Things That Matter

Here’s How You Can Start Investing Even If You Don’t Know Where To Start

The other day I was talking with a client and she told me “Brittney, I finally feel like I understand investing because you explain it as if we are just two girlfriends talking over lunch. You make it so easy to learn and I feel like I finally know what I’m investing my money in!”

I’ve been a financial planner for over 13 years and one of the biggest reasons I started my own financial company was to help smart, savvy women understand money and finally feel like they could come to a financial planner without feeling judged, talked down to or ashamed for not knowing personal finance and investing principles. 

I know how overwhelming investing can be, but the truth is once you dive into this new subject, you will find it isn’t as scary after all and a few smart investment strategies can go a long way in your overall financial plan and success.

Regardless of where you stand in your investing career, just starting out or a seasoned investor, here are three tips to get started in investing. 

1. Understand Compounding Interest

To me, this is like the 8th wonder of the world as it really does work like magic when it comes to growing your money for the long term. The simple way to understand the power of compounding interest is by the rule of 72.  Basically, the rule of 72 tells us how many years it will take to double your money given a specific interest rate.

For example, let’s say you have $5,000 that you can invest in a lump sum today into an investment that returns on average 4% per year. By using this rule, 72 divided by 4 is 18, so every 18 years your $5,000 will double.  

$5,000 today, 18 years from now $10,000, another 18 years from then, $20,000 and so forth.  

What if you took that same original $5,000 investment and instead got an average annual return of 8%?  Now your money will double every 9 years.  

So after the same 36 years instead of $20,000 from the 4% investment, you can potentially have $80,000.  That is how compounding interest will help you build wealth over time. It helps your money make money which of course is a very wise financial move.

2. Diversify

Don’t put all your eggs in one basket. I know this sounds easy, but yet so many people still don’t understand the importance of having a diversified portfolio. Basically, it means to have a little bit of everything in your portfolio. So a mix of different types of mutual funds whether they are stock mutual funds or bond mutual funds, real estate and possibly business equity in your overall investment portfolio.  

Think of it like a pie, if one slice of the pie is eaten and no longer has value then it’s okay because you still have the rest of the pie remaining. Diversification helps minimize your risk over time as you never have all your eggs in one basket, i.e. one investment category, one company, etc.  

I know investing can be confusing, so start by reading and learning more about the differences between a stock, bond, mutual fund, real estate.  This will help you have a better understanding of what is most appropriate to hold within your own investment portfolio. 

Remember everyone is different so your mix of investments may be different from your neighbors and that is okay as you may have different goals, timeframe, risk tolerance, etc.  Find the mix that is right for you and keep that diversification going!

3. Focus On The Longterm And Keep Emotions Separate

One of my favorite investing quotes is from the successful investor Warren Buffett who says, “be greedy when everyone else is fearful and fearful when everyone else is greedy.”  

Basically what this means, is you have to be clear-headed when it comes to your longterm investment strategy and not let your emotions get the best of you when the stock market fluctuates up and down. Most people react to the swings in the stock market and panic when Chicken Little on TV is telling them the sky is falling so they make irrational decisions regarding their investment portfolio. 

If you can remember Warren’s quote, then during those times of stock market dips, if you were in control of your emotions, you might be able to see that there are investment opportunities to take advantage of, for example buying more of a position if you found it a value in the market, versus being fearful and panicking and perhaps selling at a loss like most people end up doing. 

Again, investing is complex and what I am saying may not apply to everyone so please do your homework and work with a financial professional you trust to help you build the right investment game plan so you can stay the course for the long-term.

Learn more from Brittney about investing here:

I Have $150k in Debt — Here’s What Financial Experts Told Me To Do

Things That Matter

I Have $150k in Debt — Here’s What Financial Experts Told Me To Do

Suriyo Hmun Kaew / EyeEm / Getty Images

Money is a topic that is difficult to talk about. Traditionally, society has told us that there are three things that we should not talk about in polite company: religion, politics, and money. Well, politics seems to be the only thing anyone talks about these days. As for religion, well, I’m of the “to each their own” policy. But money is something that we often still ignore — especially when it comes to frank discussions about debt.

Nobody likes to admit that they have debt. Whether it’s credit card debt, student loans, or paying off cars, most of us have something that we’re keeping quiet about. According to CNBC, 70 percent of college students are graduating with a “significant amount of loans” which total $1.5 trillion in debt for the over 44 million Americans who have student loan debt. In fact, a recent survey revealed that two-thirds of millennials have at least $10,000 in student debt and more than a third admitted to over $30,000 in debt, according to Inc.

Even worse, 42 percent of those that had more than $30,000 in debt were women and 11 percent of millennials have over $100,000 in student loan debt. Unsurprisingly, credit card debt is actually even higher for millennials (at 46 percent) and car loans come in just behind student loans (at 34 percent). Then there’s also medical debt to think about, as well as the 20 percent of millennials who actually have a mortgage.

Some of us, like me, have debt in all of the categories.

When my husband and I met and moved in together just six weeks into our relationship, we did it because we were in love and knew we wanted to be together for the long haul.

ehplusmoney/Instagram

However, what we didn’t know at the time (and came to learn very quickly) is that we both came with a heaping amount of debt. Now, two and a half years into our relationship and nine months into our marriage, I can tell you that our debt has only increased: Collectively, we have around $150,000 in debt — about $100k of that in student loans, $40k in car loans, and another $10k in credit cards and medical bills. Add to that the fact that we just bought our first house and, well, our financial situation has gotten a bit more complicated.

It’s not easy to talk about finances, and it’s especially not an easy thing to do with someone you love. Sadly, money is often cited as a common cause of marriages falling apart — which is precisely why my husband and I are trying to tackle these issues sooner than later. I know that we won’t get out of debt any time soon, but having a secure financial plan is a good way to step into our future, together. So, shortly, after getting married, we decided to speak with some financial experts about how exactly to tackle our $150k in debt… WITHOUT driving each other crazy or stopping some of our other personal goals (like traveling together or having kids in the next couple of years).

Nora Dunn, a former Certified Financial Planner and blogger behind the financially savvy travel site, The Professional Hobo, told us that a lot of it depends on what we as a couple are earning and what our goals are. Dunn advised that my husband and I evaluate the importance of each of our goals. Was buying a house more important than taking vacation? How much did we expect to spend on a house based on the market in our area? According to her, it was all about taking an ‘everything in moderation’ plan, where we would examine our take-home income and expenses, and then divide our disposable income between different goals, depending on how our goals are prioritized.

After some discussion, we decided that prioritizing goals, and dividing our income accordingly, definitely seemed like a good place to start. In fact, Shana Bickel, CPA and Financial Coach, mirrored that advice when she told me that “it is not for me to tell the couple how to prioritize their financial goals.” The important thing, she says, is “to identify and get very clear about those goals and then develop a plan to pay off debt while saving for a home and allowing travel that makes sense for their financial health and well being.”

Another financial expert took a more straightforward approach.

black_girl_success/Instagram

“Sell those cars!” said Lynne Somerman and The Wiser Miser. “If you’ve got big financial goals like this, there’s no situation where I can recommend $40K in car loans when you can buy a reliable used vehicle for $10K. Even assuming you still need two cars, that’s $30K that you’ve now got towards a down payment. After that, it would depend on the type and interest rates on the student loans. If they’re private loans, go aggressively after them. If the interest is higher than about 4-5% on the student loans, they’d be my next priority. If their income is high enough, you could do both here.”

However, David Rae, a Certified Financial Planner based in Los Angeles, has a more realistic approach.

“Get those cars paid off and drive them forever!” he advised. “You don’t need a new car every two or three years. My car is paid off, and I plan to drive it forever. Each of those car payments is like a trip to Europe each year. Would you rather have a brand new car or a trip to Europe?”

He’s definitely right about that, which is why we have made paying off our cars our #2 priority (after paying off our credit cards), since we’d also like to save for an international trip in the near future. Rae also reminds me that, although student loans are important, so is saving for retirement.

“The student loans are going to take a long time to pay off. Get serious about them, but make sure to contribute to your retirement at least enough to get a company match,” he said. “This will be like free money from your boss, and the government will give you break on your taxes.”

Meanwhile, Ashley Feinstein Gerstley, a money coach who runs The Fiscal Femme, said that it is all about opportunity cost.

“We can only use or spend each dollar we have once, no matter how much or little money we have,” she reminds me. “How can we use it in a way that will maximize our joy per dollar in the shorter and long-term? It’s about looking at each option and choosing consciously. If a couple is paying down their debt and that’s really important to them but they also want to travel, they might decide to let go of expenses in other areas to make that work. What expenses aren’t bringing them much joy? Would they rather live in a less expensive apartment for the time being so that they have more money to travel? When we take a look at each expense annually (including our bills) it’s much easier to see where our money is going and decide if we want to allocate it any differently.”

Taking a look at our overall finances, my husband and I were able to use this advice to devise some financial goals, set some priorities, create a payment plan, and figure out what we want to save for.

barefootbudgetmama/Instagram

It took some serious negotiating but we came away with a clearer picture of our finances. It’s not going to be easy, mind you. Having debt as a couple is difficult, but unfortunately, something that almost all of us face these days. If you don’t have student loans, then you might have a car payment or credit card debt or medical bills from that time before ACA when you didn’t have health insurance and ended up in the hospital (guilty!). But ultimately, the best thing you can do for yourself when it comes to your finances, whether you are coupled up or not, is to do the work to figure it out.

As Rae put it, “Get serious about your finances now — it won’t get easier when you have kids. You may make more money but you will be busier and tired. Parenting is hard. Just saying.”

Latinas In Texas Are Among The Most Affected By The Wage Gap And It’s Getting Worse

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Latinas In Texas Are Among The Most Affected By The Wage Gap And It’s Getting Worse

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According to new research, Latina workers had to work until Nov. 20, 2019, to be paid the same wages as white non-Hispanic men in 2018, and it’s even worse in Texas. Representative Lizzie Fletcher (D-Houston) highlighted that fact on Latina Equal Pay Day, Nov. 20, in a tweet. “In Texas, Latinas make less than $0.45 for every dollar a man makes. That makes us 49th in the nation. The Senate must pass the (Paycheck Fairness Act) now. Latinas deserve better — we all do,” the Representative tweeted. Texas’s House of Representatives approved the Paycheck Fairness Act, sending it to the Senate for a vote back in March. The bill has been stalled in the Senate ever since. If passed into law, the Paycheck Fairness Act would increase penalties for employers that issue discriminatory wages to their workers. The bill would also require employers to report pay information to the Department of Labor, holding employers accountable for paying Latinas unfairly.

Last year, Latina Equal Pay Day was on Nov. 1, but Latinas have to work an extra 20 days than last year to make the same as their white male counterparts.

CREDIT: @REPFLETCHER / TWITTER

Last year, Texas was “the third-worst state for Latinas when it comes to the wage gap,” Maya Raghu, the Director of Workplace Equality at the National Women’s Law Center told Houston Public Media. She added that “the wage gap for Latinas has barely budged in about 30 years.” This year, Texas is the second-worst state in America for Latinas to make a living wage. Rep. Fletcher took Latina Equal Pay Day as an opportunity to push for legislation of the Paycheck Fairness Act. Later, Rep. Fletcher clarified her statement in a follow-up tweet, saying, “Someone asked the question, so to be clear: this statistic refers to white, non-Hispanic men.”

Rep. Fletcher received plenty of backlash from Twitter trolls, who nearly cried ‘white racism’ and spewed anti-immigrant rhetoric. “Why Latinas?  Why not just level it for all????  After all Latinas are your new majority. Who will be looking after the new minority?” asked Twitter user Shifty Schiff. “NO to #LatinaEqualPayDay !! Latinas crossing the border INCREASE chances Americans will be trafficked. #BuildTheWall traitor!!” tweeted another user in response to Rep. Fletcher. Another troll tweeted, “Equal opportunity, not equal outcome.  You can’t enforce equal outcome unless you take all opportunity away from everyone. This is not the job of government!”

In fact, reports show that the pay gap widens the more educated a Latina becomes.

CREDIT: LEANIN.ORG

Unfortunately, education appears to be a key factor, robbing Latinas of opportunities to compete in higher-wage fields because of the lack of access to education. In 2013, 19 percent of all Latina-Americans aged 25-29 had completed a college degree compared to 44 percent of white women, according to a government study. When you add documentation as a factor, the statistics plummet. Still, when you control for education, the gap only gets worse, according to the Bureau of Labor statistics. Latinas in the legal field are paid an average salary of $52,477 compared to white men who earn an average of $150,487, averaging a 65 percent pay gap, according to the Bureau of Labor. While Latina CEOs and General Managers are paid 35 percent less than their white non-Hispanic male counterparts.

More than half of Latina mothers are the primary income-earners in their household, and the disparities become inherited. Over the course of her career, the average Latina would earn over $1.1 million more if paid fairly, according to the National Partnership for Women & Families April 2019 report. The report cited that “if the wage gap were eliminated, on average, a Latina working full time, year-round would have enough money to afford one of the following: more than three additional years of child care, nearly 19 additional months of mortgage payments, more than two additional years of rent, almost two years of the maximum retirement contribution to her employer-sponsored 401(k) retirement account, or more than five years of the maximum retirement contribution to her Traditional or Roth IRA account.”

Nearly 1 in 3 Americans are not even aware of the Latina pay gap, according to a LeanIn.Org/SurveyMonkey poll.

CREDIT: LEANIN.ORG

A sample of 5,690 adults polled online between Oct. 25-29, 2019 showed that nearly 1,900 surveyors were not aware of the Latina pay gap. Half of them were not aware of the pay gap between Latinas and white women. The dollar for dollar wage gap is relevant when you control for job title, education, and location, but doesn’t factor in discrimination that favors white men over Latina women for promotion. The LeanIn.org/SurveyMonkey poll found that “for every 100 men who are promoted to manager, only 68 Latinas are promoted. This ‘broken rung’ results in more Latinas getting stuck at entry-level.”

READ: Today Is The Day To Stand Up Against This Horrible Latina Wage Gap And Here’s What You Can Do To Close It