1 00:00:00,160 --> 00:00:04,480 This is personal finance one O 1 from 2 Harvard and Stanford 2 00:00:04,480 --> 00:00:07,640 graduates and let's be honest, they didn't teach us this in 3 00:00:07,640 --> 00:00:10,200 school. We became self-made millionaires 4 00:00:10,200 --> 00:00:14,760 in our 20s and we're sharing the tips, tricks and also mindset 5 00:00:14,840 --> 00:00:18,480 that helped him get us there. I'm Cherie, I'm Jean and. 6 00:00:18,480 --> 00:00:34,360 We're the Tiger sisters. And so the outline for this 7 00:00:34,360 --> 00:00:37,120 episode is that Gina and I are going to share a little bit more 8 00:00:37,120 --> 00:00:40,240 about our backgrounds, where we grew up, how we grew up. 9 00:00:40,440 --> 00:00:42,120 We don't come from generational wealth. 10 00:00:42,320 --> 00:00:44,920 So everything we learned, we kind of learned the hard way and 11 00:00:44,920 --> 00:00:47,480 want to share that with you. And then in this episode, we're 12 00:00:47,480 --> 00:00:50,960 also going to give very tactical advice and break it down from 13 00:00:50,960 --> 00:00:54,560 beginner to intermediate to advanced strategies and. 14 00:00:54,920 --> 00:00:56,720 We'll get started right after this break. 15 00:00:57,400 --> 00:01:00,240 Hey guys, quick break to let you know that we now have merch on 16 00:01:00,240 --> 00:01:03,240 sistersmatcha.com. We have sweatshirts and T-shirts 17 00:01:03,240 --> 00:01:05,920 that we designed ourselves. Go check it out and please rate 18 00:01:05,920 --> 00:01:08,800 US five stars on Spotify and Apple Podcasts. 19 00:01:08,800 --> 00:01:11,440 These ratings are so important for the distribution and 20 00:01:11,440 --> 00:01:13,560 survival of Tiger Sisters Podcast. 21 00:01:13,760 --> 00:01:16,280 Thank you for your support and we're back. 22 00:01:16,520 --> 00:01:19,240 So the first section, Gene and I are going to share more about 23 00:01:19,240 --> 00:01:21,920 our backgrounds. And honestly, the biggest 24 00:01:21,920 --> 00:01:25,520 contributor to becoming a self-made millionaire in our 20s 25 00:01:25,960 --> 00:01:28,360 had to do with our first job out of college. 26 00:01:28,640 --> 00:01:32,160 And this goes back to what we chose to study in school. 27 00:01:32,320 --> 00:01:34,720 So Jean, can you talk a little bit more about how you thought 28 00:01:34,720 --> 00:01:35,680 through that? Yeah. 29 00:01:35,680 --> 00:01:39,720 So in college I basically had the concept that I wanted to 30 00:01:39,720 --> 00:01:43,880 work in business or do something in business, but I went to a 31 00:01:43,880 --> 00:01:46,480 liberal arts school, so we didn't have a business major. 32 00:01:46,480 --> 00:01:49,680 So the closest that I could get was studying economics. 33 00:01:49,760 --> 00:01:53,120 So that was kind of like where I decided to focus my energy. 34 00:01:53,560 --> 00:01:56,600 And once I was actually in the economics program, what I did 35 00:01:56,600 --> 00:01:59,440 was I looked to the older students and I kind of looked to 36 00:01:59,440 --> 00:02:04,240 see who was sort of being like upheld and acclaimed as being 37 00:02:04,240 --> 00:02:08,240 like the most successful seniors and like what jobs they were 38 00:02:08,240 --> 00:02:09,800 getting. And it was like, pretty, it 39 00:02:09,800 --> 00:02:13,120 became pretty obvious to me that there were just like a few jobs 40 00:02:13,120 --> 00:02:16,560 that everyone was like, Oh my God, like you got, You got a job 41 00:02:16,560 --> 00:02:20,320 at McKinsey. Like, Oh my God, you got, you 42 00:02:20,320 --> 00:02:22,560 got into Goldman, you got into Morgan Stanley. 43 00:02:22,720 --> 00:02:25,200 And so that was kind of like the first time I even really heard 44 00:02:25,200 --> 00:02:27,760 about those companies because that's not what we grew up with, 45 00:02:27,760 --> 00:02:30,640 right? So once I like heard that enough 46 00:02:30,640 --> 00:02:33,440 times and I started to ask about it and like learn about what 47 00:02:33,440 --> 00:02:37,000 these companies even were. That was kind of how I even 48 00:02:37,000 --> 00:02:41,360 formed the goal for myself where I was like, OK, I want to get a 49 00:02:41,360 --> 00:02:43,440 job at Goldman Sachs out of school. 50 00:02:43,440 --> 00:02:47,040 That's going to be my goal for the next 4 years of my life. 51 00:02:47,760 --> 00:02:51,960 So then once I sort of had that goal in mind, I worked backwards 52 00:02:52,160 --> 00:02:55,160 and then I figured out like, OK, what are all the things that I 53 00:02:55,160 --> 00:02:58,240 need to do in order to get this job out of school? 54 00:02:58,480 --> 00:03:02,120 I need to get an internship my junior year at ideally at the 55 00:03:02,120 --> 00:03:04,640 company, which didn't happen because it was the Great 56 00:03:04,640 --> 00:03:09,160 Recession, but still it, it was, it was a good goal, right? 57 00:03:09,160 --> 00:03:11,680 So I was like, OK, I need to get that internship. 58 00:03:11,920 --> 00:03:16,520 Then before that, I need to do something valuable my sophomore 59 00:03:16,520 --> 00:03:19,040 year so that I can like ladder up into the internship, like all 60 00:03:19,040 --> 00:03:23,040 that sort of stuff. Even if you don't know what you 61 00:03:23,040 --> 00:03:26,360 want to do, a lot of it is being curious and asking questions. 62 00:03:26,360 --> 00:03:29,560 And then also like looking at people around you and people 63 00:03:29,560 --> 00:03:32,920 that you admire and then learning from them and their 64 00:03:32,920 --> 00:03:35,320 path and almost trying to copy them. 65 00:03:35,320 --> 00:03:37,560 I think it's very legitimate to copy. 66 00:03:37,560 --> 00:03:40,120 Yeah, it's really important, I think more than anything else. 67 00:03:40,360 --> 00:03:42,760 Like, it's really important to have that mindset where you're 68 00:03:42,760 --> 00:03:45,920 curious about others and then you, like, seek out information. 69 00:03:46,080 --> 00:03:48,320 Yeah. You're talking to people. 70 00:03:48,320 --> 00:03:49,720 You're Googling things. Yeah. 71 00:03:50,000 --> 00:03:52,560 And like having you're like once you have the information, you 72 00:03:52,560 --> 00:03:55,640 can create a plan of like how best to get there. 73 00:03:55,760 --> 00:03:58,200 Yeah. And like, it's not saying that 74 00:03:58,200 --> 00:04:00,760 just because you create the plan, it'll automatically be 75 00:04:00,760 --> 00:04:03,000 successful, right? Like you could be hit with the 76 00:04:03,000 --> 00:04:06,880 greatest recession in COVID, yeah, in like 20 years or 77 00:04:06,880 --> 00:04:10,080 whatever. But as long as you have 78 00:04:10,080 --> 00:04:13,080 something, an idea of like what you're working for, what you're 79 00:04:13,080 --> 00:04:14,840 working towards, you can always pivot. 80 00:04:14,840 --> 00:04:18,640 You can always make adjustments. I guess the take away here is 81 00:04:18,640 --> 00:04:22,120 that like information is power in the sense that like even when 82 00:04:22,120 --> 00:04:26,080 you're an undergrad, you didn't really know what roles out of 83 00:04:26,080 --> 00:04:30,880 school would be like high paying or would be very successful or 84 00:04:30,880 --> 00:04:33,640 lead you to like wouldn't lead you to long term career success. 85 00:04:33,960 --> 00:04:36,960 But by like talking to more people and seeing what was 86 00:04:36,960 --> 00:04:39,080 around you, you can kind of put the pieces together. 87 00:04:39,400 --> 00:04:43,920 In that way, I feel like I was very lucky that the 88 00:04:43,920 --> 00:04:46,320 opportunities were there, but then I had to do a lot of the 89 00:04:46,320 --> 00:04:49,160 legwork to even like understand the opportunities and then 90 00:04:49,160 --> 00:04:53,080 eventually position myself so that I was a good candidate. 91 00:04:54,160 --> 00:04:58,040 And I think also in today's day and age, the equivalent of what 92 00:04:58,040 --> 00:05:00,160 that would be is just doing a Google search. 93 00:05:00,160 --> 00:05:03,640 There's like so much more information out there today now, 94 00:05:03,640 --> 00:05:07,480 like on Glassdoor and also just, I don't know, like LinkedIn 95 00:05:07,480 --> 00:05:10,520 salary. You can see what industry and 96 00:05:10,520 --> 00:05:14,480 what roles in each industry, like which ones, how much money 97 00:05:14,480 --> 00:05:17,680 they do they make and how to get there is a different story. 98 00:05:17,680 --> 00:05:19,440 You kind of have to piece it together through networking, 99 00:05:19,440 --> 00:05:21,560 etcetera. Check out our Networking One O 1 100 00:05:21,560 --> 00:05:26,680 episode here here. But also, I guess, like, 101 00:05:26,680 --> 00:05:29,640 information is power. You can now know like right out 102 00:05:29,640 --> 00:05:33,080 of school what to expect in those more corporate jobs. 103 00:05:33,240 --> 00:05:36,480 Yeah, And even I think I feel like podcasts such as ours, like 104 00:05:36,480 --> 00:05:38,960 where we really try to lift the veil and share with everyone, 105 00:05:38,960 --> 00:05:40,680 like, what are these jobs actually like? 106 00:05:40,680 --> 00:05:42,240 What are the jobs that are out there? 107 00:05:42,600 --> 00:05:45,280 I think the information is out there, but you do have to do the 108 00:05:45,280 --> 00:05:47,920 legwork to find it. So Sheree, how about you? 109 00:05:47,920 --> 00:05:51,120 How did you think about what major to do in school and like 110 00:05:51,120 --> 00:05:54,240 what sort of path you wanted to be on in undergrad as it relates 111 00:05:54,240 --> 00:05:56,760 to personal finance and your first job out of school? 112 00:05:57,080 --> 00:05:59,160 Yeah. So college was an interesting 113 00:05:59,160 --> 00:06:03,480 time, I guess just in the personal finance aspect, like 114 00:06:03,480 --> 00:06:06,320 Jean and I both had student loans of some sort. 115 00:06:06,320 --> 00:06:10,600 And so that definitely like weighed on my mind of like, yes, 116 00:06:10,600 --> 00:06:13,880 I want to have a really interesting college experience 117 00:06:13,880 --> 00:06:16,800 where I can choose all the like most amazing classes and just 118 00:06:16,800 --> 00:06:20,800 really follow my curiosity purely, but also balancing like 119 00:06:20,800 --> 00:06:24,080 the reality of like, Oh my God, I definitely need a a job out of 120 00:06:24,080 --> 00:06:30,080 school that will help pay loans that I have and pay the expenses 121 00:06:30,080 --> 00:06:32,480 that I have. Jean and I don't have 122 00:06:32,480 --> 00:06:35,040 generational wealth or family money to fall back on. 123 00:06:35,040 --> 00:06:38,480 So really when we say we're self-made, it, you know, double 124 00:06:38,480 --> 00:06:42,400 underlined there. So I felt really lucky because 125 00:06:42,520 --> 00:06:45,400 obviously Jean was like looking around to people who are older 126 00:06:45,400 --> 00:06:47,080 than her when she was a college student. 127 00:06:47,080 --> 00:06:50,760 And I have my older tiger sister, Jean, and she was the 128 00:06:50,760 --> 00:06:52,600 one who put me on computer science. 129 00:06:52,840 --> 00:06:56,440 So I would originally wanted to be a doctor in college. 130 00:06:57,840 --> 00:07:00,360 I really, I was good at bio and I liked helping people. 131 00:07:00,360 --> 00:07:01,760 So I'm like, why don't I be a doctor? 132 00:07:01,760 --> 00:07:04,600 And doctors at the time make a decent living. 133 00:07:04,600 --> 00:07:07,560 But then Gene put me on computer science where then I was like 134 00:07:07,800 --> 00:07:10,840 further immersed in those classes in the world of Silicon 135 00:07:10,840 --> 00:07:14,080 Valley, not only learning about like what engineers do, but how 136 00:07:14,080 --> 00:07:19,280 vast this industry is and also how much this industry can pay 137 00:07:19,440 --> 00:07:24,040 in kind of like a crazy entrepreneurial business way as 138 00:07:24,040 --> 00:07:25,480 well. You know, like there's a very 139 00:07:25,480 --> 00:07:28,800 steady paycheck of like you can be a doctor and you know, you 140 00:07:28,800 --> 00:07:31,600 earn this much in salary, But there was kind of like a bit of 141 00:07:31,600 --> 00:07:34,800 a gamble at the time when I was a student of like, Oh my God, 142 00:07:34,800 --> 00:07:38,280 there's so many startups blowing up like this is it could be a 143 00:07:38,280 --> 00:07:41,840 like crazy lucrative life changing career. 144 00:07:42,080 --> 00:07:44,360 So I think that was really appealing to me as well. 145 00:07:44,560 --> 00:07:47,400 In addition to like I enjoyed my computer science classes, but it 146 00:07:47,400 --> 00:07:51,560 would be, I'd be lying if I said like if I had the chance to like 147 00:07:51,560 --> 00:07:55,160 pursue for example, art history or a more like liberal arts 148 00:07:55,160 --> 00:07:58,960 degree, that it might not be as easy to get a job out of school. 149 00:07:58,960 --> 00:08:01,720 Like that could have also been a path that I went on, but I 150 00:08:01,720 --> 00:08:05,200 definitely knew that I couldn't given that like I don't, it 151 00:08:05,200 --> 00:08:07,440 might, I might not see success there, but I could see more 152 00:08:07,440 --> 00:08:10,720 success doing engineering and having more guaranteed, 153 00:08:10,960 --> 00:08:12,440 guaranteed. It's never guaranteed. 154 00:08:12,440 --> 00:08:15,080 But like, yeah, job financial. Success. 155 00:08:15,080 --> 00:08:17,840 Yes, financial success. Because there's a lot of 156 00:08:17,840 --> 00:08:19,000 different ways you can define. Success. 157 00:08:19,000 --> 00:08:21,200 I meant financial success given the loans and the bills. 158 00:08:21,320 --> 00:08:23,680 Yeah. And so like the context from my 159 00:08:23,680 --> 00:08:26,720 perspective is that it kind of worked out since we're seven 160 00:08:26,720 --> 00:08:31,000 years apart, that by the time I had wrapped up two years at 161 00:08:31,000 --> 00:08:33,760 Goldman, my first job out of school, I was kind of looking to 162 00:08:33,760 --> 00:08:37,159 decide what I wanted to do next. And I wanted to work in tech. 163 00:08:37,480 --> 00:08:40,280 And by that time I kind of figured out, OK, the role that I 164 00:08:40,280 --> 00:08:44,120 want to do is product manager. And having done all this like 165 00:08:44,120 --> 00:08:46,320 research and having all these conversations, I really found 166 00:08:46,320 --> 00:08:50,200 out that it's, at the time it was very, very hard to break 167 00:08:50,200 --> 00:08:54,560 into a product manager role if you didn't have a technical 168 00:08:54,560 --> 00:08:57,360 background, meaning if you didn't study computer science 169 00:08:57,360 --> 00:08:59,760 and an undergrad and have a computer science degree. 170 00:09:00,080 --> 00:09:04,240 So I kind of like, I don't know, I feel like I, I got lucky and I 171 00:09:04,240 --> 00:09:06,560 was able to like leverage the skills that I have and the 172 00:09:06,560 --> 00:09:10,480 network that I have to get a product management job without a 173 00:09:10,480 --> 00:09:13,560 computer science degree. But that was when I told Sheree, 174 00:09:13,560 --> 00:09:16,120 because you started undergrad in 2013. 175 00:09:16,760 --> 00:09:19,320 That was why I told her I was like, you need to study computer 176 00:09:19,320 --> 00:09:23,280 science because it's going to set you up and have it's going 177 00:09:23,280 --> 00:09:25,720 to set you up so that you have the most options out of. 178 00:09:25,840 --> 00:09:29,360 Undergrad, I think that's the best way to put it, is that like 179 00:09:29,360 --> 00:09:32,000 it just gives you more freedom. You know, finding it gives you 180 00:09:32,000 --> 00:09:35,800 more financial freedom if you study something that like, you 181 00:09:35,800 --> 00:09:37,880 know where you will. I don't know what am I trying to 182 00:09:37,880 --> 00:09:41,160 say. Where you know that should you 183 00:09:41,160 --> 00:09:44,960 want to take it, there is a there are lucrative 184 00:09:44,960 --> 00:09:47,320 opportunities right out of undergrad and like. 185 00:09:47,320 --> 00:09:51,960 Also, I'm not saying I don't know if the exact same advice is 186 00:09:51,960 --> 00:09:56,560 true today, because, you know, in the year of our Lord 2025, I 187 00:09:56,560 --> 00:10:02,480 don't know if a computer science degree is as valuable as it was. 188 00:10:02,520 --> 00:10:04,960 Chachi BT be replacing engineers these days. 189 00:10:05,560 --> 00:10:09,360 So I don't know if it's like exactly like word for word like 190 00:10:09,360 --> 00:10:11,480 you should get a computer science degree so that you can. 191 00:10:11,480 --> 00:10:13,280 It's more the mindset. It's more the mindset. 192 00:10:13,280 --> 00:10:16,360 It's more like try to talk to people and figure out and 193 00:10:16,360 --> 00:10:19,440 understand like what is the best way for me to position myself 194 00:10:19,440 --> 00:10:21,960 for my goals right out of school? 195 00:10:21,960 --> 00:10:27,640 And if your goal is to maximize your earning potential right out 196 00:10:27,640 --> 00:10:31,320 of school, then, you know, follow that path. 197 00:10:31,480 --> 00:10:34,320 Yeah, and honestly, maximizing your earning potential right out 198 00:10:34,320 --> 00:10:36,440 of school, the reason why we're talking about it is it just 199 00:10:36,440 --> 00:10:39,120 gives you more freedom to then choose what you want to do. 200 00:10:39,120 --> 00:10:42,520 I think a lot of people ask me like right now, like how are you 201 00:10:42,560 --> 00:10:47,400 able to have a podcast as a full time job and have the startup as 202 00:10:47,400 --> 00:10:49,880 a full time job? It's because of the decisions 203 00:10:50,040 --> 00:10:53,960 that I made that were informed by Jean back when I was 19 years 204 00:10:53,960 --> 00:10:56,720 old that lead me to where I am at 29. 205 00:10:56,760 --> 00:10:59,560 Well as a full time job, bootstrapped without having 206 00:10:59,600 --> 00:11:01,800 raised money like we haven't raised any. 207 00:11:01,800 --> 00:11:04,360 Venture capital or? Like any sort of Angel funding 208 00:11:04,360 --> 00:11:07,240 or anything like that, we support and pay for everything 209 00:11:07,240 --> 00:11:08,160 on our own. Yeah. 210 00:11:08,440 --> 00:11:11,600 So I think it like, that's kind of what I'm harping at and I 211 00:11:11,600 --> 00:11:13,600 hope it's not taken the wrong way, but like we're genuinely 212 00:11:13,600 --> 00:11:17,760 like sharing our advice so that like if this is what you want to 213 00:11:17,760 --> 00:11:21,760 do as well, maybe you can develop a path to that as well. 214 00:11:21,800 --> 00:11:27,520 Yeah, And I think even just like being conscientious of it and 215 00:11:27,520 --> 00:11:31,840 like thinking about is that something I want to optimize 216 00:11:31,840 --> 00:11:33,480 for? Like do I care? 217 00:11:33,480 --> 00:11:37,640 Or maybe the answer is no. Like I actually don't care to to 218 00:11:37,640 --> 00:11:38,920 do that. Like I'm not stressed about 219 00:11:38,920 --> 00:11:41,160 student loans or I don't have student loans and like I 220 00:11:41,160 --> 00:11:44,880 actually want to take the time out of undergrad to explore and 221 00:11:44,880 --> 00:11:47,280 like try a lot of different paths then that's great. 222 00:11:47,440 --> 00:11:51,120 But this is just like. More security for the insecure 223 00:11:51,120 --> 00:11:53,880 way that I think. But I will say, you know what, 224 00:11:53,880 --> 00:11:56,280 here's another me revealing and being vulnerable, another 225 00:11:56,280 --> 00:11:59,320 insecure way. I know people who have studied 226 00:11:59,320 --> 00:12:02,720 art history or have studied political science more like 227 00:12:02,720 --> 00:12:06,920 liberal artsy majors in college and then started working at 228 00:12:06,920 --> 00:12:09,440 McKinsey or started working in investment banks, like they were 229 00:12:09,440 --> 00:12:12,320 able to do that as well. I know I like, I just don't 230 00:12:12,320 --> 00:12:15,480 think I'm that smart that I'm able to do that quite honestly, 231 00:12:16,040 --> 00:12:18,000 like or. It's not all about smart, but 232 00:12:18,000 --> 00:12:21,080 sometimes it's about access. It may be well, I just know that 233 00:12:21,080 --> 00:12:24,440 like I was not in a position to do that, which is why I needed 234 00:12:24,440 --> 00:12:28,200 more of like a bulletproof, foolproof plan that I was like, 235 00:12:28,240 --> 00:12:30,960 I'm going to be an engineer. At the time people were hiring 236 00:12:30,960 --> 00:12:33,640 for engineering and in tech press, product managers. 237 00:12:33,840 --> 00:12:37,320 This is what I know is going to be a bit more certain. 238 00:12:37,600 --> 00:12:39,480 And so that's why I chose that path. 239 00:12:39,680 --> 00:12:43,240 Yeah, you were doing everything you could to maximize your 240 00:12:43,400 --> 00:12:44,560 chances. Exactly. 241 00:12:45,240 --> 00:12:48,640 So now you guys know that's some of the background of how we even 242 00:12:48,640 --> 00:12:52,240 thought about like what to study and how to land our first job 243 00:12:52,240 --> 00:12:54,560 out of school to set us up on this path. 244 00:12:54,720 --> 00:12:56,920 So that, you know, the next things that we're going to be 245 00:12:56,920 --> 00:12:59,800 talking about in terms of like beginner, intermediate and 246 00:12:59,800 --> 00:13:03,480 advanced tactics are kind of based off of like having 247 00:13:03,480 --> 00:13:07,840 expendable income and also having a mindset of like, how do 248 00:13:07,840 --> 00:13:14,440 we guarantee savings, guarantee a more like stress free 249 00:13:14,840 --> 00:13:16,880 financial life over the next? Decade. 250 00:13:17,280 --> 00:13:20,680 OK, so Sheree, let's say you're at the point now where you've 251 00:13:20,800 --> 00:13:22,640 actually gotten the first job out of school. 252 00:13:23,040 --> 00:13:25,720 What are some of the things that you should look out for or 253 00:13:25,720 --> 00:13:29,120 definitely do? So the first thing we're going 254 00:13:29,120 --> 00:13:32,680 to talk about, and this is like the very beginner recommendation 255 00:13:32,680 --> 00:13:35,560 for us is basically it's free money. 256 00:13:35,560 --> 00:13:40,400 Free money is 4 O1 KS. If you have a job out of school, 257 00:13:40,680 --> 00:13:45,160 especially at a big company, they often have 401K matching 258 00:13:45,400 --> 00:13:47,840 and basically This is Money that you're putting away for your 259 00:13:47,840 --> 00:13:51,040 retirement. You put it away now, you know, 260 00:13:51,120 --> 00:13:53,640 when you're not retired, when you're working, so you can take 261 00:13:53,640 --> 00:13:57,040 the money out for when you are retired, when you're, you know, 262 00:13:57,040 --> 00:14:01,240 62 to 65 or possibly older. There's different time periods 263 00:14:01,240 --> 00:14:03,880 you can take it out. But basically, I think people 264 00:14:03,880 --> 00:14:05,760 don't take advantage of this enough because they're not 265 00:14:05,760 --> 00:14:09,240 thinking about the future in a way that is accessible. 266 00:14:09,240 --> 00:14:11,560 You're like, oh, OK, 65 year old me. 267 00:14:11,560 --> 00:14:14,480 You're like, I don't think about that Now, you know, I'm 2122 268 00:14:14,480 --> 00:14:16,200 years old now. Like, why am I saving for the 269 00:14:16,200 --> 00:14:17,960 future? But I say that this is free 270 00:14:17,960 --> 00:14:20,720 money because many big companies have matching programs. 271 00:14:21,080 --> 00:14:23,760 So what this means is that, you know, you go inside the portal, 272 00:14:23,960 --> 00:14:27,680 you have to set it up so that when your paycheck comes every 273 00:14:27,680 --> 00:14:31,160 two weeks, it automatically takes a portion of that out and 274 00:14:31,160 --> 00:14:34,000 it puts it into your 4O1K. So you're basically 275 00:14:34,040 --> 00:14:36,280 automatically taking it out and you have some money put into 276 00:14:36,280 --> 00:14:38,240 your retirement. That amount of money. 277 00:14:38,360 --> 00:14:40,960 Some companies do really great matching. 278 00:14:40,960 --> 00:14:42,840 They're like whatever money you put in, we'll put in the same 279 00:14:42,840 --> 00:14:44,920 amount. That's what I had at my company, 280 00:14:45,040 --> 00:14:47,120 which was fantastic. And that's why it's usually 281 00:14:47,120 --> 00:14:49,040 referred to as like free money with these matching. 282 00:14:49,040 --> 00:14:52,560 Programs up to like a certain percentage, usually like up to 283 00:14:52,560 --> 00:14:55,080 3% or something like. That exactly some other programs 284 00:14:55,080 --> 00:14:58,160 that they have are like will match up to, you know, some sort 285 00:14:58,200 --> 00:15:00,320 of X percent. So you guys just have to do some 286 00:15:00,320 --> 00:15:03,240 research to figure out what your program is if you work at a big 287 00:15:03,240 --> 00:15:06,520 company. But I would say so many people 288 00:15:06,520 --> 00:15:09,080 miss out on this because they they don't think about 289 00:15:09,080 --> 00:15:11,760 retirement and they don't think about the future because it is, 290 00:15:12,160 --> 00:15:14,640 you know, I don't know, 40 years. 291 00:15:14,640 --> 00:15:18,480 Away and then just to sort of set the basic context, the 292 00:15:18,480 --> 00:15:20,920 reason why you would even want to contribute to the four O 1K 293 00:15:20,920 --> 00:15:24,880 program through your company is because the money that you put 294 00:15:24,880 --> 00:15:28,360 into the four O 1K is contributed pre tax. 295 00:15:28,600 --> 00:15:33,160 So let's say you put in, you know, $100,000 over the course 296 00:15:33,160 --> 00:15:38,000 of however many years instead of if you receive that money as 297 00:15:38,000 --> 00:15:40,960 your income, usually you would have to pay like say $30,000 in 298 00:15:40,960 --> 00:15:43,160 taxes. But if you had put all of that 299 00:15:43,160 --> 00:15:47,120 into your 4O1K, then all of that 100,000 goes straight into the 300 00:15:47,120 --> 00:15:49,640 investments and it sort of grows. 301 00:15:49,640 --> 00:15:52,480 And then you only get taxed when you actually take the money out 302 00:15:52,480 --> 00:15:55,080 post retirement. And the thinking is that after 303 00:15:55,080 --> 00:15:58,160 you've retired, you aren't really making money, so that you 304 00:15:58,160 --> 00:16:01,640 pay a lower tax rate in the future and you've had time for 305 00:16:01,640 --> 00:16:05,600 all of those investments to compound and you've invested 306 00:16:05,600 --> 00:16:09,880 more money than you would have were it not in a 401K. 307 00:16:10,280 --> 00:16:13,000 That's a really, really good explanation. 308 00:16:13,040 --> 00:16:14,880 Thank you. That it was super clear. 309 00:16:15,120 --> 00:16:18,040 And I think I would double underline the word compound. 310 00:16:18,440 --> 00:16:20,760 Yeah. So the power of compounding, 311 00:16:21,320 --> 00:16:23,960 it's amazing to talk about retirement funds because that is 312 00:16:23,960 --> 00:16:26,720 40 years in the future. And my brain can't even 313 00:16:26,800 --> 00:16:30,360 comprehend the power of compounding over time. 314 00:16:30,480 --> 00:16:34,400 But think about like, your money over 40 years, literally in 315 00:16:34,400 --> 00:16:37,840 investments, Like you just leave it in there and ostensibly, 316 00:16:37,840 --> 00:16:40,920 like, you know, your investments will grow year over year. 317 00:16:41,120 --> 00:16:42,000 How? However many? 318 00:16:42,440 --> 00:16:43,160 Yeah. What is it? 319 00:16:43,160 --> 00:16:45,960 The 10% or whatever. Yeah, it's the average. 320 00:16:45,960 --> 00:16:49,240 I've never really thought about it that closely to be honest, 321 00:16:49,240 --> 00:16:51,720 but it is actually really helpful that you're kind of like 322 00:16:51,720 --> 00:16:55,920 putting in 30% more money that can then compound over time. 323 00:16:56,880 --> 00:16:57,920 That's cool. Yeah. 324 00:16:58,160 --> 00:17:00,720 And you don't really. Have to manage it either so the 325 00:17:00,720 --> 00:17:03,360 reason why this is in the beginner section is that 326 00:17:03,560 --> 00:17:07,880 basically all you need to do if you haven't already if you want 327 00:17:07,880 --> 00:17:10,319 this is not financial advice you you guys can do whatever you. 328 00:17:10,319 --> 00:17:13,240 Want I guess what we did, what we did and we are pleased about. 329 00:17:14,560 --> 00:17:18,079 Is that just start putting money into your 401K through your 330 00:17:18,079 --> 00:17:20,839 work? Just configure it once and then 331 00:17:20,839 --> 00:17:23,760 it'll be taken out of your paycheck automatically. 332 00:17:23,760 --> 00:17:24,680 You don't have to think about it. 333 00:17:24,680 --> 00:17:27,319 Yeah, well. What percentage contribution did 334 00:17:27,319 --> 00:17:30,480 you put? So I actually don't remember 335 00:17:30,480 --> 00:17:31,760 what percentage contribution I did. 336 00:17:31,760 --> 00:17:33,320 But the way I don't remember either, but it doesn't. 337 00:17:33,320 --> 00:17:34,640 Matter. The way that I thought about it 338 00:17:34,640 --> 00:17:36,680 was that I maxed it out every single year. 339 00:17:36,680 --> 00:17:38,880 I maxed it out so that I would do. 340 00:17:38,880 --> 00:17:41,680 You maxed out the match. I maxed out the match 341 00:17:42,000 --> 00:17:48,480 contribution for MY4O1K which I think ended up maxing out. 342 00:17:49,080 --> 00:17:52,160 Like however much money you can contribute to your 4O1K. 343 00:17:52,240 --> 00:17:56,560 And it doesn't matter if you do that, if you choose to have the 344 00:17:56,560 --> 00:17:59,240 most amount of money taken out of your paycheck for a short 345 00:17:59,240 --> 00:18:01,520 amount of time or you kind of drip it over time. 346 00:18:01,560 --> 00:18:05,520 It really depends on your lifestyle, your needs and your 347 00:18:05,520 --> 00:18:09,080 need for liquidity in your life. If it's taken out even before 348 00:18:09,080 --> 00:18:12,000 you get your paycheck, then you kind of don't miss it because 349 00:18:12,040 --> 00:18:14,280 you don't realize that it was even there. 350 00:18:14,880 --> 00:18:17,920 I think I had an ex-boyfriend who worked at the same company 351 00:18:17,920 --> 00:18:21,640 as me and we talked about this, about personal finance, and his 352 00:18:21,640 --> 00:18:25,440 strategy was to Max out the contribution over a short period 353 00:18:25,440 --> 00:18:29,480 of time such that his like salary, his take home salary was 354 00:18:29,480 --> 00:18:33,600 like $1000 a month. He's just like, let me just get 355 00:18:33,600 --> 00:18:37,920 it over with, you know? OK, how did he pay for his like? 356 00:18:37,920 --> 00:18:40,800 He had like, he had like savings and other stuff otherwise to use 357 00:18:40,880 --> 00:18:43,560 from, but he's just like, let me just do this, you know, it was 358 00:18:43,560 --> 00:18:45,520 just, I don't, that was his strategy where I dripped it out 359 00:18:45,520 --> 00:18:48,720 over time. He wanted the Max Payne he 360 00:18:48,720 --> 00:18:50,520 wanted. He wanted the Max Payne. 361 00:18:50,640 --> 00:18:52,880 I don't know. But it just sucks to see your 362 00:18:52,880 --> 00:18:55,560 paycheck is like $700. Like, I don't know. 363 00:18:56,040 --> 00:18:59,120 I wouldn't want that. Yeah, OK. 364 00:18:59,520 --> 00:19:02,600 And next, we'll be talking about the intermediate section of this 365 00:19:02,600 --> 00:19:05,960 podcast and the most impactful book that we read that changed 366 00:19:05,960 --> 00:19:10,160 our financial thinking forever. And Gene actually put me on this 367 00:19:10,160 --> 00:19:11,000 book. Thank you. 368 00:19:11,360 --> 00:19:15,280 It is Remit Sethi's book called I Will Teach You to Be Rich, 369 00:19:15,360 --> 00:19:18,240 which is a very catchy, catchy title actually. 370 00:19:18,240 --> 00:19:20,200 Should we make out the title of our podcast? 371 00:19:20,480 --> 00:19:22,400 Sure. Of our podcast episode. 372 00:19:22,400 --> 00:19:25,760 I mean, it's funny because the the the title is very catchy. 373 00:19:25,760 --> 00:19:28,160 It's not really about teaching you how to be rich. 374 00:19:28,160 --> 00:19:32,200 It's more about teaching you to have like a very healthy, 375 00:19:33,360 --> 00:19:36,960 healthy habits to then I guess eventually be rich through 376 00:19:36,960 --> 00:19:40,320 compounding and making money of your own that you then allocate 377 00:19:40,320 --> 00:19:42,680 correctly. Honestly, that book changed my 378 00:19:42,680 --> 00:19:45,720 life. Like I don't know who told me to 379 00:19:45,720 --> 00:19:49,600 read that book, but or how I discovered it, but I read it and 380 00:19:49,600 --> 00:19:53,400 there are things that I implemented that, you know, this 381 00:19:53,400 --> 00:19:58,520 was like 15 years ago that are still my go to standard today. 382 00:19:58,520 --> 00:20:01,840 Like for example. The OK, the good thing about the 383 00:20:01,840 --> 00:20:05,080 book and obviously we encourage you guys to read it, is that it 384 00:20:05,080 --> 00:20:08,840 had very directive specific things to do. 385 00:20:08,840 --> 00:20:12,240 So one of the things that I remember it said open a Charles 386 00:20:12,240 --> 00:20:14,200 Schwab checking account because 1. 387 00:20:14,200 --> 00:20:17,040 You can do it online, just, you know, you don't have to go in 388 00:20:17,040 --> 00:20:20,280 person. And then two, the ATM card that 389 00:20:20,280 --> 00:20:23,680 you get gives you refunds for any ATM fees. 390 00:20:23,680 --> 00:20:27,600 It was very tactical, yes, like it told you, like very random 391 00:20:27,600 --> 00:20:28,600 tidbits. Yeah. 392 00:20:28,600 --> 00:20:33,120 And it was like open a Vanguard fund specifically like put your 393 00:20:33,120 --> 00:20:37,480 money in like this type of fund in Vanguard. 394 00:20:37,840 --> 00:20:40,320 I love that. Well, I think it's also really 395 00:20:40,320 --> 00:20:44,560 important that like these little actions compound over time. 396 00:20:44,560 --> 00:20:46,880 Like we're going to keep talking about the power of compounding, 397 00:20:47,160 --> 00:20:51,240 but also like to be rich and to be wealth and to be self-made 398 00:20:51,240 --> 00:20:53,840 millionaires. Like there is no silver bullet. 399 00:20:53,840 --> 00:20:55,560 Maybe I should have said this in the beginning, but there is no 400 00:20:55,560 --> 00:20:57,920 silver bullet where like we got rich overnight. 401 00:20:57,960 --> 00:21:02,440 Like everything we do is building and accruing wealth 402 00:21:02,480 --> 00:21:04,960 over a long period of time. Wealth. 403 00:21:05,880 --> 00:21:09,120 And I think it's also just like, feeling like you kind of like, 404 00:21:09,120 --> 00:21:12,400 did the right thing and feeling like you have, like, a strong 405 00:21:12,440 --> 00:21:13,680 foundation. Yeah. 406 00:21:14,000 --> 00:21:17,320 Like I feel like that book really helped provide some just 407 00:21:17,320 --> 00:21:20,080 really key steps when like after graduation I was like. 408 00:21:20,080 --> 00:21:21,680 What do I what? Do I do? 409 00:21:21,680 --> 00:21:23,240 I have no idea. Yeah. 410 00:21:24,000 --> 00:21:24,880 I think. Thank you. 411 00:21:25,120 --> 00:21:29,360 Thank you. Also, I think the biggest take 412 00:21:29,360 --> 00:21:33,480 away from from that book for me was the section on budgeting. 413 00:21:33,560 --> 00:21:37,520 OK, And we'll go through a breakdown of like, how to think 414 00:21:37,520 --> 00:21:40,480 about budgeting, but I want to start first about talking about 415 00:21:40,480 --> 00:21:44,120 the mindset of budgeting. For me, when I was a new grad, I 416 00:21:44,120 --> 00:21:46,960 was just like paralyzed for months. 417 00:21:46,960 --> 00:21:49,120 And I actually talked about this in therapy because I didn't have 418 00:21:49,120 --> 00:21:51,520 a good relationship with money. I was like scared to spend money 419 00:21:51,640 --> 00:21:54,000 because I didn't know how much money I was spending and how 420 00:21:54,000 --> 00:21:57,600 much I could spend, which it was really useful. 421 00:21:57,600 --> 00:22:00,280 So like I would kind of lived a lifeout of fear where I'd be 422 00:22:00,280 --> 00:22:02,480 like, oh, I don't want to go to that event because I guess I'll 423 00:22:02,480 --> 00:22:04,480 have to Uber. But like the Uber's like $30. 424 00:22:04,480 --> 00:22:06,000 Can I afford that right now? You know what I mean? 425 00:22:06,000 --> 00:22:07,520 Like it's like sent me into a spiral. 426 00:22:07,520 --> 00:22:09,240 But you made like so much money out of. 427 00:22:09,280 --> 00:22:12,080 Undergrad exactly like that was the bad part. 428 00:22:12,080 --> 00:22:16,320 I just like didn't know where the limit was because I didn't 429 00:22:16,320 --> 00:22:18,760 do some calculate like initial calculations. 430 00:22:19,160 --> 00:22:21,920 It like came at me all at once because in undergrad I had this 431 00:22:21,920 --> 00:22:23,600 mindset. Where like I had, you didn't 432 00:22:23,640 --> 00:22:23,920 have. Money. 433 00:22:23,920 --> 00:22:25,400 I didn't have money. And I was like, Oh my God, can I 434 00:22:25,400 --> 00:22:26,800 spend that money on a sweet green salad? 435 00:22:26,800 --> 00:22:28,480 Oh, wait, you know what I mean? Or like, should I go to the 436 00:22:28,480 --> 00:22:30,800 dining hall? Like kind of like that mindset 437 00:22:30,800 --> 00:22:33,360 which carried over, but it didn't make sense now that I did 438 00:22:33,360 --> 00:22:34,280 make money. Right. 439 00:22:34,280 --> 00:22:36,160 It was an outdated mindset. Exactly. 440 00:22:36,160 --> 00:22:40,640 It was like scarcity in college, which didn't need to be, I 441 00:22:41,000 --> 00:22:42,560 didn't need to have that mindset after school. 442 00:22:43,080 --> 00:22:45,600 So I think the thing that was really important was to then be 443 00:22:45,600 --> 00:22:47,880 like, this is how much I'm spending. 444 00:22:48,120 --> 00:22:50,760 This is how much I and spend. This is how much should go into 445 00:22:50,760 --> 00:22:52,240 savings. How much should go into four O 446 00:22:52,240 --> 00:22:54,920 1K? My mindset when it came to like 447 00:22:55,160 --> 00:23:00,520 budgeting out of school is that I didn't really do it. 448 00:23:00,520 --> 00:23:05,000 I think I was also like avoidant about money, aside from like 449 00:23:05,000 --> 00:23:08,040 these few things that roommate Sethi said to do in the book. 450 00:23:08,040 --> 00:23:11,120 So I like did those things. And then other than that, I was 451 00:23:11,120 --> 00:23:13,680 kind of like avoidant. Like I didn't want to think 452 00:23:13,680 --> 00:23:17,560 about money, but luckily I had done the step where I kind of 453 00:23:17,560 --> 00:23:21,960 tried to optimize for a job that was lucrative out of school. 454 00:23:22,080 --> 00:23:24,640 So like, I definitely had enough money to like cover all my 455 00:23:24,640 --> 00:23:29,600 expenses and more, but I just never like thought about that. 456 00:23:29,600 --> 00:23:33,120 So I never budgeted. I never was like, can I afford 457 00:23:33,120 --> 00:23:34,040 this? Can I afford that? 458 00:23:34,040 --> 00:23:36,880 But I was pretty frugal because I was like similar to you. 459 00:23:36,880 --> 00:23:40,720 I was, and also pretty much all I did was work and like 460 00:23:40,720 --> 00:23:43,720 occasionally go out to dinner. But you also had many dinners 461 00:23:43,720 --> 00:23:46,880 covered by work, too, yes. So like you didn't have to like 462 00:23:47,200 --> 00:23:48,080 think about that. Yeah. 463 00:23:48,080 --> 00:23:50,640 And like the gym was at work. I think we paid like a nominal 464 00:23:50,640 --> 00:23:54,480 free fee every month for it. Like I just didn't really have 465 00:23:54,480 --> 00:23:56,200 that many expenses. You don't have that many 466 00:23:56,200 --> 00:23:58,160 expenses when you work 90 hours a week. 467 00:23:58,720 --> 00:24:01,480 Like that's just and and like you're not really travelling 468 00:24:01,480 --> 00:24:03,800 anywhere because you're working on the weekends too, right? 469 00:24:03,880 --> 00:24:07,120 You know, so you didn't. Have the freedom of leisure time 470 00:24:08,160 --> 00:24:11,840 yeah, to even spend your. Money, have time to spend money. 471 00:24:12,960 --> 00:24:15,080 And then like occasionally, I don't know, like we would go out 472 00:24:15,080 --> 00:24:18,280 to clubs, but like I was a girl. So then like this was 15 years 473 00:24:18,280 --> 00:24:20,960 ago, but so like, you know, someone would have a table and 474 00:24:20,960 --> 00:24:23,080 then you'd just be like at your friend's table. 475 00:24:23,080 --> 00:24:25,560 And like, I wasn't spending that much money to be honest. 476 00:24:26,640 --> 00:24:27,640 So I didn't really think about it. 477 00:24:27,640 --> 00:24:31,520 So it suited my money avoidant mindset at the time. 478 00:24:32,160 --> 00:24:34,200 I was avoidant too. Avoidant is such a good word 479 00:24:34,200 --> 00:24:36,840 here, but I just didn't want to know because I was just scared 480 00:24:37,120 --> 00:24:40,320 to know that if I was spending a lot of money, I was like scared 481 00:24:40,320 --> 00:24:41,760 I would get in trouble with myself. 482 00:24:41,760 --> 00:24:44,760 So I just like. So I just avoided it for maybe 483 00:24:44,760 --> 00:24:48,400 like 5 months but it kind of like drove me crazy because I 484 00:24:48,400 --> 00:24:50,440 was just like. Oh, you never talked to me about 485 00:24:50,440 --> 00:24:52,680 it. Yeah, I talked to my therapist 486 00:24:52,680 --> 00:24:53,800 about it. Oh. 487 00:24:54,200 --> 00:24:56,880 Why didn't you ask me? Because I was afraid I was going 488 00:24:56,880 --> 00:24:58,280 to get yelled. At by me, yeah. 489 00:24:58,280 --> 00:25:00,360 For what? Reprimanded for not budgeting. 490 00:25:00,880 --> 00:25:05,000 Oh. So this is the breakdown, this 491 00:25:05,000 --> 00:25:07,680 is a guideline. Obviously the numbers are a bit 492 00:25:07,680 --> 00:25:11,760 squishy and you can make it your own, but basically this is what 493 00:25:11,760 --> 00:25:15,680 the the budget breakdown is at 50% goes into fixed cost. 494 00:25:15,680 --> 00:25:19,640 This is like how much you're spending every month on like 495 00:25:19,640 --> 00:25:23,840 rent and food, your car payment, things you need to live. 496 00:25:23,840 --> 00:25:28,400 So you know, after you have your take home on salary, 4050% can 497 00:25:28,400 --> 00:25:32,080 go to your fixed costs. And also, you know, these are 498 00:25:32,080 --> 00:25:33,720 fixed costs like utilities, student loans. 499 00:25:33,720 --> 00:25:35,720 These are generally things you can't really change. 500 00:25:35,960 --> 00:25:38,120 I mean, you can get cheaper housing Gene and I always 501 00:25:38,120 --> 00:25:40,280 optimize for cheap, cheap housing. 502 00:25:41,320 --> 00:25:45,560 So, you know, take a look at where where things can flex. 10% 503 00:25:45,560 --> 00:25:49,560 should go into your investments. This is like your 4O1K or your 504 00:25:49,560 --> 00:25:53,120 index funds. Usually 5 to 10% can go into 505 00:25:53,160 --> 00:25:55,600 savings. This is if you want to travel or 506 00:25:55,600 --> 00:25:59,760 you have an emergency fund or if you're saving for, you know, a 507 00:25:59,760 --> 00:26:02,240 wedding or a big thing in the future that's coming up. 508 00:26:02,480 --> 00:26:05,760 And the last category, this is what remit Sethi talks about. 509 00:26:05,760 --> 00:26:08,960 And what I really took away is guilt free spending. 510 00:26:09,200 --> 00:26:11,760 Like I spent with so much guilt because I just like didn't know 511 00:26:11,760 --> 00:26:13,440 how much I was spending and if I was going over. 512 00:26:13,640 --> 00:26:19,480 But this is around 20 to 25%. This is like you can spend on 513 00:26:19,480 --> 00:26:22,240 going to the spa, getting your matcha, getting your nails done 514 00:26:22,360 --> 00:26:25,160 without feeling bad because you know, it's all within this 515 00:26:25,160 --> 00:26:29,880 bucket of like this is spending for fun and for leisure that I 516 00:26:29,880 --> 00:26:32,840 can just use up. I think probably I was a little 517 00:26:32,840 --> 00:26:35,440 hyperbolic in saying that I like never budget in my life. 518 00:26:35,440 --> 00:26:38,880 I think what I probably, I think what I did at the time is I like 519 00:26:38,880 --> 00:26:43,000 looked at these guidelines and I like assessed my own personal 520 00:26:43,000 --> 00:26:46,360 situation like once or twice and I was like, OK, I'm doing fine 521 00:26:46,360 --> 00:26:49,440 within these guidelines. And then I kind of just never 522 00:26:49,440 --> 00:26:51,600 thought about it again. And I was like, OK, I'm making 523 00:26:51,600 --> 00:26:56,560 enough money so that my natural inclinations and how I naturally 524 00:26:56,560 --> 00:27:01,360 spend money is not exceeding these guidelines. 525 00:27:01,360 --> 00:27:03,760 So like I'm good. And then I just never really 526 00:27:03,920 --> 00:27:06,640 thought about it. But to be honest, I could have 527 00:27:06,640 --> 00:27:10,600 been much more nice and to myself and like permissive in my 528 00:27:10,600 --> 00:27:14,840 spending because I love shopping, I love fashion and I 529 00:27:14,840 --> 00:27:18,520 like, love spending on clothes. And I think I could have, had I 530 00:27:18,520 --> 00:27:23,200 had the time, just done more shopping and just like enjoyed 531 00:27:23,200 --> 00:27:25,920 myself more I could. Have enjoyed life a bit more out 532 00:27:25,920 --> 00:27:28,720 of school. Yeah, like one of my friends 533 00:27:28,720 --> 00:27:30,560 bought a couch. This is maybe when I was like 534 00:27:30,560 --> 00:27:33,800 2324 and still kind of in that scarcity mindset. 535 00:27:34,000 --> 00:27:36,440 I, you know, and then he bought a couch and he's like, yeah, I 536 00:27:36,440 --> 00:27:39,440 was like 2500. I was like, huh, like you paid 537 00:27:39,440 --> 00:27:42,640 22 / 2000 dollars for a couch. I was like, not everyone gets 538 00:27:42,640 --> 00:27:44,040 their couch from Facebook Marketplace. 539 00:27:44,360 --> 00:27:47,640 Like, didn't you have a couch? Yeah, from Facebook Marketplace 540 00:27:49,120 --> 00:27:52,760 that we paid $80.00 for 80. Dollars it. 541 00:27:52,880 --> 00:27:57,000 Was like a used used couch. I guess that's a great deal 542 00:27:57,000 --> 00:27:58,200 though. Did you like the couch? 543 00:27:58,200 --> 00:28:03,280 No, it was smelly and uncomfortable and so. 544 00:28:03,560 --> 00:28:06,440 But The thing is, your roommates also were in the same mindset as 545 00:28:06,440 --> 00:28:08,840 you, even though they were. Doing the same thing. 546 00:28:08,840 --> 00:28:11,120 Just as well. We were just so. 547 00:28:11,680 --> 00:28:13,920 They were in the same. Same scarcity mindset. 548 00:28:13,960 --> 00:28:15,480 Yeah, we were, we were in the same boat. 549 00:28:15,480 --> 00:28:19,320 We've had the same experiences. It was kind of crazy that like I 550 00:28:19,320 --> 00:28:22,800 could have had nicer things. I mean, you know, looking back 551 00:28:22,800 --> 00:28:25,320 on it now or just enjoyed a bit more, but obviously we are where 552 00:28:25,320 --> 00:28:27,160 we are. It's just so funny because your 553 00:28:27,160 --> 00:28:29,280 roommates at the time worked in investment banking. 554 00:28:29,280 --> 00:28:32,120 And in Facebook, yeah, right. And in tech, so like, and we got 555 00:28:32,120 --> 00:28:34,400 like a stinky couch and we got like tables and stuff from 556 00:28:34,400 --> 00:28:38,640 Facebook marketplaces for $10. Like our TV stand was an IKEA 557 00:28:38,640 --> 00:28:41,560 table that was messed up. It's like scratched all over for 558 00:28:41,560 --> 00:28:44,320 $10. I guess those things weren't 559 00:28:44,320 --> 00:28:46,240 that important to you guys at the time it. 560 00:28:46,240 --> 00:28:49,400 Wasn't, but I was just like, I guess we didn't need to do that 561 00:28:49,400 --> 00:28:51,600 given how much we were spending, but it was our first place out 562 00:28:51,600 --> 00:28:52,480 of school. Like it's not. 563 00:28:52,600 --> 00:28:54,360 I guess it's not meant to be nice, but now I'm just like, 564 00:28:54,360 --> 00:28:57,800 what the hell, like. I mean, that's, that's fine. 565 00:28:57,800 --> 00:29:00,040 I don't. See, nothing, nothing matched. 566 00:29:00,360 --> 00:29:02,880 I guess another thing was that like something that I'm very 567 00:29:02,880 --> 00:29:05,600 proud of is that all my time living in San Francisco, I 568 00:29:05,600 --> 00:29:09,120 didn't own a car and I made use of the public transit in San 569 00:29:09,120 --> 00:29:11,840 Francisco. Well, because it served you. 570 00:29:12,080 --> 00:29:15,240 It served me and I don't know, a lot of people complain about it, 571 00:29:15,240 --> 00:29:17,960 but I'm just like, you can use public transit and SF the way 572 00:29:17,960 --> 00:29:20,800 that you would in New York City. Obviously it's not as good, but 573 00:29:20,800 --> 00:29:23,560 like I'm really proud that I did that and I saved money. 574 00:29:25,120 --> 00:29:29,320 Cherie's personal story time. Cool story, bro. 575 00:29:30,320 --> 00:29:32,640 OK, she's like I took the bus once. 576 00:29:32,920 --> 00:29:33,880 No, I. Took the bus every. 577 00:29:33,880 --> 00:29:35,520 Single day to work. I know so did I. 578 00:29:35,520 --> 00:29:39,080 I took the 22 and the mission was just like a crazy ass line I 579 00:29:39,080 --> 00:29:42,080 think I took. A38R Rapid. 580 00:29:42,120 --> 00:29:44,120 I think that was what it was called when I lived in Pack 581 00:29:44,120 --> 00:29:49,520 Heights, an upgrade from my life in Noe Valley. 582 00:29:52,080 --> 00:29:54,280 She's sick. It's a joke because both of 583 00:29:54,280 --> 00:29:56,640 those are like, beautiful. Really nice place. 584 00:29:56,640 --> 00:30:00,400 Neighborhoods in San Francisco. And the last section is our 585 00:30:00,400 --> 00:30:03,600 advanced section, and we're gonna just drop some like 586 00:30:03,600 --> 00:30:05,880 terminology that you guys should be familiar with. 587 00:30:06,120 --> 00:30:08,000 This is obviously for the advanced folks. 588 00:30:08,000 --> 00:30:10,560 Once you've figured out your 41K, once you've figured out 589 00:30:10,560 --> 00:30:13,880 your budgeting, these are things that Gene and I have done, but 590 00:30:13,960 --> 00:30:17,200 they're a bit more complex and we just want you to know about 591 00:30:17,200 --> 00:30:20,600 them and you can look into them, like do a Google search and 592 00:30:20,600 --> 00:30:22,280 learn more about them if they apply to you. 593 00:30:22,520 --> 00:30:24,720 So the first thing is a backdoor Roth. 594 00:30:24,840 --> 00:30:27,160 There's also a mega backdoor Roth. 595 00:30:27,440 --> 00:30:30,640 There's also HSA, which is a health savings account. 596 00:30:30,680 --> 00:30:33,120 Look these up if you're interested in learning more 597 00:30:33,120 --> 00:30:35,200 about them. And then what I want to talk 598 00:30:35,200 --> 00:30:38,400 about is the Super, super advanced stuff. 599 00:30:38,640 --> 00:30:43,040 And these are actually things that I myself and have not done, 600 00:30:43,440 --> 00:30:46,880 but I recently learned about and I wish I had done. 601 00:30:47,280 --> 00:30:50,200 So I'm going to kind of talk through them and then, you know, 602 00:30:50,200 --> 00:30:52,600 you could always look it up more and see if it applies to you. 603 00:30:52,960 --> 00:30:57,240 So this is more so for people who have worked at a company and 604 00:30:57,240 --> 00:31:02,760 have received a lot of Rs US or stocks in that specific company 605 00:31:02,760 --> 00:31:06,200 because a lot of companies, especially in tech, a lot of the 606 00:31:07,360 --> 00:31:11,600 compensation is through stock, not just, you know, cash income. 607 00:31:12,600 --> 00:31:16,160 And if you are in that case, a lot of times you have a very 608 00:31:16,160 --> 00:31:20,480 highly concentrated equity portfolio where a vast amount of 609 00:31:20,480 --> 00:31:24,840 your net worth is in just one share, which is not a good 610 00:31:24,840 --> 00:31:29,160 position to be in. And again, yeah, diversify. 611 00:31:29,160 --> 00:31:31,080 So I'm telling you guys all these things because this is 612 00:31:31,080 --> 00:31:35,960 what I freaking wish I had done. And I recently learned them 613 00:31:35,960 --> 00:31:40,280 through a friend of mine who is who leads a private net worth 614 00:31:40,280 --> 00:31:45,200 like PWM team at Morgan Stanley. And two of the things to be 615 00:31:45,200 --> 00:31:48,200 aware of, the first one is called an exchange fund. 616 00:31:48,640 --> 00:31:51,360 The second thing is called a 0 cost collar. 617 00:31:51,360 --> 00:31:53,920 So I'll just kind of talk to them at a high level. 618 00:31:54,240 --> 00:31:58,080 The first one exchange fund. First of all, you need to have a 619 00:31:58,080 --> 00:32:03,480 good amount of equity. It's usually several million. 620 00:32:03,800 --> 00:32:06,600 I think sometimes the minimum is around like 5 million. 621 00:32:06,600 --> 00:32:08,560 So this is for people who have like a super concentrated 622 00:32:08,560 --> 00:32:10,560 portfolio. Actually, it happens a lot more 623 00:32:10,560 --> 00:32:12,360 than you think. If like think about all those 624 00:32:12,360 --> 00:32:17,560 people at NVIDIA like their net worth is probably like 90 plus 625 00:32:17,560 --> 00:32:19,800 percent if. You're an engineer at NVIDIA. 626 00:32:20,200 --> 00:32:22,400 This advice is for you. And if you're an engineer at 627 00:32:22,400 --> 00:32:25,880 NVIDIA, call. Me. 628 00:32:25,880 --> 00:32:28,840 That's funny. So the idea of an exchange fund 629 00:32:28,840 --> 00:32:33,320 is that you pool your shares with other people and then you 630 00:32:33,320 --> 00:32:37,720 somehow can buy into this diversified fund using your 631 00:32:37,720 --> 00:32:41,480 existing single equity shares and you don't have to sell your 632 00:32:41,480 --> 00:32:43,520 single equity. The thing is you have to keep 633 00:32:43,520 --> 00:32:46,520 your money in that fund for a minimum of, I think it's usually 634 00:32:46,520 --> 00:32:49,000 seven years. And then after that you can 635 00:32:49,000 --> 00:32:51,440 actually take the money out. But the benefit of this is you 636 00:32:51,440 --> 00:32:55,360 don't need to incur the like taxes of selling the shares that 637 00:32:55,360 --> 00:32:58,880 you own in order to diversify. You could like take those shares 638 00:32:58,880 --> 00:33:00,960 and just like diversify right away. 639 00:33:01,280 --> 00:33:04,600 So it's like as if you had invested the same dollar amount 640 00:33:04,600 --> 00:33:07,800 of those shares into a diversified portfolio. 641 00:33:07,800 --> 00:33:10,040 I understand that because that's kind of what I do now anyways. 642 00:33:10,200 --> 00:33:13,920 Is that when I have my stock I have to sell it and then 643 00:33:13,920 --> 00:33:16,520 reinvest it my on my on my? Own but you have to sell it. 644 00:33:16,520 --> 00:33:20,320 So 1 you have to pay those taxes and two, if those are short, 645 00:33:20,320 --> 00:33:23,080 short term gains, you have to pay like pretty high taxes, 646 00:33:23,080 --> 00:33:24,640 correct? As opposed to like, you know, if 647 00:33:24,640 --> 00:33:26,200 you held them for longer for long term gains. 648 00:33:26,240 --> 00:33:27,480 Yeah. So this allows you to kind of 649 00:33:27,480 --> 00:33:30,120 like circumvent that. So like I was asking, I was 650 00:33:30,120 --> 00:33:31,920 like, is this like a new invention? 651 00:33:31,920 --> 00:33:33,480 Like how come I've never heard of it? 652 00:33:33,680 --> 00:33:37,280 He's like, no, it's not new. So learn from my mistakes, my 653 00:33:37,280 --> 00:33:39,960 friends. My costly, costly mistake. 654 00:33:39,960 --> 00:33:45,280 Learn from our mistakes my NVIDIA friends who have over 655 00:33:45,280 --> 00:33:49,640 $5,000,000 in stock at concentrated stock. 656 00:33:49,640 --> 00:33:51,320 Is more is more common than you think. 657 00:33:51,440 --> 00:33:54,520 So, OK, so that one has sort of like a cost minimum to it or 658 00:33:54,520 --> 00:33:57,080 like a you know a floor of investment. 659 00:33:57,320 --> 00:34:02,200 The second method which is called 0 cost collars is it 660 00:34:02,200 --> 00:34:04,840 sounds a little bit complicated, but actually most people can do 661 00:34:04,840 --> 00:34:10,000 it as a retail investor as long as you have the ability to buy 662 00:34:10,000 --> 00:34:14,239 options, which most people do like even in your retail 663 00:34:14,239 --> 00:34:16,520 account. The idea behind that is that you 664 00:34:16,520 --> 00:34:19,560 buy a put option and you sell a call option. 665 00:34:19,920 --> 00:34:24,520 And what that does is it limits your downside for your your 666 00:34:24,520 --> 00:34:27,920 stock that you have like a lot of concentration in, but it also 667 00:34:27,920 --> 00:34:30,679 caps your upside. But importantly, it limits your 668 00:34:30,679 --> 00:34:32,960 downside. And the reason it's called a 0 669 00:34:32,960 --> 00:34:36,719 cost collar is that profit that you get from selling the call 670 00:34:36,719 --> 00:34:38,639 covers the cost of buying the put. 671 00:34:38,800 --> 00:34:41,800 So this seems like pretty advanced, like you have to be a 672 00:34:41,800 --> 00:34:44,600 bit more in the weeds and know what you're doing, which is why 673 00:34:44,600 --> 00:34:47,120 this is in the maybe ultra advanced category. 674 00:34:47,520 --> 00:34:50,600 So this is really good information for people who are 675 00:34:50,600 --> 00:34:54,080 like not afraid of their personal finances, want to take 676 00:34:54,120 --> 00:34:59,240 a more involved approach and also that involves Googling and 677 00:34:59,240 --> 00:35:01,160 learning more. Or if you have a financial 678 00:35:01,160 --> 00:35:05,600 advisor, you can talk to this about too and be like, hey, can 679 00:35:05,600 --> 00:35:08,600 we do this? Like we always say, information 680 00:35:08,600 --> 00:35:12,120 is power, right? These are things that I wish I 681 00:35:12,120 --> 00:35:17,760 had known so badly, like let's say 5-6 years ago because then I 682 00:35:17,760 --> 00:35:21,800 would have done a much better job of my own concentrated 683 00:35:21,800 --> 00:35:26,800 portfolio situation. But you live and you learn. 684 00:35:27,080 --> 00:35:32,040 And this is the lesson that I have learned that in the future 685 00:35:32,040 --> 00:35:35,640 we will apply for whatever situation that we're in and that 686 00:35:35,640 --> 00:35:39,080 we can share with you guys. And finally, just to wrap up 687 00:35:39,080 --> 00:35:42,720 this episode, reminder, we are not financial advisors. 688 00:35:42,960 --> 00:35:46,320 These are just interesting concepts that some of we've 689 00:35:46,320 --> 00:35:48,840 applied to our own lives and some that we wish we've applied. 690 00:35:48,880 --> 00:35:52,120 I did pass the series 7 and the series. 691 00:35:52,160 --> 00:35:55,200 But I have not and I would like to not be sued for this episode. 692 00:35:55,560 --> 00:35:57,880 OK also mine was like 15 years ago so it doesn't. 693 00:35:58,320 --> 00:36:00,960 I'm not qualified so. We're not financial advisors. 694 00:36:01,040 --> 00:36:04,680 Advisors, please Google everything to, you know, make 695 00:36:04,680 --> 00:36:06,840 your own decision. This is big sister advice. 696 00:36:06,840 --> 00:36:09,800 For you big sister advice, yeah. OK, so the key take away from 697 00:36:09,800 --> 00:36:12,960 this episode is that you don't need to come from money to build 698 00:36:12,960 --> 00:36:15,800 wealth, but you. Do need knowledge, discipline 699 00:36:15,800 --> 00:36:19,440 and to understand the trade? Offs and also just a reminder, 700 00:36:19,440 --> 00:36:24,120 money doesn't buy happiness but it can buy freedom and Peace of 701 00:36:24,120 --> 00:36:27,200 Mind. And so if you are interested in 702 00:36:27,200 --> 00:36:30,520 buying Remit Sethi's book, we're going to link it in our Amazon 703 00:36:30,520 --> 00:36:33,640 storefront, which is connected. You can find it in the 704 00:36:33,920 --> 00:36:37,360 description of this video. And I do want to, you know, give 705 00:36:37,360 --> 00:36:40,160 a quick plug, Shameless plug Gene and I have a matcha brand 706 00:36:40,320 --> 00:36:44,520 called Sisters Matcha. And while you're budgeting for 707 00:36:44,760 --> 00:36:47,680 your, you know, I can just spend money on things that make me 708 00:36:47,680 --> 00:36:49,960 happy. You can also and healthy and 709 00:36:49,960 --> 00:36:52,160 healthy. You can purchase sisters matcha, 710 00:36:52,160 --> 00:36:55,720 which is available on our website, also energetic and also 711 00:36:55,720 --> 00:36:57,000 LinkedIn the description of this video. 712 00:36:57,560 --> 00:37:00,880 So thank you guys so much for watching this episode. 713 00:37:00,880 --> 00:37:02,560 Hopefully it was helpful for you. 714 00:37:02,920 --> 00:37:06,440 Please remember to like, comment and subscribe and share this 715 00:37:06,440 --> 00:37:09,040 episode with someone who would also find it helpful. 716 00:37:09,520 --> 00:37:12,320 Yes, learn from our mistakes. Love you guys. 717 00:37:12,320 --> 00:37:13,360 Bye.