with just 10, 15% coming out of your paycheck. Now, if you’re doing it on your own and you want to save for retirement, then you are opening up something called an individual retirement arrangement, an IRA, and you can go to any financial institution pretty much, open an account. There are different minimums. Sometimes there are less if you contribute every month but we’re talking maybe in the thousands. You certainly in most cases don’t need more than that. So if people have the idea, “I’ve got to wait until I saved five or $10,000,” you can start way before that either through your employer’s plan which is money out of every paycheck or a couple hundred dollars, a few thousand or even less if you sign up to contribute every month to open up one of those IRA’s. [0:18:23] MM: Yeah and that’s one of the things, I remember when my brother was in high school I was jealous actually because when I was growing up in high school and everything, my parents didn’t know hardly anything about investing and mutual funds or anything like that. So I didn’t have this opportunity but my younger brothers, my parents were like, “Here, we can open up this account,” and actually, I think it was with T. Rowe Price. They said, “You could open up this account and you could put in 50 —” I don’t know if this is still true but you can but they each got their IRA’s with their first jobs in their teenage years and they only had to put in like 50, $75 a month and it was easy and they were teenagers and I was just sitting here going, “I’ve only just barely opened my own IRA,” what is going on here? [0:19:11] SR: Yeah, the most important thing you do is just get started. One of the themes that came through all of the stories that we’ve been hearing about, the first time we invested, we all talked about looking back and saying, “Well, that may not have been the best thing” but you started. You have way more money in there that’s somebody that saved nothing and you learned about it on the way and improved from there. And then improvement can only start after you’ve begun the process. [0:19:39] MM: Yeah and that’s so true and it’s great to know that you can do it with a small amount of money as well, as little as $50 a month. So we’ll go ahead and wrap up here. We like to do this thing called “the final word”. So we’re going to go around and ask each of our panelist for their final word on getting started in investing. Let’s start with you Tom, what is your final word? [0:20:03] TD: Well I just really wanted to add to today is the couple of things that I mentioned earlier related to how much it cost to start. With the E-series funds, you need a $100 per fund but you really need three to four funds for it to be a balanced portfolio. So 300 to $400, you can get started here in Canada on a really cheap good index fund. [0:20:28] MM: All right great and what is your final word Peter? [0:20:32] PA: My final word is just get started as early as you can. I talked about my 401(k) that I started with and how it really wasn’t the greatest one. I had a ton of fees and all that kind of stuff but even that, those investments that I made back, way back then. It’s been a long time now, now that I think about it. That small amount of money that I put in right at the beginning has turned into tens of thousands of dollars overtime. So get started early. It doesn’t take a lot to get started like we talked about especially nowadays are a ton of financial products, the Betterments and Wealthfronts of the world and investment companies like T. Rowe Price and Vanguard and other companies as well that have some index funds that you can jump into for a $1,000, maybe a little bit more. So just get started. Start putting in as much as you can and let the wonders of compound interest do the work for you. [0:21:27] MM: That’s great and finally Stuart, why don’t you give us your final word and then tell us a little bit more about what you do and where our audience can find you? [0:21:37] SR: My final word would be to keep it simple. If you’re getting started, chose a fund like a target date fund, retirement date fund, they go by a couple of names but you can start with just one mutual fund that’s a collection of all the investments that might be appropriate for your goal and from that core, if you want to then start branching out into specific ETF’s or funds that focus on just one index or individual securities, then you’ve got that base that you can build on to add those things in but at the very beginning, keep it simple. Get yourself started, as Peter said, and go from there. Companies that we’ve talked about that is obviously willing to help you, T. Rowe Price will be one of them. Feel free to give me a call if you’d like. My direct number is 410-345-5225 and we’ll be happy to help you. [0:22:37] MM: All right, great. Well thank you so much for joining us and thank you everyone out there for watching and for listening and until next week, be good with your money. Good night. ANNOUNCER: Thanks for joining us on the Money Mastermind Show, get more information at Moneymastermindshow.com. Don’t forget to subscribe to the show on iTunes and YouTube and follow us on Google Plus. [END] Important issues discussed in this episode: What does it mean to be an entrepreneur? What makes someone a serial entrepreneur? Tips that can help you start a business. Sacrifices that come when you start businesses. Strategies for making your businesses work in a family setting. How to take the step from being a business owner to becoming a serial entrepreneur. Panelists In This Episode: Stuart Ritter | VP of T. Rowe Price Investment Services Glen Craig | Free From Broke Kyle Prevost | Young and Thrifty Miranda Marquit | Planting Money Seeds Peter Anderson | Bible Money Matters Tom Drake | MapleMoney For a quick bio of each of our show participants, head on over to our panelist page. Follow Us Join us around the interwebs for more money-related goodness! Twitter: https://twitter.com/MoneyMstrmind Facebook: https://facebook.com/MoneyMastermindShow/ Google +: https://plus.google.com/+MoneyMastermindShow/ YouTube: https://www.youtube.com/user/moneymastermindshow MMS081: What To Know When You Start Investing appeared first on Money Mastermind Show.
35 minutes | 5 years ago
MMS080: Do You Have What It Takes To Be A Serial Entrepreneur
Executive Summary Do you dream of being your own boss? In theory, it sounds like a great idea. Creating multiple businesses, growing your wealth and living the dream, might even be more attractive. But is everyone meant to be a business owner? Even if you have a business, do you have what it takes to be a serial entrepreneur? You might be surprised to discover how much work and sacrifice it takes to start a business, and then start another, and another. Jim Wang, a serial entrepreneur and millionaire, joins us to talk about what it takes to be your own boss. Click to read full transcript [INTRODUCTION] ANNOUNCER: Welcome to the Money Mastermind Show. Let’s Talk Money. [EPISODE] [0:00:18] GC: And welcome to the Money Mastermind Show. Tonight, we have Jim Wang of Wallet Hacks and he’s going to help talk about what it takes to be a serial entrepreneur. Welcome to our show Jim. [0:00:30] JW: Thanks for having me. [0:00:31] GC: Absolutely, thanks for being here and the members of the Money Mastermind Show, for everybody else out there, is Kyle Prevost of Youngandthrifty.ca, Miranda Marquit of Planting Money Seeds, Peter Anderson of Bible Money Matters, Tom Drake of the Canadian Finance Blog, he’s not with us tonight but he’s part of the show, and I am Glen Craig of Free from Broke. So, in this day and age, you hear about entrepreneurship all the time. How you had to get out there, building your own business, you see people, Shark Tank, so on and so forth. But it takes a certain personality, some type of person that can be an entrepreneur that keeps building different companies and businesses. What does it take to be a serial entrepreneur? Maybe let’s throw out what does that even mean to be a serial entrepreneur? It sounds almost dangerous like you want to avoid that type of person. [0:01:29] MM: Well, I’ll try to avoid Jim whenever I can but. [0:01:33] GC: You know what I mean, I hate to say you throw “serial” in front of something and all of a sudden it’s like serial killer, okay wait, maybe it’s not an association when you want and maybe there is a certain psychosis involved with being a serial entrepreneur too but what do we mean by that? What do you think that’s all about Jim? [0:01:51] JW: I mean I think that a serial entrepreneur is someone that, obviously definitionally, is someone who is building business after business and I think that’s driven a lot by a sense a curiosity of solving problems and so, it’s funny, one of the things that I’ve always been a fan of is standup comics and what’s funny now like Louis C.K. or like Chris Rock is a lot of its observational. You see these things that are just, they’re a little weird and then you work on it and it becomes this bits that are funny and hilarious because everyone else sees it too and a lot of times, I think a serial entrepreneur is someone who’s going to be building businesses and businesses. They’re trying to solve these problems because they see these things. These problems in the world that they’re like, “This isn’t how it should be. I think I can fix it and I can make some money in the process,” and so at the core of it, I think a lot of times it’s that curiosity, it’s that problem solving. They say like, the best business is the one that scratches your own itch and you have to have itches. You have to see these things otherwise without that curiosity, you can’t come up with a business because then you will just go to work and be happy and content and not really have something that you think you could fix necessarily. That’s how I see it. [0:03:11] MM: I want to say something really snarky about whisky right now, I just do. What problem is whisky solving? [0:03:18] JW: Oh, the ones that can’t be solved by anything else I guess. There’s that. [0:03:26] GC: That’s a whole other episode and a topic that we could go into but another time and maybe Miranda’s mentioned that because you Jim, you’ve had a lot of experience building different sites and different ventures out there. The reason we have you here is you have a certain success behind your own ventures. What is it that maybe drives you to keep building? [0:03:54] JW: When I started talking about curiosity, it’s the problems that you want to solve but more so, there is a bit of fun in figuring things out, in starting a business and figuring out how to make it work. Miranda joked about whiskey and it’s because I have a blog about scotch called Scotch Addict and I started that as a hobby at about the same time I started Bargaineering which is the personal finance blog that predated Wallet Hacks. That was more trying to figure out how to make money blogging about something that I was truly interested in. Which, I mean sounds kind of silly to say being interested in whiskey but we all have hobbies and much like personal finance when I started it, it was about chronicling and journaling that discover process and as we learn years later, you can make a pretty good living just writing your own experience nowadays. Other things like I started a meal plan service with a partner called $5 Meal Plan that was me trying to figure out how to build a business with reoccurring income. I don’t use meal plans, don’t tell anybody this probably sacrilegious getting really started but. [0:05:13] MM: We’re having Erin on in a couple of weeks. [0:05:15] JW: Oh good, don’t ask her about me using her meal plans but I like to cook so I understand food and I understand the need to save money and I recognize the value in meal planning but I took on that project because I thought it would be fun to try to figure out how to build a reoccurring revenue business. And we’re at the point now where we have a couple thousand numbers and building that community and learning how to keep that alive because unlike a blog, with a membership site, that’s how I think of it, you need to build that community because they’re going to be more willing to pay a monthly fee if, in addition to getting of the service which is a meal plan of sales every week, there’s a community there, they’re a part of something and the service isn’t just an e-mail that shows up every week. So I took on that project because I was curious on whether or not I could do it, I could build it, it done very well much in part because of Erin and because in the end, you have to like the meals and the meal plan for you to keep going but there are all the other execution and tactical things that we’ve been able to do that it is fun to discover and it just goes back to the whole curiosity point. [0:06:32] GC: For your partnership there it sounds like even though maybe, like you said, you want to scratch your own itch, your itch may not be necessarily the meals. That’s maybe Erin’s curiosity that drove her and what you found is like, “Hey look, you know what, I really like this business part of it.” Here’s the problem that you see that, “Hey can I conquer this, can I do something with it?” [0:06:55] JW: Yes, exactly. So it’s not always necessarily what that service would provide to the end customer but what I can learn out of doing it. You asked what are the other traits of an entrepreneur? And looking back, I think not being afraid to mess up because there are some businesses that I’ve started that didn’t do well and you just shut down and you never hear about those because they just don’t come up in conversation. Right? So you have to be able to start things, learn what you can, learn whether or not you could do it and then shut it down if you can’t. So I think that’s another sort of key trait of entrepreneurs. [0:07:42] GC: It’s not necessarily an easy process either and it’s certainly not overnight, and so it sounds that what your saying is everything that you do isn’t necessarily, you’re not going to get Facebook every time you go up to bat in other words. [0:07:56] JW: Yeah but what’s fun is you learn something from each of those and the first time you go up to the plate to swing at a pitch, chances are you’re not going to hit home run but you’re probably are going to be in little league. So the stakes are lower, you get to practice, you learn and if you mess up and you strike out or whatever you got another at bat, you’ve got another at bat. What you don’t want to do is wait until for some miraculous reason you’ve managed to make it to the major leagues without ever swinging a baseball bat. This is where the analogy kind of breaks down. You don’t want to have a high stake situation where you have everything riding on the line for the first time for you to try something. That’s the worst time to try. So a lot of times, you try something and if it doesn’t work out, it doesn’t work out and you try something else and again and again and one of them has to work or you die of old age at which point it doesn’t matter at least yeah, you had fun trying all these different things. [0:08:59] MM: I like how you talk about it as learning and kind of as this process and moving forward because a lot of the time, when we talk about entrepreneurs, we talk about successful business, we have this idea that there is this overnight success, so called “overnight success” and that’s only because we see the big splashy ending and we forget that there’s all these work that goes into it and leading out it. I think a lot of people when they think about entrepreneurs and serial entrepreneurship, they’re like, “Oh well, they’re just moving on to this big thing, this big thing. And if I don’t have a big thing then it’s not worth it for me.” When the reality is, is you’re really putting it on the grind and you’re going to fail and you’re not going to be huge all the time. [0:09:45] JW: Most of the time you’re not going to be huge. [0:09:48] MM: Right. [0:09:49] JW: Right and there’s the survivorship bias, you only hear about the success stories. No one really talks about the things that end up poorly and who’s got money. So I started listening to this podcast called Startup. [0:10:02] MM: That’s a good one. [0:10:03] JW: What’s fun is, so the second season, they’re talking about this company called dating ring which is match making and they go to Y Combinator, they get a little bit of funding, they decide they’re going to a transition to a lifestyle business. But the most interesting part, the part that I found valuable was when they were talking to their YC mentor and trying to figure out whether or not they’d come on the podcast and sort of show the behind the scenes. The mentor was like, “Don’t do it,” because on the outside, all startups until they implode look wonderful because they are always talking about all these crazy growth and no one has to worry about making money and you have the whole everyone is in Silicon Valley, they’re all in bar saying, “Oh it’s so great to be at this whatever,” when in reality, everything is held together by duct tape and people making phone calls. That’s what life is. Life is messy. It isn’t until they decide to make a movie out of it and even then, movies they gloss up all the good parts and they dumb down all the bad parts and you don’t realize that it’s mostly is really hard and you’re barely scrapping by and that’s all part of it and sometimes the thing dies and sometimes it succeeds and sometimes it dies slowly but that’s find. I mean it’s all part of the experience. It’s never like a rocket ship awesome forever to think that’s the case would be a huge mistake. [0:11:38] GC: It also seems like whatever you’re working on now, either as much as it may be failing, as much as it’s successful, it doesn’t necessarily mean that’s your whole trajectory either. Whatever comes next, as good as this is, it might be even bigger. You always hear about an entrepreneur like, “Oh I did this and then I did this and that’s the superstar thing where as a lot of people might have been happy if they’d gotten maybe just a piece of it versus an entrepreneur that even if a little bit of success comes along, they’re still going out for something else. [0:12:08] JW: Also, whenever you have any sort of business, you’re trying as many things as you can think of and that you have time for and some small fraction of them, they’re going to work and a lot of them aren’t. That means as you try, you’re going to fail a ton and most of it is going to suck but the part that doesn’t is a part that you remember and the part that drives you to keep going. Right? You have a blog, you’ve been writing articles, no one likes them, no one shares them on social media and then one day, some reporter catches it and you’re on whatever MSN, Yahoo, one of the portals and you’re like, “This is awesome. I’m going to keep doing it.” When you think about it though, that’s in part dumb luck. That’s not dumb luck — well, you do things to improve your chances, the fact that that thing was seen by that person and caught on this much is in part luck and if you last at something long enough, you’re going to have more lucky situations. And so the question is can you create that survivorship by. So just doing it long enough, you don’t fail until you quit. So you just keep doing it and then you won’t fail. [0:13:23] MM: But when it’s time to die, I mean I really like how you mentioned a little bit earlier that sometimes it’s time to let something die. How do you decide that, how do you make that decision as you’re going forward when part of you is just like, “Oh, just if I just hang on another couple of weeks then I’ll be discovered, if I keep surviving I’ll be fine.” But where is that line? Where do you decide when it’s time to let it just die and go away? [0:13:51] JW: I think in each of our own lines, we have this list of opportunities that we want to pursue and it’s when you get to the point with whatever is your primary focus where you feel like your time is better spent somewhere else. When you have exhausted all the things that you know off of what to do and you just don’t have the emotional buy in to keep going at it, I would say that that’s probably a good time to figure out how to exit. Now if you thought that the business generates cash flow, “Do I let this just glide and just slowly die, do I try to sell it or whatever?” But the point is that you’ve gotten to the point where you’re no longer emotionally invested in this project and if you don’t have that, I often find that it’s very difficult to grow it, to wake up and I hate the use the word passionate, because it gets overused. But if you aren’t waking up thinking about the things that you could do on this project, that means you’re not bought into it. If you’re not bought into it, it’s really hard to be creative and grow something when you’re not thinking about it all the time whether subconsciously or actively as you’re doing things. I’m very much a spreadsheets guy, like numbers and everything but like everyone else, we all make decisions based on emotion and look for logic to support it and at the very core, if it’s not exciting you, if you’re not waking up wanting to do something for it, it might be time to think about is there an alternative project that I can work on? [0:15:30] KP: The teacher side of me Jim wonders, other than just jumping in with both feet and failing a bunch of times, is there anything you can do to increase your chances whether it’s your third company or your first company? Is there a way to prepare for any informal or formal education that you think highly of? [0:15:47] JW: That’s a good question. This is probably — I don’t know if this is the best way to do but I think of the thing that I’m most interested in and I try to figure out what can I do in the next couple of weeks to figure out whether this is something that will be big or just not at all. And it’s very much like getting your first customer, like figuring out, “What milestones do I need to hit within the next, within the first three months for me to take this seriously?” One of the things that I did with Kasai Media which is the personal finance influencer network, the very basic idea that’s been around for a while but I figured — I partnered with someone that was very big on the lifestyle space. I figured I had all the company, a lot of personal finance company context so I told myself, “If I can get on,” it was in the first month or two I think I must have been on like 30 phone calls with companies. And I said, “If I can get on 30 calls and I can get a couple of campaigns just enough of the really good, like the getting of front page of Yahoo or whatever, like some really good events happening with this company, then we’ll keep it going and then we’ll get a sense of how big it could be,” and we were able to get a couple of campaigns. We talked to some companies, someone we’ll do it later, someone we do it early and it was almost as if, it was one step beyond proof of concept. I didn’t build the prototype or anything, we didn’t build anything. I just called people, e-mailed people, put it in the spreadsheet and then once we got to the point where we needed something bigger, we didn’t build software, but build a more secure process in the back to manage all these contacts like a sales funnel. I think you just have to go out and do it and figure out pretty quickly whether it will be effective. [0:17:50] GC: And for that, it sounds like it was everything that you did before prepared you for that. Like you said you had all these personal finance contacts so you were able to take and leverage what you did in a prior business and prior working contacts and build that into something else. [0:18:08] JW: Yeah. [0:18:08] GC: So even whether or not you had this success you had, just that experience probably helped prepare you for Kasai Media? [0:18:19] JW: Yeah and you always have to leverage your strength and so what I knew is that I had a lot of friends who are personal finance warriors, I’s talked to a lot of companies. Now, there had been a bunch of years where I stopped writing Bargaineering and when I started reaching out to these companies again, but there was still the relationship there to some degree. People knew who I was. It wasn’t like a cold e-mail or a cold phone call so I had that advantage. In life, it’s not fair. You’ve got to take whatever advantage you can get. You have to think about the things that you can take, you can leverage for your benefit and for that, a lot of that is relationships. But if you wanted to start it completely from scratch, I would think the hardest part is not so much getting the companies but for getting the bloggers, the actual influencers of the product that you’re selling to even pay attention to you. So I had covered that hurdle, I jumped over that hurdle or whatever and the next part was getting on phone calls and learning how to sell. So here’s the part of that project that really interested me is I didn’t feel very comfortable selling and so I thought, “Well, the best way to get over that is to try to sell something.” So I thought, “Well, why don’t I just go on these phone calls, try to pitch them this idea?” I started reading books and learning how to sell everything, which surprisingly effective selling doesn’t feel like selling at all, which is good. But that was a part of it that really excited me and what I want to learn and so through all the phone calls, it helped me become better at it and it’s been fun. I don’t know. [0:20:14] GC: It sounds like just there, you are also talking about the passions that you have. So it’s not just something that you try doing door to door, nine to five. You’re not selling encyclopedias, that just work. But here is something where this is what you were doing, who you were, this selling comes off differently. It’s not selling, it’s like, “I’ve built this and I know it could help you.” [0:20:38] JW: Yeah. It was fun to talk to startups because pure companies are doing really interesting things and they’re really innovative and they’re not getting the response from bloggers that they like because there’s not as if no one knows who they are. There’s an e-mail among thousands of e-mails that people are getting and they’re unable to spread that message which kind of sucks. So that is where I felt, “Oh, this is awesome that I could bring some of these companies that are doing cool things,” and I felt like they were fellow entrepreneurs and they wanted to help when they had a good product. When they didn’t, often times I’ll just say that there really not much, “I don’t think we could help you get,” — because they see sponsored posts and things like that as a paid acquisition channel. They want to pay X dollars to get a number sign up so they need the sign ups that cost them about whatever it is, $1, $2, $5. But if I don’t think their product is really that good, then this will be a one off thing where we do a small campaign. It’s not going to work and then it won’t really benefit them or benefit us in the long term and it really won’t benefit the bloggers either because they’re promoting, they would be writing a review or talking about a service that I already felt wasn’t really that good. And so it was fun because a lot of these startups do have interesting services because they got funding for it but the ones that don’t, maybe they’re less interesting so I don’t know. All throughout the process, learning to do sales, and I don’t think I’m good at it by any means but I am certainly far more comfortable. When I started, I used to have not a script but a list of bullet points in case I ever got lost in a conversation and didn’t know what to say next because sometimes those happen. I was like, “Oh, well now I can go on a call and I could talk to someone, build a rapport, find out about their service and find out what they need without having to have that list,” and it’s fun. It’s a lot of fun. [0:22:45] MM: One of the things that I really like about what you said was you’re uncomfortable and I think that a lot of — what’s that saying? Is that your growth doesn’t happen in your comfort zone. So I really like you talking about being willing to get out of that comfort zone. [0:23:01] JW: I think there are two schools of thought, like you work on your strengths or you work on your weaknesses and I guess this falls into the work on the weakness thing but to counter that, because like they say, “You work on your strengths, you get better on your strengths and it’s usually a far more better use of your time,” but the core that I also feel like on some weaknesses is you have to have a certain level of competency. I didn’t feel like I had that level of competency so that’s why I wanted to work on it and I don’t know if starting a business with that in mind, like I didn’t — we didn't start the business because I wanted to get better at sales but there’s this thing about it that I latched onto as the fun thing or the thing that will help me grow as a person. Sort of like the Meal Plan thing was about how do I build this? The number one reason is because obviously, you want to generate income and you want to build a good company and things like that. But the part that I latched onto that was the most interesting was work on retention, work on upgrades rates, work on all these other number things and community building. In every project you have to find, day to day there’ll be things that you don’t like and you have to latch on and find the things that you really enjoy digging into and try to do more of that. [0:24:25] PA: You know, I think that if you’re going to be a serial entrepreneur, it really almost sounds like you have to enjoy the process of building something, of growing something from the ground up and seeing it from the infancy stage all the way up to where it’s a full fledge product or service or whatever the case maybe and also just enjoying the process of building something and learning new things like learning sales or whatever the case maybe. [0:24:53] JW: I totally agree. [0:24:53] GC: You said you didn’t like necessarily using the word passion but there’s always going to be something that spark that keeps you going. If you run into any entrepreneur and they all seem to have some sort of maybe phonetic excitement about what they’re doing. You don’t run into people going, “Yeah, you know, I’m doing this.” They’re just like, “Yeah, yeah! I’ve got this going on and then I’m doing this and then I’m doing this,” they have this energy towards the work that they’re doing. It’s not like, “Oh yeah, it’s just another day in the office,” because being an entrepreneur it’s not that nine to five grind. It’s a different type of energy that you’re putting into it. [0:25:36] JW: Yeah and I think the problem with the term passion is it becomes very loaded and people think about, “You know, I need that to happen every single day for me to have a business or continue to be involved.” And earlier, Miranda asked me, “How do you know when to quit?” and I started to say when you don’t have the passion but you will passion and excitement about anything over a period of time. You start something, you can be super excited because the learning curve would be huge, it’s going to be constant discovery and constant growth and you’re going to get addicted to it and then you’ll go over a little hump where you maybe don’t learn or there are other things that you have to deal with and you won’t be passionate about dealing with it by any means and the problem is, you have to push through that. Well, if you started the whole thing thinking, “I need to be passionate 24/7,” you’re going to hit that moment where you’re like, “I’m not passionate anymore, time to quit.” Well no, you have to push through that in order to get to the next level or the next phase of that business and work is called work for a reason. You have to just work and sometimes you won’t be super excited about it but if you haven’t been excited about it in a year maybe, right? But if you haven’t been excited in a couple of months, okay maybe you just got to push through this section of it. That’s why I am always hesitant with the whole passion thing. [0:27:01] PA: In the New York Times, Jay Gold, an author and an entrepreneur, he talked about how one of the main attributes of a successful entrepreneur is tenacity. Just being able to stick with it and work hard through those tough times and knowing what your ultimate goals is and being able to work through those tough days where you don’t want to make sales calls or whatever, sticking with it and getting over the humps and staying all the way through the end. [0:27:29] JW: Yeah, tenacity is just a nicer word for being stubborn, right? Like, “I’m going to do it. I’m just going to fight through this.” Because here’s the funny thing. There are a lot times when I would have a scheduled call, as mentioned early on I’m like, “I don’t really want to do this. I don’t really want to do this.” And I thought to myself, “There is no reason other than myself for me not to do this.” But it would be one thing if I’d set myself three or four e-mails to someone trying to schedule something and they kept blowing me off and on the fifth time I was like, “You know what? I don’t want to e-mail this person because they’re just going to blow me off.” That I can understand you giving up on that process but if you already have a scheduled call and you just don’t feel like doing it and the only thing stopping you is you because you don’t feel like it, you can’t let yourself stop it. The world is going to conspire against you, you have to have that chip on your shoulder and feel like everyone is out to get you, you have to at least be on your side and you can’t quit and so that’s where I draw my stubbornness and tenacity. It’s like, “Listen, other people are going to stop me. I can’t stop me because if I do, I’m not going to go anywhere.” [0:28:43] GC: It’s interesting how you’re saying the world is always going to conspire against you because there’s also this other attitude out there and maybe not entrepreneurship but that, “If I just put it out there, if I tell people what my passion is it’s going to happen,” and it sounds like what you’re talking about is almost like the exact opposite of that. You’re going to have to overcome a lot but you’re going to have to be the one that does it and that maybe is the big difference. [0:29:12] JW: I don’t know if there’s any one right way but I think whatever gets you to do the work and continue to do it when it sucks and you don’t like it is what you have the focus on. If you have to draw a vision board of how you want your life to be and that’s what motivates you to continue working when you don’t want to work then do that. Whatever the secret is, visualizing your future whatever gets you to do it. For me, it’s thinking that other people are trying to beat me and I don’t want them to beat me so I’m going to keep going out there and doing what I can to prevent it. There’s no right answer, there’s so many different ways to do it. Just pick the one that works, just keep doing that one. If it stops working and I need to make a vision board to help me visualize my future, then I’ll do that but I think what I’m doing is working so far. [0:30:10] KP: It’s interesting Jim as a sports junkie that almost sounded like a clip out of like a Michael Jordan or or Kobe Bryant or some of those guys have a very similar view. So it’s interesting to see similar motivation or similar mindset can be applied to excelling at a kid’s game like basketball and being an entrepreneur and that you had similar ways of facing challenges. [0:30:33] JW: Yeah, I mean I don’t think I’m to the degree of Jordan or Kobe where I think everyone is out to get me and they guy across from me. I not to not only beat or embarrass. [0:30:45] KP: Annihilate, yeah. [0:30:47] JW: Yeah, well I don’t think it’s like that but there is us versus the world. Now that us could be a group of people that I see as us, it may change the situation to situation but it’s very much like that’s how I motivate myself is that there’s competition and I want to win it somehow. Now, that’s not at all cost because there are people and I remember working nine to five. There are people that wanted to get promoted and work up the corporate ladder at the cost of spending time with their family. Yeah, I wanted to win at the businesses that I have but not at the cost of friends, family, health and things like that because I hope that when I’m old, I don’t think to myself, “Man, I wish I went on more walks and I’m not this unhealthy person.” Or, “My kids don’t know who I am because I’m always on the internet working on the internet businesses with my internet friends.” I just don’t want that to happen and I think because I know that at this age, it won’t but to the extent, I don’t have to sacrifice those other things that I find more important in order to pursue some of these business and financial goals, that’s what I’ll do. [0:32:09] GC: It sounds like you’ve struck a pretty good balance Jim. I think we’re all familiar with a lot of your success and obviously, that’s why we have you here. So it sounds like you’ve had… [0:32:19] JW: I thought you guys liked me? [0:32:23] GC: Well yeah, a little bit of that too. [0:32:24] PA: That too, that too. [0:32:25] GC: Yeah. But just to wrap up here at the end of the show, thank you for your time. [0:33:00] JW: Of course. [0:33:01] GC: We like to have a final word where we talk a little bit and kind of sum up what we’re doing so we’ll go around and Peter, what’s your final word on being a serial entrepreneur? What do you think about that? [0:33:11] PA: Well, I just think you have to know yourself and know if you have the right personality for that because I think that you really have to have an optimistic outlook, kind of a go-go mentality to get things done when they need to get done. You can’t be the kind of person that’s going to be making excuses of why you can’t get things done. You have to be the kind of person that find solutions for problems and tries to fix things and build something big. So just know that when you start, whether you’re the right type to be that serial entrepreneur. [0:33:41] GC: Kyle, what’s your views on serial entrepreneurship? [0:34:00] KP: Well, I have to admit that I am not in fact a serial entrepreneur as of yet, maybe a “baby steps” entrepreneur would be a better description but I know this much. I know I get excited when I do talk to successful entrepreneurs and people that are talking with the passion like Jim does and a little bit of knowledge and experience both tackling different challenges and that fires me up to try and do the different things that he’s talking I’m like, “Oh, I could apply this and I could put this spin on that in my line of work.” So yeah, the more people you can network with that have that inner fire, that entrepreneurial drive, I think the better off you’ll be. [0:34:37] GC: Jim, what’s your final word on being a serial entrepreneur? [0:35:10] JW: I think, you know as I said before, businesses on the inside, they are messy. They’re not perfect and as much as you’d like everything to go a 100% your way all the time, they don’t and that’s how you react to it because if you let them beat you up and stop you and prevent you from doing something, then you’re going to stop. If you stop, then you will not have a business. So keep at it, learn from these mistakes. Someone get Miranda a headset that works and have fun. You guys are always having fun so that part is not a problem. [0:35:54] GC: And that’s an important too, sometimes you have to team up with people who help your entrepreneurial idea. Like you were talking about Jim, how you teamed up for the Meal Plans, you found somebody else that found that other side that was able to do something here. I think we at the Money Mastermind Show, we teamed up because we all brought certain something different to the show and as a result and one of us has a little hiccup or whatever, we have the rest of the team that can jump in and help out there. So Jim, thank you again for coming on and joining us. [0:36:29] JW: Thank you. This has been a lot of fun. [0:36:32] GC: For those who may not be familiar with Wallet Hacks or any of the projects that are out there, let us know what you’re doing, what is it out there where could people find you online? [0:36:41] JW: All right, so the WalletHacks.com is the new personal finance site and I try to focus on strategies and tactics for people to get ahead financially in more clever ways to not take the regular road. The meal plan service if you’re looking to save money on meals $5 Meal Plan and as you like whisky and everybody should like whisky especially scotch, you go to ScotchAddict.com. Love to have you, we have a fun group there. It’s probably my most entertaining part because it involves alcohol and you get samples. It’s my most entertaining project but yeah, I love to have you and anyone. [0:37:24] GC: You look at common themes that run through people’s businesses and you’ve got a $5 Meal Plan, scotch and personal finance and that, yeah, hmm. [0:37:35] KP: It pretty much sounds like college to me. I don’t know. [0:37:40] GC: You’ve got the personal finance so you have enough money, you got the $5 dollar plan so everything is taken care with that and then you have enough money for the scotch so. [0:37:50] PA: It all works out. [0:37:50] JW: It’s a natural tie in. [0:37:52] GC: Thank you again Jim for your time and for sharing your expertise with us and our audience and everybody out there, thank you for listening and until next week, be good with your money. ANNOUNCER: Thanks for joining us on the Money Mastermind Show, get more information at Moneymastermindshow.com. Don’t forget to subscribe to the show on iTunes and YouTube and follow us on Google Plus. [END] Important issues discussed in this episode: What does it mean to be an entrepreneur? What makes someone a serial entrepreneur? Tips that can help you start a business. Sacrifices that come when you start businesses. Strategies for making your businesses work in a family setting. How to take the step from being a business owner to becoming a serial entrepreneur. Panelists In This Episode: Jim Wang | Wallet Hacks Glen Craig | Free From Broke Kyle Prevost | Young and Thrifty Miranda Marquit | Planting Money Seeds Peter Anderson | Bible Money Matters Tom Drake | MapleMoney For a quick bio of each of our show participants, head on over to our panelist page. Follow Us Join us around the interwebs for more money-related goodness! Twitter: https://twitter.com/MoneyMstrmind Facebook: https://facebook.com/MoneyMastermindShow/ Google +: https://plus.google.com/+MoneyMastermindShow/ YouTube: https://www.youtube.com/user/moneymastermindshow MMS080: Do You Have What It Takes To Be A Serial Entrepreneur appeared first on Money Mastermind Show.
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