Finance for Millennials – Episode 120

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[00:01] Welcome to the Prosperity Podcast, fresh alternative personal finance talk for independent thinkers who prosper outside of Wall Street. Here’s your host, bestselling author, Kim D.H. Butler, and No BS Money Guy, Todd Strobel. Hey everybody, welcome to another edition of the Prosperity Podcast. This is No BS Money Guy, Todd Strobel. Once again, I have my co-host and bestselling financial author, Kim Butler, with us. And we’re going to be talking about millennials today. And again, we’ve done a few podcasts on millennials and it’s sad in a way because millennials have learned to distrust so much of what they see because they recognize that it’s hype, they recognize that it’s marketing, and they really have lost trust.

[00:55] So, my question today with our expert with Kim is, okay, I’m a millennial, you know, how do I prepare myself for the future when I distrust what my parents did because I saw where my parents are? Absolutely, it’s so understandable. And the answer to that is to have them do their own research. And it’s the beautiful thing about the web these days. They can get on Amazon and read. They can get on YouTube and research and watch videos. They can get in the various places that they like to go, which is the Facebook and the pictures and the Twitter. I can’t think of all the terms. I’m going to prove to them that I’m not a millennial myself. My apologies right off the bat. But go where you like to go and do the research and learn.

[01:44] We talked so often about education and how it should be something that’s lifelong. And that is one thing that millennials are good at. They like to educate themselves. And that’s awesome. So they need to find a variety of sources. They can ask their friends. They can go on the places on the web that they’re used to going to. But then they should also expand that reach a little bit and seek out some sources that they’re not used to paying attention to. And learn to trust their own instincts. There is something that Kathy Colby talks about. The Colby profile, K-O-L-B as in boy-E.com. It’s just one of our favorite things. And she talks all the time about it’s time to trust your instincts. Your instincts are a lot easier to trust when you’ve added some education

[02:33] to them and then you just spend a little bit of quiet time accepting the education and then trusting the instincts. And then keep learning, keep learning, keep learning. Your opinion does matter. And mostly it matters to you. So how you feel about certain things is what you should be paying attention to. And if you sit down in front of somebody, whether you’re literally physically in front of them or you’re over the phone with them or you’re looking at their particular information that’s on the web and you get a visceral gut reaction that says no, I don’t like this, then pay attention to that. And turn somewhere else and somewhere else and somewhere else until you do get to a place where your gut reaction is yeah, I like this, I can buy

[03:25] into this. And then the beautiful thing for most typical younger people starting out is that you don’t have a lot to work with starting out. So you can only take baby steps, which is what our recommendation is all the time anyway. Even if I’m dealing with somebody in their 60s and they have millions of dollars, I want them to take small steps. Start an account with 50 or 100,000. Start an account with X dollars per month or start an account with some smaller figure for you, a baby step for you, which of course that definition is different for everybody, and get your confidence over time rather than trying to make this big huge decision and trying to get your confidence all at once or worse, trying to get your

[04:15] confidence from the advisor that’s talking with you. You need to get your own confidence from your own research and your own good homework. And then yeah, that advisor can play a role and share with you sources and resources and that advisor should have resources that are their own as well as resources that are other people’s that can back up and prove what they’re saying. And frankly, when you’re talking about finances, you really shouldn’t take anybody’s opinion without proof because finances have this thing called numbers, which has this thing called math, and math can be used to prove things. Now, that being said, I’m going to make it equally clear that a lot of times math may be mathematically accurate or numbers may be

[05:09] mathematically accurate, but they do not relate to our own lives. So we also want to be very careful that while we look at the numbers and we look at the math and we make decisions based on proof, we then also step back and we listen to the narrative. What’s the story being told here? What is this advisor recommending in concept? And we need to make our decisions with numerical proof, but concept also, generic story-based concept because it isn’t going to matter what the numbers say. They’re probably, though the proof may be there, they’re probably going to be wrong over time because they’re going to be based on assumptions. So we have to really make sure that the concept is crystal clear. And if we need it explained again, we need to be confident in asking

[06:05] for it to be explained again so that we can get clear on it. I think so many times people tell us that, okay, it’s okay to invest in bank XYZ, it’s okay to invest in college XYZ to get our MBA, but yet it’s not okay to invest in ourselves, and I can’t think of a better place to invest in you than ourselves. Absolutely. That right there is the best place for education. You’ve got it, is ourselves and our own good work that enables us to learn and us to gain confidence, and we as individuals have that ability. It’s a fabulous investment. So if you don’t know what investment to do, invest in your own education. And I think one of the things that we can do to start you off on that education is I believe you have provided a resource at no

[07:02] cost to our listeners to recommend. Absolutely. It’s called Financial Planning Has Failed. So let’s think about this. For the millennial that’s feeling like, oh, my parents didn’t really do what’s right, this book will address that concern because I’m guessing that your parents probably did financial planning. I mean, it was a common thing for many, many years. And so we in this book make it very, very clear the problems with financial plans and financial planning. You know, the plans are the written documents, which are so worthless. And the planning is the actual process that unfortunately leaves us with such a false sense of peace of mind. But then, of course, like any good advisor, we also have

[07:49] YouTube’s and we have the books that are available on Amazon, which, of course, are also available on audiobook. And that’s probably one of the biggest suggestions I would make to a younger person starting out. Call yourself a millennial or whatever. And younger, it’s not even relevant. It doesn’t matter. Learn how you learn. Figure out how you learn. Are you a reader? Are you a watcher? Or are you a person that just needs to listen? And there’s actually some more formal language around those three methods of learning. Todd, do you happen to have that on the top of your head? I do not, but we did not mention the website where that book is listed, the audiobook. So if you could give that. Absolutely.

[08:35] So that’s at Partners, the number four, Prosperity.com slash ebook. There’s an immediate downloadable PDF and an audiobook. And the types of learning that I’m talking about, I know one of them for sure is called kinesthetic, where you actually touch to learn, which is a real challenge around personal finances, because there isn’t really anything that you can touch. Most of the products are intangible products, but you can touch books, of course, and maybe that does the job right there. But then what I really want people to get is that some people learn best by reading, some people learn best by watching video, and some people learn best by listening to audio. And so in all cases, we’re trying to make all three styles of learning

[09:27] available to you, and any advisor that’s helping you should be seeking out those three learning capacities, especially with the way of the web these days and how capable video and audio and material print via PDF via email are. And then of course, yeah, some people were actually really want a physical book, and that’s on Amazon. And I would like to mention the fact that if anybody ever tries to tell you that this is a complicated process, you need to run because it is simple. If it is not simple enough that you can understand it in 10 minutes or less, then chances are something is being pulled on you. You need to get out of there. Absolutely. Simplicity and clarity. And it is possible. And you as a millennial or a octogenarian doesn’t matter.

[10:25] You can learn how to handle your finances. If you will seek out very specific things. And in our minds, they boil down to three specific things. A place to store your cash, which is your emergency opportunity fund. A place to invest dollars that create income, a cash flowing investment. And third, a place to grow your assets where they will not be shrunk. If you’ll just boil everything down to those three areas, you’ll get good results because no matter what level of complication you want to apply, in fact, I think there’s literally 26 different asset classes. They still boil down to these three things. And yeah, there’s nuance on taxes. And yeah, there’s nuance on timeframes. And yeah, there’s other nuances that we could bring up.

[11:21] But the bottom line is your money either needs to be liquid and available for your emergency opportunity fund, or it needs to be creating income, or it needs to be growing. And if you’ll keep those three things in mind and fit the various financial products out there that you’re learning about into those three categories, then it will make things much more simpler. Now, of course, there’s a category of debt as well. And in that realm, you’re just looking for the lowest interest rate. And there is so much important information around interest rates and how there is some very misleading information around interest rates in the car buying community. So poke around on our podcast. We’ve actually done quite a few podcasts

[12:06] around the purchasing of a car and the truth and the lies about interest rates when they’re offered from the car financing company. And I’ll just give you one hint, and that is that 0% is not always 0%. Super. And again, we invite you to send your questions to us. We invite you to email us. We invite you to contact us via telephone. We are here to answer your questions. And if you want to do it anonymously and let us answer it over a podcast, absolutely no problem. Anything you want to add before we wrap up, Kim? Well, I’ll just list my own personal email today as a source for information if you have a podcast question. And in time, maybe we’ll have a special one for you. But for now, we can use kim at partners,

[12:57] number four, prosperity.com. We’d love questions to answer on our podcasts. That’s Kim at partners, number four, prosperity.com. Super. Well, pick up the free materials that are on there. Check out that website. Again, ask us any questions that you may have. Special thanks to you, the listener, for taking time to listen to our podcast. And special thanks to Kim Butler. Take care, everybody. Thank you for listening to the Prosperity Podcast. To take control of your money and have it work for you, visit us at partnersforprosperity.com. If you liked this episode, make sure you subscribe and leave a review.