← Earn Your Leisure
Loading summary
Transcript32 lines
- [00:00]
A
Earners. What's up? Look, the holiday season is supposed to be about joy and celebration, but let's be real. Finances could take a serious hit this time of year. Have you ever found yourself dipping into your savings or even adding to your credit card debt just to cover some holiday expenses? I know, I've been there. And those months of catching up afterward? They're not fun. But what if you could approach this holiday season differently without the stress? That's where Chime comes in. With a Chime checking account, you get features designed to help you stay in control of your money. Like no monthly or maintenance fees, fee free overdraft up to $200 with SpotMe, and my personal favorite, getting paid up to two days early with direct deposit. Think about it. No surprise. Fees draining your account and the flexibility to handle those holiday expenses when they pop up. Let me tell you about SpotMe. I remember a time when an overdraft fee hit me just because my timing was off with my paycheck. It was frustrating and unnecessary. With Chime, you don't have to deal with that. SpotMe lets you overdraft up to $200 without fees, and your next deposit just covers the balance. And here's something unique. Chime is all about community. You can even get a boost from a friend to temporarily increase your Spot Me limit. And when you help a friend out, they can boost you back. It's a real give and take that makes managing your finances feel a little more supportive. Millions of Chime members are making financial progress every day. To date, Chime has spotted members over 32 billion in transactions through SpotMe. And with access to over 50,000 fee free ATMs, you can take care of your money anytime, anywhere. So enjoy the holidays while keeping your financial goals on track with Chime. Open your account in just 2 minutes at Chime.com earn that's Chime.com earn Chime feels like progress. Banking services and Debt card provided by the Bancorp Bank NA or Stride Bank NA members, FDIC Spot Me eligibility requirements and overdraft limits apply. Direct deposit timing depends on submission of payment file. Boosts are available to eligible CHIME members enrolled in SpotMe and are subject to monthly limits. Fees apply at out of network ATMs and for OTC withdrawals. Earners what's up? Look, you know how every new year we set these big goals like saving more money, but somehow life just gets in the way? I mean, how many times have I told myself I'll stick to a budget only to see random delivery fees and subscription services eating away in my wallet. It's like the world is designed to spend our money. That's why I love Acorns. It makes saving and investing automatic so you can stick to your financial goals without even thinking about it. This episode of EARN your Leisure is sponsored by Acorns. You've probably heard me talk about Acorns before and I'm excited to share more about how it can help you too. Acorns makes it easy to start automatically saving and investing so your money has a chance to grow for you, your kids and your retirement. Here's the best part. You don't need to be an expert. Acorns will recommend a diversified portfolio that fits you and your money goals. You don't need to be rich. Acorns lets you invest with the same spare money you've got right now. You can start with $5 or even just your spare change. You don't need a ton of time. You can create your own Acorns account and start investing in just five. Basically, Acorns does the hard part so you can give your money a chance to grow. For me, Acorns has been a game changer. I remember looking at my bank statements and realizing I wasn't making any progress toward my long term financial goals with Acorns. It was like flipping a switch. Now every little bit of spare change I spend is automatically invested. Over time, those small steps have really added up and it feels good knowing I'm working toward a better future without stressing about it every day. So head to acorns.com eyl or download the Acorns app to start saving and investing for your future today. Paid Client Endorsement Compensation provides incentive to Positively promote Acorns Tier 2 compensations provided investing involves risk. Acorns Advisors LLC and SEC registered investment advisor view important disclosures@acorns.com UIO IRAs and.
- [04:38]
B
Retirement accounts what are the options? Guys, these are things. Rashad alluded to this. You have some of these already. Some of you have been investing blindly and passively just through your job and dollar cost averaging. So some of the things we talked about in our lesson today you have been doing just by happenstance. Traditional Roth ira, Roth IRA are some investment and retirement accounts. You have your 401k. You guys all may be familiar with that. If you have a W2 type of job, your 403B, myself and Troy, we were former educators and so we know about the 457 you got, your health savings account, you have various IRA and retirement vehicles to invest in Let me break down this traditional Roth ira, okay? And the Roth ira, these two vehicles, okay. The. Not that there's a knock, there's never no knock to investing. But they have caps, they have limitations, they have income limits, okay? And so if you make a certain amount over a certain threshold, then this might not be readily available to you. You might have to do a, a Roth conversion, okay? You have to do something different. But a Roth IRA is after tax dollars that you guys will be investing. So after your money has went into your work, 401k that they automatically debited out of your account into your retirement, hopefully you got that at least 7% or 15%. We got to do better with our allocation, okay? After tax dollars would then go into your Roth ira, similar to what Rashad told you guys earlier with. You need to get your own brokerage account. You gotta have inside that brokerage account a Roth IRA as well. So that you can put up to the limit, which this year, $7,000 into that. And if you're over 50, you can put up another thousand which would get you up to $8,000 on a year. And so these are other things you can do in addition to your stocks, in addition to your ETFs, in addition to trading options, in addition to your money markets. These are things you can do as well on the wealth building journey, even as a beginner.
- [07:16]
C
Yeah, and the HSA thing is something that people don't talk about a lot either.
- [07:19]
B
Because they don't.
- [07:21]
C
That's important to know.
- [07:22]
B
That's a game changer for me. The HSA Health Savings Account guys, just so you know the acronym Health Savings Account. So whether you're married and or single, if your insurance has a hsa, a health Savings Plan, you can use the money to take care of doctor bills, appointments, co pays. But whatever money isn't used, the HSA invest in it invested for you inside some of their allocations, they have mutual funds that you can pick from Growth tech. Some of the things Rashad told you guys about earlier, Growth Tech, you can do energy, you, they, they have it all inside the hsa. Just type Health Savings Account. Okay? And you will see like healthequity.com will come up, you will see certain things come up. And if you invest inside that, I know being married, we can put up to seven, a little over 7,000, maybe 7,800 a year into this. And guess what guys, it reduces your taxable income. Okay? So there's another way for on that front for you guys to also be doing the right thing by your money, doing right by your money, but also reducing your taxable income. And that money, if not used for a copay, simply is there growing on your behalf. And that can snowpile pretty big for those of you that, that stay on top of your health and wealth.
- [08:55]
C
You can use it. You can 65. So if that. That's gonna be a question people like, well, if I don't use. You're supposed to use it for medical expenses. If you don't use it for medical expenses, if you can use it after 65 without getting penalized, yeah, it's like it's another form of retirement, right? Another. Another form saving money that you have to pay like a deductibles or like you said, out of the pocket medical expenses, but it's invested in the market. But as that's growing, if the money that you don't spend. So if you're 65 years old and you have $100,000 in your HSA now, that effectively is like another IRA for you because you can use that for your retirement without getting penalized. So if you use it before that for anything other than medical expenses, you get penalized. But if you use it after 65, that's important for people to fully understand. So it's a way to definitely kind of hedge with the medical aspect of it. But also it's like a double edged sword where you save it for retirement also if you don't use it.
- [09:56]
A
Chris, you brought up something in terms of education, us both being education about maximizing these allocations. Now at 25, I'm fresh into the game. I'm about to make 65, 000 for the year. 70 at the. You're not thinking, hey, I should take the largest percentage. Just like, all right, what's the lowest? I could put 3%. I'm gonna do that. Talk about the mindset in the shift because people are looking like, what can I do right now? Like, this is something that you can go to your HR department like on Monday, right, and say, hey, I want to actually max out my 403B. Talk about the importance of that. Because I don't think people really understand it. There's that one guy that comes once a year to talk to you about it at lunch and you never see him. And then you just forget about it. Talk about the importance.
- [10:39]
B
It's so important because time is our greatest asset. And so the earlier you can do these things, take advantage of all these vehicles, the bigger your pot will be, the bigger your nest egg. Will be when it's all said and done. So listen to this. You can't miss what you never had. You can't miss what you've never seen. If you take that allocation that they're going to by default, have it at between 1 and 3%. If you move it to 7% or 15% and you get used to living your lifestyle around what your check will then be, when that comes to you every two weeks or however you get paid, you won't miss it because you didn't see it. It's only when you see, oh man, my check, $3,000. You think you got $3,000 to spend, okay? But if you never seen 3,000 or whatever your check may be, because it is going to something that's going, your future self is going to thank you for, that's how you get ahead of the game. And so the earlier, if you're 24 years old and you're seeing this, the earlier you can go into your employer, your place of employment and tell them, if I'm receiving a 401k contribution, can you make sure my allocation Is at least 7 to 12%? 15% is on the higher end, but that would even be good if you can make that shake. If you're still living at home and you don't have and your mom is letting you do your thing, you're not having a whole bunch of responsibility, put it at 15% until you get your own place and then scale it back down to seven. But you can't miss what you never had, okay? And so if you get that mindset early, you're off into the races. Okay? For me, it kind of clicked when I was around 27. Between that 27 and 29 year range for me, you know what I'm saying? But listen to how it happened though. My wife, I saw her 401k killing mine. I'm looking like, what, what am I doing? My allocation was poor. My allocation wasn't where it needed to be. I'm looking like, man, I've been, I was an administrator in higher education for 10 years. I'm. What am I doing? My investments, because of what I was controlling, blew my edge. Higher education job, which was good benefits, it blew those and they blew that 401k and out the, out the water. That showed me the importance of man. My wife, retirement was way higher than mine simply because hers was like at 12 or 15, the whole 10 years she was in the health field. And so Troy brought it up, but it's need to be said do it as early as you can. Your future self will thank you later.
- [13:23]
C
And then also before we leave this topic, it's important people to understand the 401k, 403, 457. Like they'll give you a bunch of different options. A lot of people don't invest because they, they don't know how to go about and they're intimidated. One of the easiest ways is to pick a target date fund. So a target date fund is, it calculates your age and the age that you would be like around 60 or close to retirement. So it might be 20, 30, 2040, 2050. Depends on how old you are. And the whole theory with retirement plan is that you got to be aggressive when you're young and conservative when you get older. So it automatically changes over the course of time. So that's a very cookie cutter easy approach to take. If you, if you are like unsure of like 20 different options that you have available to you, the target date is, is something that is recommendable. I rec. I used to recommend it when I was an advisor. It's like that's something that is kind of does the work for you and you don't have to like worry about changing it every five years and switching the allocations. And then sometimes you have a Roth 401k component too in your job. That's important to ask because the raw, the difference between the Roth and the traditional is that one takes money. You save money today, which is a traditional one. You save money later, which is the roll. So it depends on your situation. But if you have, let's say a million dollars in retirement and you took out that whole million dollars at one time from your 401k, you, you would get like 600, 000 net because that is fully taxable. So that's important for people to fully understand. Especially when you think about your retirement. You think that you got a certain amount of money, but you, you don't, you don't realize that that's taxable state and federal tax. That's why a lot of people move to Florida when they retire, because there's no, there's no state tax. But regardless of where you live, you still got to pay federal tax. But if you have the Roth, if you have a million dollars, hypothetically, and you took out all the million dollars at one time, you would get $1 million because it's not taxable. But you didn't, you didn't get a tax benefit when you put the money in today. So that's important for People to understand as far as the tax, because we don't talk about taxes at all. But even like capital gains, short term, long term, that, that's important, people, because it's like you do a lot of like, trading or selling stocks and you don't realize that you, you're racking up a tax bill and then at the end of the year you like, damn, I got to pay taxes. I. I didn't even know I had to pay taxes on this. Like, I kept it in my brokerage account and I didn't put it in my bank account. But if you sell a stock, you pay capital gains tax on that stock.
- [15:56]
A
Yeah.
- [15:56]
C
You don't pay capital gains tax on your retirement, but you do pay federal estate tax if it's not a Roth. So understanding that is important because you don't want to get like 20 years down the line and it's like, damn, I wish I had a Roth. Because now I got to pay hundreds of thousands of dollars because I have millions of dollars in my 401k.
- [16:17]
A
Yeah. Or. And you don't want to put the profits, if you're talking about stocks into your account and say, oh, this is all profit. No, there's a percentage of that that's going to be for taxes. If it's been with. If you sold it within a year and a day, that's going to be short term capital gains. And depending on your tax threshold, that's the allocation that you're gonna have to pay for it. If it's over a year and a day, it's long term. And again, there's a cap on that. Things like 15 for the most part, but sometimes it does go up to 20. But that's a big percentage, right? I know in the short terms it can get up to 30, 37 to 39. So you're talking about a 20% difference if you just hold long term. That's why we always stress it.
- [16:54]
B
Wow. What's up? I just bought and financed a car through Carvana in minutes.
- [16:59]
A
You, the person who agonized four weeks over whether to paint your walls eggshell or off white, bought and financed a car in minutes.
- [17:05]
B
They made it easy, Transparent terms, customizable, down and monthly. Didn't even have to do any paperwork.
- [17:11]
A
Wow. Hey, have you checked out that spreadsheet.
- [17:15]
B
I sent you for our dinner?
- [17:15]
A
Options finance your car with Carvana and experience. Total control financing subject to credit approval.
- [17:24]
C
Yeah, sure thing. Hey, you sold that car yet?
- [17:28]
B
Yeah, sold it to Carvana.
- [17:30]
A
Oh, I thought you were selling to that guy.
- [17:32]
B
The guy who wanted to pay me in foreign currency.
- [17:35]
A
No interest over 36 months.
- [17:38]
C
Yeah.
- [17:38]
A
No.
- [17:39]
B
Carvana gave me an offer in minutes.
- [17:41]
C
Picked it up and paid me on the spot.
- [17:43]
B
It was so convenient.
- [17:45]
A
Just like that?
- [17:45]
B
Yep.
- [17:46]
A
No hassle? None. That is super convenient. Sell your car to Carvana and swap. Hassle for convenience. Pickup fees may apply.