Personal Finance First: The Step-by-Step Plan Before You Start Investing

26:46Stephen:Download my ebook for free at stockmarketpdf.com. No, I wouldn't say you missed anything. I think credit cards are definitely a big thing. I am an advocate of having more than two credit cards once you are financially stable and once you understand everything that's going on. Once you've developed, I guess, the willpower and the self-control to understand how to use them, maybe you've developed automations to help you do it, whatever it is, you've worked to a point where you understand how to safely and powerfully use credit cards instead of seeing them as a crutch or seeing them as a way to get by.

27:22Stephen:And if that's where you're currently at, then they absolutely need to go or be severely restricted. It can also be a good idea. It's a great idea for people with poor credit to begin with, young people, people who have a poor credit history, or it could also be a great limiting measure for yourself is to get a secured credit card. Most credit cards, when we say credit card, it's an unsecured credit card where you with the credit card company, they say, hey, you can spend$5 ,000 as long as you pay us back to simplify it. A secured credit card is saying, hey, if you want to spend$1 ,000, you're going to have to give us$1 ,000 first so that if you don't pay us back, we've got the money and we're secured for it.

28:04Stephen:And so we are taking out basically no risk by bringing you on. And secured credit cards are a great way to get started. And because it's going to be very limiting for you in terms of how much you can spend and it's always going to be your money on the line, It's a great way to sort of build that mindset of not seeing credit cards as just free money that you can go spend willy-nilly and pay, you know, however far off in the future you want. It's a great way, I think, to limit yourself. And absolutely, emergency funds, I want to emphasize that very heavily, are exceedingly, exceedingly important.

28:38Stephen:And turn, you know, like tires, for example, I did, I can't remember exactly how long ago it was. I know I talked about it on AAR, but about four or five months ago or so, I had to get tires in this new development, there's nails and stuff. I'm sure that that's where it came from, because Jen also got one in her car as well. But getting a nail on our tire and having to get that tire replaced and figure out that process goes from crap, where am I going to get this money from? I'm going to need to restrict myself from somewhere, or I'm going to need to get paid early or something like that to get by.

29:09Stephen:It goes from that to, oh crap, okay, let me pull some money out of the emergency fund so I can pay for this. And even though that money is still gone one way or another, where you pull that money from is a massive, massive change, not just financially in terms of not going into debt, but it's huge for your mindset and stress level because it still sucks to lose that money, but it's a lot less stressful to see your money go from a savings account to a checking account and gone versus, okay, now that's debt that I'm going to have to figure out how to pay off. Those are very, very different situations.

29:40Stephen:An emergency fund is the bridge to get there. Yeah, I would phrase it as, you know, where we're, you know, an emergency is going to be an emergency, whether you have the money or not. But, you know, if you don't have that money, like you described, it goes from being an emergency to a financial disaster. And the stress level from one to the other is a thousand percent, you know, you know, like you said, you know, when you got that nail in your tire, it went from, you know, well, this sucks. And what do I need to do now to, you know, if you don't have that money, it's like now you're freaking out.

30:19You're losing sleep. You're not eating. You're stressing out. You're, you know, some people get violently ill when they reach that level of stress, which is really bad for your body. So, I mean, we're not even talking about financial health anymore. We're talking about your physical and mental health now because you don't have the money to support whatever emergency it is you're going through. Absolutely love that. And so on to phase two, we kind of doubled down on that mindset, Evan, where we're going to really do our best to pay off the high interest debt. So if we came out of college with some credit card debt, we need that gone because that high interest credit card debt is just crippling and it's just going to get it's going to you know that in and of itself compounds but in the negative way so we want that to go away so that our buying power is increased and then we're going to really focus on building out that emergency fund fund from the thousand dollars to we're going to you know first we're going to hit a month then we're going to hit two months and then we want to try to hit three months of expenses And when I say expenses, I don't mean, you know, you're spending money because you can live without that spending money.

31:34And of course, like if you can eventually work that into your emergency fund, great, good on you. But when I say emergency, I mean very essential survival. You have to pay this, no questions asked. That's what an emergency fund is for. So we want, you know, in phase two to get that to three months. And then this is really the building phase of where you're starting to learn what different types of investments are. You're differentiating a 401k from a Roth IRA, from a traditional IRA, from a mutual fund, from a high yield savings account, you know, stock picking. you're starting to learn about these different types of investments so that when you get to the next phase you're prepared and you're ready to go and start really making a difference in your

32:21Stephen:financial future yeah and it's okay to just spend this phase learning about that kind of stuff like like steve mentioned getting a 401k match that's a free that's free money that's 100 guaranteed immediate return that's worth jumping on as soon as you're able to but these other accounts while very powerful in the long run are not going to be that. If you don't start this right now, you're screwed sort of situation, or you're really, really missing out situation. It's okay to just spend some time learning about this before you dive into it. The last thing you want to do is try to dive into it too early and maybe commit a bunch of money to something only to realize, crap, that's not really where I wanted to put that money.

33:01Stephen:And then now I'm having to kind of scrape by to make it happen. Like for example, you might see a 401k is very powerful. And so you're like, oh, I'm just going to dump everything I can into that. And then five months down the road, you're like, cool, I want to buy something now. And you realize all of my savings are in a 401k and I can't get it out unless I want to pay taxes and fees and all that crap. But if you'd spent a little bit of time understanding them beforehand and understanding their pros and cons and their limitations and restrictions, then when you're ready to start putting money in those accounts, you understand better how to balance that for your lifestyle and your long-term goals.

33:35Stephen:So don't be afraid to just spend some time learning about that stuff before you're jumping in. Yeah, absolutely. And so I'm moving on to the next phase. And this is the phase where you really get to just like start, I would say, leveling up your financial status. And that's setting up automatic investing. So for me, I would say a comfortable, And I almost hesitated, Evan, to put a number on this because I feel like it's different, like intimately different for each person individually. So I really didn't want to put a number on it. So I put what I felt like would be safe for me. And so starting out, I think 10 to 15 percent of my income would be a safe place for me to start.

34:28I would feel comfortable with that. Keep it simple. You know, I know if you listen to IFB, we get pretty complicated sometimes and we start talking about all kinds of crazy stuff. If you're starting out in the weeds and you're young, you don't need to be at that level. That's going to come with time. And so a broad index fund, I think Vanguard is Evan's favorite one. Am I wrong?

34:58Stephen:Yeah, the VOA was, yeah. So, I mean, you know, just a broad index fund, that is perfectly fine. And then just as you start to get more and more income, and for me personally, this is one of the ways I combat lifestyle creep is the very first thing that gets increased as my income increases are my investments. So have that kind of planned out as I make an extra 5 % a year or whatever your raise is, this percentage of that is going to go to these investments. Yeah, I love to personally, I tend to split that about half and half or so. Ballpark, it can be a little more, a little bit less. But like you said, if I get, just making up numbers, if I get a$1 ,000 raise, I like about 500 of that to be heading towards savings and or investing.

35:55Stephen:And then the other half of that, okay, spend a little bit more. You're still, like I said before, you're still heading in the right direction. You're still increasing the amount you're investing and saving. and it's okay to spend a little bit more as long as it's controlled and visible and planned ahead of time. That's very important. And to touch back on what you talked about, the 10 or 15 % number, I think that's a solid number to aim for. One thing that I want to kind of caution to some degree is something I don't think I've mentioned before, but when I go through and I budget everything out for myself, I like to figure out what is meant to be sort of temporary savings or potentially short-term savings and what is semi-permanent savings is what I call it.

36:37Stephen:So something like an emergency fund or in my case, saving up for a motorcycle purchase or something, those are savings and I'm not spending them right away, but it's money that I know I'm planning to probably spend at some point. And so I'm not going to treat it as forever. And why this is an important differentiator for me is if you can only, let's say that you can only make a 10 % savings rate happen for you. If you put all of that 10 % into like a 401k or an investing account or a market account, that's going to be very inaccessible for you if you need it, or even just want it. If you want to spend that on something like a vacation or need to spend it on something above and beyond your emergency fund, it's going to be difficult for you to get to, and you're going to be paying some kinds of taxes and fees.

37:24Stephen:You're going to be waiting on it because transfers are going to take time, yada, yada. You want to make sure that that 10 or 15 % has some margin on top of it, where you can also save for some short-term purchases and be able to also make that 10 or 15 % long run sort of semi-permanent savings happen on top of that. That's a great point. And I think it's a little bit of a different approach from the way you do it to me, because for me, that's the next phase. And so I want to clarify, on what I was talking about since Evan brought it up, and it's a great point, that, you know, initially, from my, the way I think about it is, I want you to go as deep, you know, as hard as you can with those first initial months of investing.

38:12So that full 10 to 15%, because if you, you know, say you want to save up to buy a house in the future, you know, a couple of months, that 10 to 15 % all going into your investments, is not going to hurt you. The reason I say that is just because of the way compound interest works. So we get that larger amount in our market, whatever we're investing in, we get that larger amount in as fast as we can. That compounding is going to be much larger down the road than if we had just started with, say we cut it in half and we do 5 % and then 5 % for a house. You know, that actually is a pretty significant increase in money versus what you were saying.

39:06And I'm not saying my way is right. That's just how I think about it. And that's why I do it that way or would suggest that someone do it that way.

39:14Stephen:Does that make sense? Yeah, that makes sense. I think that's totally valid. I think it's also to your point at this point, as long as you already have an emergency fund set up to support you, then you're already going to have some savings set aside to support you in the short term if you need it. I would just make certain that you have that set up. I know it's in the prior phase, but make sure you have that set up prior to trying to push for this 10 % or 15 % if that's a push for you. But if you have that security net set up for yourself, then I don't see anything wrong with trying to get that compounding set up early.

39:49Yeah, absolutely. And if you don't have an emergency fund, I wouldn't even, you know, stop. Just stop what you're doing. Go get your emergency fund because, like, life's going to hit you. And, you know, oh, shoot, Murphy's Law, you know, what can happen will happen. And usually, especially what I've learned with finances is it's hard, very, very hard, harder than it needs to sometimes.

40:18Stephen:so yeah things cost more than you think they do when you actually have to buy them they cost a lot more way more tires and i know we keep touching on it but tires why why are towers so dang expensive and they're consumable oh man so but yeah and i think that you know no matter how you do it no matter how you slice the pie you're going to win it's just a matter of how you want to do it i think it's just a different approach um but i definitely agree with you evan i think your way is definitely valid and is it you know if someone chooses to go your route hey i don't care as long as you're doing the work that's all that matters to me um and so then we move on to the final phase of this and that would be phase four and that is increasing your rate um like evan was just talking about you know now we're getting into maybe we want to have kids in the future maybe Maybe we want to have a house.

41:11Maybe we want to upgrade our cars. Maybe we're going to planning on getting married and we want to have a decent sized wedding. So, I mean, but this is the phase where we start doing that. We're going to start setting up savings accounts for our homes, for motorcycles, for cars, for weddings, for kids, whatever it is we're starting to want in our lives. and now the and this is the place like once you get to this place in your finances is the only time i would say it's safe for you to start picking stocks like andrew and i do so i mean you know this is like your superpower time this is the time you really don't want to waste because this is your peak saving and earnings time so i mean evan like out of all of that is Is there anything you felt like I got a little too risky with or should we have created a phase five or do you think this is a pretty, pretty solid foundation to get your life going the direction you want it to?

42:19Stephen:I think this is just this is a perfect place to end up and just following these phases is doing absolutely plenty for yourself. We can always, you know, find find other ways to just perfectly tweak things or, oh, you If you invest in this crypto, it's been beating the S &P 500 by half a percent or 1%. There are always other ways to maximize stuff. But by just following these phases, you're already ahead of, again, we're just making up numbers here, but easily ahead of 80%, 85 % of people. You're already in a fantastic, fantastic place. And if you want to keep doing further research to tweak things further, then that's completely fine.

42:58Stephen:There's nothing wrong with that. You've already set up the foundation to do that safely and in an educated manner for yourself. But just by following these steps, you're already in an incredibly powerful place. And I guarantee you that by the time you're retirement age, you are going to be in a very, very good place for yourself. And that's that's something to be freaking proud of. There's there's nothing wrong with that. I would even argue like you're, you know, depending on your life, you know, the life you grew up in. But I mean, if you grew up the way I did, which is relatively poor, like you've changed your family tree, literally, you know, you've you've set up a lifestyle for your children to flourish as well without them having to do the hard work that you had to do or whatever.

43:40But I mean, like it's it's setting you up in a way. Now, Evan, this is the one question that really just kind of irritates me. And I hear it all the time when I talk to younger people about investing. They say, well, I just want to enjoy my 20s.

44:00I don't know what you're arguing. I have a very distinct argument that I use for that, but I'm curious to hear what yours is.

44:06Stephen:I don't think I'm ever going to match up to whatever your particular argument is. But I mean, it's very difficult for me. I mean, it doesn't help that I think I have a different point of view currently being in my 20s. I think you get a very much more educated view of it past your 20s, looking back on it, what what you enjoy doing, what you regretted doing, whatever. But for me, actually, in my 20s, while I understand where that's coming from, I think that the enjoyment of being in a solid situation financially, emotionally, relationship-wise, just having a good, solid life is incredibly underrated.

44:46Stephen:Traveling a bunch, traveling the world, that's absolutely fantastic. Buying a bunch of stuff, living a lavish life. Sure, I can understand the enjoyment and happiness that comes from that. but I think that it's, again, it's all, it's all what's exciting to put on social media or what's exciting, an exciting story to go tell somebody. It's not exciting to say, I'm going to go home and watch TV with my best friend and have a great night. That's boring. If I was telling you, you know, actually, we're going to be, we're going to be driving down to Key West. We're going to be staying there. We're going to be, you know, having a party down there with some, you know, friends or whatever.

45:19Stephen:We're going to go out on their boat and then I'll be back or whatever. That's a much more exciting story to tell. But I think that they are both arguably equally as happy lives. And just building a good, solid life for yourself is enjoying your 20s, not to mention that it's also setting yourself up to enjoy your 30s and 40s and 50s and not hit your 30s and suddenly have to be running twice as fast to make up for what you didn't do in your 20s. I just I do get frustrated by that too because I think that it's it's easy to underrate the the the stuff that's not as flashy oh 100 social media is the bane of of my existence like and we we've talked about it before like all you know all the investing bros on social media I want to want to choke slam most of them you know like good old like the rock style like just stop That would be clicks, though, so that could work, too.

46:14That would, but I mean, it's just they're promoting a lifestyle that for most people, I would say 99.9 % of people is not attainable, let alone sustainable. My argument to that is, you know, okay, fine, skip your 20s. That's going to cost you, you know, upwards$300 ,000,$400 ,000. dollars um so i mean is that trip to cancun worth 300 grand to you if it is fine take i don't care but i mean that that is the difference of starting investing when you're 24 versus starting when you're 30 and that's you know if you don't believe me go to just just type in compound interest calculator, pick one, it doesn't matter.

47:04And, you know, just type in the numbers. It's super simple. 24 versus 30. You know, you pick an investing number, doesn't matter. Like, it's going to be hundreds of thousands of dollars of a difference. And because I mean, right now you are in your compound interest time. And, you know, it's insane. It just irritates me that that this isn't taught in high school and college in most places because it's, it's so important in my opinion. But like you said, if, if it makes you miserable and you would rather do other stuff, then, then, you know, ultimately enjoying your life is the most important. And I can attest to traveling around Europe.

47:53I've done it. I've lived in, I lived in Europe for five years. It was amazing. You know, traveling, I've been all over the world. It's great. I would highly recommend it. Now, I did it on the Army's dime. I didn't have to pay a single cent for it, which was awesome. You weren't paying your electricity either. Yeah, I wouldn't pay my electricity bill either. Or rent, or garbage, or water, or anything else. But, you know, I highly recommend those things. But to me, I would, you know, it's not worth that big of a sum of money because that in and of itself is a life changing sum of money. So that would be my argument.

48:41Anyway, I digress. Moving on. So to kind of just recap this and put it into like a simple little checklist for you, because, you know, we want you to maximize. Like I said, this is your superpower time and we don't want you to waste it. You know, step one, can you pay your bills without panicking? Step two, get at least a thousand dollars in an emergency fund. And step three, get rid of any high interest debt you might have, you know, credit cards, maybe a car, whatever. Get rid of that high interest debt. Step four, get your basic budget laid out. And Evan has, and he can plug the URL because I don't remember what it is, but he has a really awesome, very simple to use budget to get started with.

49:36What's that URL, Evan?

49:37Stephen:It is einvestingforbeginners.com. slash budget. Thank you. And then get your automation automations going. Can you, and the final question I would ask, like when it comes to, is it time to start investing is, can you contribute 12 months to this investment without batting an eyelash? And, you know, that just is a final check because if like you can't solidly say yeah i can you can take that money right now it doesn't bother me then you might need to go back and relook at what the work you had done prior because i feel like there's an error somewhere and then when it comes to the time to start investing you got your three months of emergency funds the all the high interest that is gone and you fully understand what it or i wouldn't say fully you have a good understanding of what you're doing with your investments.

50:37Stephen:I've been thinking a lot about heart health lately, not because something felt wrong, but because I got my results back and saw markers I'd never even heard of that were out of range. What caught me off guard is how much can be happening quietly with markers most people have never even had tested. Here's the thing about feeling healthy. Feeling fine and being fine are not the same thing. Most of us track the basics, maybe cholesterol, maybe blood pressure, and assume that that covers it. But there are markers that paint a much more specific picture of what's going on inside of your body. For example, your omega-3 index, because your body can't make those fatty acids, and most people are deficient without even knowing it.

51:08Stephen:And amylase, which reflects how well your pancreas is handling the job it does every single time you eat. These aren't obscure numbers, they're just ones that most standard physicals skip entirely, and they're ones I'm glad I know about thanks to function. That's why I use function. 160 plus lab tests a year, including the cardiovascular markers that actually tell a more complete story. Not a guess, not a maybe, a real look at where things stand. That's why taking your heart health seriously actually looks like. I use this and you should too. Check your health the way I do. Function provides 160 plus lab tests for$1 a day and member pricing on MRI and CT scans.

51:42Stephen:Join at functionhealth.com slash beginners or use gift code beginners25 for a$25 credit towards your membership. The first time I heard about Bitcoin, honestly, I thought that was a scam. I did not realize it was something that would last and I was wrong. technology has made it so much easier to use these days especially on cash app with cash app it was so easy for me to take the direct deposit i already receive allocate a percent of that to automatically buy bitcoin inside of the app and i can use that as a form of payment in so many places if you've been curious about bitcoin but haven't made the jump yet cash app makes it easy you can set up automatic purchases with zero fees or buy larger amounts also with zero fees start small or go bigger.

52:26Stephen:It's designed to be simple either way. For a limited time, new customers can get$10 added to their balance. Just use code cashapp10 when you sign up. And don't forget this part, send at least$5 to a friend in the first two weeks. Terms apply. Cashapp is a financial services platform, not a bank. Banking services provided by Cashapp's bank partners. Bitcoin services provided by Block Inc. brand. For additional information, see the Bitcoin disclosures at cash.app slash legal slash podcast. Yeah, I love all that. And the only thing I would add is just, just make sure to be heading in the right direction and be proud of yourself for heading in the right direction.

53:04Stephen:If you decide to enjoy your 20s and, you know, go to Cancun, travel Europe, whatever the heck it is, I would just strongly recommend the whole time to continue trying to head in the right direction. Continue building up wealth, continue growing that wealth wherever possible and compounding wherever possible. If you're heading in the right direction, then in the long run, you're going to be in a fantastic place. And I wouldn't even say like, I guess I came off really strong with what I said. I wouldn't even say don't do it. I would say just have a plan, you know, know, fully understand what you're doing and have a plan for it.

53:43You know, and that changes everything. Like you said, it always keeps you going in the right direction. And I would finish this by saying if investing is ever going to cause you to use a credit card or your emergency fund, you're not ready. Because at that point, you're not investing. You're just playing. You're gambling. You're going to a casino. So don't do that. So we kind of want to wrap this up with what to do if you're like me. You're middle-aged. Well, I guess Evan, too, now. Evan's middle-aged. Hey, hold on.

54:15Stephen:Hold on. I don't know where the goalposts are moving. If Gen A is already in the workforce, bro, you are officially middle-aged. You're telling me I lived to 54? That's a rough place to be. Well, screw this. I'm going to go enjoy my 20s. You guys can say goodbye to me. Say goodbye to the house. You can catch us in Cancun or Italy. I'm kidding. It is frustrating how young Evan is, though, sometimes. but um but we we kind of want to shift this a little bit uh to what to do if you're middle-aged and you haven't started any of this in your 20s you didn't start any of this in your early 30s what to do should you is is it time to freak out is it you know is there still a safe place or a safe way you can navigate this and get um back on track and the answer to that is no it is not time to freak out.

55:11It is time to be serious, intentional. And yes, you very much can catch up. And I am a prime example of that. And there are only three phases to this, Evan. And the very first one, stop the bleeding. Get your budget. Like Evan said, understand exactly where your money is going. And I would argue if you're in this scenario, going the way I went of where I I track every single dollar that's spent. I track every single penny that's spent. I would say that this is definitely applicable to you. Like you need that level of intentionality in your budget. And it doesn't, I'm not saying permanently. I'm just saying while you're digging yourself out of whatever hole you're in, you need every penny you got.

56:03And so I'm not trying to scare you. That's just the reality of it. So get that spending down, get that understanding done and get that budget made. Very next step, build that thousand dollar emergency fund as fast as you possibly can. And of course, if you got that employer match, obviously, we're never going to say, you know, ignore that employer match. It's too much money and it's too much free money. So you got to get that. so go I would say at the end of phase one go ahead and and nail that in as well and then the last thing I will say Evan before I hand it over to you is in your mind you're going to feel and I know this because I felt like this too is I should have done this earlier the truth is yes you should have the also truth is it doesn't matter you like you didn't but that doesn't mean you're screwed.

57:04That just means you have a little bit of a different path. But the destination is the same and the goal is the same and you will get there eventually.

57:15Stephen:Yeah. Like you said, the goal is the goal is absolutely the same. I think that, that, like you said, that, that regret, that, that frustration, that sort of disappointment yourself is going, is completely natural and that's okay. And that's that I'm sure that that's already happened to you by that age for other unrelated non-financial reasons. We all feel that in one way or another many times throughout our lives. You just need to make sure that it doesn't debilitate you into non-action. If you are feeling that fear, even if you're listening to this right now, like, oh, I'm in that situation or a similar situation, it's okay to feel that frustration, but don't let it stop you from doing anything.

57:54Stephen:Don't let it put you in a situation where one, five, 10 years from now, you look back at it and now you're past middle age or whatever, and you're still feeling that same shame and frustration. We want to just put you in a place where when you look back on your now current self in the future, you can be proud of what you did and know that you didn't do everything perfect, you never will, but that you, again, headed in the right direction and started doing the right things and made that turn now. I don't give a crap when it is. I just care that when you look back on it, you will have made that turn.

58:26Yeah, absolutely. I mean, it doesn't matter how long it takes you to take the right step, just taking that right step. Like, that's all that matters. That's, you know, and eventually taking that right step pays off. So and then once we get into step two, that's where we're aggressively. And I and I don't know if if Evan will agree with all of these things, but this is where I would say you need to aggressively pay off your debt, starting with high interest. debt, but I would also put that towards other debt as well. Not, not house, house is obviously, obviously excluded, but if, you know, you got two car payments, well, let's try to get that down to one or, you know, but I mean, aggressively getting that debt paid off and then building that three to six month emergency fund again, as fast as you possibly can.

59:18And then I would advise, you know, we need, it's going to be uncomfortable, but we're going to have to be a little more aggressive in the amount of money we're starting to invest as well, because we've lost that time. So I would say at this phase, we'd probably want to do 15 to 25%. That's what I would be comfortable doing. That's what I did. And then the final point here is to really focus on non-complex investments where, you know, you're going to learn as you go. So just start off with that, that VOO or that whatever you know bonds or whatever it is you want to start in the gold realist like just focus on that simple thing you can invest in do it and then as you're doing it you're going to build more knowledge and you can get more complex with your investments as you go it is funny Evan as you take action as you get more into what it is you're doing something that is super complex initially suddenly like starts becoming more clear, like you start getting clarity.

1:00:23And it's like, man, I'm not even doing anything. I'm just doing these actions. But those actions are just building on more clarity and more clarity as you take them.

1:00:33Stephen:Yeah, I think that it's going to be even more difficult. The later in your life, you start to do anything. You know, wait later in your life to ever start stretching or working out or whatever. It's it's always going to be harder to get started. and you're going to have to undo habits. You're going to have to undo muscle memory. You're going to have to undo, undo any of that. And so it's going to be more difficult and that's okay. But like you said, once you start doing it, it's, I mean, you know, you're, you're middle-aged, you are, you are experienced enough to be able to handle this kind of complexity in your life.

1:01:02Stephen:You know, you've been working a job for quite a while. You've had many life experiences. You've done many things. You can handle this. This is, this is in your, in your wheelhouse. This is not crazy complex, you will be able to do this. I absolutely guarantee you. And I do actually agree with you with trying to ramp things up as much as possible, partially because if we just look at the statistics, of course, this isn't going to apply to every person out there, but statistically, over time, the older you get up until retirement, you're going to be earning more money. And so at this point, if you're middle-aged, more than likely, again, not guaranteed, but more than likely you're earning more than you would have if you were in your 20s.

1:01:38Stephen:And so at this point in your life, you can take advantage of that extra income to push more aggressively than you could have if you were a 21-year-old just out of high school or college who's trying to do the same thing. And some of that may take undoing some things, undoing some habits. Maybe you've locked yourself into some situations that you didn't realize. Maybe you've built some spending habits that you don't realize are over the top or unnecessary. And so it may take some pulling back and some visualization and some sort of self-reflection and honesty with yourself about what's really needed and what purchases are actually reasonable.

1:02:15Stephen:But once you're done with that pullback, I think that more than likely you'll have that extra wiggle room to make that more aggressive push happen than if you had started earlier in your life. Absolutely. Love that. And then our final phase, phase three, we're just going to protect and optimize. Now we're going to really focus on things like our life insurance. We want to make sure we're prepared because you're more likely to have these statistically, you're statistically more likely to have these life changing events, you know, death in the family, disability of some sort happen as you get older.

1:02:55you want to start thinking about your estate as well you you know everyone thinks oh well I'll worry about a will later you know you know I had a friend he died I think he was 44 years old had a massive heart attack and died and left his wife they live in Hawaii fortunately their children are all adults so I mean that wasn't a big huge burden on her but I mean he had they had no plan they had nothing and so now she's left not only trying to navigate grief but navigate all these financial issues because they didn't they weren't prepared in any way and he was 44 he was a surfer they lived in hawaii surf every single day he was in good health apparently it appeared um and just out of nowhere he was gone and so i mean i'm not trying to be all doom and loom, but the reality is these things happen.

1:03:49And I would much rather be prepared for these things should something unfortunately happened to me. My wife is taken care of should something unfortunately happened to Evan. His wife is taken care of. Um, that's what we care about. We don't want it to happen, but if it does, um, and then, you know, at this phase of your life, If I would say keep your investing at least for a while, I would say keep it consistent, but boring. We're not trying to hit a moonshot here. We're not trying to get rich overnight. We're just trying to catch up to the 20-year-old that started before you. So, I mean, that's literally all we're doing.

1:04:33We're playing catch up, and you're going to do that by just boring investments, nothing fancy. You know, we can't go back in time, but we can go forward with intensity. And that is what is going to make those drastic changes in your life.

1:04:47Stephen:It's easy to assume that that especially when you really need it, that you're going to be able to make, like you said, some moonshot investment. You're going to be able to do something crazy and boom, now, you know, caught up instantly or whatever. I did. I just always like to go with the statistics and not you can never guarantee results. but put yourself in a statistically advantageous place that you can be confident in the moves you're making, decisions you're making, and that it's going to help you in the long run and head you in the right direction. And with that, it is completely okay to be boring.

1:05:19Stephen:And I would much rather see you scrape by a little bit financially otherwise to be able to push your investing forwards and get that, again, as close to guaranteed long-term return as you can and guarantee that future life for yourself rather than take the financial risk to try and hit the same end goal. One of those ways is statistically very, very likely to happen. And one of them is statistically, it's not going to, it's not going to happen. And, and just, I don't give a crap. It's 0.5%. It's nothing. Just, just aim, aim in the direction that you can be confident that you're doing the right thing.

1:05:55Stephen:And then it's going to help you in the long run it's it's going to be boring but that is okay one of the things i've noticed is the more correct steps you take the more likely you're you are to find yourself in a position for an opportunity that will greatly benefit you and there is so much power i know you feel like you should be running a sprint but the marathon that is where the power is man just small consistent steps. Yeah. Yeah. Nobody's sprinting for 26 miles. Man, could you imagine? That would be so cool. I wish I could do that. Anyway, so Evan, as we close this out, I guess the last question I would ask you is if there is one thing you could like surgically implant into someone's head, be it younger, be it middle-aged, somewhere in between, maybe even older, what is that one thing you would want to just like surgically stick in there so it can never leave?

1:07:03Stephen:Just don't be afraid to look at your finances. Whatever age you are, if you hardly have any finances, you know, to speak of, or if you have a heck of a lot of finances, just look at it. Look at it, visualize it, understand it. Don't be afraid of it. It could be, it could be absolutely fantastic. It could be horrible. It doesn't matter either way, looking at it and allowing you to see what's going on under underneath the hood. Even if you don't take any of these steps, just looking at things will allow you to make your next decision to be a ton more educated than it would have been otherwise. And if you do all these things, right, that visualization is also going to help you do all those things even better, even more easily, even more educated and even more powerfully.

1:07:45I love it. So the final question for the audience is, what do you guys think the over under is that Andrew's baby, Andrew's new baby was born with a 10K in his hand? What do you what do you think? Let me know in the comments if you think Andrew's baby, maybe even an abacus, maybe maybe or a calculator, you know, I don't know, maybe just let me know what you guys think. I think he was I think there is a solid chance that we the new Warren Buffett was born. and so we'll see but thank you for joining us so much we appreciate it, we love you guys and we will see you next time Andrew will be back and in the meantime though invest with a margin of safety emphasis on the safe, peace

1:08:35Stephen:you've been listening to the Investing for Beginners podcast all show notes can be found on our website at einvestingforbeginners.com. To master the basics of stocks in seven days, sign up for our free email series at einvestingforbeginners.com slash newsletter. Until next time, have a wonderful day. The information contained is for general information and educational purposes only. It is not intended as a substitute for legal, commercial, and or financial advice from a licensed professional. The hosts may own positions in the securities discussed. Review our full disclaimer at einvestingforbeginners.com.

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