Understand The Stock Market + Investing w/ Bola Sokunbi

episode for you today. Yes, I am very very excited about this, as am I because I think this is a topic we really don't know much about just in general, unless you are working in finance who are writing about personal finance. In general, we don't have much knowledge about this. I think in part because it doesn't affect us right now. We're not great at future thinking and planning for retirement, so it's just like, oh, well, that's in the future. I don't need to worry about that, you know, kind

of like scheduling doctor's appointments. But I think that this really pairs well with frugality because Bola is about to encourage us so much to do our own research and to understand and not just to a ignore this or be pass it on to somebody else and just pay somebody else to do this. For us, but to really problem solve, understand research, and be involved in this very important aspect of our finances in a way where we are empowered to do so and can even do it

in a frugal manner. Absolutely for sure, and I know that this is going to be a very much listened to episode because this is something that everyone's interested in and we don't cover much on the show because we try to stick to more of kind of are safe zone. But we definitely want you to be while staying in your zone of genius, it doesn't mean you can't branch out when it is super relevant and that's kind of

where we are at in this episode. So we brought in Bola because she has a new book out called Learn How Investing Works, Grow Your Money, and it is just phenomenal. So super honored to have her. But first we got to give it up to our sponsors for the show. First is Side Hustles. So if you don't think you have enough money to invest for a retirement, think again. Side Hustles can provide you with the extra

money you need to start stashing cash. All you need is an extra hundred fifty dollars a week, So if you want some ideas for really good side businesses. Head to Modern frugality dot com slash biz with a z ideas and I've got ten simple business ideas that you can start pretty quickly. And then you'll also get emails. Every Friday we have new episodes of the show, so yes, perfect also brought to you by Things I should understand

by now but don't today. Sponsor is a bit more of a confession about things I don't know, like how electricity works, or how to navigate social media, or what different cuts of meat are and how to use them. Nevertheless, I can't let my lack of knowledge keep me from living my life. So here's to admitting what I don't know and doing more research things I don't know but should I'm in my thirties and still learning. Amen. Well, when you stop learning, you stop growing, and then you

are considered dead. So that's a good thing and you shouldn't be ashamed of it. Thanks, thank you. Also, I can't remember if we talked about meat on the episode, so that's I'll be interested to see if that came up. The other two I remember, but meat wasn't there, so I'm interested to see if I just zoned out on that one. Pay attention to the after show. Okay, if you are interested in investing, we've got a few other

episodes in the archive, just a few. Episode fifty three, we're talking to Aaron Lowry of Broke Millennial on paying off debt and investing. At the same time, episode fifty six we have an interview with Abby Chow about saving for kids college, specifically in A five nine, which is an investment account. And then episode ninety four was a very popular one where we go through basically retirement one oh one. So this will kind of dive a little deeper into some things from that episode, and some of

it will be a refresher because we've got Bolascumbi. She is a certified Financial Education instructor, money expert and CEO and best selling author and founder of Clever Girl Finance. You've probably seen Clever Girl Finance on Instagram or some we're on the internet. She's just done great work there and she's so kind, she's so great. After reading her latest book, I really believe that it is the handbook that everyone needs to learn about investing and then to

refer back to whenever questions come up. It's very comprehensive and easy to read. Beautiful. Let's get into it. Welcome Bola to the Frugal Friends podcast. Thank you so much for having me. I'm excited to be here. We are so looking forward to talking with you about this topic that most people know a little to nothing about. Yes, I okay. So I was mentioning this a little bit before we started recording, but I had a tiktoko viral

over the weekend. Thank you. I'm in my thirties, so I don't feel like that should be a thing I should say. But I meant for it to be about, you know, do side hustles so that you can like help pay off your debt, but it also helps you invest. And there's like almost a million views on it, and everyone is asking all these questions about where to invest. What's wrath? I are all the stuff. So this interview comes at the perfect time because it's been a long

time since I've covered investing. Yes, and I'm excited to talk about investing. It's like one of those murky areas that you know, people talk about a lot, but not everyone knows what things mean, or how to get started, or what they're really doing to be honest, and there's a lot of trends and you know, social advice that's not always accurate. So I'm always happy to talk about investing in a way that empower empowers the person who's listening and trying to learn about it for themselves. Yeah,

and we're just here to ask the questions. I know, I'm not an expert on investing, nor am I licensed or have any of the letters to be giving this kind of advice. It is purely for entertainment, but yes, hopefully there can be some helpful tips from you Bola for those listening in. Yeah. I also don't have any certifications. It's purely retirement education and not advice. So let's yeah,

that's probably a good preface to make on this episode. Well, we're giving disclaimers, not your financial advice, but you are a certified financial education so you do you. I mean, you're probably more qualified than the rest of us. So we're super excited. And I think your book is after reading it, like the manual for investing, So I hope everyone goes out and just to have a copy on hand for reference, Like it's that good. So we'll just

cover kind of like the basics in this episode. But if you're listening and you have more questions, they're probably answered in the book. So definitely will put a link to the book in the show notes for you too. You go get that on Amazon. It's so great. But first, so this wasn't a question that was on the list, but I kind of wanted to know, like, how did you get into like investing? Just interested in it and started with it. Yeah, so I got into investing pretty

early on in my career. My first foray into investing was with my four one K. I didn't know what it was. I had no idea what it meant. But I remember sitting out and starting to tune out of the HR meeting at my first job. All I could hear was what And then they said he had talked about the four one yah mi whatever? Like what kind of scam? You know? Is it that I have to give you my money when you're paying me? Like pay me and I pay you back. I was like, no way.

And then I heard them talk about free money and they're like, well, match you at the time up to six percent of your contribution. I was like, wait a minute, that is free money. I'm on that. So I automatically signed up for that really understanding what the four mon key was. And it took me three months for my probationary period to end for me to actually start contributing. And that three months I started to learn about the

four one key. And then I got curious about investing, like where was this money being put, whether the stock market mean, and then I got into investing, so I started I opened up my own brokerage account, and then I started out with just investing in companies that I liked that had stocking Kmar at the time. I had stock and Gap at the time, and it sounds really smart and like, oh my god, she was on top of things. But I had no clue what I was doing.

I would panic every time the stock would fall and I would sell it, and then it will go up and I would buy more. Don't do it and then and the on the rare occasions and I would make money. I would forget that I would have to pay taxes at the end of the year, and so you know, I was just all over the place when it came to investing. I was like, wait a minute, I actually need to figure out how this thing really works and stop listening to my coworkers and stop, you know, just

doing hearsay investing. And so I picked up at the time an investing book for dummies, and I remember I would be on the subway in New York City with my investing book for Dummies, that's what it was called, Investing for Dummies by Wiley, reading it, and people would look at me like, look at this dummy, and I would stare back like, no, you're the dummy because I'm learning about investing with my book for dummies, Thank you very much. That's look at me now, yeah, hanging out

New Jersey. No, no dummy, no mo. All right. How I think about those for dummies books? Um, they're great. Cool. That's that's a cool. That's such an accessible story because it's some people think like as professional, like financial educators, we come into this through some kind of like education or certification or something. But like, no, you had a four oh one K and you wanted to figure out what to do with it, nuts, and you know, you have to start somewhere, right. This was my first job.

This is me as a child of immigrants, not knowing a lot about the US financial system, Like the stock market was completely new to me. So by starting with

that book, it was incredibly helpful. And then I started learning about index funds and like long term investing and not trying to time the market, and tax planning and capital preservation and like, you know, all these other important elements my risk tolerance, should I be investing in individual stocks, and all these different factors that allow me to create my own investing personality and you know, grow over time.

And so I think the biggest barrier to investing is that people assume that you're born with this knowledge and you automatically know how investing works, but you have to learn it. Right. A lot of people talk to talk, but they actually don't know what they're doing. So, you know, there's no shame in learning about investing. There's no shame in starting at the basics. What is a stock? What is a fund? What is the stock market? What hours do they trade? Those little factors all help with your

education around invest becoming as accessible investor. Well said Bola. I think it's amazing to even hear a little bit about your background and some of the additional barriers that you faced in learning about what this is and how to invest, And I think it's encouraging in a lot of ways that yes, this can be done regardless of

the different barriers. It might require more work and more effort in some regard, but there is information out there, and so thank you for doing it, and then for turning back around and saying, Okay, how can I help others in understanding this and not putting shame around it either that. Yeah, no one is born knowing this and you've got to learn. And there might be some sweat that this requires to put into that, but yeah, amazing, well done, Bola and just being curious and asking questions

to get to this point of real understanding. And now no other woman has to sit on the subway reading a for dummies book because they can. Just was a good fun I don't know if they still make it, but I do recommend it, you know, like I don't care people think what I'm reading certain books in public places, Like you know, I'm not bothered by it. I'm getting the knowledge. If you don't want to join me, good for you. There you go. That's it, alright. So let's

dig into some of this knowledge that you drop. Tell me kind of about the different types of stock market investments that are available in which may be best for beginners, because this was a big question that I got over the weekend, like what do I invest in? Yes, so you know when it comes to what you should invest in. The first thing you want to invest in is knowledge, understanding how it works. I do not have an investment recommendation for you. You have to because the thing is,

you work so hard for your money. The last thing you want to do is follow the horde or the herd, because everybody's doing it, but you don't really know what's happening. So the first thing you want to do, the first investment is educating yourself basic book on how investing work, what it means, or just going online, watching YouTube videos, listening to podcasts like this one and you're here listening

to this one. The second thing as a beginner is, you know, I'm pretty wary of saying, hey, go buy your favorite song because everybody's talking about Tesla, everybody's talking about cryptocurrency, and I'm sure all those are really great investments, but I think it's really important to have really really broad diversification when you're first starting out. This way, you can minimize the amount of mistakes that you make, and you can recover quickly, and so I always saw someone

who's starting out. A great place to start if your employer offers one is through your company's for one key, this is automatic investing. You don't have to think about it. It's before taxes, right, which reduces your overall taxable income. Many people will say, well, the four one K can

be expensive, and that is true. They sometimes charge higher fees, but the fact is that it is one way where you can automate your investing, and studies show that when you automate you save even more than if you're doing it manually. You're come But he doesn't offer a form one K. They may offer an IRA, which is an individual retirement account, or they may offer a WRATH, or

you can open up one of those for yourself. The difference between the IRA and the ROTH IRARA is basically the traditional IRA is contributions to an investing account for retirement before taxes, and the ROTH is contributions to an investment account after taxes have been taken out and you don't get taxed again in the future. Both are great avenues and your goal is to start investing in those platforms, leveraging index funds that will provide you with broad diversification.

So when you open one of these accounts, whether it's your Form one K, A traditional IRA or roth irara, then it's a good idea to leverage something like index funds, which give you broad diversification in terms of investing and minimizing your risk. And basically what an index fund is, it's an investing vehicle at tracks an index um of

the stock market. So everybody has heard in one way or the other of the SMP five hundred, this is one of the major US industries traded on the stock market that basically tracks the performance tracks benchmarks of five hundred large corporations of the largest corporations in the U S. So by investing in an index fund that mimics SMP five hundred, you're essentially investing in each of these five companies based on a certain percentage breakout that's defined by

that index fund you're investing in. And this, like I said, gives you broad diversification. So that's a good place to start. And then you also want to think about can I max out my four one K? Can I max out my I raise based on the guidelines that have been put in place by the I R s and just work on pursuing that. So I believe the four one K as of this recording is about eighteen thillars to max it out, and then the I RAS or six

thousand dollars. And what you can do if you cannot afford to just set up a max out right now, is that you can increase for contributions by percentage points every month or every quarter until you can get as close to maxing out as possible. So, you know, going back to your original question like getting sorry, where do I invest? Start by educating yourself and how all this works. You know, I just throw out a bunch of different terms for one K, traditional ira A roth, ira, SMP five,

index funds, etcetera. It's not that complicated if you just dedicate some time to learn how it works. And I will say that people can get overwhelmed by investing. You know, hearing people talk about investing. You don't need to be Jim Kramer to invest. You don't need to know all the jargon. The investing world is full of jargon. Think about it this way. You have a car, right to

drive your car to get safely to your destination. You don't need to know how your engine is turning the engine oil and how the gas is going through the systems, or the aerodynamics of the tires, and the blah blah blah jargon. All you need to know is how to turn the car on, put on your seat belt, no one to break, no one to ccelerate, know how to use your navigation, turn on your radio if you want to to get to your destination. So don't get overwhelmed

when you hear all of this no investing jargon. Instead, focus on what's most relevant to me and what I need to learn right now. Do I know what the stock market is? No, let me go and learn what this is. Do I know what a stock is? No, let me go learn what this is. Do I know what an index fund is? Do I know what all these different things are? No? And there's no shame in learning,

because learning is how you become a confident investor. There's so many people who are investing right now who cannot say in confidence that they feel comfortable, that they understand their objectives, that they are clear on their risk tolerance, on how they are investing. You don't want to be that person. You want to sleep well at night knowing that your money is working for you regardless of what's happening in the economy, because you're focused on building wealth

long term. You don't want to be pulling your hair out and having panic attacks because you don't know what you're invested in and you're seeing this investment going crazy and like, oh my god, you know what am I doing? All us Yes, and we just get a round of applause and anyone listening, pause, rewind, Listen to that section again.

That was a monologue of goodness right there, not only with some of the low hanging fruit of items that we do need to understand, so if we're wondering where to start even just looking up this knowledge, but then also your message of it's okay if you don't know what all these words mean, go back and educate yourself. I was considering a similar thing to what you're saying about our understanding and are doing. We do plenty of things that we don't fully understand. Like I flick on

the lights. I don't really understand how all of that works, but I still do it. But yet our lack of understanding about investing often keeps us from doing it. But I love your metaphor to a car if we our understanding of cars from driving, if we don't fully understand it all, so I'm not going to drive. Well that's ridiculous. So similar thing with this and you, even going back to your background, you began before you fully understood it.

There can be some opportunities to fail, to make mistakes and then learn from them, to not be so fearful of this thing. But let's take the first step and then the next step, and then the next step and just continue to grow in it. So thank you for that entire message, Bowla. I think it's what we need to hear is a cold glass of water in this topic.

So with that being said, I'm curious, just as we're talking about some of the beginner things and the low hanging fruit, and when we're talking about investments, where should we go to purchase some of these investments? And why is robin Hood not the best place to go? Okay, you're putting me on the spot, Robin Those. I don't know what that is, um, but you know, I would just say a brokerage of choice that has good customer service, that had good reviews and offers a wide variety of

options to you, it's a good place to start. You know, your employer, if they offer you an investing plan for retirement, is probably partnered with a major brokerage firm that you can contribute to a four one K there, but you can also write open up your own I RA open up your own non retirement investing accounts with a broke Which popular brokerages are Vanguard and Fidelity specifically for their really good customer service and very very very low cost.

I think between the both of them, they're competing on lowest costs in the industry. Shop job to ro price um there's lots of these really reputable large investment platforms. There's even the fractional investment platforms like the Acorns, and there's other um road advisory services like Betterment and wealth Front.

Take some time out to do some research and you know, see what people are saying about their customer service, about their expenses, and just visually do you like the user interface. Is this somewhere that you feel comfortable putting your money. That's a great place to start. You know, when it comes to robin Hood, I don't have a robin Hood account.

I'm not entirely familiar with their platform. I think we have talked about on the Clerical Finance platform in terms of there's a list of different places you can invest, but I know they focus a lot on individual stock investing. I would say, you know, a platform that doesn't offer a lot of variety is maybe not a great place

for a beginner, especially there's no retirement options. If you're prioritizing your investments, I think the first place you want to start is invest for retirement, right, invest for longer term goals, and then the money you have leftovers you can use that for fun and higher risk investments, which I find a lot of people tend to do with

the robin Hood platform. But you want to make sure that you're not putting your long term investing, your emergency savings or life savings into an individual stock platform right where there's a lot of higher risks. So do your research, Do your research, do your research. That's so important. Yeah, And when the younger you are, the more time you

have on your side. And so that's kind of the benefit to these retirement accounts and index funds is that you can put some in like in your twenties and thirties and just let it grow and compound interests will work in your benefit and if it's like in a raw IRA, you can take it out like tax free, So those tax advantages and time are so much more

reliable than like a single stock or something like that. Yeah, and I would say that you know you want to aspire to maxing out those retirement savings accounts, right, But if you get to the point where you've maxed out your four owne K, you've maxed out your you know, your IRA, whichever one you have, and you have spare money,

don't stop investing, right, There's still opportunity for growth. So you can open, like I mentioned, your own independent brokerage account and invest in non retirement accounts, which means these accounts are not tied to any restrictions, but they also don't have the tax advantages. Right, you still have the opportunity for your money to grow. And the way your money grows from investing, specifically investing in the stock market

is from appreciation, dividends, and compounding. And compounding is that magic that gives your money the opportunity over the long term to grow pretty much exponentially. And basically what compounding is, it's your money having a baby, which is interest and then the baby, having another baby, and the baby's babies baby having another big and in retirement you get a big old family. But these are all dollar bills. These are all dollars that are having dollars having dollar babies,

and you want all those babies. You want the big, big family. When it comes to these are babies you do want. I'm gonna take a family portrait with all of my dollar babies. This is the kind of family planets Jill and us and all of our babies dollars. One more thing I'll say about robin hood, and this is because I was also not familiar with it, but so many people asked me about it last weekend that

I actually had to look into it. And it should be telling that like people in the financial industry don't use robin hood very often versus like Pete random people on Instagram and TikTok that are loving it. So just be cognizant of where you're getting your financial advice. Rather I say that, but there are some There are some great people on TikTok that offer like really great financial

advice there, and then there are some some weirdoes. I would say when it comes to any platform, like you know, I think any platform that gains popularity probably have something good going for it. But just because something is popular doesn't mean that it's right for you given your circumstances. If you don't know anything about investing, are those kind

of platforms your first start, right? If you don't know anything about investing, you want to make sure that you're leveraging a platform and a resource that's going to help you have a good experience and put your money to good use for you, And so I would just say do your research. Yeh. It's it's usually not the platform, it's the individuals. Am. Because something is trending does not mean that you need to jump on the bad wagon

if you don't know what it is. People talk about cryptocurrency and for us all day long it is trending. Is it for you as a beginner investor? You know, when you if you do not have retirement savings, you don't have emergency savings, your finances are not in order. Maybe not at this point. Yeah. I think that ties into just our lack of understanding. If something just sounds smart, it can feel as though, well, then I'll just do that. People who sound like they know what they're talking about

it sounds smart. I don't really understand it. I should probably do it, It's not necessarily the right thought process comes to something we don't understand. Yeah, and you know, I recently needed a YouTube video on how your favorite influencers might be making you broke. And this was in relation to like shopping and all of that. But you know financial influencers, you know also, and I guess I fall into that category. Whenever somebody tells you something to do,

to buy, to try, don't do it blindly. Right, So, just because Bolas as investment in next one, doesn't mean you should go and buy the index one. Go do your research first. I cannot and I cannot stress the importance of research. And in addition to that research, does this thing that I'm having hearing this influencer tell me to do doesn't align with my goals of things I want to accomplish over the long term? Right? Does this fit in? And also does this tie into my risk tolerance? Right?

Does this seem too aggressive of an investment? Too expensive? Like? Is this making me uncomfortable? Just because you love your influencers you follow them, does not mean that you are sheep right. You have a mind of your own and you want to leverage your incredible intelligence to figure out if what they're telling you is going to make sense of you personal finances, personal finance, because it is personal, right,

that's the key word here. So there's a lot of things trending, a lot of people are jumping on the bandwag and a lot of so much is going on, but always bring it back down to you and your unique personal situation because at the end of the day, a lot of people out there don't know what they're doing. That's just the truth. That's so true. It's just there, honest truth. So many words of wisdom coming out of

your mouth. Okay, so let's talk a little bit more about accounts to put your investments in, because so many people get confused. It's like they open an account and then they put money in there and it sits or they think they have to buy index fund, but like where does it go? Like, let's talk about the best account out for beginners kind of like what order you

should go in. So when it comes to investing accounts, let's assume let's create a scenario and let's assume that you have an employer that offers you an investment plan, and they offer a form one k UM. There's also a four or three B which is similar to a formal case specific to people who work in certain industries, or four fifty seven plan. They're all very similar something that an employer offers to help you, say for retirement.

So that's one account that if it's offered to you, it's a good idea to have, right, And money is taken automatically from your paycheck into this account. And at the beginning of setting up this account, you pick out what you want to invest in. Right, So let's say you pick out two different index funds or an index fund and some other type of investment like a bond, right, which is essentially and I owe you loan that you make to a government of corporation or something like that.

So you have these investments there, and that happens automatically because you've set that designation from the beginning of starting that account. You can change them whenever you want, but every time money comes out of your pre check, it's automatically invested there. Let's say then you decide, okay, I'm going to open my own traditional or wrath I AARA, and I'm going to open it with fidelity, you contribute

money in there. You can decide that every time you get paid, you have your perial deposit a hundred dollars, five hundred dollars, whatever it might be, into this account. However, once that deposit is made, unless you have set up to automatically invest in a particular investment, you're going to have to go in every couple of weeks to make that investment right. And so there are different ways you can invest. You can invest a lump sum. Let's say you get a bonus or a a tax refund. You can

invest that every year. You can invest every month. You can invest every two weeks when you get paid, you can invest every week. You can set up your own investing schedule. But it's all about being consistent over time. And by investing consistently over time, you do something called dollar cost averaging, which basically means one investments are high. So let's say you have this fixed amount of money you're investing every pay period. For example, let's say's five dollars.

So what investments are high? Right? Stock market? Stock prices are more expensive, your five per dollars buys you less. And when investments are low, right, stock market has a decline or etcetera. Your money buys you your fire phere dollars buys you more of the investment, and over time you have this average through right. And the whole idea is with dollar costs investing or dollar cost averaging, is

that you're not trying to time the market. You're just buying consistently at different points in time with a long term focus on investing. And what this means is that over time your investments are likely to go grow given the historical performance of the stock markets and also given the historical behaviors of economies as a whole, even despite recessions and depressions. And this is because demand for items grows as population grows as resources decrease. Right, That's what

it has shown over time historically. And so you have the opportunity and then tying you know, in addition to that growth in value, tying in dividends which is you know, profit sharing in a sense that companies give to their investors, and then tying in compounding based on the average earnings on your investments, which can allow your investments to grow

over time. So you have your four one K. You then have your traditional iras and let's say okay, have maxed out my four one can have maximum traditional iras. Then the next account you want to open is a brokerage account, just a regular broker account that's not tied to investing. You don't get penalized at age if you take money out before age fifs nine and a half. It's just a brokerage account and you can start to

contribute money here and invest in index funds. If there are some individual stocks you're interested in, invest that way, knowing that you don't want to have all of your money in one stock. You want to diversify, right. The key to diversify and then invest that way. And it's important to give in mind though, that when if you choose to sell an investment that has appreciated, that has gained, you're going to have to pay something called capital gains tax.

And this is basically the tax that you pay on your investment account. And this is something that you would get a letter or a tax form at the end of the year from your broker saying this is how much you earned in profit from your investment. This is what reported to the I R S and you would have to pay those taxes. So it's important to keep that in mind that if you invest ten tho dollars and you sell it for twenty you're going to have to pay taxes on that profit of ten thous dollars

depending on what that capital gains tax rate is. So those are the different accounts that you can have when it comes to where to put your money as it relates to investing, which is really simple. I mean it's

basically three accounts. Yeah, it's not complicated, and you can have you know, like when I think about my financial situation, which is a bit more complicated, but you know, I don't have a four one K because I work for myself, but I have something called a step I RA which allows me as an entrepreneur to say for retirement, and then I have brokerages and then I also brokerages in my kids names for their college investing in their future investing.

So you can have more than one brokerage account, but you just want to make sure that you're not overwhelming yourself. People do this with bank accounts a lot um. They have so many different bank accounts, so people remember what bank accounts and they're chasing all these bonuses dollars opening a new bank account twenty dollars here, Like all these things, it's not keep it simple. You don't need to chase the twenty five dollars or twenty dollars. It's not even

a getting your time. To be honest, a lot of times you'll tell you, oh, we'll give you the twenty five dollars, and six months after you've made seventeen deposits equaling ten dollars, come on now. So so don't get into a bank account chasing for twenty five dollars or twenty bucks. Just keep it simple. Once you have your account set up, you want to check in and see how your investments are doing. Right, and before you check and take a deep breath and know that, remind yourself

of why you're investing. You're investing for the long term, for your kids, education, for retirement. What are your long term objectives? And then when you log into your accounts, just make sure that you know there's basically a check in. Sometimes things may be down, depending on the economy, depending on your investments, but that's okay given that you have

a long term horizon. Right, you don't want to start panic selling because everybody on Instagram is like, oh my god, cell Cell Cell. The stock market is taking and you also don't want to start panic buying because everybody's saying, oh my god, bye bye bye. Tesla is going to do a stock split, apples in the stock spit bye bye bye bye. Like it has to align with your

own financial goals and fit into your life. If you have high interest credit cards that you're trying to pay off, right, makes more sense to take that spare money you have and pay off that credit card, then go buy the latest scryptocurrency that you have no idea how it works. Right. Once you're jet is gone, take that money invested and make sure you're investing it sensibly in accordance with your

long term goals. Absolutely, thanks for that step by step list for us, Bola, and a lot of things that where we can start to research. If where you don't understand all the things that are coming out of your mouth, and then you know exactly where to start in your research. Yes, and I know that we've talked a lot about making this personal and identifying what works for us. I am curious, however, if you'd be willing to tell us, Bola, what are

your favorite fund portfolios? So I invest with Fidelity. That's where I have primarily most of my investments. I've set up investing accounts for my children, but I use Fidelity and they hold my retirement and non retirement accounts, and within them, I invest in index funds. So I like total market index funds, which are index funds that basically aggregate the broad stock market. I have money in international funds outside of the US. I have money in bonds.

I also have money in more niche funds like healthcare and technology. And also one thing I'm very keen on is just like, what is the word ethical responsible farming? Yes, yes, so I have some farmland food production funds that aligned with that um and also property and development funds and align and that. So I primarily invest in index funds. I do have certain individual stocks, and then my kids, I'm teaching them, they're seven years old, I'm teaching them

about investing. So we're investing in individual stocks with them to teach them how the stock market works. Like you know, you don't always have to buy something at costco you can also own part of the company that we go to buy something at all the time. Or you don't always have to buy a new barbie instead we can buy stock and Mattel. You know, we don't always have to buy the toys. We can buy something in Scholastic,

for example. So I'm teaching them the concept of ownership and just being able to tie the way they consume to what alternatives can we spend this five dollars just ten dollars from Grandma, from Auntie. That is not about acquiring a thing, but instead building an asset. That's what I'm trying to teach them right now. How empowering to expand the mind larger not just this thing, this toy, but you can actually go bigger than that. You can

own part of that company. That's my mind is a little bit right now to think that you're saying your rols are beginning to grasp this concept, and I like confusion there? When can I start teaching kai this? Like should I wait till least like three or four? Because I teach Yeah, that's a great age in small ways. I mean. Now, so my kids they love dunkin Donuts,

so we have stock in Dunkin Donuts. And my daughter has this idea that when she graduates from college, she's going to get a job at our local dunka Donuts are like, well, that's not kind of how it works. But she's like, no, but I'm an owner. I need to work at my store. I'm gonna get a job. So I have a girl who's going to collegical work. Don't get there, don't get there. But I also like

about what you're saying, Bola. It excites me that as we learn more and as we get more involved and personally invested in our financial investments, we can start to look for ways that align with our own personal passions, interests, values, morals, ethics, that it doesn't just have to stop at I gotta four O long K, but we can go even deeper and really put our money where our mouth is, our money where our ethics and values are. That there's so

much more to be grasped here. That is very exciting. Yeah, I was super interested to hear what you would say, like just for like portfolio types, because we started out we just had like in the total stock market and ten percent in bonds and that was that was good to start out, but then we didn't want to stay there, so like you, we started we added the international funds when we rebalanced for the first time ever, that's when

we added our third fund. But now we do have some in the E S I funds and some healthcare, and that's kind of where it's very simple, super simple, and it feels safe because it's it's indexes. So I would say that, you know, so a couple of things for a new beginner. When you're investing in your I RA or in your four one key, you know, you can shift these investments around as you please because you're

not withdrawing the money. But if you are making investment changes in a regular brokers account that you set up, you want to be mindful as to how often you're doing them because there can be tax implications. So a typical rule of them is that you don't want to rebalance your accounts too often once a year if you need to, like if they're falling out of alignment with how much you want to have in this index fund versus this index funds in the national versus U S stock.

You know, maybe you have too much in TESLA versus total stock. You know, you want to be mindfless to how often you're making these trades in a regular brokerage because of tax implications, and just keeping that in mind and the second thing I was gonna say, You know, for a beginner investor, it's okay to start out with one fund, a total market index fund, or an index

one that mimics SMP five. But you may decide, Okay, I want to do more, I want to invest internationally, I want to have some bonds, right, So you can't start to determine what your distribution is. One thing that I'm very mindful is, especially as you start to get closer to your timeline or you know, depending on your

risk tolerance, is capital preservation. And that means trying to keep the value of your investment so you don't lose too much of what you've invested if there's like a severe economic downturn, if there is a depression, if you're

getting close to your timelines. Right. So, for example, in the two thousand and eight recession, a lot of people who were closer to retirement how to delay or defer their retirement plans because they're investments lost so much value they weren't able to take out what they needed to take out annually to support the timeline of retirement. So retirement is on average about twenty to twenty five years. That is a long time, right, and so you want

to make sure your investments can support you. I'm not super high risk, and you know, I think we definitely have to recognize the times that we live in were in a pandemic where the government has tried to put in place and continues to put in place all these different programs to kind of help sustain the economy, the ppe loans, the stimulus check stood at loan deferrals, mortgage forbearance,

all these different things. And once we really step into that true recovery, all these programs are going to go away because they're not sustainable long term, which means we may see I'm almost certain that we will see the ripple effect in the economy and in the stock market. So you want to be thinking about, okay, you know, what is my risk? What is my portfolio risk looking like right now? Do I need to become more conservative?

And it is a great time for me to become more understanding your risk is really important so that you can plan out how you want to preserve your capital. What percentage of your money is non negotiable when it comes to risk. What percentage of your money you're okay taking higher risks? Was depending on how you want to invest. But those are all things you want to keep in mind.

And also keep in mind that if you see big declines in the stock market and you have a long term horizon ahead of you, you're not retiring anytime soon. This is a great time to take advantage of that low point to buy more. But this is not you timing the market. This is you opening up your mind to pursue opportunities as they present themselves to you. Well said Bola, speaking of taking advantage of the prime time

and lowering risks and wise words. It's time for that's right, it's time for the best minute of your entire week. Maybe a baby was born and his name is William. Maybe you've paid off your mortgage, Maybe your car died and you're happy to not have to pay that bill anymore. That's bills, Buffalo Bills, Bill Clinton. This is the bill of the week. Every week we invite our listeners for our guests to come on and share their favorite bill with us. Um and I know you've got one, so

will you share it with us? Yes, it's that incredible bill that just interrupted our podcast recording where I had to pay one thousand, five and forty dollars to fix my HVAC heating system so we don't die of cold in the middle of winter. And mind you, this was after the warranty came in to playing favorite bill of the week the week I yeah, I mean hopefully we have good editors so the listener is not necessarily going to know that you had to step out in the

middle of this podcast. But yes, this is a very recent bill that you had to pay it. It may yeah, maybe the first time we've ever had a bill actively come during a podcast recording. So this is history so important. You need that heat in the north, I know, New Jersey. It makes me cold thinking about it, like I get cold in Florida, and it's my heart went out to you. I'm looking at it as an investment in my warmth and if you are warm, then you will feel more

motivated and energized to do your work. And thanks thank goodness Interest for your wisdom and personal finance that allows you to pay that one bill. I know, well, it doesn't get easy. Even when you have the money for it, it's still still still hurts. I mean I could have just spent that money on, you know, a pair of shoes, and hand bad. You could have could have just warn't warn't those to keep you warm. Put your hands in

the handbag and your feet and the shoes. I don't know how often you watch YouTube, but there's one of these, um I forget what video it was, but there was this woman who you know her most expensive purchase of it was like one of these annual salary how do I spend my money? And she had bought a seventy dollar for a blanket, and I was like, you know, I did a bought it for a blanket. You know

it's okaying for the eating right. We're all about maybe spending a little more upfront to get a better lifetime value and save over time. So you just have to determine the way some people spend their money. What gives you joy? Yeah, what gives you joy? Well? Thanks Bola, And if you all listening, want to submit your bill of the week, whether it's a bill buying a blanket hopefully not. That's the only bill I want to hear. Paying your recent bills, lowering a bill, anything related to bill.

Visit for Cool Friends podcast dot com, slash bill. Leave us your bill, We'll listen to it and probably play it on the podcast. Let's be real, sure will play it before listening to it. That's how we do it. And now it's time for the Lightning Round. All right, yeah you should be. Just because we yell doesn't mean it's scary. Jill yells on that one. It's it's kind of like the child that you had accidentally. Um, you love it, you still love it as much as you

but it's just like you're a little reluctant. There's always this tinge of like I'm your a lot of bitch five years. No, the Lightning Round is my reluctant child. Got it? Got it? Jill, You're my first. You are Um yea, you made me a podcaster. We are going to talk about our biggest investing mistakes that we want other people to learn from. So as our guest below, we would invite you to give us yours first. Yes, my biggest investing mistake was my incredibly large and amazing

Chanel handbag collection. Whoa, I do. I love Chanelle chance that the perfume is my favorite, but I've never purchased a handbag. Yes, um, yes, so I have a lot of them and they are very expensive. They were at a point where I'd saved all this money. I'm like, I just ever bag, but you know, one was just not enough, and I bought two that I bought three, and then it got down this slippery slope and I was wasting to buy money on these handbags when I

could have been investing the money instead. And one day I looked at my closet and it just looked like mold stacks of money turning to mold in the closet. And my husband's like, these bags are hideous anyway, what a waste of your money. He was my boyfriend at the time, And I was like, you know what, they've got to go. So I sold them, and you know, given the crazy price increases with designer brands, I was

able to recoup a lot of money. But when I decided to go onto an online calculator and calculate how much money myself I would have made if I had not bought the super bag but instead invested, I almost jumped off a bridge. Listen, So that's why, you know, I mean, you live and you learn, but that's a big mistake. You know, I still buy handbags, but not nearly in moderation now, and I'm I'm more focused on long term building. But that was just one of mine.

You know, twentysomethings flurges excessiveness. Um yeah, big mistakes. Wow, good for you for recognizing it and being able to reframe that mold. I mean, how what a word picture that the bags that you thought were beautiful at one point, with your new knowledge and research and understanding, makes those bags nearly look repulsive to you. They were beautiful, but I was so for anyone who loves designer bags, no shade,

I love designer bags. Whatever your thing is, your whatever your kryptonite is, your vice is, but you have to be getting your value out of this thing. And I was only really using the first one I ever bought. I was hardly barely using the others, which is why I was able to sell them and get so much money for them. Because they were practically brand new, it

didn't make sense. The cost for wear was dumb. It's like buy a Lamborghini and keeping it in my garage for what everyone that's what we do because it was so expensive, and it's so that's what I do with my raspberries. To me, raspberries are luxury and they are more expensive than any other berry and then they just sit in my fridge and then they get moldy because I'm like, oh, they're so they're so tasty and they're so expensive, so I need to save for them, and

then I just can't maldy raspberry waste of money? Can you tell? Can you tell? Rulled three fifty for a tiny thing of raspberries? It's money. This is like when we asked Chris Hogan, like, what would you do if you could you have unlimited money to spend on whatever you want? And Jill was like an indoor water future from Facebook Marketplace? What that cost? Like three d bucks? What is that though? And then Chris he called us out and he's like, you guys collectively do like you can't.

You can't spend more than mine with the Aldi Wine Advent calendar, which is seventies so mine was worse. Um, but he's like, you just said, like unlimited money, and he's like some brand new Harley that would be his dream. So clearly we don't even need we don't even know what to do with money. We don't know what to do with money. That's we're learning. We're learning, Yeah, we're learning what real luxuriou is because beyond raspberries, O N

what's yours? Okay? So mine happened actually last year, and it was so embarrassing because this is something that I tell people to do all the time, like an article in assignments personally is too. When you put your money into an ira A, you don't let it sit there. You actually have to buy the investments once you transfer the money, like manually, or if you're setting up an auto then you have to set up an auto purchase

of index funds. And so I had a four oh one K that I rolled over to a traditional ira and it was right when I had Kai. So the whole process like I got it rolled over like right after I gave birth, and I for a whole year

I forgot about it. And then one day was going in actually I think it was in March or something when the when we had a big dip, and I was like going in to be like, oh, okay, can I put a little extra in right now into which I noticed that my traditional ARRA had grown like point four percent or for you know, something really paltry, and I was like, no, I did it. I forgot to invest.

It was just sitting in the brokerage account, and so that was my biggest and I actually did a video on it on YouTube, like just saying like, don't make my mistake, and somebody actually in the comments was like, oh my gosh, mine was in my brokerage. And so I saved somebody else from at least prolonging the mistake I made. So well, it sounds like you turned your failure into a success, and it sounds like this might have been a humble brack and I didn't know I

lost there it was still your money. Yeahn't lose money. I mean I lost money that I could have been making over a year. Branded it was just a year. But sure, it's it's a good thing to know. It's one of those beginner mistakes. It was embarrassing because I'm not a beginner. I was. I am a professional personal finance writer. I was. I was. I was the retirement writer at the Penny Harder And so it's it's humbling. You weren't taking your own int I love you anyway, Jenna,

Oh thank you. My biggest investing mistake is not doing it so uh, you know, not asking questions, letting my embarrassment and lack of understanding be a barrier to doing it that I want to learn from and I want

other people to learn from. Even though you co host a personal finance pack, I do have a wrath I ra a. But I will say so, my husband and I have been independent contractors, self employed, and so where you typically have this four oh one K that's the beginner step, we haven't had that, and so that has been a big barrier. I'm learning more about what is available to us, and my husband and I do have a roth ira and there's more to learn and grow from there. But yeah, so there are more ways that

we can understand what works best for us. And even if you don't have access to a four oh one K, there are other things out there that you can be investing in. But I think even that has been a barrier to me. I've been too embarrassed to ask. It's one of those things and I'm like, well, in my thirties, now I should know this. And then because I'm too embarrassed and I think I should know it already, it just like perpetuates me just living how I'm accustomed to

living and thinking, well, hopefully I'll be okay. You know, sometimes when you ask people don't even have the resources to tell you. I remember talking to my old account about how to just save money on taxes because who wants to pay taxes? And they didn't really have much to help me in terms of resources, so they were fired. But I started doing my own research and you can definitely look into accept ira into a solo for one k. Those are great resources for entrepreneurs to save for retirement.

It helps reduce your taxable income. You can save more a lot more than the traditional four one K or IRA limits like by far more. So definitely look into those. They are a pain to set up, but once you set them up, it totally works, and you can have a sep ira and a wrath ira and you can layer these things up as long as you you meet the overall bulk requirements that the i r S has set, So definitely look into those. If you guys are independent contractors. Yeah,

thanks so much for coming on. This was a really helpful episode. I think it's going to answer a lot of people's questions that maybe they didn't even know to ask, and they're gonna drive away with much more investing knowledge. So where can people find more about you and what you offer? Yes, so I have a book on investing, yes, called Clever Girl Finance to learn how investing works, Grow

Your Money. A great book if you're trying to learn about how investing works and you don't want to hear all that jargon and you want real life experiences from people who have made investing mistakes, including myself and some other incredible women, as well as key steps as to how to set up your investment accounts, what to invest in, understanding all the jargon and all that good stuff. And then you can find us at clever world Finance dot com. We have tons of content on the blog, free courses,

a fun Instagram account. Just start Clever Girl Finance. Yeah, you have over forty courses for free. We have about yeah, about thirty six three courses completely free, no catches, to support our community and to help women, you know, to financial wellness. So get the book. It is literally a complete guide to the stock market and investing. It will be a great to have just as a reference, even if you don't read it through the whole way at first.

But it's great, it's accessible, it's not boring, And head over to Clever Girl Finance dot com and check out everything that offers. So thank you so much for coming. Thank you for the opportunity to be here. This is so much fun. Yeah, thanks for coming. That was fantastic. That was a good interview. So much good stuff in there, I think, just a really good combination of tangible tips

as well as encouragement. So I'm going to be coming back to this one myself, yes, and I will be coming back to her book, like I'm talking a lot about it, but that's because I haven't seen a book like this that is about investing about the stock market that's also accessible for people who are not super into

the jargon. So that's why I think besides Simple Path To Wealth was the one that I love and typically recommend, and now this is going to be the other one because I feel like this is even more readable than Simple Path to although both of them are great, perfect So thank you for listening out there. We want to thank you for your kind reviews. They are kind of the lifeblood of the show. They help people find it

and decide if it is worth their time. Um, and that in turn can really help, you know, change people's lives if they take something away from the show and and implement it. So thank you like this one from Rebecca. It's just titled love and it happens to be five stars. She says as an Aussie, I feel that a lot of American money podcasts are hard to relate to, but I enjoy every single second of Frugal Friend. I find myself listening to the same episode many times over because

there are so many good points. Since I started listening to this podcast, my financial situation has completely changed. You have both inspired me to make smarter choices with my money and given excellent tips. Keep doing what you're doing. Thank you, Rebecca. That's our goal. That's amazing. I'm really glad to hear that it's helpful for people even in other countries, and be able to make the tips relatable or even inspire some creativity, even if all the things

aren't exactly translatable. I think, yeah, just opening up some mindset even to what else is out there and how can I create something similar? So so so glad. Thanks for your review. Becca. We also want to thank our friends who share these episodes on social media. So when you share the latest episode and tag us on Facebook or Instagram, we're adding you to our monthly drawing for every five tags and reviews we get. Each month, we give away a copy of the Frugal Friends workbook. Who

so keep leaving us reviews on iTunes or Stitcher. Send the screenshot to Frugal Friends podcast at gmail dot com before you submit it, and don't forget to tag us on social. Frugal Friends podcast See you next week. Frugal Friends is produced by Eric Sirian. So tell me about the true confessions I realized recently, Well I've realized it a lot, but I think I gave it a full

thought a couple of weeks ago. I do not understand the different cuts of meat or what to do with them, and I've been wanting to ask me in general or particular meets meets. I guess maybe I'm primarily talking about at meat, maybe just all meets. I mean, I understand the difference between like cork, poultry and beef. I get that different animals, but all the different types of packages

of meats, like what do you do with it? And then I was thinking about this and then my sister just mentioned it to me recently, just like I don't know what all the different meets me just could just be like a family problem that could just be that her and I growing up. I don't know, we just didn't understand it. But I realized, Holy smokes, I think I'm embarrassed that I don't know what all of these means. So I just stick to what I know. I avoid

conversation about meat. Thankfully, it doesn't come up all that often. Right, you're gonna talk about me because I think I also avoid I don't know recipes. I just feel like there's this whole world out there. I just don't understand it. I've learned to live life without it. But then I realized, I think I need to express this lack of knowledge, get your insight and input. Maybe I'm the only one out there, but hopefully it creates a less shame for

others who have things that they don't understand. I don't know, Jen, but I don't know what the different meats I mean, the meaning I have only eaten meat for a total of two years of my adult life, and you feel like you you have a full grasp of it. Oh no, I'm saying, like I'm not the person you should ask, like I went into a meat market. That's probably my first problem. I've never I haven't been to a meat never been and took me once. It looks so gourmet.

But then I'm like, I have no idea what to do with that thing. And then they've got all these different titles to it. Also, I know that I like steak, and then I go to purchase steak and I'm just like, I don't know. I don't know either bone. I mean, I do know what a filet is. I do know that I like that. But then but then you've got all this chuck gross and this and that, and I'm just throwing out names. I'm just like, well, would you what would you do with that versus this other thing.

I'm sure I'm going to get an onslaught of emails from now until eternity, which I do welcome. If you've got an infographic on how to use meat and what they mean, I have no clue. I've literally only been eating and cooking with meat for two years. But you know what, my lack of knowledge has not kept me from eating meat, but my lack of knowledge about the stock market has kept me out of the stock market. So you know, go and explain that one mm hmm, Well,

meat is tastier than giving away money, you know. Instant gratification. You know, when you talk about my money making babies, then I am kind of sure of me with just lots of money, um and mostly I mean all dollar bills because it's not that much. But and then it's a family portrait. I love this idea money. I could see a few problems with that, but let's do it anyway. Yeah,