In this episode, Jeremy Schneider, who retired at 36 and currently has a net worth of over four million dollars, answers some of the top questions teachers have about how to get started with investing.
Listen to the episode in the podcast player below, or find it on Apple Podcast or Spotify.
Getting started with investing with Jeremy Schneider
Daphne:
Hey Jeremy, thank you so much for being here today.
Jeremy:
Hi Daphne. Thanks for having me.
Daphne:
I have been following you on my personal Instagram account for a really long time because I knew that after I left teaching I had some gaps to fill as far as retirement went. And I was always looking for learning about investing, learning about just my own personal finance, and that led me to you. I’ve been really impressed with how you break out all of the really complex information and chunk it into bite size and really informative pieces, which I feel you must have even a teacher on your team because you feel like you’re an educator in this space. But for those of who are just finding out about you for the very first time, I’d love to hear a little bit about you and why you’re so passionate in giving when it comes to this type of information.
Jeremy:
Thank you. That’s so flattering. I don’t know. I think that I have the heart of a teacher. I love teaching. I love this topic, which is why I think that it kind of comes across my content. But the quick story is I studied computer science in college. I turned down a job offer from Microsoft to be a computer programmer and instead started my own tech company. An internet company that I was an idiot 22 year old, really had no idea what I was doing. I grew it for 12 years. I sold it when I was 34 for just over $5 million. I worked there for two years and then quit. And then with about my share after taxes, that $5 million was like $2 million and then I ended up with about $3 million when I quit my job. And in an attempt to not be one of those garbage men who wins the lottery and then becomes a garbage man again when they spent all their money, I learned everything I could about personal finance and investing.
And after you read two or three books on the topic, you realize that all these books say the exact same thing. These aren’t my original ideas. These are the tried and true truth of wise investing. And the truth is that it’s very, very simple, but it’s still a message that we don’t hear much in pop culture. You hear crypto and credit cards and buying cars and options and futures and day trading and all this crazy stuff in the finance and investing world. But the truth is actually very, very simple and so that’s why I do what I do because I like to get it out and I think that I try to keep it simple.
Daphne:
So you said the truth is very simple because you just went over all the keywords that I’ve been terrified to bring someone in based on watching what people say in the space. I did not want talk about crypto, whether or not people who are listening have made money on it. I want something that I feel comfortable and I feel knowledgeable about and I know can help people in the long term, but there’s always going to be some risk involved when it comes to investing. And you said that you have a very simple philosophy to it, and I know you’ve repeated it over and over again.
Jeremy shares why living below your means is the first rule of investing
What are the rules that you constantly are sharing on your page?
Jeremy:
Well, there is complexity out there in the world, and I think doing it right is very simple, but I always like to start with the bare bones rules of building wealth. Because if you don’t do these two root things… There’s exactly two rules. If you don’t do these two things, then you’ll be broke. And if you do these two things, even if you do them in a mediocre fashion, you will build wealth and do great. Rule number one is to live below your means, which means spend less money than you make. And so if you leave teaching and get a job making half million dollars and then you’re like, “All right, I’m a baller. I’m going to spend half million dollars.” At the end of the year, you’re broke. 500,000 minus 500,000 is zero. But if you get a job making 60,000 and spend 40,000, which a lot of people live fruitful lives spending $40,000 a year, then you have $20,000 you didn’t spend.
If you invest $20,000 a year, you’ll be massively wealthy, easily a multimillionaire over your course of your career. So rule number one is live below your means. And rule number two is invest early and often. If you just save the money you don’t spend, if you just put under your mattress or even in a savings account, it’s not going to grow. It’s not going to have that compound growth that’s going to turn to lots of wealth over the years. It’s going to lose value to inflation or maybe just barely keep up with inflation if you’re in a high yield savings account. And so that’s the strategy. You spend less than you make, you invest the difference along the way. If at any point in our conversation anything seems intimidating to you, just remember those two things. If you do those two things and they’re not perfect, you’ll be in great shape. But if you spend all your money and you’re living in debt and you’re living beyond your means and you never invest, then you’ll be broke.
Daphne:
And when we’re talking about investing, it’s probably important to clarify because so many people who are listening are thinking about leaving a pension. They’re potentially either vested in their pension or not vested in their pension depending on where they are on their years of service right now. And they’re looking at companies that have matching 401ks. So are we just talking about investing in your matching 401k or your 401k at your company or are you thinking about doing some sort of a hybrid of both?
Jeremy:
Both what? 401K and what’s the other half?
Daphne:
Picking your own index funds?
Jeremy explains the basics of investing and 401(k) plans
Jeremy:
So let’s get into it. First, before we even get there. I always want to talk about the word investing because the concept of investing is pretty simple. Investments do two things. One, you buy something and while you hold it, it pays you income. So if you buy a rental property and you put renters in there and those renters are paying you rent, that is investment because you’re getting income. And the other thing it does is it’s likely to go up in value. And so again, in the rental property example, if you buy rental property and you hold it for 10 years. In 10 years it’s pretty likely to be worth more than it’s today, just by the nature of they’re not creating more land and properties tend to be worth more overtime. And so those are the two things that we’re looking for.
And so when you mentioned all those crazy things like day trading and crypto and options and all that stuff, I don’t consider that investing at all. I consider that speculation and for sure there are people who got rich with speculation, but they’re just lucky. They’re just randomly lucky. And it’s just like people got rich with a lotto, we don’t emulate that behavior because that was random luck. We emulate a plan that is basically a guarantee to build wealth, which is buy things that pay you while you own them and go up in value. And that’s what leads us to this concept of an index fund. An index fund is just a list of all the stocks in the US or the world and the stocks are ownership of the companies of the world and the companies of the world do business, grow, innovate, sell products, profit. They pay those profits back to the owners, which are the stockholders and that’s distributed to you in what’s called a dividend.
And so when you buy this index fund, you’ve bought all the stocks of the world, they’re paying you and you get cash payments just while you hold it. And then the stocks go up in value. And so that’s how we build wealth. So into the 401k. So 401K is a type of account. And so inside of 401k can go in index fund, and I think this is where a lot of people get confused. It’s what I call the layers of investing. At the core of investing is the stocks. Those are the things that we buy, stocks and bonds to be fair. But bonds are less sexy. So we can talk about stocks, but it’s the same kind of concept. So at the core of investing is the stocks, then stocks need to go in something, which is why we buy an index funds. It’s like a value pack of all the stocks and then the index fund has to go into something which is like a 401K or a regular brokerage account.
And so when you said, “Hey, what’s better? 401K or an index fund?” The answer is that doesn’t really make sense, index funds go inside of a 401k, but you could also buy an index fund not through your company retirement plan, just by going to a website like Betterment or Vanguard or Fidelity or Schwab and buying it there. And then you’d buy it in the inside of a regular brokerage account or inside of a Roth IRA, which stands for individual retirement account. I knew I just threw a lot at you. How are we doing so far?
Daphne:
No good because I know that that is a question that I even misspoke right now, and it’s something that I’ve done both. I’ve made both mistakes. I’ve had a 401k when I first left teaching. I had actually a 1099 yearly annual contract, but as a freelancer and that’s when I first started with Betterment. So I opened up my own retirement account. They have different types of funds, I like them because they have some green climate change friendly accounts, so I can pick based on my morals. And that also led me to go down the rabbit hole of picking individual stocks outside of my retirement plan accounts and I picked some of the biggest names in vegan food and I’ve lost a lot of money.
And that I think is a mistake that many beginners make as well is thinking that once you start to leave your retirement account and you start to say, “Okay, maybe I have an extra $50 per month or an extra $500 per month. How do I still add more money to my investments?” They start to see shiny objects like their favorite brands and they want to start putting money on those but what you’re saying is these are the exact same things. You can pick the safe time weighted account inside your retirement but on your own and that’s where you’re going to have a better return on investment.
Jeremy:
Absolutely. And it’s important to learn a little bit about this stuff. That’s said, I think it’s great for people to get started. If you go open up a Robinhood account and buy random stocks, you’re learning something, it’s not what I would recommend. It’s not what I would consider optimal investing, but you’re learning something. But once you kind of get it and you understand that you don’t want to pick individual stocks and you want to buy all the stocks and you want to minimize your fees and you want to buy and hold and do all these best practices of investing. Absolutely, you can do that.
Inside of your 401k, which is great because a 401K is an account that basically protects you from taxes, either when you put the money in or when you take the money out. Or you can do inside of a regular old investment account or you can do inside of an IRA and all these different types of accounts are, it sounds confusing, but you basically just can use all of them. You just fill them up in order of preference, which is your 401k to the match, then your Roth IRA. Then you go back to your 401K until it’s full and then you can invest in a regular brokerage account, which is kind of your last, not your last resort, but the last option just because you don’t get any tax breaks from investing in a regular old brokerage account.
Daphne:
So let’s say someone left the classroom, because I know that there are former teachers who are listening and they left. Maybe they no longer have a pension to depend on, but they’re making two times or three times their teaching salary. So first they have the 401k. Let’s say in this hypothetical situation, they have $2,000 that they know they can put away in some sort of savings account on a monthly basis or an investment account on a monthly basis. You’re saying max out the 401k. Let’s say the max they can put into that, $1,200. The other $800, they would find a regular brokerage account for index funds and that would be Fidelity or Betterment.
Jeremy shares four steps to a successful retirement financial plan
Jeremy:
So I’ll break it down. So basically there’s really four steps and it sounds complicated, but it’s not that bad. If you got that $2,000, the first place you go or whatever the amount of money, is your 401K up to your match? And so a match is basically your employer is saying, “Hey, we’re trying to incentivize you to invest because that’s the way America works for some reason. And so if you put it up to 3% of your salary, we’ll put 3% of your salary as a bonus into this account.” And so let’s say 3% of your salary is 500 bucks a month or whatever. There’s your first 500. Now for the next 1500, where does it go? Well, the next step… And you do the match first because it’s an instant 100% return on your money.
There’s no better financial deal on the planet than an instant doubling of your money. So you always max it out first. Then the next step you go is to a Roth IRA. And so an IRA stands for individual retirement account. You can open one up by going to Vanguard, Fidelity, Schwab Betterment.com. You click open account, you click Roth IRA. It’s just opening any sort of bank account. Then this year, you can put up a $6,500 per year in that, which is 566 bucks a month or something, or 533 bucks. And so 500 bucks for your match, 500 bucks for your Roth IRA. So now you have a thousand bucks left. Then if you still have more to invest, if you’re investing over a thousand bucks a month, you go back to your 401k. The reason you do the Roth IRA second is because 401ks do have fees associated with them and there’s often less great investment options than in a Roth IRA we can invest in anything.
You go back to your 401k this year, you can put $22,500 in. And so it turns out if you’re putting 1500 bucks a month in, you’re not going to hit that 22,500. So in the example you just gave, what you’d end up doing is basically be putting 1500 bucks a month in your 401K and 500 bucks a month in your Roth IRA. Then inside of both of those accounts you’re investing in index funds and that’s it. And if you’re putting away 2000 bucks a month over any number of few decades over, at least half of a investing career, you’ll easily be a millionaire. That’s a ton of money.
Daphne:
What I’ve kind of seen calculated, and correct me if I’m wrong, it’s just a general number. Obviously no one’s like a fortune-teller, but whatever I invest right now, so let’s say I put $100 in today, usually if I’ve picked a time weighted return of a index fund, in seven years, that will double. So if I have a thousand dollars, in seven years that’s going to be $2,000. And then if I have 14 years, then that number would even double. So if I put in a thousand, that would be like 4,000 in 14 years, and that’s the best way for me to stay motivated because I am an absolute freak and I’m like, do I want this thing for $100 or do I want the $700 down the line. Or do we really need this? Can we figure out how to do our yard remodel a little bit easier? And then this is a month’s worth of income for us when we retire instead of hiring someone to do some work that I really don’t want to do. This is a real story about my life.
Jeremy talks about why it is important to invest early and often
Jeremy:
What you just described is true. If you get a 10% return on an investment, it will double in about seven years. And the stock market has returned on average about 10% over the last 100 plus years. And so when you invest early and often, like I said, rule number one, live below your means. Rule number two, invest early and often. When you invest early and often over time, what happens is the earlier money starts to double and then that money starts to double and the new money you put in starts to double. And then over the years it gets to be more and more.
And so I love the idea of thinking about the time value of money. So if you say… We just did an example of Beyonce tickets were selling for $2,000. If you’re in your twenties and you take $2,000 out of your 401k or you put $2,000 less into your 401k, it could cost you a year of retirement at the end of your career. And so it’s like, love Beyonce, she’s the queen, whatever, but could you find cheaper tickets or could you cut back somewhere else? And when you think about it that way, it’s like what do you want? A really fun concert or a year of paid time off? Teachers love whatever you get in the summer now six days or whatever summer break has been reduced to, but think about a year of it. So I do think it’s really important to think about the more you live below your means and the more you’re putting into these investment accounts and letting them compound and grow over time, the more freedom and time you’re buying yourself.
Daphne:
I think that is also a concept that has become more popular is the acronym F.I.R.E., financial independence retire early. I think I’m saying it right, but especially coming from a job like teaching. Teaching has this invisible contract of you’re going to stay in it for the rest of your life to a very specific year because the pension’s going to tell you we’re going to cut it in half. But if you start to supplement your investing from point A to whenever you retire, whether or not you retire from teaching or another job, you can shorten that window. You can retire at 55, you can retire at 60. You don’t have to wait until 65 or whatever number they’re telling you for that retirement age, if you start investing earlier on in the game.
Jeremy:
Totally, a hundred percent. And our parents, I think I’m older than you, but my parents’ generation, that was kind of just what people did. You go to college or you get a job out of high school and then you work until you’re in your mid to late sixties and then you get a pension from the company you work for the entire time. But this concept of F.I.R.E. is just kind of putting that idea in its head and saying, “Hey, you don’t automatically get to retire at any age.” If you’re a teacher and you do work the entire time and get a pension, hopefully that pays off and then you can live on your teacher pension, but otherwise you only get to retire when you have enough money. And on the flip side, you can retire earlier if you have enough money, if you get your investment portfolio to a point where its growth is going to pay for your living, then you can retire whenever you want.
And so for sure, sometimes I talk to teachers and they say, “Well, I’ve got pension.” I was like, the ceiling on that is so low. It’s like you’re going to work 40 years and then just get what you get cause what they gave you. What if you just take things into your own hands a little bit more, you could obviously leave the career or you could be investing along the side, building wealth, having that own portfolio, giving yourself options. And maybe in your number 30 of teaching, you don’t have the same passion you did in your number one and you don’t want to spend the next decade of your life because you have to get the pension. And so that’s what I think is the most valuable part of money is just options in life. And you don’t have to work until the governing body above you says you can stop working and gives you your pitance for the rest of your career. You can take that into your own hands and investing is the way to do it.
Jeremy discusses paralysis analysis and questions about the economy
Daphne:
Why do you think that knowing that adding $500 extra or a thousand dollars extra or even a smaller amount just depending on your financial situation, why do you think that that’s just such a hard hurdle for people to overcome mindset wise? Why do you think people are so hesitant to even start investing?
Jeremy:
I think there’s a lot of things. I think that investing takes time and people just… Human nature is you want the thing today, not years from now, but the dirty little secret of life is that when you’re 40, you still feel like you’re 20. And I assume the same is true when you’re 60 and you… People say, “Oh, I’m 30 and it’s too late to start.” I’m like, when you’re 50, you’re going to wish you started when you were 30. And so I think there is part of that. I think that investing is an intimidating topic. I think that people hear that it’s like a yo-yo, it’s up and down. I don’t want to lose my money. So there’s paralysis analysis there.
I think teachers specifically have this different world they live in that’s kind of overshadowed by the pension and they’re in the system and they must follow the structure. And when you’re going outside of that, it feels like you’re coloring outside the lines. So I think there’s multiple things at play, but the cool thing about investing is you can start with 10 bucks and you can open an account and you can just watch it with your eyes for a few months and see what happens. And then you can put more in and it’s pretty easy these days to get started and there’s no one stopping you. And then the stakes can be low while you build confidence and understanding around it.
Daphne:
There are a lot of concerns, especially when it comes to the economy right now, and I think that that’s really valid. And we should probably talk about is this a safe time to actually start putting money into any sort of investment account with potentially recession on the rise going on right now?
Jeremy:
I wish I could sound bite that paragraph you just gave and we could play it every single year for the last a hundred years. The short answer to that is, yes, this is a good time to invest because they say the best time to plant a tree was 20 years ago, the second-best time is today. But you could literally go back at any moment in American history and say, “Oh, is this a good time? Because there’s the Iran Contra affair. Is this a good time? There’s the Desert Storm operation. It’s dotcom crash, it’s the financial crisis, it’s the great recession.” And so through all of humanity there are negative, scary sounding headlines. And actually one of my little Instagram posts literally listed the crises the last a hundred years and it’s crazy. It’s Cold War and weapons of mass destruction and wars and we had 20% inflation and I don’t know, I think we had 15 recessions and we had bear markets and just all the stuff and going through all that stuff, the average stock market return was 10%.
And so is this one the big one? No, it’s not. This is… We’re going to get through it. I don’t know what’s going to happen. I don’t know what’s going to going to happen the next year, but the economy will continue to go. Businesses will continue to operate, businesses will continue to profit and the owners of those businesses will continue to build wealth from those profits. And so for sure, it’s a great time to start now. And the concept of timing the market, getting in their out based on what you think’s going to happen is a very dangerous concept. And I actually have a great story about this where it basically compares three different people. One who has the world’s best timing, one who has the world’s worst timing, and then one who just invests every month blindly without looking at it. And it turns out the person who invests every single month actually does better because both the best timers in the worst timers who are holding cash waiting and get in the market for the perfect moment do worse than just the early and often strategy.
And so that was a very quick synopsis of that story, but it just goes to show investing early and often. Ignore the news, ignore the headlines, ignore the gloom and doom. There will always be negative headlines because that’s the nature of the world, yet still the economy will continue to operate.
Daphne:
And I will definitely link your website, it’s www.personalfinanceclub.com. And there are two tools that I’ve played with that I think are really extremely fun and educational. One is your retirement calculator. So when we were talking about that retiring early calculation, you have something that they can just crunch on their numbers and it will tell them when they would actually be able to retire. And another one is a timing the market, so just watching the stocks go up and down and trying to buy and sell at certain times to see if you can make more than just leaving it in over that timeframe. I’ve played it a couple of times, maybe a couple more than I’d like to admit, but if anyone wants to find them, we’ll have them linked in today’s show notes as well.
Earlier we were talking about your own personal journey and how you just started reading some finance books. I personally have really enjoyed, I Will Teach You To Be Rich and Psychology of Money. Those are two of my favorites when it comes to these topics, but I’d love to hear what your suggestions are for people who are just getting started as well.
Jeremy:
Those are both great. Those are both on my list. It kind of depends on what you need. If you are a person who spends beyond their means and thinks that being rich is having fancy watches and fancy cars and you just always want to do better than your neighbor and you’re living beyond your means, I think Millionaire Next Door is a good place to start because it just breaks down all the myths around wealth. Wealth is not having the fanciest car. Wealth is not wearing the fanciest clothes. The millionaires are the ones wearing old jeans and sneakers and driving used cars because wealth is what you have left after you spend. Spending is just showing, wealth is what’s left over. And so if that’s your problem, Millionaire Next Door, if you want kind of a really simple, straight to the point breakdown of how to invest and why investing works, I like the Simple Path to Wealth by J L Collins.
It just is a really no nonsense kind of explanation of the stock market. He really just is unapologetically simple, but not because it’s for beginners, because it’s correct. Because it’s better than what experts are doing. Because the experts are doing all this fancy stuff and they’re underperforming when the simple thing is actually the best.
Daphne:
I will have to put that onto my Audible playlist because I haven’t even heard of that one yet. I know we’ve talked about giving great advice and I talked about how I was lurking on you for forever to make sure that you were giving credible advice. I ran this through some people that I really trust in the space who were like, “He’s so great. Everything he gives is really solid.” I wish that it was all sunshine and rainbows, but there are some predators out there in the financial space.
Jeremy explains how to discern good financial advice
There are people who are going to sell you products that potentially are actually damaging to your own financial wellbeing. And I’d love if you kind of talked about what you’ve seen or what people should be aware of, specifically teachers too.
Jeremy:
The financial services industry is this $4 trillion industry and the purpose of the industry is to basically extract money from you as any the industry is. But it’s kind of a weird one because they’re purportedly helping you with money while also trying to charge you fees to grow their business. And unfortunately for whatever reason, I feel like teachers are especially prey to this. I think a lot of school districts don’t want to show favoritism to specific vendors and so that basically opens a door to these predatory salesmen. And if you’re listening and you’re a teacher, you probably have seen or heard from them. They come sit in your break room or they send you emails, they’re wearing suits, they bring donuts or sandwiches or whatever, and then they sell you financial products. And you might be a young teacher and thinking, “Here’s a financial person, I want to get into investing.”
But generally those people don’t have your best interest at heart, they’re generally insurance salesmen. They’re selling things like annuity or permanent life insurance, and those are products that are riddled with high fees and will dramatically underperform the better path of investing, which is to buy an index fund. Which is a super low fee investment that directly takes the growth of the investments from the stock market, puts it right into your bank account. Whereas these insurance products are just complex, expensive nonsense in my opinion. I don’t have no love lost for the predatory insurance agents, so I’m going to speak my mind. But be very, very cautious about that stuff. And also not everyone in the financial services industry is bad. Of course they’re also financial advisors, but when people ask me, how do you pick a good financial advisor? My answer is I can’t explain that to you.
There’s no simple way to just pick a good one without you understanding the core basics of investing. Because if you don’t understand that, they can tell you anything and you just have to nod and trust them. And I don’t know how to tell you who to trust without explaining to you the basics and once you know the basics, you often don’t even need a financial advisor. So that’s why I think it’s important to… And also, no one’s ever going to care about your money like you do. Even great financial advisors, they’re looking out for their pocketbook. And so I think that… I know it’s really hard being a teacher and there’s a million things occupying your time and you don’t need another homework assignment, but taking a few hours to basically learn about money can dramatically change the trajectory of your financial life.
Daphne:
And then adding to that, I know I shared it back on a past podcast episode, it was episode 49. It’s when I interviewed Emily, she’s a teacher financial coach, and she came on and just broke down, should you stay for your pension? Let’s talk about the numbers and crunch those all out. But we talked specifically about 403bs, how you can supplement your income, supplement your investing with a 403b. But just like you said, in addition to people who are selling these insurance kind of scams inside of the school district, there are 403b advisors that are going to charge you these really high fees.
I had someone who came into my own school district, sat in and fed me sandwiches and then wanted to meet at a coffee shop later, was walking me through everything, was going to set up all the accounts. And I asked them a very simple question, which was, what is the percentage of fees that you guys are going to take off of this? And he let me know that it was 0% and that in itself is a huge red flag because that’s just not how these services work.
Jeremy:
True. Even though if they say they’re a 403 advisor or they say they’re a wealth advisor or whatever, those words aren’t reserved for anyone. And so they can still be insurance salesman or even if they’re selling legitimate investments, they could still have high fees. And if you’re ever talking to someone who isn’t crystal clear about what they charge or they’re telling you they charge zero, then I would just run from that person, right? Because they don’t charge zero, there are fees. And they sometimes will say things like, “Oh, we make money when you make money, or I get paid from my company not from you.” Or these squishy answers, which all of it’s not true. Money comes out of your investment to fund their business. Absolutely.
Whether it’s in transactional fees, when you make a payment, they take some. Whether it’s in monthly fees, whether it’s in what’s called an expense ratio, where a percent of your investment is taken every month or every year. There’s always fees because they have to eat. They’re not volunteers. And so you were right when you heard that, you’re like, “That doesn’t make any sense. And now I have to pull in the string until I find out what is actually going on.”
Daphne:
If anyone chases you and meets you for coffee and goes above and beyond to do something and then says they’re doing it out of the goodness of their heart, usually there’s some sort of red flag there.
Jeremy:
Unless it’s like a date and they’re trying to date you or something, maybe then but they’re probably not.
Daphne:
So I know that even with Betterment, I was able to just go on and they just have really clear this is the exact fee amount that they’re taking out. I think them it’s 0.25% or something like that. I’m not 100% sure. You might want to check it on your end, especially [inaudible 00:30:33] is put out in 10 years or whoever knows how long they’re going to keep it at that per particular rate, but what is a good rate for someone managing your funds?
Jeremy:
I’m a DIY kind of guy, and so I wouldn’t necessarily suggest anyone in the wealth building career portion of their career have someone manage your funds. The problem with someone managing funds is, here’s the thing is if you have less than a quarter of a million dollars, they can’t afford to charge you a percent of assets under management. That’s a business model where they take 1% per year. So if you have $250,000 invested, you give them all the money they invested for you, they take 1%, that’s 2,500 bucks a year. It’s kind of like the minimum that they can afford to charge per year to pay their rent and have their offices and make their salaries and their profits and everything. If you come in with $10,000, one of two things that happened. One, they’re going to say, “Hey, sorry, you just don’t have enough money to make it worth my while for the reasons Jeremy just explained.”
And so you say, “Okay, thanks.” Or they’re going to say, “Great. Let me show you where to put your $10,000.” And then that’s even worse because what they’re going to do is they’re going to take their 2,500 in sneaky ways and then you’re losing 25% of your money to fees and only have 7,500 invested. And so that’s kind of the nature of the world of the financial advice space right now. So I generally don’t recommend people hand over their investments. But a site like Betterment is a great option, what’s called a robo-advisor. And with a robo-advisor, it’s picking all the investments for you. You just put your money in and answer some simple questions and it’s very, very easy to use. It’s as easy as opening a Venmo account or something, but then instead of one to 2% of assets under management, which you only even get if you have a ton of money.
Or the worst model where they’re selling you all these crappy products, it’s a quarter of a percent and would prefer to be zero, but quarter percent’s getting close enough to zero where it doesn’t have a huge impact on your long-term growth. Or you could spend a few hours learning about this and open up a Vanguard, Fidelity or Schwab account and do it for essentially zero fees, just the expense ratio on the funds, which is like 0.03% or something. Now we’re talking pennies if you could go that way.
Daphne:
I feel like that is the most ridiculous setup to segment to my very next question or point, which was, this is why I brought you on, is because I am actually personally taking your course right now to help me do that. To supplement my own retirement account, walking me through exactly what to invest in, how to set up those types of accounts and not just depending on robo-advisors as well. Because it was something that I knew if my husband and I don’t have traditional retirement accounts or if we want to supplement it and potentially retire a little bit early. That was something that was really important for me to get a really quality, well-thought-out path to figure out how to do it because we’re DIY people, but I don’t want to figure it out all on my own. It’s overwhelming even for me, and I’ve been studying it for two years, and because you put out so much great educational information, I knew that I could learn something from you, and I was really excited to take your course.
So one thing that I’m excited to talk about is that you were able to set us up with a specific coupon code for this audience if they wanted to take your course, which is Teacher Career Coach, and you can go to teachercareercoach.com/investing to take his course and get even a discount on top of this. But do you mind sharing what is inside the course? Because it’s eight hours is the one that I’m taking right now, and it’s so much really great information and videos that’s helped me walk through all of this.
Jeremy:
Whenever I hear someone else saying the words, “This guy’s got a course.” Warning bells go off in my own head, I was like, “Oh God, it sounds like such a scam.” And so I don’t want to start off by saying there’s no secrets inside the course. This is the same… This isn’t some gateway to all like, “Oh, this is how you get rich quick.” It’s the same thing that you’ll find on my free content. It’s the same thing you’ll find in the books we talked about. It’s the same thing you’ll find in the classic books of investing, and your grandma who has your best interest at heart is going to tell you. It’s just an organized place to put it all together With videos and A through Z walkthrough. It goes through everything. It’s like, what is a stock? What is a bond? What’s an index fund? What’s a mutual fund? What’s an ETF, Roth IRA, 401k, taxes, everything you need to understand the stuff and it cuts through all the noise.
I think it gives a really deep understanding of why you shouldn’t be day trading, why you shouldn’t be speculating, why this is essentially guaranteed to work because you’re systematically buying at a very low cost and accumulating stocks and optimizing for taxes, and it puts all together with how to choose the accounts and all that stuff, and so people love it. Our average reviews are 4.97 stars out of five, and whenever I get a four, I’m like, “Oh, no, but that’s okay.” The four people are fine too. And so it is just the basics of investing, but it’s also the path that’s going to beat the experts and it’s not super expensive. It’s 79 bucks and with the coupon code, it’s I think 59 bucks or 25% off, which I think is about the same thing, and so not a huge difference.
And 20% of sales go to charity, not profits, 20% of sales of your 59 bucks we just donate to charity every month, and so we’ve donated, I think over $200,000 so far. I just think this is what I like doing now. I kind of retired at 36 and this is my early retirement side hustle passion project thing.
Daphne:
I love that. I love the confidence that you have that it’s going to help simplify the process because that is exactly what I needed. Somebody to just like, “This is the actual screen that you’re going to look at and you’re going to click here and here are the fancy acronyms that they use. Nope, don’t accidentally buy that one. Buy this one. This is the one that you want to buy.”
Jeremy:
No, totally. Because even in our conversation, the discussion of investing is so abstract. It’s like, what is an index fund? What does it look like? Where do I get. . . Is it on the shelf at Target? And then you just see the screen, you click open account. You click buy index fund. You type in the letters of the one that matches your age. You click buy and then you see it there and you’re like, “Okay, it’s actually not that crazy.” But it is nice just to have someone walk through it in real time with you.
Daphne:
It helped alleviate a lot of the concerns that I had that I was making the wrong decision or that I was putting too much in or too wit in, and just having someone confidently guide me through it has been game changing and the price is right. It is a reasonable price for how much information you’re giving. So if anyone wants to see it, once again, it’s teachercareercoach.com/investing and use the coupon code Teacher Career Coach, take his money, save on it. It is a really great product. Jeremy, thank you so much for being on here. I have learned a ton. I am just so grateful that you took the time. Where can they find you in addition to the course if they want to just learn from you for free?
Jeremy:
I’m an easy guy to find in the internet, Personal Finance Club. Most of the magic happens on Instagram @PersonalFinanceClub or the website personalfinanceclub.com.
Mentioned in the episode:
- You can find Jeremy at @PersonalFinanceClub and www.personalfinanceclub.com
- Our career path quiz at www.teachercareercoach.com/quiz
- Explore the course that has helped thousands of teachers successfully transition out of the classroom and into new careers: The Teacher Career Coach Course
