Beginner’s Guide to Investing: Roth IRAs, 401ks, Index Funds & How to Get Started Today

Foreign. This is Busy Getting Better, the podcast for women who are committed to prioritizing their own personal growth. I'm your host, Madison J. A mindset and money coach, a first generation wealth builder and a woman on a mission to help you master your finances and live your best life. Money is not all we are covering though, because in order to live your best life, you have to become your best self. So we are diving deep into all things personal development and bringing you the mindset. Mindset shifts, money, tips and inspiration. You need to go out there, be bold and build the life you can't stop daydreaming about. It's time to get busy, babe. Busy getting better. What is up you guys? Welcome back to the podcast. I am so excited to be here mainly because I just got done being wildly sick for the last week and there is nothing like a great gratitude reset than getting sick. Let me tell you, the ability to be able to form a coherent sentence and leave my house and go to the gym and sit here and have this conversation with you today makes me so happy. I'm so grateful to be able to do what I do and I'm so grateful to you for listening to me yap about money. So I am just, yeah, overflowing with gratitude and just wanted to take an opportunity to say thank you to you. Thank you for listening. Thank you for taking the time to message me. For those of you that have ever sent me a message around how the podcast has helped you mindset shifts, it's provided info that it's helped you implement to better your finances and better your life and help you on this journey of becoming the best version of yourself. Obviously you know this podcast is not just about money. It's about rightfully that like becoming the best you mentally, physically, spiritually and of course financially. I just am so grateful I get to be a part of that journey with you. So thank you for the messages, thank you for posting and sharing the podcast. Thank you for sharing the podcast with a friend or a family member, whatever it is. I just wanted to come off of a week of the couch and just say I am so grateful for you. I'm so grateful to be here and I'm so excited to get into today's episode because this is a topic of conversation that comes up so often is figuring out where the heck to start if you want to start investing. The world of investing is scary. It is intimidating. Like that is just how I feel like the narrative is around it. And, and I hope today's episode can give you A good starting spot. I hope I can clarify a few things for you around the world of investing, and I hope that this episode can serve as a very simple guide for you of how to actually go out and take action. So my ask of you as you're listening to this episode, if you are somebody who's like, okay, I'm ready, but, like, what do I do now? I hope that you can take something from this episode and take action on it, because information is fabulous, but actually doing something with that information is what is going to change your life. And investing is, hands down something that can and will absolutely, positively impact your life and change it for the better. And so I just want to go through a few places to start, kind of break down some stuff in a way that makes sense. That's always my goal here, is to make money make sense, because, again, I'm going to minimize the amount of lingo. I did not come from Wall Street. I do not have a personal finance master's degree. Right? Like, I learned this by doing the good old dirty work, reading the books, listening to the podcasts, and piecing it together. And if you know me, you know I need to understand things at such, like, a basic level. Otherwise it just doesn't click. I am absolutely the person that is asking, but why that? And how do those connect? Like, if you have ever had the pleasure, I say pleasure of sitting down with me and we're, like, talking about a topic, I'm like, ooh, Google this next. Oh, what's this next question? Like, we go deep down the rabbit hole. That is one. Because I'm a nosy bitch. I've said that before, and I will say it again. I like to know things. And also, in order for things to, like, click in my brain, I have to just, like, really understand it. Bare, bare bones. Which is why I ask a lot of questions and why I have to have, like, points of reference to everything when I'm trying to actually comprehend things. So my goal for this episode is to make money makes sense and to make investing just make a little bit more sense on where the heck you should get started so that you can go out and take action and get started today. The first thing that I really want to talk about is why investing matters and just really simplify it. If you never take your money and invest it in an asset, then you are essentially not doing anything to help your money work harder for you. And so when I talk about an asset, there's really two ways that you could be spending your money. You could either be spending your money on assets or liabilities. And when we think about an asset, an asset is something that gains value. It grows in value over time, right? When we think about home prices, home prices have gone up, but if you bought it at a very low price and now it is worth way more, you have invested in an asset that has gone up. When we invest in the stock market, you are buying assets. When you invested in the stock market and that stock price goes up over 5, 10, 15, 20, 30, 40 years, you are putting your money in something that is going to go up in value, meaning that you're parking it in a place where you're like, okay, I'm going to take this $100 and I'm going to put it into something that is going to eventually be worth more money. Now obviously we don't necessarily always know exactly how much more money it's going to be. That is kind of the risk of investing is it could go up, it could go down. But there are tried and true ways to kind of take less risk when it comes to investing. And one of those ways we are going to talk about today, which is really navigating the stock market. I think that starting with the stock market is the best place to start. When we're talking about investing in assets or growing wealth, you really could look at the stock market, you could look at real estate, you could look at businesses. Crypto is now being considered a new asset. And the most tried and true way is, and the way that is going to require the least amount of risk, the least amount of time and energy from you is going to be learning how to invest in the stock market. And that is because we have the most proof of concept, we have the most history behind it and there is just like a, you know, a tried and true. If we look at all the historical data over X amount of time, the stock market is always rising, right? Like if we dial in to the day to day and the nitty gritty and you're paying attention to the news and it can sound scary and it's up and it's down and what's going on. But investing is a long term game and that's something else that I want to talk about because right now we are riddled with a lot of get rich quick schemes. I shouldn't say right now they've always been there, but obviously now we are all on the Internet and we are constantly being inundated with like an extra money in five days and you know, like all of these crazy claims of what you can do. And obviously everything that you're going to do with your money is going to come with risk. And I think that the best place to figure out how to mitigate that risk is by the strategies that we're going to talk about here. When people think about the stock market, sometimes I get questions like, well, isn't it just like gambling and, you know, buying penny stocks or day trading? And those are very different than what we're talking about. When we're talking about buying assets to build long term wealth. We are not trying to like get in and get out really quick and make a pretty buck, right? We're not trying to buy low and sell high and cash out within the same day or within the same week. We are going to play it nice and slow and take a lot of the like mental power out of it and just buy something and let it sit there. Right? I imagine most of us that are listening to this podcast, we're in our 30s, we're in our 40s, we've got time, we've got time on our side. And so the sooner that we can start to figure out what strategy makes sense for you and where to get started, like, I just want to highlight on the fact that the most important part of the wealth building equation is time, more time in the market. Instead of trying to time the market. When people say that, that's what they mean. If you just buy something and you let it ride, then you're going to have a higher probability of making money off of that investment than buying something and selling something in a very short term game. So when I'm talking about investing today, I'm talking about for the long term and the other side that I want to talk about with this from a mindset perspective. A mindset shift is that we are conditioned as a society to really treat our money in a way where we get paid, we pay our bills, we go out and have fun, we do whatever we want and then maybe we invest, we what's left over, we save and invest what's left over. And that is a backwards way of thinking. And if we can get to a point in your finances where you are paying yourself first, you're taking the money that you want to invest in your future off the top first and you're not even having to think about it, then you're just spending and playing around with the leftover money. That's how we start to really build this like investor first mentality where your wealth is just building on autopilot in the Background. And we're kind of removing the like, emotional component of money. Right? We know money is emotional. We know 90% of the decisions that we make with our finances are rooted in emotion and not logic. And we know that we are constantly inundated with ads and like YOLO mentality. There's so many things that are vying for our attention to spend money. So I think that finding a way to invest what you want to invest first and then playing around with the money afterwards is a really good way to just set it and forget it and build wealth on autopilot. There is actually studies out there that show that some of the best performing portfolios are women that have forgot that they owned them. I want you to think about that for a second. It's so funny to me because I feel like women are, you know, we're touted as like the emotional creatures and men are better at this. And there are literally studies out there that show that women are actually less involved, our ego gets less involved with investing. Men try and get in there and do all that, like day trading, like I said, right? And be smart and all this stuff. And the best performing portfolios are the ones by women who forgot they had them and they just let it ride. So I hope that that at least puts you at ease a little bit of like, you do not need to be a financial expert to learn how to invest. You do not need to have worked on Wall Street. You do not need a personal finance, like master's degree. You really do not. What you need is the courage to listen to a podcast like this and take little baby steps towards the goals that you're working towards. And so we should start out with is really just understanding that the smallest amount will eventually add up, even if you' through this and you're like, hey, I'm going to take action. I don't have a bunch of extra disposable income right now. Or maybe I just want to dip my toes and I want to get my feet wet. Even starting with 50amonth, 100 bucks a month, I want you to get in the habit, switch your mindset, get these systems in place. Maybe you're going to set up some automations and then as you make more money or as you start to see the power of compounding growth, then you're like, oh, maybe I want to bump this up a little bit. Maybe I actually want to put more into this. And I think that that is exactly what I'm hoping you do with this is understand that the power, compound interest is just the best thing that we have on our side in this life and in this wealth building equation. Right? It's like Albert Einstein, the seventh wonder, eighth wonder of the world. Whatever the quota is, right. Is is compounding interest. And when we can start to learn to make it work for us, then that's great. That's when you can take your hard earned money that you're working a job for, trading your time for and put it into something that doesn't require your time. You set this up, you invest and then you let that compound in the background. And now your dollar bills are working hard for you. You are working hard for your dollar bills. I want you to make your dollar bills work harder for you. And that is what we talk about when money is growing in your sleep. That's my objective for you. So where do we start? First I want to talk about, we are going to talk about account types. So this is like the two parts of it. We're going to talk about the account types that you can set up that you can go invest in. And then once you are in and you've identified the account type that you want to start with, you can figure out what you want to invest in. So examples of account types we are going to talk about this would be like a 401k or a 403b. This would be an IRA. This would be a traditional brokerage account. This could also be an hsa, a health savings account. And then what we are going to talk about investing in those accounts are going to be things like index funds. I'm sure you have heard about index funds. Index funds are the simplest and passive way to diversify your portfolio without having to be a stock market expert, without having to watch trends, without having to like stay up to date with what the heck's going on in the news and what's going on in our economy. Index funds are like a catch all for it. And I'm going to get into that. But what I want to start with first is the account types. And the account types are important for a couple of reasons. So first we want to figure out what it is that you're investing for. Obviously I already articulated the fact that long term investing is really the main thing I'm talking about here. So we want to look at are you investing for retirement? If you're investing for retirement, there are two main retirement based accounts and this is really where we should start. So the, the retirement accounts are going to be like your K. If you're in the education government side it's going to be your 403B and then your IRA. So your 4K, your 403B, these are tied to an employer. These are employee plans, meaning that you have to be an employee of these companies in order to benefit from having the 401K or the 4B and then an IRA. An individual retirement account is another retirement account that you have access to that has absolutely nothing to do with your employer. So these are going to be your two main retirement accounts. The best place to start. This is where I started. This is how I popped my investment cherry and officially became an investor. And it was with my company's K plan. So your 401k plan is again, a place for you to put money aside for retirement. And the best thing that you can do if you are not investing in it, maybe you have it set up, but you're like, not really sure what's going into it. You don't really know how much you're contributing is. I want you to go figure out if your company offers an employer match. An employer match means that they are going to match what you put into that account. We like to call that free money. If your employer is willing to match, let's just say up to $3,000 a year, meaning that you can put 300 or put $3,000 in and then your employer will match $3,000. And now you've got $6,000 that you have now invested into that 401k or that 403 plan. If you, if your employer will match up to $3000 and you only put in 1500, they are also only going to put in 1500 dollars. If you put in $6000, they are also only going to Put in $3000 to hit that employer match. So the best place to start is at least figure out what your, you. And I think what people miss sometimes is, you know, we go and we negotiate these new jobs and we get these, you know, benefit plans and they're like, cool. Your total compensation package. I'm obviously talking in corporate here, like your total compensation package is going to be x. Maybe it's 100k and you know, your salary is 60k and this is your benefits. I'm really winging the numbers here. But like you get the gist. What people don't recognize is that part of your total compensation plan accounts for the employer match that they're giving. If you're not taking advantage of it, it's actually money that you are just leaving on the table. And so this is going to be the best place that you start. This is considered 100% ROI on your money. You are not going to get that anywhere. So go figure out what the employer matches that your company offers and figure out what that would look like for like a monthly contribution. So for example, let's say it's $3,000. That means $250 a month. That should be your first goal is to go be able to put in whatever your company match is in your 401k plan. After you hit that company match, you can technically invest in your 401k. It's like $23,500. Think somewhere in that range for the 20, 25 year. So you can put in there 20 up to that. But you at least want to make sure if you're just getting started that you're hitting that employer match so that you're capitalizing on the free money that your company is giving you after you hit that employee match number. This is where you can look at potentially now moving over to an ira, your individual retirement account. Your IRA again is something that you set up by yourself at like a Charles Schwab at a Fidelity, at a Vanguard. You can also set up IRAs at companies that have Robo advisors where you don't need to choose the portfolio yourself. Right? That's one side of it. You do everything yourself. You pick the index funds, you pick everything you're going to invest in by yourself. You manage the portfolio. We call that a self employment, self managed portfolio. Or you can invest in a financial advisor who is going to charge you 1% of your assets that you have with them, a fee that they have which definitely absolutely compounds over time, especially we're talking about the lifetime of your investments. Or they have these new things called robo advisors. They have them at like Betterment, Wealthfront, some of these other companies. And so you can also set up an IRA there. The benefit of utilizing an IRA over a 1k if you're going to continue to invest above what that employer matches is IRAs have a lot more options for you to invest in if you are in your 401k 403b plan. There are usually limited things that you can choose to invest in in there. When I say choose to invest in, they have target date funds that are based off of the year that you plan to retire based off of your age. Target date funds auto adjust their risk tolerance as you get closer to retirement. The younger that you are, the more risk you want to take in your portfolio because you have more time to bounce back, you have more time to take the risks on what you're going to invest in. The closer that you are to retirement age, the less risk you want in your portfolio because you want to know that that money is there for you to live off of. When we're thinking about what you want to be able to invest in. Usually 401ks have limited options of what you can invest in. You can't just go pick any index fund that you want. You can't just go pick whatever you want in a 401k. They have limited things that that company or utilize Whoever runs the 401k program at your employer. They have limited things that you can invest in and they also often have higher fees involved. And so yes, it's a great place to start. It's the easiest thing for you to set up to go reach out to your HR and get it all set up. Set up automatic contributions so that money immediately comes out of your paycheck and goes into your 401k. This is that profit first mentality we're talking about. Have it go into your 401k before it even hits your paycheck so the investing is done by the time it gets to you. That is the beauty of the four is once you set it up and you automate it and you pick that amount that's going to go in there, by the time you get the money you've already invested, you've already helped your wealth building journey. And I think that's really cool. And again, that's exactly how I started someone, God bless someone at my work was just like, you should make sure you're investing in a 401k. I had absolutely no idea what a 401k was. Didn't know what investing was. Just was like, okay, you seem smart, let me go ahead and turn this on. And God bless, I did. And then eventually I would go in there and be like, oh, okay, I see what's going on in here. I think I'm going to up the contributions. And eventually over time I got to the point where I was maxing out the 401k. But you don't got to start there, but at least make sure you're hitting your employer match. And also by the time, by the, when I was doing this, my employee match was like 750. So it wasn't even a lot. But you got to make sure you got it. Every company is different. After you max it out, you could go to the ira. The benefit of an IRA is that you can Invest in whatever you want. You've got way more flexibility to buy any index funds that you want. And there's a lot less, less fees. There's not another program attached to it. It's just you super simple cut and dry, going in and buying and investing in whatever you want to invest in. So typically you hit the employer match and then you move to the IRA. The IRA has a $7,000 max a year. For the, for the folks keeping up with the math here, let's say you're investing $3,000 into your employer match in a 401k. And then you decide you have another, another $7,000 you want to invest, you can invest that in your IRA. You've now invested $10,000 over the course of the year. And that is really exciting. And so what I also want to talk about here between the IRA and the 4K that comes up a lot is the traditional versus the Roth. We are always talking about, like Roth IRAs, I feel like. So everyone's talking about there are two sides. And you can invest in a traditional 401K or a Roth 401K. Sometimes you can also invest in a traditional IRA or a Roth IRA. What's the difference between traditional and Roth? Because let me tell you, the amount of times I am googling when I was trying to figure this out what the fuck a Roth was like, I was so lost in the sauce. So I'm going to break it down for you super simply the difference is when you pay taxes on this money, if you are going to invest your money into a Roth account, that means you are going to pay taxes on the money now, in this calendar year, in this tax season, based on the tax bracket that you are in, based on the income that you are in this year. And then the money in that account does not get taxed again, meaning that it's going to grow tax free. And when you go to pull it out eventually in retirement, you will not have to pay taxes on that money. Again, the difference between that and now, the traditional side, the traditional side is saying that you are going to pay taxes on that money. You withdraw it. So if you are going to withdraw this Money at age 60, you are going to pay taxes on that money based on whatever tax bracket you are in in retirement. And that money is going to grow, but you're going to have to pay taxes on that money. Again, that's the traditional account. Okay, so those are the two differences. What are the pros and cons? When would you want to do both? When we're talking about an IRA specifically. If you make too much money, it's like 154,000. I want to say you actually can't contribute to a Roth account. You have to contribute to a traditional. So if you make under that. I really think that a Roth account is a really great way because to grow wealth and tax free. Because you don't know, we don't know what tax bracket you're going to be in in retirement. We don't know what tax law is going to look like in retirement. We don't know if taxes are going to go up. They seem like they keep going up. So the more that you can do that and also that number that's growing, you just know what it is. You know exactly how much money you're going to have in that account. Account. Those are going to be your two main retirement accounts, a 401k and an IRA. There is. And then from there, let's just talk through this because I feel like this also comes up often is like, okay, I hit the employer match. Now I'm at the ira. We're big ball in this year. We have even more money to invest. Where do I go from here? So you've got some options. You could look at investing some money to an hsa. I want to talk about this one because this is like a very unique one a lot of people don't know about. An HSA is your health savings account. Your health savings account is something that you have access to if you have a high deductible health care plan. If you have access to a high deductible health care plan, you're going to have access to something called an HSA Health Savings account. And within that account, what people don't recognize is that you can actually invest money in there. The benefit of your HSA account, I mean usually an HSA account is for health related things, right? You go to the doctor, you've got money in there, you can spend it. You just have that that you can lean on for your bills. And so if you're investing in an HSA as well, that's great. You can leverage that for your medical expenses. What you can also do is leave that money in there and invest it. And what people don't know about an HSA is an HSA is the only one that is a triple tax advantaged account, meaning that the money that goes in there does not get taxed. You can invest it and grow it tax free, you can spend it tax free as long as it's on medical related expenses. And so the reason that we start talking about the, okay, the IRA and the HSA first are because they all give us tax benefits, right? Like we talked about the Roth or the traditional, there's tax benefits here. You're either going to pay money on taxes now and it gets to grow tax free in the Roth account, or you're going to not pay money on the taxes. Now. The benefit, I guess I should say too, from a traditional perspective, if you don't pay money, if you don't pay taxes on the money now, you're essentially lowering your taxable income for this current year. What does that mean? Let's just say for the sake of Math, you invested $7,000 into a traditional IRA and you made $100,000. And you're saying I'm going to pay taxes on the money I put into the traditional IR later, so I'm not going to pay taxes on that money right now. That means your taxable income for the year went down $7,000 and you're now paying taxes on $93,000. So that's what I mean when there are tax benefits to your, to your ira, into your hsa. So those are going to be the first three that you are going to start with when we're looking at investing because we know, we know two things are sure in this world, right? Death and taxes. And you are always going to pay like you're just going to pay a shit ton of money in taxes over the lifetime of your life. It is what it is. So what can we do to be tax efficient in our investment strategy? And so when we're talking about being tax efficient in our investment strategy, it just means this, starting with some of these accounts that are going to give you tax benefits. Now where are you going to go if you want to invest and it's not for retirement and you don't really care about the tax benefits. Other, the other reason that you would want to invest in this other account, which is a traditional brokerage account, it has nothing to do with taxes and has nothing to do with your income is if you want to invest in something for a more short term goal. So obviously what we've been talking about so far is investing for retirement. Investing for retirement. For most of us, that's a long way down the road, right? We got a long time until we're there. So what happens if you also want to invest for something that is ten years from now? Then we can be looking at investing in a normal brokerage account, your brokerage account has absolutely no tax benefits. Everything you put in there is taxed. Everything that grows, everything that comes out of its tax. But you have a lot more flexibility because there's no age requirements attached to the investment account. So the benefit of the brokerage account is that you can do whatever you want with it. Again, when we're talking about a brokerage account, this is something that you set up by yourself. You can do this at a Fidelity, at a Schwab, at a Vanguard. You can do this, this again at those same robo places, like anything that's just labeled a traditional brokerage account. All that means is just you investing in that account and it's not attached to the retirement accounts that we've mentioned. And so those are going to be the four places that you can look at investing. So we've got the K, which is sponsored by your employer. We've got the ira, which is another retirement account not sponsored by your employer. We've got the hsa which is through your healthcare plan. Those are your three tax advantaged accounts. And then we've got the fourth account, which is your brokerage account, which you've got the most freedom in and the least tax benefits from. That's the best way to explain it. So those are your account types. Those are going to be first. What you want to pick is like what is the account that makes the most sense for me right now. And then from there we're going to look at what you want to invest within those accounts. And this is where we get into the conversation about index funds and ETFs. So the benefit of doing index fund and ETF style investing. Let's talk about what an index fund is and why it differs from just buying an individual stock. So an individual stock, when we think about it, is essentially buying a slice of a company. You could go and be like, I want to own shares in Walmart, in Coca Cola, in Apple, in Tesla. All these big companies that we know. You could go out and say, all right, I am feeling so ambitious about Tesla. Let's just, I don't know, let's talk about Tesla. And you're like, I'm going to go and invest $10,000 just in Tesla. If you have been watching the news, like, like we don't really like there's just so there's so much ups and downs with these company, like Elon Musk, little crazy man, right? Like, who knows what the heck is going to happen with Tesla. And if you were banking all of your money and all of your investments into this one stock, it could absolutely. A hundredfold. It could blow up. And you could be the wealthiest person in the world, right behind Elon Musk, because he went all on, on this company that was like super big. We talk, we see people talk about this like, if you would have Invested in Amazon 30 years ago, you would be rolling in the fricking dough right now. Right? The problem is, is we don't know what the next Tesla is going to be. We don't know what the next Amazon is going to be. And frankly, we don't even know what's going to happen with the current versions of them like those companies. Something could happen. They could tank. And so when we want to talk about minimizing our risk with investment, we want to talk about investing in index funds and ETFs, because index funds are essentially owning a small portion of a bunch of companies in one fund. And so a really common one is we'll just talk about like tracking the S&P 500. The S&P 500 is 500 of the biggest companies in our country. And so usually if you hear people talk about like the s and P500, 10% annual returns, right this, they're talking about tracking the S&P 500. Traditionally, over the last a hundred or so years, The S&P 500 on average has returned a 10% growth year over year year. We are up the last couple of years because there's been a lot of growth within some tech companies. Obviously technology is really changing our industry. It's changing the world right now. Right? AI growth is only going to expedite that. So typically these tech companies are the ones that are leading a lot of growth. But we also know that that's not always the case. And so when you're buying a little bit of all 500 of these companies, it's if one company has a really bad day or a bad month or they have a terrible business model change, and guess what? Now they're bankrupt. That company is now getting booted out of the top 500 and replaced with the new top 500. And so you don't have to do anything with that. You don't have to pay attention to who's getting the boot. You don't have to pay attention to quarter analysis reviews on how their revenue's doing. And like, if they're gonna make it, like, like you don't have to do any of that. You just have to pick the index fund that's going to track that. And the other thing to recognize about Index fund investing is that it just takes all, it just takes all of the guesswork out of it. Like you want to do the research to pick the index funds that you are interested in and have a solid strategy of what those are going to be. But outside of that, like it doesn't take a whole lot of legwork to invest in a very automated way once you pick the indexes that you want want to invest in. So The S&P 500 is one index. They also have indexes that track the growth stock companies that we talked about, the tech ones. There's indexes that just focus on specific industries. If you're really interested in tech or medical, there's indexes that focus on everything. So like you just want to figure out what it is that you want to invest in. And like I said, a great place to start is really looking at just the S&P 500 in general. You could look at the total US stock market, you could look at markets overseas, you could look at dividend. Like there's so many. I don't want to get too nitty gritty into all of them. I just want to keep it high level enough to understand that you just need to go in and invest in these index funds. I shouldn't say you have to. I'm just saying this is a more tried and true process to investing. And that's again because we don't know what's going to happen in the market. We don't know what's going to happen with these companies. And so often, oftentimes people are trying to put together their own funds or buy and sell all these stocks so that they can outperform the market. So their, their baseline is trying to beat the S&P 500. And again the S&P 500 is tried and true. If you are just investing in that 10% growth year over year. What I want you to do at some point in this episode, maybe right now, is pull out a compound interest calculator. Because this is something, this is like low key. Like guys, I'm such a geek. I love a good compound interest calculator. Let's just mess around with how much money you need to put in these and have that 10 growth year over year. Like what that can do for you. It is so fun. So play around with it. Go in and put just like let me pull it up right now. Actually let's just play around with that 250 that we were talking about. So let's say you've got no money currently invested and you want to put in 250 bucks a month over the next 30 years at a 10% annual return. That means you will have contributed $90,000 over 30 years. $250 a month. You will have profited $475,000 for a total account balance of $565,000. So you put in 90,000 and you now have $565,000. That is what we're talking about. Two hundred and fifty bucks a month. You guys, over 30 years. Like if you're sitting here saying, I have no idea how I would invest $250 a month, I want you to ask how, how is this possible? How would you be able to do that? Where can you either lower your expenses or increase your income, start a side hustle and figure out how to put $250 a month into your repeatable investment strategy. Because guys, that's crazy to me. 90. Now let's play even more. Now let's say you're a crazy person. You're not crazy. I'm kidding. But like, let's just double it. Let's say 500. 500 bucks a month. 30 years. Now we've got a hundred and eighty thousand dollars that you've contributed. You have $950,000 of profit, bringing your total balance to 1.3 million. I just want you to hear that you took $180,000 over a 30 year time frame and you now have $1.13 million in your investment account. Just from the quote unquote 10% average that happens in the S&P 500. Like, sure, everyone's trying to beat it, but that standard is incredible and will change your life. And so you want to go figure out what the index funds are and that's what you're buying within the 401ks within the IRAs, within the brokerage account is picking this. And so if you are like, okay, great, I'm fired. Out Madison. Like I want to go do this. What I would want you to do is go look up how to build a three fund portfolio. Three fund portfolio. This means you are going to pick three funds, right? So we could talk about again the S&P 500 being one of them. You could look at another one. That is the total US Stock market. You could look at another one that is a dividend fund. Dividends just mean that those companies pay you, the investor in the company, right? Cause that's what you are when you buy these index funds. You are now investing in these companies. You get dividends which Is little payouts the best way to think about it every quarter based on the earnings of that company. And then you can take those payouts, those dividends that you get paid out and reinvest them. You just put, you keep them in your portfolio. Your goal right now for long term investing is to keep everything in there and let it grow and let it compound as long as humanly possible. Go look up a three fund portfolio. And that is where I would encourage you to start, is looking at what three would you want to be doing. And if you're like, I don't even know, I am going to, I don't have it yet. I wish I had it prepared for this. But I'm working on a quick little ETF index fund cheat sheet. So if you want first dibs, first in the line for that, you're like, yeah, yeah, I just kind of want you to give it to me. Give me the outlines of them. Yeah, me on Instagram at New Money Madison and I will put you on the list and you will be the first person to get this index fund cheat sheet that I'm working on. But if you're just a little eager beaver and you want to go look it up, plenty of resources on YouTube, plenty of things to find about building a three fund portfolio. And once you have those funds that you're interested in, once you have those indexes that you are interested in purchasing now you can just automate it. Now you can just be like, hey, I want to contribute X amount into this account. And these are the things that I'm going to do. This is like, you do the research once and then you can really set it and forget it. Obviously, the more that you're into it, the more like you can go in and, okay, how did my account do? But we are just simply talking about getting started today, you guys. And so keeping this as simple as possible, I want you to figure out what your employer matches, if they offer one, what that would look like for you from a monthly contribution perspective. And can you do it? If you can do it, then that's perfect. Start there. If that's like, hey, you're like, I'm capped out at that. Stop there and pat yourself on the fucking back. Because you are an investor now. You are investing in your future and you are buying assets that are growing. If you're ready for that next step, you're going to look at that ira, you're going to look at that hsa. If you have access to it, you're going to look at that brokerage fund. You're going to pick your, your indexes that you're interested in and you're going to set up automatic contributions, you're going to set up automatic investments and you are going to let your money grow for you in the background. And that makes me so excited. The other thing right when we talked about it, I think I already mentioned it, but I just really want to hammer home because when we talk about investing all the time, it's all about diversity diversification. Index funds do diverse diversification for you. That's it. Like you're investing in all of the companies within this index versus just picking one. And so that's going to be a really big benefit for you in order to not have to stress so much. We don't want to be stressing all the time. We want to be able to just feel confident that our money is heading in the direction. And I want to instill you with the confidence that you absolutely can get started today and that it doesn't, it doesn't need to be super overwhelming or super complicated. The other thing I want to talk about is again the fears that I feel like the common mistakes that often hold people back, one of them is feeling like you don't know enough and letting that analysis paralysis really kill you more. Again, I already mentioned it, but time in the market is more important than timing the market. So if you go through these steps and you pick the account and you pick the index funds and you get started, congrats, that's great. From there, reiterate, if you don't feel good about it, change your plan. But like, yeah, started. The most important thing is to get started. The other thing I want to talk on is feeling like you don't have enough to get started. That money compounds. Obviously I broke the calculator out. We did a little example. Even if you're starting with 50 bucks, like every dollar counts, every dollar counts. So don't wait until you are a frickin millionaire to start investing. In order to become the millionaire, you must invest. You have to invest. You cannot save your way to wealth. Compound interest is the only way to beat inflation and to have your money grow to a point where you can actually benefit. Otherwise we just stay caught in this hamster wheel of make money, spend money, not, not having enough leftover. We've got to do something to make our money work harder for us. The other thing I want to mention is that we want to be really cognizant of not investing money that you need in the next three to five years. Why is that? Because the market is so volatile, we don't know if what's going to happen in the short term, in the long term, we know it's going to go up and we know that you're going to be just fine. But this is where you want to also be saving for those short term goals in the next three to five years. So if you're like, like I want to buy a house in three years, I wouldn't recommend investing in a brokerage account for that specific goal. I would probably look at utilizing a high yield savings account for your down payment so that you can make sure it's still growing and compounding, but you're not subjecting that money to market volatility. If you need money for 10 years from now, great place to look at brokerage account, right? So just being really cognizant of like what is the goal with the money that you are utilizing and just make sure you're putting it in the right bucket, in the right account so that it can help you hit your goal. And the last thing that I really want to talk about is really just learning to delay gratification. Like in a world where everybody is so obsessed with instant gratification. I want you to be different. I want you to be the person that sees the power of investing and loves yourself not just today, but loves the version of yourself that you are going to be in five years, in 10 years, and 20 years, in 50 years. Like, we need to learn to be able to love her and to be able to take care of her. Because we might be young and sprighty and working hard now, but we've got to understand that the future us is only going to be so grateful for taking the steps today to start building this wealth. And again, we live in such a society where it's like instant gratification, get rich quick schemes like do the things, do the tried and true things. If you want to play around with meme stocks and crypto. And again, I love crypto, I invest in crypto but like I'm not basing my entire retirement fund off of crypto because I, it's just more risky. And so if you want to play around with these other things, if you're like, oh, but I actually want to do day trading, all the cool, play around with it but view that money differently than the money that you are viewing to build long term wealth. The money that you are putting into these investment accounts are like a love note to future you. And I just can't say it enough. In a world that's obsessed with instant gratification, stand out and love yourself by learning to love. Delayed gratification and learning to invest in your future is such an ode and such an important step in that. And your future. You is just going to thank you. So that is going to be it for today's episode. I hope that this helped gave you some clarity. I hope that you are leaving this episode with one action step. If you are, I want you to DM me it on Instagram. Let me celebrate with you. Let me help move any rocks or take any clutter out of the way. If you have any let's make some money moves today, this week and start or accelerate your investment journey and keep me along for the ride. If I said something that still doesn't make sense. If you have questions like guys, there are no dumb questions. The dumbest thing you can do for your financial journey is not asking the questions that are holding you back from taking action. So if there's anything that I've said that you still feel a little bit lost in the sauce on DM me, reach out to me, let me know how I can support you and then let me know what your money move is of the week. Take action and I am just rooting for you. I know the stuff can feel super overwhelming. Hopefully this episode made it just a little bit less overwhelming and was a really good tactical guide for you to get started on investing, where to go and what to do in it. So I love you. I am rooting for you. I'm so grateful for you. If you know anybody that would benefit from this episode, please share it. If you think somebody would benefit from listening to it on your socials, please post it on your story, send it to a friend, tag people, whatever it is. Help spread the word so we can get all the girlies investing and we can all work our way towards financial independence, financial freedom, and becoming our best selves. So that is all. I will see you on the next episode.