Category Archives: Podcast

How Your Family Can Become Financially Free

Despite popular opinion, you don’t need a million dollars to be financially free. We’ll go over how you can create a financial independence plan that fits your family and is actually fun!

How Much Do We Need as a Family to Be Financially Free?

Simplify and Enjoy is about families working toward financial freedom using core ideas from financial independence and minimalism. 

But how does that work in times like these? 

Can we take this foundational question we talked about in an earlier episode – finding your FI number – and actually craft a plan for a family now going through the pandemic?

Let’s be honest, depending on where you were in your own financial journey, the pandemic could’ve shifted things in so many directions for you.  

I think it’s reasonable to acknowledge that a family who’s carrying debt like car payments or student loan is going to experience things much differently than a family whose paid off their

Non-mortgage debts and are using that money to invest. 

So how do you create that path for those families? Is it possible to work towards financial freedom and perhaps independence during times like these? 

First off, let’s start off with the good news. 

You don’t need a million dollars or more saved to achieve financial freedom. In fact, with some planning, you can really open up a lot of options for your family in a relatively short amount of time. And you know, what it can be rewarding and enjoyable. 

I want to show you how. 

In this episode, we’ll get into:

  • Making financial independence approachable by doing it in phases
  • The key numbers to watch 
  • How to craft a plan that fits your family

So we’re going to start with concepts but then go into some real numbers so you can see how the process works.

Ready? Let’s get started!

Handy Tools to Start Your FI Journey

If you’re looking to get ahead with your finances as a family and look at pursuing financial independence, here are some resources to check out:

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union!

If you live in the Triangle area of North Carolina and you’d like someone to work with you on your goals, you really want to check out Coastal’s Wealth Management team.

They’d love to help you start investing for retirement and more!

The Phases of Financial Independence

One of the biggest barriers families have with tackling FI is the feeling that financial independence is an all or nothing deal. 

You have to go all-in until you hit that number and then you can quit that job you hate and never have to work again. 

And look, for some people that’s their path. 

But that doesn’t have to be yours. 

You can approach your finances through levels or phases. With each phase, you can adjust your plans based on what’s currently going on and give yourselves more options to improve your quality of life bit by bit. 

And if I had to break it down to the most basic stages, I would say that families typically progress from:

  • Financial Stability
  • Financial Agency
  • Financial Freedom

An idea I picked up from City Frugal really clicked for me. It’s switching from “enough money” to “enough money to”.

‘Enough’ is this nebulous term that can be hard to pin down.

But ‘enough to’ can allow you to get a  number (ballpark or not).

And it also gets you into this mindset of money serving a purpose rather than being the goal. 

So let’s look at finances through that lens – ‘enough money to’ and line them up with a few big milestones families strive towards. 

  • Phase #1: Enough Money to Cover the Bills: It might seem like an obvious goal, but many families are now experiencing hardship because they realize with even a small drop of income that they are not able to pay their bills.
  • Phase #2: Enough Money to Ride Out a Financial Emergency: Look, no one could have anticipated this global pandemic, but the truth is emergencies do happen to all of us. So this would be the stage and phase where you're trying to build up a financial cushion.
  • Phase #3 Enough Money to Start Investing: Now we're gaining some margin. You're able to cover your bills. You do have money that you can put towards building your financial cushion a bit more. Or paying down your debt. It's not a bad spot to be in, but there's still more phases that you can continue with.
  • Phase #4 Enough Money to Switch Careers/Negotiate: Here is where your quality of life starts becoming more of a factor. You're not just trying to survive, but now you're opening up some options. You're feeling a little bit more secure and confident that when you do come up for a promotion, you can push back maybe a little bit more for better pay or better benefits.
  • Phase #5 Enough Money Where Saving More is Optional (CoastFI): You've done really well. You've invested enough money to have a traditional retirement. So now you can decide, do we want to go all-in and speed up the date? Or are you looking for more quality of life choices?
  • Phase #6 Enough Money to Where Work is Optional (FI): You can live off the money that you have saved and invested and your covered.

This list isn’t meant to cover every point, but instead, give you a guide of progression a family can make. 

Key Numbers to Watch to Become Financially Free

Last week we talked about credit scores. While your credit score can affect your finances, it’s not really a key metric to hone in on. At best it gives lenders an idea of how likely you’ll be able to pay back.

In the grand scheme of things, you’ll better off putting your energy towards numbers that give you a picture of your financial health. 

As you work through financial stability, agency, and freedom, you’ll see a few crucial numbers pop up. 

  • Net Worth
  • Cashflow, in particular, essential and typical expenses
  • Saving Rate

Phase #1: Enough Money to Cover the Bills

  • Your Cash Flow: How much are you losing or having at the end of the month? 
  • Your Essential Expenses: How much money do you typically need each month to provide the essentials and stay current on your bills? 

Phase #2: Enough Money to Ride Out a Financial Emergency

  • Your Cash Flow: How much are you losing or having at the end of the month?
  • Your Saving Rate: How much can you sock away in your financial cushion? 

Phase #3 Enough Money to Start Investing

  • Your Net Worth: Big picture view of your finances. 
  • Your Cash Flow: Look for opportunities to optimize your expenses. 

Phase #4 Enough Money to Switch Careers/Negotiate

  • Your Net Worth: Big picture view of your finances. 
  • Your Cash Flow: How will it be affected during the transition? 
  •  Your Saving Rate: Do you need to crank it up? 

Phase #5 Enough Money Where Saving More is Optional (CoastFI)

  • Your Net Worth: Big picture view of your finances. 
  • Your Cash Flow: How will it be affected during the transition? 
  • Your Saving Rate: Do you need to crank it up? 

Phase #6 Enough Money to Where Work is Optional (FI)

  • Your Net Worth: Big picture view of your finances. 
  • Your Cash Flow: How will it be affected during the transition? 
  • Your Saving Rate: Do you need to crank it up?

Creating Your Family FI Plan

So how do you create your own FI plan? 

Let’s go through the process to give you an idea. 

The first thing I would suggest is to talk it over as a family and define what kind of lifestyle you’re going for and getting a really rough estimate of the annual expenses. 

And if you don’t have an anchor point, you can use your own spending. Would you say you’re pretty happy with things? Now imagine if you had no debts, how would that affect your financial needs and expenses? 

It’s interesting because some families realize that just the debt payments alone were hindering their lifestyle.

But let’s continue…..

You can then take that amount you feel is reasonable for what you want and multiply it by 25 to get your ballpark FI number. 

  • So if you need $30,000/year -> $750,000
  • $40,000/year -> $1 million
  • $80,000/year -> $2 million
  • $100,000/year -> $2.5 million

Now it’s time for some analysis and reflection. 

If you haven’t already, look at your annual expenses for the last couple of years. Where are you in those phases? Are you financially stable? Do you have some wiggle room with your cash flow so you can save and invest? 

Do this exercise – take away all the debts. If those were gone, how much do you need now?

Now as we’ve discussed plenty of times on the podcast. It’s definitely a smart money move to go through your expenses and see where you can lower them, but keep in mind you don’t want to compromise your quality of life

Sure you can live on the bare minimum, but it wouldn’t either be enjoyable or healthy.  

Let’s say you can pay the bills, but you’re worried about being able to ride out an emergency. Like the one we’re in now. How much is enough to be able to do so?

So now you can craft that budget so you’re meeting that more immediate goal of getting your financial cushion solid with an eye towards that long term goal of FI! 

Support the Podcast!

Thank you so much for listening to the podcast!

  • Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and become financially free, please share.
  • Leave a review. Honest feedback and reviews make a big difference and gets the word out about the podcast. Leave your review on Spotify, or Apple.
  • Grab a copy of Jumpstart Your Marriage and Your Money. My book is designed for a busy couple to set up their finances in 4 weeks. Get tips and tools that have worked for other couples on their journey of building their marriage and wealth together!

This episode was originally released in July 2020.

Family Guide on How to Start Investing

With so many different options for investing – 401(k)s, IRAs, taxable accounts, you might be wondering where should we put our money? 

Today we’re looking at how you can invest for you and your goals!

Where Should We Invest?

How

You talk to most families about investing, whether it’s for retirement or another goal and you get this sense of overwhelm. 

Part of it is due to having so many things you’re working on. 

Taking care of the kids. 

Saving for emergencies. 

Dealing with work. 

Paying off debts. 

It keeps you busy for sure, but because you’re doing a little here and there, many times, you’re spreading yourself and money thin. 

And you’re not making the progress you want to make. 

We had a bit of this when we were first got married and were figuring out what our priorities. 

It took a bit of time to really nail those down, but once we did it made things so much easier because we could then work on things one by one. 

It was less stress and we were actually making progress. 

So today I thought we could do with investing – break it down so you can see what options are available to you, like 401(k), Thrift Savings Plan, or IRA and then see how they fit in with whatever season of life you’re in. 

Drew Snider is here to help out. He’s the director in Financial Planning at Coastal Wealth Management. He’s also a husband and father so he gets it. 

In this episode we get into:

  • Conversations to have at certain milestones about finances
  • Major investment accounts you need to know about and how they work
  • How to align your money including investments with your priorities

Let’s get started!

Handy Resources to Start Investing and More

Whether you're new to investing or looking to level up, here are some resources to get your there faster!

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union!

If you live in the Triangle area of North Carolina and you’d like someone to work with you on your goals, you really want to check out Coastal's Wealth Management team.

They'd love to help you start investing for retirement and more!

How Investing Fits in With Your Financial Plan

Elle Martinez: Some couples, they feel like, ‘OK, like financial planning and how does that fit in?'

What we've noticed, [when] we've met with a financial planner, it just makes things so much easier, especially when you're talking about something as big as retirement.

I wanted to discuss some conversations you suggest couples have to keep the ball rolling about planning for retirement. What should they sit down and chat about first?

Understand Where You Are In Your Financial Journey

Drew Snider: Well, I would first say that I think it's age-dependent and sort of where you are in the process.

If you're just starting out in your single or just married twenty five to thirty five, I think the first conversation is really about budgeting and making sure that as a family you're putting aside 15 percent of your income for retirement.

If you've been started doing that when you first form your household at that age, you should be very well prepared for retirement.

Those folks who are 35 to 50,so a more established family and younger children getting into middle school age children. Your goals start to get conflicted. It gets a bit more challenging.

You really start realizing that these kids are actually going to go to college and that you really need to actually have some money saved for them.

You're also reaching mid career and so you're being pulled in directions for work, which can be challenging.

That requires vacation time to to get away for a bit as your kids get older. You're starting to enjoy that vacation time, too. So you have these conflicting goals.

It becomes very important at that time to really have a goal focused financial strategy.

How Drew and His Wife Define Their Goals and Plan

I can tell you what my family does. So, yeah, we have specific goals. I have a twelve year old daughter who's going to go to college, no doubt about that.

My wife and I want to retire someday so we specifically fund those goals.

As we're getting older now, we definitely and my daughter is having fun with us on vacation for now. So we definitely have some goals for that to to visit National Park.

We put aside some money specifically for those goals. I call that goal based budgeting where you're you're putting that money into the account design for those specific goals.

You can feel like, well, the rest of the money that you have coming in and outside of that is disposable income.

It's really up to managing that on the day to day basis to make sure you've got, you know, that the bills paid and food on the table and everything else is really up to you as a family to decide. But you've got your goals paid for effectively. So that's, you know, for that mid-range middle period and then fifth age 50 to retirement is really the conversations with the spouse or significant other is really about what do you really want to do in retirement? They think retirement starts to come a little bit more into focus.

Where do you want to be? How do you want to spend your time? You really should start having those conversations because. That, in view of your future, is going to back into how much money you really need to have set aside to accomplish that, and then hopefully your kids are getting older and and and you might be becoming an empty nester. No kids in the house.

You can focus a bit more on saving and getting those goals a little bit more in focus on target. So those that's the way I would kind of look at it from an age standpoint and what the focus should be.

Which Investment Accounts Should Families First Focus On?

Elle Martinez: Yeah, I definitely agree. And I love that the focus is, first of all defining the goals.

We're kind of in the middle of it right now, we're in our late 30s we have two little ones. And so are our goals are like you mentioned, going in different directions, two little ones preparing for the future. We're also trying to save up and be wise and enjoy the time we have now with them. So it makes sense to make a plan.

I love that you said even before you pay the bills, [take care of] those important goals. You already set aside that money.

I think if you wait until the end of the month or until after everything's been spent, you find out there's not enough. There's nothing at all. So I do appreciate that.

I know a lot of couples. They know what they've us to do. They signed up for the fall and can't work or the fallen 3, B or whatever, you know, number and letter combination that's out there.

There are so many different accounts. Could we kind of go over the benefits and the differences of the accounts that are typically offered at work, either raise and so forth?

Drew Snider: Yeah, I'd be happy to. Primarily the accounts that you're going to be offered at work. As I said, most people are going to be offered a 401(k) plan.

Basically, you're taking money directly from your paycheck and depositing it into a retirement account. It's easy. Often there's some sort of an employer match. So there. So your employer is helping you reach your retirement goal and then there's often an option to do it either pre-tax or after-tax people. Maybe you hear that as the Roth option is the after-tax options.

Basically, when you're deciding there is, do you want to pay taxes today on your income? Or do you want to pay taxes later? And really, that decision you should decide with working with a CPA or a financial planner to determine which is the best approach for you. I

personally just do a 50/50. I do half in my Roth for one day and I do half the traditional four or one K. So I'm getting some of the tax benefits today and then some of the tax benefits in the future. So the following K is the primary option for a lot of people. If you work for a nonprofit or a state organization, you'll have the four or three B which roles are effectively the same.

They're just under a different part of the tax code. They operate very similarly less likely to have a Roth option within the four or three B and then there are others various smaller plans if you work for a small company, but effectively they're all kind of doing the same thing. They're making it easy for you to choose to invest for your future. And within the plans you and you're going to have choices of investments.

Almost every plan these days has what's called a target-date mutual fund portfolio, which effectively is here deciding, OK, what day or year am I going to retire in the future?

If it's 20, 30, then the portfolio manager is going to invest it in a basket of mutual funds, stocks and bonds that are geared for someone who's retiring in 20, 30.

And over time, it's gonna get more conservative, less stocks, more bonds, and that's going to happen automatically for you. So all you have to do is show up for work, do a great job and continue to save money into the plan. And it should work for you over the long term outside of your four okay plan or outside of the company plan.

Looking at IRS. OK. And one thing to know is, is that if you are contributing or participating in a company plan, you are limited to putting money into a traditional IRA account and getting a deduction. So that's something that you're in. If you're interested in saving outside of your own K plan, it's important that you talk to a CPA or a financial planner to make sure that you're doing the right thing from a tax standpoint and you're not get trouble at the IRS. But the the Roth IRA is really the IRA that most people should be focusing on if they're contributing to their Forum K plans or other work plans.

The Roth IRA Ray is a way to save money today where you don't get a tax deduction by contributing today, it still grows tax deferred, meaning you're not going to pay any taxes on the money as it grows.

And then when you retire at age fifty nine and a half or older and you start taking money out of the account, it comes out tax free. So what I encourage a lot of our members to do is to consider having some money savings in the Roth bucket.

And then in a traditional bucket so that when you hit retirement, you have some tax free income. In some of the income that you're going to have, it's going to be taxable. And that's going to come from your Form K plan and the traditional IRA.

Elle Martinez: So you're you're trying to coordinate your different accounts to work well to get the tax benefits both now and in the future. That is correct. Yeah. OK. So that's why it would be great to have an expert. Because when we file our taxes, I mean, they're fairly straightforward.

But again, I wouldn't know or be familiar unless I'm digging around with contributions and I need the requirements if you're required contributing, you said to an employer versus a traditional IRA array. So it's great having an expertise advice.

Drew Snider: One other thing I should mention is with the Roth IRA? You can be limited in how much you can put in there or put in there at all based on your income. No. That's at another point where you need to talk to your financial planner or a CPA to learn if you can actually make that contribution.

How Spousal IRAs Work

Elle Martinez: Yeah, that completely makes sense.

I know I've gotten some e-mails. From members in the community, they had a question.

Some of them have decided, child care is expensive and at least for a few years, one of them is going to stay at home, either work part time or just focus on the kids for a few years.

They're worried about, how is this going to affect our retirement planning? I had read about spousal IRAs. How did how would that work?

One spouse sat for a few years, was taking home, taking care of the kids at home, but they still wanted to make sure that their retirement accounts are growing.

Drew Snider: Good question. So as a non-working spouse, you can contribute to a traditional IRA or a Roth IRA. Based on your spouse's earnings, everyone needs to have.

If you want to contribute to an IRA or a Roth IRA, you have to have earnings in order to make those contributions to qualify as a non-working spouse.

You can qualify based on your spouse's earnings as long as the spouse's earnings are more than the contribution you put in. If that makes sense.

If your spouse makes and we see this sometimes with older folks who are kind of semi retired but have some income. In order to make a six thousand dollar a Roth contribution, if your spouse has to have six thousand dollars, that makes sense.

Finding the Right Financial Planner for You

Elle Martinez: We want everything above board we can, right? Yeah. Yeah. OK, thank you. That's really important. We've kind of been discussing this about the benefits of working with a financial planner. You're a certified financial planner? No.

For some couples, it seems intimidating. And sometimes they'll tell me like I want to go. My husband doesn't want to go or vice versa because they feel like we're gonna be sold something versus actually getting advice.

And I look at your take, Drew, what are some signs, good or bad, that couples should look out for when they meet with a financial planner?

Drew Snider: That's a good question. Yeah. I've been in that business as a financial planner for almost 20 years, and it's changed a lot. And I think it's changing for the better.

In that more financial advisers are taking a planning approach, which means that when you sit down to meet with them for the first time, they should be talking about your goals, not your family. Learning about you and what you are trying to accomplish, what your pain points are, what your concerns are.

And then from there, they really should be taking a more personalized approach to figuring out how to solve those problems for you. And I can tell you, a coastal, that is definitely what we do. That's precisely why I have the job that I have, is so that when a member comes in and meets with one of our seven financial advisors, they know that they're going to be asking them lots of questions.

Be prepared for that to learn about them and their family and understand what they're trying to do and then working with me. I do kind of the work behind the scenes to make sure that we're covering all the bases. We're looking at their tax situation.

We're making sure that they have appropriate insurance coverage. We're making sure that their estate plan is complete. You know, they've got a will in place. And then we might start talking about investments. And if their investment strategy is appropriate to reach the goals that they've set out for us and we start with creating a financial plan for them. So if you meet with a financial adviser and they start talking to you about investments right away and products that they can put you in, you should be concerned, honestly, because they haven't learned enough about you to make those recommendations. I feel like the advisors here, coastal entity, really good adviser in twenty nineteen should be taking the time to learn more about you before they're making investment recommendations.

Elle Martinez: That makes complete sense. Yeah. And so I know this has happened to us in the past and I've heard people's back and something that they're scared of talking with advisors, they feel like. Well, when I was starting to ask questions, the person felt challenged because they were putting me in these vestments and then they were saying I was the expert. You should trust what I say. You as a financial planner. And you knew seeing how your team works and when they meet with the clients. How how did they feel if a client does not push back but ask questions? Dig around is fine with that or is that encouraged? How does that work?

Drew Snider: Oh, that is definitely encouraged. I mean, we want people in investments that they're comfortable with that we together agree upon is going to help them reach their goal. So just as an example, you know, we're going into a financial plan for somebody and we're going to realize that, you know, based on their risk tolerance and the goals that they're trying to accomplish, that they may need only a 4 or 5 percent rate of return on their investments to be reached there. Their objective? Whether it's for college or retirement, but also still feel comfortable about their investments. So if they come back to us and they say, hey, I am I'm not comfortable with what happened with this, whether the investment didn't perform well or if it lost money during some sort of a correction and that kept them up at night, that we need to make some changes to that. We're definitely open to that. We want you know, but we're going to tell them, you know, if we make that adjustment, this is the impact it's going to have on your financial plan over the long term. So we we don't have a lot of those conversations, I'll be honest with you, because I feel like if you're doing the work up front.

Yeah. To understand someone's goals and their risk tolerance and what they're comfortable owning inside their portfolio, then typically you don't have those conversations. Now, what can happen is people's risk tolerance changes. They think they're more aggressive than they really are because they become complacent and comfortable with what really what we've had for good 10 years is a rising market. And so a lot of people feel like, you know, they're pretty comfortable with that. We haven't really had a big correction in a while. So, you know, we anticipate people changing their risk tolerance when we go into a recession and there is a market slump. But, yeah, we're we definitely want to talk about that for sure. And I think we see ourselves as partners with our members and making investment decisions. We're not telling them what to do. And that's in my opinion, that's really another red flag. When you're meeting with somebody who's last minute buys, is it they're telling you what to do rather than you doing it together? Chances are they're putting them in an investment that they're comfortable with that maybe you're not comfortable with.

Optimizing your Financial Health

Elle Martinez: Yeah, I've I've had quite a few that got taken in with an investment and they couldn't explain what exactly it was. So definitely that's a big red flag. So thank you.

I mean, it's it's good. It's kind of like I see. Going to a financial advisor, almost going to a doctor. Of course, the doctor is the medical expert. You want them to be like on top of everything. But it really does. Hey, to be very aware of like your health habits, your routines have that basic knowledge. So you can't ask the question. So you feel comfortable working like you mentioned being a team member for your health. So, you know, that's physical health, but also for your financial health. So. Right.

Drew Snider: We do see ourselves that way. It's kind of like your financial doctor, for sure.

Support the Podcast!

Thank you so much for listening to the podcast! If you enjoyed this episode and found it helpful, here are some ways to support it.

  • Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and become financially free, please share.
  • Leave a review. Honest feedback and reviews make a big difference and gets the word out about the podcast. Leave your review on Apple or Stitcher.
  • Grab a copy of Jumpstart Your Marriage and Your Money. My book is designed for a busy couple to set up their finances in 4 weeks. Get tips and tools that have worked for other couples on their journey of building their marriage and wealth together!

Music Credit

Like the music in this episode? Music is by Lee Rosevere and Music for Makers.

This episode was originally released in August 2019. Show notes have been updated July 2021.


How to Make the Most Out Of Your Bonus or Raise

Expecting a raise or bonus soon? Learn how to make the most out of any extra money you have coming in!

Optimizing Your Raise or Bonus

Even though I do believe that diversifying your income is a smart money move, let's not ignore the most common one that most people have – your nine to five job.

This is a steady paycheck for work that you hopefully enjoy.

Besides the paycheck, things like benefits can be a huge plus for you. Depending on where you work, you could also receive bonuses and if things are looking good, raises.

Okay. So you may be getting a raise because you switched jobs and companies still.….

Even if neither of those is the case, you two could be getting money this summer in the form of the advance child tax credit payments.

Today, we're going to show you how to make sure that any extra money you receive helps you achieve your family and financial goals faster.

That's why I'm so glad Joe Mecca is here. He's the vice president of communications over at Coastal Credit Union and our go-to savings guy.

In this episode, we'll get into:

  • how these advance payments work with the child tax credit
  • a checklist to help make sure that your financial foundation is solid
  • t ideas on how you can layer and optimize your money.

Are you ready? Let's get started!

Resources to Maximize and Manage Your Money

Want to make sure your dollars go further? Here are resources mentioned in the episode as well as additional handy tools to stay on top of your money!

If you're still sorting out what goals you want to pursue and plans that you want to set up, please join us in our Thriving Families group on Facebook.

We're all about helping one another out with our family and financial goals.

We'd love to see you there!

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.

Slash Your Phone Bill with Republic Wireless!

Thanks to our new sponsor Republic Wireless.

If you’re looking to hit your family’s financial goals faster, optimizing your expenses is the way to go. Chances are you’re paying too much for your smartphone and not getting the value you deserve.  

Same thing happened to me years ago. Wanting to become debt free faster, I switched to Republic Wireless and saved big time. 

Nationwide coverage, fantastic phone options like the Samsung Galaxy and Moto g, plus seriously affordable prices (plans start at $15/month!) make it a smart choice for families looking to save without sacrificing value. 

See all they have to offer at Republic Wireless

How the Advance Child Payments Work

Since the advanced child tax credit payments are coming up next month, I want to cover some of the most common questions I'm hearing from parents.

Mandatory disclaimer, even though I've been a contributing writer at TurboTax, I am not a tax expert.

There are a few key things you need to know about with the child tax credit.

In years past this tax credit has been $2,000 per qualifying child. For this tax year (2021) it has increased.

  • If you have kids five and under, it's going to be $3,600.
  • If your kids are six through 17 at the end of 2021, it's going to be $3,000.

So that's the first difference – an increase.

The second is this – you will be getting half of that credit in advance as monthly payments starting in July.

Are We Eligible for the New Child Tax Credit? 

Before we get into the payment scenarios, I do want to note that there are some income thresholds to get the full tax credit.

  • If you are single filer or you're married and filing a separate return, that threshold is 75,000.
  • If you're filing as a head of household, it's $112,500.
  • If you're married and filing a joint return or filing as a qualifying widow or widower, it's $150,000.

If your adjusted gross income exceeds that then the tax credits begin phasing out. [The IRS has all the details here.]

Let's take a quick moment to go over some scenarios so that you can have a better idea of how that would look.

Let's say that you just had a baby this year. (First of all, congratulations!) If this baby is your only kid with this tax credit, you would qualify for the $3,600.

Half of that $1,800 would be paid to you each month from July to December giving you an extra $300 a month.

Now let's say you have two kids, a four year old and a nine-year-old. You would qualify for 6,600 dollars in tax credits.

Half of that 3,300 would be split into six payments from July to December. Each month, you would have $550 deposited.

I hope that makes sense.

How You Can Use That Child Tax Credit to Improve Your Family Finances

This tax credit money can be used in so many different ways. For some parents, it can offset a bit of the cost of raising kids now.

It can also be used for future expenses. I know some are talking about using that money to start or increase their five 29 contributions.

Or you can put this money towards your family's financial goals, which can benefit everyone. An example is paying off your high interest debts; that frees up cashflow now and in the future that you can use for your kids and other family needs.

How do you know what's the best path for you?

That can be the tricky part, which is why I think you'll enjoy my conversation with Joe Mecca on how to optimize your money!

Getting a Raise? Here's How to Make the Most Out of It

Elle Martinez: A lot of people in our community, once a year they do reviews and in some cases, this is raises.

We have many teachers, as a part of our community. As they start the new school year or any job where you're getting a raise, you want to make those dollars go further.

Especially After the year we had last with COVID and just focusing on getting through that year.

I wanted to talk about any tips on how to approach this high level view with your raise- what things to maybe talk about or consider.

Joe Mecca: Yep and I always like to tell people this works for a raise, this works for even a bonus in a short term.

It's a great opportunity for you to take Just take a look at your personal financial situation and then make some adjustments to make sure you're working your way toward your goals, especially before it happens.

Maybe take some time before it actually hits your paycheck to plan out what you're going to do next.

Create Your Family's Financial Game Plan

The first thing I would tell people get prepared for the short term. If you haven't reviewed your budget in a while, and if they're listening to you, I hope that it review your budget.

Now is a great time to do that. You take a look at where your money's going, understand what you're spending your money on, understand what you're setting aside money for and where that's going.

Does what you're setting aside for paying your bills, match your current spend because your bill habits change with time, your utilities might go up or you might cancel something. That may shift a little bit.

Yeah. Overall, just you can look at your budget. I always like to tell people to look at the 50/20/30 rule. I know, you shared that with people in the past.

  • Set aside 50% of your income and make sure you're paying your necessities. Paying down debt.
  • 20% to savings and then
  • the rest – 30% – for discretionary spending.

I actually like to be a little bit more aggressive and try to put the 50 towards the savings, but

Elle Martinez: -because you're a hardcore saver.

Why You Need an Emergency Fund

Joe Mecca: Yeah, it takes a while to work up toward that, but in the short term get yourself, toward those percentages. Next, make sure you do it in an emergency fund.

Another thing that I always love to talk about is making sure people, we have have money set aside for emergencies because they do happen.

There've been plenty of studies that show that half of the population doesn't have enough set aside to cover a $400 emergency. So if you don't have that, Use this as an opportunity.

Then look beyond that. I know the experts usually say three to six months living expenses are good emergency fund. Again, I would prefer to see more because as we saw in the last year, sometimes an emergency can last a year.

Elle Martinez: Yeah. Who would have thought of that? Like no one came into 2020 thinking that.

[You] definitely want to have that financial cushion where you're both comfortable with it.

Pay off Your Debts (or at least Refinance)

Joe Mecca: Yep. Then the last piece on the short-term stuff is you take a look at your debts.

Do you have some higher interest or high rate loans that you might be able to refinance?

I know that's not really taken advantage of the pay increase, but while you're looking at that stuff, make note of it.

This might be the ideal time to refinance some of this debt or consolidate some of this debt to something that's going to be a little bit lower cost.

As long as you're laying it all out in front of you at the time and examining your financial situation, then go ahead and do that.

Building Up your Investments

Joe Mecca: Once you're comfortable with the short term stuff, now you need to be thinking about the future.

I'm not a financial advisor, so I'm not going to be give you financial advice.

I'm going to tell you what's worked for me and what I always like to share you know, if you have a retirement plan, a 401k, or especially if we're talking about teachers, it's a 403(b), are you taking advantage of that?

Are you at at least trying to get your match? If your employer offers a match and you're not putting in that much into the plan, then you're missing out. So I would say take a look at that.

Let's say you got a 2% or 3% increase in your salary. Might be an ideal time for you to do a 1% increase in what you're contributing to your retirement fund.

If you do that over time, eventually now you're up to like 15 or more percent and you can really start making some progress toward, toward your retirement by just adding to it at 1% at a time.

If you two or 3% increase, if you can put 1% towards your retirement you're not going to notice. You're not going to miss it when you get your check.

You're not going to have that lifestyle increase of suddenly you've got more on your check. You know, put, put the focus into taking care of yourself first, taking care of your future self.

So I always like to say, great opportunity to examine your 401k or 403b and bump it up another percent.

Shift Up Your Savings and Investment Contributions

Elle Martinez: Yeah. That does make a difference. When we were first married, just out of college for my husband, I had my internship. Even then we're like, let's put in just enough for that free money.

At that time it was not much right? But years passed, we didn't notice that money.

These small changes, you don't feel and much pain, if any, but then you see compound interest you that advantage of time and building up that habit, it does make a huge impact on your finances later on.

Joe Mecca: Even if you're maxing it out, still do that exercise because all you're going to do at that point is you might just hit your max earlier in the year.

That just frees up more to do with later on in the year, you might have a larger check later in the year to do some other saving investing, or spend it on something that you really need or want.

It's worth doing that exercise year over year, over year.

Again, once you do it, it might not seem like much at first, but when you've done that over several years, you can really make a big dent in one year you're doing an increase in percentage.

So you're contributing more and more and more toward your retirement. Again, there's tax benefits to doing that, depending on how you've got that structured again, not giving tax advice, not giving investment advice.

Health Savings Accounts

If you have access to a health savings account, and I know a lot of people have high deductible health plans this is also a good opportunity to take a look at that.

Are you contributing what you can to that plan?

If I had to guess most people are not maxing out their health savings, but you know, as an individual, I think this year, but $3,600 into a health savings plan. Family plans double that $7,200.

Again, those are tax advantage plans as well. That allows you to save for either current or future health care costs that the money is yours to keep one wants it in that account.

It's not like a use lose it, flexible savings spending plan. Just a great way to be saving up for, cause you never know when you're gonna have a future health care expense.

So to plan for that now, it could be just putting a few extra dollars more out of every paycheck into, into an HSA and saving up that way.

Maxing Out Your IRAs

If you're eligible for an IRA and you're not currently maxing that out, take a look at that. Eligible employees now can do up to $6,000 a year into an IRA account.

There's two different versions of the traditional and a Roth. They both have different rules and different tax implications as well. But again, good opportunity to look at that stuff there.

If you're comfortable with all those look at different savings options, you can look at investing options.

That's, where you might want to sit down and talk with a financial advisor and really get some direction on where to put some excess money.

But yeah, for majority of people in the short term, it's getting your budget in place and then start focusing on saving for your future. And then if you're already saving for your future, beefing that up just a little bit each time.

Approach Your Finances as Layers

Elle Martinez: Yeah. I mean, it's brick by brick. You're building that financial foundation.

We mentioned last year, but that was really a stress test for a lot of people's finances through no fault of their own, where something comes up, we're all experienced, some kind of pressure.

I think that was , if you could take a key takeaway is do your best to have your financial safety net or cushion, whatever you want to call it in place as best as possible.

Then once that's in place, then you have more options.

You have some peace of mind too, to save for a dream. Whether that's a retirement, a career pivot you're saving for a family house, you know, or could be investing for the future. Maybe you want to speed up that retirement date.

However you want to play around with that, but you gotta have that foundation, right?

I know we talked about several goals, but I want to hone in a little bit more about savings in investment options. You mentioned IRA, as an option as well.

Choose the Best Bank Accounts for You

Coastal has a lot of different accounts especially on the saving side so do you mind just going over a couple of them?

Joe Mecca: For a lot of people they're saving for short-term goals. I'm going to focus on really the short-term stuff, and then the things that products that coastal offers. A lot of people use our go green checking account.

Even though it is a checking account, it does pay a dividend

. A lot of people will use that as their savings vehicle because they use that account to do their transactions once every month. But that's where they can also earn a dividend too. So it's a way to kind of boost your savings.

In the short term, a lot of people like to keep money separate and they don't like to mix their transactional money they're spending money with their savings. So coastal offers a companion to go green checking. It's actually the go green money market.

That's actually where I prefer to do most of my savings. So I do my transactions out of the checking account that helps me earn a higher dividend out of the money market account.

I like to keep money in the money market account for all my short-term goals.

You can do multiple accounts. I actually like to keep it all in one account and then I keep a spreadsheet and segment out-

Elle Martinez: I'm not surprised with the spreadsheet.

I'm a fan of the spreadsheet spreadsheet. You're a super saver.

Joe Mecca: Yeah, and I do like to like segment out, like I'm saving for a car I'm saving for a trip. If I ever get to travel again and savings for some other things I want to do around the house.

For me, it's okay put all that short-term stuff into the money market account. It's separate from the money I'm spending. It earns a dividend so it's going to grow a little bit each month. It's accessible when I need it.

The other option is to do a certificate account CD. Everybody knows CDs. Those are a little different cause they're they're time bound. You're agreeing to put money on deposit for a set period of time with traditionally the benefit of getting a little bit higher rate on that.

That's good if you've got a kind of little further out goal that you're trying to save for.

So now you're talking about, I want to pull together the down payment on a house. And my goal for that is to do that three years or five years or whatever.

You can set aside money at a yeah, put it in a three-year certificate, put it in a five-year certificate and set it aside.

That way the money's locked up. You can't really touch it. There it's yours. If you really have an emergency, you can get it back out.

What you're doing is you're agreeing to put it on deposit for a longer period of time in exchange for a little bit, a little bit better return. Yeah. Again, those are all insured products too.

They're guaranteed by NCUA up to it's a $250,000 per account. Just great safe, kind of boring savings vehicles, but savings savings yeah exciting if you make it. Exciting. Yeah.

Elle Martinez: Well, we had enough ‘excitement' in 2020. We can just do boring this year, and progressing.

When You Need a Financial Advisor

Joe Mecca: Now if you do have longer term savings goals and you mentioned saving for college or are you doing retirement planning? Are you, are you looking for things that are furthered up?

That's why I say go talk to go talk to a financial advisor. Coastal offers coastal wealth management to all of our members.

You can sit down with financial advisor and work through things like retirement planning and investing. You're doing a 529 college plan and really trying to look at the stuff that's further down the road.

You know may involve More variety in the types of financial investments that you have access to a little bit more risk, a little bit more, potentially more reward, but yeah, that's where you really want to sit down with somebody and lay out your plans and say, here's what I want to do.

Here's when I want to do it and have them help you work backwards from there and decide like what type of, what type of risk you're willing to take and how much you want to put into those certain types of investments. With the hope that over time, you're gonna be well situated to reach those savings goals.

For the short term stuff, I love savings products. I love the money market. I love certificates. They're reliable.

There's a reason that everybody's still offering them, you know, after decades and decades and decades of financial services, because they're really solid products for short-term savings.

Coastal's Wealth Management Team

Elle Martinez: I do believe you should layer your money and finances based on the timeframe and everything. Before we wrap up, I definitely want to point out with the wealth management team.

I've met a few of them and I have to say two things stuck out to me. Of course you want this with a financial advisor, very knowledgeable about specific things, but they genuinely are people oriented.

We were giving general advice, which is helpful for a lot of people, but when you're coming up with a plan for those big milestones

  • if you know you're saving up for college,
  • if you're planning for retirement,

It is incredibly helpful to have someone sit down, look at your particular situation, look at all the numbers and give you a personalized, crafted plan.

Joe, in case anyone is listening is here in the triangle area of North Carolina and they want to start maximizing their finances, whether it's saving more or maybe sitting down and crafting that plan, what's the best way they can find out more about Coastal?

Joe Mecca: I would say, start with our website. It's Coastal24.

You can go there, you can research all the products and services that we offer. Even open an account online start conversation with wealth management advisor, see some of our other services that we offer too.

We're very consumer oriented and, and are really geared toward people who just want to want to take the next step in their finances financial journey.

Our motto is bank better to live better. That's really our goal. That's our mission. We're gonna help you. We're gonna help you live better.

Support the Podcast!

Thank you so much for listening to the podcast! If you enjoyed this episode and found it helpful, here are some ways to support it.

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Music Credit

Our theme song is from Staircases. Additional music by various artists from Audiio.

Should We Invest In Real Estate?

Real estate investing can be a way to build up a passive income, but is it the right move for you? Learn about some of the different options you have and what you need to discuss before jumping in!  

Is Real Estate Investing Right for Us? 

We've been talking a lot this season about building and diversifying your income streams. 

Part of it is in reaction to the past year or so we’ve had. With some industries being hit hard with job losses and hours cut, having another source of income – even if not full-time- can soften the blow. 

We spoke about working from home with Modern Frugality creator Jen Smith. We also talked about entrepreneurship and building a portfolio of income streams with author Michelle Jackson.

Today we’re talking about another opportunity to build an income stream – real estate investing.

If you’ve ever watched shows on HGTV or followed DIY influencers on social media, it looks fun and exciting, right? 

These transformations can be dramatic and then when they go ahead and sell those houses, sometimes those numbers look tempting. Or the idea of owning properties and having rental income looks like a passive way to earn more. 

But is that really the case? What does real estate investing really involve? How can we get started? How can we be smarter with how we invest? 

I’m happy that Rachel Richards is joining this episode. She’s an author and real estate investor with over 30 properties. With the income their properties are generating, she and her husband are able to be financially free. 

In this episode we get into:

  • different ways to invest in real estate
  • Understanding what’s really involved with investing and finding properties
  • A peek of how one couple got into investing and how they grew it 

Are you ready? 

Let’s get started! 

Resources on Real Estate Investing

Are you thinking about getting started with real estate investing? Here are some handy resources to get your finances in shape and learn more about it!

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.

Slash Your Phone Bill with Republic Wireless!

Thanks to our new sponsor Republic Wireless.

If you’re looking to hit your family’s financial goals faster, optimizing your expenses is the way to go. Chances are you’re paying too much for your smartphone and not getting the value you deserve.  

Same thing happened to me years ago. Wanting to become debt free faster, I switched to Republic Wireless and saved big time. 

Nationwide coverage, fantastic phone options like the Samsung Galaxy and Moto g, plus seriously affordable prices (plans start at $15/month!) make it a smart choice for families looking to save without sacrificing value. 

See all they have to offer at Republic Wireless

Different Ways to Invest with Real Estate

When you're talking about real estate investing, there are really so many different avenues you can take. Some of them are very passive while others require a lot. With finances time. And in some cases, sweat equity.

I thought it would be handy to give a high level quick overview of the different types. So that you can sit down and discuss which options appeal to you the most based on your goals and circumstances.

Let's start off with something that many people are familiar with, especially if they watch HGTV which is flipping houses.

This is where you take a property, you fix it up, and renovate it so that you can sell it for a higher price and make a tidy profit.

On TV and on social media, this seems exciting. And yes, the transformation is looking credible in some cases, but you really have to know your skillset and run the numbers.

Now, if you're skilled with the trade, this can be fantastic. But if you are relying on contractors, you have to be on top of it to make sure. Not just that you're staying within budget. But that it is passing inspection and that there's quality work involved.

This is a very hands-on process. So if you're just starting out. It might not be the best fit for you.

Another way to earn income with real estate investing. Is rental properties.

You can either buy a property that is moving ready for tenants. Or buy one that you fix.

And within that space of rental properties, there's also house hacking. For example, you could buy a duplex live on one side. And rent out the other.

Another situation is where you buy a property and you live in it for a certain amount of time. And then later on either because you're moving to a different area. Or need a different space you keep that property and then Let's say though that you're more, the hands-off type. You're not really interested in getting into the weeds in the day-to-day of managing properties. There are still options out there for you.

Are you the type of person that loves the low key aspects of investing in index funds? Then you might be interested in real estate investment trusts or REITs.

Greets are great to be in your investment portfolio. They can be publicly traded and you don't need a lot of money to get started. Plus. If you want to get out, you can sell at any time.

Then you also have real estate investment groups where your money is pooled with other investors as they buy properties. This can take a lot of research cause you want to make sure that you are investing in a reputable incredible group.

And then finally, another way that you can invest with others is with real estate limited partnerships. And this is like an investment group that you're pulling your money with others, but it is for a limited time. At the end of it the properties are sold and you benefit from that.

So they already have it. High level view of some of the different options you have when it comes to real estate investing.

It's one thing to read about real estate investing and another to actually go do it.

I want to share a recent chat I had with Rachel Richards about how she and her husband got started, the lessons they learned along the way and how they built up enough cashflow to hit their financial freedom number. And for her to quit her job at 27.

Achieving Financial Freedom Through Real Estate Investing

Elle Martinez: I been talking about diversifying income and why it's so important. This past year and a half has been really a great reminder of well not great circumstances, but just a reminder that you don't want to depend on one income stream when something happens.

Real estate investing; a lot of people have questions about that. What does that look like? And you've become quite the expert on this owning properties. You were able to retire at 27.

Rachel Richards: I was able to retire at 27. We actually started investing in real estate when I was 24. So it took us three years.

Elle Martinez: That's an incredible. I know that didn't just happen by accident. You had to have a plan and you had to put that in place. I want to take a step back and ask what made you look at diversifying your income particularly through real estate investing?

Rachel Richards: Yeah. It really started at a pretty young age. In my childhood. I grew up in a very wealthy county. It was a very unrealistic bubble to grow up in.

So my family was not in poverty. We weren't poor. Like we always had food on the table, but compared to my peers, I always felt poor because there were kids in my high school that were getting brand new BMWs when they turned 16.

Right. My family was not operating that way. I mean, we weren't going out to eat at restaurants, let alone, driving new cars or going on family trips. So at a pretty young age, I felt like I didn't fit in and that's not the way you want to feel in middle school.

In high school, I remember thinking to myself, I don't want to end up like everyone else struggling with money. I don't want to have to operate on a strict budget or borrow money from family and friends to make it to my next paycheck. I want it to be different.

I realized then that what I did then could either set me up for wealth or for poverty. This realization, which I'm sure took the place over the course of a few years, but this kind of lit a fire within me.

I had a lot of limiting beliefs growing up because of our household like money was always a stressor. There was a never enough, it was always a bad thing. We didn't like money and they do say that fear can be motivating or paralyzing. Luckily for me, the fear was motivating and I took that situation and I said, I don't want to end up like this.

I want to become financially independent. And I never, ever want to be in a place where I have to make a decision based on whether I have enough money.

Discovering Financial Independence

Elle Martinez: I can completely relate to that. Just having that freedom and flexibility is definitely one of those things that pulled me towards the financial independence space, but I have two questions based on what you were telling me.

First off, do you remember the first resources, whether it's a book podcast, blog, where you encountered financial independence?

Rachel Richards: Yes. The first one where I encountered money management was actually, I was in sixth grade. I was in a summer camp and I was the little nerd, like reading a book by the pool instead of playing, I've been a nerd my whole life.

I love it. I read the Motley fool's guide for teens, how to have more money than your parents ever dreamed of something like that.

So that was exciting; that set me off on a path of learning as much as I could.

The first book I read about real estate investing, where that started to click for me was when I read a rich dad, poor dad in high school.

And I was like, this is it. This is my way out. This is what I'm going to do.

Elle Martinez: It's fascinating how you click that together to take sometimes people well into adulthood to figure out, Hey, I just want to go on a different path.

So when you met your now husband, what were those initial conversations? Did you know from the get-go I want to pursue financial independence, do you want to join me? Was he already on board or did you have to have some conversations to get on the same page?

Rachel Richards: Yeah, so I was already on board and, and learning and trying to work towards that from past relationships that I'd had with other guys that I dated, I kind of knew.

Well, here's what I don't want. Right. I think that's important too. Yeah, exactly. So I specifically wanted somebody that was ambitious and was entrepreneurial and like-minded like I was, and interestingly, when I met my husband, Andrew, I learned.

A few weeks after we started dating, but he had tried to do this t-shirt printing business on Etsy, where he was trying to make these t-shirts and designs and sell them.

And it didn't work out. I think he lost some money on the inventory, but I thought it was amazing. I was like, this is great. Like, I don't care if it didn't work out, but like you're out there trying, you're trying to make something happen. And clearly you have the same values and mindset that I have. So once I told him about real estate investing and the power of that.

He was immediately on board. He was like, this is great. Let's do it. So I didn't have to convince him. I'm more, I'm more so just had to educate him.

Elle Martinez: Well, that's great that you guys were able to get on the same page fairly quickly.

One of the draws of real estate investing is this idea of, it's going to be passive, but you, and I know even with those income streams, initially there has to be some investment time, finances, whatever it is, might be some skillsets involved.

For you and Andrew, what did you have to do to get started with real estate investors?

Rachel Richards: Yes. Absolutely. I'm glad you bring that up because there's so many misconceptions now about passive income. So I like to talk about what it is, what it's not the way I define passive income is that it's money that is earned with little to no ongoing effort. Okay. Is it a get rich, quick scheme? Absolutely not farthest thing from it.

It takes a lot of time or money to invest, to create the passive income stream. I like to look at it in two stages in stage one, you're investing a ton of time, a ton of money. Maybe you're looking for rentals, learning how to do rentals. You're making offers, closing on a property, renovating get you're getting your tenants and that's all stage one.

That's a lot of work, but then once you have it going or you have your income stream launched, then it becomes a lot more hands on.

That's when you enter stage two where it's a lot more passive. Okay. But there aren't a lot of things that are truly 100% passive. Most passive income streams will require a couple hours a week or a few hours a month to maintain them.

With real estate specifically, I always tell people you have to have a property manager if you want it to be anything close to passive income, because once you get a lot of units, It will be a full-time job and none of us want to quit our full-time job to become a full-time landlord

Elle Martinez: through true.

So a little bit kind of into the numbers and the process, because obviously, buying property, you have to put a down payment of some sort. Like you mentioned, sometimes it means, renovating a property or getting it up to standard so you can get a good cash flow from it first. How did you adjust your budget?

So you could start saving, I'm assuming a significant amount of money to start putting that down payment.

Rachel Richards: Yes. I'm glad you asked. A lot of people see that I scaled my empire so quickly and they assume I'm a trust fund baby. I like to clarify that I'm not a trust fund baby, and I never made six figures from a job or career ever in my life.

I started off after I graduated making $36,000. It wasn't like I was making some huge income where I could save a ton of money, but even then I was very frugal and I was saving 50% of my income.

I was living off something like $1,500 a month in Louisville, Kentucky. Another advantage I had is that I paid my way through school by selling Cutco cutlery.

Have you heard of Cutco knives?

Yeah.

It's a direct sales company. I did that and I paid my way through school and I graduated debt-free and my husband also graduated debt-free because he is a veteran and he used his military benefits to pay for his school.

Elle Martinez: So it sounds like you guys took any opportunity you could one, on the income side trying to earn some extra income pay as you go for college, but then any advantage, like being a veteran, that bill to keep your costs. That's commendable.

So how did you stay motivated? Cause like you said, you were living, pretty frugally. How do you, when you might have friends that are, you know, getting a new car or they're upgrading because they finished school and now they want to get a bigger place.

How did you keep each other in check and keep each other motive?

Rachel Richards: Yeah, it was so difficult because at one point we were making progress more money than any of our friends cause we were both working full-time we had this rental income and then when I released my books, those were making money, but we saw all of our friends passing us by in terms of lifestyle.

They were upgrading, getting fancy houses and buying beautiful new cars and doing all these things that we weren't doing. Because we were trying to save money. So that was difficult. I knew that in the long run it was going to be worth it, but it was hard to continue to sacrifice and feel like I was missing out on certain things.

So that was definitely difficult. I just think it's so important to have it. Yeah. Single-minded focus on what your motivation is. To always be able to go back to that, because if your motivation for achieving something is strong enough, nothing's going to stop you or get in your way.

I'm actually reading this book called I think it's called the compound effect by Darren Hardy.

It's so good. He talks about this and he's like, if I can do a $20 bill to walk across a plank between two buildings, Would you do it?

Most people wouldn't right. It's 20 bucks. It's not worth it, but if your child was on the other building and it was on fire and you had to walk across to save them, would you do it?

It's like, of course any parent would do that. So it's a great example to illustrate how is your motivation strong enough is your why strong enough, where nothing's going to stop you from getting in the way? If you know that for sure, then everything else will be okay.

Yeah,

Elle Martinez: I agree. I think that's the step that we kind of gloss over. When I talk to couples and they're trying to figure out their plan, the first thing I said is like it, can you describe to me what you guys are trying to work for the next year and the next five years?

Try to avoid the general like I'm gonna, you know, just retire.

Well, what does that look like? Would you like to travel? What are your plans? Do you want to stay in the same place?

We think, well, that's not a big deal I'm just going to, you know, figure it out as I go, but having a plan and having your why, as you said, your motivation makes a huge difference.

Absolutely. I want to dig in a little bit more about that with real estate investing, your first property was a duplex,

Rachel Richards: correct?

Yes. It was a duplex that we found in Louisville, Kentucky.

Elle Martinez: Okay. Can you take me back a little bit? Like what kind of work involves, like how did you find it? What were the biggest surprises your first property buying it and then getting it ready

Rachel Richards: to rent out?

Oh, for sure and I'm happy to go into numbers too, but in terms of how we found it. I had my real estate license and I still do.

It was never for the purpose of having my, of having clients. I just had it for my own purposes as a real estate investor. I had MLS access that other people don't typically have.

Okay. One of the things I did though, it wasn't like deal I really found on the MLS that it was listed there. It was an expired slash canceled listing.

I was looking through all the expired and canceled listings on the MLS to see if there was anything intriguing.

Sometimes the owner just can't sell it cause they're asking for too much or they take it off the market and they're going to relist it or whatever reason. I was like, well maybe if I follow up with some of these where there's less competition, I'll look up and I did.

I found this duplex. I was like, this one looks great. I wonder if they're going to realist. I reached out to the listing agent and I asked her and I basically followed up with her on email once a month or so for six months.

Oh wow.

Top of mind. A lot of people are afraid to do that cause they w they don't want to be seen as being annoying or whatever, but it was just a friendly email.

It was just, Hey, you know, I'm super interested in this. If your seller's going to be putting it back on them soon I'd love to make an offer. It was just me politely reminding them that I'm interested to stay top of mind and it worked out because right before they were going to relist it, they reached out.

They said, Hey, we're going to put it back on the market that you want to make an offer. I was like, yes, I'm going to make an offer.

That was a huge advantage because I didn't have to beat out all of these other buyers that would have been interested. I made a reasonable offer and they accepted.

I think the lesson to be learned for for other new investors is be patient because it can take a long time to find the right deal.

This is after we've made an offer on other properties. This is after we even had an accepted contract on another property that fell through so this was months and months. It took us nine months. We were discouraged by then, but because we didn't settle.

This first deal that we did is still the best deal we have ever done to date. And that's because we were patient. So I like to just share that story as a reminder, that you will find a property. Eventually.

I love that.

Elle Martinez: I think. I mean, whether you're buying a home to own it or to rent it, I made it really does pay, like you said, to be patient and just, you don't want to let your emotions get to the point where you're not making financial sense.

I've seen people rushing to buy. Like I just have to have it. If I don't have it, I'll never get a house, you know, or I really want to get into real estate investing and it's hot market and they're like, I can't wait or it's going to get worse than that.

Like fear of missing out really just sabotages what could be a great deal down the line if they just waited a little bit longer.

Rachel Richards: Exactly. And you said a great thing. Yeah. You said to not let your emotions impact you, which is so, so true. Cause you don't want to be, you don't want to be acting in a place of desperation when it comes to your first property.

So yeah. I like the way that you.

Elle Martinez: Yeah, and I want to talk about how you built this up. You seem like someone who's like very strategic and you have a plan. So that first property was like 500 a month cashflow. How did you go from there for your second property? Was that nine, another nine months?

How did that accelerate where you reinvesting in the business taking that cashflow for the next down payment? Or how was that arranged?

Rachel Richards: Let's start with that first one, which is that duplex. Okay. This was a hundred grand. By the time we bought it, my husband and I had both been working for a few years.

So we each had 10 grand saved that we put together to get to the 20% down payment.

Yes. So for that first one, we essentially depleted our savings. So we were, we were willing to take on that level of risks, cause that is risky.

We depleted our savings, but because I was the buyer's agent on that deal, representing myself, I immediately got a commission check back for a few thousand dollars.

So having my realtor license was an enormous advantage that allowed us to scale quickly. And not only was I saving all the commissions. But we were still, and by then we were making more money. So we were still saving 50% of our income and all of the cashflow we were now generating, we were saving a hundred percent of that.

So one thing we did well is that we didn't allow lifestyle creep to impact us. We weren't saying. Oh, we're making $500 a month more. Now let's spend this and let's let off the brakes a little bit. We can live it up. We were very strict and disciplined. Between all of those different things, we were able to come up with down payment after downtown.

Yeah. The more rentals we got, the more cashflow we were making, the quicker we could save money. So it was kind of the snowball effect gained more and more momentum.

After that first property, it took us, I think it was nine or 10 months to close on the second property and then like six months after that. And then three months after that, something like that so it kept getting faster and faster.

Elle Martinez: With the two of you, when you were creating this plan and your portfolio of properties, was there a point where you're saying this is the goal for cashflow. Like when we hit X amount a month, we're good with this, or was this more of a certain amount of properties?

Like what was that goal or metric that you guys have for this passive income or this income

Rachel Richards: stream?

Our goal was $10,000 a month. We came up with that because I think at the time living in Louisville, Kentucky, our living expenses were six or eight grand a month, something like that.

We were wanting to have 10 grand a month in passive income so that we could still save a decent amount and just have that buffer room. Like we didn't want to be cutting it too close. So that's why we aimed for 10 grand.

A lot of people ask me, you know, why am I not buying more rental properties? Why am I still not building out this empire and becoming this huge real estate mogul?

I always answer, that was never the goal. We were never so passionate about real estate investing that we wanted to build this huge empire. It was just a means to an end for us.

Once we got to the point where we were making 10 grand a month in passive income, that's when we were financially independent and now we can work when, where, and if we want because of it.

So we stopped then and now we're able to enjoy our lifestyle because of that. But that's kind of why we, we haven't wanted to create some huge empire.

Yeah. I

Elle Martinez: think that should be mentioned, but a lot of times people are like, Hey, I have X amount of properties are making this up this amount.

It's like, every year it grows and there's nothing wrong with that if that's what they want, but there's not enough discussion about here's our enough in terms of we're happy here.

If it grows another opportunity, but you guys are in a great spot where you have that flexibility and freedom, take your foot off the brakes and kind of just coast a little bit, especially this past. Right.

Rachel Richards: Yeah. And I think it's easy to get caught up in this sense of like enough is never enough.

And once you make this amount, it's like, well, let's make this amount, let's make this amount. You kind of lose sight of the initial reason you're doing it in the first place. And it's fine to, to want to make more and more money if that's truly what you want. But it's really all about living intentionally and knowing what you want and why, and sticking.

Elle Martinez: Yeah, absolutely. I know there's going to be a couples listening and they're thinking, this is something I want to look at into more.

I know you have a book specifically about this, about passive income and aggressive retirement. What other first steps would you recommend for couples interested in learning more about real estate?

Rachel Richards: Yeah, for sure. And thanks for mentioning my book, passive income, aggressive retirement.

Another great resource is bigger pockets. They are like the real estate experts. They have a blog, a podcast, a website.

There's another book called hold by Steve Chader that I think is amazing. So those are some resources, but in terms of next steps, I would say the first thing to ask yourself is, do you have more time or money?

To invest into creating passive income because you need one or the other. Now, if you're anything like I was a few years ago, you would say, well, I have neither. I don't have time and I don't have money.

The next question to ask yourself, Which one will be easier for you to create more of, will it be easier for you to free up more time or to create more money?

And then you can go from there because real estate investing is not the only type of passive income. There are tons of others in my book, I talk about 28 different types. So there's plenty out there.

There are some that require a ton of time upfront and very little money. There are others that require a ton of time, a ton of money and no time.

So you have to get clear on which resource you have more of and narrow it down from there.

Elle Martinez: Okay, well, I love this.

This is fantastic, Rachel, thanks. Not only answering my questions, but being open and transparent about the work that's involved to build and diversify your income streams. So if anyone wants to learn more from you, I know, I believe you have a course as well. Where's the best way they can find?

Rachel Richards: Yes. Thank you so much. Well, I'd love to give your listeners my passive income starter kit for free so they can hit the ground running. Yeah. So they can go to money, honey, rachel.com/bonus to download that. And then there'll be, you'll be on my email list. So you'll get notified if I come out with any new courses.

Elle Martinez: Oh, that's fantastic. Thank you so much.

Support the Podcast!

Thank you so much for listening to the podcast! If you enjoyed this episode and found it helpful, here are some ways to support it.

  • Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and become financially free, please share.
  • Leave a review. Honest feedback and reviews make a big difference and gets the word out about the podcast. Leave your rating and review on Apple Podcasts.
  • Grab a copy of Jumpstart Your Marriage and Your Money. My book is designed for a busy couple to set up their finances in 4 weeks. Get tips and tools that have worked for other couples on their journey of building their marriage and wealth together!

Music Credit

Our theme song is from Staircases. Additional music by various artists from Audiio.

Mid-Year Financial Reviews: An Easy and Fun Way to Tackle Them

It's June – the year is halfway over. Now is the perfect time to hit pause and do a mid-year financial review.

A midyear checkup is a great way to see how you're progressing with your goals and make sure that your money is working for you and your goals.

Today, we'll go over a system that makes it simple to set up and checkup on all your accounts including investments!

Mid-Year Financial Reviews

While we automate much of our finances, especially the tedious parts. It really does pay to have these times where you sit down. In review the numbers. And having a financial checkup mid year is a fantastic opportunity. Not just to look at your day to day accounts, like your checking and savings but your investments.

Having these more in-depth conversations. Can be beneficial to both your marriage and finances.

For us, this is an opportunity to hit pause and to really sit down and talk.

I don't know how this year has gone for you but it really has flown by for us. In overall, it has been good, but that doesn't mean there hasn't been some struggles and challenges that we face.

Second, it gives us a chance to talk about what's been working and what's not working with our family finances.

Life comes up and maybe we had to shift some things for a month or two. This is a pause where we can ask, Is this a trend that we should start planning for, or is this a one-time deal?

Knowing that ahead of time can relieve the stress going forward.

Finally, it's a great reminder to reflect on the big picture.

What are we really working towards and how are we aligned towards that?

Yes, it does involve looking at the finances, but also schedule wise, work choices that we make, time with the girls – all these things are connected to each other.

Having a set period where we can reflect on that big picture is a huge help.

This past year and a half can be especially challenging for families as we are navigating through this unprecedented time.

Which is why I'm glad Kevin Matthews is a part of this episode. He's a former financial advisor and a number one bestselling author.

He just had a new book from Burning the Blueprint that's out that you should definitely grab.

Today, we're going to be talking about that connection between your family and financial goals and making sure that your investments are moving in the right direction.

In this episode, we'll get into:

  • why investing matters and how you can come up with a plan that reflects your goals
  • how to do a financial review for your investments?
  • making sure that they're aligned with your priorities and goals.

Are you ready? Let's get started!

Resources to Stay on Top of Your Money 

If you’re looking to build up your finances, here are some handy resources we mentioned in the episode plus more! 

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.

We’ve been Coastal members for a few years have been happy with their services.

They have wonderful services and accounts to make saving easier including their competitive money market accounts!

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Thanks to our new sponsor Republic Wireless.

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Same thing happened to me years ago. Wanting to become debt free faster, I switched to Republic Wireless and saved big time. 

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Investments: Making your Money Work for You

Elle Martinez: I want to talk to you a little bit from burning to blueprint, kind of start off there because you lay out how a family can start getting that financial stability and wealth using the SIP system.

First off, how important is it for families to include investments with their financial plan?

Kevin L. Matthews: Yeah, I think it's one of the most important parts, because when you invest, you are essentially electing to grow your money.

While savings accounts are always important, we're never not going to get away from that. That's the bread and butter, but we have to make sure that that money is growing so that it takes care of us.

The way that I like to describe it is when I'm investing, I'm sending my money to work.

I have a nine to five that my money needs to have a nine to five as well, and they need to bring home more money. The more often that we do that, the longer that we do that, the quicker that we can leave our own jobs, we can create financial freedom for ourselves.

Investing is just the process of giving your money, a job, allowing that money to go to work so it can take care of you.

Elle Martinez: I definitely agree. I feel like coming from a family where investments weren't talked about, there's there was like a lot of concern. It came from a good place, but they were hesitant about it. They thought, you know, is it really safe to invest?

They thought maybe real estate buying home was more of a financial priority.

I do want to talk to you a little bit about that. People's misconceptions about investing and some of the money scripts that they pick up that can show up with their financial decisions specifically with investing.

Have you seen some of these play out with families on deciding how to do it?

Kevin L. Matthews: Yeah, I have, especially around the tangibility of the stock market, meaning I would prefer to invest with something that I can feel, I can see that I'm sure it's not going to get up and walk away tomorrow. And I understand that.

My thing is to show that the stock market while not as tangible is still tangible.

If you invest in a target or a Starbucks, that you can walk into a target and a Starbucks and see that it is a real thing and that your investment is very much tied to the success of that company as a whole.

It's all about understanding that the tangibility part, but also easing into it. I think, especially for families too, to understand that you don't have to be an expert on day one is extremely important because that's where it gets intimidating that you feel like you have to have a finance degree from, from day one.

And that you had to be, you have to know every single thing all at once, and that's not necessarily the case.

You can start small, you can start with one company or one fund. I think an index fund is probably the best place to start just to just do that first and understand what type of investor you are and just take it step by step.

It may take a while. It may take several weeks. It can take several months and that's totally okay.

Elle Martinez: Yeah. I know a lot of people are hesitant.

And then this past year, maybe you've seen this too the other extreme where you have people who are eager to make their money work for them. But what they're doing is they want to jump into things because they see this crazy growth with cryptocurrencies or what's happening with AMC in GameStop, but they're not taking the time to understand, either the technology behind it or just the businesses.

What would you say to them?

Kevin L. Matthews: My thing is, and I've say this all the time is, don't let your emotions do not do math. I think that that's the key thing.

Most people take that to mean that you're falling in love with the company or a stock and it doesn't do well, but you're just hanging on to it but it also means that people who move anxiously and I feel a rush that I need to get into this.

I can't miss it. I can't miss it. I got to get into this now. I don't know what it is, but I have to get into this right now is also an emotion that doesn't always fare well for most investors.

So anytime that you're making a financial decision, you want to make sure you're doing it out of understanding and that you're doing it out of your own will and not because of an emotional push or just because you're chasing something that you think or feel that everyone else has.

I think that that's the key thing we see all the time that there are, there are some times where these well, we call meme stocks like AMC and game stop, a lot of times they have popped.

They have done extremely well and then shortly after they don't do so well.

We talk about those all the time, right? That this has been a recurring theme. All of 2021. We don't talk about how Kodak did something very similar and then Kodak very quickly lost more than 70% of his value within a week. Yeah. That's a risk that I don't think most people are willing to take.

We also have to pause and say, you know, there are some people who had their risk tolerance where they want to make, you know, hundreds of percent. Yeah. A hundred percent of the day and all that kind of stuff. But there are regular companies out there that have built wealth for generations and generations.

And those are okay too. You don't have to get everything overnight. I think that's the key thing, especially for beginners.

Elle Martinez: Yeah, consistency will Trump that anxious feeling where you cycle. I've seen people put money in their money, goes down, especially with cryptocurrency. I think even in the personal finance space, it was done as an experiment. So it wasn't a lot of money. And Bitcoin dropped and then, you know, A normal person would typically just take it out.

It's like, okay, I've lost money. And that cycle just really makes it worse.

I just want to fast forward for maybe a couple that they have been investing and they've put money into the 401k. How would they go with this process of reviewing their investments, making sure that it's on track? For example, like how do you and Jess review your investments?

You do it like twice a year, I think.

Kevin L. Matthews: Yeah. That's exactly right. So we do it at the end of June at the end of December. And that's it.

And what we, I think for everyone that the key is know what your goal is and know what the standard of the bar is going into it. I think that's the key thing. So for example, we do, what's called the rule of 110.

So you take 110 minus 30. That gives me 80. Right? So 80% of my 401k of all my investments should be in stocks. And 20% should be in bonds.

It's just a rule of thumb. So throughout the year, depending on how the market has performed, depending on how I've invested, that number could be out of whack, maybe it's it's 90 10 now because the stock market was great or maybe it's, you know, 70 30, because things didn't go the way we expect it.

What we try and do is say, this is what the bar is, is what we intended to go into the year with. This is where we should be. And then we go back and measure to see how close we are to that number.

If we're a little off by, let's say more than 5% or so that we make sure we come back in balance. So maybe we're adding more money to one to bonds and stocks and so forth to make sure we're properly allocated and properly balanced.

Then we come back and check back in on it at the end of the year.

Elle Martinez: Yeah. I think sometimes people. I think it has to be very complicated or they see on television, like they have to have a ton of spreadsheets and yeah, spreadsheets are a part of it, but nowadays there's a lot of apps and tools that make it easy to grab the numbers.

Kevin L. Matthews: Yes and that's the thing, too. So for example, especially if you're talking about your 401k or even a regular brokerage account, usually when you log in, it gives you a pie chart that shows you now the words are a bit different. They'll say, domestic stock or fixed income or something like that.

Usually that number is readily available and it'll tell you flat out. Yeah, you have X percent here and X percent there and it makes it a lot easier nowadays than what it used to be.

Elle Martinez: Yeah, I do like that. There are more tools. Sometimes though I think certain apps make it easy to invest, but they don't do the education side as well and some people get burned by that.

But I love how you do that you have a plan and then you measure it up against it. It's not that complicated.

You guys already talked about this before and how often do you and Jess kind of go over the big, big picture, like your plans for 10 years or 20 years down the road. How often do you guys kind of review that and adjust?

Kevin L. Matthews: Yeah. So we have a living document for our 5 10, 15, 20 years. And that's the one where we generally review once a year and the way that we break it down is, let's say for the five-year goal, we put up what the goal is.

It has actually the most detail and the further out it goes, the less detail it has, because there's only so much, you can play into a detail, right?

We work backwards and break those down. They'll try to break those down into monthly goals. And on the first of the month we just quickly review and say, okay, have we started this part of it?

Have we started that part of it and kind of move on? For example, I think back in 20 15 or so I was looking at grad school. We said, okay, by 2020, we want to make sure that we graduate on or about this date.

Then we start to work backwards and say, well, now we need to buy the study book. Now we need to consider scholarships. Now we need to consider what schools we want to apply to and broke that down year by year.

We ended up graduating in 2020. We did not expect the pandemic there, but you know, you have to, yeah, they got to figure your way around those things. But it's we review those once a year.

Then at the top of the year, every year we prioritize and say what's the most important and then break those out by month and sometimes by quarter

Elle Martinez: yeah. I love that and you're right -no one planned for the pandemic and, and everything that happened in afterwards, but it does bring up a good point.

If you could say a silver lining or a plus about it is that it's given us more time at home with the kids or reflecting, you know, what kind of legacy or what kind of lessons we want to pass on to our kids.

You're known for taking a long-term approach when it comes with finances specifically, I saw your article about building generational wealth.

I'd love to get your take on both sides of the coin. One, the lessons your parents passed on to you. And then what key lessons you want to pass on to your two kids?

Kevin L. Matthews: Yeah, I would say for me, there were a few lessons that I learned. I think the first one is that investing is, should be prioritized and is important.

So my parents did not actually invest in the stock market. When I was growing up, it was less accessible. A lot of people who look like us and just didn't really know that it existed.

And there wasn't like a Robin hood or a fidelity app back in the day. But what my parents did do, especially my dad is he, he was a someone who rented property.

He was a firefighter and he would go to a firefighters auction and buy cars for thousand dollars, $1,500 and then fix them up and then sell them for a lot more.

That was my first introduction to like what investment was, what investing was rather and how it can work for you outside of just having your regular nine to five.

I think that's where I got that, that business acumen from and where I got the the idea that there, there might be an even better way for me to do this without like, you know, worrying about title Jansport and all that kind of stuff that you have to worry about with buying a house or a car.

So that's the first one. The next one is, is being flexible and resilient financially. Because everything, like you said is not going to come out the way you expect it to a lot of hurdles that we all run into, especially as parents that you want to do X thing. And then this thing happens and you have to adjust everything all over.

I was so grateful that my parents were always transparent financially and say, look, you know, we can't afford this. We're gonna have to wait until tax time. Right. Or, Hey, this bill was really expensive. We have to reschedule this trip or something like that. While it wasn't always a fun conversation per se, it was transparent.

It's that communication is what I brought into my marriage and what I hope to bring to my kids too, that we can talk about the positive things that we're trying to do and, and negative if that should occur and let them know that it's not something I need to be ashamed about. Is that something I should hide and not talk to talk about so the people who are most important to me,

Elle Martinez: Yeah. I love how not only are you having these conversations with your kids, but you and your wife have started investing on their behalf. So when they are 18, they're starting on a strong foot financially speaking. So they have choices and opportunities. What made you and just decide to do that?

Cause I know a lot of parents have the idea. They want to do this but we get pulled in so many different ways so how did you guys make this a priority? What discussions did you have?

Kevin L. Matthews: Yeah, it was more of a reflection on my end that that kind of spurred it. So my origin story, if you will, into the financial space was in 2010. I flew to New York and did the internship on wall street. And it was, I was utterly floored. Like I didn't understand the market. I was confused, flustered and everything that they could go wrong.

They go wrong in terms of like, What an intern is supposed to do. Cause I had no prior training about the stock market at all.

But it was like second to last day and I realized that we did what's called backtesting. So essentially what if you invested a thousand dollars in apple in 1989 or something like that, and then it would spit out a number and say you could have been rich.

I essentially found out that had my parents invested a thousand dollars a year, which is just $83 a month in apple for the time I was born in 2010, I could have like $800,000.

Yeah and that was the moment I was like, oh my God, everybody should, should know about this. And whenever I had kids and this was, you know, 10 years before I even had kids, I was like, I want to make sure that my kids never have to wonder, like, what if dad or mom invest in X, Y, and Z.

So that was it. When we found out we were having kids. First thing I did was open a savings account clearly that we, his name wasn't on it at that point in time that wanted to make sure like, look, the first thing I do when we leave this hospital is we're opening an account and we've got to start this now.

Like, even if it's a little bit of money, he'll have way more than I would've ever imagined.

What happened in reality was I went downstairs while my my wife was in labor and I didn't know she was going to have the baby within 10 minutes cause I was like, look, it's going to be like several hours.

I'm like, okay, great. I'm gonna go down to the lobby. I'm gonna record this video real quick. And I came, I, you know, recorded the video. I don't know, two or three minutes long about the things I was going to do to ensure that just my son at that point in time. Cause my daughter wasn't born yet, but what we're going to do to build generational wealth, get back on the elevator, get back up there.

And like, they're like, oh, the baby's coming now. And ten minutes, when he

Elle Martinez: Wow.

Kevin L. Matthews: So, so yeah. You know, I never made that mistake again, but I almost missed it. So yeah, that was the thing I wanted to make sure that my kids never had to wonder what is and have labs.

So both of my kids now have, at this point have more money than I had at 18, which, you know, I had a part-time job.

I was working left and right. I had been working at a gas station since I was 16. And because of investing, they've already leapfrogged me at where they are age wise to where I was when I was 18.

Elle Martinez: Yeah, And your kids are small.

Kevin L. Matthews: Yeah. Yeah. Yeah. So they're at this point at nine months and three years old,

Elle Martinez: Oh my goodness. But that that's something parents would love to be able to do. I'm glad that you pointed out it doesn't take a huge investment.

Kevin thank you so much for coming on. I really appreciate this and congratulations on the book. I mean, best-selling, it is a fantastic read, more importantly definitely one of those that makes you think and come up with a plan for your family and your legacy, but also the community.

Kevin L. Matthews: thank you. I really appreciate that.

Support the Podcast!

Thank you so much for listening to the podcast! If you enjoyed this episode and found it helpful, here are some ways to support it.

  • Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and become financially free, please share.
  • Leave a review. Honest feedback and reviews make a big difference and gets the word out about the podcast. Leave your rating and review on Apple Podcasts.
  • Grab a copy of Jumpstart Your Marriage and Your Money. My book is designed for a busy couple to set up their finances in 4 weeks. Get tips and tools that have worked for other couples on their journey of building their marriage and wealth together!

Music Credit

Our theme song is from Staircases. Additional music by various artists from Audiio.

Why and How You Need to Diversify Your Income

Learn how you can protect your family’s finances and open up more opportunities by diversifying your income! 

Why You Need to Diversify Your Income

Diversifying income is something every family should consider. It can not only give you a bigger safety net, but it does give you some more options no matter what stage you are in your financial journey. 

Here are a few scenarios where diversifying and increasing your income can be helpful.

We're still not out of the woods when it comes to the financial impact of COVID.

In April, 9.4 million people reported that they were unable to work because their employer either close or lost business due to this pandemic.

As you can probably guess the more income you get, the higher your chances of saving.

In 2019, the median bank account balance for American households was 5,300. What's interesting is when you break it down by income, how drastically that changes.

For a family that's in the 40 to 59 percentile of income, the median savings was 4,400. You moved to the next bracket, 60 to 79%. You're looking at 10,000. The next one 20,000 and then finally 69,000.

Having income to take care of essentials means you can then take that so-called extra income and put it towards financial goals, including savings.

Finally, if your family is on the financial independence path, then increasing your savings rate can speed things up for you when you'll hit your FI number.

For example, if your savings rate is 15% then you have 43 working years until you retire. If you bump that up to 30%, then that drops down to 28. You move up to 45% and it becomes 19 years.

You're literally buying back your time when you're increasing your savings rate.

So hopefully it’s clear why you need to diversify your income. The question is now about finding the right ones for your family. 

Side hustles are a popular recommendation, especially online, but they're not your only option.

Which is why I’m so happy to have Michelle Jackson on today. She’s an author, podcaster, and entrepreneur.

Not only has she developed these business and income streams, but she’s found a bit of balance with juggling them. 

In this episode, we get into:

  • different types of income you can earn
  • Pros and the cons of them
  • how to decide which income path is right for you

Let’s get started!

Resources to Diversify and Build Up Your Income

If you’re looking to boost your income, here are some helpful resources to earn more money and manage it better!

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.

Slash Your Phone Bill with Republic Wireless!

I'm so happy to announce our new sponsor Republic Wireless.

If you’re looking to hit your family’s financial goals faster, optimizing your expenses is the way to go. Chances are you’re paying too much for your smartphone and not getting the value you deserve.  

Same thing happened to me years ago. Wanting to become debt free faster, I switched to Republic Wireless and saved big time. 

Nationwide coverage, fantastic phone options like the Samsung Galaxy and Moto g, plus seriously affordable prices (plans start at $15/month!) make it a smart choice for families looking to save without sacrificing value. 

See all they have to offer at Republic Wireless

Support the Podcast!

Thank you so much for listening to the podcast! If you enjoyed this episode and found it helpful, here are some ways to support it.

  • Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and become financially free, please share.
  • Leave a review. Honest feedback and reviews make a big difference and gets the word out about the podcast. Leave your rating and review on Apple Podcasts.
  • Grab a copy of Jumpstart Your Marriage and Your Money. My book is designed for a busy couple to set up their finances in 4 weeks. Get tips and tools that have worked for other couples on their journey of building their marriage and wealth together!

Music Credit

Our theme song is from Staircases. Additional music by various artists from Audiio.