Invest like the best: 4 of our favorite tips

Brian Ford (00:08):

Welcome to Money and Mindset With Bright and Brian, where we explore the link between your well-being and your personal finances. I'm Brian Ford, head of financial wellness at Truist, and I help people take charge of their money so they can have more control over their lives. I'm joined by my co-host and friend, Bright Dixon, Truist's resident expert in positive psychology.

(00:29):

Hey, Bright. How's life?

Bright Dickson (00:31):

Life is good, Brian. Thanks for asking. How are you?

Brian Ford (00:34):

I'm good, thanks. In fact, I'm better than good. I'm excited because today we are talking about one of my all-time favorite subjects around personal finance, and Bright, you know that is investing. And investing is so important because it can help us grow our money and lead to a more secure financial future. As many of our listeners know, we've talked about investing on past episodes, so today we're going to do something fun. We plan to revisit some of those episodes, like a greatest hits mixtape of investing, like a one-stop shop for some of our best investing tips. What do you think? You ready to go?

Bright Dickson (01:14):

I was born ready. Let's do it.

Brian Ford (01:21):

OK, Bright, I know from the past, you and I have been doing this for a little while, I get a little bit more pumped about investing than you do, but where's your level of enthusiasm these days around investing?

Bright Dickson (01:35):

Yeah, I'd say great improvement in that area. It used to be that I wasn't super excited about it, but once I jumped in and started participating and doing it and gaining some skills, I'm much more excited about it.

Brian Ford (01:48):

Well, cool. I love it. I mean, I think we're trending in the right direction. And look, I get it, Bright. You're not alone. Investing can be a pretty daunting intimidating subject, especially when you're just starting out.

Bright Dickson (02:00):

Yeah, there's a lot, but now that I understand it more, I know that it's not really scary. It's just another skill that you build and that there are really successful strategies and steps that anyone, and everyone, should take to feel more confident about their future. I mean, I always knew that it was something you were supposed to do in adulting, but I just didn't know where to start.

Brian Ford (02:23):

Yeah, I think there's a lot of people that feel that way. And in fact, this is the theme of our first clip from an episode titled, "Reasons You Are Not Investing and How You Can Start."

Bright Dickson (02:35):

Let's listen to the clip.

Brian Ford (02:38):

It's not uncommon for people to share with me why they're not investing. Let's see if I can break it down as far as what I'm hearing from folks. So sometimes I hear people say, "I just don't have enough money to invest." Well, the truth is we can invest very little. It doesn't take a whole lot, so very little up front, and it's going to grow over time.

(02:58):

Another common reason for not investing is I just don't know where to start. First of all, it's a good thing we're tuning into this podcast. One of the keys to overcoming this is education. Education is not only a great tool to help you master the how-to of investing, but it can put you in a more confident mindset as well. So keep listening to good material. Keep reading. Don't be afraid to reach out to a financial planner, and listening today will give you the basics so that your questions with a planner are more informed.

(03:33):

Also, I'd say sometimes I hear people say, "I'm afraid of the risk. I don't want to lose money." And look, Bright, this one is fair. Investing always carries risk. In fact, if you're not exposing your money to some risk, you're probably not investing. But there's some things we can do to lower our risk, like being properly diversified, dollar cost averaging, having the help of a planner or using a robo-advisor.

Bright Dickson (03:59):

I think I have even still a little bit of all of those. That's all in there for me too. There's a lot in there to get started.

Brian Ford (04:08):

All right. You're resonating with some of these, that's good. That's good. I've got a few more. It's also not uncommon for me to hear something along the lines of wouldn't my best option be to just save money in a savings account? Why do I even need to invest? And first, I want to say that saving is important. It's tough to be a good investor if we're not first good at saving. However, our money does virtually nothing in a savings account, so it's difficult to save our way to many of our long-term financial goals, especially like retirement.

(04:44):

Another common reason for not investing is it's difficult to know when is the right time. I hear this a lot. So when it comes to investing, it's about time in the market, not timing the market. I mean, nobody can predict what the market's going to do next so the best time to start investing is now.

(05:03):

I'll give you one more reason, Bright, why some people don't get started, especially if you're on the younger side. Sometimes we feel like our goals, especially retirement, they're so far off in the distance that we don't really need to start investing now, but the truth is, investing takes time. The power of compound interest takes time, and the more time our money has to be in the market, the better our odds are of reaching our financial goals.

Bright Dickson (05:31):

I think I'm in that group too, Brian, because retirement just seems for me like an impossibility. I just feel like I'm going to be working forever, but I've got to be real about it and know that it's not an impossibility, and I need to start prepping for it so that it's good so that I don't have to keep working forever. And I think the best thing is having the knowledge you need eases that anxiety. So for me, knowing that I have lots of control over my investing and my money as a whole and that there are well-known strategies for success, it's just made it seem more doable, not so scary, not so overwhelming.

Brian Ford (06:08):

Totally. As you start to invest, you're only going to learn more and become more confident, so it builds on itself. It's sometimes just taking that first step. That is a good conversation to listen to for anyone. But I think it's especially good for those that are just starting out on their investing journey.

Bright Dickson (06:28):

It's a good way to build some confidence and get started.

Brian Ford (06:32):

And now I know investing may not get everyone as happy as it does me, but it should. It's one of the best ways to prepare for the future, especially if you're a member of Gen Z. The earlier you get started, the better. For example, if someone sets aside $5,000 a year each year starting at age 19, that could yield a half million dollars more at retirement than if you just started at age 25 and did the same thing. So in this next episode titled, "How to Invest for Retirement at Any Age," we get into the benefits of investing and planning for your future sooner rather than later, and what can happen if you don't.

Bright Dickson (07:19):

Juicy. Hit it, Brian. So Brian, you mentioned that investing for retirement is a subject that can really grab people when you're teaching classes. Can you speak on your experience with that?

Brian Ford (07:32):

Yeah, for sure. I've taught thousands of people about personal finance. And when I give a class on investing at the end of the class, it's almost inevitable that someone will come up to me and say, "Brian, like, man, that was awesome, but where were you 30 years ago when I really needed this stuff?" And normally I'm like, "Well, I was in middle school." And I'll joke with them like that partly because I'm just trying to ease the tension a little bit. Most people who are asking that type of question, they usually have some serious worries about the fact that they're behind on saving for retirement. So I try and ease things up a little bit.

Bright Dickson (08:14):

Yeah. Well, I mean, let's be clear, Brian, you also joke like that you can be pretty funny when you want to be.

Brian Ford (08:20):

That in and of itself is funny, Bright. I wish my wife thought so. But the idea is that once I've broken the tension with this person who's worried about their future, I try and pivot the conversation. I'll simply let them know, you have time. It's not too late. Start applying the financial principles we're talking about and you'll be surprised how quickly you can get on track. And that's true. It's not too late to start getting serious about investing for retirement no matter what age you are.

Bright Dickson (08:50):

And it's never too early either, right?

Brian Ford (08:52):

Oh, absolutely right. In fact, the best time to start investing for retirement was yesterday. The sooner you start, the better off you're going to be. And I share that story about my classes for our older listeners, but also the younger folks out there. I don't want that to be you. I don't want you to be in a personal finance class in your sixties saying like, "Dang, that was good. Why didn't I learn this 30 years ago?" This episode is for you. Get going today and you'll be so glad you did.

(09:23):

I've seen both ends of the spectrum. Bright, I've sat down with couples in their sixties who are wanting to retire, and sometimes unfortunately, I have to be the bearer of bad news when I look at their savings and investments and have to let them know, probably not yet. But then every once in a while I sit down with a couple and I look at what they've saved, and I'm so happy to tell them, you did it. You can retire if you want to, if that's where you want to go. And so if you're listening to this now, I want you to be in that latter group, to have the ability to retire on your terms with dignity and confidence.

(10:03):

That is solid information. Bright, you know this, I've got two daughters in their early twenties, and I'm proud to say they've already started investing for their future.

Bright Dickson (10:17):

Really good stuff in there. I think I go in to mention what can motivate us to take action is really thinking about both outcomes, not just the good stuff, how planning for the future can help you retire earlier and live well, or at least comfortably. But the other side of that too, what it can mean for your future if you don't.

Brian Ford (10:38):

I mean, it's definitely not fun thinking about the negative aspects of not investing, but it can help us to start thinking about what we want and what we don't want our future to look like.

(10:51):

All right, let's shift into the positive possibilities, shall we?

Bright Dickson (10:56):

Yeah, let's do it. You know that's my favorite.

Brian Ford (10:58):

It's interesting because 73% of Gen Zers, they say that they'd rather have a better quality of life now than having money in the bank. But I want to stress that you can have fun right now and still have a long-term view towards investing. I think you can find that nice balance, and I just think it's important to get started when you're young, because again, the sooner you start, the better off you'll be.

Bright Dickson (11:24):

It's not an either-or. It's a both-and, right? And in the next clip, we get a little help from our friend, Ali Mahbod, a financial advisor with Truist Wealth's Client Advisory Center, who talks about one of the most important ways to get started in investing.

(11:39):

We know everyone's individual financial journey is unique to them, but there are lots of commonalities too. So Ali's here with answers to what he says are the five most common questions he gets a financial advisor. So Ali, let's start with why is investing in a 401(k) so important?

Ali Mahbod (12:00):

Great question. This is really important. It's the one thing that I emphasize over and over with my friends. So especially when you're young, when you think about a 401(k), what you're truly doing is you're building wealth. A lot of younger adults and people in the workplace, they unfortunately don't like the idea of saving for retirement. I mean, you tell someone who's 24 years old who might have student debt or who's trying to buy a house, has kids, they've got all these competing financial needs, and you're like, "You need to save for retirement," and that's 40, 50 years down the line. Who knows what's going to happen by then. If you think of it in that mentality, it's going to be a little hurtful because it's hard to get excited about it. It's hard to really want to do anything. It's easy to kick the can, which is not good.

(12:38):

What you want to do is change your mindset to thinking of it as this, your 401(k) or 403(b), some people might have that for government agencies, or whatever fancy number, 457, whatever they might be, all of these things are the same, the retirement plan at work, and ultimately what you should look at it as building wealth versus just being a tool for retirement. If you can switch to that mindset, it's going to be very good. I can assure you there's probably not going to be a scenario where 10 years down the line, you look back at yourself and say, "Wow, I wish I didn't save all that money."

Bright Dickson (13:09):

I love this thought when Ali said looking at a 401(k) as building wealth instead of just being a tool for retirement. I like the way he put that. And investing requires patience and a long-term mindset, but really it's a way to empower yourself and reach your goals and live the life you want to live. And getting started with a 401(k) is actually super easy. If your employer offers it, just reach out to HR and ask them how to sign up.

Brian Ford (13:36):

Yeah, right. I agree. I mean, a 401(k) is the main vehicle that you should be driving into the sunset of retirement. Even if you're on the younger side and you're just getting going with saving for retirement, what's important is that you just simply start. Just start putting a portion of your paycheck into your 401(k), even if it doesn't seem like much at first.

(13:58):

Now, the cool thing is some of you will work at companies where they'll match a portion of your contribution up to a certain percentage. So if your company matches dollar-for-dollar up to a certain percentage of your income, that's like getting a 100% rate of return. Even if your company matches 50 cents for every dollar, so what that would look like is you put in a dollar, they put in 50 cents, that's still a 50% rate of return. So please, please, if you have access to a 401(k) and your company has a match, make sure you're contributing enough to at least get the full match.

(14:35):

But like Bright said, the folks at your company, maybe that's folks in your HR department or the people who run your 401(k), they can help you get going. Just reach out for help. You can always also tap a financial advisor if you need help getting started.

Bright Dickson (14:50):

Yep, absolutely. It's a no-brainer. It's there for you. So there are other people on the other side of the spectrum who are really actively thinking and planning for their futures and have big goals to retire early, in their 50s, 40s, and even 30s. It's the whole FIRE philosophy. If listeners aren't familiar, FIRE stands for financial independence, retire early. In this last clip, we're joined by Ben Appel, senior vice president of workplace financial wellness at Truist. He's living that FIRE lifestyle, and he shares tips on how we can also start taking steps towards reaching financial freedom and retiring early.

Brian Ford (15:34):

All right, Ben, for our listeners out there who are really interested in giving FIRE a go, what are your most important tips to help them go after their early retirement goals?

Ben Appel (15:45):

I'd say nothing too fancy. Very simply, it boils down to a simple concept, which is live below your means and save and invest the difference. That's really it in a nutshell. But the biggest part is the more that you do that, the faster you're going to get there, and it really is as simple as that. But if I were to get a little bit more specific, I guess let me just talk about what I've done to get to where I am and some of the key things that I think about.

(16:12):

Number one is saving first and automatic in my 401(k) and in my IRA, which are investment, tax advantage investment retirement accounts. But probably more importantly is investing regularly regardless of what the market is doing and making sure I don't get too worried and caught up about the short-term fluctuations in the stock market and the headlines, but making sure I have that buy and hold mentality and staying the course for the long-term that's really helped me out.

(16:41):

I'd say number two is, this is where I'm going to lose a lot of people I know, but I love this one, is tracking every single dollar I spend to make sure it's aligned with my values and my goals and the things that we're trying to accomplish. I love data, but doing it in a way that's automatic, so I don't have to manually track it, but I love being able to go back and look at where my spending is going, how we did based on our budget, looking at it on an annual basis.

(17:04):

Number three, this one, I wouldn't have said this 10 years ago, but I've really realized that honestly just in the last couple of years is I've done a pretty good job in focusing on growing my career by doing well in my job, and that has really allowed me to grow my income faster than I would have expected, and that's really accelerated my path to FIRE.

(17:26):

And most importantly, I'd say making sure I'm always bringing everything back to my why. Why am I even interested in FIRE? What is my true purpose in life? Because that's the only thing that will keep me going when the going gets tough. So I guess those are some of my main takeaways that I would say. But what about you, Brian? What tips would you add onto that for someone who is going down this path and wants to have the option to maybe pursue FIRE?

Brian Ford (17:53):

Well, my goodness, that was a great list. I think for our listeners, if they are ready to jump in, I personally would hit the back button a couple of times and relisten to that, take notes, create an action plan that really works for your lifestyle. Well said, Ben. I like that. I would simply add that you can use this episode as a jumping-off point. If you are inspired by Ben's story, continue to dig into the subject, read, keep learning, and start to apply what you're learning about.

Bright Dickson (18:26):

That was an awesome summary on FIRE from Ben. I loved that episode.

Brian Ford (18:31):

Yeah, I love listening to that as well. That episode about FIRE is in my top five all-time, like such good information. Man, Bright, this has been really cool, diving back into these past episodes on investing. I'm curious, Bright, of everything that we've listened to, what's one of your biggest takeaways from today?

Bright Dickson (18:52):

I think it's just get started. Get started. Whatever way makes sense to you, whatever lights you up, get started. Like you said earlier, the earlier the better. Do it today. Do something today that takes one step towards it. I think one of the biggest things for me is that it can be totally normal to feel overwhelmed with the topic of investing, finances in general, or being hard on yourself because you're feeling like you're already behind in saving and investing for the future. You're right, sometimes that can get in our way. But it's like you said before, it's never too late and it's never too early, and the most important thing is get started.

Brian Ford (19:32):

Bright, you nailed it. I totally agree. Listeners, if you're not investing, let's go. You can start with a simple 401(k). There are folks at your company ready to help. If you don't have access to a 401(k), no problem. You can get going on an individual retirement account, or an IRA.

(19:52):

Now, some of our listeners are a little further ahead, and if you are currently investing, are you on track? Maybe it's time to revisit your plan and make some new investing goals, or maybe it's time to meet with a planner. Your future self will be so glad that you did.

(20:11):

Well, that's it for today's episode of Money and Mindset With Bright and Brian.

Bright Dickson (20:15):

We hope you've enjoyed this episode full of some of our favorite little gold nuggets of wisdom. If you enjoyed it, please subscribe and give us a rating or review wherever you listen to podcasts. You can also find our episodes and more inspiration for your money and mindset on truist.com.

Brian Ford (20:31):

To everyone listening, thank you so much for tuning in. Until next time, friends.

Announcer (20:41):

This episode of Money and Mindset With Bright and Brian is brought to you by Truist.