Lessons - Starting a Business and Exposing Money Myths | Fiona Smith - Founder of Millennial Money Woman

What would you recommend for somebody who lets assume that somebody wants to start their own business to reinvest in themselves? You said, okay, you have frugal living tips, but is that the best way is it to save money first or is it just to start investing, start a side hustle? First of all, is mindset locked in? What do they do next to build their own thing? Perfect. Great question, Scott. So, I think before even thinking about money at all, for me at least, what worked well was finding a mentor. For me, my mentor helped, he was probably like six decades older than me. Very well seasoned, executive, I was very fortunate to meet him and he taught me some of the basic steps that I would need to work and focus on in order to build a successful business down the road. So that includes looking at finances, but not just finances. Figuring out how to interact with prospects, figuring out how to hold myself in conversations in the boardroom, whatever it is. So I think finding a mentor in your area, whatever it is, if it's a blog, if it's actually building a brick and mortar business, find a mentor who's willing to give you the time and help you literally jump ahead of the rest of the game because I personally think that mentors are the ultimate shortcut in life. They can give you so much advice and help you save time, energy, and money. So that's number one. And then number two, when it comes to money, yes, so I would probably recommend starting off at paying off high interest debt, so like credit card debt, right? So I mean, definitely don't live with high interest debt. The second thing then is yes, focusing on investing in the stock market, for example, I'm a big believer in just investing in low-cost index funds. So very passive, yes, I do know a lot more stock market terminology, but for my own personal purposes, I just do a dollar cost averaging strategy, which is automatic. It's a set amount of money over a very long period of time for me. It's going to be like four, five, six decades down the road, investing and sticking to that strategy. That's my ultimate plan. But I think it even boils down to simpler terms. It's just quite simply spend less than you earn. And I think, you know, it becoming a millionaire or a hundred thousandaire, whatever the goal is in your personal life, it really just comes down to spend less than you earn. It's that simple and anything that, oh, go ahead. And now I was going to say, where do people spend and waste the most money? Oh, yes. I think number one is cars, especially newer cars. I'm just going like, oh, just thinking, oh, maybe, yeah, she's not wrong. I mean, yes, cars are, I mean, I myself, actually, I love cars. I'm a big car geek. I love everything about cars, especially racing, all of that type of stuff. So I'm definitely into that, but I do know that if you want to focus on building your wealth, especially in the long term, it's probably not a good idea to spend money on depreciating assets. Now, I know not all cars are depreciating assets. I know that there are some luxury cars out there that probably appreciate, but it probably takes a couple hundred thousand to buy them. So, yes, not the average Toyota, that's right. So definitely stay away from brand new cars. I think they depreciate the second you drive them off the parking car law, actually. So stay away from that. The second thing that I see a lot of people overspend money on is actually subscription services. If you look through your budget and take a look at how much recurring money that comes off of your credit card, for example, so we're talking Spotify, Netflix, any other subscription service, it actually adds up over the long term. And what I like to do is add up your subscription services over one month. So let's say it costs you 30 bucks for all of your subscription services. Okay. Multiply that over a year, right? So that's 360. And then multiply that by 10 years. That's 3,600 bucks. Right? So if you look at it in the long term, what could you do with 3,600 bucks? Like, a lot of different things. So again, it's all about looking in the long term and it will change your life. You're sort of like living, you know, you eat your own dogs, you're living all the things that you teach over entrepreneurship. But now let's go into the millennial portion. You've owned your own home since 23. These are all smart things. So okay, let's start it off, millennial money myths. What are some? All right. Let's go for it. So it's actually say the number one millennial money myths I've heard over and over again is that to be successful in America, you have to own a home. And I know it's really funny coming from a home owner, but honestly, I'm going to be, you know, totally honest about it. It is not all what it's out to be. It's really not. Home ownership might not be right for you. And that's totally fine. Like, you do not need to own a, you know, $300,000 or whatever it is at home in order to be considered, you know, you've made it. And honestly, it's because of liquidity, you know, again, the house isn't necessarily liquid like a bank account. You have super high initial costs, right? You talk about a preferably at least 20% down payment of your home. You got inspectors fees, not to mention all of the maintenance and the repair work that has to be done. Like, I have an air conditioner that's about to go yesterday. We had a pretty bad thunderstorm actually. So I was really worried. I turned it off. I'm like, no, please don't hit my air conditioner. The plumbing, I mean, I have plumbing issues too. So I went through probably a couple of hours on YouTube myself, you know, try to save money, figure out plumbing issues, which is not a good site. So no, it's not always, you know, amazing and you do not need a house apartment lifestyle or condo lifestyle or whatever it is that you want is definitely okay if that's what works for your lifestyle. So that's number one, you don't need a house to be successful. Number two, an excuse I often hear is that I don't earn enough money in order to invest today and I'll do it tomorrow. So that is, I think, honestly, like I said, it's an excuse. And the real reason behind it is because thanks to modern technology like investment platforms such as M1 Finance, you got a corn, so you got, I think Robin Hood, you got stash, you know, the list goes on. There's something called fractional investing. And what fractional investing is is that you don't need $3,000 to buy one share in Amazon. You literally can have five bucks and you can already be a fractional owner of Amazon and also in Apple, et cetera, et cetera. So no, you don't need hundreds or thousands of dollars to start investing. You can literally start with five bucks and I'm pretty sure everyone can do that. So no marks uses there. And the third one that I hear very often is, honestly, it's about life insurance. I hear that life insurance is a total waste of money. And I get it because I think that life insurance has gotten a pretty bad rap over the last couple of years because of, you know, sleazy life insurance salesmen. They try to push their products on you in exchange for pretty nice commissions. And typically speaking though, there are two types of life insurance products. There's one called a term life insurance product, which is like the simplest, the cheapest form of life insurance. And it's often recommended for millennials. And then there's something called a cash value life insurance. And that's kind of like an umbrella terminology, which covers whole life insurance universal life. The list goes on and on. And what's a cash value life insurance product? That's typically what's pushed onto millennials. Those are expensive. Those are permanent. And typically speaking, they don't match a millennial lifestyle. So anyway, long story short, life insurance isn't always a waste of money. If you have a family, if you have people depending on you for income, if you have a big liability, like a mortgage and you have a spouse, for example, that might need your help down the road. A term life insurance policy could actually help. You can get half a million dollars, a million dollars of death benefit for 30 bucks a month. You know, it's not that bad. So that's the last myth that I hear very often. Yeah.