Day 10: Financial Literacy
Feeling pretty blah today. Woke up with sinus issues and tired eyes. A few weeks or months ago I started limiting my caffeine intake to 1 Stormio Nespresso a day. Then this week I thought it would be ok to add a Melozio at around 11 am. Not a good idea. Being unable to fall asleep easily at night has been compounding and now I feel like doodoo.
Speaking of compounding, I want to talk about finances. I recently had lunch with a development director at a local non-profit who is in her early 30’s. She mentioned her and her fiance planned to keep their finances separate after they get married. Since they don't intend to have kids, they don’t see the need to combine finances.
She told me that because of her fiances upbringing in a single parent household, he was extreme when it came to money. He wanted to save a certain amount of money between the two of them to buy a house and she was extremely overwhelmed.
I helped her with the knowledge I have.
In my early 20’s during my cushy government job my dad attempted to encourage me to put the COLA (cost of living adjustment: basically the fed gives employees an increase each year to cover inflation) into savings. He was actually trying to get me to put Step increases (higher annual increases as long as you’re doing your job well) but that fell on deaf shoulders. $2000k extra per year was EXACTLY what I needed to support my late night shenanigans.
Anyways, it wasn’t until 2020 when I got help from a previous business partner, who is an investor, that I wished I’d listened to my dad.
I went to my friend and said, “I’m about to make my final payment on my first business’s credit card. I’ve been increasing how much I pay per month by $5. So, once it’s fully paid off I’ll be used to the $200+ per month going to debt. I want to have a place for that new “free” money to go.”.
He helped me set up an eTrade account. He also asked if I had any retirement accounts. Which I did (YAY!). It was an old 401k from a pharmaceutical company I worked at for about 18 mos in my early 20’s. I ended up having $10k in that and moved it over to eTrade, as well.
What I try to impart on anyone I meet who seems overwhelmed and confused about finances is that they have to start. The best way to learn, is to get skin in the game. And it’s actually not that difficult in this day and age.
The first stock I bought back in 2020 was 23&Me. They had just gone public and their symbol was ME. I thought, how cool is it going to be when I’m a billionaire and it all started by making my first investment in ME. lol…spoiler alert: I lost a significant amount (by my standards) in that stock before finally selling it for around 1/8th of what I bought it for. The company bankrupted or sold and now stocks aren’t even available.
No worries, I’m close to doubling what I’ve put into the market in just 5 years.
One of the best things I did, was buy VOO. It’s an index fund which is a group of businesses. This is something that the finance folks always recommend. It’s kind of the opposite of putting all of your eggs in one basket by buying an individual stock.
I could go on for a while about this but will stop by telling you to start, if you haven’t yet. There is so much empowerment that comes from realizing that the finance bros don’t know any secrets that aren’t available to you. The best secret is to start educating yourself as soon as possible. If you know about, or are in. debt, you can also learn about finances and investments.
