Insights Into Teens: Episode 52 “Financial Responsibility”

This week we are talking about what it means to be financially responsible, how to save money and how to start thinking about money management even in your teens. We’re joined by Dan Fooks of who started his financial adventures at age sixteen and has seen great success in growing his money.

Dan gives us some hints, tricks and advice on how to make our money work for us. From looking at multiple streams of income to how to wisely invest your money safely we learn how even with a small savings from an allowance or doing chores can get you started with your own portfolio with the help of your parents. It’s never too you to start saving money, and it’s certainly never too young to have your money start working for you.

Insights Into Teens


Speaker 1 (00:00:01):
Insightful pocket, formative hopes, insights, a podcast network.

Speaker 3 (00:00:26):
Welcome to insights into teens, a podcast series, exploring the issues and challenges of today’s youth. Your hosts are Joseph and Madison, Whalen, a father and daughter team making their way through the challenges.

Speaker 4 (00:00:51):
Welcome to insights into teens. This is episode 52 financial responsibility. I’m your host, Joseph Waylon, my mature and responsible cohost, Madison Waylon. And we are joined today with our special guest, Dan Fukes from the financial fix.

Speaker 5 (00:01:10):
I know Joe, happy to be here.

Speaker 4 (00:01:11):
Awesome. you get a stop in and talk to us today. Absolutely. So just as part of our, you know, process here, we’d like to try to define what we’re talking about so that we can keep that in context for the rest of the podcast. So let me just ask you right off the bat, what is the financial fix?

Speaker 5 (00:01:34):
Yeah. So I couldn’t tell you when, couldn’t tell you why. But one day I thought, you know what? I have all these ideas about finance and I want to share them with people. So, you know, I, through word of mouth, obviously I share with friends and family and whatnot, but I said, you know what, I need to document all this somewhere. So I coded and created a blog, a financial blog, and that’s what the financial fixes. You know, you can see it’s personal finance, budgeting, it’s credit, it’s investing. So I covered basically all different types of topics for, you know, whether you’re an adult and you know a lot about finance, whether you’re, you know, a teen and you might not know as much or whether you’re, you’re a young adult and, and you know, you’re kind of just getting started. It’s, it’s kinda covers all, all, all spectrums. So it’s, it’s a, it’s a financial blog for people looking to learn more about finance and it’s where I share my ideas.

Speaker 4 (00:02:20):
Very cool. So what got you into finances and financial planning?

Speaker 5 (00:02:24):
Yeah. So I mean, as I was growing up you know, my grandfather and my dad you know, my dad working for Vanguard, he, you know, financial investment company kinda got me into it and kind of when I was younger got me started with this idea of, of investing and saving your money. And, and that’s kinda where it stemmed from. I opened my, my first investment account at 16 years old and that was with a couple of yeah. And you know, I saved up a lot of money and I think I probably around $500 and you know, you don’t, that’s another misconception. You don’t need a lot or you don’t crazy amount, whatever you have. And so I opened it up when I was 16 and that’s what really got me started with all that research and you know, everything else. And that’s what got me started.

Speaker 4 (00:03:09):
Nice. Nice. So today we are talking about financial responsibility, which I think what you just told us is kinda kind of the definition of financial responsibility, but just to couch the discussion today, how would you define a financial responsibility?

Speaker 5 (00:03:27):
Yeah, I think it’s a desire and, and also responsibility to just properly manage your finances. So it’s going to be a combination of everything, right. Spending what you’re spending, how much you’re saving when your savings goals. Keeping in mind, you know, future expenses, everything. It’s just having, having a mindset of finance and kind of visualizing the whole financial picture.

Speaker 4 (00:03:49):
Okay. Cool. Cool. Well I think we’ve got a number of questions for you. I know Madison has a couple of questions prepared, so we’ll come back, we’ll take some quick questions and we’ll go from there and see where the conversation goes. Great.

Speaker 6 (00:04:03):

Speaker 7 (00:04:09):
Alrighty. So the first section we have is budget questions. So the first question is how important are budgets to being financially responsible?

Speaker 5 (00:04:18):
Yes. So, so budgeting, actually it’s the last article I posted on my website. It’s about budgeting, just cause a lot of people are asking about it and it’s a great question. She, you know, basically what a budget is. It’s, it’s looking at all your expenses and kind of a bigger picture and, and managing them and seeing you know, where you can save money, where you should be spending money, maybe where you shouldn’t be spending as much money. So that sense of organization is, is over time going to save you, you know, a drastic amount of money. You know, let’s say that you’re spending on a credit card or cash, whatever it may be. When you, when you have that control, then you have a general idea of, of how much you’re spending. It’s obviously going to be tamed and managed.

Speaker 5 (00:04:59):
Whereas if you’re just spending it in saying, okay, paying it off at the end of the month and you’re like, Oh, well how am I bill gets so high? Right. you know, it’s because you’re not consciously thinking about what you’re doing as you’re spending, so what you’re spending, what you’re spending it on. So I think, think that’s why a budget’s really, really essential for whether, you know, you’re a teenager, whether you’re, you’re 50 you know, everyone needs a budget and it’s, it’s what saves you a lot more, a lot more money in the long run.

Speaker 7 (00:05:27):
Alrighty. Thank you. The next question we have is what are some of the basics to know about budgets and handling money?

Speaker 5 (00:05:34):
Okay. So, so for me, the, the goal is to save as much as possible without obviously sacrificing, you know, things that you might want to buy or you know, things that you love, hobbies you might have. You know, cause everyone has that, that those hobbies that they obviously want to spend money on, whether it’s, yeah, exactly. Yeah. So you have cost of living, you have other hobbies, like you know, maybe, you know, trains, whatever it may be. Like my dad, he’s crazy with the, with the you know, trains in the basement, you know, whatever, whenever it may be everyone has something that they like to spend money on and that’s important to factor in your budget. But in the long run, the goal is to, as I said, minimize the extraneous expenses, the things that we don’t need to spend money on because that money we’re saving you know, whether it’s a weekly budget, a monthly budget, I prefer monthly is that that money we’re saving on the things you don’t need is what we’re going to be putting into investment vehicles.

Speaker 5 (00:06:32):
And that’s in the long run can be such great difference. So when you’re talking about budgeting or you, you, you said you’re talking to, you’re looking at monthly budgets, do you generally center the budget around your income or your expenses? That’s a great question, Joe. So I don’t even pay attention to income. I pay attention to expenses and then at the end of the month, I, I do see what percentage of the income was saved, but I don’t keep in mind, you know, if I’m making a little less this month or more this month, I’m right. I don’t say, Oh, I’m going to spend less necessarily. That’s a great idea. But what I do is I kind of think of what’s coming with the month ahead. So you know, it’s February right, it’s Valentine’s day expensive dinner, right? Sure. You know, I, that’s money. Of course I love the span and never mind spending.

Speaker 5 (00:07:21):
But that’s something I’m going to factor into my budget. If I’m traveling a lot in a month, right. I’m going to factor in more gas. You know, maybe I’m spending a hundred a month in gas you know, if I’m driving to Vermont or something, I’m going to probably account for like 200, $300 in gas. So I kind of look ahead at the month and, and like to see what’s, what’s gonna be needed for that month. And then at the end of the month you know, if I saved a better percentage of my income, that’s, that’s phenomenal. So, yeah. That’s good answer. Thank you.

Speaker 7 (00:07:52):
Alrighty. So the next question is, what are some tools that Dean can use to budget their income?

Speaker 5 (00:07:58):
Yeah. so this is, this is awesome because you can’t do any of this mentally, right? It has to be written down. I like to use the term documented, but so does the IRS. Yes. yes. So I use a great app on my phone. It’s called money control and there’s tons of apps like this. Like I’m not saying you have to use this one. This is what I love and it works for me. I want to say it was like three 99. I bought it a few years ago and by far my favorite app. But what that app does is it shows you, it doesn’t actively update it, so you have to manually enter everything. But not only this is manually entering it make you more aware. I think, but you can see all your money at a client. So in all your different accounts, like a bank account, right?

Speaker 5 (00:08:43):
You know, a savings account your, your cash on hand, maybe your cash in a safe at home or something. You know, all your investment at different investment accounts. You might have the holdings for those investment accounts, it just shows you all your money it wants. And that is such a great tool to kind of get an, as I said, just a look, you know, stepping back and taking a look at everything at once. That’s kinda what this app does. And, and that’s a great tool for saving money to see, you know, tracking you’re saving over time that that app also generates like income and expense reports yearly, monthly, whatever. It’s really cool. And it’s, you know, you can, as I said, you can be like 50 and use it. You can be, you know, 10 to 15 years old use and that’s great. So that’s, that’s an app money control I recommend for everyone other, there are tons of other apps like it out there. I know mint personal finance is pretty popular.

Speaker 4 (00:09:34):
Well men on, on, you know, contrary to what you were just saying. Mint kinda does a lot of that free reaches out and, and I use mint for a while myself and I found it was one of these out of sight out of mind things where I wasn’t entering those expanses in and, and all of a sudden stuff is showing up that I didn’t, you know, wouldn’t have caught. And, and the money starts to flow out a lot faster when you’re not on top of it. Entering it like you had said.

Speaker 5 (00:10:03):
Absolutely. Yeah. And I, I, I used some in for a little bit, not long at all, probably a week. And I, it just wasn’t for me. I liked, I loved money control. I love entering everything manually because at the end of the day I’m seeing what I’m spending and I’m the one entering the control. Yeah. That’s why I preferred it. You know you might want something more automated. You know, it’s kind of whatever works for you. But, but money controls great. Also journaling I think is, is great. Having a journal. That’s how I keep my budgets. I talked about it in my last article. You know, I kind of write down all the expenses. I write down all the expenses I expect to make. And then as I go throughout the month, I’m going to be writing down notes

Speaker 4 (00:10:45):
Like projection through the journaling as well. Wow. That’s brilliant. Okay.

Speaker 5 (00:10:48):
Yeah, I love it. Good answer. Yeah, we can go more in depth later at that process. Absolutely. If you guys want to. Sure.

Speaker 7 (00:10:55):
Alrighty. So the next question is what are some budgeting tips you can give to everyone watching to make it easier to basically budget instead of endless like a chore.

Speaker 5 (00:11:09):
Okay. Yeah, that’s a great question. Medicine. I think, write it down as I just said. That’s, that’s so awesome. So in my last article I talked about how they’re kind of three different types of expenses. In a budget every month you’re going to have your reoccurring expenses. So reoccurring is going to be things that are happening every month at the same price. So maybe your Netflix account. Disney plus, you know, something I love to pretty much use at least like once every couple of days when I have some downtime. That stuff’s important. Apple music, if you listen to music all the time, like I do gym membership, you’re going to have a lot of stuff that you’re paying for every month. So, so that makes a budget so much easier by writing all that stuff down. So now, you know, okay, at the beginning of every month I’m automatically spending X of money, whether it’s, you know, a little bit, a lot like haircuts, stuff like that.

Speaker 5 (00:11:56):
You got to account for that. Whether you like to get haircuts, listen, you’re saving money with it. So my, my hair grows like a chief had some, I’m there pretty often. But yeah, so, so the first step is to simplify. Everything is running down the reoccurring stuff. Second step is, is why I like to call the variable expenses. So that’s going to be things that are happening every month, but in different amounts. So this could be buying groceries, right? As I said, buying CAS, so I’m going to be projecting how much I’ll be spending in these different categories every month. So kind of getting an idea for them and how much you’ll be spending per month in variable expense categories. And the third is personal stuff as I said. So if you want to buy yourself some clothes account for that at the beginning of the month.

Speaker 5 (00:12:43):
So yeah, exactly. Say, okay, I’m going to be treating myself and probably buying 50 to a hundred dollars worth of clothes or something this month. So stuff like that, if you break it down into those three categories you can use the same template from month to month and it becomes just so much quicker and easier to make your budget. So that’s, that’s kinda what I do. Everyone does it differently, but the, the point of it is going into each new month you have a template and that’s what simplifies it for, for everyone. So, so in doing that, and I want to kind of step outside the teen realm here. In doing that. Do you use that for any of your taxes as well to go through and itemize your taxes? I do. So I really don’t need to worry about taxes right now.

Speaker 5 (00:13:26):
It’s kind of great. I use TurboTax, so basically I just get all my forms from, you know, from investment accounts, what not income statements from, from work, you know, it, it does everything for you. A TurboTax is free if you’re in college. So it’s nice to not have to worry too heavily about taxes. Usually I claim I love the claim zero on all, all my papers. So genuinely you’re getting more back at the end of the year, not doing any but, but then, you know, the government’s making money off of your money at that. Exactly. Right. Right, right. That’s, you know, the government gets enough money, money, they don’t get to make interest on it. Right. Yeah. So it’s, for me it’s good. I don’t really have to really, I’m pledging the taxes, but you know, as, as you said, straying away from kids my age and teens. That’s, that’s a great idea. Yeah. Okay. Just kind of relate those two and, and account for, for taxes. Awesome.

Speaker 7 (00:14:21):
Alrighty. So then, so the final question for budget is what does it mean to live within my means?

Speaker 5 (00:14:28):
Okay. This is something I talk about all the time and I’m glad you mentioned it. So living within your means is, is living within your lifestyle, right? So there’s kind of three ways to break it up. You’re living beyond your means, which is spending way too much for what you earn. Living, you know, right on your means within your means. You know, spending wisely. And then there’s living below your means, which is really being frugal and really, really pinching those dollars and saving money where, wherever you can. So the importance of that is, is the fact that, you know, right now, if I really wanted to, I could go to a car dealership and buy a brand new Audi if I wanted to and, and have probably a ridiculous monthly payment of, you know, 400 or $500 a month. Could I afford it?

Speaker 5 (00:15:11):
Yes. would it be the thing to do 100% now? Because I know that even though I could buy it right now, that money is what’s driving my investment portfolio and that the future money that I’m going to be putting towards that car, that’s money that I’m going to need my, my investment accounts to, to help me out in the later years. Whether it’s just a savings account or whether it’s a, you know, account you have money invested in you know, living within your means is eliminating those extraneous expenses, the things that you really shouldn’t have for your current position. Now, you know, if I’m 30, 40 years old and I have, you know, crazy amount of money where that’s really not a lot to me, then yeah, of course it’s going to be great to buy the car you want and if it’s not going to really affect your investment goals.

Speaker 5 (00:15:55):
And that’s great. Now living below your means is, is kind of what I like to do. And that’s where you really start to get financially aware and really start to save the money so that, that includes stuff like using coupons to get your Dunkin right. You’re not paying for coffee. Stuff like that. Just kind of squeezing, using credit cards to earn points and sign up bonuses and stuff like that. Living below your means is, is where you really start to, you know, to understand that, how, how valuable your money is to you and that, that it can, it can be spent in better ways than on things you don’t need and put away.

Speaker 4 (00:16:30):
I totally agree with you there. In fact, when when my wife and I bought this house at the time I happened to be consulting and I was making decent money consulting, but it was consulting work. It wasn’t, you know, I didn’t have guaranteed income. Okay. So when we qualified, we had qualified strictly on her salary and we said, all right, we’re going to buy a house that fits us right. That should I be out of work for a period of time? It’s not gonna kill us. Yeah. and that actually, you know, I had to credit my brother for that lesson. Him and his wife his wife came from an affluent background, so she had certain standards and what she wanted and they’ve burned through three houses they couldn’t afford as a result had. So

Speaker 5 (00:17:13):
I like to think of like when you, when you get older, right? So if you’re like 56 years old, you can afford a giant house, no problem. But you see a lot of people downsize because not only do they not want to have to maintain all the space in the house, but they don’t want to pay an insane amount of money for a house that they don’t need. So even, even when you’re older, you’re kind of living within your means and not living you know, an extravagant,

Speaker 4 (00:17:36):
By the time you get that at easy, kids aren’t living at home with you today.

Speaker 5 (00:17:39):
Exactly. Right. Yeah. But it’s, it’s such a great question, Madison, because w whether you’re, you know, you’re 13 or my, he’s 21, any age, it’s, it’s really important to, to that concept of, of living within or below your means. So I’m, I’m glad. Yes. Yeah. Cool.

Speaker 4 (00:17:55):
All right. We’ll take a quick break and come back with some expense questions.

Speaker 8 (00:18:06):
Alrighty. So the first question we have is, I’m always 13, so I don’t have a lot of expenses. What are some common expenses that teens have to watch out for?

Speaker 5 (00:18:16):
Wow, great question. Not so you are, I’m about eight years behind me, so I am in your place eight years ago. The things I think I spent the most money on your age where we’re entertainment expenses. So like maybe going out to ice skate, going out to the movies kind of stuff like that. It’s not really for me at least. I didn’t have to worry about too much financial responsibility until I was a few years down the line. So maybe, maybe high school, that’s when you have a car now, right? You’re paying for gas, you’re paying for insurance, maybe a lot of stuff like that you’re paying for the car itself. So that’s where a lot more serious expenses I think come into play when you’re in high school. You know, when you’re your age, it’s kinda nice because you know, you’re not spending as much, you’re not really having to worry about money yet. Even though, you know, it’s great to have a headstart on it like you do. But yeah, for me, at least when I was 13, a lot of entertainment stuff like you know, ice skating and things of that matter with friends.

Speaker 4 (00:19:17):
Well, and nowadays everything is going to a subscription model that, you know, your music, your movies, your software, everything has gone to subscription. And while you know, mommy and daddy may handle your subscriptions for Apple, well not Apple TV because they give that away for free if you buy something. But Disney plus, you know, you watch movies on Disney plus all the time. So we’re handling those. But there’s nothing to say that you might not have an iTunes account if you want to listen to music or Apple music, I guess at that point. Or subscriptions to other music services or something like that that, that kids listen to. So that’s probably more of a recurring entertainment expense. As opposed to, I guess, incidental expenses of going out with your friends or going to an entertainment leg, fun plaques or the movies or something like that is a great place. Yeah, we love that.

Speaker 5 (00:20:17):
Yeah. So let’s say exactly. It’s great. Like Disney plus for me, it’s free through Verizon for a year. So that’s not something I have to pay for right now. Or no

Speaker 4 (00:20:26):
Paying for your cell phone yourself?

Speaker 5 (00:20:28):
No, so I, we have a work plan and a family plan, so it works out really well. And you know, some kids do have to pay their phone. I pay for my phone you know, to, to actually purchase it. But luckily through our plan it’s I’m still on the family plan, which is great. Just cause you know, I’m still in college, still living at home and hoping to live at home as long as I can. I’m just to save even more money until I’m ready to move out and have a few year salary in the bank. So but you know, things like that it’s, it’s great when your parents can pay for them, but you know, as you get older, some things start to shift. On the, your responsibilities, maybe like a music membership or you know, a phone bill or stuff like that. Yeah. Okay.

Speaker 9 (00:21:11):
Thank you. So the next question I think you sort of answered this, but just for a clearer answer, where’s the best way to ensure the money I earn is friend correctly?

Speaker 5 (00:21:24):
Yeah. And I think even when you’re a teenager, I think money is so valuable because you’re not making as much yet. Right? you know, you’re not on salary with a job and you’re not you know, interning or anything like that. So if you’re making less, what you have is worth a lot to you. Right. So it’s really gonna be what you just justifies, needs and wants. So, you know, whether when you buy something, if you think to yourself, or am I going to need this in the long run, do you think it’s a waste of money at the time being you know, it’s really gonna be what you justify as I said you know, is what you want versus what you need. So the best way to ensure that you’re spending it correctly, I’d say, is to, to ask yourself that is, is you know, what’s important to you? What are you going to get real, real joy out of? And maybe what are you just thinking, Oh, I really want this pad, but I won’t want it in the future.

Speaker 4 (00:22:16):
And I think you’d do that now. You know, we’d go out to the mall or you know, we go out to you know, the toy store or whatever, and you look at it, you know, you have an idea of what you want to buy and you’ll spend 15 minutes looking at one thing, trying to weigh whether or not you really want this, how much enjoyment you’re going to get. Am I going to play with it once, put that Lego together and put it on the shelf and leave it and you’ll walk out of the store after all that time and not buying anything. Yup. And then you’ll save the money. So I think you’ve, you’ve pretty much nailed that one. Yeah.

Speaker 9 (00:22:49):
Yeah. I definitely think I’ve gotten better with my financial responsibility because before, when I like was on, when I didn’t have chores and I was like, I don’t know, nine and 10 I didn’t have a lot of money. I only got it from like birthdays and stuff, but now that I have a chore that pays very well, just saying

Speaker 4 (00:23:10):
For an hourly rate, you’re making some good money. Trust.

Speaker 9 (00:23:13):
Yeah. I’ve definitely now realize that I need to focus and figure out am I really gonna want to have this? How much in drummer am I gonna get all that other stuff? Right.

Speaker 4 (00:23:28):
And I, there’s a, I think there’s an appreciation you get when you work to earn the money as opposed to when it’s even just gift it to you. You look at a completely different, when there’s an expense,

Speaker 5 (00:23:40):
I always feel that way. And a couple of things I love to add, not understanding. You know, I’m the same way with that, right? I’ll spend forever looking in a store at something, you know, maybe I’m between two items maybe I’m like, if I needed it. All right. So that’s great. You think that way? You think, well, do I really need this or is this kind of just me saying I want it? So that’s great. The second you mentioned, I think it’s great to, you know, before you’re of, of the age to have a job, it’s great to have chores and to be able to make a little income at home. And that’s great. And then, as you said, the other only really income a teenager has is like birthday and Christmas. Right. so this is obviously different for everyone, but I would never spend a penny of what I made, what I, what I got from family or friends or whatnot on birthday and Christmas. That would be my money that I’d just take and put away for my, for my investing. So that way when I was 16 I had a lot to put in. Yeah. You know, and you know, I, you know, my initial $500, I as I learned, I put more and more and more in and to have that money readily available, you know, by the time you’re 16 or even younger, it’s, it’s great. And so that’s, that’s kinda how I got that from kind of just saving gifts is a great idea. I, when you’re younger. Awesome.

Speaker 7 (00:24:52):
Alrighty. So the next question I think we also sort of answered this, but just for a nice clear answer with a new question.

Speaker 5 (00:25:01):
Well, yeah, I think we did. So the next question that we had was, was handling recurring expenses. And I think we covered that one. Right? Right. I think the next one’s a good question.

Speaker 7 (00:25:13):
Okay. So the next question is how do I know if I have too many expenses?

Speaker 5 (00:25:19):
Ooh, that’s a great question. So, so Joe actually talked a little bit about that. You, you asked me if when I budget, I compare it to my income. So if you’re making, let’s say you know, $1,000 a month and you’re spending $950 a month, something is not right, either you need to be making more or you need to be spending a lot less or both. So, so when you find that you’re really not able to save at all that’s when there becomes a problem. And that really is that’s a reality for a lot of people. I don’t know if you know this, the average net worth of a 21 year old, can you guess how much that is? So how much a 21 year old is worth is $0 million. So they’re, that means their assets and their liabilities just because of so much college debt is actually canceling out or becoming negative.

Speaker 5 (00:26:06):
So that’s really scary to think that not everyone is in a great financial position when they start out. And that’s because of college. And you know, that’s a reality. And you know, the way around that is, is to, you know, obviously you say, okay, well I have college debt, but the first three years out of college, as soon as you get out of college, you start making the money, start paying off the debt. And, and again, budgeting comes into play with that. So to make sure you’re saving enough to pay off that debt as quickly as possible and then, and then you could start to begin to become on track for you know, for, for saving for your investment accounts. So very good point. Yeah.

Speaker 7 (00:26:40):
Alrighty. So for the final question, and I think is a pretty good one and an important one for pretty much everyone watching, not just teens like myself. Should I prioritize which expenses I pay first?

Speaker 5 (00:26:54):
Yeah. So, so anything that you’re being charged interest on, especially if you’re an adult, you need to get rid of that right away. So I, I, one thing we’ll probably talk about in a little bit is credit cards, right? I paid the same amount of full every month, so I’m never being charged interest on credit cards. If you have any type of alone or maybe a credit card balance, maybe college debt that you’re being charged interest on, so that means you’re being paid. I’m sorry, you’re, you’re being charged more and more. The longer you don’t pay it, that’s what you need to pay off as soon as possible. That’s what we need to do before you start the investing accounts and everything like that. You know, you need to get that money paid off and so does that, that is always the first expense you pay off. If we’re just talking about monthly expenses you know, after you get paid, I think it’s, I love the idea of pay yourself first, which I’m sure you’ve heard of. You know, putting the gas in your car and making sure you have the groceries at home for the week and the month. Just the important stuff first before you go spending money for yourself and putting the money away for you. Invest and maybe putting the savings, make sure you’re taken care of at home with, with things like that I’d say.

Speaker 4 (00:28:01):
And you’re sure your survival expenses basically, you know, the making sure there’s, there’s food on the table and making sure the Electric’s paid, making sure you can get the work so that you can make money for the next month. You know, all the basics I think.

Speaker 5 (00:28:14):
Right. And they’re very, to me the very scary thing is that that with investing, as we begin to talk about investing more in credit more none of this stuff is taught in school. And that is just mind boggling to me that, you know, I learned all this through the past five, six years on my own. Nothing, you know, nothing you do in school, you have, you have financial literacy in 10th grade, that’s a half a semester course that honestly you learn absolutely nothing in as opposed to what you should be learning. You know, especially when there’s so many young, young teens and young adults you know, battling college debt and other crazy living expenses day to day expenses. It’s not that they don’t teach you, you know, you don’t see the school.

Speaker 4 (00:28:59):
It’s funny you mentioned that. I was, I was just in the process of cleaning out my desk downstairs or putting their desk in and in going through it, I came across the box of very old stuff. And in that box I happen to have a plaque that I had earned when in high school from, for national honor society for outstanding achievements in, in business. And that class did all the budgeting, showed you how to manage a checkbook, showed you, told you about investing and they don’t offer anything like that in schools today, which is,

Speaker 5 (00:29:37):
It’s so easy to be honest that everyone can do. And everyone be, you know, doubling their money every 10 years and, and they don’t realize the effect that has by the time you’re, you know, you’re 60 ready for retirement. It makes a drastic difference. And we’ll, we’ll go more in detail about that later in the episode, I’m sure. Absolutely. So we’ll come back and we’ll talk about credit since that seems to be a hot topic.

Speaker 8 (00:30:00):
Cool. So basically starting off with our credit section of this podcast is credit important?

Speaker 5 (00:30:14):
Yeah, absolutely. You know what, I’ll bounce that question right back to you. Like, so I, I want to know as a teenager, do you know what credit is? And it’s okay to say no. Perfect. So credit and credit worthiness credit is basically your likeliness to, to pay back a debt, right? So, you know, if you have an established credit you’re going to be offered better interest rates. I know this might sound complex to you, but to put it in layman’s terms, right you know, it’s your ability to pay back money that’s given to you, right? So whether you’re a risk, exactly, whether you’re a liability or a company can trust you. A a lending company, credit card company, and auto company for buying a car. It’s, it’s whether they can trust you. If I could give you $20, what are the chances that you’re going to give me that back over a period of time?

Speaker 5 (00:31:02):
Right? So let’s say I do give you $50, and I said, okay, in a month, give me 50 back and, and you never give it to me back. How likely am I to give you $50 again, right? Not too likely. So that’s, that’s what the idea of credit is. Is an important 100%. Absolutely. you’re gonna need, you’re not gonna need to worry about credit too early on in life. Probably around your early, mid twenties is when you start to need it for things like car payments, home payments. But the important part is having it ready for when you need it. So that’s when you’re going to start building the credit when you’re 18 through credit cards. Establishing a good credit score. Which really doesn’t require a lot at all. It doesn’t require you to spend money that you wouldn’t spend. So, so establishing good credit is, is important for when you need it in the mid twenties. So. Absolutely. Alrighty. Well, I think you just answered like the next three question. Oh no, that’s okay.

Speaker 8 (00:31:57):
Alrighty. So I moved down through questions.

Speaker 5 (00:32:01):
Yeah, so I think we want to ask, and I’ll ask this one are certain credit cards better than others? Yes. So as you start, I’m a little crazy. I want to be honest about credit cards. I’m going all crazy with them. You know, people say credit cards are a bad thing and I agree with that. If you do not know how to manage your money and you cannot control yourself, credit cards are not for you. And, and I’ve, I’ve heard of people that just like max out their credit cards and then they’re paying all this interest and all this debt and it’s a nightmare. That’s not how you use credit cards. How you do use credit cards is you use them to suspend money that you’re not going out of the way to spend that you’re going to spend anyway.

Speaker 5 (00:32:41):
So if you are paying that streaming service for that streaming service for Disney plus for Apple music if you’re buying something at the mall, when you’re putting it on the credit card and paying it back at the end of the month, it’s a lot better than using cash just because now it’s showing the lender that you’re, you’re able to pay back your debts. And starting that at as I said, the age of 18 I think is when you could start to open a card by yourself. Starting that at 18 is really important just to start building the credit for, for your later years. So back to the question, are certain ones better than others? Absolutely. So different credit cards have different perks. That gets really, really in depth and extensive. The idea essentially to explain to a teenager of cash back is you know, for every a hundred dollars you spend, they’ll give you a dollar back.

Speaker 5 (00:33:30):
So instead of spending $100 spending 99 there’s credit cards you can use for gas, so you’re saving 5% every time you swipe your credit card for gas. So, you know, every a hundred, you’re getting $5 back. And that adds up over time in, in the form of rewards. So, you know, I, I can’t tell you, I’d probably save hundreds of hundreds and hundreds of dollars just from using credit cards, not spending any money that I wouldn’t spend anyway. I’m not like crazy and say, Oh, I need points or anything like that. Through sign up bonuses and things like that. Depending on what you want, they’re there perfect credit cards for you. You might just want one credit card that it’s 2% cash back on everything and that way you don’t have to go crazy tracking rewards which, which I think is what a lot of people like to do. Just have one or two or you can be a little crazy like me and you can go, you know, have a few different cards for different scenarios for month and month. I probably have about six or seven and I use at once, usually two or three every three month periods cause that’s when, that’s when the rewards that the rotating rewards change.

Speaker 4 (00:34:32):
So, so I read your article on the financial and the article on the Apple cart. So I have an Apple cart. I use it rarely. Primarily I use it for anything that I purchase from Apple this point in time, which is great. So I get to 3% back on that. A lot of it’s gimmicky, so you know, the whole next day cashback reward type thing. I totally agree with you that I’m not spending money to the point that I’m looking to get that back every day. Right. And nor am I using it enough where the analytics work. But what’s to me, I think advantageous for, for something like that, it’s for online purchases. One of the, one of the biggest advantages I think the Apple cart have and some of the cards that are out there today are offering this where you can generate temporary account numbers. Every time I make a purchase online I can generate a different account number for that purchase often becomes compromised, their database gets

Speaker 10 (00:35:38):
Compromised. Like we see, you know, on an almost daily basis that isn’t going to hurt me. How do you weigh those factors?

Speaker 5 (00:35:47):
Credit card? Yes. So I mean you, you’ve had so many, especially being on my computer science and cybersecurity students. So you know, there’s so many data breaches nowadays. You know, why, why millions of dollars a month, a lot of customers with credit card information target not too long ago had a huge data breach. Protecting your, your your money and your privacy is important. And the fact that when you use Apple pay for not even the Apple card, but, but any credit card, right? It’s, it’s generating a different hash every single time you use that card. So you know, if they’re going to hack your data if they’re going to, they’re going to get access to the data. They’re only getting that one transaction. They can, they can get only one piece of the big puzzle and they can’t get any of your other stuff, which, which is great.

Speaker 5 (00:36:31):
I, I mean the, I think that the worst thing to do is actually use physical plastic. That’s what’s actually, if you’re actually swiping a car without using a chip that’s what is the least secure, obviously. And then my, my, it just happened to my parents, they had to get new chase freedom cards just because they, they had a couple of expenses on there. They didn’t, they didn’t have and they had to change your numbers up. And so it does happen to everyone. You know, I, I always like to be very cautious with, I never saved my credit cards on my computer. I don’t like to do that. You know, I, I try to use Apple pay whenever I can just for the extra layers, security and absolutely use a chip whenever I can because it’s, it’s way more secure than ever, I think the swipe your card. So, yeah, great question though.

Speaker 10 (00:37:16):
Alrighty. So the next question we have is how do I learn about which credit cards are best for me?

Speaker 5 (00:37:24):
Yes. So, so the internet I say is your best friend. I, I there’s this YouTube where I love Graham. Steven, I don’t know if you’ve ever heard of him. He’s a, he’s a millionaire. I think living out California. I don’t hang out with of all, listen, neither do I, but yeah, he is. I’m a real estate investor and, and really great guy that to talk about credit cards to you and how to use them. So I, I love watching his credit card videos and stuff like that. But any like Investopedia is one of my favorite websites for kind of just basic descriptions of things. If you’re looking to learn more about credit cards it’s always a great idea to just go to Google type in, you know, X credit card, maybe discover a card is a great start, a credit card that I love the recommend people going online and just kind of learning more about it and looking up the perks and the rewards is how you’re going to get an idea of what you want.

Speaker 5 (00:38:18):
So if you’re, let’s fast forward a few years, let’s say you are 18 years old and you’re looking to get your first credit card right you’re just gonna want something really simple, really basic that you can start to establish and build credit with. So that’s when I recommend either a secured credit. If you don’t have a credit score and you need some help getting one a secure credit card is basically when you, you deposit money into the credit card account. And that way if you don’t pay it back, it automatically does for you. So it’s kinda like a learning curve for using a credit card. If you don’t want to get a secure credit card, you can start out with I know capital one has a journey card where it’s just kind of 1% cash back on everything. But it’s, it’s just a great card to start building credit with.

Speaker 5 (00:39:02):
Same with discover it, it’s just 1% back on everything. But they also double your cash back at the end of the first year. They also had a 5% back on rotating categories like gas and dining. So the rewards spectrum really starts to grow over time. And, and as you start to get more of an idea of, of kind of what you want and credit card. But you know, I think if you’re just looking to establish credit, really your goal should be to get a credit card that earns 2% back which, which everyone should have, I think. Okay. Yeah. Alrighty. So the next question is how do I get a credit card without credit? Okay. Yeah, great question. So I, when I applied probably about 18 or 19 I, my first credit card was discover it card. And I, I guess maybe I had a previous credit score, but you never really know.

Speaker 5 (00:39:57):
I guess you’re, I’m not, there were no loans in my name or anything, so there’s really not a reason for me to have credit score. They are accompanied notorious for, you know, giving credit cards to people with low or, you know, coming into the world of credit. So you want to look for companies like that, that do, that discover is great for it. You know, if, again, if you don’t have the credit score capital one journeys and amazing one they also have a card that just doesn’t earn any perks. It’s just you charge it and then you pay it back. And sometimes that’s what you have to use. If you don’t have a credit score, but once you get that first car and you start making your payments on time for a few months to a year then you’re going to start establishing your credit score and start to be able to expand your, your credit card, our game.

Speaker 4 (00:40:44):
How do you feel about the apartment store? Credit cards? They used to be years ago when I was getting into credit, that was your entry level, you know, that was how you got a credit score because you weren’t getting credit cards that you were fresh out of high school, you know, from the major credit card. So you can get a Sears card or a JC penny card and that was how you got your credit established. Is that still viable?

Speaker 5 (00:41:08):
You don’t know people that, that use them? I know for a fact I don’t I just kinda like the generic no annual fee cars that are gonna maximize my cash back. So, you know, for a kid my age, I’m looking for things like 2% back on everything with the, the what is it? The Citi double cash back card. You know, I’m looking for 5% back on gas quarterly. I three, three out of the four quarters of the year I’m earning 5% back on gas. So I’m looking just for things that are maximizing my cash back. I’m the older,

Speaker 4 (00:41:41):
Let me, let me interrupt you for just a second there. What about interest rates? Do you shop for an interest rate? That’s what used to be the traditional philosophy with credit cards.

Speaker 5 (00:41:51):
Yeah. so an interest rate to explain to a teenager again, medicine is if you’re not able to pay your balance at the end of the month, it’s how much extra they’re going to charge you for carrying that downs into the next month. I don’t care if a credit card I get is 1% interest or 99% interest because I am paying it off at the end of every statement in full. And so an interest rate is really enough. Something I never pay attention to. Now I’m sure there are credit cards out there that have really good competitive interest rates. So maybe if you know you’re going to be charging something like a very large expense you know, on a charge card or something along those lines, maybe that’s something you look into as an adult. But again, I, I never would promote using an interest rate. I’d probably recommend just getting a loan at that point because you’re going to get a lower interest rate with a loan, I think then probably you would through a credit card lender. So

Speaker 4 (00:42:44):
Makes sense. Yeah. Good segue too.

Speaker 9 (00:42:46):
Yeah. So we’re about to talk about loans. So I’m just going to combine the last two questions. So how do loans work and what are, and are some loans better than others?

Speaker 5 (00:42:57):
Yeah. So are some bearing others? Absolutely. so that’s all going to depend on your credit worthiness. So if you have a better credit score let’s just use the example again of buying a car, right? Let’s say go out and buy that Audi a few years from now. I don’t even know what that Audi, I don’t know why I’m saying how many, but so let’s say I’m going to go buy that a few years from now, they’re going to look at my credit score and they’re going to say, okay, he has a great credit score, so we are going to lend him money and charge him less. So maybe the interest rate is 6% over a fixed period of time. Right? That’s, that’s a really good interest rate. For someone that doesn’t have that go to the credit score they’re going to charge a lot more in interest.

Speaker 5 (00:43:40):
So they’re gonna charge maybe 20% or something like that. So not having good credit score is going to cost you more money if you’re going to need to take out loans for college loans, which are obviously very important for kids my age. Again, you’re gonna, you’re gonna need to look for the lowest rate available through your school or through any third party college lending service. So just because how essentially how a loan works is, right? You’re, let’s say you have a $10,000 loan, so a company company’s giving you $10,000, but they’re gonna ask for $12,000 back. So that’s where that interest rate comes in. It’s going to determine how much you need to pay back over a given period of time, whether it’s two years, three years, and it varies per loan. But yeah,

Speaker 4 (00:44:25):
And they’ll amortize that loan too so that you’ll be paying mostly interest the first of the loan.

Speaker 5 (00:44:32):
So the bank gets their money first and then the principal, which is what you actually borrowed, you’ll pay this on the second hand for the loan there.

Speaker 9 (00:44:40):
Yeah. The thing is I actually learned this, well I learned about principles, income, all that stuff in math when we were doing math problems on how to calculate interest principle and the time and rate to basically like

Speaker 5 (00:44:56):
Well good. So I’ll leave it up to you and we refinanced the house. So some yeah, to answer some loans. Absolutely. You’re burying now there is the lowest interest rate possible is, is most likely in most scenarios going to be the best loan. And again that comes from having good credit score. So all right, so let me ask a counter question there. So you can get a fixed rate or variable rate. Right? I can get a lower variable rate today than I can affix rate. Is that a good, is that a good move? I mean, so I, I’m very fortunate. I don’t have to worry about loans. It’s, yes, you want, you want one day, you will one day. Absolutely. so, you know, a fixed rate is great because I assume you, you know what you’re going to be paying over X amount of time you know, variable.

Speaker 5 (00:45:42):
It’s going to be a little different. I mean for that, I’d probably just say that whatever, you know, put it as simply as possible. Whatever you know, for certain is going to cost you the least amount of money. You know, when I’m, when I have to go into to knowing about a lot of extensive stuff for loans you know, whether it’s for, for a mortgage, for stuff like that I’m really going to do my homework and make sure that I, that I know you know, historically and you know in today’s day and age how I’m going to spend the least amount of money. Yeah. Yeah. Okay. Good. Same as say when investing, I mean, right. Oh wait, wait, wait, jumped the gun there, our next segment. All right. So I think we’ll come back. We’ll talk savings then investing, right? Yup. All right,

Speaker 9 (00:46:36):
So British, Oh, we already answered the first question a while ago, so we probably can breeze over that.

Speaker 5 (00:46:42):
Okay. And that was about what is, you know, why would you, why should you be concerned about saving money and you should be absolutely.

Speaker 9 (00:46:51):
So what are good ways and bad ways to save money?

Speaker 5 (00:46:57):
Okay. Yeah, I’m a bad way, I think is just keeping money in a bank account or at home. As cash. I always like to say that a bank account is essentially just a prison cell for your money because, or it’s, it’s just as good as being at home in a safe or you know, in your piggy bank, right? It’s not making you any money. It’s not making you any passive income. And that’s not good. There are tons of savings vehicles, not even talking about investing that, that you can use to make a APY, which is interest that you’re earning, not that you’re paying. There are tons of high APY saved music count. I know Goldman Sachs, Barclays. So what’s APY stand for? Annual percentage yield. So that’s, that’s going to be per year, how much you’re making. So if you have $100 and the APY is 2%, you’re making $2 a year that’s $2 a year. You wouldn’t have if it were sitting at home. Now that’s a very small scale. If you have a lot more money than that, obviously that’s going to tally up again to, to be making a, an amount, like 2% a year. In the grand scheme of things, that’s not a lot, but that’s because there’s no risk involved with that. That’s going to be a guaranteed profit per year. I’m sure

Speaker 4 (00:48:14):
There’s safety in that Garmin

Speaker 5 (00:48:17):
Normally. You know, with, with savings vehicles, you’re not going to have any risk, but you’re going to have also with that low risk, low reward. So, but yeah, I, I love to encourage for people that aren’t quite ready for investing high APY savings accounts when, when you’re younger. Yup. Okay.

Speaker 7 (00:48:37):
Alrighty. So the next question is a little, it varies between age. I’m pretty sure. So how much should I save?

Speaker 5 (00:48:50):
Yeah. I don’t think this questions as much about amount as it is percentage. So you don’t, let’s whatever you make throughout the year through your chores, right. Through, through birthday and Christmas and things like that. Those gifts, you know, essentially, I know they’re gifts, but that’s income. So, so you should be looking to save a very reasonable amount of that. You know, again, it’s gonna vary from person to person. So you’re not going to be looking to save like X amount of dollars every year, but you want to make sure your percentages are high. So maybe when you’re, when you’re bringing in this income, let’s say per week, you’re making $50 from chores, which is, which is a pretty darn good paycheck, I think. So you want, maybe you want to save $30, right? And then maybe $20 for, for expenses. So you want to, the, the goal ideally is to save as much as possible, even over 50% which, which sometimes can be realistic and sometimes can’t your agent. It absolutely could be realistic. So your priority should, should be heavily in the saving part and then maybe 25% and the spending part 75% in the saving part.

Speaker 4 (00:50:02):
And I think you’re, you’re pretty spot on for that. I think right now we’re doing a 50, 50 right now and the 50 that she’s not putting in the bank, she’s not spending either. So she’s sitting on it a great

Speaker 5 (00:50:17):
Thing because you know, a lot of kids your age, I can tell you, do not do that. They’re, they’re going to be getting money and just going out and spending it right away. And the fact that you have the financial awareness at 13 years old olds, phenomenal. You know, that’s, that’s not something a lot kids have and that’s something that’s definitely important, special down the line. So that’s awesome. Awesome. Alright.

Speaker 7 (00:50:36):
Alrighty. So the next question is, when do I stop saving money? Never. I was just going to say, if I ever do, yeah.

Speaker 5 (00:50:49):
Any age, you’re always going to be adding money, your portfolio, your saving account, your bank account. It never stops. It’s something that’s important in your whole life to start saving for retirement and, and, you know, hopefully the, you know, ideally the younger you start the early you retire and you know, whether that’s a difference of a year or a few years, that makes it in the grand scheme of things and an awesome difference. So, so saving money never stops. It should always be a focus on a priority. Obviously I always love to say money’s obviously not everything right. But it’s very important to keep in mind that you do need it for the things you want, the things you need. So, so that’s, that’s why saving is important and that’s why it never stops.

Speaker 4 (00:51:31):
Good answer. I agree.

Speaker 7 (00:51:34):
Alrighty. So the next question is can I lose money through different saving types?

Speaker 5 (00:51:41):
Yeah. So I’m Joe, maybe you want to pick my brain a little bit with this, but I’m going to initially say like savings accounts. I don’t really think so. I couldn’t think. Maybe you can count on me. I’m here, but I don’t think there are any savings accounts that are unsafe investing accounts. Absolutely. Right. You can absolutely lose lose money with investing.

Speaker 4 (00:52:03):
The only time I think you’ve run into any risk of loss is in huge amounts. FTC insures you for what? Up to 500,000. So, so even if the bank that you have money and goes under the federal government actually ensures that money. So unless you go over that insured amount, you’re not risking anything with a savings account. And that is why your interest rates are so low. Yeah. So no risk, little reward. I risk generally high reward.

Speaker 5 (00:52:33):
Yeah. And I think if you have $500,000 in a savings account, that’s probably be invested

Speaker 4 (00:52:38):
Well. And if you have $500,000 in a savings account, you’re probably not that bad off to begin with.

Speaker 7 (00:52:48):
Next question. Alrighty. So this goes into what you were starting to say, but into more depth. What is the difference between savings and investing?

Speaker 5 (00:52:58):
Yeah. So they’re, they’re both similar and they’re both different, right? So they’re both taking your money and write your harder money and you’re putting it somewhere. The real difference comes in where you’re putting in. So a savings account is typically going to be through a banking company. You know, every, every bank has it as a savings and a checking account. Obviously checking, being for spending and savings being for putting your money away. Now on the other hand, an investment account through a brokerage, which what’s we’ll talk about is where we’re putting our money into a market that the real world, you know, moving every day, all around the world market where we’re going to grow our money based on the values of funds of companies of other, of other markets. So that’s where it differs, right? We’re putting, with investing, we’re not just putting it into our bank account, we’re putting it into the stock market and we’re now, we’re really starting to make our money work for us. So, so that’s where the different comes into play. Difference comes into play. Right. Cool.

Speaker 7 (00:53:59):
Alrighty. So the final question in savings is how do multiples streams of income effect savings?

Speaker 5 (00:54:08):
Yeah, so a topic I love to always touch on is, is creating multiple streams of income, right? So if you’re, you’re doing chores right now that’s great. You’re making great money probably at this age. That’s your only stream of income mainly. I guess you can report cards. Okay. Okay. There you go. So that’s another stream of income. So now you have two streams of income. Fast forward a few years. You’re working a job, right? You know, maybe you’re, you’re blogging, you’re doing something on the side where you’re making some passive income doing that, we start turning these podcasts into something

Speaker 5 (00:54:47):
Yeah, I mean, so I always love to use myself. For example I, I’m probably one of the busiest kids for a 21 year old, but, so I have a job. I’m a software developer for a company. Right? that’s, that’s my day job. My internship. I work at a golf course part-time over the winter, usually once a month during the summer, three to four times a month. I play guitar at restaurants at least usually once or twice a month. I tutor. I give piano lessons. Just it adds up all these different streams of income. You, you’d be amazed at over a year, a few years, the difference in income that makes just aside, instead of doing one thing, doing a few different things to make some extra money how the hell it helps you in the long run. So I think from young age it’s important to start that.

Speaker 5 (00:55:33):
Under those circumstances, would you dedicate one or more streams to savings and then live off others? Yeah, that’s a great idea. So the, the idea of this is think, okay, well maybe I play guitar at a restaurant twice a month. That’s the money I can use the pay off all my expenses. Right? And then the rest of it I can just put right in the savings. So I only have to get my spending money from one source. So that’s, that’s the overall goal is to create those multiple streams and, and of revenue and, and be able to allocate more of that savings. And that’s awesome. Yeah. So we’ll come back and we’ll talk about how we can invest all that money we’re making from all of our AEs.

Speaker 7 (00:56:18):
Okay. So this question, the first question is basically, when should I start thinking about investing?

Speaker 5 (00:56:27):
Yeah. that, that varies for everyone and I think that the, the concrete answered that is as humanly young as possible. Whether it’s, it’s mostly going to be through your parents, your, your dad, Joe telling you about all this stuff. Right. you have a very big edge right now and a lot of other people your age, I’d say just for having this conversation at least, and, and having your methods of saving. I, as I said, I was 16 when I decided I really wanted to open my, my brokerage account and, and get into investing. That’s really young. You know, I, I think as soon as possible, as soon as you start understanding this concept it’s, it’s great to start and what’s even better is to have the money set aside beforehand so that way when you’re ready to go into action, you have everything ready for it. So awesome.

Speaker 7 (00:57:17):
So the next question is what is the easiest way for a teenager to get involved with vest and vesting?

Speaker 5 (00:57:26):
Oh yeah. So I think for someone your age, it’s great to do it through your parents. So that’s going to be having your, your mom or dad set up your brokerage account for you and we’ll talk about what that is, but they’re going to be setting up all the, all the details for you and you’re going to be giving them the money and you’re going to say, okay you know, put this in my account and now you’re not going to have to look at it. You’re not going to have to worry about it. Cause you know, it’s, it’s set and taken care of and place. You’re, you probably wouldn’t be doing any, any of that yourself until you’re a little older. I know that’s what the case was for me. I wasn’t, you know, I mean, I’m not moving things around for longterm investing at all, so I never really even need to look at it. But even though I do monitor it you know, that’s something that you’re going to not need to worry about touching. So you’re, you’re gonna want to do that through your parents and have them set up that account and it’ll be all put in place for you. Okay.

Speaker 7 (00:58:20):
Alrighty. So the next question is how do I know what is a good investment?

Speaker 5 (00:58:28):
Okay. well there’s many, there’s many different good investments I should say. To me and for a kid you know, a teenager someone your age, a good investment is something that is safe. Okay? You don’t care about how much with the, with the percentage you’re making is a year. You know, you don’t care if you picked that pick that investment that’s going to make you a fortune. You want the safest investment. A good investment to me is a safe investment and that’s how I invest my money. Okay. I don’t focus, I mean, I mean I do a lot of analytics and, and I’m able to sometimes make swing trades and day trades and things like that just because that’s what I do. I’m into it. But good investing essentially is, is safe. And I agree. I’m generally risk averse when it comes to my investments and if I, if I yield 15 to 20%, right.

Speaker 5 (00:59:21):
I’m doing pretty good, which is phenomenal by the way. Yeah. It’s phenomenal. I’ve, I’ve been very fortunate, so, and are low risk yields that I have at this point in time. Right. Okay. Diversity helps. Yeah. I mean a good we’ve, we’ve really only known our economy. There was other than a slight bear market and the end of 2017 or 2018 we’ve only known a bull market these past five years of bull market is rapidly increasing. A bear market is rapidly decreasing. So bullish is good. But you know, as you said, if you’re earning 15 to 20 years, it’s phenomenal. Usually what a good safe investment. You want to expect anything from five to 10. So to have safe investments and to, to be able to do even more than that, which most people, a lot of people have done with this, with this amazing market in the past few years, that’s great to have a safe investment. Give it pretty, pretty promising return. Yup.

Speaker 9 (01:00:15):
Alrighty. So as a counterpart to the last question, what is a bad investment and what do I do? I do if I have one.

Speaker 5 (01:00:24):
Okay. so Ben investment I think is not knowing what you’re investing in investing in a fund or whether it’s an index fund, which we’ll talk about or a company with, without knowing what you’re putting your money behind. Right. you should never put your money behind anything or your, even your word of mouth buying anything, right? You wouldn’t say you like something if you had no clue what it was. So in this, in the similar sense, you wouldn’t want to put your money behind anything that you didn’t know anything about it. So Ben investments as we get older and start to start to study investing, whatnot is buying it too high of value. Right. you know, buying something we’re not familiar with or you know, things like that. Again, I think you stay away from bad investments by not being a greedy investor by being a safe investor. Right. Because you, you’re working hard for your money. Whether you’re young or you’re older, you’re always working hard for your money and you don’t want to see it go away. You want wanna. You want to make sure that you’re putting your money where it belongs if you’re going to be saved. So I think a bad investments you know, something you’re not informed about and something that can be a little more on the risky side. Okay. That makes sense. Yeah.

Speaker 9 (01:01:36):
So the next question, we didn’t enter this one, right? You did not answer this one now. Okay. I’m just trying to, hopefully not.

Speaker 5 (01:01:45):
Yeah, no, this was actually explaining how you make and I must say this, this is all makes sense so far. You know, I’m trying to explain it in a little more simpler terms. If you have any questions, always, always ask after I’m done, but just want to make sure it all makes sense. Yeah, it makes sense.

Speaker 9 (01:02:01):
So the next question is how do you actually earn money from investments?

Speaker 5 (01:02:07):
Yeah, so the, to, to be really simple, it’s gonna, it’s going to be you’re buying it at a certain value, right? And then over time, whether it’s a year or usually a lot more than that 10, 20, 30 years, you’re going to be selling at a higher, higher price than you bought it at. And that’s where you’re going to be making your money is that margin in the middle. There’s also going to be dividends, which we’ll discuss, which is, which is money that the company pays you for owning their stock. But funds also pay you dividends, not just on just individual companies. So the money’s going to be made when we’re taking our money or investing into a fund or the company. And then we’re taking it out years later down the line at a, at a higher price. And now that’s, that’s when we officially make our profit. Unfortunately we officially have to pay those taxes when we take it out. And that’s where the money’s made.

Speaker 4 (01:02:57):
So you buy a share of Apple at whatever astronomical price it said, and I’ll just say $100. Okay. And then 10 years from now, that stock is going off to $110, hopefully higher than that dang years. But you sell it, you made $10, you pay the government half of that probably, and then you get to keep the other half. That’s how you, that’s how you make money through investing. And now multiply that.

Speaker 5 (01:03:24):
Let’s say you don’t have one share of Apple, Apple, you have 70 shares, now you’re making a lot of money. Right? So that’s, that’s why it’s important to you know, invest over time and hold for awhile. Yup. Okay.

Speaker 7 (01:03:37):
Alrighty. So the next question is, what are some things teenagers should look to invest in?

Speaker 5 (01:03:45):
Yeah. this is, this is something that’s extremely important because it’s not, investing isn’t like a savings account where wherever you put it, you’re making money, right? There’s a lot of ways to lose money if you’re an experienced. And that’s something that I went through. Thankfully I’m not a whole lot because I’m a, I’m a very strong advocate of buy and hold. I don’t like to, to to sell, to sell quickly. I think the goal of investing is, is long term, the long, the long game. So things you want to look to invest for. I love to recommend ETFs. An ETF is called an exchange trade fund. That’s what it stands for. That’s a really complex term. I know. So all it is is instead of investing in one company, you’re investing in a ton of companies. So it’s an average father’s company.

Speaker 5 (01:04:38):
So it’s going to be extremely safer because if one company, let’s say goes bankrupt or tanks or something like that, it’s not going to affect the whole value of your portfolio a whole lot. It’s just going to make a little dent in that and that value. So that’s where we’re index funds are really, really great for longterm investments because with the right index funds index funds that are going to measure the main markets and in our economy, they’re going to do with the market does. And if you have a fund that does what the market does, the market always goes positive in the long run. So that, that’s what makes it a safe and sound investment. So whether you’re a teenager which, which is a great question, or whether you’re older any index fund is going to be a phenomenal vehicle to, to grow your money without, without risk.

Speaker 4 (01:05:24):
Okay. And I think that that answers the follow up question of can I lose money in investing? Which absolutely you can.

Speaker 5 (01:05:31):
Yeah. Right. Yeah. If you, if you, let’s say you bought a Tesla a couple of days ago, well, I apologize, but he lost a lot of money. So again, there, there are tons of ways to, to lose money experience being probably the number one way I’d say, but when, when a company you know, when a company’s going to lose value, it’s not gonna gain value. That’s when you’re going to lose your money. And I think the best way to avoid that is to not be investing in individual companies. When you’re beginning, when you’re starting to invest, you want to focus on index funds first. And then, you know, as you learn, as you learn more and start to, you know, look into company’s financials and their, you know, their, their future plans and things like that, or their overall goals or objectives you know, their revenue, things like that. Once you look into that stuff, then you can absolutely feel free to start investing in individual companies. But and which is great because as, as we said, higher risk, higher reward, right? But, but to start out absolutely, index funds are going to avoid that risk. So,

Speaker 4 (01:06:33):
So I think we’ve asked and answered all the major questions we had. I did have some general questions here I wanted to throw out your real quick, we’re kind of pushing up against the clock here. Okay. But I wanted to kind of bring some of these terms full circle that we talked about, right? So we’ve talked a lot about the market. What is the market?

Speaker 5 (01:06:53):
Right? So there’s, there’s two major markets in the U S the Dow, Dow Jones industrial average, and the S and P the Dow is going to be composed of the 30 the 30 largest high cap funds which is, I know a lot of terminology and then the S and P, the top 500 companies. So basically what they are is averages, right? 500 companies in one fund, 30 companies in one fund. That’s what drives our nation’s market. That’s what makes our economy good or bad. And that’s what people, when they invest in companies, that’s what those companies are a part of, right? Apple, Disney you know, Tesla, you name it, they’re, they’re going to be up. They’re all a part of the, the Dow Jones, the, the average that drives our economy. So that is, that’s what makes index funds good for time is that market goes up, is the Dow goes up, is the S and P goes up.

Speaker 5 (01:07:43):
So are those index funds that, that track those companies and track those indexes. So stocks and bonds, what are they? Yeah. stocks I really see, I, I never get in the bonds. I, I’m more of a stock person, but I’m a bond is going to be a lot safer, a lower rate of return. They’re going to be given out by usually a bank, the F government bonds of corporate bonds. But basically you’re, you’re giving money. You’re getting back a set interest rate, almost like a savings account, like a high APY savings account. You’re going to get kind of like a fixed rate back over time. Low return, a little less riskier than stocks, stocks, again you’re going to be investing in a company, I’m hoping to see profit over time, price go up and then sell.

Speaker 5 (01:08:26):
So stock is just a, the value in one sentence, stock is the value I’d say, of the alpha company. So it’s going to be you know, what that company’s was in the market or lack thereof when it comes to Tesla. Oh geez. You know what all the analysts were saying, you know, this is an I 100%, 110% agreed that this was all just price was driving up and it was all a bunch of bogus. Sure enough, there were two subjected to the regulation at this point in time. And every little setback they get kills them. It does. Yeah. Very, very volatile company. Elon Musk doesn’t help you either love him by like he’s, he’s crazy money markets. What are money markets? Yeah. so money markets are, I guess basically a higher kind of savings account. Banks offer them credit lenders would, credit unions would offer them.

Speaker 5 (01:09:24):
They’re, they’re just accounts that are gonna generate a lot less interest. So maybe like two to 4%, I guess. I don’t use them. I, as I said, I love the index funds. That’s, that’s where pretty much all my money is, about 65% of my investments is of my investments are in index funds, 40% in stocks. But money markets are, yeah, just like in a, probably like a higher APY savings account where, where you can, you know, put a, put a fixed amount in and get a fixed percentage back. If just another different type of account, different type of investment vehicle you know, where you can grow your money. As you can see it’s discussion. There are tons and tons of options just in an hour discussion. Right. So, so, all right. Dividends, we touched on it. What are they and should, should I look for stocks that offer dividends?

Speaker 5 (01:10:13):
Yeah, absolutely. Dividends are great. They’re, you know, just they’re going to be when a company pays you essentially for owning their stock, right? And not just companies offer dividends, right. Index funds offer dividends. Couple of my favorite index funds pay pretty good dividends. Give a downs. You usually paid him pretty low amounts, like less than 1% or around 1.5 or less percent. But if you’re owning a stock and you’re making money with the stock, it’s, it’s great to also make money off of quarterly dividends. So you know, I don’t typically look for dividends, but it’s a huge plus one when a company or I’m like apples decent with dividends Disney pays them as well, I believe. So, so they’re great. They’re a little bonus. Further, a little perk for, for owning stock. You can company, you can cash out dividends and take the money out, right? Or what I did was I have my dividends reinvested in the stock itself, right? So I own a little bit more of that stock when those dividends come out. Right? And that’s the idea of kinda just adding fuel to the fire, right? Not just investing once and letting it sit there, just keep adding to it. And that’s when it really grows and you know,

Speaker 4 (01:11:19):
It grows over time. So we’ve talked for about an hour and 10 minutes about finance and financial responsibility and haven’t mentioned prime rate at all. Could you explain that? Yes. So that

Speaker 5 (01:11:32):
That is basically probably the ideal or best interest rate that you’re going to receive on like a loan or something like that. Correct. so you can add in here a little bit if he wants to, but the most, I guess the most credit worthy people are going to get better rates as opposed to the non,

Speaker 4 (01:11:49):
Right. So your prime rates set by the federal government as to what they’re lending money at five and a half right now. So depending on how the economy is, that prime rate goes up and down. So when we were talking about fixed mortgage or fixed loan or a variable, the variables tied to the prime rate. So H you can usually get a percent less or so on a, on a variable than a fixed. But if you know, something happens to the economy and it drives that prime rate up two points, now you’re paying more for that thing you would have if you had a fixed rate

Speaker 5 (01:12:26):
And the same even goes with dividends, right. It acts with the price of the stock. So just as it acts inversely, I guess with the price price of the stock. So if price drops a lot they might boost the dividends a little bit just to be giving you the around the same amount back and vice versa, if prices go up, they may drop the dividends a little bit so they’re not giving you a crazy amount of money. Right. And the primary in that sense kind of also acts you know, together.

Speaker 4 (01:12:52):
Yup. Is investing really as simple as buy low, sell high?

Speaker 5 (01:12:57):
Yeah. I mean, I think there, there are obviously many different types of investing, but if you’re, if you’re a safe investor, it shouldn’t matter where you buy because your goal was to take it out years and years and years, 40, 50 years from now. So it shouldn’t matter if you buy low or so high, obviously it is better to buy low. But if you’re a longterm investor, absolutely you’re going to want to put it in, take it out or you’re in time. You know, for the more risky stuff. It does get pretty complex with what all different types of analytical tools to, to measure relative strength and, and current value and things like that. But you know, I think buy low sell high is, it’s just such a great principle to grasp if, if you’re investing the safe and, and when I think for, for the new, the new investors is the right way

Speaker 4 (01:13:47):
And the market is sick, lik you know, it’s going to go up and it’s going to go down. And if you catch it at the right time,

Speaker 5 (01:13:52):
It’s better. Like I’ll tell you when the market does go down, that’s when I always buy because you’re getting in at a little better rate than, than what you typically would if it were a little higher. Right.

Speaker 4 (01:14:01):
And that’s what terrifies me. Buying now with everything, you know, the market, the super economy being so good right now, everything is up right? And when you’re waiting for that right

Speaker 5 (01:14:11):
Now, when you’re in an adult that’s something you have to worry about. Let’s, let’s say you’re a little closer to retirement. And the market’s really high. It starts a tank. You know, you’re not going to have your money in an account for that much longer. So you might want to be looking to take it out. Now, when you’re young, that’s a great buying opportunity. You want to buy more. You know, I could tell you, I could constantly, a hundred percent tell you put your whole life savings and index funds. You know, Vanguard they measure the mega cat. So basically the larger cap companies in the market or mid cap, small cap measures, the home market in general, all of these ETFs. So it’s a safe investment, right? If you invested in those and it tanked 10% the next day, I’d say I still 100% stand behind what I said, because by the time you take it out, you’re going to have double, triple, quadruple your initial investment. So it’s in support, not to focus on the shirt short term, but, but look at the long term. So to sum up,

Speaker 4 (01:15:10):
What is the most important advice you could give a teen about financial responsibility?

Speaker 5 (01:15:15):
I think that as a teenager it is, even if it’s not something that you think about every day it’s something that will be happening every day in the future, if that makes sense. So you’re not going to have to worry about paying bills right now. You’re not going to have to worry about buying a car right now, but one day you will. So if you can prepare for that now, it’s so much better through investing through budgeting you know, through saving the early, I think the number one thing about financial responsibility you know, in teens and younger adults is the earlier the earlier you prepare, the the more ready you’re going to be when the time comes to, to, to need those skills. So

Speaker 4 (01:15:54):
I think that’s awesome advice. We’ll come back with some closing thoughts and closing up the show. Great. So, Dan, I wanted to thank you again for coming in. I think it’s been a fantastic discussion we’ve had here. I’ve learned a lot from it. How can people learn more about you and the financial fix?

Speaker 5 (01:16:18):
Yeah. Joe, thanks so much John Madison for having me. I had a great time recording this episode. So the financial fix, you can visit the website the blog, the financial We also are on Instagram where we’re pretty active. It’s just, they’ll financial fix on Instagram. So we have tons of information on the website, tons of great information on Instagram where you can reach out to me at contact, the financial that is all that information about contacting the emails on the website. He also has on the screen there for you. So you can always feel free to reach out to me with any questions about blog, about personal finance. Other than that you know, I’ve, I’ve really enjoyed being on the show. I’m glad you know, glad we got to showcase the website and kind of talk about our, our use on finance a little bit. Especially it’s interesting to talk about that with, with the younger generation because you know, I think eight years ago, you know, that’s where I was, I was in the same place as you just starting to learn this stuff and you’re even, I think a little ahead of where I was at that age. So you know, having that information through dad, through yourself is definitely valuable. So that’s, that’s good. All right. Madison, any closing remarks?

Speaker 9 (01:17:35):
I guess just for anyone, however old you are, it’s important to be financially responsible, to have savings to invest on certain things. And

Speaker 5 (01:17:53):
I am a bit tired. That’s okay. I think you did great, sweetie. Hit the nail on the head there. And then to learn about investing, I think is, it’s like you had, is extremely important. So, yeah. Awesome. Great show. Thanks so much. Thanks so much guys. Appreciate it. That’s it. And another word in the book.

Show Notes


  • Insights Into Teens Episode 52 “Financial Responsibility”
  • My mature and responsible co-host Madison Whalen
  • Our special guest this week is Dan Fooks of The Financial Fix

Introduction Questions

  • What is the Financial Fix?
  • What got you interested in finances and planning?
  • What is Financial Responsibility

-a person’s duty and desire to properly manage their finances and grow their wealth

  • Budget questions
  • How important are budgets to being financially responsible

-budgets help to tighten spending

-spending money less freely

  • What are some of the basics to know about budgets and handling money

-save as much as possible

-live within your means

-always monitor spending

  • What are some tools a teen can use to budget their income?



  • What are some budgeting tips you can give to make it easier and less of a chore?

            -write it down! See everything in front of you

-List recurring expenses

-List variable expenses

-list personal expenses

-going into every month, you’re already going to have a template for your budget

  • What does it mean to “live within my means”?
    -live beyond your means

-live below your means

  • Expenses
    • I’m only 13 so I don’t have a lot of expenses. What are some common expenses that teens have to watchout for?
    • What is the best way to ensure the money I earn is spent correctly?
    • Should I handle recurring expenses like a magazine or streaming subscription different than a non-recurring expense like movie tickets?
    • How do I know if I have too many expenses?
    • Should I prioritize which expenses I pay first?
  • Credit
    • Is credit important?
    • When should I start to build my credit?
    • How should I start to build my credit?
    • Are credit cards good or bad for credit?
    • Are certain credit cards better than others?
    • How do I learn about which credit cards are best for me?
    • How do I get a credit card without credit?
    • How do loans work?
    • Are some loans better than others?
  • Savings
    • Everyone talks about savings, should someone my age be concerned about saving money?
    • Are there good ways and bad ways to save money?

-savings vehicles, good and bad

  • How much should I save?
  • When do I stop saving money?
  • Can I lose money through the different savings types?
  • What’s the difference between savings and investing?
  • How do multiple streams of income affect savings?
  • Investing
    • When should I start thinking about investing?
    • What is the easiest way for a teenager to get involved with investing?
    • How do I know what is a good investment?
    • What is a bad investment and do I do if I have one?
    • How do you actually earn money from investments?
    • What are some of the things teenagers should look to invest in?
    • Can I lose money by Investing?
  • General Questions
    • What is the “market” and why should it interest me?
    • I hear things like the “Dow Jones” and the “S&P”, what are these?
    • -Dow Jones industrial average – tracks 30 companies large cap companies – the companies that drive our economy 

-market that measures the top 500 corporations by market capitalization

-weighted towards larger cap companies

-etfs that can cover mid cap and small cap

  • What are stocks and bonds?

-a loan to a company/government that pays back a fixed rate of return. Typically a safer investment than stocks

-long term bond usually 5% rate of return

  • What’s a money market?

-higher apy accounts offered through banks and credit unions 2-4%

  • What are dividends and should I buy stocks that have them?
  • What is the “prime rate” and why is it important?
    -interest rate that most credit worthy customers will receive from banks – 5.50%
  • Is investing really as simple as “buy low, sell high”?
  • What are the biggest pitfalls to avoid in investing?
  • What is the most important thing you’ve learned from investing?
  • What’s the first step in getting into investing?
  • What’s the most important advice you could give to a teen about financial responsibility?
  • Closing
    • How can people learn more about The Financial Fix and get in touch with you?
    • Closing remarks and shoutouts