Join Angie Austin and financial column expert Jim Stovall as they delve into Investing 101, offering key insights on mastering the basics of personal finance. From understanding the importance of spending less than you earn to leveraging the power of compounding interest, Jim shares timeless advice for anyone looking to grow their wealth. Tune in to discover why starting young and getting rid of consumer debt can sow the seeds for a prosperous future.
Welcome to The Good News with Angie Austin. Now, with The Good News, here’s Angie.
SPEAKER 05 :
Hey there, friend. Angie Austin here with The Good News with Jim Stovall. We’re talking about the new year and resolutions and stopping to smell the roses. And we’re talking about Jim’s column, Winner’s Wisdom. And this week, it’s Investing 101. Thanks for sticking around, Jim.
SPEAKER 03 :
Always great to talk with you, Angie, and I appreciate it. And, you know, here in the new year… You know, Psychology Today has done a survey for the last 35, 40 years, every year, to find out what are people thinking about, what are the most important things to them, what would they like to change in their life. And the top three have never changed. People want to lose weight, gain wealth, and have a great relationship. Those things never change. So in an upcoming column, we’re going to deal with all three of those. But right now, I’ve been watching a lot of football games, as everybody has over the holidays, and it gets so complicated and all these diagrams and the different formations and everything. But in the final analysis… winning and losing comes down to the same things it did a hundred years ago who can block and who can tackle right that’s all that matters and uh you know you can have a plan and it’s like tyson mike tyson said about fighting everybody’s got a plan until they get hit in the face that’s hilarious he said that and then they’re laying on the canvas looking up at the lights and uh The fight’s over, you know, and a plan’s only as good as your ability to implement. Well, investing’s the same way, and I think every once in a while it’s just good to go back to the basics. It’s very, very simple. It’s not easy, but it’s simple. I have a friend that gave a ton of money to a charity one time so he could play golf with Tiger Woods. And he thought, I’m going to learn a lot. So he gets on the first tee, and he said, Tiger, what do I do here? And Tiger said, hit it in the fairway. And… He said, okay. And he said, then what do I do? And he said, then hit it in the hole. And that’s all you need to know. That’s all there is to golf. Hit it in the fairway, hit it in the hole. And he said, well, what about when you get in the rough? He said, don’t hit it in the rough. No, just hit it in the fairway, hit it in the hole. And, you know, my friend was being somewhat critical, and I said, well, golf is pretty simple. You hit the ball in the hole. Now, it’s not easy to do that, but the plan is simple. Well, investing is the same way, right? When I was young, I used to go to these investment seminars these companies would put on, and I’d go downtown, I’d put on my best suit, and we’d go down there, and you’d sit in a room with all these other people, and the guy would introduce himself and talk about his credentials, and then he would say, okay, let’s assume you’ve got $100,000 to invest. And I’m thinking, you’ve got to be kidding. Let’s assume you put most of your money in the parking meter downstairs and you’re open. It doesn’t run out before you get out of here, you know. That’s where I would, I mean, $100,000. I mean, as we speak today, 80% of Americans don’t have $100,000 in net worth, even including their retirement plan and their equity in their home.
SPEAKER 06 :
Oh, wow. 80%.
SPEAKER 03 :
So, you know, so every once in a while, it’s just good to go back to basics, which is, you know, the first thing you’re going to, if you’re ever going to be wealthy, every person that’s ever gone from poverty to prosperity at some point has mastered, they spend less than they earn. you’re never going to have anything to invest. This seems like an overly simple idea, but our elected officials in Washington have not mastered this yet. They have never spent less than they earn, which is why we have a $30 trillion deficit. Well, if you’re going to be successful, you’re going to have to spend less than you earn, and the only way out of that, if you’re not doing that, is you’re going to have to earn some more money, or you’re going to have to figure out a way to spend less. Then, Out of the rest of that, the first thing you need to do is you’ve got to pay off all your consumer debt. The best investment you’ll ever make is get rid of those 20% and 25% and 28% credit cards that you’re paying. I mean, that’s just a direct savings that goes right to your bottom line. And it’s a wonderful thing. And then after that, you need to put six months of your living expenses in an emergency account that you can get whenever you need it. And that’ll help you sleep good and invest well. then you’re ready to start investing. But until you get to those points, you’re really not even ready to start investing. Now, and please hear me, folks, if you don’t get anything else out of my time today with Angie, if you work at a place where they offer a 401k, particularly if they have a match, you’ve got to do this. I mean, there’s never been more of a no-brainer in finance than the 401k match. You know, if your employer matches you, You’re taking dollars you would have sent to Washington anyway. They’re letting you invest those tax-free. Your employer is matching that. So you double that minus the taxes. You’re investing $0.36 for your future, and those things can grow so much over the next 20, 30, 40 years. I mean, you’ve got to do that. I mean, that’s like saying if you want to be wealthy and you’re walking down the street and you see a bundle of $1,000 bills, pick it up. Well, that’s just exactly like investing in your 401k. It’s that simple. You’ve got to jump on this.
SPEAKER 05 :
You know, I did that when my 20s and 30s. And after you mentioned this recently in another one of your columns, I called my nephew who’s 25 and he’s making a pretty good living. You know, he’s like a chemist. And so he works for like a medical company and they do compounding and, you know, for patients. prescriptions, et cetera. So anyway, um, I said, are you doing your company matching? He said, well, I don’t qualify yet, but after a year with this company, I will. And it’s this percentage. And I said, you have to do the maximum amount of company matching. And I said, you know, I’ve got a decent retirement account. And the majority of the money that I saved was in my twenties and thirties when I worked for big companies like NBC that at the time was owned by IBM. And then I could get a lot of IBM stock and this, that, and the other. And so, um, Yeah, it really worked out well for me. GE, pardon me, they were owned by GE. It was GE stock. Go ahead.
SPEAKER 03 :
No, and it’s important, as you told him, you’ve got to get a sense of urgency about it. I always tell the story about the two fictitious twin sisters. Sister A… you know, believes in the 401k, and she starts investing early when she’s 20, and she never misses a year. She invests until she’s 30. Sister B, she finally catches on and says, I’ve got to do this. And, well, when she’s 30, she starts, and for the next 40 years, until she’s 70, she invested. But Sister A got frustrated and doesn’t do it anymore. So she only invested from the time she was 20 to 30, so 10 years. And her sister invested 40 years. When they retired at age 70, Sister A still has more money.
SPEAKER 02 :
Wow.
SPEAKER 03 :
And that’s the power of compounding interest. People don’t understand what happens when it just gets the snowball that keeps rolling over and over and over, and it gets bigger and bigger and bigger. I mean, one little grain of snow, and the next thing you know, you’ve got an avalanche here. And so the sooner you can get started, the better. I mean, if you can find a way to put away money when you’re a teenager, the sooner you start, the better you are.
SPEAKER 05 :
My son has his business and he’s saving up enough because he’s been saving since he started the business at like 12 or 13 and he’s 18 now. He thinks he’ll have enough to put a down payment on a condo in Boulder where he wants to go to college, University of Colorado, and that real estate there is very expensive. And so I said, well, how much do you have? And we went over all of his different accounts or whatever his investing accounts and stuff. And I was like, oh, wow, I think he does have enough to do a down payment. Like I was kind of shocked because we don’t really keep track of his finances per se because they’re all of his own accounts that he does himself. So I didn’t really have an idea if he was just dreaming or if this is legit, but it was legit. And I was like, wow, I’m pretty impressed. You know, not many kids can do that by their senior year in high school. So I think sometimes we don’t give him enough credit. We’re hard on him about like, oh, you forgot to feed the cat. And I’m like, well, he did save up for a down payment on a college place, so give him a break about feeding the cats.
SPEAKER 03 :
No, I consult with a company, a real estate company, and their CEO many years ago was doing an ad campaign, and they’re putting these billboards all over cities where they have offices. And I said, you know, it’d look good if you had a family. Put your family with you. And he had kids that were two, four, and six, and I’m consulting with him about his real estate company. You know, he put these kids on the billboard, and I said, now you need to write a contract with them, and you’re going to pay them to be on your billboard. And their payment is whatever it costs to have a 529 or the state tuition waiver. And so basically just that one little thing. for these two, four, and six-year-old kids paid for their college. It’s amazing what you can do if you get some time in front of it. I settled an estate for a guy recently who never earned $100,000, was the only income of his family, raised his kids, did everything, and never invested in equities, never invested in the stock market. Always put his money in bonds, government bonds or CDs. And when he died, he had several million dollars. And, you know, it’s just a matter of being diligent. One of the fastest growing groups of millionaires in America today are the 401K millionaires. And among them, one of the biggest employment sectors are teachers. And Angie, you and I know that we don’t overpay our teachers, as we say. No. But they have a very good retirement plan in most parts of the country, and a lot of these teachers, thankfully, are smart people, and they invest aggressively. And there are teachers that are retiring with millions of dollars, and it just doesn’t take that much to get the ball rolling in your direction.
SPEAKER 05 :
Yeah, those pensions are just a godsend. So in terms of investing 101, what’s your takeaway from this when it comes to investing? Start young, obviously.
SPEAKER 03 :
Start young. Spend less than you earn. Take the difference. Get out of all your consumer debt. Pay off everybody you’re paying interest to. Get them out of your life and quit borrowing money. You never borrow your way to wealth. The only exception is real estate in your home and those sorts of things. And if you have to do it to get a vehicle, do it, but don’t trade every year. I mean, drive it until the wheels fall completely off and save for that next vehicle. So spend less than you earn, pay off all your debt, get an emergency fund that will allow you to sleep nights and not worry about it, And only then do you start investing. Look at the 401k, the match, all the things they do. And while you’re looking at investing 101, everybody listening to me right now should have a will. Particularly if you have children, you should have a will. Because if you don’t have a will, the state you live in will decide who raises your children.
SPEAKER 06 :
Mm-hmm.
SPEAKER 03 :
And these are the people that can’t fix the potholes on your street, are going to decide who raises your children. And I just think you’re in a better position to do that than they are. And it’s very simple. You can go online. There’s a number of sites that you can do it online and print it out. And, you know, it will suffice. And that can really, really change the whole complexion going forward. And the You know, unfortunately, the obituaries are full of people that thought they had another 30 years to live, and their families are in a quandary now trying to figure out what to do because they didn’t take 15 minutes and get a will done.
SPEAKER 05 :
OK, that’s a great reminder for people and a trust if that’s something that would be beneficial for your family. I read something recently and it was talking about, you know, because I don’t want to be one of these people. My girlfriend’s getting a divorce because her husband’s so cheap. I’m almost embarrassed to tell you this, to even know the guy that did this. But their house is worth about two and a half million. They live in a different state. And she found out that he because he has his own business, that he was collecting welfare and food stamps and he was getting a million dollar inheritance from his father. And they’re living in a very prestigious area. And she said, I see that you’re collecting food stamps. She doesn’t make a lot of money. And I can’t have you do this. Like, I can’t be married to someone that’s that cheap that you’re actually doing something that I believe is dishonest because he was probably going by, you know, his manufactured numbers for what his company makes. So anyway, they I don’t want to be that person that’s so cheap that, you know, you’re dishonest because I I will not get a soda at the restaurant so that I can leave a bigger tip for the waiter. You know what I mean? Like, I always get water. It’s just like my thing. But the advice was to spend things on things that bring you joy. So I don’t spend a lot of money on myself, like nails or hair or any of the facials or massage. I don’t do any of that, but I travel. So find what brings you joy and invest in that. But then skimp on the things that you couldn’t care less about. Jim Stovall dot com. You’re the best friend. I just appreciate you so much.
SPEAKER 01 :
Be welcome. Arc Thrift loves your gently used clothing, furniture, and household items. But did you know they also accept non-perishable food donations year-round? Arc Thrift partners with Volunteers of America to help supply more than 70 food pantries across Colorado, from Pueblo to Northern Colorado and all the way to Grand Junction. So when you head to the store, be intentional. Grab a few high-protein items like peanut butter, canned beans, tuna, chicken, soups, or pasta, and bring them with you when you donate or shop. Instead of cleaning out your closet, clean out your pantry. Plus, Arc Thrift always We’ll be right back.
SPEAKER 04 :
Englewood is listening to the Mighty 670, KLT Denver.
SPEAKER 05 :
Hello there, friend, Angie Austin and Grace Fox. And today we are talking about real life struggles from her book, Fresh Hope for Today, Devotions for Joy on the Journey. Hey, Grace. Hi, good to talk to you again. All right. So tell us about real life struggles.
SPEAKER 04 :
All right, so I wrote this one after interviewing a friend. Her name was Nancy. She lives in Oregon, actually. And she talked to me about how she and her husband had decided to take a hike. And so they trudged, as she described it, trudged four miles uphill through the forest. And they began second-guessing their wisdom in choosing to do this hike. but she said that they persevered and they got to the top of a, when they got to the top, it was this meadow that was just filled with flowers and glacier fed streams. And she said, it was just so beautiful. They sat down and had a picnic there and thoroughly enjoyed their time. It was that kind of a space where you work so hard to get somewhere. And when you, when you find it alive, it’s just so beautiful. You don’t want to leave. And that was like their experience. And, And so when I heard her story, I thought, well, that is like real life in that sometimes we end up on a journey that is so arduous. And it’s maybe not by choice, but it’s just something that happens. We end up on this path that is so hard, and we just don’t know that we’re ever going to reach whatever it is we’re trying to reach. But finally, the Lord just brings us into a place of rest. And it’s a place that our soul is longing for after all of that maybe hardship that we’ve just come through, but where we can sit down and we can rest and we know that he’s with us and we know that he’s got us and he’s holding us close. But wow, it’s, you know, the destination of getting there and experiencing that rest for our soul is good. But the pathway to getting there is sometimes really hard sometimes.
SPEAKER 05 :
Can you think of examples like in your own life where that really applied to you as well? And you’re like, oh, I’m going to write this because I can really relate to this.
SPEAKER 04 :
Yeah, I think that when my husband and I sent the Lord nudging us to purge almost all of our earthly belongings to move aboard our sailboat home. And we didn’t have a boat. It’s not like we had this boat sitting around and we could just move into it. We had to find one that worked for living aboard and find a place to moor it. It was a journey that took a lot of energy mentally and emotionally as I had to part with all of these things that I counted precious. It was a path that was arduous. And we didn’t have a long time to do it. Once we got on it, once we actually found a boat and bought it, we had like six weeks to get rid of our stuff. And it was a path that wore me out in some ways, just emotionally every day, getting up and sorting again and purging again and saying goodbye again to these things that we’d held dear. But once we completed that and arrived, moved into the boat, settled in, and realize that, wow, this was a time of really stretching our faith and growing our faith, but we saw God come through. And it was a time of thanking him for that opportunity to walk that tough path, but to come to that place of knowing full well that we had obeyed him completely, And there was peace in that. Even though I’d said goodbye to all these things that I’d once held dear, there was peace in my heart and there was joy in having obeyed. And it was something that, yeah, we walked that path and it was hard, but wow, it’s been worth every step.
SPEAKER 05 :
You know, it’s interesting you talk about, you know, peace of letting go of things that you once held dear. It’s so hard sometimes to part with them. And there’s some organizer lady that, you know, basically says, if you feel, if that item brings you joy, you know, keep it. And of course, if it’s something you haven’t, you know, used or worn or whatever for many years, you know, even if you’re like, oh, I might wear that again. There’s really no sense in keeping it. But I wonder why we have such a hard time letting things go. My… Mother-in-law has, the family calls her an organized hoarder. And so she has a basement that’s probably 1,500 square feet. And it’s the most organized basement stuffed to the brim with like 200 purses, you know, 400 pairs of pants. And they’re those stretch pants that… you know, like senior citizen ladies wear that you can slide on and have Thanksgiving dinner and they still fit just fine in every color of the rainbow. And then I’m like, well, why are there like 20 yellow pairs? Well, she used to be super skinny. So there’s like, you know, three pairs and a size four, three pairs and a size six, three pairs and a nine. I’m like, oh my gosh. Like you could never, if you wore these pants every day, like you probably, she couldn’t even wear them like at the end of her life now and go through all those pants. You know what I mean? Like, it’s just crazy to me. And she won’t let us down there. Like my son really wants to go down there because he’s a thrifter and he’s been allowed down a couple of times, like with oversight, like she’ll be down there with him. And he might get like a hockey jersey that my husband had when he was little. Or this last time my son came home with a stack of photographs of like my husband when he was, you know, a kid and in college. And then some from when we first got married, like probably 50 pictures. So that’s what he came home with. But usually he gets like a little thing. I even got down there. Oh, I couldn’t believe that was loud down. But I needed one of those like shopping bags kind of like to take on the plane that… you know, fooled up. And she had some nicer ones down there that were like designed or whatever. So I found a small one that you could maybe put like the size of like two bottles of wine, maybe. So that was perfect for like my snack on the plane. I go, ooh, look, there’s another one. There’s a matching one. I’m thinking, oh, I should take both, right? She goes, oh, no, no, no, no, no. Don’t get greedy, girl. And I’m looking around, right? Even three of the purses that I gave her, they’re just hanging down there collecting dust, right? Like coach bags, right? And I’m like, are you sure you’ve never used that coach bag? Are you sure you want to keep that? Like, I gave that to you 20 years ago. I would definitely use that. Oh, no, no, no, no. And I’m like, what? What is it? I don’t understand the psychology grace behind that kind of hoarding. You know what I mean? Like, and I know they say it can, you know, relate back to maybe losses like shit, her Her dad was a police officer and he was killed in the line of duty when she was like maybe 8, 9, 10. And I’ve heard that like losing, like if you lose a child or lose something big, like somehow hanging onto these things. And I know that that’s not like the Christian way to do it. We’re not supposed to get our like comfort and our like, you know, out of things. They’re not supposed to give us like that comfort, right? But it’s perplexing to me. Like I can’t wrap my head around it, but it’s got to have something to do with it giving you comfort or… Security, something like that, you know, that we’re supposed to be secure through Christ, but apparently we’re secure through 200 pairs of pants and 200 purses.
SPEAKER 04 :
The word security came to my mind as you were talking, and I think that’s it, is that we look to things for our security. But if that house burned down, if that house were to burn down today, how would she respond, right? Like if she found her security in those things, that would be a significant loss for her. But the one thing about hanging on to the Lord and finding our security in him is he’s never going to leave us. Nothing’s ever going to take him away from us. The scripture says in Romans that nothing separates us from his love. And so no matter what happens, even on those tough walks that we take through life, sometimes doesn’t matter where he leads us or what he asks us to go through or what he allows in our life. still we can find hope and we can find peace and we can find joy if our security is in him and not in stuff that can be gone in a heartbeat.
SPEAKER 05 :
Yeah. And I think with so many of the people, I keep seeing these pictures because I’ve got so many friends in the news business in Los Angeles. And one of my girlfriends went out really this early this morning. And, you know, I don’t think we can really wrap our heads around the loss that those people experienced. Right. And I know everybody says, well, you know, you still have your life and things can be replaced, et cetera, et cetera. But it’s a whole change of like, All those lives. Because it’s not like a house in your neighborhood burns down and you get rid of it and you rebuild. It’s so toxic up there. And now they’ll have problems with mudslides, right? But your grocery store is gone. Your library is gone. Your mechanic is gone. All your neighbor’s homes are gone. So then you go up there and you rebuild everything. In the midst of all this toxic, you know, material that’s up there and even working up there, you know, how how easy is it going to be to get workers that want to go through all this burnt, toxic, you know, you know, destruction that they need to throw into a big dumpster and, you know, start from the ground up and then the soil. And I don’t know, just that kind of loss happens. you know, being secure in Christ, we’re supposed to find our security there. But I can imagine when you return to your neighborhood and you don’t even know if there’s a possibility of you rebuilding, like, I’m very curious to see what it’ll be like in 20 years. I’m assuming the oceanfront Malibu homes where those people have money coming out of their ears and they’re like $10 million houses, those will get rebuilt because even if you don’t have insurance money, you’re loaded and you can rebuild. And the people in Pacific Palisades, you know, those are very expensive homes, too, in the millions. But some of them may have been in a different position of maybe owning it for 30 years. And they aren’t multimillionaires. They just became millionaires because the real estate values went up so much. But I’m just very curious to see what that will be like in 20 or so years if it is all rebuilt because it is such a prime spot. But sometimes I feel like – so the picture that I had when my friend sent all these pictures out today – was of just um kind of despair and just kind of like a hopelessness that many of them feel about you know where do we go from here kind of feeling and i think some of us have that feeling about other things in life you know where we end of a relationship oh gosh where do i go from here or the loss of someone a loved one you know how do i work my way through this how do i claw I just watched a documentary on Avicii, this DJ who was so talented, just so talented. And he committed suicide. And I just thought to myself, like, gosh, you were such a genius with creating music. If you didn’t want to do those concerts, couldn’t you just stop doing the concerts and just create with other… He was working with the top of the top of the top musicians. Yeah. And couldn’t you just do that? Like, couldn’t you see your way out of it? And I know that that’s why we have faith. I know that’s why we have like the Lord to turn to. But I just think people get lost in a sea of despair sometimes.
SPEAKER 04 :
I agree with you on that. I think depression and anxiety are on the rise. And I just want to encourage listeners today to not give up. to keep putting that one foot in front of the other, just like my friend and her husband, as they were going on that path. They didn’t know it was going to be four miles long. They didn’t know how long it was going to take or how arduous, how steep it got. They just heard it was a great path. So, you know, the path that we end up on, we don’t know where it’s going to lead to eventually. We don’t know sometimes. how steep it’s going to get. But like these poor people that have lost so much out in California, they don’t know how long this is going to take before they can return to their life or what their life is going to look like. What is their new normal going to be? Where is their workplace going to be? Where are their kids going to go to school? Where about their church family if they lost their church? So, you know, everything is disrupted in their lives. But to not give up hope, just every day put one foot in front of the other on that path and and persevere because eventually it will it will even out it will we don’t know what that will look like there are no guarantees but it’s going to be okay is what we want to say right it’s going to be okay
SPEAKER 05 :
Well, I always love your Fresh Hope for Today devotions. That’s the book, Fresh Hope for Today, Devotions for Joy on the Journey. If you want some hope, it’s a great book. Always enjoy talking to Grace Fox. And if you want to find her and her books, you can go to gracefox.com. Thank you, friend. Thank you.
SPEAKER 02 :
Thank you for listening to The Good News with Angie Austin on AM670 KLTT.
