Why the Right Time to Build Wealth is Now

Speaker 1 I live in LA now, but lately I have been craving the seasons. Snow, hot cocoa, the whole thing.

Speaker 1 I don't even ski, but I have been daydreaming about working remotely from somewhere really cozy on the East Coast, like a cute little ski town for a little bit.

Speaker 1 And whenever I know I'm going to be gone for a while, I always remind myself that my home can actually be working for me while I'm away because I host my space on Airbnb.

Speaker 1 It is one of the easiest ways to earn passive income from something you already have, and that extra income feels particularly helpful this time of year as we approach the holidays. holidays.

Speaker 1 A lot of my friends say that sounds amazing, but where do you find the time to manage guests and bookings? And that's when I tell them about Airbnb's co-host network.

Speaker 1 Through Airbnb, you can find a local co-host who can help you set up your listing, handle reservations, communicate with guests, provide on-site support, even help with design and styling.

Speaker 1 I like to give a personal touch when I'm hosting on Airbnb. So I make a list of my favorite restaurants in the area and I hand write a note welcoming my guests to the property.

Speaker 1 My guests love it, but I also know that some of those little personal touches can take a lot of extra time. So this is the exact kind of thing that you would want your co-host to help you with.

Speaker 1 Whether you're traveling for work or chasing the snow or escaping it, or you've got a second place that just sits there empty more often than you'd like, your home doesn't have to just sit there.

Speaker 1 You can make extra money from it without taking on extra work. Find a co-host at airbnb.com slash host.

Speaker 2 Here's one piece of advice that I've given for years. Build an emergency fund.
Aim to stash away enough to cover at least three months of expenses in case your income suddenly drops.

Speaker 2 Sounds simple, right? But let's be honest, it's not. Saving even one month's worth of living costs can feel impossible.

Speaker 2 Just when you're making progress, that check engine light blinks on and derails your plans. Life already throws enough curveballs.
You don't need your bank adding to the chaos.

Speaker 2 That's why it's so important to choose one that makes savings easy and doesn't nibble away at your hard-earned money with ridiculous fees. Chime understands that every every dollar counts.

Speaker 2 That's why when you set up direct deposit through QIIME, you get access to fee-free features like free overdraft coverage, getting paid up to two days early with direct deposit, and more.

Speaker 2 With qualifying direct deposits, you're eligible for free overdraft up to $200 on debit card purchases and cash withdrawals. To date, QIIME has spotted members over $30 billion.

Speaker 2 Work on your financial goals through QIIME today. Open an account in just two minutes at chime.com/slash MNN.
That's chime.com/slash MNN. Chime feels like progress.

Speaker 3 Chime is a financial technology company, not a bank. Banking services and debit card provided by the Bank Bank NA or Stripe Bank NA.
Members of DIC.

Speaker 3 Spot me eligibility requirements and overdraft limits apply. Timing depends on submission of payment file.

Speaker 3 Fees apply at out-of-network ATMs, bank ranking, and number of ATMs, according to US News and World Report 2023. Chime, checking account required.

Speaker 2 Here's one piece of advice that I've given for years: build an emergency fund. Aim to stash away enough to cover at least three months of expenses in case your income suddenly drops.

Speaker 2 Sounds simple, right? But let's be honest, it's not. Saving even one month's worth of living costs can feel impossible.

Speaker 2 Just when you're making progress, that check engine light blinks on and derails your plans. Life already throws enough curveballs.
You don't need your bank adding to the chaos.

Speaker 2 That's why it's so important to choose one that makes savings easy and doesn't nibble away at your hard-earned money with ridiculous fees. QIIME understands that every dollar counts.

Speaker 2 That's why when you set up direct deposit through QIIME, you get access to fee-free features like free overdraft coverage, getting paid up to two days early with direct deposit, and more.

Speaker 2 With qualifying direct deposits, you're eligible for free overdraft up to $200 on debit card purchases and cash withdrawals. To date, CHIIME has spotted members over $30 billion.

Speaker 2 Work on your financial goals through QIIME today. Open an account in just two minutes at chime.com/slash MNN.
That's chime.com slash MNN. Chime feels like progress.

Speaker 3 Chime is a financial technology company, not a bank. Banking services and debit card provided by the Bankor Bank NA or Stripe Bank NA.

Speaker 3 Members, FDIC, spot me eligibility requirements and overdraft limits apply. Timing depends on submission of payment file.

Speaker 3 Fees apply at out-of-network ATMs, bank ranking, and number of ATMs according to US News and World Report 2023. Chime checking account required.

Speaker 4 I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand.

Speaker 5 It's time for some money rehab.

Speaker 5 Today's episode of Money Rehab is sponsored by Bank of America. So I have some good news.

Speaker 5 According to a recent Bank of America survey, Gen Z and millennials are actually feeling good about their financial futures.

Speaker 5 And while we love a good confidence boost, what I love even more is action because feeling good about your financial future doesn't mean much unless you're going to do something to actually make that future happen.

Speaker 5 So today I'm bringing on a money rehabber who you may recognize. She has had some big life changes lately and is now wondering when the right time is to start building wealth.

Speaker 5 And spoiler alert, it is now. I'm teaming up with Bank of America for this episode to show you ways to start investing for your future with Meryl.
But don't just take my word for it.

Speaker 5 Let's break it down. Morgan Lavoy, welcome to Many Rehab.
Thank you so much.

Speaker 5 Thanks for having me.

Speaker 5 Not the first time.

Speaker 5 Not the first time. No, I've been here before.
How many times? All the times. in one way, but how many times as

Speaker 5 a caller, a listener?

Speaker 5 Maybe three.

Speaker 5 This is maybe my fourth time. Does that sound right? Well, yeah, we need to get you a jacket.

Speaker 5 So I guess let's step back. How do we know each other? I'm your producer.
I work on this show with you. We've been doing that together since 2021.
So that's how we know each other.

Speaker 5 But also, I am a listener to Money Rehab. I follow, I do whatever you tell Money Rehabbers to do.
I'm an OG money. I'm maybe the first Money Rehabber, I should say.
You are.

Speaker 5 I think you were even a money rehabber before that's what the name of the show was called. Yeah, you originally wanted to call it the money show.
Oh, I did. I forgot about that.

Speaker 5 I do love a literal naming convention. It's a good name.
And you have a question today. So exciting.
I do. So I,

Speaker 5 like you said, have had some changes in my life recently. I got married.
That's the big, that's the big one. And I'm also turning 30 this year.

Speaker 5 And so it's a time where I'm thinking about financial planning a little bit more than I have. It feels like time to get a little bit more serious.

Speaker 5 It feels a little bit more serious now that my husband and I have a joint checking account. So there does just feel like an extra level of, you know, responsibility there.

Speaker 5 And so my question really is: is now the right time for me to start thinking about building wealth? Yeah.

Speaker 5 Yeah. Okay, great.
The end.

Speaker 5 Welcome to the family, Jack, by the way. Congratulations to you two.
You guys have a joint checking account. And as a money rehab OG disciple, a yours, mine, and ours situation.
Yeah. Yeah.

Speaker 5 I have my account. And then, which is just my account from before we got married.
So like before a month ago, the same. And then Jack has his separate account.

Speaker 5 And then we just opened a joint account a couple of weeks ago. And we put what's in there right now is just what we've been given as wedding gifts from friends and family.

Speaker 5 And what are you guys doing with that joint account?

Speaker 5 We have been dollar cost averaging into the stock market. We also opened up a joint brokerage account.

Speaker 5 And so we've maybe invested half of it in the market so far. And then the rest of it, I don't really know what we're going to do with it.

Speaker 5 Because we both have enough money in our separate accounts to like cover half of rent and things like that.

Speaker 5 We could potentially invest kind of all of the stuff that's in the joint account. These are just the questions that we need to figure out.
And why I'm here? What should we be doing with it?

Speaker 5 Okay, well, how much money is in there? How much money do you guys get? We've been very fortunate, I should say.

Speaker 5 Each of our parents gave us a wedding gift that they said we could use on either during a wedding or just for whatever we wanted.

Speaker 5 And so we decided to do a really small wedding ceremony with just our immediate family. So there's eight people total.

Speaker 5 And so we pretty much got to keep all of the gifts that we've gotten from them and from extended family and things like that. So we had $40,000 in the account.

Speaker 5 And so we have 20,000 invested, 20,000 in the checking account now. And we haven't decided what we're going to do now.

Speaker 5 Well,

Speaker 5 let's figure it out. So before we get into it, let's talk about your current financial situation, shall we? Let's do it.
Let's do it.

Speaker 5 Do you feel like you are living within your means or below your means or above your means? According to Bank of America, 95% of Gen Z,

Speaker 5 which you are, and millennials, which I am, say that they are living within their means. Where do you land? I think that I am.
I should have a better budget, and I don't.

Speaker 5 So that would be how I would really be able to tell if I'm living below my means, which would be my goal. But I'm able to save every month, save and invest every month, which makes me feel like I am.

Speaker 5 So I feel like I'm living below my means and feeling good about the way that I spend. Now, with the 40,000, this is your fund for

Speaker 5 what primarily? A house, a baby.

Speaker 5 I know. I just just the future.
I really, I really don't, I don't know. I think the way that I'm thinking about it is it is money that I want to turn into more money more than anything else.

Speaker 5 Like it's not, it's not money that I'm saving for anything in particular. We're renting in New York.
I don't think we would buy a place here. I

Speaker 5 am

Speaker 5 really happy to rent here. I like being a renter.
I like having a landlord.

Speaker 5 I think, just with kind of weighing the benefits and costs of owning real estate in New York, it makes more sense for me to be a renter right now. And then

Speaker 5 we plan on having kids, not within the next three years, but like

Speaker 5 I save saving is

Speaker 5 probably a good idea because it seems expensive to have a baby. I don't know.
You tell me.

Speaker 5 It sure, it sure is.

Speaker 5 Okay,

Speaker 5 so

Speaker 5 I'm assuming you've played with a compound interest calculator on this money, or do you not like do the things that you do for work for yourself? I don't really.

Speaker 5 That's so interesting. I know.
And I, and I should. Because like, how often do you play with a compound interest calculator just for this show? For this show, all the time.
But I think that

Speaker 5 because

Speaker 5 I guess, like, Jack and I talk, Jack and I talk about money a lot,

Speaker 5 but we don't

Speaker 5 sound so we don't have goals.

Speaker 5 What? What is even happening right now? Like, I, like, I don't be clear, like, you're the most organized

Speaker 5 producer,

Speaker 5 employee, human. Like, there's a spreadsheet for everything.
There's

Speaker 5 a calculator for everything. I mean, we have our own proprietary calculators, even.
I'm so surprised by this. I know.
Jared and I play with compound interest calculators all the time.

Speaker 5 I'm sorry that you guys are cooler than us. You guys have better Feldmans.

Speaker 5 We all have the same last name. Okay.
So you guys haven't yet played with a compound interest calculator.

Speaker 5 No, we haven't. On your free time.

Speaker 5 We haven't. And I think part of it is because we haven't talked very seriously about like

Speaker 5 where we want to live in five years. And we have talked about kids.
So that's not a question mark so much.

Speaker 5 I think we would maybe take it a little bit more seriously if we had a certain goal in mind by a certain date. And we don't have that.
So we should.

Speaker 5 When you hear the idea or the phrase wealth building, what comes to mind for you?

Speaker 5 A whole mess of things. I think a little bit of imposter syndrome because I don't come from wealth.

Speaker 5 A little bit of guilt because I don't come from wealth too. But also, those are two kind of bad things that immediately jump to mind.
But also there's there's good stuff too.

Speaker 5 Like I feel very lucky and grateful and empowered. So, all of those good things, too.
But there's also a little bit of, yeah, like guilt and imposter syndrome mixed in. What are you guilty for?

Speaker 5 I can do it. When my mom was my age, she was making $35,000 a year and she had me.
And so it just feels like I

Speaker 5 don't know. Like, my mom

Speaker 5 worked so hard to

Speaker 5 provide for me and she helped me pay for college and I don't have debt and it just I just feel a little guilty about it. You know, I work hard.

Speaker 5 Guilt means you made a mistake. Shame means you are a mistake, which you are definitely not.
But I understand that sometimes it feels that way. But you didn't do anything wrong.

Speaker 5 Yeah.

Speaker 5 Yeah, that's that's true. That's true.
I guess it's like almost

Speaker 5 it feels a little bit more like survivor's guilt, where it's like, I didn't do anything wrong, but I am luckier than she was, or like have had more opportunities than she did, despite her working, you know, just as hard.

Speaker 5 So, how does that affect

Speaker 5 what wealth building looks like for you? You want to do

Speaker 5 more, you want to save more, or you

Speaker 5 feel

Speaker 5 stymied and and like sort of struck with

Speaker 5 inertia around it? Yeah, I think maybe that's why I'm a little, why I'm playing with compound interest calculators less for myself.

Speaker 5 I think maybe it's creating a little bit of like avoidant behavior around talking about long-term planning.

Speaker 5 To be clear, like, I don't think everyone, you know, I'm not surprised that everyone is not playing with a compound interest calculator on their free time, just to be clear.

Speaker 5 It's only for you because I know how much time you spend on it normally. Yeah, so no, it's a really good point.

Speaker 5 I think everybody should, but like, I'm never surprised when somebody's like, No, as a matter of fact, I have not used a compound interest calculator lately.

Speaker 5 So it's not something that like you need to be doing, but it's interesting that there's this like block for you from

Speaker 5 what you do at work and how into this you are around investing investing, compound interest, and then for yourself, there's like a little bit of a block. It is, yeah, it is weird, isn't it?

Speaker 5 If I really thought about it, we're getting deep here.

Speaker 5 So should we unblock? I would love to unblock. Okay, so

Speaker 5 for you,

Speaker 5 is there a number that feels wealthy for you? Or

Speaker 5 is that, do you have like a magical number that you think I'm wealthy? I mean, it's going to be different than what the stats are because the stuff is super personal. Yeah.

Speaker 5 I think something that I would like to do that I haven't done yet is

Speaker 5 think about

Speaker 5 how I can

Speaker 5 build

Speaker 5 wealth where my kids can go to whatever college that they want to and not have to worry about financial aid being a big factor.

Speaker 5 And so I haven't really taken a look at, you know, when I went to Skidmore, tuition was $60,000 a year. It's probably more now.

Speaker 5 And so I think something that would be useful to me would be to like think: okay, so that's like $240,000

Speaker 5 for one kid. We will maybe have, I don't know, one or two.

Speaker 5 And so having that

Speaker 5 saved,

Speaker 5 I think would be a good goal. Okay.

Speaker 5 Saved, saved, and have it not be our life savings, like saved in a way where it's like we can spend that on education and we won't have to, you know, sell our house or like, like we can still have the life that we want, but also spend that money on college for kids.

Speaker 5 Okay. So for you, it's being able able to pay 100% of college.
Let's just assume

Speaker 5 if it's around today's dollars, we're talking about $500,000. I think that that's a good start.
We have,

Speaker 5 you know, a rough number of what will make you feel wealthy. How does Jack feel about it? Is there a thing that makes him feel wealthy? Or he came for money, so it's different.

Speaker 5 I think it's different for him. I think he would probably have a higher number than I would.
And not to do

Speaker 5 anything differently necessarily, but just to like have it in the bank. Like he, it's, it's not that he wants to buy a fancy house or go on a crazy vacation or anything specific like that.

Speaker 5 I think for him, it's more about being like,

Speaker 5 I know my net worth is X and that feels like wealth to me. What's interesting is that you

Speaker 5 have some blocks around this between like what you know

Speaker 5 for

Speaker 5 money rehab and what you're doing for your own money rehab, but you're putting your money into the places we talk about on the show.

Speaker 5 You're putting your money, you're doing the dollar cost averaging, which is you know, taking the full amount that you have and trying not to time the market and put it in at different increments so that you're getting the average of what the price is worth over time because we want to buy low and sell high, not the opposite, but we don't know where the low is and we don't know where the high is because this is the first time you're really investing, right?

Speaker 5 Yeah, I started, I started investing when I started working with you. I had 401k at my old job, but I didn't know what was what it was doing or what it meant.

Speaker 5 So I wouldn't, even though that like was technically an investment, I wouldn't really count that because I didn't set up the account or like know what it was doing or anything like that.

Speaker 5 And so I think that it is interesting because while I am doing some of the like quote unquote right things,

Speaker 5 I am not not thinking about it as strategically as I think that I should and could.

Speaker 5 And now is probably the time to start doing that, especially since it's like, I do feel like a bigger sense of responsibility and accountability now that I have a joint account.

Speaker 5 And it's like, this is, you know, financial planning for like two people and a family. And so I need to be more thoughtful because even though I'm not doing nothing,

Speaker 5 I

Speaker 5 should probably have my goals a little bit more defined and play with compound interest calculators more. So here's the deal: wealth building is not about one magical fix, it's about consistency.

Speaker 5 And it sounds like you

Speaker 5 and your now husband are committed to being really consistent about saving and investing. So I think we've covered a lot today,

Speaker 5 dear Morgan.

Speaker 5 I would say

Speaker 5 step one is to come up with some really clear goals together.

Speaker 5 Goals have price tags. And so, first, you know, figure out the life you want and then reverse engineer it to figure out how to get the money to live that life.

Speaker 5 I know that some people have magic numbers that just feel good to them for no other reason than feeling good. And maybe that's part of it too.

Speaker 5 There's probably like some number that feels really good. Take that into account.
Figure out where your destination is so that we can reverse engineer how to get you there. And is that enough? And

Speaker 5 then maybe

Speaker 5 you put numbers on what feels like enough so it's not as emotional because it sounds like there's like an emotional, I didn't have enough component to this. Yeah.

Speaker 5 I think that that all feels very doable.

Speaker 5 And

Speaker 5 it does feel,

Speaker 5 I don't know, it just, it just feels like it makes sense.

Speaker 5 I feel like I didn't even realize because I felt like I was doing the right things, I didn't realize that I was also kind of doing it in a bit of a blind way. So I think those steps don't feel scary.

Speaker 5 They feel very reasonable. And

Speaker 5 I do feel like they can be motivating, like you said, like

Speaker 5 get myself more excited about wealth building. and that it's not a dirty word.
It's definitely not. It's very exciting.
You're starting early.

Speaker 5 You're doing so many of the things that we talk about on the show all the time. There's some like block around it, but I think it's pretty normal for people to,

Speaker 5 you know, not take their own advice. And so it's a good reminder to

Speaker 5 get your financial hygiene on yourself. Put your oxygen mask on first, even before helping our listeners.

Speaker 5 Yeah, it's a good point.

Speaker 5 Okay, so how do you feel about getting started? I feel good. I feel good.
Jack and I are going to dinner with his mom tonight. Otherwise, I would say tonight we'll talk about it.

Speaker 5 So maybe we'll talk about it over the weekend. Over the weekend, we are thinking about going out to dinner because it's our like almost one month anniversary of being married.

Speaker 5 Listen, I haven't been married a year. So

Speaker 5 who am I to talk?

Speaker 5 Sounds like perfect dinner to me. For today's tip, you can take straight to the bank.
If you're waiting for the perfect moment to start building wealth, please don't.

Speaker 5 The earlier you start, the better off you'll be. And if you're looking for the right tools to help you save or just get a plan together, check out Bank of America.

Speaker 5 Bank of America is the one-stop shop where you can get guidance, tools, solutions, and view your Bank of America banking and manage your Merrill investing accounts all in one place.

Speaker 5 To learn more, go to bfa.com slash financial next steps, which I have linked in the show notes.

Speaker 5 Brokerage services are provided by Merrill Lynch, Pierce, Fenner, and Smith Incorporated, a registered broker dealer, registered investment advisor, member SIPIC, and a wholly owned subsidiary of Bank of America Corporation, member FDIC.

Speaker 5 The views and advice expressed by Money News Network are independent and not endorsed by Bank of America Corp.

Speaker 4 Money Rehab is a production of Money News Network. I'm your host, Nicole Lapin.
Money Rehab's executive producer is Morgan Lavoy. Our researcher is Emily Holmes.
Do you need some Money Rehab?

Speaker 4 And let's be honest, we all do.

Speaker 4 So email us your money questions, moneyrehab at moneynewsnetwork.com, to potentially have your questions answered on the show or even have a one-on-one intervention with me.

Speaker 4 And follow us on Instagram at MoneyNews and TikTok at MoneyNews Network for exclusive video content. And lastly, thank you.
No, seriously, thank you.

Speaker 4 Thank you for listening and for investing in yourself, which is the most important investment you can make.