Latest / Banter At The Bedside / Healthcare Worker Money Mistakes: 401(k), Roth IRA, Student Loans & Financial Planning Explained

Transcript

Healthcare Worker Money Mistakes: 401(k), Roth IRA, Student Loans & Financial Planning Explained · Banter At The Bedside

0:00
SPEAKER_03: Did they teach you about money?
0:02
SPEAKER_03: You know, I would not want Nick to intubate me.
0:12
SPEAKER_01: Hi everyone, and welcome back to Banter at the Bedside.
0:15
SPEAKER_01: We are here today with a very special episode.
0:19
SPEAKER_01: We're hoping that there will be two parts to this, but first we are talking today about finances, specifically aimed for those nurses.
0:28
SPEAKER_01: How do we talk about finances and healthcare?
0:30
SPEAKER_01: How can we prepare?
0:32
SPEAKER_01: These are well-paying jobs, and yet we all seem to have a side hustle.
0:36
SPEAKER_01: Why is that?
0:37
SPEAKER_01: So we are joined today with very good guests.
0:40
SPEAKER_01: But before I introduce them, let me get through our disclaimers.
0:43
SPEAKER_01: First, this is not medical advice.
0:45
SPEAKER_01: Please seek the care of your own medical professional.
0:48
SPEAKER_01: All of our thoughts and opinions are our own.
0:51
SPEAKER_01: We do not represent any entity at all.
0:54
SPEAKER_01: As always, I'm one of your main co-hosts.
0:56
SPEAKER_01: I'm Abby.
0:57
SPEAKER_01: I'm a nurse practitioner of eight years, been in healthcare 17 years now.
1:02
SPEAKER_01: Ooh.
1:03
SPEAKER_01: And this is not one of my strong topics.
1:05
SPEAKER_01: So I'm excited to learn with you.
1:07
SPEAKER_01: We're joined by Kaylee, our other main co-host in ICU nurse of 18 years now.
1:13
SPEAKER_01: Hey everybody, welcome back.
1:15
SPEAKER_01: Our two guests today.
1:16
SPEAKER_01: We have Michael coming back, nurse practitioner.
1:20
SPEAKER_01: He was on one of our first episodes, ICU Then Versus Now.
1:24
SPEAKER_01: And he has been in healthcare since 1985, and he became a nurse practitioner in 2000.
1:31
SPEAKER_01: He's specialized in cardiology and critical care throughout his journey in healthcare.
1:37
SPEAKER_01: And one of his main passions is helping educate young nurses on their financial future.
1:43
SPEAKER_01: And then we're joined today by Nick.
1:46
SPEAKER_01: He is the founder of Testament Wealth Management and is a certified financial planner.
1:51
SPEAKER_01: So we got someone not fully in healthcare, but Nick still understands the ins and outs, particularly for the nurses, because his wife is a nurse.
2:02
SPEAKER_01: So welcome, gentlemen.
2:04
SPEAKER_00: Yes, thank you so much for having me.
2:06
SPEAKER_03: Glad to be here again.
2:07
SPEAKER_01: So I think this is an interesting topic.
2:10
SPEAKER_01: We've kind of been talking about doing this kind of financial series.
2:15
SPEAKER_01: Why are all these side hustles in medicine when they are such good-paying jobs?
2:21
SPEAKER_01: I kind of wanted us to open up just with a bit of a question of what's one thing in your financial history that you wish you did different.
2:32
SPEAKER_01: And I'm hoping that this gives Nick a little bit to kind of guide us.
2:36
SPEAKER_01: And I'll start.
2:38
SPEAKER_01: I didn't have undergraduate loans.
2:41
SPEAKER_01: I was very blessed and I didn't need to have any.
2:44
SPEAKER_01: I got some scholarships.
2:46
SPEAKER_01: I had help from my parents.
2:48
SPEAKER_01: But when I went to go and get my master's, I needed loans.
2:51
SPEAKER_01: And someone told me, just take out whatever they give you.
2:54
SPEAKER_01: So I got all of these federal loans and I took out everything that I was offered, even though that was way beyond what covered the school and I was working full time.
3:05
SPEAKER_01: And now looking back, I'm like, that was probably not the best advice.
3:09
SPEAKER_01: So I'm still paying off student loans.
3:12
SPEAKER_01: I will because I decided to go back for my doctorate too.
3:15
SPEAKER_01: But that time I did not take out the maximum amount that I was offered, only what I was needed.
3:21
SPEAKER_01: Does anyone else have a financial thing that they wish they didn't differ or knew back then?
3:27
SPEAKER_03: Well, one thing that that Gwen and I have talked about is as new in our career is just because you can do something doesn't mean you should.
3:38
SPEAKER_03: You know, we bought our first house, we bought a brand new house because we had to be in a new neighborhood, and we could afford it when we really could have bought my Uncle Melvin's house for much less and still had a nice house.
3:52
SPEAKER_03: And you know, we've thought back, wow, if we had just just because we could afford it, it didn't mean we had to afford it.
4:00
SPEAKER_02: Mine kind of goes along with that, Michael.
4:02
SPEAKER_02: I let myself be talked into a car payment and a car when I didn't need a new car.
4:07
SPEAKER_02: But you know, car people I think they know everything.
4:10
SPEAKER_02: Not the people at the dealership, the people that like cars and like work on community.
4:15
SPEAKER_02: But I feel like that would have been probably a better decision.
4:21
SPEAKER_02: And I do regret not maybe like travel nursing for a couple years before I had my kids just to help like make some extra money to help pay off some stuff.
4:28
SPEAKER_00: Yeah, yeah.
4:28
SPEAKER_00: And I think the car payment is is rather common.
4:32
SPEAKER_00: Um recently I I spoke at UNC Chapel Hill.
4:36
SPEAKER_00: They had a financial symposium, spoke to the students there, graduate and and undergrad.
4:40
SPEAKER_00: And I was looking into car payments, and the average car payment right now in America is about$530 with an interest rate of 11%.
4:48
SPEAKER_00: And that's just the average, which is bizarre.
4:51
SPEAKER_00: So that can certainly set you behind a a lot.
4:54
SPEAKER_00: And a lot of times when you go to buy a car, the car salesman will ask, you know, well, what do you want to pay a month?
4:59
SPEAKER_00: Not how much do you want to go in debt, what interest rate can we have, but how much do you want to pay a month?
5:04
SPEAKER_00: Which is, I don't want to say borderline illegal, but it's it's bad.
5:09
SPEAKER_00: You know, we should understand how much we're going into debt and what that, you know, uh interest rate is and for how long that payment is and what the flip side of what you're giving up if you commit to that.
5:17
SPEAKER_00: You know, I don't not as hardcore as Dave Ramsey and that I don't think you should buy every car in cash, but there should be a healthy balance to you know not going too far in debt so fast.
5:29
SPEAKER_01: I I've had bad car.
5:33
SPEAKER_02: That's the thing.
5:34
SPEAKER_02: The second I did that, guess what?
5:36
SPEAKER_02: Somebody hit me and it choked it.
5:40
SPEAKER_01: When I was a new grad nurse, I had I think it was 2013, and I think I had a 2003 Buickle Saber and the window was broken, and I had to like hold the window sometimes when I was driving and the heat didn't work, but I didn't care because I lived in North Carolina, so it didn't matter.
6:02
SPEAKER_01: And but I will say I'm glad I drove that thing into the ground because for I think like three years living down here, I I drove that thing despite my mechanic wanting me to not drive it.
6:15
SPEAKER_01: But do all of these kind of sound like common things that especially like young people come to you out, Nick?
6:23
SPEAKER_01: Like kind of give us a little bit into like that fine, step us into that financial world.
6:28
SPEAKER_00: Yeah, I mean, so much of it depends and is behavioral and the fact that, you know, a lot of mistakes people make is made out of just uneducation.
6:38
SPEAKER_00: You know, the financial literacy in America is is very bad and very low.
6:42
SPEAKER_00: Because of that, people get talked into you know buying annuities they don't need, buying a house they can't afford, buying a car they can't afford, because they don't understand the full picture.
6:50
SPEAKER_00: They say, hey, I want this and I don't really care what it takes to get there.
6:53
SPEAKER_00: So especially with the car payment, and you know, a lot of people buy homes that they can't afford now.
6:58
SPEAKER_00: Obviously, rates are you know high, home prices are high.
7:01
SPEAKER_00: So, you know, I think renting gets a bad rap too.
7:05
SPEAKER_00: It's hey, it's you know, it's okay to rent sometimes.
7:07
SPEAKER_00: So I think being fluid, just you know, not having rigid rules.
7:11
SPEAKER_00: One, and being fluid in, you know, what is the environment that you're in, what's your situation is incredibly important as well.
7:16
SPEAKER_00: So, you know, those are incredibly common.
7:18
SPEAKER_00: I I've heard um a lot worse, but I think you know, funny mistakes typically are bred out of not being educated enough in what you're making a decision in.
7:29
SPEAKER_00: I think that flows too into one of the reasons, you know, you put on there, you know, why are healthcare workers so bad at talking about money?
7:35
SPEAKER_00: Um, I think one is because this isn't apply to everybody, but after, you know, the last 10 years of working with doctors and dentists and neurosurgeons and and you name it, it's because they think they know everything.
7:46
SPEAKER_00: And I think that can be said about a lot of professions.
7:49
SPEAKER_00: But nurses and doctors and dentists and surgeons are very, very, very smart, but also we need to understand that we're subject matter experts in that specific field.
7:58
SPEAKER_00: And so, you know, when we take a step out of that, like, you know, my wife was an ICU nurse for, you know, a number of years.
8:04
SPEAKER_00: You know, if something happens to me, I'm not gonna chat GPT it or look online or do, you know, find a Reddit form on how to fix myself.
8:12
SPEAKER_00: I'm gonna go to the hospital.
8:13
SPEAKER_00: And I think a lot of times what, you know, maybe people don't want to pay for an advisor, they don't want to admit that they don't know everything.
8:20
SPEAKER_00: Um, they don't want a second, you know, or third opinion.
8:23
SPEAKER_00: I think that's incredibly important to have a sounding board in your life that, hey, that is their specialty, right?
8:28
SPEAKER_00: Especially, you know, surgeons, they they are incredibly talented and they're incredibly smart and they're really good at what they do, and it's not easily replicated.
8:36
SPEAKER_00: Um, and I think that should be, you know, kind of the standard for a lot of other fields, whether it's attorneys or advisors or, you know, what have you, it just the rise of, you know, AI and Chat GPT and and do-it-yourself investors has has really bred a lot of bad mistakes that I see these days.
8:53
SPEAKER_00: And, you know, I think the first thing that leads to not making a lot of those mistakes is the you know, humility in that, hey, maybe I don't know everything.
9:02
SPEAKER_01: Yeah, I I think that's a good point.
9:05
SPEAKER_01: And I think too, it's like it's hard to admit that like I'm an expert in this one area, but then in this other area, maybe I don't know quite as much.
9:18
SPEAKER_01: I don't think they want to know.
9:20
SPEAKER_02: 22?
9:21
SPEAKER_02: You're making money now?
9:22
SPEAKER_02: I don't think they want to know what to do if it that would actually help them because that means they can't go on a vacation every six months or all the other fun stuff.
9:30
SPEAKER_02: That's why yeah.
9:31
SPEAKER_03: I mean there is definitely like I'm sorry.
9:34
SPEAKER_03: It's a good point, Haley makes about Haley's my daughter.
9:38
SPEAKER_03: Kaylee makes about I've got this money, and and but the reality is that you have I was just reading like the average nurse salary in the country now is uh is more than double the median salary in our country.
9:53
SPEAKER_03: So nurses make good money up from there, even more, of course.
9:57
SPEAKER_03: So really you have money to go have fun and do things, but still prepare for when your hair is my color and you're you know looking at retirement.
10:08
SPEAKER_03: So you really have money for both.
10:09
SPEAKER_03: I just don't realize it sometimes.
10:12
SPEAKER_03: Yeah.
10:14
SPEAKER_01: Yeah, I think we saw a lot of what Kaylee was talking about during the some of that COVID nursing money too.
10:21
SPEAKER_01: Oh yeah.
10:22
SPEAKER_01: Definitely saw people that like left and got you know, was getting though that COVID travel money and got remodels done and cars and then when that dried up, I think that's another piece too, is there is good travel money and we have some of these like high times, but it's not always there.
10:48
SPEAKER_01: And I remember at 22, like for an ex just like a day-to-day example, like I became very reliant on overtime shifts in my budget for the month.
10:58
SPEAKER_01: And then some months they didn't need me on that overtime shift, and I'd be called off and I'd be like, Oh, guess we're guess we're eating ramen this week, or guess I better find some guy to take me out on a date this week.
11:14
SPEAKER_01: Okay, yeah, no problem.
11:16
SPEAKER_03: Well, that is a good that is a good point though about the overtime because I've seen people that they go buy that really expensive car and and now they've I've got to work my overtime because I've gone out and spent too much money.
11:29
SPEAKER_01: Yeah.
11:30
SPEAKER_01: And overtime is never a guarantee.
11:32
SPEAKER_01: Even I think a lot of people that work in the hospital get shocked as new nurses when censuses are really low.
11:40
SPEAKER_01: They'll call you off from your regular shift.
11:43
SPEAKER_01: Like you can be put on call on your regular shift, and then you're making two two dollars an hour, or you have to do a PTO fill.
11:51
SPEAKER_01: And if you don't have PTO because you use all your PTO, you might that paycheck can get pretty skimpy sometimes.
11:59
SPEAKER_01: So I think it's important to talk about it.
12:03
SPEAKER_01: I think as elders in the community, it's good that we talk about it openly with the younger generation as well.
12:13
SPEAKER_01: Where where do you start?
12:15
SPEAKER_02: Like if if a nurse comes in to you, Nick, is like, where do I start?
12:19
SPEAKER_02: I don't know anything about it.
12:21
SPEAKER_00: Yeah, I think I I think understanding one, you a budget of how much is coming in and how much is coming out, you know, and that really dictates everything uh throughout the course of your life of, you know, you're only able to save for retirement or save for the future if you don't spend all your money.
12:38
SPEAKER_00: If you spend all your money, the rest of what we're gonna talk about is not relevant because you can't do it.
12:43
SPEAKER_00: And so I think, you know, the first thing isn't, hey, I want to, you know, I there's a number I need to get to, 10%, 20%.
12:49
SPEAKER_00: I think you work backwards in, okay, what are things I have to pay for?
12:52
SPEAKER_00: Do you have a car payment, utilities, house, rent, you know, you have kids, whatever, then there's gonna be a discretionary amount of, okay, there's some money I can go on vacation with, entertainment I can save, and then you, you know, go from there.
13:04
SPEAKER_00: I think, you know, the first thing, you know, especially hospitals are relatively generous as far as offering a 401k in a match.
13:11
SPEAKER_00: And, you know, a 401k is just a simply retirement plan.
13:15
SPEAKER_00: I'll get into the options between a traditional Roth potentially later on, but it's a retirement plan where you get money taken out of your paycheck, potentially uh the hospital matches, you know, typically is 3%, 6% you put in your plan.
13:29
SPEAKER_00: Um, and then that money just stays invested into the market for you know the next hopefully 20, 30, 40 years.
13:35
SPEAKER_00: You can't take money out until you're 59 and a half without avoiding a penalty.
13:40
SPEAKER_00: So it's a it's an account that saves for long-term growth.
13:42
SPEAKER_00: And so I think establishing a budget, understanding, you know, how much is coming in, how much has to go out, what amount do I have left over, and that amount left over can I afford to save and invest some is a really good place to start.
13:55
SPEAKER_01: Tell us about like your role then.
13:57
SPEAKER_01: So we've I've budgeted and I've got X amount of money to put towards my future.
14:04
SPEAKER_01: Like, where does what does a financial planner, a certified financial planner, do?
14:10
SPEAKER_01: Are you the person that we come and see?
14:13
SPEAKER_01: Should I be coming to you at 22?
14:15
SPEAKER_01: I'm not 22, unfortunately.
14:18
SPEAKER_00: Yeah, there's there's varying degrees of advisors and also services and help.
14:25
SPEAKER_00: And so I think to you know, take a little step back.
14:27
SPEAKER_00: Uh so I am what's called an independent fee-only advisor.
14:31
SPEAKER_00: And what that means is I'm not under any large company of Edward Jones, Morgan Stanley, Merrill Lynch, anything like that.
14:37
SPEAKER_00: And so fee only also means that I can't, you know, sell products, get commissioned.
14:41
SPEAKER_00: I only get paid directly from my clients.
14:43
SPEAKER_00: And I'm required to be a fiduciary, which means I'm legally required to act in your best interest at all times, which sounds obvious, like, hey, your advisor should do that.
14:51
SPEAKER_00: But those large firms, somebody who's not feeling like they don't have to do that.
14:55
SPEAKER_00: Like I can be an advisor to Edward Jones and Morgan Stanley, and I don't have to act in your best interest.
14:59
SPEAKER_00: I could get commissions, I could put you in products, I don't have to tell you how much I'm paying.
15:02
SPEAKER_00: And guess what?
15:03
SPEAKER_00: I don't have to act in your best interest.
15:04
SPEAKER_00: You know, it's like going to, you know, a doctor or, you know, a nurse, and you know, at bedside, she gets, you know, an extra kick.
15:12
SPEAKER_00: And if she gives me one drug versus the other, well, she's probably gonna give me the one that she gets a kickback on.
15:16
SPEAKER_00: It's kind of the same thing for advisors that they can put you in investments, they can get kickbacks or commissions on the investments they put you in, and they don't have to tell you and they don't have to do it in your best interest.
15:25
SPEAKER_00: So I think, which is bizarre that that's even allowed.
15:30
SPEAKER_00: And so I think, you know, one, before we even get into like, you know, how we help people, just if you are looking for an advisor or evaluating or thinking about it, you really need to understand how they get paid, what the incentive is, and do they have to act in my best interest?
15:44
SPEAKER_00: And what you're looking for is a fee only financial advisor.
15:47
SPEAKER_00: If you hear fee-based commission, like you just need to walk out the door and run.
15:51
SPEAKER_00: Obviously, I'm biased.
15:52
SPEAKER_00: I own a I own or run a fee only firm, but you can look up, you know, the definitions of what is fee only versus fee-based and how are they paid.
15:59
SPEAKER_00: So, you know, that's that's one.
16:01
SPEAKER_00: But two, you know, there is really no way that you know we don't help people in in their lives.
16:07
SPEAKER_00: It's, you know, when you're young, you know, it there's differing levels of needs, right?
16:12
SPEAKER_00: If you're 22 years old, you might not be married, you might not have kids, you might be single, dating, renting.
16:18
SPEAKER_00: So really at that point, you just not try not to blow all your money and save as much as you can.
16:22
SPEAKER_00: And so I don't typically work with, you know, people that young just because there's not a ton I can do or offer them.
16:30
SPEAKER_00: You know, I think the real thing is just hey, contribute to your 401k, save some in a what's called a taxable brokerage account, which is just a regular investment account.
16:38
SPEAKER_00: You can open a Fidelity, Vanguard, Schwab, somewhere like that, and you know, just try not to get too deep in a car payment or, you know, buy a house you can't afford.
16:47
SPEAKER_00: I think those are some practical steps early on as you progress, you know, throughout your career and you start making six figures, maybe go to, you know, nurse practitioner, maybe become a doctor, uh, maybe you have children, maybe you get married, maybe you buy a house.
16:59
SPEAKER_00: So this needs certainly change.
17:01
SPEAKER_00: And so instead of, hey, I just need to put money away my 401k, that's when it turns to, well, there's also other types of accounts to invest in.
17:09
SPEAKER_00: You have, you know, a Roth IRA, a Roth 401k, a traditional IRA, and a regular brokerage account.
17:14
SPEAKER_00: How much do I put in each account and why do I put money there?
17:17
SPEAKER_00: Because when you do retire, or hey, guess what?
17:19
SPEAKER_00: A lot of people don't want to work until they're 60.
17:21
SPEAKER_00: They want to retire early on.
17:23
SPEAKER_00: If all your money is in a 401k, you can't really do that.
17:26
SPEAKER_00: So it's really taking proactive planning to talk about that early on.
17:30
SPEAKER_00: And okay, if we retire early, where's that money going to come from?
17:32
SPEAKER_00: You have adequate life insurance.
17:34
SPEAKER_00: You have disability insurance outside of work.
17:37
SPEAKER_00: Um, a lot of people only have life insurance or disability policies through their work.
17:41
SPEAKER_00: But guess what?
17:41
SPEAKER_00: If you get fired or leave, those are no longer.
17:44
SPEAKER_00: You have no more.
17:44
SPEAKER_00: Um, and the earlier you get those, the the cheaper they are.
17:47
SPEAKER_00: And so, you know, and also estate planning, having a will and a trust, you know, if something happens to you and your husband or you and your wife, you know, what happens to your children, who looks after them, where does your money go?
17:57
SPEAKER_00: Who takes your money?
17:58
SPEAKER_00: At what age can your kids control that money?
18:00
SPEAKER_00: You know, those are all things that you need to think through early rather than later, because unfortunately, I've seen a lot of instances where they keep kicking down the road, kicking down the road, and then you wake up one day and it's it's too late.
18:12
SPEAKER_00: And so, you know, really we take the time to think through every single aspect of your life, or those cash flow planning, investment planning, retirement planning, tax planning.
18:20
SPEAKER_00: How do I pay as little the least amount of taxes as possible?
18:22
SPEAKER_00: Which I think everyone will sign up for that one.
18:28
SPEAKER_00: So I think, yeah.
18:30
SPEAKER_02: Yeah, tell me more.
18:32
SPEAKER_00: Yeah, I haven't met anybody that wants to pay more taxes.
18:34
SPEAKER_00: Um, and so we put a lot of emphasis on tax planning and how can we lower your tax bill because there's a lot of proactive things we can do there.
18:42
SPEAKER_00: And so um, there's really if you're working with the right advisor, there's you know nothing that they can't help you with.
18:48
SPEAKER_00: And I think that's really important to, you know, know, hey, your advisor, like the industry's evolved, right?
18:53
SPEAKER_00: We don't pick stocks anymore and I don't wear a suit and a tie and talk over your head and you know, walk you out the door and say that's it.
18:59
SPEAKER_00: It's it's very in-depth now.
19:01
SPEAKER_00: And so I think when you're differentiating other advisors or potentially looking into it, one, understand how they get paid, and two, you know, understand what they do for you.
19:10
SPEAKER_00: I I've had plenty of clients come to me lately, you know, prospects to turn into clients, and they are coming from another advisor at one of these big firms that's never looked at their tax return.
19:20
SPEAKER_00: I mean, I it's literally you can't do anything if you don't know anyone's tax situation.
19:23
SPEAKER_00: That's like going to the hospital or going to the doctor and you're telling them what's wrong with you, and they're standing in the corner with noise canceling headphones in the blindfold on.
19:30
SPEAKER_00: Like, what's the point?
19:32
SPEAKER_00: It's unbelievable.
19:33
SPEAKER_00: And so, you know, it it's it's so important to understand that you have a good advisor because not only will it cost you money, I mean, it can cost you, you know, quality of life.
19:44
SPEAKER_00: I mean, I know multiple people who've got sold into an annuity.
19:47
SPEAKER_00: Um, and I mean, that's literally the difference of$500 to$700,000 in their life, which is also the difference of being able to retire now versus having to work three to five years longer.
19:57
SPEAKER_00: And so it's not, you know, oh, I might make a little, you know, miss a little there.
20:01
SPEAKER_00: There's serious ramifications of not knowing what you're doing when it comes to financial planning.
20:06
SPEAKER_02: Yeah.
20:07
SPEAKER_01: Yeah.
20:08
SPEAKER_02: How could they not look at their tax returns?
20:10
SPEAKER_02: I don't understand.
20:11
SPEAKER_00: It's bizarre.
20:12
SPEAKER_01: That's really crazy.
20:14
SPEAKER_00: Yeah, I mean, they literally red flag.
20:18
SPEAKER_00: Yeah.
20:18
SPEAKER_01: If they don't ask for your tax returns, walk on out.
20:22
SPEAKER_00: I mean, I literally talked to a woman yesterday who inquired on our website and she had a Vanguard advisor.
20:29
SPEAKER_00: Um, and the advisor, she made too much money last year, and she accidentally accidentally Vanguard told her to contribute to a Roth.
20:36
SPEAKER_00: Well, guess what?
20:36
SPEAKER_00: If you contribute to a Roth when you can't, when your income's too high, you have to pay a pretty massive penalty to the IRS for doing so.
20:42
SPEAKER_00: Vanguard had never looked at her tax return, had no idea how much money she made.
20:46
SPEAKER_00: And so she was looking elsewhere.
20:47
SPEAKER_00: So I mean, she had to pay thousands of dollars for for that.
20:50
SPEAKER_00: And so it's just things like that that, you know, you think, oh, they're an advisor, they're, you know, they work at Vanguard, they work at wherever.
20:57
SPEAKER_00: It's it is tough because there's so much information.
20:59
SPEAKER_00: There's more information in the world now than there ever has been, or that we have access to in the course of human history.
21:04
SPEAKER_00: So there's a lot of a lot to sift through.
21:07
SPEAKER_00: But you know, I think just practical things, you know, does my is my advisor clued in on all these areas of my life because we we're past the stage where an advisor just does investment.
21:16
SPEAKER_00: That's that's that's so 20 years ago.
21:19
SPEAKER_00: We we've moved on.
21:20
SPEAKER_01: Yeah.
21:20
SPEAKER_01: I I got a Roth IRA penalty to taxes ago.
21:26
SPEAKER_00: Yeah.
21:26
SPEAKER_00: So and wow, yeah.
21:28
SPEAKER_01: Thankfully, mine wasn't a thousand, like we had just tipped over and I'd forgotten about this like Roth IRA that was like automatically like drawing money out that I set up when I was like twenty one, and then that I remembered about it, and then it was like I think I had to pay like a five hundred dollar penalty, but that still sucks.
21:49
SPEAKER_00: Yeah, it still sucks.
21:50
SPEAKER_00: I mean, you can do a lot with five hundred dollars.
21:52
SPEAKER_00: I mean, if if I saw five hundred dollars laying on the ground, like I'd push you over to get it, you know.
21:56
SPEAKER_00: I mean, it's not something you just wanna, you know, like uh I mean it's a
22:00
SPEAKER_01: Car payment as you started off with.
22:02
SPEAKER_00: Yeah.
22:03
SPEAKER_01: That's a lot of money.
22:05
SPEAKER_01: So it is it is important.
22:08
SPEAKER_01: Obviously, my my financial literacy continues to I'm just happy I know some of these words.
22:14
SPEAKER_01: I was like, yeah, I know.
22:15
SPEAKER_00: Well, if if I talk if I say something that you don't understand or that's not, you know, you're like what does that mean?
22:23
SPEAKER_00: Let me know.
22:23
SPEAKER_02: And I and I can see I know what they mean, but it's like like you know all the like you just said like the penalties and stuff like that.
22:30
SPEAKER_02: So I know the differences, but I don't know those types of things, which is I feel like probably how a lot of people my age are.
22:35
SPEAKER_02: Mm-hmm.
22:36
SPEAKER_01: Just from like talking with my friends and coworkers.
22:39
SPEAKER_01: Well, I think so many of the millennials too, it was like, I think for so long we were told you're just gonna have to work till you die anyways.
22:48
SPEAKER_01: Like there's gonna be no social security, there's all these investment accounts, you're just gonna have to work forever.
22:55
SPEAKER_01: And now that I'm older, I'm starting to realize like that wasn't that wasn't accurate.
23:01
SPEAKER_01: I shouldn't have learned this stuff in my 20s, as opposed to just being like, well, I'm gonna have to work till I die.
23:07
SPEAKER_01: Yeah.
23:08
SPEAKER_01: And also being a workaholic.
23:11
SPEAKER_00: Yeah, well, you know, you bring up a good point about social security, especially for people that are, you know, 45 and under, you know, there's a real problem in that I think every, you know, there's four over four people taking out of social security for every two people putting in.
23:26
SPEAKER_00: And so I think this year, next year, the the fund that the government has to pay out, essentially, for those who don't know, Social Security is the definition of a Ponti scheme.
23:34
SPEAKER_00: If you look into Bernie Madoff for how it's funded, you don't put money in 40 years ago, the government grows it for you and you get money out.
23:41
SPEAKER_00: That that's not how it works.
23:42
SPEAKER_00: That's how they say it works.
23:43
SPEAKER_00: But essentially what happens is they take tax dollars that working professionals are putting in now to the Social Security Fund, they use that to pay the Social Security claims, you know, to people that are on Social Security.
23:54
SPEAKER_00: The issue is that baby boomers in that generation, they had so many more kids than people have had now or in the last 20 or 30 years.
24:02
SPEAKER_00: So you have significantly more people taking out of social security than putting in.
24:06
SPEAKER_00: And what that does is the money's gonna run out eventually.
24:09
SPEAKER_00: And so there won't, I would be shocked if there's a world where they completely get rid of it just because the average person who is on Social Security, that's literally their only income.
24:18
SPEAKER_00: Like they don't have retirement.
24:19
SPEAKER_00: Like if you look at the average American, that's all they have.
24:23
SPEAKER_00: So they can't necessarily do away with that because we're gonna have mass homelessness or there's gonna be a lot of issues.
24:29
SPEAKER_00: But for my younger clients, they're you know, essentially when we go through the financial plan, we can see what it looks like is hey, how does your plan look if we reduce benefits by 20, 30, or 40 percent?
24:38
SPEAKER_00: Um, which I think is a very, very real possibility.
24:42
SPEAKER_01: Yeah.
24:42
SPEAKER_00: And so, you know, I'm certainly not counting on it.
24:45
SPEAKER_00: Can I see the future?
24:46
SPEAKER_00: No.
24:46
SPEAKER_00: But there's one of two things are gonna happen.
24:48
SPEAKER_00: They're gonna have to increase tax rates or they're gonna have to pay you out less on social security.
24:54
SPEAKER_00: And and so those are things that we need to prepare, you know, for, especially for younger people, you know, 45 and under, because that's that's a very real possibility.
25:02
SPEAKER_01: Kaylee, the one time being young.
25:05
SPEAKER_02: Yeah, I'm grouping with the young people now for that.
25:09
SPEAKER_01: Hey, Kaylee's like, wait, I'm in the young group now.
25:12
SPEAKER_03: Yeah, y'all keep paying your taxes, please.
25:15
SPEAKER_03: I'm gonna be needing that.
25:16
SPEAKER_03: But I think I'm not I hope I'm not messing up your outline.
25:23
SPEAKER_03: One year left to leave.
25:24
SPEAKER_03: That's right.
25:26
SPEAKER_03: No.
25:27
SPEAKER_03: One year and three days, I'll have a Medicare card and uh NB Sayanara.
25:33
SPEAKER_02: Wow.
25:34
SPEAKER_03: Yes.
25:34
SPEAKER_03: But hey, you know, uh unless this is messing up your outline or anything, Abby.
25:39
SPEAKER_03: I think a lot of younger people, yeah, I talk to so many new nurses because I really it's so important.
25:46
SPEAKER_03: But uh, you know Maybe Nick can talk about why is it so important to start young versus why can't I spend and get my car and do all my stuff and then okay, when I'm in my 30s, I'll start planning when really it's so important to start.
26:01
SPEAKER_03: As soon as you get your as soon as you start your first job, it's important to start.
26:05
unknown: Yeah.
26:05
SPEAKER_00: Yeah, I think it it's you know, an investing buzzword people use is compounding.
26:11
SPEAKER_00: You know, what what does compounding mean?
26:13
SPEAKER_00: Essentially, it means that if you invest for you know long periods of time, you know, that money grows on top of each other, on top, on top, on top, and it keeps getting bigger and bigger as exponential growth, you know.
26:24
SPEAKER_00: And so again, I I have these slides up because I I just spoke to Carolina a couple months ago.
26:30
SPEAKER_00: But I looked at, you know, if you let's say you make$150,000 and you just put away 10%, right?
26:35
SPEAKER_00: So that's$15,000 a year.
26:36
SPEAKER_00: What does that number look like if you do it for 10 years, 20 years versus 30 years?
26:40
SPEAKER_00: Um, and we're growing it at 8%.
26:42
SPEAKER_00: I think it's important to know the growth rate.
26:44
SPEAKER_00: So if you look at, you know, if you invest$15,000 for 10 years, after 10 years, you'll have$217,000, which is fine.
26:50
SPEAKER_00: If you invest it for 20 years to$15,000 over 20 years, you'll have$686,000.
26:55
SPEAKER_00: So we've doubled the time, but we tripled our money.
26:58
SPEAKER_00: If we look at 30 years, saving$15,000 for 30 years, we're looking at$1.7 million.
27:03
SPEAKER_00: So it, you know, it's it's the the compounding is is an exponential growth.
27:06
SPEAKER_00: It's not, well, if I start five years from now versus now, then that'll only be, you know, five years to that time.
27:12
SPEAKER_00: That's not necessarily how that works.
27:14
SPEAKER_00: Uh and so starting to save early and often that that enhances your ability to get the compounding, to get the exponential growth.
27:22
SPEAKER_00: And again, you know, there's obviously varying levels of not everybody you know can save$15,000 a year or whatever it is, but I the principle still applies that the earlier you start, the more time you give your money to work for you.
27:35
SPEAKER_00: And hopefully the earlier you can retire.
27:37
SPEAKER_03: I think, Nick, it's really, you know, and I've I've read this and seen it in Financial Freedom or whatever.
27:44
SPEAKER_03: There's the uh common statement that if you start at age 22 and put money away until you're 30 and then stop and never put in another dime, or you start at 30 and put in until you're 65, that one that started at 22 and only put in for eight years will have more money when they turn 65 because of the compounding thing that you talk about.
28:06
SPEAKER_00: Yeah, and and essentially that we just hit 100 years in the stock market.
28:10
SPEAKER_00: So so looking back historically, your money, if it's in the market, SP 500, you know, whatever you look at, doubles every seven, seven and a half years, which which is pretty substantial.
28:19
SPEAKER_00: Uh so we hope that's the case going forward.
28:22
SPEAKER_00: But again, the earlier you start now, you know, I don't want, you know, somebody's 35, 40, 45 listing, and uh, maybe I hadn't saved that much.
28:29
SPEAKER_00: There's still time.
28:30
SPEAKER_00: But those younger people listening, you know, that it's it's incredibly important to set aside, you know, an amount early on and just keep it going, keep it going, and it really just live like that money doesn't exist is you know, can pay off big time later.
28:44
SPEAKER_01: I think that's one of the tricks is like when you get a new job, when you get a pay increase, put some of that money aside, increase your matching because you're not used to that.
29:00
SPEAKER_01: Like you're not used to that extra money yet.
29:02
SPEAKER_01: And so that's one way where if like you're used to getting, let's say, fifteen hundred every two weeks, and then you get a pay raise, and now you're going to get eighteen hundred every two weeks, take some of that eighteen hundred because you're already budgeted that way, and that's how I learned in my twenties to start being a little bit more proactive, and it's kind of like out of sight, out of mind.
29:28
SPEAKER_01: I'm not used to that extra 300.
29:31
SPEAKER_00: Yeah.
29:32
SPEAKER_00: So yeah, and that's great.
29:34
SPEAKER_03: That's really a good point, Abby, because when I when I was first starting, yeah, I'm sorry, that's that's a good point you made when I was first starting.
29:41
SPEAKER_03: I think I was doing your basic five percent.
29:44
SPEAKER_03: Then when I got a two and a half percent raise, I just increased my 401 contribution by two and a half percent.
29:50
SPEAKER_03: I mean, I did that on and on until I got to 15%.
29:54
SPEAKER_03: Just like you said, if you have it, you'll spend it.
29:56
SPEAKER_03: If you don't have it, you won't spend it.
29:58
SPEAKER_03: You'll you'll find something to use it on if it's there.
30:01
SPEAKER_01: You'll if it's not there, especially healthcare workers.
30:05
SPEAKER_01: We're real thrifty, we're real crafty.
30:08
SPEAKER_01: We'll figure it out.
30:09
SPEAKER_02: Yeah.
30:10
SPEAKER_02: So you spoke earlier about like a penalty if you make too much and with your Roth IRA, but for your 401k, you can increase your percentage of what you put into there without any penalties.
30:21
SPEAKER_02: Is that correct?
30:22
SPEAKER_00: Yeah, so there's still a cap though.
30:25
SPEAKER_00: So if you are under 50 years old, uh, I believe right now they they change it every year, but you can only put in a maximum of$24,500 a year in your 401k.
30:34
SPEAKER_00: That doesn't include the match.
30:36
SPEAKER_00: Um, and depending on what hospital or or you know your employer, they're just called an overflow account where they can make more contributions on your behalf.
30:44
SPEAKER_00: If you're over the age of 50, you can make what's called a catch-up contribution, would typically, and now there's even more complex rules depending if you're 60 to 63.
30:53
SPEAKER_00: We won't get into all that, but essentially if you're over the age of 50, you can put in an additional, I think it's$8,850 a year to bring it up to you know$31,000,$32,000 a year.
31:01
SPEAKER_00: So there are contributions there.
31:03
SPEAKER_00: And so the plan will just essentially cut.
31:05
SPEAKER_00: There's no the majority of plans now are smart.
31:08
SPEAKER_00: If you hit that limit, they'll just cut off your contributions and your paycheck will just increase by that amount.
31:13
SPEAKER_00: So, but then that's a good point because if you're used to saving that much, let's not just spend it, right?
31:19
SPEAKER_00: There's other investment accounts like individual or you know, just call it a brokerage account.
31:24
SPEAKER_00: It's just a regular investment account.
31:26
SPEAKER_00: Um, you put money into it's after tax money goes in.
31:30
SPEAKER_00: Um, but when you sell and take the money out later, it's is taxed a little more favorably.
31:34
SPEAKER_00: It's called um capital gains tax.
31:36
SPEAKER_00: And essentially what that means is you're only taxed on the gain of the investment, right?
31:40
SPEAKER_00: So if I put$100,000 in, it grows to$150,000, I sell it and take it all out.
31:45
SPEAKER_00: I'm only taxed on the$50,000 and long-term capital gains rate for marriage filing jointly up to$500,000, roughly, it's about 15%.
31:52
SPEAKER_00: So it's lower than you know your income tax bracket.
31:55
SPEAKER_00: But you know, investing in the you know, that account, I think is incredibly important for young people because you know, what if I don't want to work until I'm 59 and a half or 60?
32:04
SPEAKER_00: There are some ways you can get your money out of a 401k without a penalty at 55, but you typically have to wait till 59 and a half.
32:11
SPEAKER_00: And so that brokerage account really gives us the ability to be flexible and when to retire.
32:15
SPEAKER_00: If we retire early, we can do something called Roth convergence, which you know we could potentially get into later, but it just gives us more flexibility.
32:22
SPEAKER_00: But you know, that's a good point that if we do hit that limit, there, you know, doesn't mean going, you know, spend it all.
32:27
SPEAKER_00: If you're used to saving that aside, there's other ways to, you know, get that to work for you.
32:32
SPEAKER_03: I was gonna say, um, you know, he's talking about how the stock market grows over time.
32:36
SPEAKER_03: And I remember, gosh, pretty early in my career, maybe it's in early 90s, the market took a real downturn and people were quoted, losing money, even though like, no, you didn't lose money, the value of it went down, but people were bailing out of their 401 when the market went down, which was exactly the opposite thing they should have been doing.
32:57
SPEAKER_03: You know, I I I think it's important for people to know historically, yeah, it's up and down, up and down, but the trend continues to be up ever since the Great Depression.
33:07
SPEAKER_00: Yeah, I mean, we've and that's uh plays into why a lot of people don't think they need an advisor now.
33:13
SPEAKER_00: Um, because they, you know, any you know, any person could have put their money in the SP 500 or really most in stock or ETF over the last 15 years, and they would have looked like a genius just because we are in the you know one of the biggest bull markets or you know, uh markets ever.
33:28
SPEAKER_00: But people forget that from 2000, 2009, the market was down, was negative for for 10 years.
33:34
SPEAKER_00: So, you know, if you'd have put$100,000 in the 2000 check back, you know, January 1st, 2010, that$100,000 turned into$91,000.
33:42
SPEAKER_00: So you had lost 9,000 over 10 years.
33:44
SPEAKER_00: Now tech stocks, everyone wants AI, tech stocks that they you know, they want those, you know, that that sector, the market, you know, was negative from 2000, 2013.
33:52
SPEAKER_00: So for 13 years.
33:53
SPEAKER_00: So essentially from now until 2039, if you had to put$100,000 into tech stocks, check back 13 years later, it'd only have been worth$74,000.
34:01
SPEAKER_00: And you know, Michael brings up a good point is that you hadn't lost money until you've sold, which is why we we invest in low-cost, broadly diversified, you know, mutual funds or ETFs.
34:11
SPEAKER_00: But you know, selling when the market's down can have a significant impact, you know, on your portfolio.
34:18
SPEAKER_00: Um and what, you know, one just last out on that.
34:21
SPEAKER_00: If you look at the last 25 years and you look at the best, you know, the best week of the last 25 years, it it actually happened in 2009, which was after the global financial crisis.
34:30
SPEAKER_00: But if you just missed that one week over a 25-year period, your portfolio would be less, you know, 20% less than if you just stayed invested for that week.
34:39
SPEAKER_00: And so, you know, I if we missed the best one month or three months, you know, your your portfolio is down, you know, 30% than it would have been.
34:46
SPEAKER_00: So there are a lot of people during COVID when the market was down 30% in 23 trading days, 23 odd trading days that sold or were dying to sell.
34:56
SPEAKER_00: Um, and guess what?
34:57
SPEAKER_00: That was the best three-month period in the stock market after the bottom of March 23rd in the last 30 years.
35:02
SPEAKER_00: Um, and so typically tremendous upswings in the market happen, you know, after some downturns as well.
35:09
SPEAKER_02: But your point is stay and hold.
35:11
SPEAKER_00: Yeah, say, yeah.
35:13
SPEAKER_00: I mean, it it obviously depends on your your circumstance, but you know, in the situation, now if we're talking about individual stocks and you put all your money in Bitcoin, I'm gonna take you inside, we're gonna have another conversation.
35:25
SPEAKER_00: But the market as a whole, I I think you know, long term what we're betting on is human innovation and ingenuity, and that hey, people, we live in a capitalistic society, they're going to want to make money and pretty much do it at all costs.
35:38
SPEAKER_00: And that's what we're investing in, not a singular company or a you know theoretical coin.
35:44
SPEAKER_00: So uh I certainly have my you know thoughts there too.
35:48
SPEAKER_01: I think that's an interesting way to talk about it.
35:52
SPEAKER_01: I don't think anyone has like talked about the stock market in that way that like you're investing in like innovation and kind of this capitalistic drive that we have in our society.
36:05
SPEAKER_01: I've never like thought of it like that.
36:08
SPEAKER_01: But no Bitcoin.
36:09
SPEAKER_01: What was the what were those like images that people were into as well?
36:15
SPEAKER_00: NFTs, yeah.
36:16
SPEAKER_00: Yeah, NFTs, that's yeah, it's like non-something tokens or or something.
36:24
SPEAKER_00: There, yeah, there was like these apes, people were selling uh I mean meta invested, I think 70 plus billion dollars.
36:32
SPEAKER_00: It potentially was more than that in the metaverse, which is gone.
36:36
SPEAKER_00: And so, you know, yeah, Bitcoin uh obviously if you bought it 15 years ago, you you certainly look like a genius now.
36:43
SPEAKER_00: But over the last couple years, you know, I think there's a a 60%-ish difference in Bitcoin and SP 500 in the last year.
36:50
SPEAKER_00: Um, and SP is up, Bitcoin's down.
36:53
SPEAKER_00: So it's really what it understanding what we're invested in.
36:56
SPEAKER_00: If you invest obviously in the global market or the US, we're investing in in all these companies where their main goal isn't to feel good, their main goal is to make money, and that's what you're investing in.
37:05
SPEAKER_00: And, you know, people get upset about who the president is or who the who's in Congress.
37:10
SPEAKER_00: At the end of the day, these companies, their job is to make money, and that's really what we're investing in.
37:15
SPEAKER_00: It's the you know, that's why it's important to own thousands of individual stocks inside of a mutual fund or what's called an ETF, an exchange traded fund, which those um are just vehicles that hold thousands of stocks in them.
37:27
SPEAKER_00: Because if you were to buy every single stock in the US stock market, that would be several hundred thousand dollars to buy individual stocks.
37:32
SPEAKER_00: ETFs or mutual funds is an investment that allows us to do that at a much lower price.
37:37
SPEAKER_00: So we we can be diversified there.
37:39
SPEAKER_00: So that's you know what we're doing, um, you know, primarily for clients not picking individual stocks or Bitcoin or or you know, gold.
37:47
SPEAKER_00: Warren Buffett said gold doesn't do anything but sit there and look at you.
37:50
SPEAKER_00: And so, you know, we invest in in the market and that companies are making money.
37:55
SPEAKER_00: Their goal is and intention is to make money.
37:57
SPEAKER_00: Um, and I think that's important to know that when we go through these dips that we are going to go through at some point is it's not you know if it's when to have that in the back of our minds.
38:07
SPEAKER_01: So, what about student loans?
38:08
SPEAKER_01: Because now we have nurses coming out with, you know, undergrad nursing degrees with$80,000 in student loans.
38:17
SPEAKER_01: And it it I mean, the student loans have gotten absolutely crazy.
38:25
SPEAKER_01: So do you have any, does that even come into like the financial planning world, or is that like totally separate?
38:32
SPEAKER_00: No, it does, Matt.
38:33
SPEAKER_00: I mean, there's really if if you have the right financial planner, there's nothing that doesn't come into that world.
38:40
SPEAKER_00: You know, kid, you get a new dog, you get a student loan, it it all impacts your plan in your life.
38:46
SPEAKER_00: Student loans, like you mentioned, are interesting where you have doctors, nurse practitioners, even nurses, surgeons, you name it, that are graduating with three, four, five, six hundred thousand dollars in student loans.
38:57
SPEAKER_00: You know, I met with a podiatrist last year.
39:01
SPEAKER_00: She was older, maybe 40, 45.
39:04
SPEAKER_00: She had$300,000 of student loan debt, hadn't done anything with it in a you know the last decade or so.
39:10
SPEAKER_00: Now it was$600,000,$700,000.
39:13
SPEAKER_00: Um, and she was like, Yeah, for some reason, uh my paycheck's lower.
39:17
SPEAKER_00: Um, you know, people don't understand that if you don't pay your student loans, the government will garnish your wages and take the money from your paycheck to pay off the loan, um, which is a bad place to be, number one.
39:28
SPEAKER_00: Um, but but number two, Abby, I think it's important to know what type of loans you have.
39:33
SPEAKER_00: Like, you know, you you know, I probably were alluding to the, you know, what PSLF, the public service loan forgiveness.
39:40
SPEAKER_00: Um, but there are still, you know, criteria on that that you have to make you know regular payments for for 10 years.
39:45
SPEAKER_00: It has to be direct loans from the government.
39:48
SPEAKER_00: It you, you know, people, some people might work for a hospital, but they took out private loans and those don't qualify.
39:54
SPEAKER_00: Um, and so you know, they might make making the minimum payment, which also is not the right thing to do because when you know during COVID, then when they paused student loan interest, the majority of America just stopped paying it.
40:07
SPEAKER_00: Now, granted, there wasn't interest on it at that time, but you were given a gift of no interest loans that you could be paying down for years.
40:14
SPEAKER_00: Um, and and most people didn't take advantage of that.
40:17
SPEAKER_00: So it's something that needs to be evaluated and also looking into that.
40:22
SPEAKER_00: What's the interest rate, right?
40:23
SPEAKER_00: Because if your interest rate is two, three, four percent, maybe we can be a little less aggressive.
40:28
SPEAKER_00: But I've seen people that are in the 10 range um where it's like, okay, that needs to be number one priority because until we get that taken care of, we're we're really, you know, being held back.
40:38
SPEAKER_00: Uh so I it really it definitely goes into the financial plan, but I think you know, it it's important to understand what type of loan you have.
40:46
SPEAKER_00: And one, does it even qualify for the you know, loan forgiveness?
40:49
SPEAKER_00: Because a lot of people think it does, and they'll check back seven, eight years later and they took out private loans and they can't get the forgiveness and they've been making minimum payments.
40:57
SPEAKER_00: So it's important to understand that and also the interest rate you have on the loan.
41:02
SPEAKER_00: You know, hey, should we be aggressive in paying this off?
41:04
SPEAKER_00: Or if it's three percent, we can get more than that, you know, in a money market fund right now.
41:09
SPEAKER_00: So let's make the minimum payments and then anything we have left over at the end of the year, we'll make a lump sum on it.
41:13
SPEAKER_00: So there's definitely strategies behind that, and it's certainly, you know, client dependent.
41:18
SPEAKER_01: Yeah.
41:19
SPEAKER_01: I will say, again, like going and everyone's situation in COVID was was varied.
41:27
SPEAKER_01: I do understand that.
41:28
SPEAKER_01: But thankfully, you know, working in the health year, we were very secure during COVID.
41:37
SPEAKER_01: And again, I didn't because my student loan was already budgeted into my budget.
41:42
SPEAKER_01: I was so grateful during that time, those two years where that interest was paused.
41:48
SPEAKER_01: I actually increased because I was like, I started to see how much quicker I was able to chip away at these loans, and I was able to get those master's loans down so much because of that.
42:02
SPEAKER_01: It was such a gift.
42:04
SPEAKER_01: So I think that is one of the things too that whether you're a new nurse or new in medicine or you're going to go back for for another degree, like knowing the type of loans, because again, I didn't have undergraduate loans.
42:21
SPEAKER_01: I didn't get my first student loan until my master's.
42:24
SPEAKER_01: So I was already like 26, and I kind of, you know, you would think I knew something, but someone was like, Yeah, take out all of it.
42:31
SPEAKER_01: They're offering you 80,000.
42:33
SPEAKER_01: Take the 80,000, and that was terrible and fun.
42:38
SPEAKER_00: Yeah.
42:39
SPEAKER_00: Yeah, it's yeah, it's unfortunate a lot of people will, you know, take out as much as they can, or you know, they may want to go to a school that they really can't afford, but you know, people will loan you as much money as you want.
42:50
SPEAKER_00: And that's it.
42:53
SPEAKER_00: Um that that it's not a flex to, you know, go to a more expensive cool school just because you got a loan for it.
43:00
SPEAKER_00: They they're looking for jobs, you know, when you sign up for that.
43:03
SPEAKER_00: So um, I think just understanding the the terms of the loan and getting familiar with that is is definitely important.
43:10
SPEAKER_01: You've given us a lot.
43:11
SPEAKER_01: I want to kind of sidestep us a little bit and hear from Michael with all of his years of experience.
43:19
SPEAKER_01: Why has and I know because I've seen you sit and have these same conversations that we're having with young nurses at the nurses station.
43:28
SPEAKER_01: You've had these conversations with me in our office when we worked together.
43:33
SPEAKER_01: Why has this become such a passion for you?
43:36
SPEAKER_01: Why and you and you glad I mean we're so happy you reached out to us with this idea to talk about it.
43:43
SPEAKER_01: But why tell us what kind what you've seen, why is this such a passion for you, Michael?
43:49
SPEAKER_03: I think mostly because you know, I saw when I grew up, you know, it was a single paycheck household with my dad, and there was zero financial planning.
44:00
SPEAKER_03: On his behalf, uh fortunately for him there was the state retirement stuff that peop that doesn't really exist anymore.
44:06
SPEAKER_03: Companies don't have retirement plans and work for us thirty years and you're gonna make a salary the rest of your life like they used to.
44:14
SPEAKER_03: And like Nick said earlier, the the whole thing with Social Security, it's it's gonna go away or at least go away as we know it.
44:23
SPEAKER_03: It's already going away as we know it.
44:26
SPEAKER_03: Um I was looking a f a few weeks ago and I think if if I start taking money out when I'm 67, I will get about$3,800 a month.
44:36
SPEAKER_03: And that's I mean, that's not chump change, but that's you know not what I'm used to.
44:41
SPEAKER_03: And I think I I've you know nurses have such, or anyone in healthcare, if you do the math for I've and I've sat down last week and said, if you're a new nurse making the 33 bucks an hour that we make, that that I think is the minimum now at the hospital um or at a lot of hospitals, somewhere in that range.
45:00
SPEAKER_03: And if you take the company match and never get a raise for 35 years, you would still have two million bucks in your account if you started at 22 and went to 65, and the market keeps growing.
45:11
SPEAKER_03: So, you know, I I think I want to see people be successful and learn from the things I didn't know.
45:18
SPEAKER_03: So you can say, hey, you know, you really can be a millionaire in healthcare, even as the nursing assistant.
45:25
SPEAKER_03: If you are wise, you can be a millionaire when you're when you turn 65, and you're not dependent on the government, you're not depending on anyone, because you have planned for yourself.
45:35
SPEAKER_03: And I think that's um well, that's important to me.
45:39
SPEAKER_03: I know Nick's not a Dave Ramsey fan, but he does make the comment when you're young, live like no one else, so that when you're older, you can live like no one else.
45:48
SPEAKER_03: And when you get old and hopefully are still healthy, you want to be able to travel and do things and have fun and not sit around and wish I had done this and wish I had done that.
45:58
SPEAKER_03: And so for me at my point now to say, Oh, I wish I had done, well, I can tell younger people what I wish I had done so that maybe they can actually do that and will be in a better spot than I am.
46:12
SPEAKER_03: That's true.
46:14
SPEAKER_01: What do you what do you guys think?
46:17
SPEAKER_01: And Nick, you can probably you kind of touched on it, but those of us in healthcare, why do you think some of these conversations are so hard for us to even have?
46:27
SPEAKER_01: Like talking about our paychecks, talking about that, like why are we all hustling?
46:32
SPEAKER_01: Why are we all struggling?
46:34
SPEAKER_00: You know, I think a lot of it's psychological.
46:36
SPEAKER_00: One in the fact that, you know, if you're a good nurse or, you know, nurse practitioner or doctor, I don't think you're a slouch or you don't try to work hard.
46:45
SPEAKER_00: I think, you know, not that you're obsessed with work, but it is an obsessive culture and that it becomes, you know, your personality, it becomes, you know, so much about you in nursing, I think, unique in that aspect that a lot of companies aren't.
46:58
SPEAKER_00: Like if uh if I'm working for IT at Google or, you know, you know, construction company, maybe I I don't have the same, you know, love or you know, community that nurses do.
47:08
SPEAKER_00: And so I think, you know, from that mindset, you know, it it just becomes, you know, just gotta work, gotta work, gotta, you know, gotta go.
47:15
SPEAKER_00: Um, and it's hard to turn your brain off if that's how you think.
47:18
SPEAKER_00: And and so, you know, that I think that's that's the first part of it, right?
47:24
SPEAKER_01: Um, and you know, you can disagree with me, but after no, I was gonna say you sound like the husband of a healthcare worker.
47:30
SPEAKER_01: Yeah, he's like, we're know it all and we're insufferable as a whole personality through many uh many a story time.
47:39
SPEAKER_00: No, I don't think it's a bad thing, but right when you're right.
47:42
SPEAKER_00: When you watch somebody die or save somebody's life or whatever, that brings you far closer than you know working on an Excel sheet together.
47:50
SPEAKER_00: And I think you know, that plays into so much of who you are and your life.
47:54
SPEAKER_00: You know, if that's your job, like you're you know, saving people's lives and and you're watching people die or you have to go through that, that's gonna impact you significantly more than 99% of jobs.
48:05
SPEAKER_00: Um, and so I think just a nature of being, you know, hard worker, hustler, you know, what have you, it kind of breeds, you know, that well, what do I have to do to make more?
48:13
SPEAKER_00: What do I have to do to make more?
48:14
SPEAKER_00: But you know, a lot of that's just you know, hey, don't you don't have to buy a brand new car that your you know friends have or in the new neighborhood or whatever, but really just setting, you know, the money aside and kind of tuning out that noise of a lot of the you know financial decisions around you, because believe it or not, the average American is in significant credit card debt.
48:32
SPEAKER_00: You know, when I tell you know my wife that she just doesn't believe it.
48:35
SPEAKER_00: But I mean, if you look, over 50% of Americans have significant credit card debt, you know, and people don't really realize that they see the new car, the new house, you know, doing this for for the last 10 years, I've been doing it.
48:46
SPEAKER_00: Just because you have things is not indicative at all of how much money you have.
48:50
SPEAKER_00: I mean, not at all.
48:51
SPEAKER_02: Yeah.
48:52
SPEAKER_00: You know, I've seen, you know, a husband and wife couple who are managers at a food line retire at 60 years old with$2 million.
48:59
SPEAKER_00: Um, and they worked at food line for 25, 30 years.
49:02
SPEAKER_00: And so they're, you know, and they started as a clerk and and and worked their way up.
49:06
SPEAKER_00: So so much of it is you are so close and you're around other people and you're seeing everything they're doing.
49:10
SPEAKER_00: It's well, I gotta get that, I gotta have that, I gotta do that.
49:13
SPEAKER_00: When that, you know, is kind of digging you into a hole a little bit.
49:17
SPEAKER_02: Yeah.
49:17
SPEAKER_02: My mom calls it being house poor.
49:19
SPEAKER_00: Yeah.
49:19
SPEAKER_02: Yeah.
49:20
SPEAKER_02: It's like you buy the big house, but then you're poor because you can't do anything, you have no other money.
49:26
unknown: Yeah.
49:26
SPEAKER_02: Which you can apply to a lot of stuff.
49:28
SPEAKER_02: What do you consider for people?
49:29
SPEAKER_02: You said so many people are in significant credit card debt.
49:32
SPEAKER_02: Like, what does that mean?
49:33
SPEAKER_02: What's like is that a number?
49:35
SPEAKER_02: Is it like a percentage of what you make?
49:36
SPEAKER_02: Like, how do you can what how do you define like significant credit card debt?
49:41
SPEAKER_00: Uh I would say significant.
49:43
SPEAKER_00: It's, I mean, I'm gonna not making up a number, but significant is anything that I can't pay for out of my cash and be okay with it right now.
49:50
SPEAKER_00: That to me is significant because that means we have a problem.
49:52
SPEAKER_00: And so, you know, I don't think it's necessarily because$20,000 in a credit card debt to you might be different than a$200,000 credit card debt to a neurosurgeon who's bringing in a couple million a year or whatever.
50:03
SPEAKER_00: So um, I think there's varying levels of degree, but uh, you know, to my definition, significant is something that I can't pay off immediately.
50:10
SPEAKER_00: Um, or if I did, there would be some issues somewhere else.
50:14
SPEAKER_00: Uh, not that I think credit cards are bad because they can you can get rewards, you can you know increase your credit score and all that.
50:20
SPEAKER_00: I just think you know, if you do use a credit card, you need to get into the habit.
50:24
SPEAKER_00: If you have trouble with maintaining it, as soon as you make a payment, just like there's no amount of times you can you know make a payment.
50:31
SPEAKER_00: I can make 500 payments a month on my credit card.
50:33
SPEAKER_00: As soon as you make a payment, just go pay it off in your from your account.
50:35
SPEAKER_00: Go pay it off, pay it off, pay it off immediately.
50:37
SPEAKER_00: And that just changes your mindset.
50:39
SPEAKER_00: On the topic of spending, when Haley and I first got married, you know, I had an Excel spreadsheet, and everything that we bought, we had to put in the spreadsheet.
50:47
SPEAKER_00: So there are a lot of things that like I don't really want to buy that because then I gotta go into it, gotta put it in there for I think that's a pretty uh interesting strategy to say, you know, hey, each person, you know, put it, you know, you have to manually do that.
51:00
SPEAKER_00: And you're like, wow, we spent, you know,$300 eating out.
51:03
SPEAKER_00: We only ate out a couple of times.
51:05
SPEAKER_00: It because things add up so quickly.
51:06
SPEAKER_00: But once you like see it, it it kind of quantifies it a little bit.
51:10
SPEAKER_02: That gave me such like a visceral reaction, but actually, I think that is a good idea because the people who want to complain about the person who spends too much money maybe don't realize how much they're spending.
51:20
SPEAKER_02: Yeah, yeah.
51:20
SPEAKER_01: I will say and I developed like my first true, true budget during COVID after you know, contributing to the economy and doing a lot of Uber Eats Door Cash.
51:34
SPEAKER_01: I calculated my DoorDash and I was like, Yeah, I'm not even going to say the number.
51:41
SPEAKER_01: It was bad.
51:41
SPEAKER_00: Yeah, DoorDash and Uber Eats and eating out is just there.
51:44
SPEAKER_00: The the it gets obscene with how much people spend.
51:49
SPEAKER_01: It was bad on some bad spending.
51:51
SPEAKER_01: It was bad on my body.
51:53
SPEAKER_01: It was bad all around.
51:55
SPEAKER_01: Well, I thank you guys so much for coming on in opening up these discussions as we close out.
52:04
SPEAKER_01: What is one thing you're taking away from this discussion, or you hope a listener takes away from this discussion?
52:13
SPEAKER_01: I'll let you start, Michael.
52:15
SPEAKER_03: Okay.
52:15
SPEAKER_03: I think well, Nick said it early on, and and Kaylee just mentioned it briefly just now, is that most of us in healthcare, we're educated, we have advanced degrees, you have your doctorate from Yale, but nowhere in your doctorate from Yale did they teach you about money.
52:32
SPEAKER_03: You know, I would not want Nick to intubate me.
52:36
SPEAKER_03: Um that's not what he does.
52:41
SPEAKER_03: And finance is not what I do.
52:44
SPEAKER_03: And so um, I think you made a good point about you take a step back and be humble and go, hey, you know what?
52:51
SPEAKER_03: I don't know everything about this.
52:52
SPEAKER_03: Really, I don't know a lot at all.
52:54
SPEAKER_03: So if I get somebody who does involved, I'm gonna be doing, I'm gonna be doing much better for myself in the long run.
53:00
SPEAKER_03: And um even for just the short term that um that I've had, you know, a planner, my oh wow, my accounts are growing at a rate significantly more than my what I'm making per year in salary.
53:13
SPEAKER_03: So uh I'm I'm trying to set myself up for the future.
53:17
SPEAKER_03: So I guess the two-word answer is get help.
53:20
SPEAKER_02: That's what I was gonna say.
53:21
SPEAKER_02: Like, I think my takeaway is I need to get financial advice.
53:24
SPEAKER_02: The only.
53:25
SPEAKER_00: Yeah.
53:25
SPEAKER_00: Right?
53:26
SPEAKER_00: Thank you.
53:26
SPEAKER_00: Yes, the only.
53:29
SPEAKER_02: I wanted to do that for years for many reasons.
53:31
SPEAKER_02: It didn't happen, but uh, I think it you made such a good point about that.
53:36
SPEAKER_02: Yeah, that's my takeaway.
53:37
SPEAKER_01: I I I'm along with Michael, and you are the subject matter expert, and I think that's really such a good analogy of like you're not ex we don't expect you to know how to take care of yourself.
53:50
SPEAKER_01: You come to us for help.
53:51
SPEAKER_01: We shouldn't go to people that are experts in this.
53:54
SPEAKER_01: And I am reminded of uh one of our guests that comes on Ava.
53:59
SPEAKER_01: Her one of her favorite quotes is she doesn't want her doctor worrying about anything.
54:05
SPEAKER_01: And so we don't want them worrying about finances.
54:09
SPEAKER_01: We shouldn't be worrying about our finances when we're talk taking care of our patients, and so getting subject matter experts to help in that will help you be able to focus on your career and your job better.
54:23
SPEAKER_01: So I think that's the the big thing for me that I really enjoyed.
54:29
SPEAKER_02: You don't want to have somebody taking care of you that's so tired because they've had to work so many extra shifts because they can't not and they're just exhausted, or you know, they work five or six days in a row.
54:39
SPEAKER_01: You don't want to put your license at risk because you've had to work so many shifts and you're tired, or get stuck accidentally with a dirty needle and get some infectious disease because you're so tired.
54:51
SPEAKER_01: Like real things that happen.
54:54
SPEAKER_01: All right, Nick, what's one takeaway you hope everyone gets?
54:57
SPEAKER_00: Yeah, I think you know, Kaylee and Michael said it too.
55:01
SPEAKER_00: I I think it's you know, get help or at least, you know, talk to somebody who does this for you know a living.
55:07
SPEAKER_00: Because, you know, especially if you're younger, if you make a mistake, we talked about compounding of interest, but mistakes can also compound.
55:13
SPEAKER_00: And so I think that's important to, you know, know is that you know, if we make mistakes early on or we try to do it ourselves, and some things we can do ourselves, but but that compounds too.
55:23
SPEAKER_00: And it's not that, you know, I said earlier that you know, a lot of doctors or you know, whoever think they know everything.
55:29
SPEAKER_00: But you know, I think because they are so smart, but it it it it is impossible to know everything.
55:35
SPEAKER_00: Yeah, our brains can only take so much, and we can't be, I mean, nobody can be an expert in everything.
55:40
SPEAKER_00: Um, so I think, you know, know your limitations and you know what I am good at, and I'm gonna hire somebody who's better at that than I am.
55:48
SPEAKER_00: You know, and I think that can apply a lot of areas in our life, just even outside of finance.
55:53
SPEAKER_01: Yeah.
55:54
SPEAKER_01: Like my housekeeper who's better at my lawn.
55:59
SPEAKER_01: That's better at my lawn than me.
56:00
SPEAKER_01: Well, thank you both so much for coming on.
56:03
SPEAKER_01: Please send us in your financial questions.
56:06
SPEAKER_01: We're happy to bring Nick back to answer them, send them his way so he can maybe make some social media posts for us and answer them.
56:16
SPEAKER_01: We are happy to send that on.
56:18
SPEAKER_01: As always, from all of us here at Bancher at the Bedside.
56:21
SPEAKER_01: Until next time.
56:23
SPEAKER_01: Bye.
56:23
SPEAKER_01: Bye.
56:24
SPEAKER_01: Bye.
56:24
unknown: Bye.
56:25
SPEAKER_01: If this felt your kind of conversation, make sure you're following, leave us a review, and we'll see you back here soon.
56:31
SPEAKER_01: Bye.
56:33
SPEAKER_01: Step into the light where the stories come.