A Word To The Wise
Curating mind, body, spirit, and personal development conversations to help you live a more aware, intentional, fulfilled, and purposeful life.
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A Word To The Wise
143. Finance 101: How To Make Your Money Work For You Ft. Walli Miller
Walli's unique approach to personal finance has taken her from the Bronx to millionaire status, all while breaking generational cycles of money mismanagement. Together, we dissect the emotional ties to our wallets and provide listeners with straightforward tips for tracking finances, setting achievable goals, and bravely facing the financial fears that hold many of us back.
Today's conversation goes beyond mere savings and budgeting to explore the heart of our relationship with money. Drawing on Walli's life experiences and my own path to financial independence, we share invaluable insights into the importance of recognizing 'wallet leaks' and making intentional choices about spending and saving. Plus, hear how a no-spend challenge revealed the traps of mindless consumption and how tools like Rocket Money can turn the tide in your favor. We also tackle the taboo of money talk, urging listeners to bring financial discussions into the light to truly understand how to make your income work for you.
About Walli:
Walli is a financial coach and money mentor who went from being an overspender and compulsive shopper to being debt-free and building a 7-figure investment portfolio.
After spending her 20s spending every dollar she earned and saving very little she knew she had to start doing something different. The thought of working for the next 30 to 40 years just to survive wasn’t the life she wanted. After gaining control of her finances and creating a plan, she became work-optional before the age of 40! Walli is a first generation college graduate, Latina, and daughter of an immigrant. Born and raised in the Bronx, she is the first millionaire in her family.
Where to find Walli:
https://financiallythriving.com/
https://www.instagram.com/financially_thriving/
0:00 - Intro
6:39 - Personal Finance and Financial Freedom
13:12 - Understanding Mindless Spending and Budgeting
20:11 - Unpacking Our Relationship With Money
31:47 - Financial Coaching and Wealth Building
36:52 - Building Wealth and Achieving Financial Independence
47:37 - Achieving Financial Independence and Investing Early
1:01:11 - Outro
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Hello everyone and welcome back to the A Word to the Wise podcast, a space where we curate conversations around mind, body, spirit and personal development. I'm your host, jumi Moses. On the show today is Wally Miller. Wally is a financial coach and money mentor who went from being an overspender and compulsive shopper to being debt-free and building a seven-figure investment portfolio. After spending her 20s literally spending every dollar she earned and saving very little, she knew she had to start doing something different. The thought of working for the next 30 to 40 years just to survive wasn't the life she wanted. After gaining control of her finances and creating a plan, she became work optional before the age of 40.
Speaker 1:Wally is a first generation college graduate. She's a Latina and daughter of an immigrant. Born and raised in the Bronx. She is the first millionaire in her family. In the words of Wally, financial survival is no longer enough. We need to gain control of our finances, believe it's possible to reach our money goals and start financially thriving. Forget complicated financial jargon. This is money made simple, and that is exactly what this conversation is all about.
Speaker 1:I wanted to have a financial expert come on the show to talk about finance 101. Because, if you're like me, you probably get confused with all of the different financial jargon out there. It feels like, oh my God, this is so much to digest. I don't really understand this. I don't even know where to start. I feel overwhelmed, and I think that Wally is so knowledgeable. She makes it so plain and easy to understand. This is where you need to start from. This is what you need to look at, this is what you need to pay attention to, this is what you need to track, and I left the conversation with Wally feeling very empowered and feeling more knowledgeable about finances in general.
Speaker 1:Wally and I also talk about the energy and the emotions people have tied to money, because in a lot of these conversations, people forget to talk about how they view money, and a lot of times, how you view money also ties into how you attract money. It also ties into how you grow your wealth and it also ties into how you manage your finances, and a lot of times, people are too afraid to look at their bank accounts. They're too afraid to kind of see on a paper. Hey, this is what I'm working with. There's a fear around money and we talk about that, and she talks about how important it is to acknowledge the emotions you may have tied to money and much more.
Speaker 1:Again, this was a conversation that was very illuminating for me, it was very empowering, and it's a conversation that I'm going to go back and listen to a few times, because Wally dropped so much digestible knowledge and easy to implement knowledge, and I can't wait for you guys to listen to this episode. Let's get into the show, wally. Welcome to A Word to the Wise. Thank you so much for being here. How are you today?
Speaker 2:I'm good. Thank you so much for having me. I'm excited about this conversation.
Speaker 1:Me too. I think it's honestly timely, because I'm always the type of person, like every year, where I'm like I want to get better with money, I want to budget better. I have all of these different questions related to money and just managing my finances. But I do get overwhelmed by it all and I like that. One of your slogans is just making it easy, like cutting out all of the jargon and making money talk easier. So I'm excited to like hear about all of the insightsgon and making money talk easier. So I'm excited to like hear about all of the insights that you have to share. But I want to start off by asking you a fun question, and that is do you have a life motto?
Speaker 2:Yeah, I would say that this changes probably not even by year. It sort of changes by seasons, depending on sort of what's going on. And so one of the things that I have right now and I looked up because I have it posted is we either repeat or we evolve, and that is something that I've been living with sort of you know, it's kind of a model that I've been living by the last maybe two months or so, because it can be it can be a little bit fear inducing to try something new, and so we stay with the same old, same old. So it's like you're either going to repeat the same mistakes or sort of repeat the same life circumstances, or you're going to evolve, and evolving can feel a little bit scary, but yeah, I'm like I don't want to be on repeat, I definitely want to evolve. So that's sort of my little mantra going on for this season of my life.
Speaker 1:Oh my God, I feel like again, this is also really timely because I've been thinking for myself too. I'm like I feel like I've been feeling a lot of stagnant energy and I'm like I need to start doing something or making decisions that are a little bit outside of my comfort zone. And that's where you like get to evolve and live when you start doing things that are outside of your comfort zone instead of just staying in what's familiar. But you're kind of stagnant. So I resonate so much with what you just said, and speaking of an area of my life that I want to continue to evolve in is finances, and I think a lot of people listening to this episode can probably relate to that. So I want to get into your background a little bit. Right, so I know that you are a first-generation college graduate and now you work as a financial coach. So can you just talk to us about your journey being a first-gen graduate to becoming a financial coach and why that's important to you?
Speaker 2:Yeah, so I love money, I love talking about money, I love teaching people about money and in some ways that was always kind of my jam. But the thing is that I thought I was really good with money until I realized that there was a whole different world that I knew nothing about. So, as you mentioned, my name is Wally. I'm a Latina, a daughter of an immigrant. As you mentioned, my name is Wally. I'm a Latina, a daughter of an immigrant, born and raised in New York City, first-gen college graduate and recently first-gen millionaire. Right, and I say all of those things because every single one of those aspects has really shaped the way I move around this world and I, you know, growing up in in the Bronx.
Speaker 2:I was born and raised in the well, born in Manhattan but raised in the Bronx, so I'm really from the Bronx, growing up in the Bronx, in the poorest borough in New York City. There was just certain things that I was and was not exposed to. Right, my mom was a stay at home-home mom. I'm one of five children. My dad worked Again, he's an immigrant and we just didn't have a lot of money going around. Right, my parents didn't sit down and talk to me about opening bank accounts or saving money or spending money, right. So we didn't have conversations around money. But that doesn't mean that as a kid, as a teenager, there weren't things that I learned and observed and sort of overheard conversations around and those definitely shaped how I interacted with money as I got older. Especially, my dad, who wasn't born in this country, came from a third world country where the trust of financial institutions is almost non-existent, like if we think here in America there's a distrust of financial institutions, it's even so much more for our immigrant parents, right. So when I, I always got the inclination that education was going to be the key out and the key to sort of success. So you know, when I was in junior high, I was thinking about high school. When I was in high school, I was thinking about college. When I was in college, I was thinking about career. And so I'm going to fast forward a little bit into sort of like getting a career that I really enjoyed and that I loved.
Speaker 2:I began working in the government, I began working in public service, and it was really a job that was super fulfilling, it was challenging. I felt like this role was sort of created for me and I went from one office to another office, but always in the same work, and I was like I'm good, I really didn't get the Sunday blues, as some people say. Right, I really enjoyed my job. Of course there was an everything that was perfect about it, but I felt my work to be really fulfilling until it wasn't right. And when that happened for me, I realized that I felt a little stuck. Now it wasn't that I stopped loving the work, but there was sort of a change in management and went from sort of an ideal work environment to like I always enjoyed the people that I worked with, but it was the people that I was working for, that sort of you know. When management changed, my whole experience of the workplace and of the work that I was doing really shifted.
Speaker 2:And I remember feeling so stuck, like I didn't have any options. I couldn't just like get up and quit and find a job tomorrow. It really felt like if I missed the paycheck definitely if I missed two paychecks I was going to lose everything I had worked so hard to build right. So I was paying off my student loans, I had a car note, I had housing to pay for, so I was just like man, like what is going on? Like I can't just leave, and it was that feeling of stuckness that really made me sit down and think like I think there's like something wrong here.
Speaker 2:Like why don't I have any savings? Because by that point I was making decent money and I wasn't married, I didn't have kids and I was just like where's all my money going? And that was sort of like the first wake up call that I had that something was wrong. Right In my mind, I was good with money because I was able to pay my bills. I never had my phone turned off, I never had the lights cut off, so it felt really good to be able to pay my bills on time. I really try to stay out of credit card debt, and so I was like I'm good. But that feeling of not having a whole lot of options and really living paycheck to paycheck became really real for me in that moment, and that was when I realized, okay, I'm missing something here, there's something happening. And that was sort of my wake-up call to checking out my own personal finances.
Speaker 1:Wow, you said so much there that I think a lot of people can relate to, which is this notion of you're making pretty good money but you still kind of feel stuck, like, paycheck to paycheck, bills are piling up and it just feels like there's never enough money and it's almost like you feel chained to a system, chained to that rat race.
Speaker 1:And something that you said that was important was you know the management within your job had changed. You were no longer feeling fulfilled, but you couldn't just get up and leave right, like you didn't. It felt like you didn't really have options to kind of move around or potentially discover or live the life intended for you, because you were stuck to this job, because you needed the money, et cetera. If I'm understanding you correctly, and when I think about money, I think about not just having money to buy things, but the sense of freedom to be able to move and like, god forbid, if I were to lose my job, I still wouldn't be like, oh my God, I'm suffering here because I have ample savings, etc. So I want to know how did you, like, when you had that realization, what steps did you start to implement to kind of become this millionaire and financial coach that you are today.
Speaker 2:Yeah, I think one of the things that happened was it wasn't that it was bills piling up, right? So in my mind I was good. A lot of the financial gurus and the financial advice if you picked up books was like get out of debt, stay out of debt. And I was like, ok, like I have student loan debt and I have car notes, but like I pay my bills and I don't have credit card debt, so like I'm good. So it was like this disconnect, like I'm paying my bills, I feel fine, only to realize, wait a minute, I don't think I'm fine, right? Because, like I said, if I missed one paycheck definitely two paychecks everything that I worked for was going to be gone. And it made me sort of ask myself that simple question like where is my money going? And there's something called a no-spend challenge, and people do this on a variety of different ways. You could say you know what I'm going to take this week and not spend any money at all except the things that I absolutely need, right? So I'm only going to spend money on paying my rent, I'm only going to spend money on, you know, paying for gas in the car or transportation, whatever the case might be, but I'm not going to spend money on anything extra. So I decided to do a one-week no-spend challenge where I was going to stick specifically to like these main categories that I had set for myself. To stick specifically to like these main categories that I had set for myself.
Speaker 2:Every single day I was violating or I was, you know, sort of breaking the no spend challenge. And it wasn't that I was going to the mall and buying big things. It was that I would go to Target to buy laundry detergent and toilet paper and I would leave with candles and pillows. I would be on my way to the gas station and make a detour to Ross and Marshall's and Burlington Coat Factory, right, and so it was all of these little things. It was even something as simple as picking up medication from the pharmacy and then grabbing a magazine or a candy bar or you know. It was just all of these like wallet leaks that kept happening, like all of this money kept slipping away. And so I wasn't.
Speaker 2:I tried over and over again to try to complete a no spend challenge and I wasn't able to, and what that made me realize was that my money was sort of seeping out of me not in huge chunks. I wasn't going and buying luxury handbags and like expensive clothes, but it was in all of these like little things that I was just purchasing and I was a little bit of an impulsive shopper. So if I would see something, I would just like buy it. And here's like the mistake that I made. For me, I thought I was a wise and savvy shopper because I would try to buy things on sale or maybe it was fun to try to like find a coupon and get like 50% off, right. So in my mind I was being wise with money. But just because you buy something on sale doesn't mean you're not spending the money. You're still spending the money. And so it was sort of that realization that I couldn't go a couple days without spending money. Like every single time it was all of these little things. And that was when I realized, okay, like I don't have credit card debt, I'm able to pay the bills. It's not that they're piling up, but I don't have anything to show for the hard work that I'm doing. Right, and it's because I'm making all of these like very impulsive purchases.
Speaker 2:And there's a saying that says if you want to know what someone values, take a look at their bank statements. And if somebody would have looked at my debit card transactions, my credit card transactions, it would have said that I really favored fast food and I really favored shopping trips to the mall and jeans and shoes and clothes, and that wasn't really what I valued. I am not a fashionista. I would buy clothes and never even wear them right Because they didn't fit right or it wasn't my style or I didn't know how to wear it. But if I thought it was pretty or if I thought it was nice, I would buy it with, like, no plan, right, there was a lot of mindless spending and a lot of mindless shopping going on, and so I had to sort of become aware and answer that question to myself of where is my money going?
Speaker 2:Right, because it can be so easy to say, oh, my money's going to bills, right, and that's what I would just say. But it's like, is it really all going to bills? And I had to really get crystal clear of like, okay, what does a bill look like? What am I calling a bill? And really like, okay, a roof over my head, that's a true living expense. Food on the table? That's a living expense.
Speaker 2:Going out to brunch not necessary, right? Doesn't mean that I don't want to do that and that doesn't mean that I can't do that. But I really needed to get crystal clear about what exactly were my true needs, right? And then when I figured out what my true needs were and I added up that number and I calculated how much of my needs, my expenses for need for that need category was in a month, it said I was supposed to have like a lot of money left over and I was like I don't have that money left over. I do not have that money left over. So number one is like getting crystal clear about what your numbers are doing, get crystal clear about where your dollars are sort of going.
Speaker 1:Oh, I can relate to you on the mindless shopping, because when I go into Target I'll be like, okay, I'm just picking up this one thing that's at most $20. And then by the time I'm out I'm like, why did I just spend $150 to $200 at Target? Target is one of those places where, like you go in for one thing, you just can't leave with one thing. And I get what you're saying again, with the mindless spending in your wallet just leaking, because it's like you on food, on outings, which all of those things are important, but if you're not tracking them and seeing how your money flows, you actually don't know how much excess you have after you paid your rent, after you've paid your bills, etc. So then it starts to feel like you're living paycheck to paycheck but there might be a lot more money that you have that you're not stewarding over enough.
Speaker 1:So some people obviously put together like Excel sheets. Some people put together. There's this app called Rocket Money. I'm not trying to endorse any app, but I will say for someone like me who the whole Excel sheet thing doesn't really work well for me, rocket Money kind of allows me to see where, how my money is moving in and out of my account every single month, week, I should say. So I can like review, like okay, this is where I have like recurring bills, you know, coming from Cause there's some subscriptions that I had that I was like why am I paying for this Like every month or like once a year annually? So there's so much that you said there and I want to kind of dig deeper into that a little bit more.
Speaker 1:But before we get into that stuff I want to talk about. You know, when it comes to money, people are avoidant, right. So, like you said, we're spending money. We're not sure how money's flowing in and out of our accounts. A lot of that, too, can come from not having a good sense of money, being in a family where maybe you had to kind of struggle with money a little bit, so money's a little taboo. So why do you think, from working with so many people who need financial advice and coaching, why do you think money is such a taboo subject for a lot of people and what are the biggest misconceptions people have around money?
Speaker 2:Yeah, you know, money is neutral. It's not good, it's not bad, but it's laden with emotions, right, how we spend money, how it makes us feel the lack of money, right, the scarcity of it, especially. You know, like I said, we didn't grow up in poverty, but we were really low income. There wasn't a whole lot of extra to spend money on. You know, we had the lights turned off, we had the cable turned off, things like that, cars repossessed. So there was a lot of things that, even though my parents didn't sit down and chat with me about money, there were a lot of things that I was absorbing, right and observing, and it was okay. You need money in order to feel safe. If you don't have money, you can't buy things, right. And so that was why there was like a little bit of a disconnect. When I began making money and I had money left over, I was like, okay, well, I paid my bills. I know that that was super important. But then what do I do with it? What do I do with like the extra? And I was like oh, I guess I can now do some of those fun things that I couldn't do as a kid. Maybe I could buy more than just having like one or two pairs of shoes. Like, maybe I could buy five pairs of shoes, right? Maybe I don't have to just choose between two jeans and three shirts and I could have like five jeans and 10 shirts, right? So it was all of these like little things that began to influence how I was spending, really, because I didn't know what to do with the money. Right, they don't teach this stuff in school. They don't tell us, they don't really talk to us about putting money aside. I knew saving was good and I was like, okay, yeah, I'll just put $25 a paycheck, but what is $25 a paycheck going to do if you lose your income, right? What is five dollars going to do if you want to go on vacation, right? So it was all of those lessons that I realized that I had sort of missed.
Speaker 2:And you know, during that period where I was like really stressing when it came to work and like really unfulfilled, I went to the Googles, right. I went to Google and try to figure out, like, what was going on and there was like this very click baity article that came up and it was about a couple who had retired in their forties to travel the world. Now, one of the other things that really would have been reflected in my like credit card transaction and history was travel. Like that was something that I did value and I didn't feel any guilt or shame about spending money there, right, like I felt more kind of guilt about like overspending on clothes that I wasn't valuing and, you know, using, right, it was just kind of sitting in my closet but I did. I had no qualms about spending money on travel, and so when I read that this couple was able to retire in their 40s in order to travel the world, I was like what, what nonsense is this? But I was very intrigued as I read their story and I was thinking they must be like multiple six-figure earners and blah, blah, blah.
Speaker 2:And as I read the story and started beginning and started to see some of the changes that they made and some of the things that they implemented, I was like, well, if them, why not me? Right, if them, why not me? And that was when I realized, ok, these wallet leaks may not seem like a whole lot, because maybe it's like a ten dollar day here, extra twenty five dollar day here, $30 there. But when I began to add up the extra money that I was spending on things that weren't adding true value to my life and that really weren't necessary. I realized, okay, I do, I could find some money to be putting aside to at least give me some options when it comes to my job, right, and could provide some sort of comfort.
Speaker 2:And so I began really digging into this whole world of personal finance and I learned a few basic things, which was just because you have it to spend doesn't mean that you can or that you should. Right, and it was understanding and I know that sounds so simple Like, of course, you don't have to spend every dollar you get, but like I knew that, but like I didn't know that, like I didn't, I really wasn't practicing that, I just didn't really know what to do with my money. I didn't know what I should be saving for and the importance of goal setting, right Of like why would I be putting money aside? You know, why was that important? And so, as I began to sort of like uncover my own personal relationship with money and this is what I see with my clients all of the time right, that there's so much guilt and so much shame, but the reality is that they don't teach this stuff in school. I will say that today there are more schools requiring personal finance and financial literacy, but it's still just a fraction of the country.
Speaker 2:Right, in ways that you know people are, you know we learn what a parallelogram is, but we don't know anything about taxes or entrepreneurship or credit scores or investing in the stock market or investing period and building wealth. And so when I began sort of understanding, okay, like these wallet leaks, if I begin to like add them up, it's not just a couple dollars, right, it's like $100 a month. Right, it's $200 a month, it's $300 a month. And so as I began to add up where my money was going and really understanding it, I realized, okay, something needs to happen and money can feel really taboo because nobody wants to talk about the thing that they don't understand.
Speaker 2:So many of us are making money but we don't know why the money isn't there for us. There's shame because we're like, oh man, yeah, I got paid Friday and it's Monday and I'm broke already, right, like nobody really wants to talk about that. There's shame in talking about how much money you make because you don't want to be the lowest earner, but there can be shame and guilt if you're earning more than your peers. Right. Like wealth, guilt is a real thing about like not wanting to share how much money you make if everybody around you is making, you know, 20, 30, 50% less than you are. And so when we're talking about money, it can bring up so many different feelings, right.
Speaker 2:It can feel very scarce, it can feel very taboo to talk about, and so a lot of people will come to me as a financial coach and sure, I have a heart of a teacher and I will teach you some financial concepts, the things that they should have taught us right. Everything from taxes and credit scores and investing and compound interest right. So we learn some of that financial literacy. But most of us know some things, and it's the problem we have is not in total lack of financial literacy, it's in two things One, in knowing how it applies to our personal finances and how it applies and how we should implement those principles we know. And then number two, it's in sort of taking it to the next level and really understanding how to build wealth right and the emotions that come with it. Right?
Speaker 2:I have people who finally save money for the first time for a specific goal. Maybe they, you know, they spend five months saving for a vacation and now it's time to spend that money and they're like, oh, I can't spend that money right. And it's like, well, the whole purpose of it was to be able to use that money for that specific goal. And they have so much mind drama about it. And this has happened to me and I'm not talking about like years ago, I'm talking about a year ago, six months ago where you save up for something and you see that money sitting in there for that specific goal and it's like, man, I'm just gonna like use it in one shot. And so there's so many emotions that come up. So money, yes, we got to deal with the math. There's some addition and subtraction we need to understand. But we also need to understand how we interact with money and what our relationship looks like when it comes to money. And I think making sure that we're balancing both is really important.
Speaker 1:I 100% agree with everything that you said. I think there's the management part of money, but then there's the energy that we give to money. I think everything in this world is energy and you can have a lot of money, but if you have a scarcity mindset, you might hold on to everything and not really live your life right and not take the vacations because you can't actually afford it but because you're scared that, oh my God, I might lose this money. You might hoard it right or you might spend recklessly because you don't want to address money. It's scary.
Speaker 1:So you know you're avoidant, et cetera. You know I'm constantly working on my relationship with money and I want to get to a point where money feels like something that flows to me and flows through me. Right, not just like something I have to hold on to and feel fearful of, but look at it as another form of abundance. Right, and abundance has like a flowing energy to it. So obviously you know you are able to figure out your finances. And are you a full time financial coach or do you still work in the corporate world?
Speaker 2:Ah, very interesting question. So I, at the age of 39, I walked away from my nine to five job because I reached financial independence A few years ago. I, as I was sort of learning and in my own personal finance journey, I realized that there was a lot of things that I had no idea about and nobody that I knew was talking about finances, and so I first started as a blogger. I was like an anonymous blogger, like sharing all of the things that I was learning, and from there I got a couple of gigs doing some freelance writing work, and people started messaging me and emailing me and asking if I did consultations and I'm like, no, no, go read this book, go watch this YouTube channel, like go watch this pod. You know, listen to this podcast, right, like there was like resources that really transformed my life. Right, when I was traveling for work and I was in my car I was listening to a podcast, like it was. I was like in the school of really trying to figure out this money thing, and so I wanted everybody else to be in that same journey. But what I realized was that there was an emotional piece to why people were really struggling with again implementing what they knew about money right, and even wanting to understand money, became very overwhelming because they couldn't open up their checking accounts, they couldn't open up the bill, they couldn't like. They felt it felt really overwhelming to like sit and understand really where money was going. And so that was where I realized, okay, it's not just the lack of information like that is a piece of it for sure but there's also that emotional component and sort of the trauma, right, that can come with some of our experiences with money. And so someone asked after many times just saying, yeah, just go watch this, listen to this, read that Someone asked if I did a consultation.
Speaker 2:I said, sure, let's go ahead and I'll do it. And I realized that it wasn't the complex things that people were nervous about or worried about. It was just sitting with the emotions and the shame and the fear and the scarcity and you know, and the overwhelm with just organizing their finances. And that was when I was like, oh, this is what's also missing in as part of the conversation. And so that was how I started financial coaching.
Speaker 2:But I had my career in public service, that job that I was talking about, like I ended up leaving because I was able to fund an emergency fund and I felt comfortable taking some risk and changing from one office to another. So when I began developing that, I began having some more options. Right, that's what money was able to afford me was having some freedom and having some options. And so when I started doing the consultations that's what I called them at the beginning I realized, okay, like people need a coach the way they need you know, like a personal trainer, the way you know you yeah, the best athletes have coaches right. Like you need someone not just to teach you. It's not just about being an educator or a teacher, it's also about helping you and supporting you along the way.
Speaker 2:And so I started doing financial coaching, consultations and then financial coaching what sort of transform into financial coaching because of those realizing that what people needed wasn't only financial literacy that is definitely one piece, right, the educational piece but it was also the support that they needed and the accountability to make sure that they were implementing not only all the things that they were learning, but the specific things that were right for them. Right, because there's a lot of stuff out there and we don't need to be listening to all of the stuff. We just need to be listening to the things right in front of us. So you know one thing that I will mention because it's really important to me and to you know what I help my clients with? Sure, creating debt payoff plans, getting out of debt, building savings accounts, reaching financial milestones. But even if you do all of that, if you're not using a vehicle to build wealth, you're going to be missing a huge portion.
Speaker 2:Right, and when I'm talking about I couldn't even relate to the word wealth. Right, wealth meant to me. You know, the athletes who make, you know, millions of dollars, or the actresses or the actors. Right, or an artist or a musician. I had no concept of what being wealthy was. Right, it was like an old man smoking a cigar in a velvet robe. Like I had no connection to that word wealth.
Speaker 2:But what I realized was that that couple remember I mentioned that article one of the things that they talked about in order to build wealth was that they used investments as a way to make sure that their money was making money for them. And I was like, huh, my money could make money for me. And you can choose a couple of different ways to get there. Right, you can use real estate, entrepreneurship, right Business, investing or the stock market, and I chose the stock market as a way to generate wealth for me. Now I will say I'm an entrepreneur now and I have real estate and I also invest in the stock market. But the stock market was one of the easiest and laziest ways to build wealth because we have access A lot of us have access to things like a 401k plan or a 403b, or we can open up an IRA if you don't have a workplace retirement account and so understanding the very simple investing rules.
Speaker 2:I'm not talking about watching the stock market from the time you wake up until they closes. I'm not talking about watching red and green charts and trying to figure out what shapes like that is way too much work. I'm talking about using passive investment streams in order to build wealth, and one of the pieces of financial coaching for me that's really important is that my clients get crystal clear about which investment vehicle fits their style right. So it's understanding. Like you mentioned, you're not into spreadsheets. You like the apps. I'm like it's important for you to understand how you want to interact with money right For some people to understand how you want to interact with money right. For some people it is apps. For some people it's a pen and paper right. For some people it's a spreadsheet, like understand how you want to best interact with money, how best you want to plan for money, but and then what is a way that you want to use in order to build wealth? Because if you don't have that wealth building piece, all we're doing is sort of extending that time that we will have to work and not using money for us.
Speaker 2:So I have been. I was able to reach financial independence, and how I define financial independence, or how most people define financial independence, is that my investments make enough money that I never have to work again and it covers my cost of living Right. And so I reached that through investments, and that didn't happen overnight. It took years of investing to be able to do that. But because we were my husband and I were very strategic in how we saved and how we spent and how we invested, we were able to reach work. Optional status is what I call it now, because even though I don't need to work and I did early retire early from my career I'm choosing to work because I want other people, other families, other women to understand the power of building wealth and the freedom and the options that it affords you.
Speaker 1:Wow, this is so good. You addressed every single thing I was going to ask, especially on the side of you know, how did you build your wealth? How can people invest? Because I get stuck in the middle, right, there's so many like jargons, like open a high yield savings account, invest in a Roth IRA, and, you know, open stocks. There's just so many terms that, personally, for me, they're a little bit overwhelming, right.
Speaker 1:And then I'm always in the middle of okay, should I double down on paying down student loan debt, for example, or should I double down and go towards the you know, growing my money? It's always this like catch 22 for me, and I'm sure for a lot of people who are listening. It's like how can I really grow my money when I still have all this debt to pay down? So the question I want to ask you, right, because student loans is a big thing for a lot of people. I think that's where a lot of people have so much money to pay back and they feel really in shackles. It's one thing to work and have to pay your regular bills, but it's another thing, right? So what are your thoughts on paying off student loans or debts in general and also trying to invest and grow your money. Should you pick either or or. What should you focus on more?
Speaker 2:Yes. So I like to teach my clients that when making financial decisions, there is a mathematical component. So it's understanding what is the in this specific situation? What is it costing you? So what is the debt costing you, right? Or what is the alternative option going to cost you, right? What is it going to bring in for you? So there's that mathematical component. The other component that we need to take into consideration is the emotional one, and this is where people don't really think about it right. So knowing both is really important. Sometimes we make only emotional decisions and don't take into consideration the math, and sometimes we only take into consideration the math and then we regret the decision or we have guilt, or we have regrets or doubt because we're totally disregarding how we feel about it, only thinking about the math. So I think it's important to think about the math and then also think about what's going to help you sleep better at night. So let's take debt in general. Also think about what's going to help you sleep better at night. So let's take debt in general.
Speaker 2:When we think about credit card debt, credit card debt is not 2% interest. Credit card debt compounds and it's 19, 25, 30% interest. So if the question is should I focus on paying off credit card debt or putting money in the stock market? I'm going to say well, on average, the stock market could return 10, 11, 12%, right? I mean last year, in 2023, it was 20%, right, but that's not average, right? That was out of the ordinary. What you could grow your money in the stock market is, on average, 10%, but what good is it if your money is growing at 10% but your debt is growing at 25 and 30%? It doesn't make a whole lot of sense, right? So then we think about something more like student loans, right? If your student loans are at 4%, but you could grow your money at 10%, even if you take away 4% from the 10, you still have your money growing at 6%. So that doesn't mean you don't focus on paying off your debt. But what I'm saying is that if you have extra money, you could either put it towards the debt or you could put that extra money into a wealth building vehicle, right? So not all debt is going to be the same. I think that you can have debt and you could be building wealth at the same time.
Speaker 2:But we want to look at that mathematical component, right? But we don't want to forget about the emotional side, right? If it's like, look, every time I think about how much student loan debt I have, even though it's only at five, six, 7%, I can't sleep. It makes me feel overwhelmed. Know what? The math is right. But if you are not sleeping at night and you're having trouble sort of thinking about future plans because you have this really heavy burden of that debt, then I would say, maybe consider no, but what? Both are right.
Speaker 2:But then making an emotional decision to really focus on paying off the debt, it's going to be the right option for you, right? So I can't say as a blanket statement focus on paying off debt first, focus on investing only or first. Right, I think you could do both. I think you can pay off your debt and you can also invest. But take a look at what your emotions feel like when you think about the debt and also what do they feel like knowing that?
Speaker 2:Okay, even though I might have this debt for a little bit longer because it has a lower interest rate we're not talking about credit card interest rate which is again 19, 20, 30%.
Speaker 2:But if that debt is sitting at three, four, five, six, seven, 8%, then we could say okay, now I can make a decision as to how quickly I wanna get out of debt or how soon do I wanna start building wealth.
Speaker 2:And that's an exercise that I take my clients through, right, because I want them to see okay, if I take 10 years to pay this off, how much interest am I going to pay?
Speaker 2:What is it going to cost me? But if I wait 10 years before I need to pay off all my debt first and I wait 10 years before I start investing, what is that going to cost you? How long is it going to take you to reach financial independence? How long is it going to take you to be able to fund your retirement? Right? So I think, knowing what those numbers are, first checking in with your mind, with your body, with your spirit, to see what's going to help you sleep better at night, then you make a decision about what's going to be best for you and that can change, right. What your focus is right now versus what your priorities will be in six months or your priorities will be in two years will be different and you make adjustments. But you want to check in with the math, because that's important, but you also want to check in with yourself.
Speaker 1:That was very, very helpful. That gave me a lot to think about, and I was as you were talking. I was also thinking about the notion of savings. So you know vehicles that help us make more money, whether that's investing in stocks, you know investing in real estate, et cetera. Does that count as savings, or do we still need to consider savings as an additional bucket with paying off debt and also growing money?
Speaker 2:Okay, beautiful question. So I like to take my clients through an exercise where we first determine short-term goals. So your short-term goals is money or experiences or expenses that are coming up in the next three, six, 12, 18 months. Okay, think about all of the things that you want to accomplish, all of the things you want to experience, the things you want to buy, the things you want to pay off in the next year, year and a half. So those are your short-term goals. Then you want to think about what are your goals for that mid-range time, which is two to five years from now. So maybe you're like, okay, I'm not going to buy a house in the next year and a half, but I think in four years I want to be a homeowner, right. So think about those. I want to have a down payment for a home, right? So think about those goals that you have for the next two to five years. And then we're going to think about long-term goals. Right, when we're thinking about long-term goals, we're not gonna need that money for five, 10, 15, 30 years from now. How you save and how you build that bucket is gonna be determined by the time horizon, right, the time horizon. Your goal is gonna. How you fund those goals is really gonna be determined by how long you have to reach it right. The time horizon your goal is going to, how you fund those goals is really going to be determined by how long you have to reach it right. So, if you know you're going to go on summer vacation, we're not going to want that money to be in a risk, in a risky place like the stock market, because I don't know what's going to happen in June. I don't know what's going to happen when you're going to need that money. So we want to have that money in a safe place, and a safe place to have that money is something like a savings account, right. But if we're thinking about building wealth for the long term so maybe 10 years from now, 15 years, 30 years from now we want to use something that can tolerate and sort of I'm trying to think of sustain, sort of the ebbs and flows and the ups and downs of something like the stock market, right?
Speaker 2:You mentioned something a little earlier and you were like. You know, people talk about a high yield savings account. Like, what does that mean? I know it's, I don't know why they use all these big terms right, but the difference between a high yield savings account and a regular savings account is how much money the bank is giving you, and so I would suggest to anybody out there who might be listening to take one simple step is to call your bank that you have your savings account at and say hey, I have a savings account with you, mr Banker, what is my interest rate that I'm earning on my money that's sitting in my savings account? Just get that number Right now, a high yield savings account, the banks will give you four, four and a half 5% on your money.
Speaker 2:Okay, if you call the bank and they're giving you half a percent or 1% on your money, you may wanna switch banks. High yield just means a higher return on your money. And here's a little cheat sheet If you have your money sitting at a Bank of America Wells Fargo or Chase you're not earning 4% or 5%. The big banks have no incentive to, or don't incentivize, people to, keep their money with them. Right, they give really little interest. They could care less about your $500 sitting in the savings account, so they're not going to reward you for that. But there are other banks or even credit unions who will have these higher interest rates because their overhead is lower, and so they just reward people for having their money at their banks. So some of those banks might be something like Marcus by Goldman Sachs, might be Ally Bank A-L-L-Y, which is my favorite one. It's the one that I've used for years and years and years, and the one that I recommend the most right. So that's going to be like one simple homework assignment Just call your bank, or maybe you can go online and check to see what is the interest that your savings account is earning.
Speaker 2:But we want to be earning interest, but if you have debt, you're probably paying interest as well. And so the second assignment now for this week, we're going to do one. We're going to just find out our savings account first. Next week, what I want you to do is to start calling some of the people or some of the institutions that you have debt with. Right. Call American Express and say hey, I have an American Express card. What is the interest rate on my credit card? Call your Chase credit card hey, chase, I have a credit card. What is the interest rate on my credit card? And just begin to write down those numbers, right. The higher the interest rate, the more money we're paying to that institution. Right, we don't wanna be paying interest, we wanna be earning it. So if your money is in a savings account, you want a high interest rate. If you have debt, you want a lower interest rate. So just start with those two actionable steps to sort of begin getting organized when it comes to your finances.
Speaker 1:That was good. I recently I had a savings with Bank of America and I recently switched over to Capital One. I think they have a interest rate of like 4.5% on savings. So you know, starting to take baby steps on that.
Speaker 2:Yes, amazing, and that's what it is Like. Capital One is another great place, right. They even Capital One, has checking accounts that earn interest. So it's really we want to be. Or this is free money, right, this is free money that they will give you, and sometimes it's just a couple pennies, right. But we want to be earning money on money that's just sitting in the bank because they're making money off of your money.
Speaker 1:Exactly exactly. We should be getting money that's just sitting in the bank rather than having to constantly be paying interest and speaking of interest. I want to kind of go back to the student loan conversation a little bit. Go back to the student loan conversation a little bit. In your opinion, what do you think the quickest way is to paying student loans? And should more people reconsider or consider what's the word refinancing right? So I know some people like consolidate their student loans and like refinance it, et cetera. So I just wanted to hear from you in hopes of getting a smaller interest rate. I think that's why a lot of people do it. So if someone was trying to aggressively pay down their student loans, what do you think the quickest way to do that is?
Speaker 2:There's quite a few different strategies, but we have to start with the goal right. Someone who is in public service or who qualifies for a public student loan forgiveness, they may disqualify themselves by consolidating their loan, right. So we want to understand what is the goal first, and so I'm really reluctant to say this is what you should do, because we need to understand the type of loan it is. Is it subsidized, unsubsidized, Is it private? Is it federal loan? So we need to get some more information about that right.
Speaker 2:Most of the time, companies, just by asking, will give you a smaller student, we'll give you a lower interest rate. You can call American Express, you can call Discover, you can call Chase and say, hey, what's my interest rate? Oh, your interest rate is 26%. By the way, I've been a customer with you for four years. I've paid my credit card bill on time every four years, even though it's just the minimum payment, but I've paid every time. Is there a lower interest rate available to me? Right?
Speaker 2:And so when we're thinking about different types of interest rates that we have, there's quite a few different options that we have. When we're talking about refinancing loans, consolidating loans, these are strategies and tools that we should be aware of. But you want to know the goal first, right, and we want to understand the type of loan that you have, because you don't want to put yourself in a situation where you're just putting a Band-Aid and it's like it didn't need a Band-Aid, it needed stitches, right. So we really want to get clear about what the goal is. I have all of the information about the type of debt that it is, whether it's credit cards or the different types of student loans before we make that decision. Debt consolidation can work really well sometimes, and then sometimes it doesn't work so well. So before you exhaust that right, working with a professional is going to be the best option for you or for anybody yeah, I think that makes a lot of sense.
Speaker 1:And, um, now I want to ask you about this term that you call fire and you kind of alluded to it throughout our conversation which is financial independence, invest early. Why did you come up with that term? I mean, I think it's clear, right, Investing early means retiring quicker. But I just want to talk a little bit more about. You know the term FIRE financial independence, invest early. Why was that important for you to kind of call out?
Speaker 2:Yeah, so FIRE is actually financially independent, retiring early. So it's F-I-R-E.
Speaker 1:Oh sorry.
Speaker 2:Yeah, so it's F-I-R-E financially independent, retired early and so it is a community, a movement of people who are pursuing building wealth, reaching financial independence and then retiring early. So I would say that sometimes the retirement police will come after me they say you're not retired because you have a business and you're earning income. So I have changed the acronym to financially independent and I'm just simply refocusing my energy. Okay, so I still work, because I do have a. I don't have my nine to five, I work with my financial clients. I've basically retired to entrepreneurship, if you want to say so. I'm still earning money. There's a difference, though, between between having to work because you needed to pay for your bills and needed to pay for your expenses versus choosing to work right and you make working an option and I really like that term work optional. Or, like I said, I retired from my 19-year career in public service and I became work optional year career in public service, and I became work optional and I just exercised that option and I refocused my energy from, you know, from sort of, again, public interest work and public service, to working in, working for myself, and refocusing my energy to helping other people reach financial independence.
Speaker 2:How do you reach financial independence. How do you reach financial independence? How do you reach early retirement? It's really going to be through investing, right, you have to use, because when we're thinking about long-term goals, saving money, even if your money is earning 4%, 5%, that's great, but we want to be earning 10%, 12%. Like I said, the stock market was up over 20% last year, so we want to be earning money. We want our money to be really accelerating in that journey and this is not about investing $1,000 today and making $2,000 tomorrow. That is gambling, that is speculative.
Speaker 2:I am not the financial coach for you. I am not gonna tell you that I'm gonna do that, but you can make small, incremental changes and begin building wealth over time, and time is gonna be the best asset that you can use or is gonna be your best tool, vehicle that you can use. When we're thinking about investing, we're investing for the long term. We're not thinking about those short-term goals that we're going to need the money for in three, six, 12 months. We're thinking about okay, I am 35 years old and I want to be retired by the time I'm 45.
Speaker 2:That is retired early, right. We're thinking about okay, I don't want to wait until I'm 65 to retire. Can I retire at 55? What do I need to do? Right, that's 20 years from now. Instead of thinking, okay, I got to work for the next 40 years, is there a path for me so that I could accelerate my journey? And if you choose to continue to work, awesome. But you could also choose to be financially independent and have this nest egg that you've built over time that now will cover your cost of living.
Speaker 1:Thank you for that. That's really the dream, and I feel like this conversation again was so timely. I've learned so much I'm probably gonna go back and listen to this a few times myself and I think you shared some amazing tips for anyone who doesn't know too much about finance but wants to start figuring out how to save better, track their money and also start growing it. So thank you so much for sharing all of your insights. I have to ask you one final question and because the show is called A Word to the Wise any final words of wisdom to the listeners? It could be about what we've been talking about or something completely different that you keep in your back pocket.
Speaker 2:Yeah, I think it's really important to get crystal clear about designing the life the way you want, right? This isn't about being frugal. This isn't about depriving yourself now so that you could retire early, right? This is really about living a full life now and being intentional with the way you spend money and the way that you're earning money.
Speaker 2:If you want to build wealth, keep it simple. It doesn't have to be complicated. It can be kind of like a set it and forget it. And it's more important, not how much money you make, right? Because the first thing I think a lot of people say is oh, I got to make more money. I can't do this unless I earn more money Now.
Speaker 2:Making more money is great, right, but what generally happens is that the more money we make, the more money we want to spend, and what we want to do is widen the gap between the amount of money that's coming in and the amount of money that's going out, right, and we want to be able to say, okay, I have this amount of money coming in, this is the amount of money that I have going out, and I'm going to use the difference to build the savings and to build wealth, and that is what we want to do, okay, so I would highly recommend to anybody, please. It's more important to think about how you're using the money. It's more important to think about being intentional and to being consistent, and with consistency comes the reward over time.
Speaker 1:Yes, and I think everything you're saying just kind of boils down to balance. It's a lot simpler than we think it is. So, thank you, this has been the best financial conversation that I've had in a while and much needed. Again, like I said, I'm going to listen to this a couple of times because you shared so much here. So thank you, wally, so much for stopping by the show. Where can people find you if they want to check out your website and your work or potentially reach out to you for some coaching?
Speaker 2:Yeah, absolutely so. I only offer one-on-one coaching. So anybody who works with me, it's gonna be me and you on a Zoom call and we're gonna dive deep into your finances and we can talk about what it would look like to work together and what that financial coaching program is like. And if you're interested in that, feel free to follow me on Instagram I'm most active there or go to my website, which is financiallythrivingcom, and you'll find my social media handles there. On Instagram I'm financially underscore thriving, where I share tips and a lot more actionable steps that you can take to begin gaining control of your finances and building wealth.
Speaker 1:Awesome. Thank you so much.
Speaker 2:Thank you so much for having me. It's been a great conversation.
Speaker 1:You can follow Award to the Wise on Instagram and TikTok at Award to the Wise Pod. We're also on YouTube at Award to the Wise Podcast. Please be sure to subscribe If you are enjoying the show. Please rate, leave a review, share and subscribe wherever you listen to podcasts. Till next time, peace and love, always, always, always.