← Networth and Chill with Your Rich BFF
Networth and Chill with Your Rich BFF
3 Simple Steps to Start Investing From Scratch | No Experience Needed
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End all, be all. Best investment for every single person. Makes sense for everybody. It's amazing. If you don't have it, you're a loser. Blah, blah, blah. Nobody knows what the perfect investment is. Instead of just buying one company, you can access hundreds or thousands at a time. Next year, you will have less money than you have this year. Eggs are going to cost more. Milk is going to cost more. Gas is going to cost more. It is actually costing you money not to invest. The best day to start investing was yesterday. But the second best day is today. What's up, everyone? Welcome back to another episode of Net Worth and Chill. I'm your host, Vivian Tew, AKA your rich BFF and your favorite Wall street girly. The number one thing everyone asks me about is investing. How do I get started? Is it really worth it? Yes and obviously yes. And. And where do I even go to buy investments? So today on Net Worth and Chill, I'm going to walk you through the basics of investing so that you'll have an actionable plan from start to finish of how to invest responsibly. And keep in mind, these are the strategies I use to help make myself a millionaire by the time I was 27. So listen up and let's get into it. Support for the show comes from Walmart. If you're ready for summer vibes but don't want to spend a lot, Walmart's got your back. Right now, Walmart's dropping prices with thousands of rollbacks and more on summer party essential, from grills to coolers and even slushy machines. So whether you're firing up, cooling down, or just getting ready for a weekend in the sun, now's your time to save, shop and save in the Walmart app, online and in stores today. Okay, so first things first. Let me address the big question I always get. What exactly do I invest in? And the BFFs always think I'm going to magically have a list of the 10 best stock picks for them to blindly buy just because I said so. And, and I hate to break it to you, but nobody knows what the perfect investment is. Everybody is super pressed about finding the perfect investment. You, hedge fund managers and billionaires alike, are all looking for the best thing. And even though hedge funds and billionaires have endless resources, they've got tech teams, researchers, everything, they still can't do it right. While I was a trader on Wall Street, I saw hedge funds blow up all the time because people made bad investments. So please know that there's no such thing as the perfect investment. And in fact, we need to rewind a little bit before you worry about what investments you're going to buy. We need to figure out what's going to hold your investments. So step one, you are going to pick an account. These are not investments themselves. They are just online tote bags. They hold stuff. You can get a special tote bag like a 401k or 403b or an IRA or Roth IRA specific for retirement. These have tax benefits, but you can't touch them until you're older. Or you could get a tote bag specific for saving, for your kiddo's education, something called a529. Or you could get a blank slate tote bag that you can access at any time called an individual brokerage account. For general investing, you can research what account type might make the most sense depending on your goals. When do you want to have access to the money? What are you investing for? You're going to open one of these up at the end. Any financial institution you feel comfortable with. This could be your bank. This could be a new fintech with a sleeker online interface. If you're more Digital first, like SoFi, which is what I personally opt for, or at one of the old traditional brokerages like a Fidelity, a Vanguard, Schwab or E Trade. Then we move on to step two. Now you're going to fund the account. This is literally so simple. You just take cash out of your checking or savings account, at your bank or your credit union and you put it into your investment account. The this is done digitally. Most platforms just have you link your bank account through plaid. Simple enough. And last, step three, the fun part. We pick investments. And instead of telling you my top 10 stock picks, I'm going to tell you how you can buy hundreds of companies at the same time without having to spend a fortune. You are going to buy ETFs or mutual funds. In particular, I like index funds or funds that track broader indices. Indexes. Don't let these phrases confuse you for the purpose of your investing. What you really need to know is that they are essentially baskets of investments. Instead of just buying one company, you can access hundreds or thousands at a time. This is important because it lets you weather market fluctuations more effectively than if all of your money were to be in one stock. If one company happens to have a bad day, bad week, bad year, your overall portfolio will still be okay. The example that I love to use in terms of index funds or these ETFs or mutual funds that hold a bunch of stuff is Halloween candy. If you and your family buy an entire bag of Snickers and you put the Snickers out on your front stoop and the little, you know, orange pumpkin thing, and the kids come and, you know, they grab a piece of candy, everything is great. But if a kid shows up to your house and they are allergic to peanuts, your home is getting TP'd. However, if you get a mega bag of Halloween candy that has the Snickers, but it also has the Starbursts and the skittles and the KitKats and all of the other stuff, you put it out into the little orange pumpkin thing, they come to your stoop and they look around. Even the kid who is allergic to peanuts can still get the individually wrapped other candies. And so your home is safe, you don't get egged, and everything works out nicely. This is exactly the same way we want to think about investing for the long haul, diversification is your friend. One thing I want you to be on the lookout for when you're selecting the funds that you'd like to invest in is the expense ratio. While trading platforms are no longer charging commissions for transactions, mutual funds, ETFs and other baskets of investments still do charge fees. Someone has to do all the work of putting them together, right? Or at least the tech that does that, right? That costs money. And those fees are called expense ratios. It's a percentage that you'll pay on top of your gains or losses. So, for example, say an investment has a 0.1% expense ratio. If you make 8%, you'd actually be making 7.9% because you have to pay the fees. If you lost 5%, you'd have actually lost 5.1%. Because win or lose, you still gotta pay the fees. Expense ratios are important because sometimes similar investments have different expense ratios. For example, if you wanted AN S&P 500 tracking ETF, you could buy Spy S P Y. But that expense ratio is much higher than Voo, which does the same thing. By choosing Voo instead, you'd save money annually while accomplishing your financial goals. And speaking of good funds that offer diversified investments, here are some great options to just get the juices flowing in your brain. I'm not saying these are perfect investments for everybody. I'm not saying they make sense for you, but they make sense for quite a few people. And they're a great jump off point for your research. First and foremost, Voo, it tracks the S&P 500. Then you've got something like a QQQ. This tracks the NASDAQ 100. This is a little bit tech heavier. There's VT, the Vanguard Total World Stock Index Fund ETF. This is everything in the world versus just the US. You can also choose to invest in a Target date retirement fund. If you want something more tailored to your age and how close you are to retirement, all you have to do is calculate what year you turn 65 and then round to the closest year ending in five or zero. Then you just pick the target date fund with that year in it. My favorite analogy about investing is that it's like walking into a grocery store. Everybody has a different vehicle to hold their goodies. Some people grab those plastic baskets, other have the mini carts, others have the full size carts. Heck, some people hold all of their food in their hands and then they just go to the conveyor belt and drop it all off. They come to the store with money and they buy things at the store. AKA when you're investing, you choose a brokerage where you want to do your investing, the type of grocery store you're going to, whether that's a Wegmans or a Publix or a Whole Foods or Trader Joe's. Then you pick an account to hold your investments. So that's the basket or the cart type. And you put cash into the account to make those purchases. So that's the cash you bring with you in your purse or in your pocket. And then you buy stuff, AKA the meats, cheeses, breads, fruits, veg, all of that. Make sure not to just put money into an investment account and then say you're done, you're not finished until your cash is actually deployed. That'd be the same as going to the grocery store, taking a hot lap and and leaving without having bought anything from the actual store. And for some of you, you've just listened to that entire rundown and it went in one ear and out the other. I can literally feel your eyes glazing over. If that is the case, consider investing through a robo advisor. This is the simplest set it and forget it investing method. So if you're lazy, but you want to be rich, you want to get your bag, please pay attention. I'm going to teach you how. Robo advisors are just like your Spotify. You know how Spotify uses your listening data to help build you the perfect playlist. Discover Weekly Daily mix release Radar. Robo advisors do the same. But for your investments. You fill out a short survey about your goals, your risk tolerance, your financial situation, and then they build you a personalized and diversified investment strategy. If you don't have the time or the willpower to learn how to invest on your own, this is a superb way to still invest without confusing yourself. My only flag is that robo advisors do charge fees. Typically, human Advisors charge around 1 to 1.25% to manage your money. But good robo advisors charge about a fifth to a quarter of that 0.25%. While you'll pay more in fees to use a robo advisor than if you were to invest on your own, if you know yourself and don't think you'll invest, period, unless someone else does it for you, this is a great option. The best day to start investing was yesterday, but the second best day is today. Now let's get on to some questions that you've all submitted about all things investing. Question number one I've already invested in several key ETFs, VO, QQQ, VTI, etc. Should I also invest in individual stocks? If so, how do I decide? So if you're already investing in an index fund that tracks the S&P 500, which is what VO does, the NASDAQ, which is a lot of tech, VTI, which transparently I would actually make a decision between VO and VTI because 80% of VTI is VO, you already have a lot of coverage. I would not encourage you to invest in individual stocks. However, this might be an opportunity for you to expand your portfolio into certain sectors that you think have growth opportunities as well as international markets. So sectors are things like the real estate sector, the healthcare sector, industrials, or if you want to invest more in consumer tech or things like that, you can invest in a specific sector sector. This allows you to avoid any company specific movement. But if something does impact that specific industry or that sector, you will feel the up and downs. But it's a better way than I would still say buying an individual company. Additionally, I would say something that's really important to a lot of people right now, just knowing that there's a little bit of turmoil in the us. Investing in international markets could be really, really powerful for you. Things like the Japanese market or the UK or Mexico. A lot of these economies have done very, very well in terms of returns over the past couple years. And that's not to say historical returns do not indicate future performance. However, I personally am a big fan of investing internationally. If you don't want to specifically pick which countries you're trying to get access to, VX US is exactly what it sounds like Ex US So it helps you avoid the US but make some international investments so that you have a little bit more exposure to stuff outside of just the US Domestically. Okay. Another question. How can older investors safely capitalize in today's markets? That is a great question. When you think about what your investing should be doing as you get older, the focus should be more on cash preservation or or preservation of your wealth versus wealth growth. That said, if you are an older investor who feels like you don't have enough for retirement and are okay to delay when you retire, so you're like, hey, I'm not going to retire at 60, I'm not going to retire at 65. Maybe it's 70 or 75 and you have a little bit more of a window. I would say that you can keep more of your portfolio in equities versus fixed income, AKA bonds, which are largely focused on wealth preservation. Equities focuses more on growth typically. However, they do carry more risk because in a bankruptcy situation, debt AKA bondholders would be paid back first versus equity holders. This is all to say if you're older and you have a little bit more timeline because you're delaying your retirement, you can still have a little bit more equity exposure to be taking full advantage of today's markets. That said, I would make sure that not 100% of your portfolio is in equities because you never know when there might be a correction. If you end up needing that money and it's not the right time to pull it out, you could be in a tough spot. So I would just say allocate part of your portfolio to that growth, but make sure that part of your portfolio does stay preserved and can help you ride out maybe a time period where the market might be correcting and give yourself that time to recover. Okay, so this is a question I am a little frustrated by, but I'm still going to answer. How can I understand options, covered calls and cash secured puts? Here's my thing. I don't think that the average retail investor has the time and is willing to dedicate the amount of like learning required to trade options. Options are incredibly complicated and there are whole teams at banks that only cover derivatives. And I never traded derivatives or options. While I worked at JP Morgan, I was trading just cash equities. Very simple. Buy, sell stocks. Yes, there are retail investors that can understand options to an extent that they are able to make decent money buying and selling them. Sure, I'm not going to say everybody doesn't win, but the vast majority of people who are Online trying to sell you a course on how to do so are not looking out for your best interests. I would not encourage any of my own friends to trade options as retail investors. It's just not something that I promote, it's not something that I encourage and it's not something that I do myself. Next question. Where do I move my 401k? It's connected to a company I no longer work for. That is a great question. So typically your options are a couple of are are these one, you can cash it out. Do not recommend because you're going to pay some steep penalties, probably not worth doing. Don't recommend. I would never do it to myself. Alternatively, you can roll it over into a IRA that you hold individually. IRA stands for Individual Retirement Account. This is great because you're going to have full control over investment selection. You will always have access to it. It won't be tied to any sort of employer, so you'll never have to go looking for it. You'll never lose it in case your 401k plan administrator changes or like the servicer that your company uses changes. And that's great. However, if you are using a backdoor Roth IRA process, transferring and moving your 401k to an IRA could trigger Pro rata tax adjustment. So you just want to be mindful of that. In that case, I would say you could also move your old 401k and have it roll into your new 401k for another job that you might be working for. This is great because there will be no tax implications for you. However, you will still be kind of handcuffed in terms of what investment allocations you can choose because you're new company will be choosing what investments you have access to. So those are kind of your three options. You can either roll it into a new 401k, you can either roll it into an IRA or you can cash it out. But I really don't recommend that one. Next question, what are safe investments given current market volatility? I think most people typically think of index funds but what's not obvious. So here's my perspective. You should think about your investments as a little bit of a pyramid and you want to have stuff that is heavily or in this case I would say almost like a, like a teardrop, like a lemon turned like vertical. You want to have some high risk, high reward investments, some low risk, low reward investments. But the vast majority of your investments should be medium risk, medium return. Index funds I would say are medium risk, medium return. So I Think that, you know, if the bulk of your investing is in an index fund, that should be fine depending on your age. However, there are low risk investments that are super low reward things like certificates of deposit or perhaps some high grade bonds that could help you really preserve your money. And then on the flip side, if you have a lot of money that is being preserved, that's being held safely, you've got some medium investments. You could even consider some more volatile investments that could be interesting to you, whether that might be a little bit of crypto. I know people like to dabble in that. A lot of these platforms these days allow you to invest in private companies. There are a lot of more high risk investments that you can get into. Maybe like real estate, maybe other collectibles. Things are up here. But think about those as like kind of the dessert. You don't want to have too much at the top, you don't want to have too much at the bottom. Most of your investing should happen in the middle. So I would say safer. You want safe. Look at bonds. Any sort of fixed income asset is going to be a little bit safer, but again, it's not going to return as much. So you have to keep that in mind. And those will typically put you on a pretty dependable return schedule. So you'll know what you're getting and it's kind of a done deal. But you will be foregoing any sort of additional upside. Ooh, this is a really great question, and I get this all the time. Is IUL useful? And what's the lowest amount that I can invest initially? So IUL stands for Index Universal Life, and it is a fancy schmancy life insurance product that many finance gurus online are telling you is the end all, be all, best investment for every single person. Makes sense for everybody. It's amazing. If you don't have it, you're a loser. Blah, blah, blah. Great. Curtis Ray, Pound Sand. I'm so sorry, but I am so frustrated by these gurus peddling this product like it makes sense for everybody, because it doesn't. In fact, these types of products largely only make sense for people who already have a lot of money. And frankly, not even then. Usually the reason why these people want you to get this product is because they make a commission. And life insurance actually pays one of the largest commissions across the entire financial services ecosystem. Am I saying life insurance is bad? Absolutely not. I think if somebody depends on you for income, term life insurance, and laddering term life insurance policies could be a great way to protect what you have built and make sure that those people are taken care of in case you kick the bucket. But these fancy life insurance products that include a cash benefit in addition to the death benefit, which is when you and they get a little bit of money. The cash benefit is money that you can borrow against. It's like this internal value of this policy. People talk about it like it's infinite banking. You can borrow from yourself. Yes, yes, yes. But what they don't tell you is that the monthly premiums and the cost of setting this up are so high initially that they don't make sense. I would not recommend my best friend get this. I do not recommend this for anybody that is thinking about should I use this money for this insurance product or should I invest instead? This is not something that I recommend for most people. And frankly, if you are in a position where this does actually make sense for you, you probably already have a SWAT team full of financial advisors who are helping you because you are that rich. That is how rich you have to be for this to make sense. So no, 0 to 10 do not recommend. Up next where to put my little money I want to invest for my kids college fund but also keep some saved for emergenc. Yeah, this is a great question. Something that you could consider is either a 529 account because in 30 plus states you do get state tax benefits. You put money into this account, it grows tax free and it can be taken out for educational expenses, tax free for your kids college. And if you don't end up using all the money, say your kid gets like a track scholarship or whatever, you can actually roll $35,000 of it into a Roth IRA for your kiddo. I think that's great. Alternatively, something if you want to have a little bit more flexibility for emergencies. And I don't recommend you taking money out of these accounts, but like if you need to, emergencies happen. Putting some money into a custodial Roth IRA for your kid could be really helpful. You're setting them up for success, for the future, for their retirement. You can actually take money out of a Roth IRA at any point, but it just has to be the money you put in. You can't take out growth, you can only take out contributions. But it's a really great way to just make sure that if you needed to, you could access it. Support for the show comes from Walmart. We know Walmart has low prices, but did you know they do price rollbacks too? Right now Walmart is dropping prices with thousands of rollbacks and more on the items you've been eyeing to upgrade your summer vibes. Imagine yourself lounging in the sun, enjoying some nice grill time and ice cold slushy and and hanging out with all your favorite people. Summer parties are the best and we could all use one like right now. So check out Walmart and save on that big cooler that always comes in clutch for group hangs or a sleek new grill so you can finally become the grilling master. Not to mention saving on that fun slushie machine that instantly turns any hangout into an epic party for all your summer activities, whether you're outdoor biking or poolside lounging. Walmart's got it for way less. Do your future self a favor and save on your summer faves. Now you can start saving and shop these amazing summer rollbacks and more right now in the Walmart app, online and in stores. Next question. What investment strategy would you recommend for creatives who earn lots of money at once, but they also have long hauls without booking or earning anything? Yeah, that's a great, great question. This is less so about your investment strategy and actually more so about your budgeting strategy. If you're someone who makes a lot of money in small time periods, but then also goes long periods without earning a lot of money, AKA me, AKA a freelancer, AKA someone who works for themself, you need to know when those kind of buckets of money are likely to come in and also when your dry periods are going to be what I do is when I have a bunch of money coming in, I will set aside the money that I know I need for needs. I will set aside a little bit money for me to enjoy my life. But then I also set aside a large chunk of money that I'm going to split up over like the course of like weeks or months that I can consistently invest with. That way over the next couple months when I'm not getting paid a lot, I don't have to stress about do I have money for investing when I have like a bigger chunk of money, when I have a windfall come in, I make allocations for where every single one of those dollars is going to go. And yes, I do allocate a lot to taxes, but I make sure that part of that strategy is to take care of future Vivian when she has a month where she makes little to no money and maybe might even end up in the red because she has to pay employees and has to pay out her agent and her PR team and her attorney and things like that. So I just make it really, really clear of this money has to stretch for six months and then in six months time when I have another big check come in, I do the same and I do it again. Budgeting for all of the things you want to do is how you actually get to invest. And then once you are actually investing, the investing thesis should not change based on what you do for work. It should actually depend on how much you make in total every year, but also kind of what your plans for retirement look like and when you'd want to do that. That is where you can then curate your portfolio of hey, am I planning on retiring in 30 years? Am I planning on retiring in 15 years? And what exactly do I need to be able to have that happy retirement? Ooh, this is a good timing question. How do I figure out when to change my investments and reinvest elsewhere and when to let them grow? This is a great question. As you are thinking about rebalancing your investments, it really depends on how your life changes and what your needs are. And I would rebalance your portfolio at a minimum every five years. But if you want to do it every two, three, that's probably right. Two, you should not be checking your investments every week and rebalancing. That does not make any sense for anybody. I want to make sure that you hold any investment that you are making for at least one year. Otherwise you will likely be hit with short term capital gains taxes which are the same as ordinary income taxes. AKA you're going to be taxed just like you would if you had earned that money from your job. Whereas long term capital gains taxes, the max you'll ever possibly pay is 15%. So that's a lot lower than the average ordinary income tax rate. You can use a robo advisor which can not only help you tax loss harvest, but it'll also remind you to retake that quiz every year or two so that it can help you rebalance your portfolio. But if you're going to do it yourself, I would just reassess. There will probably be a portal where you're investing and it'll show you a pie chart of what your investment mix is. How much is in equities, how much is in bonds, how much is in cash, and you just want to make sure that generally fits into your lifestyle versus like what you might need when you're a little bit older, which is you would want to have more fixed income, more bonds versus equities. Another one if I want my money to not be locked into a retirement plan, but I want it to grow Faster than a high yield savings account. What's the best way to go about that? Oh, you do not have to invest for retirement. You can invest for a much shorter period than that. If you would like. I would encourage you to open up an individual brokerage account at any rate, any sort of brokerage. And that will not have all of those amazing tax benefits, but you'll be able to access that money at any time. For folks like myself who might have the option to retire early, I'm not going to be able to access my 401k until 59 and a half. I'm not going to be able to touch my retirement accounts until I'm that age. But with my individual brokerage, I'll be able to access that at 50, 52 and that way I'll be able to make sure that I have money to be able to spend on my life even if I'm not at, quote, unquote, retirement age. So I would say investing in index funds in an individual brokerage account is probably your best strategy. This is a really good question. How to get rid of the fear of investing. I feel like I'm doing everything else. Well, just investing can be jarring slash nerve wracking. Okay, here's the easiest thing that someone told me that like got over my fear of investing. It is actually costing you money not to invest. We all know what the cost of living rising has looked like. We all know that inflation is higher than where the Federal Reserve wants it to be. That means if you do not invest and you have your money sitting in a checking account, next year you will have less money than you have this year. Eggs are going to cost more. Milk is going to cost more. Gas is going to cost more. But you will have less money. Investing is the only way for your money to keep up with the pace of life, with the cost of living. Unfortunately, we have to be participants in all the companies that we are spending our money in. Because if we don't, if we don't have equity, those brands are not beholden to us. I think we forget that it is not any company's job to make a good product for its consumers. It is not any company's job to give you the best possible service. If you are a publicly traded company, the only thing that you are legally obligated to do is make money for your shareholders is to increase that stock price. And if you are not participating in the growth of those companies, if you are not participating in the ownership of those companies, realistically, those companies are screwing you over, you're getting worse service, worse products, while all the people who have ownership in those companies, even if it's a small ownership, are benefiting from that. I read an article the other day and it talked about the and shit ification of everything. And first off, the word made me laugh, but it's kind of true. Right? Back in the day, they made products to last. Like your grandparents had their fridge for their entire marriage of 50 years. Whereas now you got to get a new cell phone every two years. Really, that battery just cannot live for more than 45 minutes after 90 days. Like that's crazy to me. We have literally built a consumerist society that prioritizes you spending more money. And that is why there are new iterations. That's why everything is getting worse. You really need to be participating in the investing process, otherwise you're being left behind. Next question. I want my kids 19 and 21 to open a Roth IRA, but I'm not clear on how often they have to put money in. Okay, so it's not how often they have to put money in, it's where is that money coming from? With Roth IRAs, that has to be earned income your kids are making. So that is either tutoring or maybe they have internships and jobs. The 21 year old is probably graduating and like might be going to a full time job. That Roth IRA is available to them. They don't have to put money in. On a timeline, there is a max dollar amount that they can put in every single year. And depending on when you're listening to this podcast, that number will change every year or every other year based on the tax code. So you just literally need to Google like Roth IRA contribution maximum every single year. How much can this person contribute every single year? It'll tell you roughly. Right now it's $7,500. That $7,500 is what they can put in, but they could put that all in on January 1st. Or they could say, I'm going to put a couple hundred dollars in every single month. Or they can say I can only put $100 in per month and they only end up putting in twelve hundred dollars. That still works okay too, but the max is what you have to keep in mind. And generally speaking, with a Roth IRA there are income limits. Meaning if your 21 year old ends up getting this crazy, crazy, amazing job, if they make over and again, this changes every single year with the tax code, but the number is roughly $140,000. If they make over $140,000. They can no longer contribute to a Roth IRA. They would have to contribute to an IRA and then do a backdoor Roth IRA question. Up next, how is the market so bullish during current conditions? I'm guessing you're talking about how everything feels. Ah, but the market's still doing really well, or at least it is while I'm filming this. The reason for that is, and this is a conjecture, but I think it's a pretty fair one, is the fact that 93% of the stock market is owned by 10% of people. The stock market is not how the economy is doing, it's how rich people's money is doing. We also recently saw some data that said the top 10% of people account for half of all spending. The music is still very much playing for the Richie Riches of the world. They are still going on those crazy vacations. They're getting new cars, they're. They're having a grand old time. Where we've really seen people start to feel the pinch is the middle class, which is shrinking, as well as the working class, which has been feeling the pinch for quite some time now. That is why the market is so bullish, because the market is not a representation of the economy. It is a representation of rich people. But two, the market isn't even how are things doing now? It is a forward representation of what we expect things to be. Just because the market is up does not necessarily mean everybody feels good about their money. Next question. Is it worth it to hire a financial advisor? I'm a beginner in finance. I want my money to work for me, not me working for money. So I think it depends. I think financial advisors can be amazing if you have very complex financial situations and, and you need them to think through how to manage your cash flow. That said, if you are someone who doesn't have a very complicated financial situation, you would likely be better off doing it yourself and paying fewer fees. Because financial advisors aren't cheap. They typically charge 1 to 1.25% of the assets that they're managing for you every single year. So that can amount to a lot of money. If you're someone like, oh, I don't know Drake. Love him. Unfortunately, I still love Drake's music. He is someone who makes money a lot of different ways. He makes money from streaming, he makes money from album sales, he makes money from merch ovo. He makes money going on tour, he makes money doing brand partnerships, he makes money every which way. And not only is he making money in the us, he's making money in Canada, he's making money internationally. When he's touring in Europe and Asia and everywhere else. He has an incredibly complex financial situation, not to mention baby mama payments, the child support payments for Adonis. He's probably got a bunch of different places, a bunch of different homes and cars and things that he has to service because you can't just leave a house unattended like that. He likely has a staff. He likely has a bunch of people on payroll. That is a very complex financial situation. And I would even say as a freelance business owner, my financial situation looks more like his than a very, very high paid, high powered attorney. A high powered attorney can make a million dollars a year, but they're only making money one way. They get a W2 from their big law firm. They are making a ton of money. Let's be honest, that's a killer living. Their financial situation is actually incredibly simple. You do one job, you get paid one way, and that's it. If your financial situation is very simple like that, you make all your money in one way, you generally live in one place. You only make your money in one, you know, jurisdiction, what have you. You would be better off using a robo advisor or doing it yourself. However, if your financial situation is very complex, a financial advisor to do it for you might save you time, might save you effort, and might help you avoid a lot of those potholes. So in some cases yes, but in some cases no. Ooh. This is a misconception. That happens all the time. So let me answer this. Is it good to invest in your High Yield savings account? No, Certainly not. Because your High Yield savings account is a savings account. It is only for saving. It is not for investing. Saving and investing are two very different things. With saving, you are focused on preserving that wealth and hopefully getting a little bit of interest for your troubles. Investing is actually wealth growth and focusing more on taking risks to increase the amount of money. With a High Yield Savings Account, it is risk free. It is FDIC insured. Hopefully there is no risk to your money. Investing is risk. Savings is not. So do not invest in a High Yield Savings Account. You shouldn't even be able to do that. That should be for saving. Investing is separate. Okay, so this is a big question. I get a lot Roth IRAs. I make $170,000 a year and I'm not contributing to a Roth because I was under the impression that I can't. Okay, so you are correct. You cannot contribute to a Roth ira. However, rules are meant to be broken, baby. And rich people have found a nice little workaround for this. While you cannot contribute to a Roth ira, you can contribute to an IRA and then you can roll the dollars from your IRA into a Roth ira. People do this for the tax benefit. What you would do is you would contribute dollars post tax to an ira, meaning you do not take a tax benefit this year. Then you would roll those dollars through a rollover form from your traditional IRA to a Roth. This is generally pretty simple. You can do it at any brokerage. You can literally just search like your brokerage's name and like rollover form and then those dollars will end up in a Roth IRA that you can then utilize. It'll grow and then you will be able to take dollars out tax free at retirement. You just have to understand that you are not contributing directly to that Roth IRA because you can't. You have to contribute and go a little bit of a workaround. But depending on whatever brokerage you use, if you search that brokerage's name and then search backdoor Roth IRA walkthrough, I'm sure there's a YouTube video or a step by step on which buttons to click to actually make all of this happen for you. Last question. How do I get the best return on my investments while still trying to pay off debt like credit cards and student loans? I am a little alarmed because it sounds like you're already starting to invest while still having credit card debt. Credit card debt unfortunately is one of the scariest and fastest growing debts. Because it's anywhere between 20 to 30% APR every year. You should not be investing. You still need to pay off that credit card debt. Reason being your investments. Realistically, even if you like do really well. The S&P 500 on average has returned 8 to 10% since its inception. However, 8 to 10% doesn't even cover the interest that you would have saved on that credit card. Because that interest rate is likely 20 to 30%, you will not invest and make more than you would save by paying off your credit card debt. I would make sure to pay off all of your credit card debt first before investing. As for your student loans, if they are above 7%, I would also prioritize paying those down. But if they are sub 7%, if they're like, you know, 3, 4, 5%, you can actually make the minimum payment on those while starting to invest. So that is my advice. Make sure that you are doing things in the order of operations that'll save you the most money, you earn you the most money, and help you avoid any sort of reverse delta you want to be optimizing your dollars to help you get ahead as best as possible. Whew. That was a lot. Thank you so much for sticking with me through this episode. I hope it's given you a little bit more clarity and confidence because no matter who you are, you can and deserve to invest and get rich. If you still have questions about finance or investing, you can check out my new app, Ask Dolly. Think of it like having me in your back pocket. Ask Dolly.com, check it out and I will see you guys back here next week. Thank you so much for listening and you'll hear me soon. Bye. Thanks for tuning into this week's episode of Net Worth and Chill, part of the Vox Media Podcast Network. If you liked the episode, make sure to leave a rating and review and subscribe so you never miss an episode. Got a burning financial question that you want covered in a future episode? Write to us via podcastourrichbff.com follow Net Worth and Chillpod on Instagram to stay up to date on all podcast related news and you can follow me at yourrichbff for even more financial know how. See you next week. Bye. Thanks to Walmart for their support. Take it from me yorich bff, there's always smarter ways to save. 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