To jump right to the investing course, check out Tela’s popular Trade Your 9-5 investing program.
Tela Holcomb is a stocks and options trader, mom, and wife who’s focused on spending the most of her time living the life she loves.
Before clenching financial independence from the jaws of a lifetime spent working in Corporate America, she was dependent on a paycheck from the 9 to 5 to pay her bills.
That was cool, but she wanted to have more time to spend with her family, friends, and travel; not just climb someone else’s corporate ladder. That’s where investing to generate income came into play.
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Just five years after starting, she reached financial freedom and traded her 9-5 for the investing life. Tela’s now making the stock market accessible to regular folks like us through her easily digestible course. In Trade Your 9-5, you’ll learn how to:
- Understand complex and confusing stock jargon so you’re confident participating in conversations and making good investment choices
- Read stock charts so you can identify trends and plan your next steps
- Leverage call and put options, as well as other trading strategies to make investing easier
- Protect your investments in the short and long term
- Make money in the stock market!
We also caught up with Tela on the podcast to talk investing. You can find the episode and the transcripts below. In this one, we cover:
- An easy way to use stock charts to rebalance your 401k/Individual Retirement Account (IRA) to maximize your returns
- Tips for managing your emotions so you can choose a proven investment system
- Investment Tools to maximize the success of your short- and long-term financial goals
- The difference between active and passive investment and how both can help you
- Using your personality to determine the risk tolerance and investment type best suited for your lifestyle and how to answer the personal question: do I want to trade or invest?
- Websites, tools, and resources you can use to safely practice investing before using your own money
Rich: It was good. This is rich and Mark, and you're listening to paychecks and balances where conversations about money and work. Don't make you want to pass the cabasa. Yay. Passed the cabasa EA throwback. And on today's episode, we're talking about how you can get started with investing without being a know it all.
Marcus: And don't forget to join our email list so you can receive a new paycheck. The balance is 15 minute money plan. This could be your guide to financial independence to sign up and get the free goods. Visit paycheck, balances.com/email. Again, that's paychecks and balances.com/email.
Rich: You need that. So we'll be back after our conversation with Tila to wrap it up.
But per usual, we hope you enjoy.
Marcus: Taylor Holcomb is a stocks and opposite straighter mom and wife, who is now financially free and focused on living the life she loves. But it wasn't always that way before achieving this freedom, like many of you, she was dependent on the nine to five to pay her bills. That lifestyle never quite felt right.
Do you want it to have more time to spend with family and travel? Not climb someone else's corporate ladder. Have time to live your own life. I know that sounds crazy. So what was her plan of escape? In 2009, she started learning how to trade the stock market. And just five years later, she made a plan to be financially free and hashtag retired today.
She'll share her story. Welcome to the show Taylor.
Tela: Hey, thanks for
Marcus: Thank you for coming on. So I will begin with the show is going to be for first time investors present company included. So feel free to talk to us like small children lost in the stock market, because that is exactly what we are.
We'll try to ask some, I guess hopefully no questions are dumb because I probably will ask a double question. So what did you do before you became a stock trading machine?
So before I started training, I was actually admin for the government to keep it simple.
Can you talk about which ages some people might be able to relate to that I work with the government as well.
I just keep it anonymous or shadowing, but could you speak to which agency group or some other that you can talk about?
Tela: No, actually I can talk about it. I was actually a a government contractor. On the predator program. Like the unmanned, aerial airplanes and stuff, the remote control airplanes.
So I did administrative work for them, which involves like in college you have syllabus work, you have to work through to get your degree where their pilots have syllabus work as well. So I like scheduled them to make sure they got all their flights and stuff so that they could get their pilots by.
Marcus: Nice. Nice. Of course, my first thought, when you said predators, I appreciate you for explaining that alien franchise. I'm like,
Rich: that's not what I thought about. I thought about the Chris Hanson to catch a predator. I was like, Oh,
Marcus: I think we're now on the same page. So what was your, I gotta get out of here a moment.
Tela: You know what I had, I got to get out of her moment, but then I had a kick out of the nest moment. So I'll share both of those with you. So when I first started working there, I was doing deployment work. So that meant I had to go to Iraq, Afghanistan, places like that. And at the time I was a single parent and that.
After awhile was too much for me. And I wanted to get away from having to leave the country because my daughter was getting school age and I wanted to be there. I felt like she wouldn't remember who I was. So I went to my employer and I asked for a position that was non deploying. It was, more admin work and I wanted to just stay at home.
And they thought about what they needed more than what I needed. And they were like we really just need you where you're at. So the permit said no, so that was my, I gotta get out of here a moment. And then that's when I transitioned into my last job, I left that one, went to my next job where I was doing that admin for pilots and.
I always knew I didn't want to work for someone else forever. So when I got there, I was like, I'm going to start a business because that's how people control their time. Like you start a business and then you can work whenever you want to. So I was, I started a business and a year into that, they found out I had started another, I started my own government contracting business and they saw that.
They said, since I. Knew so much about the different departments or was so knowledgeable about the different departments and how they work. And I could like function or go and fill in into all those different sections that they saw me as a conflict of interest and they fired. Yeah. So that was a kick out of the nest to like, okay, I've got to do something.
And when that happened, I had already been trading the stock market, but it wasn't my focus was trying to get this business going, but. When I got that kick out of the nest, my business hadn't gone anywhere. So there, I was like trying to figure out what that was.
Marcus: So let me ask this, which some people may or may not be able to relate to during that time or as a contract person.
Did you have access to our gain? Best men in a pension fund? No.
Tela: No. All we have is a 401k,
Marcus: okay. Did you invest in that and then have any tips or lessons learned from the 401k side of things? I
Tela: will say, definitely make sure you're contributing to it. Especially if they match, some people would say 401ks are not the best thing out there, but if it's what you have definitely invest in it.
When I first started I didn't know anything about it. I had an older lady that was a coworker and she was like, you have to start putting your money in here. I didn't know anything. I was like, okay. So I just set up. Yeah, I set up the automatic deposit to it and I just forgot about it.
And once I started learning about the stock market, I was like, let's go back at this 401k that I've got, I've had money going into, so definitely if they're going to do anything or minimum, at least contribute to that employee sponsored investment
Marcus: account. And so you said you were trading already, so why the stock market versus other avenues that you could have pursued.
Tela: I wanted to pursue, like I said, a business and trying to do other things, but I kept getting pulled back to the training. So the training was working and I was like, okay, I'm making some money, but let me go over here and try to, get a contract with the business. And so I kept trying to push that because I thought that would be my longterm and things kept falling through.
And they just weren't working. So like during the time, while I was like sitting and waiting to hear back from different networking things and possible contracts, I would train. So I just kept getting pulled back to that. So I don't know, if God or the universe or whatever was like saying, Hey, this is what you should really be doing.
I, it just kept coming up in that way. And I was like, okay, maybe I should really look at this. So by then I had gotten married and when we sat down and looked at our finances, we're like, okay, what are we. What can we do and where's money coming in, whereas money coming out. And that's when we realized, like I've been doing pretty well with this trading thing, I'm like actually making money sometimes the same as I was making at my full-time job.
And so that's when I was like, okay, Let me stop fooling around with everything else and really give this some more,
Rich: some of the most challenging things for you when you first dip your toes into the icy cold stock waters. And how did you overcome those things? Because I'm sure whenever people get into this, there's a lot of overwhelm, a lot of misinformation.
So what were some of those challenges for you?
Tela: Challenges were the terminology. Oh my goodness. The terminology was definitely a challenge. So I found ways to break it down and relate it to something in my everyday life that I'm used to. And that really makes sense so that I could understand it.
Another challenge was really not having anybody that I could. Ask the questions too, or really get the mentorship from, because it was a cold arena. Like people are like, Oh, you can go Google that. How do you not know this? So it wasn't very inviting and not, I didn't see people who looked like me.
So that was something else trying to get into the space and trying to learn. And no one looked like me was it was hard as well because it made me stop and wonder wasn't even possible. No one else African-American woman. Like I don't see anybody else doing it. So it was, old white men and are they going to take the time to want to teach me?
Are they gonna so that was definitely hard at first.
Marcus: Did you consider yourself self-taught or are there any books or sources that you would recommend as a go-to for someone who wants to move into this lane?
Tela: Yeah, so I definitely read books. One book that I really love is called the complete turtle trader.
If you're a beginner, there's going to be some terminology in there that you're like, I have no idea what they're saying. What motivated me about that book, because I didn't understand some of the terminology at first, but I read it re-read re-read as I learned more, but what initially motivated me about that book was it's about, I believe it was like 23 or 25 people that they took off the street who knew nothing about the stock market, just like me.
And they taught them a system to do every single time to make money. And some people, the people that had the drive to do it and to remove the emotions from it. We're able to be successful at it. So that for me was motivation that like, okay, if I can find a system that works for me and remove my emotions from it all and make calculated decisions, then like I can be successful with this as well.
I definitely recommend that book. I took some courses. I went to seminars, online trading Academy, I checked out their stuff and just really took in a lot of information. Investopedia was really helpful as far as terminology was concerned. So I definitely recommend checking out them as well.
Rich: The emotion piece and how people have to be able to take that out of it, but that's not easy, there's some of us, we just get like really Routt up and anxious. So how does one do that? How do you just remove the emotions from it? If you're someone who's just naturally anxious about this type of stuff.
Tela: So removing the emotion. Does it mean like completely being, like not having any feelings related to your money because we're always going to have feelings related to our money. We work hard for it. That money is connected to our survival. So when I say remove the emotion from it, I.
More so mean, identify when you get emotional and try to get to the root of why you get emotional. Because me, I get greedy. So when I started making money in the market, I'm like, like I saw the potential. And so I would get greedy, especially after I had just made, if I made $500 on a trade or on a stock, I wanted to hop right back in and buy something else to make even more money.
And every time I would do that, I would lose. What I made in Vinson and I'm like, what am I doing wrong? And so I had to learn how to identify when I was feeling that way and try to implement ways to prevent myself from doing that or, like throwing my money away basically. So what I do now, cause I know that is what I struggle with is, getting greedy when I've made a good sum of money or when I've had some successful trades, I take a break.
So I like. Step away from the market, step away from my computer and just go enjoy, the freedom and the money that I've made and just step away so that I get over that kind of high. And so that has helped me. I have a student that I work with and she gets scared all the time. So we're working through that for her, but it's for her, we've gotten to the root that she feels like the money's going to go away.
So if she's made $20 on a stock, she's ready to sell it because. She is afraid that $20 is going to go away. If she loses $5 that she's ready to sell it because she thinks all of her money is going to go away. So we're working through, I coach her when she feels that way she can call me.
And I coach her, like, why are you feeling this way? And then we worked through everything she has learned from me from the market. What do you know right now, the news that's going on? Is it concerning your specific company or specific stocks? If it's nothing wrong with the company? Then it's just the overall market and the overall world news that's affected.
So don't, kind of panic. So you have to learn how to work through that thought process instead of being, just reacting to the news and panicking, you have to stop and take a look at everything that's going on. The bigger picture before you react.
Marcus: So I have two questions here.
It's talked about a little earlier with the business side of things. So someone moves in this direction. Some people, if they're like me, they're already thinking about the money they're going to spend. So they're already, they got dollar signs in their eyes right now. So what are the tax implications and things that they need to keep in mind.
And then along the lines of the story that you just had there, would you have any tips or recommendations for someone who should they pull their money? Is it like going to Vegas? This is the stock market, like living in Vegas. You're like, I never do it. I'm like, all right, I'm going to Vegas. I got $200 gambling money and then $2,000 later.
But anyway do you recommend that? They say, okay, this is my stock market investment pool.
Tela: Yeah, actually I do. So for the tax implications, I would. Look at what type of account you're opening up. So if you're just doing your employee 401k, then that's a long-term investment. You're not having to pay taxes on that until, 65 and a half 70, whatever your, you start to withdraw.
But if you're going to trade straight stocks in the stock market you have to know that you're going to. Pay taxes on it, like you would regular income. So what I like to do is at the end of every month, look at how much I've made from trading stocks. And I take, depending on what tax bracket, so for me, I think I'm like 30, 30 to 32.
So we take out 30% of anything we've made in the stock market during that month. And we set it aside into a savings account. So when the IRS comes knocking, we're not surprised or like wondering where's this money going to come from to pay taxes on that money.
Marcus: And for the people who, okay, they're ready to make a jump in the pool, no Kendrick Lamar.
And they're thinking, Vegas, they got chips in their eyes too. So you do recommend it. Those people either have a tax pool that they have okay, this is my, I don't want to call it a gambling money, but I don't have a better analogy at the, off the top of my head here.
But this is what I'm going to invest in the stock more. Have you found that to be successful?
Rich: That's what I was thinking. I was sitting here and I was like, this kind of reminds me of it.
Tela: And that's the rub. I don't want people to think it's gambling when you make the, make an informed decision. It's not really gambling. So to keep it from being gambling, I definitely recommend you set aside money. In a separate pool. Like for me, I have my lungs, I have my long-term investment bucket, meaning it's an account that's just for long-term investing.
And then I have an account that we're trading and I keep them separate. Think of it. Like your checking and savings account. If you lived solely out of your checking account, you'd end up spending money, you were saving for say a new car or to buy a house. You actually separate the two so that you can make sure you're staying within your budget.
Things like that. So that's how I have my account set up. So I have my long-term investing and my trading account completely separate. So I'm not playing with the house's money since we're using the Vegas analogy. So I keep it separate like that. So I always recommend to do that so that you're not trading with your investing money and vice versa, and definitely set up, like I said, a separate savings account for taxes on that trading money that you're making.
Marcus: I really like this. I'm getting excited. I'm about to open up an account. I'm about to ask you which one, but we'll get to that question later in the show. So on the website, you have the motto, the stock market in plain English. What do you mean by this? I think you're doing a great job here. And what's your goal for the people that you work?
Tela: So the stock market in plain English, when I say that, like relating it to everyday examples so that. People can make that connection. And it makes sense. Think of it like, so if anyone has kids, you're not going to teach your kid how to tie their shoe by saying, okay, you fold that left lace into a 45 degree angle, and then you take the other one and you wrap it 90 degrees.
They're going to be like, what in the world are you talking about? They're going to glaze over, probably go over and grab another toy. Because they don't understand what a 90 degree angle is. They don't understand any of that. But when we taught my daughter how to tie her shoe when she was younger, We talked about the bunny rabbit and a log and him getting his tells that like she could understand that because she knows what a buddy rabbit is and she knows what a log is.
So I like to take those stock market terms and examples and break them down into everyday language. One example I use, when I talk about the stock market as a whole, I like the Dow NASDAQ, those indexes that measure the stocks on the stock market. I explained that a big crowd of people. So if you've ever been at a carnival or Disney world or anywhere with like our concert, if that whole crowd starts shifting to the left and each person in that crowd is a star.
If that whole crowd starts shifting to the left, you're going to get drunk with it. Because it's a whole lot of people. And if you try to go in the opposite direction, it's going to be really hard because all these people are stampeding you and dragging you in one direction. So when you see that, when they're saying the stock market is down or the stock market is all, up really high, your stocks get drugged with it, whether your stock wanting to go in that direction or not.
If it's moved in such a big way, when they say the Dow is up a hundred points, or the Dow was down a hundred points, that means your stock can be drug with it. So when people are afraid, when they see that their stock is out, stop, what does that crowd doing? If the big crowd is moving in one direction in a big way, Then your sock is probably getting drugged with it.
Don't panic, just know that it's not nothing wrong with your stock, so you can hang on, sit tight and not worry. And when people can make that connection with a crowd of people and imagining how they would get pushed around in a crowd that makes sense to them versus the normal explanation you would get from somebody.
Marcus: Yeah, I really liked that example. So I want to talk a little bit about getting in. Is there, do you have a go-to source and unfortunately I'm not going to name drops. I'll let you name drop because all I have in mind is the ones that they're probably just the ones with the good commercials. So is there like an intermediate intermediary that you recommend, like they're reliable, low fees that you use either for yourself or your students?
Tela: So I'm going to name drop three because they have different pros about them. And so depending on how active you want to be in the stock market. You definitely want to, check out which one would help you the best. So I always recommend people look at what the accounts offer, what is your goal that you're trying to achieve and to make sure that those accounts have the tools to help you get there.
So my first always my first and foremost tool to recommend is stockpile because. So many people will look at say, Amazon stock and say, I don't have $1,500 to buy one share, right? Amazon stock. It seems very expensive to a lot of people. What I love about stockpile is they will sell you. What's called a fractional share or a piece of a share in a stock.
And so that allows you to stay within your budget when buying stock. So if you only have $20 and you want to buy Amazon stock, They'll sell you $20 of Amazon stock. And to further break that down, think of a share of stock, like a pie, right? And so every time you buy one share, you're buying one pie. And if you wanted, if you only had $20, they will cut you a slice of that pie and give it to you.
So you didn't buy the whole pie, you just bought a slice of it. And so that's what I love about stockpiles, because they're allowing you to buy a slice of those pies that you otherwise would feel is out of your reach. Stockpile is good for if you want to buy and hold stocks for, a couple of years.
That's what I loved them for. The other tool I like is ally. Ally has low fees. Their platform is user-friendly it's not overwhelming to people, so I would definitely love them for it. Like I said, they're low fees and they're simple platform. My third tool that I love is if you're going to be doing more training, like I do.
I love Thinkorswim my TD Ameritrade. They have the best tools hand down. If you're going to want to look at stock charts and stuff like that, like they are the best, their fees are a little bit higher, but I'm okay with that because they have the tools that I really need. So something I'm looking at when you're looking for
Marcus: all right, we feel like we've got the people off and running and reach.
And I think it's because of our track backgrounds. We're always talking about relay races here. So I feel like we're on the back stretch here. We're defining the race, so how do you differentiate between active and passive investing? Active
Tela: investing is where you're going to be buying and selling often where I feel like passing the missing is where you just, you buy it and you let it sit and you are making money off the growth of the stock and off the dividends of those stocks.
Marcus: So I, I actually hear that term a lot and I'm not actually, I know, I don't know what it means. Dividends. What are people talking about when they say this?
Tela: Great question. So dividend is when the company is paying you as an investor for pretty much loaning them the money for being invested in their company.
So what they'll do is they'll look at. Their earnings for the previous quarter. And that was basically take a percentage of that and distribute it amongst its investors. So it pays to actually invest in some of these companies
Marcus: and as long the lines of either active or passive, do you have any recommendations, maybe going back to the story of the, either the person you're working with or the person you have to work with?
How does that jive with personality type or a person who would need to choose? I should say. Yes.
Tela: So when you get started, if you find, like you said, you were very anxious about your money, like you get scared about your money. If you find that you really can't shake that, then you probably are more suited for the passive investing where you're just going to buy and hold it for longterm because the day-to-day movement in the stock market.
It gives you anxiety and it scares you. So you would be more if that is you'd be more suited for them, passive investing. Maybe you want to make money in that way, but you're focused on your business. Then passive investing is more suited for you as well. If you don't have the time to put into, more active investing.
But if you have time to, learn stock charts and to really put in the energy into it, then the active investing would be highly beneficial.
Marcus: I have a two-part question here. One's probably going to be an opinion. So I'll start with that. W what is your opinion on either the rise of, or perhaps they've been around, but the robo-advisors,
Tela: I like the robo-advisors for those who don't want to take the time to learn how to do it themselves.
It is allowing people to get involved who otherwise wouldn't, but I feel like it is also a kind of a lazy way to get out there because if we take the time to really learn more about our investments, we could grow it a lot faster and a lot better than just. Sending it on, for a robot adviser.
But again, if you don't have the time to really focus on it, it's better to invest in some way than no way
Marcus: at all. And or those that exist robo-advisors is there any of those, if someone was going to go that route that you would recommend, okay, at least we're going to do this. This is better than, and I won't name drop.
Cause I heard of one that, that people don't like now, but it could be a future sponsors. I don't want to offend
Tela: there is one man, the name escapes me right now, but they allow you to invest. Based on your values and your beliefs. So if you are all about women's empowerment and you want to invest in stocks that have women as CEOs or are about women's health, you can invest in those kind of, they do like a mutual fund basically, and allow, and that's that, Oh, that
Marcus: was so proud
Rich: of myself.
But I love it because then people are able to invest in things that matter to them. And so they curate the different bundles, like I said, a mutual fund in a way, but it's based on what you believe in and where you want to make an impact in the world. Yeah.
Rich: Got it. So mutual fund and another one of those terms that a lot of people hear and if someone's new to investing, they may not have any idea what that even means.
So what is a mutual fund?
Tela: Oh, so a mutual fund is a bucket of socks, so they pretty much just take. Stocks and bundle them together and you're getting think of a mutual fund, like an elevator, right? I've heard it explained like an elevator and I really loved this analogy. So when you buy an individual stock, your, the value is determined by that one stock.
And so that stock goes up, your money goes up. That's it goes down your money goes down, but when you invest in a mutual fund and it's buckets of stocks you are investing in multiple things. So if once that goes up, It's not going to affect you as much as if you were invested in that one individual stock.
So an elevator has the different cords, right? It's going to take all of those chords to move up, but if one chord moves, it's not moving the entire elevator. Does that make sense? So you're not affected as much when one stock makes eight, once that goes down and your mutual fund, whereas if you're invested in that one in your individual stock, It's like putting it all on black when you come to Vegas.
Versus let me put a little bit here. Let me put a little bit there and then you get to spread and that's what's called diversifying.
Rich: Got it. And so it was a mutual fund how's that different? Or is it the same thing when people hear ETF or exchange traded fund? Is that the same idea?
Tela: Exchange traded fund? So tracking an index, basically. So you have an ETF that will track the Dow or the NASDAQ, right? So it's not, it's the same, but it's taken the value of something else. Taking the average value of the mutual fund. If that makes sense. Yeah.
Marcus: I meant to drop this earlier, but I'm going to have to go ahead and hit the plug.
So if you're out there and you're wanting to get started, we actually have some tips that you can go through sponsored by [email protected] slash tools. And one of those sources is actually a robo-advisor. If you want to look into that for more information, for those of you who visited the page before I apologize, it has been revamped and it actually loads a lot faster.
You don't have to take my word for it. You can visit the page. It's broken down by topic now onto you. Rich.
Rich: And so I feel like we're in a good place, we've talked about the mindset and having, a pool of funds to be able to invest, not gamble. So someone has funds set aside, they're ready to get going.
What are the first few things they should do from there. So I'll take myself for example. So this year is the first year where I'm like, you know what? I want to be more active in terms of my investing efforts. I set aside $500 actually did sign up for stash. That's probably why it came to mind. I was like, yeah, I feel like I can invest in things I believe in, but somebody got the money.
They sign up for one of the various services out there. What are the first two or three things that person really needs to think about or do to get going? If nothing else
Tela: I would say definitely figure out what is, are you long-term investing or are you trading? There's a difference. And a lot of people don't realize there is a difference.
And that is the very first thing you have to determine, what you're doing, trading or investing. And I'll explain trading is where you're going to buy and sell within a short period of time, whether it's. Day trading, where you buy and sell, same day or swing trading where you buy now sell in the next couple of days or weeks or months, or are you long-term, you're going to hold this for years to decades.
You got to know this because people will say they're investing, they'll buy a stock and a week later, is it going straight up? Like they want it to, they're like it's not working out and I think I should sell it. Should I sell it? If you're investing it's years to decades, so don't let what happens in the next week or the next month here, you into selling it by identifying that whether you're trading or investing, when you are feeling that way, you can go back to your, what is my goal with this?
My goal was to hold it for years to decades, or my goal was to sell it in a month, or my goal was to sell it when I made $500. You get to revisit that and stick to it. So course, correct. And put you back on track what is my plan with this? So I always tell people, you gotta know what you're selling.
So people say, Oh, I bought this stuff and I don't know how to do it. What was your initial plan with this stuff? Because if you're freaking out about what it's doing right now, and you were so close to hold it for the next year, then go back to not looking at it. So that's the very first thing.
That's pretty much identifying what is your risk tolerance? You know what I mean? You've got to figure that out as well, because if you are not very risk tolerant, don't invest in Amazon because Amazon moves like 20, 30, $40 a day. And some people can't handle that. Okay. So it's figuring out what your risk tolerance is.
Can you stomach a stock moving $40 going down $40 in a day? If not, you probably need to move towards stocks that are not as big movers, meaning they don't move so much in price from day to day. Think of those long-term companies like Coca-Cola or general mills or something like that versus an Amazon or a Google, because it'll probably scare you if you're not used to that.
And then I would say practice before you use your room. And I am like really big on practice trading, investing, because that allows you to get the feel of how the market works and what you're doing, where you need to click to buy what it looks like when you sell what it looks like when you've made a profit versus trying to figure all that out while you have your money out there, that's like coming here, I don't know how to play craps.
So I went to the craps table and what I love is you can ask them, how do I play this? Can you show me how? And they will teach you how to play craps. Without you having to put money down. And so that's what a practice account allows you to do. And there's a few places that have Investopedia has a stock simulator where you can go in there and play around.
You can buy a pretend and pretend shares and stocks and watch it over the next couple of days, two weeks and see what it does. See how you feel. You know what I mean? And get that experience before you go wasting your money. It's great that you have this money saved. But it's still not yet time to go out there and invest it just yet.
Marcus: Yeah, that was a great tip. And clearly I don't have a high risk toddler. It's cause even my imaginative self thinking about losing $40 each day on Amazon stock was giving me anxiety. Like I was sitting over here. My heart started palpitating. I'm like, Oh shit. Oh wait, I haven't lost any real money here.
I'll look into some other stock options. And I want to talk a little bit about so people and this is going to include myself. Rich might be able to relate to this as well, but I just started looking into, seriously, I've actually had a, I think it was a four 57 before I'm now invested in the 401k.
And I got shamed. Basically. I got investments shamed because I didn't know what I was in. I didn't know what my fees were. It's someone asked me like three basic questions. I had to log into my account for the first time in three years I had to reset the password. Of course. Cause I had, I
Rich: didn't know what the hell it was.
I've had to reset my password like 10 times. And every time I go to reset it, there's new rules about characters and everything else. And I'm like, yo, I can not remember. It is, it's so complex. But I guess they're also looking out for my interest in security.
Marcus: I then had to find the email in which they sent the password to.
It was a whole thing, but that big said I'm back into my 401k. I actually had an update, which I put on Twitter and now in full transparency, say on the show. So I had moved out of a retirement target date fund into an index fund that matched the S and P 500. And then I like read a headline. It was like stock market down.
I was like, Oh God, I like logged in and moved back into the index fund, their retirement target date funds. In full transparency. I share that with the people, but for those who have access to a 401k, which tends to, as you might imagine, be more passive. What are your thoughts on. What accounts should they be in?
Are you adamantly for or against target date funds? Are, do you have any thoughts on how they can allocate our diversify, their funds do it?
Tela: Ooh, yes. I love that. I love this actually. So if you just want to set it and forget it I was like you, I had, like I said, it said the automatic. The posit and stuff and forgotten the password, all that.
I was just like, whatever, because I didn't know what to do in there. Once I did, once I learned this stuff about stock market. Oh my goodness. I went back in there. I got to figure it out. If you want to just set it and forget it. Pick a target date, fund, target date fund, and some bonds. You're good to go.
However, if you do want to keep an eye on it and get smart on your 401k. I have this training that I did. I actually did this with my 401k and I showed a couple of guys that I worked with before I left, like how to do it in there. But if you're going to look at the different, fun that your 401k offers, I have this little trick that I call hacking your 401k.
And instead of just allowing it to sit in a fund and do what it's going to do all year round, compare those two funds. Like you look at those funds on a stock chart. Yes. You can look at your 401k on a structure and where you look, where you see the dips compare, where you see when that goes down.
Sometimes those funds do the opposite of each other, so I showed them how to, when you see a dip by one of your other funds that doesn't dip during that time, and what you can do is shift your money from that fund that usually dips to another fund. So one of the gentlemen I showed this to we've looked at three of his funds.
One was like straight down over the past three years. And so he, he learned right then okay, I need to get rid of this one because it's just been straightened down for the past three years and it's losing him money every time. Then he saw that two other funds around like September, October one fund always went down for the rest of the year.
And the other fund always went up for the rest of the year. So he was able to rebalance his 401k around that time to stop losing money in one and start making the most money in the other. Now I always say, definitely check what your rebalance requirements are for your 401k. See what fees are involved, but if you're able to rebalance at least once or twice a year without getting penalized for it, I would definitely recommend taking the time to look at where you can shift.
Marcus: And just to be clear, let's I misunderstood there if they rebalance that's when they're more active. So that's not a target date fund, correct? That's when you have, okay. Okay. I just want to make sure.
Rich: Now a lot of these companies, they also have, because I think of like Vanguard is who our 401k is administered through at work.
They have people that you can speak to as well. So what are your thoughts on folks we're working with financial advisors, for example, or someone to help them actively manage this? Is there a threshold where it's okay, when you get to this point, this is when you really need to think about, start working with an actual financial advisor versus doing it yourself.
Tela: I think it goes back to how much time you're willing to be active on your own investments. If you're willing to take time. Like I don't have a financial advisor because I can do it myself. I have the time and I'm willing to learn and do it myself. But if you're not a financial advisor is great, but I would recommend still taking the time to learn some things.
Because it's going to make your life and your financial advisor's life. People will come to me and they'll say, I want to learn how to do this myself, because I gave my money to this financial advisor and he wasn't really making me much, and I don't understand what he was doing. So I'm like did you ask what was going on as in they weren't understanding that a financial advisor's goal is to think about the 60, 70 year old, you.
But a lot of us are impatient. We want money now. We don't want to wait till we're 60 or 70. And so I think people, there's a misconception that when they go to a financial advisor, they're expecting every month, the financial advisor to tell you about all of these thousands of dollars they've made you.
And you can now go turn up. That's not what they are working for. They're working with it for the 67 year old you, so they're putting your money in those safe places that are going to grow. Over the years to decades. So take the time to ask questions. Where's the money, where are they putting the money and why that fund versus another flood?
Not because you don't trust them, but because it helps you understand and understand why they're doing what they're doing with your money and not. Turn around and say they weren't doing anything. They were doing their job and you just don't understand what their job was. So I think it's definitely helped to do your own homework and ask those questions.
Why and understand what a fiduciary, right? So crazy term. But what a fiduciary is. Some financial advisors, they make money based on the different funds or products. They get you to invest your money into. And some don't, they don't get paid based on the product they put you in.
They'd get paid on maybe a percentage of what you're investing or something like that. They are some people feel like those who get paid based on the products are only pointing you to products that. Are beneficial to them that they're going to get a kickback on. And some people prefer that's why, some people prefer the other type of financial advisor because they feel like there's nothing enticing that advisor to not think of your interests.
Okay. So always ask, is your, are they a fiduciary will they have your best interest in mind or are they thinking about lining their pockets by pointing you to specific products? So that's something to ask as well when you're looking for a financial advisor.
Rich: And so you're speaking about the folks who are more likely to have your best interest in mind.
I think they call that fee only, correct fee only. Got it. Cool. And as you were explaining this, I was actually thinking about like, when people take their car to the shop and not thought about myself from China. Cause I don't know anything about cars. And I think about like how I try to like do research on the potential issues.
So I can go in and throw some terms around, because a lot of times people talk about when they bring their car into the shop and all of these extra things get done to it or stuff. Yeah. So it's almost like the same thing. If you're going into the car shop, trying to not get got. You should have that same mentality when you're working with financial advisor, but maybe not assuming that they have negative intentions per se, but that you want to know what's going on so that if you encounter this in the future,
Marcus: and do you have any. Financial advisor networks. First of all, I'd like to say thank you because we have a number of financial advisors, listen to the show. I know they were tapping their feet screaming. Yes. That's what we do. Thank you for defending us. So I appreciate that coming to their aid. Is there any networks that you recommend people go to?
I was going to plug the Garrett planning network of which I have no relation. How was like
Rich: you just violated probably all sorts of law.
Marcus: That I when I found that one, but is there another one that you recommend it's a good source for finding trustworthy financial advisors?
Tela: First, I would like to plug a financial advisor that I know, and I trust I don't get a referral for mentioning him.
He's not my financial advisor, but he's very knowledgeable and anytime I've gone to him with questions or sent anyone to him, like they've always been happy. His name is Kevin Matthews. And he, yeah, Kevin, he has the company building bread where he's trying to educate people on their longterm investments as well.
I love him. He's one of Investopedia is top 100 financial advisors in the country. So he kinda knows what he's talking about. Other than that outside of Kevin, I would recommend, I use this app called personal capital. And they have financial advisors that you can call on to help you figure out where you should be investing your money based on your goals.
And I've found them to be very helpful. So I checked them out.
Marcus: Yeah. I've heard good things about personal capital as well. So there's some people I have to ask the question they're probably being like, I can't believe he hasn't asked it already. What are your thoughts about cryptocurrency?
Tela: I start with, it's not my lane, meaning I don't invest in Bitcoin or any crypto.
And I think it's for a while, they're like, where did all the Bitcoin people go by the road? I haven't heard anybody talking about their Bitcoin or anything, but I think recently it has really gotten hyped up and a lot of people jumped in on that wave. And felt like they were, a great investor because they were making money.
But the way that Bitcoin in particular was moving, it can be very dangerous for those who don't know what they're doing. So I think there was plenty of, there is plenty of opportunity to make money if your trading, but if you're a newbie to all this, I recommend you hang back or least get educated before you put your money out there, because that is.
It's definitely an arena that will we'll take all you got. If you're not careful, you
Rich: know, I hear some of the crazy stories and I've actually had people at work talking about friends who got into Bitcoin early, and it does sound tempting until I see what the current price is. They're like, yeah. My friend made $287,000, or my friend made $400,000 and.
It's at one thing when you just like, see these stories like on TV, but when you hear somebody saying they know someone who actually cleaned up, it does become tempting, but I'm gonna stay on the sideline now.
Marcus: Yeah, my, and this was a, you talk about interesting conversations by tattoo artists was, it was like, it was in cryptocurrency.
I think it was the first time I heard about it. He's yeah, man. I put 500 in and I don't know. It's 10,000 now. I was like I should look into this. But I think it like dropped the next week. I'll talk to him in a few months and see where he's at. If he's still employed it, speaking of being employed we want to, of course we have to hit it.
We try not to. Shame on here. That's like our thing that might be our new hashtag also, please, don't be surprised if learned about Bitcoin is the show top title of this show because we do have to get the clicks, but that'd be exactly. I appreciate that. A thoughtful response, but the people who are, might be on the fence either about investing or just working for themselves, what is your advice for getting them off that fence?
Tela: I would say definitely pay off your debt, reduce your debt as much as possible. I think that's what keeps a lot of people from stepping out. On either starting that business venture or, stepping away from a nine to five is because they are tied to it with debt. So if you can find every way to try to pay that down or eliminate it altogether, I would definitely recommend doing that.
So even if you're doing your business as a side hustle, make sure you're throwing money at your debt to get rid of it, because that is what keeps us feeling like we can't leave. And also surround yourself with. Like-minded people who are talking about growth and investing and starting a business, investing into properties because.
The conversations are different and it fuels you like going to fan con and meeting you guys and hanging out and having the conversations on what we're working on and what we're doing next and celebrating our wins and supporting each other. There's nothing like it, it really drives you to keep going sometimes in a competitive manner because you're like, ah, man, I got to catch up with him, but I love it.
I love the energy and I love how supportive everyone is. But. Friends that I had before that's not interesting to them. It held me back and made me curb my goals in the beginning until I got around like-minded people. So definitely find your network, find your people that are going to support you and encourage you and help you get your message out there.
Whether it's a business training, whatever, writing a book, like the people you have around you really make a difference.
Marcus: And in addition to the wonderful community that people can join it, paychecks and balances on Facebook. Is there any groups that you would recommend that people can find like-minded individuals as you just spoke up?
Tela: Yes. I like the, is it the six figure army? See the six-figure check on Instagram. I love her. I love her community. She's definitely a Testament of what is possible if you're wanting to start a business, especially in the social world that we're in now through social media and being able to start something from your phone.
I think it's crazy how easy it is, but I love her community. Everyone is reaches out and help each other. And it's called the six-figure army on Facebook, or if you want to follow her, it's Six figure, check on Instagram, but look for those types of things.
Marcus: So another great episode, I'm going to go ahead and I guess give our own backpacks and self accolades, but I think that people will agree.
Where can people find you around the interwebs? Or is there anything that you want to drop that's either coming out or you have out there that people should look into? Yeah.
Tela: So if you are thinking about being a little more active with your investing, or you want to trade the stock market, definitely check out my free course, go to dot com.
I have a free course. They're sharing some tips that most people aren't really sharing about. The stock market and I share it in a way that's Laney English, and most people really enjoy that seven day free course that I give out. So check that out and reach out to me on social media. I love being social and chatting.
I'm Tila hokum on everything. My favorite platforms though are Facebook and Instagram, but reach out to me. Hi, let me know where you're at on your journey. If you have questions like I love answering people's
Marcus: questions. Cool. And thank you for coming on the show.
Tela: Thanks for having me.
Marcus: Yo, I feel like I'm ready to take over the investment game.
I'm definitely gonna have to download that guy and put the industry on its ear.
Rich: I haven't played around much on Investopedia and you've mentioned it a bunch of times, but I feel like I really need to finally dig into that at least as far as playing around with stocks, because I do have some money that I have invested via.
The stash app and also via Robin hood to check those out. And I might talk about those on a future show, but probably might be good for me to take a step back play with somethings, get comfortable, and then really dive back into it. Even though both of those apps do make it pretty easy, but yeah, I really hope people feel good about getting into investing and the mindset and learning the basics.
There's a lot of terminology and stuff like that we didn't get into. But the most important point is to get started. What
Marcus: do you think? Yes, sir. I agree. And I think I'm going to be one of those people as well. So I look forward to those
Rich: future conversations. And so if you've enjoyed today's episode or found that useful, be sure to share with your network and hit us with those five stars in Apple podcasts.
As we like to say, the more people we reach, the more people we help. So people check out the show, they read the reviews, they decide if they're going to listen and your words can influence that. So make sure that you drop by and hit us with those five stars so that people know that we're worth listening to.
Marcus: And if you want to follow us all the social media is reach out to us. And another venue you can find us on Twitter and Instagram at pay balances and on Facebook at paychecks and balances. Follow our individual accounts at Marcus Garrett with one T on Twitter to T everywhere else on earth. Rich is available at I am rich Jones.
I am, and don't forget to grab that free 15 minute money plan by visiting paychecks at balances.com/either.
Rich: So thanks to everyone for listening to this episode, it's been a dope financial literacy month. A lot of insight shared some of these. I might have to go back and listen to a second time myself, but until next time be safe, we have peace.
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Tela’s recommended Action Items:
- Get Smart on your 401k. Meet with your company or financial advisor or use Tela’s investment hacks to ensure your 401k is properly balanced and aligned with your financial goals.
- Pay Off Debt. If you’re tired of the 9-to-5, reducing your debt is a great start to turning the hobby or side-hustle into your next full-time job. Don’t allow debt to hold you back from your dreams any longer.
- Find Your People! Surround yourself with like-minded people that are interested in seeing you improve. This can be online (groups, forums, etc.) or off-line (networking, conferences, etc.) but be sure to find people that support and push you towards your goals rather than distract or discourage.