00:00.83 archpodnet Hello and welcome back to the crm archeological podcast episode 253 and we are talking about money and investing for the long term and I thought I would start out this segment by talking a little bit about what a roth ira is. And what that means should you get 1 or not and so on what I would say so the short answer is a roth ira is a retirement account where when you put money in. You won't have to pay taxes on it when you take it out. That's the big deal with a roth. So in general I would really recommend this kind of stuff for younger people people just kind of starting out in the world because. On the flip side you're like well why doesn't everyone have a roth ira it's because when you make a certain amount of money. They don't let you have 1 anymore like if if you're making like I don't know the exact line but let's say you're making one hundred and ten thousand dollars a year you're getting up into the area where they don't allow it anymore. So. If you're a rich person too bad no roth ira. But when you're starting out in your twenty s and thirty s it's a it's a great way to go to start investing your money because that's something that can be built on for the long term and then when you take it out. There is no tax penalties. So that's the big deal with that heather do you have any experiences with. 01:32.42 archpodnet With a roth. 01:35.21 Heather I um no I didn't I didn't really learn about them. Um I'm you would hear about it and I just didn't do it? Um, so and I would say 110 is not a rich person. But anyway, ah. 01:35.85 archpodnet Attack. 01:45.35 archpodnet It's that's yeah I know I know especially in you know Southern California you're you really? yeah yeah, no, but but that's but in the roth world. It is you know if that makes. 01:53.45 Heather ah no ah hundred and ten thousand a year is not rich. 02:00.15 Heather Yes, yeah, yeah. 02:02.78 archpodnet If that makes sense That's where they start drawing the line and they start making it so you can't put as much in every right. 02:07.49 Heather Right? right? and I would say you know you there are limits to how much you can um, contribute every year so you have to look and I would literally just write it down in a piece of paper all your options and figure out you know how much can you put into each one of these little buckets. 02:23.31 archpodnet Yes. 02:25.33 Heather And what makes more sense so you want to look and say um, there's multiple different places that you can put your money in and talk about all of them over this podcast. But when you're putting your money into these buckets you see. Okay, what can do more what can do more for me. 02:32.39 archpodnet Um, yeah. 02:39.80 archpodnet Right. 02:41.74 Heather And then you fill that bucket. Okay, the one that can do a little less for me, you fill that fucket and then there's some that are just um, there's almost everything has a map almost everything has a limit but like right now it's 6000 02:45.29 archpodnet Yeah. 02:51.19 archpodnet Um, yes, yeah. 02:56.23 Heather If you're um, over 50 right now. It's 7000 so that's the other thing is that you know that's 1 thing you and I were talking offline about is that just just because you're fifty years old and you haven't let's say ever saved anything. It's not too late because there are there are um laws. 03:06.66 archpodnet Um, yeah. 03:15.81 Heather In place for you to be able to save more that are that's tax free because you are older in an attempt to help you catch up. Yeah. 03:24.96 archpodnet Right? And you know I really like what you were saying ah back there a moment ago about sort of filling the buckets because that's what this is all about have as many buckets as you can. You know you're Goingnna have a roth you're gonna have a 401 k you're gonna play the stock market. You do all the stuff. So I found that that i. 03:31.84 Heather Ah. 03:33.83 Heather Yeah, yeah. 03:42.95 archpodnet Ideology of like filling the different buckets as you can is a really great way to go? um. 03:44.88 Heather Yeah, and here you know I I just said make a big list and put all the numbers down just that alone I know if in the beginning would have maybe go. Okay, you know what? forget it I That's just too much I There's no I don't even you're telling heather. 03:57.95 archpodnet Yeah, yeah. 04:04.68 Heather And Andrew you're telling me to make these lists I don't even know where to start right? So the one you don't have to do that. Um, let's say you have a job and that job has a retirement it. It has a company that's managing the retirement portfolio. 04:05.90 archpodnet Um, exactly right. 04:22.17 Heather And you can go. That's what I did you go and talk to that person and that person will sit down and will look at Okay, how much do you make right? now. How long do you have before you want to retire and you can't look at it like I'm not going to be spending as much when I get older. 04:24.79 archpodnet Ah. 04:39.83 archpodnet Um, yeah. 04:40.69 Heather Because you're going to be spending more when you get older why because things are going to be more expensive when you're older so you have to look at you have to and they're very good at that at um, ah you know, looking ahead and seeing how much is it going to cost estimating how much is going to cost for you to survive per month. And then that is what you're aiming for and then they help you figure out. How can you invest What's the amount you need to invest every year in in what buckets you need to put that those investments in so that you can build that that nest egg so that you're ready at at retirement that should be your goal. 05:15.68 archpodnet Right. 05:17.68 Heather To be able to to um, have enough money to basically take care of yourself comfortably not like in under the poverty line. You know, comfortably. 05:26.63 archpodnet Right? right? exactly and here you bring up to the like the role of the financial adviser and in my experience, you just had to be wary of the financial adviser This is the moment where when you feel a little unsure. That's okay. 05:42.97 Heather Yes, yeah. 05:46.14 archpodnet Because yes they are there to kind of well they're there for them. You know and then they kind of help you on the side if that makes sense in my experience and it's not like they're criminals but they they're they care about them First you know and yeah and you do need to. So. 06:00.43 Heather Oh of course. 06:05.23 archpodnet Go into that world with your eyes open. It is nice I would say to to deal with a financial advisor be completely. Ah relaxed in letting your financial advisor go if you don't like them because there is a billion of them out there. You know, um and I've had experiences on both sides I've had. 06:18.62 Heather Yeah, yeah. 06:23.37 archpodnet Terrible financial advisers and I've had ones that are pretty good and you just kind of it's part of the learning experience. You just sort of deal with them and you kind of you know, learn and you move on as you go, but this is your money you know so you don't need to sit there and deal with it if they're terrible. 06:39.13 Heather As you get older though I mean at least get your foot in the door as you get older. You're going to have to have more savvy financial advisors or I should say older. But as you have more money or you make more money you do need or let's say you want to kind of. 06:43.75 archpodnet Yes, right. 06:56.59 Heather Get your toe into investment stocks and things like that then you have to have a different kind of financial advisor but just to start off with don't let it overwhelm you because I know for me I mean maybe not everybody is like that. But maybe there is somebody That's listening. It's like that. 07:03.94 archpodnet Um, right. 07:12.69 Heather When you get overwhelmed and you don't know what to do. Sometimes you're just like you know I'm just gonna stick my head this and then not do it and that's the worst decision to make so yeah, okay, it's just me all right? Well never mind that thanks Andrew yeah, and I think. 07:18.10 archpodnet No no, that's that's just you. That's just you the the only person who does that in the world. Nobody no I know it it I was just going to agree that it it does get overwhelming and. 07:30.54 Heather Go ahead. 07:35.45 archpodnet As I talk about you know, being wary about a financial advisor I'm not here to say don't get one because even if you have one that's like middling it's still a really good learning experience like you like you said you have to get your toe in the door. You know you got to get in there and and ah try it out. So it's it's. 07:52.58 Heather Right? So yeah, the first step like I said before is I would say you you like I don't even know who to talk to um financial like looking at retirement and and um, you know, just looking ahead and trying to plan that's kind of. 07:53.91 archpodnet Good to do and good to learn. 08:01.58 archpodnet Ah. 08:10.10 Heather Ah, loss leader. Um, um, thing that that financial experts do so but they you they to get you in the door. So then then they can sell you other basically try to you know and have you invest in other things that they do make money on. They're helping you. 08:15.18 archpodnet Right. 08:24.49 archpodnet Um, yeah. 08:28.29 Heather Figure out how to be solvent and so that is something that they generally they do not charge for um and again go into in the best place to start is the larger companies that are actually managing the the company that you work for managing. Um. 08:32.81 archpodnet Right. 08:46.22 archpodnet Yes, yes I agree. 08:46.49 Heather That retirement fund. So so you did the so go in there and at least start there and you and you know what might be ah somebody who's not that experienced but some of the stuff like basically they're going to know more than you do? Okay so helpful and just get. 09:00.84 archpodnet Ah. 09:03.61 Heather At least get some kind of sense and what they'll do is they'll give you a profile and and most of time with these four 1 k's you can go onto their website and you can see how you have all these little pie charts and everything that tell you how you're doing as you're progressing towards saving to what you need to save in order to be comfortable when you retire. 09:21.54 archpodnet Right. 09:23.40 Heather So um, yeah, these are just start off baby steps and then master then you can move on to something a little more complex and risky. 09:26.97 archpodnet Yeah, yeah. Exactly and I have I have 2 things here first you know when you first get in touch with the financial adviser one of the things they're goingnna try and oversell to you is life insurance they be like life insurance. Oh you need more life insurance because that's where they you know make a lot of New year so don't don't. 09:39.94 Heather Term life you yeah. 09:48.25 archpodnet Worry so much about the life insurance thing like this is more for your investments. Also Heather you just brought up the term four 1 k and I thought we could move forward on that one so the 4 one k is kind of the the big mama that we all hear about for retirement and so this is where you put. 09:58.49 Heather Yep. 10:06.39 archpodnet Your money in for long term and the idea is you're going to take it out when you're retire you will have to pay taxes on it. Unlike the roth ira right? Those that's kind of the big difference between the 2 in the 4 1 k you ah you work with the financial adviser often Heather as you said with the. The one that they'll have 1 kind of attached to your company and that's really great like if you're if your company offers a 4 a 1 k some companies some companies don't and I would say if they do. The answer is always yes, right? you want. It you want. 10:31.15 Heather Ah. 10:36.69 Heather Yes, and don't assume like I've heard people I just I was just talking to somebody who just assumed that the 4 ah one k was something that the company put money in for you and I was like oh my goodness and they they haven't been doing anything. 10:46.97 archpodnet Now right. 10:53.50 Heather They haven't putting any money in because they assumed that the company did it for them like oh my goodness. Yeah yes, oh sure. Yes. 10:59.80 archpodnet And I'm so glad you brought that up I thought that when I was like 24 you know like I thought oh they just kind of started up. No, you have to actively you know, go in fill out the paperwork started up you ah depending on the 4 1 k 2 sometimes they'll give you a choice of how. Bose. Do you want it to the stock market meaning you can have your 4 1 k be more volatile and you might make big money but you also might lose big money. Um, or you have it more conservative and usually usually the idea is when you're younger, you can have a little more volatile when you're older a little more conservative. 11:23.70 Heather Um, ah, lose big money. 11:35.53 archpodnet It's really up to you I would just pick it somewhere in the middle you know? yeah. 11:37.68 Heather Yeah, the one um the 1 thing also I before I forget just because you're part time or as needed don't assume that you don't have the option for a 4 or one k ask um there are lots of companies that are giving for a one k and and. 11:48.60 archpodnet Um, right. 11:54.37 Heather Offering a 4 1 k and sometimes even for one k match which we can go into for um, part time and as needed so you know ask and you don't know if you don't ask. 11:57.14 archpodnet Yeah, yes, right I experienced that I did work part time for a crm firm that offered a 4 one k I thought was pretty awesome. You know. 12:10.28 Heather Yeah, yeah, and then the match. That's the other thing that I think is a misconception so people think oh match means match match means if I put in three hundred month three hundred a month or 300 a paycheck that my company is putting in 300 a paycheck. Nope. 12:17.21 archpodnet Yes. 12:25.88 archpodnet Right. 12:29.53 Heather That's not how it works think about like really think about that. That's a that's a lot of money if everybody did that? yeah. 12:30.87 archpodnet Um, and right and this is one that I never understood 100% because I haven't had to deal with this directly like in terms of matching versus not like if they match what does that mean. 12:47.00 Heather So um, a lot of companies what they do is they match up to a certain percentage of your salary. So um, let's say you are let's say you make forty thousand a year and you. 12:55.54 archpodnet Um. 12:59.59 archpodnet Um, right. 13:03.55 Heather You contribute 2400 in ah over the entire year to your for ah 1 k and then so that would be that's 6% of your salary and they will match a certain a certain percentage of that sometimes they'll match that full. 13:10.36 archpodnet Ah. 13:13.73 archpodnet Um, right. 13:24.35 Heather 6% and sometimes they'll match 50% of up to 6% of your salary. So it it. It's all so you have to look at it. You can't just say oh it's 4 1 k match you have to see exactly how much they are. You know they will match up to so. 13:39.74 archpodnet Right? So I I still don't get I don't get it. So if I put in that 2400 how much are they adding. 13:42.54 Heather You'll look. 13:49.38 Heather Um, so if let's say your employer says I'll match 50% of each dollar that you contribute then they're only matching 1200 right yeah 13:51.42 archpodnet Yeah, okay, okay, got you. That's all I need enough. Yeah, see that that totally makes sense So I've I've seen that in action before but I didn't quite understand see. 14:04.96 Heather So then at the end of the year now you've you've put in thirty six hundred into your four 1 k for the year 14:10.52 archpodnet Yeah, right? and and then I would also say in in case, you know they don't match it all or whatever who cares? Just do it. Just do it. Just do it. Um, if you're in the education world like I am I don't have a for one k I have a four zero three b which is. 14:18.90 Heather Right. 14:28.34 archpodnet Basically the same thing but for the education world. Yeah. 14:32.80 Heather Right? right? And here's here's another one like sometimes it'll say um, it's a dollar for dollar. That's another term that you hear that so when you're you know you're looking at um, you know you're negotiating when you're looking to move to another company. 14:36.97 archpodnet Um, yeah. 14:47.22 Heather You know they're always trying to change the terms to make them look ah more attractive. So if you say somebody says oh yes, we are dollar for dollar match on your four 1 k and you're like oh well dollar for dollar. It's great. But then this the small print is 3% 14:50.52 archpodnet Yes. 14:59.13 archpodnet Um, yeah. 15:06.10 Heather Dollar to dollar match so up to 3% of your salary. So it's actually the same thing right? So if I if your company says I will ยข50 on the dollar up to 6% of your pay and then the other company says. Yeah, we are dollar for dollar match up to 3% 15:10.31 archpodnet Ah, stack right. 15:24.55 archpodnet Ah, yeah, ah exactly yeah I know that's just they always play these games. Um I get I guess my last bit on this too is if you're in the education world right? I Obviously also get a like a pension through cal stirs. So this doesn't. 15:25.52 Heather Up your salary. Well, that's the same thing isn't it exactly the same thing. Yeah. 15:39.18 Heather M. 15:41.85 archpodnet Matter of course for the Crm world. But for those you in archeology if you go into the education world I will get that what that means is they just they take out a portion of my salary kind of off the top and put it on there. That's why if you look at my salary on like transparent California or whatever it looks like I make like a ton but I don't. 15:57.20 Heather Right. 15:59.23 archpodnet See that real money you know I guess until I retire but realize month to month I'm um, I'm not making my ah Ferrari Payments. You know I'm I'm not quite there. Ah so I Just want everyone to realize that there is that other that that the cal stars thing is separate. From the 4 Oh 3 B which is which is something in addition, the idea being that I'll put money away in the 4 3 B to kind of get me over the top because the calirs thing will be very basic if that makes sense. Yeah. 16:20.12 Heather Right. 16:28.96 Heather Right? But back to the Ira Um, the roth Ira or any of those other kinds of of means of saving money. These are things that are not tied to a company and you can do these things on your own. You should be doing these things on your own. So um, you know, just and you don't like. 16:40.66 archpodnet Nope Yes, yeah. 16:47.60 Heather Got to be careful, you go on the internet you can write but just go in and and talk to somebody whose business. It is to do this and don't be intimidated. You know, maybe sometimes ah banks offer that too or I actually say sometimes banks do offer this also use you know your bank is making money on your money. 16:52.31 archpodnet Yeah. 17:03.16 archpodnet Ah. 17:06.96 Heather So they have services that you may not even realize they have so go in and ask you don't know if you don't ask. 17:07.28 archpodnet Um, yes. 17:14.70 archpodnet That's a yeah, that's a great point. Definitely go into your bank use them because they're using you horribly you know so go in there sit down and be like I want to sit down with these people you know and we're gonna take an hour and you're gonna explain to me everything about this. Yeah I I think it's a great idea. Um. 17:20.98 Heather Yep. 17:25.36 Heather Right. 17:31.55 archpodnet Again, My my last bit on the roth I would say I've had a roth for years and years and years. Um I had probably the world's crappiest roth and still though even a crappy roth better than no roth at all you know? and um I Guess at this point. 17:45.22 Heather Yep yep. 17:49.59 archpodnet We can wrap that up and when we return playing the stock market.