Why the Right Time to Build Wealth is Now

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3:38make that future happen. So today I'm bringing on a money rehabber who you may recognize. She has had some big life changes lately and is now wondering when the right time is to start building wealth. And spoiler alert, it is now. I'm teaming up with Bank of America for this episode to show you ways to start investing for your future with Merrill. But don't just take my word for it. Let's break it down. Morgan Lavoie, welcome to Money Rehab. Thank you so much. Thanks for having me. Not the first time. Not the first time. No, I've been here before. How many times? All the times in one way. But how many times as a caller, a listener?

4:26Maybe three. This is maybe my fourth time. Does that sound right? Yeah, we need to get you a jacket. So I guess let's step back. How do we know each other? I'm your producer I work on this show with you we've been doing that together since 2021 that's how we know each other but also I am a listener to money rehab I follow I do whatever you tell money rehabbers to do I'm an OG money I'm maybe the first money rehabber I should say I think I think you were even a money rehabber before that's what the name of the show was called yeah you originally wanted to call it the money show oh I did I forgot about that I do love a literal naming convention.

5:08It's a good name. And you have a question today. So exciting. I do. So I, like you said, have had some changes in my life recently. I got married. That's the big, that's the big one. And I'm also turning 30 this year. And so it's a time where I'm thinking about financial planning a little bit more than I have. It feels like time to get a little bit more serious. It feels a little bit more serious now that my husband and I have a joint checking account. So there does just feel like an extra level of, you know, responsibility there. And so my question really is, is now the right time for me to start thinking about building wealth?

5:55Yeah. Yeah. Great. The end. welcome to the family jack by the way congratulations to you too you guys have a joint checking account and as a money rehab og disciple a yours mine and ours situation yeah yeah i have my account and then which is just my account from before we got married so like before a month ago, the same. And then Jack has his separate account. And then we just opened a joint account a couple of weeks ago. And we put what's in there right now is just what we've been given as wedding gifts from friends and family. And what are you guys doing with that joint account? We have been dollar cost averaging into the stock market.

6:47We also opened up a joint brokerage account. And so we've maybe invested half of it in the market so far. And then the rest of it, I don't really know what we're going to do with it. Because we both have enough money in our separate accounts to like cover half of rent and things like that. We could potentially invest kind of all of the stuff that's in the joint account. These are just the questions that we need to figure out why I'm here? What should we be doing with it? Okay, well, how much money is in there? How much money do you guys get? We've been very fortunate, I should say. Each of our parents gave us a wedding gift that they said we could use on either throwing a wedding or just for whatever we wanted.

7:35And so we decided to do a really small wedding ceremony with just our immediate families. So there's eight people total. And so we pretty much got to keep all of the gifts that we've gotten from them and from extended family and things like that. So we had$40 ,000 in the account. And so we have 20 ,000 invested 20 ,000 in the checking account now, and we haven't decided what we're going to do now. Well, let's figure it out. So before we get into it, let's talk about your current financial situation, shall we? Let's do it. Let's do it. Do you feel like you are living within your means or below your means or above your means?

8:19According to Bank of America, 95 % of Gen Z, which you are and millennials, which I am, say that they are living within their means. Where do you land? I think that I am. I should have a better budget and I don't. So that would be how I would really be able to tell if I'm living below my means, which would be my goal. But I'm able to save every month, save and invest every month, which makes me feel like I am. So I feel like I'm living below my means and feeling good about the way that I spend. Now with the 40 ,000, this is your fund for what primarily? A house, a baby. I know. Just the future.

9:05I really don't know. I think the way that I'm thinking about it is it is money that I want to turn into more money more than anything else. It's not money that I'm saving for anything in particular. We're renting in New York. I don't think we would buy a place here. I am really happy to rent here. I like being a renter. I like having a landlord. I think just with kind of weighing the benefits and costs of owning real estate in New York, it makes more sense for me to be a renter right now. And then we plan on having kids, not within the next three years, but like, I say it's saving is probably a good idea because it seems, seems expensive to have a baby.

10:00I don't know. You tell me. it sure it sure is okay so I'm I'm assuming you've played with a compound interest calculator on this money or do you not like do the things that you do for work for yourself I don't really that's so interesting I know and I and I should because like how often do you play with a compound an interest calculator just for this show for this show all the time but I think that because I guess like Jack and I talk Jack and I talk about money a lot but we don't it sounds like we don't have goals what what is even happening right now like I like I don't be clear like you're the most organized producer employee human like there's a spreadsheet for everything there's i love spreadsheets a calculator for everything i mean we have our own proprietary calculators even i'm so surprised by this i know jared and i play with compound interest calculators all the time i'm sorry that you guys are cooler than us you guys are better feldmans We all have the same last name.

11:24Okay. So you guys haven't yet played with the compound interest calculator. No, we haven't. On your free time. We haven't. And I think part of it is because we haven't talked very seriously about like where we want to live in five years. And we have talked about kids. So that's not a question mark so much. I think we would maybe take it a little bit more seriously if we had a certain goal in mind by a certain date. And we don't have that, so we should. When you hear the idea or the phrase wealth building, what comes to mind for you? A whole mess of things. I think a little bit of imposter syndrome because I don't come from wealth.

12:13A little bit of guilt because I don't come from wealth too. But also those are two kind of bad things that immediately jumped to mind. But also there's good stuff too. Like I feel very lucky and grateful and empowered. So all of those good things too. But there's also a little bit of, yeah, like guilt and imposter syndrome mixed in. What are you guilty for? What did you do? When my mom was my age, she was making$35 ,000 a year and she had me. And so it just feels like I, I don't know, like my, my mom worked so hard to

12:57provide for me and she helped me pay for college and I don't have debt. And it just, I just feel a little guilty about it. You know, I work hard. wrong guilt means you made a mistake shame means you are a mistake which you are definitely not but I understand that sometimes it feels that way but you didn't do anything wrong yeah yeah that's that's true that's true I guess it's like almost it it feels a little bit more like survivor's guilt where it's like I didn't do anything wrong but I am luckier than she was or like have had more opportunities than she did despite her working you know just as hard so how does that affect what wealth building looks like for you you want to do more you want to save more or you feel stymied and like sort of struck with inertia around it yeah I think maybe that's why I'm a little why I'm playing with compound interest calculators less for myself.

14:08I think maybe it's creating a little bit of like avoidant behavior around talking about long-term planning. To be clear, like I don't think everyone, you know, I'm not surprised that everyone is not playing with a compound interest calculator on their free time. Just to be clear, it's only for you because I know how much time you spend on it normally. Yeah. No, it's a really good point. I think everybody should, but like, I'm, I'm never surprised when somebody's like, no, as a matter of fact, I have not used a compound interest calculator lately. So it's not something that like, you need to be doing.

14:43But it's interesting that there's this like block for you from what you do at work, and how into this, you are around investing compound interest, and then for yourself. or is like a little bit of a block it is yeah it is weird isn't it i've really thought about it we're getting deep here so should we unblock i would love to unblock okay so for you is there a number that feels wealthy for you or is that do you have like a magical number that you think I'm wealthy? I mean, it's going to be different than what the stats are because the stuff is super personal. Yeah. I think something that I would like to do that I haven't done yet is think about how I can build wealth where my kids can go to whatever college that they want to and not have to worry about financial aid being a big factor.

15:56And so I haven't really taken a look at, you know, when I went to Skidmore, tuition was$60 ,000 a year. It's probably more now. And so I think something that would be useful to me would be to like, think okay so that's like 240 000 for one kid we will maybe have i don't know one or two and so having that saved i think would be a good goal okay saved saved and and have it not be our life savings like saved in a way where it's like we we can spend that on education and we won't have to you know, sell our house or like, like we can still have the life that we want, but also spend that money on college for kids.

16:52Okay. So for you, it's being able to pay 100 % of college. Let's just assume if it's around today's dollars, we're talking about$500 ,000. I think that that's a good start. We have, you know, a rough number of what will make you feel wealthy. How does Jack feel about it? Is there a thing that makes him feel wealthy or he came from money? So it's different. I think it's different for him. I think he would probably have a higher number than I would and not to do anything differently necessarily, but just to like have it in the bank. like he it's it's not that he wants to buy a fancy house or go on a crazy vacation or anything specific like that I think for him it's more about being like I know my net worth is x and that feels like wealth to me what's interesting is that you have some blocks around this between like what you know for money rehab and what you're doing for your own money rehab but you're putting your money into the places we talk about on the show you're putting your money you're doing the dollar cost averaging which is you know taking the full amount that you have and trying not to time the market and put it in a different increments um so that you're getting the average of what the price is worth over time because we want to buy low and sell high not the opposite but we don't know where the lowest and we don't know where the highest because this is the first time you're really investing, right?

18:28Yeah. I started investing when I started working with you. I had a 401k at my old job, but I didn't know what it was doing or what it meant. So I wouldn't, even though that like was technically an investment, I wouldn't really count that because I didn't set up the account or like know what it was doing or anything like that. And so I think that it is interesting because while I am doing some of the like, quote unquote, right things, I am not thinking about it as strategically as I think that I should and could. And now is probably the time to start doing that, especially since it's like I do feel like a bigger sense of responsibility and accountability now that I have a joint account.

19:12And it's like this is, you know, financial planning for like two people and a family. And so I need to be more thoughtful because even though I'm not doing nothing, I should probably have my goals a little bit more defined and play with compound interest calculators more. So here's the deal. Wealth building is not about one magical fix. It's about consistency. And it sounds like you and your now husband are committed to being really consistent about saving and investing. so I think we've covered a lot today dear Morgan I would say step one is to come up with some really clear goals together goals have price tags and so first you know figure out the life you want and then reverse engineer to figure out how to get the money to live that life I know that some people have magic numbers that just feel good to them for no other reason than feeling good.

20:19And maybe that's part of it too. I know there's probably like some number that feels really good. Take that into account, figure out where your destination is so that we can reverse engineer how to get you there. And is that enough? And then maybe you put numbers on what feels like enough. So it's not as emotional because it sounds like there's like an emotional, I didn't have enough component to this. Yeah, I think that that all feels very doable. And it does feel, I don't know, it just it just feels like it makes sense. I feel like I didn't even realize because I felt like I was doing the right things.

21:01I didn't realize that I was also kind of doing it in a bit of a blind way. So I think those steps don't feel scary. They feel very reasonable. And And I do feel like they can be motivating, like you said, like get myself more excited about wealth building and that it's not a dirty word. It's definitely not. It's very exciting. You're starting early. You're doing so many of the things that we talk about on the show all the time. There is some like block around it, but I think it's pretty normal for people to, you know, not take their own advice. And so it's a good reminder to get your financial hygiene on yourself.

21:44Put your oxygen mask on first, even before helping our listeners. Yeah, it's a good point. So how do you feel about getting started? I feel good. I feel good. Jack and I are going to dinner with his mom tonight. Otherwise, I would say tonight we'll talk about it. So maybe we'll talk about it over the weekend. And over the weekend, we were thinking about going out to dinner because it's our like almost one month anniversary of being married. Listen, I haven't been married a year, so who am I to talk? Sounds like perfect dinner to me. For today's tip, you can take straight to the bank. If you're waiting for the perfect moment to start building wealth, please don't.

22:27The earlier you start, the better off you'll be. And if you're looking for the right tools to help you save or just get a plan together, check out Bank of America. Bank of America is the one-stop shop where you can get guidance, tools, solutions, and view your Bank of America banking and manage your Merrill investing accounts all in one place. To learn more, go to bfa.com slash financial next steps, which I have linked in the show notes. Brokerage services are provided by Merrill Lynch, Pierce, Fenner, and Smith Incorporated, a registered broker dealer, registered investment advisor, member SIPC, and a wholly owned subsidiary of Bank of America Corporation, member FDIC.

23:02The views and advice expressed by Money News Network are independent and not endorsed by Bank of America Corp.

23:32on the show or even have a one-on-one intervention with me and follow us on Instagram at Money News and TikTok at Money News Network for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.

24:02Thank you.