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F.I.R.E. for Dummies: Money Wisdom with Jackie
391 Plays9 months ago
🎙️ Welcome to the latest episode of the Forget About Money Podcast, hosted by David Baughier. In this fun, inspirational, and information-packed episode, we're joined by the amazing Jackie Cummings Koski, a renowned financial expert and author, as she dives into her exciting new book, "F.I.R.E. for Dummies." 🌟
Watch F.I.R.E. for Dummies on YouTube
🕒 Timestamps & Chapters:
0:00 Introduction
0:51 Writing "FIRE for Dummies"
2:01 Writing Experience: First Book
4:09 Origin Story of the Book Title
5:14 Simplifying Complex FIRE Topics
6:06 Pre-order Information
6:44 Research and Writing Process
8:19 Importance of Credentials
10:31 Collaboration with Technical Editor
11:00 Top Financial Challenges
16:41 Strategies for Financial Independence
21:04 Navigating Financial Information Overload
34:24 Impact of Financial Education
35:30 Teaching Financial Concepts
39:05 Mission of "FIRE for Dummies"
🔗 Links:
- Pre-order "F.I.R.E. for Dummies" on Amazon: [https://a.co/d/gYus4Xh]
- Check out Jackie's podcast "Catching Up to FI": [https://catchinguptofi.com/]
Follow Us:
- Twitter: @forgetaboutmoney
- Instagram: @forgetaboutmoney
- YouTube: @forgetaboutmoneypodcast
🌟 Don't forget to like, subscribe, and share this podcast for more insightful discussions on personal finance and the FIRE movement. Your support helps us bring more content like this to you!
Long Summary:
Today's episode is a treasure trove for anyone interested in the Financial Independence, Retire Early (FIRE) movement. Jackie Cummings Koski shares her journey in writing "FIRE for Dummies," giving us an exclusive behind-the-scenes look at her experiences, from the initial idea to the final manuscript. 📖✍️ She discusses the challenges and triumphs she faced, her collaboration with experts, and her mission to simplify complex financial concepts for everyone.
Jackie also reflects on her previous work, "Money Letters to My Daughter," describing it as a heartfelt project aimed at instilling financial wisdom in the next generation. She emphasizes the importance of starting financial education early and providing clear, accessible information to all.
Throughout the podcast, Jackie provides invaluable insights into navigating the overwhelming world of financial information, stressing the importance of reliable sources and tailored education. 🌍💡 She also shares practical advice on investment strategies, the importance of diversification, and making smart financial decisions for long-term independence.
Recommended
Transcript
Introduction to Jackie Cummings Koski
00:00:00
Speaker
Today we share the financial wisdom of Jackie Cummings Koski, passionate fire advocate and author of the much anticipated Fire for Dummies book. Here we go.
00:00:12
Speaker
Today's guest is renowned in personal finance and the fire movement. She is the author of Money Letters to My Daughter and the soon to be released Fire for Dummies book. This guest stands out for retiring at 49 with $1.3 million. She is currently the co-host of Catching Up to Fire podcast and we are fortunate to have her on the show today. Our guest is Jackie Cummings Koski.
Writing 'Fire for Dummies'
00:00:35
Speaker
Welcome. Hey David, I'm happy to be with you today. This is so much fun. How you doing?
00:00:40
Speaker
I am doing very well, always good to see you. How's that book coming along?
00:00:46
Speaker
Oh man, it's been a lot of work. But it's the labor of love. FIRE for dummies. FIRE stands for Financial Independence Retire Early. The main thing I'm not used to, especially since I retired, is like the deadlines. A deadline to have so many chapters written. A deadline to do the review and give feedback on the edits and things like that.
00:01:11
Speaker
You know, I'm glad to be working with Wiley. It's a very big publisher. And I can't wait to just bring this book to, you know, the fire community, people that are just starting their financial independence journey and people that maybe have never even heard of fire. So thus the book Fire for Dummies. I want to get it in the hands of people that is not even familiar with what fire even stands for. But when they see that it's about financial independence, retire early from someone like me that that did it.
00:01:41
Speaker
that is a professional that has credentials to really be clear about how to do certain things. What's the process? What do you do? And then infusing my perspectives on things and sharing some of my journey too. So I'm really excited about it. This is your second book, is that correct?
00:02:05
Speaker
Yeah, the first one was called Money Letters to My Daughter. Now that was a self published book and I started writing it really right after I, you know, had my light bulb moments and learned so much about personal finance. I wanted to share it all with my daughter. I started writing that when she was 14 and I wanted to give it to her as a graduation gift. So I didn't get it done until like she was 17, graduating from high school. So it took me two and a half years to write that book. And for this book, it's been,
00:02:35
Speaker
By the time it's all said and done, it'll end up being about eight to 12 months, which is really a short period of time in writing a book because there's so many steps. It's neat to see the differences and how it is working with a group of professionals that know what they're doing versus me just winging it on my own.
00:02:56
Speaker
You know, that was a labor of love as well, and it was a passion project. So that will forever be my greatest work. But now the fire for dummies, I'm hoping to get it in the hands of a lot more people.
00:03:07
Speaker
I remember the fire for dummies series. I would go into a Barnes and Noble or a borders and usually my twenties. And if I was studying something, I would just go there and just open it up. And I was able to understand it a lot easier than if I were to go to the other, the other section with the big textbooks with a bunch of language I didn't understand. So I got a lot out of that series. So I'm very glad not only that they're having a fire.
00:03:34
Speaker
for dummies book coming out with that series but that you are going to be the one writing it because i'm in the audience when you give presentations and you have a great way of communicating about you that's relatable. Just have this energy and i know that energy is gonna come out.
00:03:51
Speaker
Well, thank you for saying all
Book Naming and Simplifying Finance Concepts
00:03:53
Speaker
that. So actually that is sort of part, there's an origin story before the book actually got its name because originally it was a good friend of mine that was going to write a book for Wiley under the Four Dummies brand called Wealth Building for Dummies.
00:04:14
Speaker
And she wasn't able to do it. She's building this amazing company and she just didn't have the bandwidth. And they asked her if she knew someone else. So originally it was supposed to be called wealth building for dummies. And as you know, yeah, a lot of the fire process is wealth building.
00:04:31
Speaker
And when I gave them all of my information and showed them some of the stuff I'd done and kind of what my mission is and things like that, the acquisitions editor came back and said, you know, I presented it to my team and they see all that you're doing like enough
00:04:48
Speaker
fire community, we actually would like to change the name to fire for dummies. I'm like, oh, really? So I was really happy that they made the connection there. So I was super pumped when they agree to title this book, fire for dummies. And I'm hoping like the way you were explaining to me about how you would see the, this black and yellow book and you knew that it was the for dummies brand. So it was going to boil things down to make it easy to understand. That is my goal with this book. I mean, cause
00:05:17
Speaker
If you think about it, some of the fire stuff can be really complex, like sequence of return risk, you know, mega backdoor. You know, there's a lot of kind of complex topics that you have to have a good understanding of it yourself to be able to explain it and break it down so that the average person can understand it. And of course, that was a big challenge I was tasked with. But that was, I was very happy to do that. I enjoy taking complex topics
00:05:45
Speaker
and boiling them down to very easy to understand chunks. Yeah, and I know a lot of people are going to benefit from you doing that. Me included, I'm definitely going to get a pre-order. When is the pre-order? Is it already on pre-order?
00:05:59
Speaker
Yeah, it's already on pre-order. If you go to Amazon, Barnes and Nobles, most online bookstores have it now. It is available for pre-order and the release date is April the 23rd. But you can go on and pre-order. And, you know, pre-orders do matter. They love to see, you know, how many books.
00:06:19
Speaker
they can have in the can and ready to go and people that are interested in it want it as soon as it's released. The number of books you sell, the success of the book and all of that is what keeps publishing companies open to be able to have people like me writing the material. I'd love for you to pre-order it and I appreciate that.
00:06:43
Speaker
I definitely will.
Finance Credentials and Ensuring Accuracy
00:06:45
Speaker
In the process of writing this book, I know you have your own certifications, but I know anytime you're putting out a book and you want it to be credible and legitimately current that you have to kind of go back to the drawing board a little bit of studying, figuring out what the most current tax laws are and things like that.
00:07:07
Speaker
in doing so you probably have what did you have to like what kind of research did you do to figure out what challenges people are currently dealing with so that you messaging can be like on point for today's investor instead of the investor of two thousand four when i was probably going through those books.
00:07:27
Speaker
Right, right. So my knowledge was fairly current because I would say it would go back maybe 10 or 15 years where I started self-teaching. I started learning myself. I had this crazy curiosity about personal finance topic. So most of what I knew up until about five years ago was self-taught.
00:07:51
Speaker
And subsequent to that, I decided that I did want to get credentialed because even though I had my journey, I was really digging into the things that were important to me. And going through the credentialing process and primarily was the CFP certified financial planner.
00:08:11
Speaker
That's obviously presented in a more organized way, and it covers every topic and every angle of personal finance. And so I knew that that would help me smooth out and fill in the gaps that I had.
00:08:26
Speaker
And that was so valuable. The other credential I think was helpful, too. It's an AFC accredited financial counselor. So that credential is more about counseling, coaching and education. And so much of our finances, that is a very important piece. So between both of those credentials, that's what helped me sort of frame
00:08:52
Speaker
me being able to tell the story or put together a guide of these are the steps that you need to take to move towards financial wellness, financial independence and retire early if you want to. So I believe bringing both of those pieces together were very important because if you have a credential and you have no experience, that's not that helpful.
00:09:18
Speaker
if you have just the experience, you're thinking about your unique situation, your unique journey, and you may not have all the credentials or the the information or the knowledge that you need to kind of be able to clearly explain it to anyone else really from a technical perspective. And considering the technical part, you know, most of these things I know, you know, I got my CFP study for the exam and all that. However,
00:09:44
Speaker
I was able, Wiley let me choose a technical editor, meaning that they would go through and make sure that all the things that I wrote about any kind of tax law, IRS, or any official rule, this person would look at it. And so I chose Fire Community friend Cody Garrett.
00:10:06
Speaker
because he is a genius. And I'm like, if I would have anyone being the technical person on this book, it is definitely him. And I appreciate it that they gave me the opportunity to do that. So he kept me straight on everything, because as as much as you boil it down, there are still some formal
00:10:23
Speaker
information or some formal things that you have to address and I want to make sure that I'm giving the most accurate and up-to-date information. So I'm doing a little bit of my research of course but then I've got Cody as a second set of eyes to look at that stuff and not to mention all the other editing things because I am not the best grammar person but you know the team helped me with that. So it definitely took a whole lot of moving parts to be able to pull this book together.
00:10:52
Speaker
In your experience, I know you've got a lot of coaching experience. I know you've spoken to groups, you've gone into high schools and given presentations. In your experience, what are some of the top financial challenges that people face when trying to improve their finances?
Psychological Barriers in Personal Finance
00:11:10
Speaker
I have to say, David, hands down, it's
00:11:14
Speaker
Thinking and believing that it's something that you can do I grew up in poverty and poverty is not just about money It's a mindset and I know I felt like I got a really late start because I didn't know there were so many things I didn't know growing up when I was you know Young adult and I just wasn't exposed to those things and you don't know what you don't know. So that's usually
00:11:37
Speaker
one of the biggest things that people have to contend with. And then sometimes when they hear people explaining things like, invest in your 401k, they don't really know what that means. And people might not even do a good job of explaining it, like investing in the stock market. What does that even mean?
00:11:54
Speaker
So I would say the mindset and believing that they can learn some of this stuff is really hard. And then by the time you do, then you're thinking, uh oh, I'm behind. I should have known this stuff already. Where do I start? So just getting started is very hard because change is different for most of us.
00:12:14
Speaker
And I and I kind of laid out like this in the book before I even get into the mechanics or the process of like reaching fire. It's so important to think about your mentality, the psychological part of it. Then you have to know where you're at and where you're starting. So as you start to lay these things out and you start organizing, OK, here's what my income really is. Here is what my expenses really are. Just sort of.
00:12:44
Speaker
being clear on where you're currently starting because that can help you decide the best place to start. What are the areas that you know you're weak at? For instance, if you make a $200,000 salary, income might not be your issue. It might be a spending issue. If you have a $40,000 income but you do good at saving and you're frugal,
00:13:11
Speaker
then your problem might be an income. So only until you see all these pieces can you really determine what are my deltas, what are my deficiencies that I want to work on, what are my challenges. And I always as well like to say, start with the thing that excites you the most.
00:13:33
Speaker
So as you're looking at these things and you just still can't pull it together or get going or whatever, start with the thing you really like the most. Like for me, I really liked investing. Now that might have not have been the first place to start use this with a budget or cash flow or something like that. But for me,
00:13:49
Speaker
I was so excited to learn about investing. I was so excited to learn about the stock market. So that's where I started. But it all did lead back to everything else. And that helped me also to start seeing what my challenges were, what my strengths were, what were my superpowers. So alongside challenges, knowing your superpowers can kind of help jumpstart that as well. But they're just all these little things that can
00:14:16
Speaker
cause people to either get a slow start or feel like they've been behind. But those are just some of the things that I see that kind of are those roadblocks or those things that kind of keep people from moving forward and trying to get their finances together. What strategies do you recommend for people starting on their path to financial independence?
Strategies for Financial Self-Assessment
00:14:41
Speaker
Well, as far as a strategy, it will really depend on the individual. And I'll give a couple of examples because I know that's a really broad answer. But again, by simply looking at where you are starting.
00:15:00
Speaker
And one of the most powerful exercises I've ever done around my finances has been doing a network statement. I was 38 before I did my first network statement. I didn't even know what it was. But that's a great starting point to see where you're at. And you know what? Even if you're in the red, that's OK. You now have a starting point.
00:15:22
Speaker
And from there, all you really want to do is move the needle. Now, net worth, because I was, you know, 38 when I first started my first net worth statement, I'll just explain what that is. It's just taking all of your assets, everything that you own, your 401k, your anything in your savings account, any equity in your home. Those are all the positives. Those are your assets.
00:15:46
Speaker
Then you're going to look at your liabilities, your debt, you know, things that you would once you come up with your list of your liabilities, you know, if you own a car. So these are things that you owe. You subtract that.
00:16:02
Speaker
from your assets, and that's your net worth. That kind of shows everything you got going on as far as your finances, okay? And this is a snapshot in time. So once you do that, normally you have just two columns, assets and liabilities. There's a lot of online tools, there's a lot of cool apps, things like that. But assess where you're at. And from there, you just start moving the needle. Your net worth will grow as you pay off debt.
00:16:29
Speaker
as you start to invest more, as your investments start to grow. And it was so much fun for me to watch my net worth slowly inch up. Until it hits that curve, right? Slowly inches up and then you hit that, whoa, then that little exponential curve starts to happen. Right, right.
00:16:51
Speaker
But the power of a trend line, right? Like, I'm a huge believer in the power of a trend line. No matter, even if you haven't had that exponential market, if you just see it going up, all that discomfort that you had before, all of that unknowing, all of the what if, the not knowing what the future holds, if you're ever gonna get there, as soon as you start seeing that trend line up, a lot of that goes away. And that's a huge mental win. It's a huge psychological win. And the power of a trend line.
00:17:19
Speaker
Yeah, I love, you know, celebrating your wins. I talk about that in the book a lot, too. It's like even the smallest thing, like once you even before you you are finished with your network statement to see where you're at, just pulling some stuff together to get organized. That is a win. Like if you had old 401ks and you was able to locate all of them and you starting with those, that's a win.
00:17:43
Speaker
You know, even if you're in the red when you do your net worth, you did your first net worth statement. That is a win. And it's so, you know, with a lot of tools and things like that, it's so easy to do it now. I just did mine in a simple spreadsheet. And frankly, if you wanted to just jot it down physically on a yellow pad, you can. But celebrate your wins. So yeah, I love the idea of celebrating wins. And that's like all through the book. Celebrate your wins. This stuff is hard. So
00:18:11
Speaker
You should consider a win if you went and got that old 401k and now you can add that to your net worth, even before you're done with your net worth. And then when you do finally get your net worth together, even if it's in the red, that's a win because now you know where you're starting.
00:18:26
Speaker
So watching that trend line really does make a difference. Emotionally, it makes you feel like you are making some progress. So as you do those things to help increase your net worth, it starts to look pretty good. And that's going to build your confidence. You're going to become more and more curious. You're going to become more and more excited and more and more wanting to say, what else can I do? So that's a great way to get things started.
00:18:54
Speaker
Yeah, and it's almost like two things are going in parallel, two paths, two journeys. One is the psychological belief journey, and then the other one is your actual X's and O's of your net worth. And even just starting out like figuring out what your 401K is in, looking at the fees, or what kind of fund is it in, or like you said, rounding up all of your 401Ks that you've lost contact with over time.
00:19:18
Speaker
Yeah, just a little things. Yeah, something happens over time where maybe before your mindset was.
00:19:25
Speaker
Eh, it's out there. It's probably doing something good. We'll see. I'm sure everything's gonna be fine, completely naive and oblivious and just going on hope, which is a terrible thing, right? But something happens when you actually start getting the information under and you get control, or at least the perception of control, or at least you're controlling what you can do about your own situation, where so many people just walk through life and like,
00:19:50
Speaker
Uh, it's going to be fine. I did that. And because somebody said do it 12 years ago, I haven't looked at it since, but it's, I'm sure it's going to be fine or whatever. So as you go through and you take more control, whether that's learning how to manage your own money, selecting your own index funds and investments and why, and really understanding why those are best for you.
00:20:12
Speaker
and or your allocation or whatever it is you're doing, that parallel path of believing that you actually have some control over your future, that's empowering. And it really is empowering, which is just being oblivious to
00:20:28
Speaker
Right. And letting the forces in the world as they might impact your future. Yeah, sticking your head in the ground. That's crazy to say like that, but that's what we do. I know. And just even the smallest things, as long as it's some action, you know?
00:20:43
Speaker
And before you know it, it will start to build on each other. You start to lay the platform and any little thing you do, that's going to just build on what you've already started. So just do a little something. Don't feel like you have to change the world or you have to do these big grand things every day. No, just little things add up.
Navigating Online Financial Advice
00:21:05
Speaker
So the economy has been kind of a crazy place of the last, I would say decade. We had a long shoot up in performance. I mean, the best performance over a decade plus in history of the stock market. And many think that we won't.
00:21:21
Speaker
keep seeing those gains even though we don't know what the future holds we don't have crystal balls but you've got the onset of crypto you've got all these apps budgeting apps spinning apps trading apps we've got social media we've got tiktok we got youtube shorts you've got
00:21:40
Speaker
so-called experts up there with no credentials giving out advice. How does somebody navigate? Let's say I'm 25 years old. How do I navigate all of this to really know that the information that I'm getting is solid information that I can bet my future on?
00:22:00
Speaker
Yeah, that is a hard question because I love technology and there is no shortage of information out there today, but there's probably a shortage of good information or knowing good sources.
00:22:17
Speaker
For a 25-year-old, they may not be as experienced and exposed to as much as we were to be able to determine what's trash and what's a treasure, right? So all you can do is just start digging around and what you're learning or before you bet the farm on it, make sure it makes sense to you. And early on, you may say nothing makes sense to me.
00:22:47
Speaker
So having just a little bit of curiosity on what you want to do will cause you to go digging a little further. I always say, don't just subscribe to one person, one voice. Check multiple resources. If it's something you're truly interested in,
00:23:05
Speaker
do a little digging. If you're curious, you want to do a little bit of digging and make sure you also, and I learned this when I was going through preparing for my CFP exam, think about how you learn the best.
00:23:22
Speaker
so some people are auditory learners some people are visuals where they like a video for me it was it was audio and i love podcasts for some people it's reading so you're gonna digest things better once you figure out which way you learn the best so if it's a book
00:23:41
Speaker
start maybe looking at reviews of the book or finding a book that speaks to you where it's explaining things, where it makes sense. And most of this stuff, when you start to dig into it, it's not as complex as sometimes the industry wants to make it. And there's never just one way. So if you hear someone saying, this is the only way to do it.
00:24:07
Speaker
I don't know why you would ever do this or why you would ever do that. Well, everybody's different and everybody has different lives. So to completely discount or marginalize everything else but your one thing doesn't make sense. Even with the fire community, David, you know this. There are certain things that seems like most of the community subscribes to, but there's plenty of things that I don't.
00:24:28
Speaker
I do it different, so I would never say this is the only way to do it. And I remember back when I wrote my first book, Money Letters to My Daughter, I did this little poem. I'm not a poet at all, but I did think a lot about
00:24:43
Speaker
how I want it to teach her. So one of the things I always said is that I want to educate you before I give you advice. So I want to really teach you how to fish versus just giving you a fish. So make sure you can
00:25:04
Speaker
Make sure you know the difference between education, advice, and the sales of a product. The education should come first.
00:25:15
Speaker
And it is hard for anyone to give you advice if they don't know you, they don't know your situation and they don't know what might be the right thing for you. And then of course, there's a whole area of salespeople where people are selling something and that's their primary motivation. They're not thinking about, they're not putting you first. So those are the three things I would say to look at.
00:25:43
Speaker
the person can still be fun. Like I want people to enjoy learning about money. I don't want it to be this dull, boring thing. So I actually love, I have a lot of Tik Tokers that I love that's talking about money that know what they're talking about. So for my nieces, so what I would do with my nieces and my daughter is when I find
00:26:03
Speaker
a really good down-to-earth fund person that I know what resonate with them, I'll send that to them. I'm not going to send Dave Ramsey to them because I know that that's not going to resonate with them. So I appreciate the TikTokers and the people on Instagram and the YouTubers like you that are breaking it down and you're just a different messenger.
00:26:22
Speaker
Um, because there is some good information out there. I don't want to totally, um, you know, discount, you know, some of these platforms, but I know that it's so hard for a young person to figure out how do I know who's saying the right thing? So I try to be instrumental in that, but those three things make sure you know, the difference between education advice and a salesperson. Uh, you always want to start with the education and make sure it's stuff, you know, 25 year olds, pretty darn smart.
00:26:52
Speaker
So if they dig a little bit, they can, you know, kind of figure some things out. Yeah. I think the tough part right now is because there is so much social media out there and they're especially these influencers, there's always selling something or, or most of the time they're attempting to sell something, whether it's a click, whether it's a buy my product or buy my program or whatever it is so that they can, they do a really good job of disguising that as education. And then,
00:27:17
Speaker
Oh, you know what? And I probably, yeah, you know, I probably left out another subset and that would be the scammers and the spammers and people that are truly, you know, doing illegal stuff. That's a whole nother level. Hopefully you'd be able to find that out really quick, but there's a crap load of that too. Yeah. So it's always interesting. Sometimes I waste too much time on, you know, scrolling through shorts or TikTok or whatnot. And you see these young people, we're talking about futures and options. And I was like, what if that's the only thing that I had,
00:27:46
Speaker
And I thought that was the only thing, and I didn't know anything about index funds, and I didn't know anything about, I just clicked on some link that was in their profile, and boom, I just started a trading account, and my $7,000 is now $7, or maybe even potentially worse, it's $70,000, and I feel good about that, and then I just don't know what to do with it that way, and then I lose it. So you've got that emotional pressure based on naivety.
00:28:14
Speaker
Yeah, it's good. And it's cool that you mentioned that, because you got to know all the nuances. If you don't have the funding to be able to start something like that, or if you don't really understand what you're doing, and you don't understand that if you're on the losing side, what that means to you, you know, it could be it could be tough. So
00:28:33
Speaker
There's a lot of stuff out there that will really get pushed to the masses regardless of who you are. And there's just certain people that that's probably the last thing they should be doing. But yeah, we see plenty of it out there. And you know what? They probably get plenty of customers, plenty of people that, hey, you had a great sales pitch, so I'm ready to go. And we all have to learn from our mistakes. The hope is that if you're really young, you don't have a ton of money so that
00:29:02
Speaker
if things go wrong with what you thought was the greatest thing, then it's not going to blow up your whole world and you learned a lesson. I mean, we all made mistakes. We all did things that we're thinking as we got older, why did I do that? Well, we're wiser for it. Yeah.
Investment Strategies: Stocks and Index Funds
00:29:19
Speaker
One of the things that I like to think about is if you could, many of these trading strategies are interesting, like day trading. It can be fun. It can be exciting. It can be profitable.
00:29:31
Speaker
But what I, my personal view on it is if once you have your solid retirement, you know, whenever, once that plan is down and automated and you got the trend line going in the right direction and you've met a certain net worth, you've then, you've then earned the right to dabble in those much more volatile strategies.
00:29:58
Speaker
So taking a percentage, maybe 10% of your total net worth if you've got a net worth of $400,000. Maybe play around with 40 grand, either selecting individual stocks or options or day trading of other kinds or whatever it is. That way, you've already got the momentum. It's not going to impact your long-term growth. You will get to your point, even if you lost that 10%. It might take you a little bit longer, but you'll still get there. And who knows? You might strike it rich. You might strike gold.
00:30:28
Speaker
Yeah, it doesn't even have to be all or none. I mentioned that I talk a lot about one of the first ways I started learning about investing was that I joined an investment club. With that investment club,
00:30:44
Speaker
pulled money together to invest in individual companies, that this was long-term investing. I'm a nerd like that. We all enjoyed doing analysis on the company. We wanted to see revenue growth, profit growth. We wanted to look at leadership, management of the company. We're looking at PE ratios. We vote our proxy, all of those things. The average person
00:31:05
Speaker
they are not interested in doing all that, but I was. So even at the beginning of my fire journey, I know generally that the fire community likes just straight up index funds. And I do too, like in my 401k and my Roth IRA, and even in my HSA, those are straight up index funds. But
00:31:26
Speaker
I enjoyed evaluating great companies, and I loved having my own individual stock portfolio. So the whole time, and even now, I still have a small portion. I would say, I mean, it's grown quite a bit, but it represents about 10% to 15% of my overall investible assets. Now, I wouldn't recommend that for anyone that didn't have the inclination or the interest like I did.
00:31:55
Speaker
But I'm not betting the farm on it. I would not feel comfortable to have my entire portfolio, my entire invisible assets being in individual companies. But I do like to have a small portion of a portfolio with individual companies. But I have thought through that.
00:32:14
Speaker
I know the additional risk that I'm taking I know the additional reward so you know if you put some thought into it and that's a strategy you do based on your situation that's fine but I would never sit here and say everybody needs to be investing in individual stops no not necessarily.
00:32:33
Speaker
But I do, and here's why I do it. If it works for you, I believe the better approach would be to know what you're investing in and to be a longer-term investor because short-term, you don't know what's going to happen. But there's just so many ways to do it.
00:32:52
Speaker
appreciate engaging in a conversation because I believe there's learning that can be had, especially for a young person. Don't just completely discount if they happen to bring up something that doesn't make sense to you or you kind of know it, speculation or whatever. It could be the basis for a great conversation and it could be a teachable moment. As a parent, that's a teachable moment. If my kid came home and said, oh, I decided I want to put all my money in crypto, you know, I wouldn't just say, no, you're not going to do that. I would say, well, tell me why you want to
00:33:21
Speaker
And we would just have this dialogue. And hopefully we get to a conclusion where she can think through what that would mean, let's say five years from now, you know. I like how in our conversations, you always go back to being an educator. Did you grow up wanting to teach or anything like that? I don't know if you have a degree in education, but it seems like that's what you continuously go back to doing.
00:33:49
Speaker
Even in conversations like this where we have a very high level, especially compared to the masses of this financial stuff, and yet you're still bringing me to understand things better because how you're presenting the information to me.
00:34:04
Speaker
And I think that's, I don't think they could have picked a better person to write a book like Fire for Dummies, which has been coming out in April. But I just think that so many lives over so many years have been and will be touched by your efforts. And as somebody who shares those
00:34:27
Speaker
that mission for finances and getting people who may not have ever heard of fire or financial independence or financial freedom or any other financial term in their life, how do we get those people in? And I think it's because of people like you who continuously put in the effort day in and day out
00:34:47
Speaker
do the work in its work it's an emotional investment in academic investment the time investment for many of the financial investment that we don't see a return on personally but we know we want to believe that the path is gonna be in the lives of the people who take this information.
00:35:04
Speaker
make real change in their lives and affect not only their own happiness, but the happiness of their families, their extended families, people that they then go and teach like you have. So that's why I'm in it. And I know that that's how, that's a very similar passion that I know that you have as well. That was a very long rant. I'm going to leave every bit of that in this podcast.
00:35:25
Speaker
Well, I think that we both share that desire and that mission. Now, I didn't have a desire to be a teacher when I was younger, but over time, it did help me. Maybe it's the topic of money that I really enjoy teaching because I see
00:35:42
Speaker
so many times where things are explained poorly or they are using a bunch of 10 letter words that no one understands and they just lose them. And one thing that has helped me a lot as far as breaking down concepts to where people can understand is working with the high schoolers that I did early on because these high schoolers, they haven't heard anything about this money stuff, right? They haven't even had a job yet, some of them. And so that always
00:36:12
Speaker
made me have to spend extra time to figure out how to boil this down. Like, for instance, I think when my daughter was like, I wouldn't say 12 or 13, I must have been looking at my 401K and I was probably talking to someone on the phone and I said the term mutual fund. She's like, mom, what's a mutual fund? I'm like, oh my God, how am I going to explain that to her? And I finally thought about it and I broke it down and said, you know, it's a basket of stocks. And so we know it's a little more complex than that, but I needed to give her a foundation.
00:36:42
Speaker
And then I started saying it's a basket of stocks or other investment. You can start to build on that. And I just remember.
00:36:51
Speaker
that that stuck with, the way I knew that that stuck with her. A couple of weeks later, I was talking to a friend in person and we must have mentioned mutual fund. And she's like, oh mom, I know what a mutual fund, I don't know what a mutual fund is. I'm like, well, what? What is it? And she said it's a basket of stocks. And at 12, that's all she needed to know, right? So I just love to see, you know, the light bulb come on. And, you know, as far as like the for dummies book,
00:37:20
Speaker
Another thing that stuck with me on why I thought this book was important was because we're in a lot of community groups, whether it's on Facebook or some other social media platform, you would have people asking questions. And after about five years, the same questions get recycled and asked again and again. And so a new person would come in there and they would ask a question. And inevitably, someone that's not an educated heart would say,
00:37:47
Speaker
You know, you can Google that or you can use the search feature in the community. I always hate it when I saw those answers because I'm like, this is a new person that's trying to learn. Clearly, they are not where you're at. Things change. You have different people that may answer their question. I just always thought it was so...
00:38:06
Speaker
helpful, even if it was a question that was asked before. And I had a teacher one time that told me, there are no dumb questions. The only dumb questions are the ones that you don't ask. So I would rather be more nurturing to that person and break it down for them, explain it to them. So what if we've done it a few other times?
00:38:25
Speaker
The discussion is always a little bit different, and this person's state of mind and where they're starting and where they're at and the genesis of their question might have been a little bit different. So I'm like, you know what? For all those people that has come into a community group and asked a question that everybody else seemed to know the answer to, but they didn't, I want a place for them to find the basics
00:38:51
Speaker
and be able to follow a simple guide to cover their basic questions on what is
Addressing Basic Financial Questions
00:38:59
Speaker
fire? What is financial independence? What are some of these terms? What does it mean to me? How do I put it all together? So I'm hoping that's what that will do. Well, I'm almost certain that's exactly what it'll do because I've
00:39:12
Speaker
I've known you for a while and I know you're going to get a great team behind you. And I look forward to reading the book and getting it into the hands of many. Jackie, thank you very much for being on the show. And I look forward to every future encounter that I have with you. And I will talk to you again soon. Awesome, David. You know, it's always great hanging out with you. Thank you so much for having me. I appreciate it.