Jamila Souffrant 0:00
You're listening to the Journey to Launch podcast, Learn to Invest and Grow Your Money with Bola Sokunbi of Clever Girl Finance.
Welcome to the Journey to Launch podcast with your host Jamila Souffrant as a money expert who walks her talk, she helps brave journeyers like you get out of debt, save, invest, and build real wealth. Join her on the journey to launch to financial freedom.
Jamila Souffrant 0:39
Hey, hey hey Journeyers. Welcome to the Journey to Launch podcast sit back buckle up we are about to launch to financial freedom and independence. Really excited to talk to today's guests Bola of Clever Girl Finance. This is actually Bola's third appearance on the podcast. She is my most re-occurring guests, which is pretty awesome. And we're going to be talking about Bola's new book, Learn How Investing Works Grow Your Money. Just a little bit more about Bola, Bola is the founder of Clever Girl Finance, one of the largest personal finance platforms for women in the US. It has consistently been voted as one of the best websites for women. She also has a podcast Clever Girls Know. And she's just all around amazing mom and business owner. So you'll get a lot from this interview, we will be talking about investing. That's what her new book is all about how investing works. So going over the basics, but also thinking and talking through the blocks that a lot of people face when it comes to investing. Then we're going to talk about how to look forward. What's your outlook on investing with the market being in such fluctuation because of the pandemic and because of this vaccine. So how can we have an outlook that serves our goals and our portfolio? And then of course, I have to just asked her entrepreneurship and business questions, because I'm such a fan of the way she has grown Clever Girl Finance.
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If you want the episode Show Notes for this episode, go to journeytolaunch.com or you can click the description of wherever you listen to this episode to get the full episode show notes. Now if you are a new listener to the podcast or OG journeyer I've created a jumpstart guide to help you on your journey to financial freedom. It includes the top episodes to listen to the stages to go through to reach financial freedom resources to help you and so much more. Get it for FREE by texting launch to 33777 text launch to 33777 or go to journeytolaunch.com/jumpstart to get your guide for free right now. Okay let's hop into the episode.
Hey journeyers I have on a special guest which by the way she is the most how you say this the most returning guests you've been on the podcast the most out of every guest I've had on Bola Sokunbi of Clever Girl Finance. This is your third appearance.
Bola Sokunbi 4:34
I know I'm excited thank you for the opportunity to be here three times
Jamila Souffrant 4:38
no every time like I feel like I've always me if you're newer to following me or even knowing about Bola I'm just to give you like a quick backstory I always love saying and telling this because Bola everyone, journeyers is part of the reason why I feel like I've made it to the heights that I've risen to so far with Journey to Launch because when I first started in this personal finance space with 100 followers at that point, I remember Bola was like the first person I saw up close and personal so that like, you know, you can see someone like and not know them and it's inspiring. But she was one of the first people like we were in a slack group together. It was a slack. It was like WhatsApp, I think with our other friend.
Bola Sokunbi 5:15
Jamila Souffrant 5:17
And because she's, Dorianne, connected us, and we all got into this channel. And I remember at that time, your business wasn't even what it is today, which is like, we could talk a little bit about that. But you were doing this full time already. This was like, what, three, four years ago, you were earning a living from it, you were impacting lives. And I remember thinking, Oh, so this can be done. And I've always credited you for inspiring me to like be able to do this full time cuz sometimes you need to see that up close. So I always got to give you your props when you come on the show.
Bola Sokunbi 5:45
Oh, thank you Jamila that means so much, you're gonna made me cry.
Jamila Souffrant 5:49
And I remember when I was talking about leaving my job, like you were one of the people where it was just like you went through that same journey yourself. So I'm excited to have you back on and I'll link all the other episodes that Bola was on because we talked through some other things before but I want to talk about Bola's new books. So she's on the podcast, she's coming out or she's came out already with her book on investing. So this is which, how many books so far have you written?
Bola Sokunbi 6:12
This is my second book. I have a third book, but it's not out until next year.
Jamila Souffrant 6:16
Right. And, by the way, I don't even know how Bola is writing these books, because she's running this company. I don't know either. She has in the pandemic, and you have twins, how old? Are they? Seven, they just turned seven. And then you're writing books like craziness. So it's her second book, Learn How Investing Works. So the first one was about personal finance, right?
Bola Sokunbi 6:34
Yes, it was about the foundations like where you want to start from. And then this book is the next step, which is the obvious step, when you have figured out your foundations. Now it's time to put your money to work for you.
Jamila Souffrant 6:44
Right. So it's all about investing. So I do want to touch upon that, to me, this is where wealth is right? Like we can learn to save for emergencies and learn to pay our bills. But that usually just keeps us on the treadmill and running in place. In order to create wealth. We need to invest our money, we need to beat inflation, it can't just sit and we can't like make all the money, have it sitting in a savings account. like you'd actually lose money over time, right? Because it's not beating inflation.
Bola Sokunbi 7:07
Jamila Souffrant 7:07
So I want to talk about how we all can understand like the basics of investing. And so for you what is like the number one reason from your community and just overall that you hear that people are just like, I'm not investing? Like, what's that one barrier for most people?
Bola Sokunbi 7:22
Fear, I definitely hear a lot of fear. I don't know how it works, I don't want to waste my money, this is a gamble. And then the second big reason is I don't earn enough, I don't earn enough to be investing, you have to have lots of money to invest. So those are the two biggest concerns I hear from people as to why they're not investing. And I think sometimes people because of what they don't know. And because of the emotion they feel, they just push it aside and say, Well, let me just save, let me just pay off my debt, and then let I'll put the money in a savings account. And I'll think about investing later, but later doesn't ever come.
Jamila Souffrant 7:53
Yeah. And there's a reason why I think investing itself because at one point, I think it's so much more easier to get into know or understand because you have platforms like ours that talk about it, you have books, it is easier to like grasp or get the information. But I still think the way the system was built was to make it harder that you needed an access point or someone to guide you. So it was beneficial to the financial services company, that you hire them and you make the jargon like complicated. And I feel like now this is like a turn where it's just like, No, no, no, you're an investor, if you have a 401k. Even if you're like doing the minimum, you'd even know like your company's just matching you and you are putting money in there. You're already an investor. And you're not, you're not considering that. For the people who are, let's say, I would say lucky. But they have a position where they have a job. And they have 401 k accounts. I kind of want to touch upon that. Because at the base level those people some people know and they're investing with so many people are not taking advantage of that 401k account investing. It's not as sexy or exciting. So can we talk through that people are investors when they have 401k accounts and process?
Bola Sokunbi 8:54
That's such a great question. And I'm glad you brought it up. But Jamila, before I answer that question, I have to say thank you to you for being in the book, which you did not talk about. You share your incredible story of how you and your husband are building wealth and investing and you share such valuable tips in the book. So thank you very much for being in it. You are part of this project, this passion project. So I'm going to say that first.
Jamila Souffrant 9:18
Thank you. I'm on page. So when you guys get the book because you all should get the book. I'm on page 143 starting on 143.
Bola Sokunbi 9:25
So sorry to sidetrack when I'm like she has to say something. So that's a great question you asked about the 401k. And I love answering this question because it's not something I get asked often. So like you said, When somebody first starts in the job, many people have the opportunity to invest in a 401k or 403 B some employers offer an IRA, and this for so many people is your first step into investing if you take advantage of it. If your employer offers you free money, this is again 100% return on an investment you didn't even make because it's free money right. But there's this controversy around the 401k that well, they're so expensive, so it doesn't make sense to invest in it, or it's too limited. So you can't invest in the whole stock market. But one big I think oversight people are making when they make statements like that is that their 401k, For the most part, your 403 B is something that's automated from your paycheck from a tax advantaged perspective. And a lot of people, especially beginner investors, people who are beginning with their financial journey, don't yet have that discipline to make those consistent transfers every single paycheck, right. And if your employer is offering you free money, that's going to appreciate help you add to your balance and dividends and take advantage of the power of compounding over time, that's going to far outweigh any higher fees are getting charged. And in today's world, a lot of 401k plans and providers are actually realizing that their offerings are expensive. So you find so many 401k plans that have Vanguard offerings and Fidelity offerings. So that expense thing may not even be a valid point, depending on what plan you have. So I highly recommend that people take advantage of the 401k especially there's free money, tax advantaged opportunity there. And it's basically setting it and forgetting it, you will be surprised at how quickly it will grow. When that automation is just taking place every two weeks, however you get paid, you'll be so surprised
Jamila Souffrant 11:25
you bring up such a good point about the automation part. But I do want to step back. So I like to like keep things really simple for people who are like they hear these terms, and we know what they are. But they may be like, Well, okay, but what does it mean. And so, 401k account similar to a 457, or 403B, those are all pre tax retirement accounts, meaning before the government taxes that money, you can put it in this account. Now when you go to take it out in retirement, so you're going to put your money in that account right before the government takes their taxes, that money is going to sit there and grow and compound over time. And let's say you have it sit there for 30 years, when you take that money out of that retirement account, the pre tax retirement account the 401k, 403B or 457, you'll get taxed on what you're taking out. Because I always say if you can't remember anything, just think just to remember and know that either way the government is going to get their tax money. So if they didn't take the taxes in the beginning, they'll take it later. Right. And so it's an advantage for a lot of people this account, and it does, you know, some people always ask about like, okay, does it depend on how much I make if I don't earn that much should I be putting it here and there. And that's like a little bit that's like next level, like strategizing like the tax implications. But overall, this is money that especially if you get contribution from your employer, meaning if you put into dollars, let's just say they feel is they put in $1, right, so then you have $3 that are working for you instead of zero, or $2. So it's beneficial to take advantage of these things. Even if, you find out the fees are a little bit higher than you'd like. Because it's better that you're investing, then you're not doing anything with that money. Right. So I think that's a great point.
Bola Sokunbi 12:56
Exactly. And you know, that pre tax advantage is really an advantage because as opposed to paying the taxes now you can put that potential tax money to work for you, right, and that money can grow even further. And so when you get to retirement, the amount of tax you pay will really depend on how much you're taking out as, quote unquote, income for that year.
Jamila Souffrant 13:17
So a lot of people in the financial independence retire early space, especially the ones that are earning right think about like these are the years that are your highest earning potential depending on how you're structuring your life. Some people are like, well, I'm gonna make a lot more money in the future. Some people are like I'm making the most that I think I'm gonna make now because I'm like, at that Prime age, I'm like, got all my you know, skill sets, and I'm making the most so for them. It's strategic. And that's why you hear a lot of people max everything out. And when I was working at my corporate job, that's how you know we got to that spectacular 169,000 have invested in saved in two years was because because of our income, we were able to like put away like half into pre tax retirement accounts. And it helped that my husband was a teacher and he had access to two pre tax retirement accounts. Because in our thought process, when we reach early retirement or retirement, we won't actually be taking or making as much or needing as much to live, like we're making now. So I rather shield money from taxes. Now, you know, what, after paying taxes today, and then worry about paying taxes later, because I'll be able to creatively pull out only what I need. And so instead of me like bringing home, let's say $300,000 a year now, I want to shield that from taxes. When I'm you know, maybe 40/45 and I'm early retired. It's not that I won't have money, but let's let's just say I'm strategically only taking out 80,000 because that's all I need to live, then I pay less taxes on that. So this is why some people you know, too, when you start getting into this, like it becomes actually more fun for me to think through like the creative ways that you can shield money from the government in a legal way. So this is not illegal.
Bola Sokunbi 14:49
Yeah, no legal stuff.
Jamila Souffrant 14:50
These things are all things that education is so important around because they're available to you. They're available to you right now.
Bola Sokunbi 14:57
Yes. It's so important to understand how investing works, what the vehicle is the 401k, 403B, 457, understanding how it works, IRA, because that's what allows you to create that plan for yourself. And a lot of people feel intimidated by investing. And I always tell people and I say in the book, you don't need to know how to build a rocket ship to go to space, right? You just need to know how to get in your car and drive it safely. And what do you need to get in your car to drive it safely, you know how to start the ignition, adjust your seat, put gas in the car, and set your navigation, you don't care how the engine is like connecting the dots when you're driving, right. So you need to know enough to help you create a plan that you have a good comfort level with that you can adjust as you go through different transitions in life, to get you to your destination of the financial goals you have for yourself.
Jamila Souffrant 15:49
And sometimes you just need to start so as long as you're not like giving your money to some, you know, some weird account like person that should get your money. Like literally even if you start you learn from starting because now you're invested, let's just say right now, you know that you could take more advantage of like pre tax retirement investing through your company, your 401k. Or, you know, you can open up a traditional IRA, let's just say you know, you're not working for anyone right now. But you have extra money you can put into your own retirement account outside of your job. Just start the process. So many people are afraid of making the mistake, needing to know all and everything before they start not knowing that like once you start again, as long as you're not putting everything at risk, like you know, you're not like investing or giving someone your money or some random account or website, your money like you literally once your money, even if it's $100 that you started to put in, you'll start paying more attention. And you'll start seeking out the information you'll need to make the better decisions.
Bola Sokunbi 16:43
Exactly. And you know, mistakes happen, right? But as you educate yourself, as you inform yourself, you become more confident and like you said, Jamila, you can make better decisions, don't be afraid to make the mistakes. Right, you're afraid of not getting started,
Jamila Souffrant 16:58
right, And that's the thing, because if you don't start like time passes anyway. So yeah, you're losing out on that compounding value. And I know the best way I show people, because I recently got like, you know, since my work in the space, I'd like to personally help family members, like start their Roth IRA. So a Roth IRA is after tax investing, right or investment account that you can do. And so like I remember, I helped my mom and two of my sisters so far opened up their accounts, and part of the way, but she might like my little sister, because right now she's they live in a lives, you know, they're in their 20s. And like that $6000 that I can like put away here I can like go to Mexico, like why am I putting this here?
Bola Sokunbi 17:38
I can buy a handbag girl!
Jamila Souffrant 17:40
Right? I'm like, no, no. So like the way I try to show and hopefully inspire people to do it. It's like I try to show if you do this, if you only do this for the next 30 years, that 6000 that you're putting in, look how much money you can have. And this is by like, just putting away here, you can do this. So they're like, Oh, I can have $500,000 by the time I'm 60. I'm like, Yes, just by doing this and putting on autopilot. So
Bola Sokunbi 18:05
yeah, sometimes you just have to see the numbers.
Jamila Souffrant 18:07
Well, so for you. So as you were writing this book, I know you did tons of research, and you spoke to a lot of people on their investing strategies. But what was like a common theme, you did see it in the people who were able to break those barriers of, you know, feeling confident or lack of knowledge?
Bola Sokunbi 18:24
The biggest theme with all of you amazing women in the book is consistency, consistency with investing, regardless of what their situation was, regardless of whatever traditions they were going through consistency and consistency over time. And the second thing was, everybody in the book took an opportunity to reflect on mistakes that they had made, things that they had done that they didn't quite like with their finances, and they leverage that to create a plan, either to avoid those mistakes in the future or to get ahead based on the time that they lost. And the reason why I share that, you know, reflecting is a lot of people feel like Well, I'm already 40 I'm 45. And I'm 50 it's too late, it's never too late to invest because you still have time, even when let's say you retire at the standard retirement age that is put up there, which is I think 65 years old, you're not going to cash out all your investments on the day you retire at age 65. Right, the average retirement is like 25 years, you still have another 25 years for your money to continue to grow. While each year you're taking out just what you need. So don't think that because you're 50 because you're 60 that you cannot invest you can absolutely invest and still build wealth because again, you're thinking long term, and also you have the opportunity to create a legacy right for your kids for your generation for your community. However, you want to disperse that money when you're no longer here.
Jamila Souffrant 19:46
Yeah, it's such a good point. The age thing for so many people to think because you know, I reference people starting in the 20s uh, how long you have but like you still given you know, despite everything happening in 2020, God willing, like we have a long life ahead of have us and so even at 40, even at 50, people are for the most part living longer. There's breakthroughs in technology that you'll need, you still need the money. So even if you feel like you're starting late, do the math, even having 50,000 is better than having zero, you know, like, it's better than just depending on Social Security. Because who knows what's gonna happen with that? Yeah. Now, one of the biggest things that happens, or people ask me all the time is investing and paying off debt. So for the people who are still working on paying off debt, what are your thoughts on investing? Because that's sometimes you know, we have people in the space, the Dave Ramsey community, or his I, theory is no, you pay off debt. First, you're not investing at all? What's your take on that?
Bola Sokunbi 20:43
So both take is, I definitely believe that you can invest and save money at the same time, right. And this is a school of thought that I come from, first of all, anyone who is paying attention to their finances is setting intention to want to improve and do things specifically. So they can achieve their financial goals. So you're not just randomly racking up more debt, and then trying to invest and counter or being counterproductive, you're doing this with intention, which strategy and time is of the essence, right? Our parents generation, or grandparents, they may have had pensions, they may have had full Social Security packages, but the chances we're gonna have that I don't have a pension, you work for the government, you probably don't have a pension, even if you do, it's not a big deal. So it was a tragedy for many people may not even exist, my mom gets $1,000 or like 900 bucks a month, it's a joke, right? She can't do anything, she can buy some groceries without even really have to think about the quality of life that you want to have. Right. So when you're thinking about paying off debt and investing, you have to be intentional, right? I would definitely say if you are fortunate enough to be employed, and you have an employer offering you free money, take the free money contribute enough to get that free money, because that's like I said, 100% return on investment that you haven't even had to make. So take that money, and then focus on getting your high interest debt down, especially those you know, credit cards, personal loans, those that that cost you a lot that are in the teens, or 20s, with interest rates, focus on getting those down, but take advantage of that opportunity with your employer. And even if your employer doesn't have a match, I think contributing like 5% of your income 10% pre tax or even you know, attempting to put the $6,000 in an IRA still makes sense. And you'd make set the intention to aggressively pay down your debt.
Also, you know, we are not in a position where you want to rely on the state right to support you. I talked about the woman in the book, they used to work at a pharmacy when I first graduated from college, and she was 80 years old working with me in a pharmacy chain because she didn't want to be in a state funded nursing home. But she had no money. And she was slow and she was exhausted, but she was trying to pay her rent. And so yes, I understand that people say oh, you know, focus all your efforts on paying off your debts, and then don't invest anything, don't save anything. But what I tend to see with the vast majority of people is that when they can't see a reward from all the hard efforts, they're putting into paying off a student loan or paying down a big amount of debt, they tend to slip off, or they tend to the timeline it takes them to pay that debt becomes more extended. So I definitely believe you can save and invest at the same time. But that's my take, especially for this generation. But you have to do it with intention, and you have to be strategic about it. So you're not like wasting time and money.
Jamila Souffrant 23:29
Yeah, good point. And I agree, I'm in your school of thought too like, I agree that you can pay off debt and invest because again, the time is gonna pass you anyway. And this is where it's really important to know what motivates you. So when I got my sister to open her account, you know, I told her not to look at it often, you know, don't look at it often, you know, she's in she's invested in index fund. She's tracking the entire market and not once put one stock. And remember, like so here's the other thing with investing. This happened with all my mom and my two sisters, I helped open up Roth IRAs, they all opened it up, you got to remember, and we went through Vanguard, and they opened up the account. But sometimes it takes a few days for it to kind of like so they were with me and I was able to sit down and help them do the account. But then when it came time for them to now buy shares, because just because you open the account doesn't mean now you're invested in anything like so one of them like I don't know, I thought that we'd went through it. But she, she, I think was my mom, actually, she had opened up her her Roth IRA, and then realize a couple months later that she never actually invested in anything, because and that happens to a lot of people. So they're like, Yes, all right, I'm taking that step I'm opening up this you know, Roth IRA, and then it's like they forget the second step was like, Oh, no, that's just the account now now you have to invest the money and so we did that. But I remember showing my sister when we did open it up. I remember when we finally invested in bought the index fund and like the next day the market crashed. And I remember like saying what she like I didn't call and talk to her about it. I doubt she even like realized cuz she's not that into the market stuff and all that, like, she's not really into that. But I was like, I hope she doesn't look today at her account because she's gonna be like Jamila I just put 3000 like, she doesn't have much, but she has something right. And she put that she trusted me, I kept, you know, me telling her to put this in. And I'm like, I hope she doesn't look at her account today. Because she's gonna say, what did you just do?
But then the cool thing is, I saw her the other day, and I was like, let's look at your account cuz I knew the market rallied back up. And it was more than what she put in. So she saw the return for the first time. And I was like, see, this is how it works. So I think for a lot of people, too, it's like investing in and not being caught up in that ride of the market. And what happens because things in the short term are going to happen.
Bola Sokunbi 25:41
Absolutely. They're going to happen. And you know, a lot of people drive themselves crazy. by tracking the stock market, don't worry, I've been there. I know how it feels. But you really have to come back to your objectives, your timeline, what are you investing for, your risk tolerance. So me personally, in the stock market, I'm a bit risk averse. And I'll tell you why. And so when the market crashed, I looked at my account, okay, this doesn't look so bad, but because I was invested in the more conservative way, but I have other people. I know other people who were invested more aggressively, and they saw a 40 50% declines in their portfolio and is like, Oh, my God, like this is crazy. And I've been at that 40 50% decline in my 401k back when that 2008 recession hits. And I remember looking into my account, and I thought it had fallen by 47%. And I was like, You know what? I call like, Listen, I locked myself out of the account, just change my password, I'll get it for you later. I'm never logging back in here, but my coworkers are selling and selling.
So just being clear on your objectives, being clear on your timeline, knowing what's going to cause you not to sleep at night is so important. And I'll just explain to you why say in the stock market, I'm risk adverse at this point. So one of the things you alluded to earlier on Jamila was different ways to invest. So you can invest in real estate and different ways in there, you can invest in the stock market in different ways in there. And you could also invest in business and different ways in there. So we are invested my husband andI that's we, across these different areas. And right now, I feel like you know, when my business, for example, that I work full time, is a much higher risk of an investment for me, because I went away from a 6 figure job earning consistent paycheck and incredible benefits to pursue this now high risk opportunity that I'm trying to build and grow. So if I'm taking this major massive risk here, right, then I want to be personally I want to be conservative in other areas. And then when you think about real estate, and the fact that you can't just sell a house and get the cash tomorrow. And depending on what the market is like which right now we're not in great times, we may not be going into great times, you may have to hold on to an asset a property for several years before you can recoup or rebounds. So that's what I mean. And that's kind of tied to our own plan, if I'm taking high risk here that I don't want my whole investment portfolio to be high risk, but that's just the nature of who I am as an investor.
Jamila Souffrant 28:08
But that's such a smart way to look at it. And I think it's also just unique because people usually talk about the portfolio, like let's just say your retirement accounts looking at that as a what that risk profile is. But if you look at your overall life, and the things that we're investing in, so like you said, like a business like that is, so people don't see it that way, like you know, entrepreneurship, but like literally, and that's one of the cool things, I think about becoming an entrepreneur there, there's a lot of risk. But there's also a lot of reward, if it works out, like you have a higher potential to earn a lot more money, but you also have a potential to, you know, to can take a long while to you know, become profitable and all those things. But I like that you framed it in that way. So, you know, hopefully people can start thinking about, okay, like, what kind of investor am I. you know, I'm also very, I'm also lazy, I would say that, like, I'm a lazy investor.
Bola Sokunbi 28:54
I agree. Not you but me too, is what I mean.
Jamila Souffrant 28:58
I'm just like, I'm not trying to like, you know, go in and out of stocks, like I'm a long term investor, I just want to just set it and forget it, I have enough things in my day to day life that I have to do. So my investments are just not one of them that I want to worry about. And I think for a lot of people, because some people were like, Well, how do you handle you know, when everyone's like talking about like the stock market? And I'm just like, what do you think Journey to Launch on and I'm like, I'm just I'm a long term investor, I really don't care, like my money stays in if you if you can afford to invest, even when it's going down, just keep on putting that money in. And don't look at it again. You don't need that much. Unless you need that money tomorrow or next year to buy something like a house. You don't it does not matter what the market is doing today, because you don't need it right now. You you what you want that money 30 years from now, that's all that matters. So you don't care what's happening today, quote, unquote,
Bola Sokunbi 29:42
that's a great point that you brought up and a lot of people say, Well, okay, you're saying I don't need that money for until a long time. But what if I need the money next year? What if I need the money in two years in three years, and again, it comes back to your objectives, your goals, your risk tolerance but now that the market has rallied, towards the end of 20. Oh, at the end of 2020, the market has rallied a lot of people's portfolios are back up to where they were even more, this is a great time to readjust your risk, to de risk a bit more, rebalance your portfolio so that if you need that money soon, like you're approaching retirement, or you're doing early retirement, you can pull out a certain amount into cash, or maybe bonds, etc. So you can have that money aside in the event that the market goes to another spin. And then you can keep the money that you don't need for several years out still invested to take advantage of future rebounds and growth and compounding, etc.
Jamila Souffrant 30:37
Yes, such a smart thing, always. So while you know, maybe you're not as tracking your investments, like daily, you know, an often but you do want to make sure that it's aligned with your goals, right. So if I were really trying to retire early, right, and I'm like, Well, I think I'm gonna like pull that trigger in two years, I would then reevaluate the complete, you know, composition of my portfolio i right now, most of our stuff is in index funds, right? It tracks the equity investments of the market. So it is higher risk, but it's just because I know too, that we don't need that money at all right now we have enough in the savings and emergency savings to cover us in the event of like, you know, a job loss or something major happening. So for the market, right, so we talked a little bit about just like staying cool when the market is kind of fluctuating. But one of the things that you brought up before we pressed record on this interview is that, you know, there's so much to come with the market happening right now with the pandemic with, you know, now we're hopefully going to get this vaccine by early next year. But that still won't fix everything. Right. So how should people be considering or looking forward at their investments at this point,
Bola Sokunbi 31:40
these are very crazy unprecedented times. The challenge with a situation like this is that typically right when the market go or the economy goes through recession, or depression, because there's so much history, analysts can go back and look at different time periods and try to model and compare. But we were an economy that was already kind of showing indications of going into recession and a pandemic team and slapped us in the face. I can't tell you in 25 days from now, there's going to be a cure you're going to have over the counter medicine, even the vaccine that we're talking about is still being tested. It hasn't been mass mass tested. So, there's a lot of question marks, right. And so in a time like this, when there's so much uncertainty, really nobody can predict or really model much of anything, because we don't know a lot of anything as it relates to the pandemic. And the reason that why that's so important is because this pandemic is impacting business. People cannot go to work, people cannot go to their businesses, people are losing jobs as a result. And then when you look at the other side of what global global governments, US government is doing to try to sustain their economies through this uncertain times. They're doing things like the PPE loans, the student loan deferrals, determine payment deferral, many people are doing interest deferrals, stimulus checks, all those things are not sustainable, long term, right? The government cannot keep those programs in place perpetually. And so I kind of imagined it that when the cure comes or the vaccine comes, we'll see the stock market rally, because, you know, it is exciting, it seems like we are going to be on the path of recovery not It seems that's what it's going to be. But then, you know, we're going to see those programs stop, because now it's time to recover. And we're going to start to see the real effects that the pandemic has had in the economy, even though it's bad right now, I think that we may still see really big effects of it.
So what does that mean for you, as someone who is investing thinking about investing has money in the market, it means that as Jamila and I have been talking about thinking long term, knowing your objectives, but understanding that if there is a potential for us to go through a wild stock market, ride, or go into a recession, I don't know if we've actually been deemed as being in a recession yet because of the pandemic. But if we're going to go through all these troubling times, this is a time to put cash aside, especially if you're fortunate to be employed. This is the time where you want to have money put aside so that when things happen, God forbid there's a job loss or like the economy isn't doing so well. You have money to ride through the storm, and you don't have to cash out your investments when they're not doing that great, you know, because you need the money. So I highly recommend people to prioritize saving for emergencies right now and more so then normal. So that standard advice that everybody gets is Oh, three to six months. If you have a working spouse three months is enough, but six months, 12 months, and again, it may sound intimidating to some people, but remember this is what do I need to survive. This is not the nice getting your hair done nails, fancy dinners, whatever this is paying for your rent, mortgage, putting food on your table, having your core utilities in place, your water, electricity, your cable medicines that you may need, transportation and when you look at have that number and you filter everything else out. It may become more manageable for you.
Jamila Souffrant 35:05
Yeah, and you know, thinking through I know for some, it seems like you said so overwhelming because here we are talking about investing and making sure you put your money into investing and then you know there's paying off debt. But then wait, you need money to save for emergencies. And not just like three months now. Now you need six to nine. I know, there are a lot of things right. And I always want to say like, if you are listening to this podcast, you're doing well, sweetie, or if you're a guy, non Sweetie, whatever. Because like,
Bola Sokunbi 35:30
You're doing well, dude,
Jamila Souffrant 35:31
right, Like, that's the Kris Jenner when she says you're doing well, sweetie like, because, like knowledge and just starting, even if like you can't go wrong with either way. So whether you're saying to yourself, okay, I'm going to take this, you know, maybe my investment contribution to 1% of my 401k. And then I find extra $50. In my budget, I'm going to put that towards like that credit card debt, or towards my savings account. And sometimes those numbers don't seem like a lot. But they are they are a lot because it's building upon habits. And you're just you're doing it. So you I don't know, I just wanted to say that because I know it can be it can sound like there's a lot going on. And then when it comes to just the emergency savings account, like you said, it's really smart to think about, I would say there's a couple ways to do it like, right, like let's say you don't want your lifestyle to change. How much do you need 3/6/9 months of expenses? Let's just say okay, no, we cannot go out to eat as we once did. You know, we need to even be more like careful with our spending, you know, you create another budget or line item, or what your expenses will look like, if you cut out like everything that you don't need, the nice things that you're doing now for yourself, maybe or that you don't need or they're not essential. Then the other category could be like, what if like things really hit the fan? And you had to move out or sell your house? Like what can the bare minimum you have to move back? If you had a family member that would take you who's going to take me in all my kids, someone who would help you right, like so I don't know, just things to think through. And it's not to scare people. But I think thinking through some of these things also makes it seem you can see Oh, I thought I needed all this. But really I can survive on this much. So it makes it more attainable that I can save up to that.
Bola Sokunbi 37:04
Yeah. And you minimize the fear when you're prepared. Right.
Jamila Souffrant 37:08
Well, that's a bar right there bola. That's like a quote
Bola Sokunbi 37:13
I know, right. No, but honestly, if you are prepared, right, a what can seem like devastation becomes an inconvenience, right. If you have the money to pay your mortgage for six months, and you're out of the job for six months, and it's an inconvenience, but it does not put you out on the street because you have money in the bank. So this is about preparation and not to instill fear. And for anyone who's like, Oh, my God, what are the stuff I declined really badly. Think about the fact that, again, we've talked about this so many times already, but your objectives, you know, your timeline, you're investing into the future. But one of the things that you should think about is, as opposed to focusing on the negative, right focus on the opportunity, this is a great time to invest in the stock markets down because it's like the stock market on sale, right, you can get more for your dollars when you invest. So don't be afraid instead, prepare and then plan strategically of how you want to invest. I know a lot of people are even putting small amounts of money aside into a dedicated investing account that they're not investing right now. So that when an if there is another decline, they want to take that money and try to purchase more stocks than what that money can buy right now.
Jamila Souffrant 38:22
All great points. I love that I hope people are taking notes if you have to listen to again, I do. I'm gonna actually some business questions and then we're gonna let everyone know where they can find the book. But I'm curious just because as you said, like so many people have been impacted, even if you work a traditional job, especially entrepreneurs now. So how has your business changed? How have you pivoted in the midst of all this happening?
Bola Sokunbi 38:43
Oh, my goodness. So this year has been, it's hard for me to compose or put into words, all the emotions, I feel about 2020 you know, just navigating as an entrepreneur, as a mom as all these things. So I will say that 2020 has been a good year for Clever Girl Ginance, going into the pandemic, starting the pandemic, as a business owner was terrifying. It's like oh, my God, like what's going to happen to our revenue, we decided to make our courses free, because our audience was really, really struggling. And for us, that was one way that we could support them. But that was a stream of income that we dropped. And so personally, I had to just sit and think deep of how to pivot how to transition. And there were certain things that I had been doing unintentionally. As an entrepreneur, being the risk averse person, I am taking this big risk. So we were able to weather through the storm, and then kind of re strategize and structure up, you know, the way that we make money to date. So you know, and as a result of that, we've gotten a lot of opportunities that I didn't even think that we would get, but just to give you more detail or more color. One of the things that I started doing so I've been running clever girl finance full time for three years now almost exactly exactly three years now from when I quit my job. One of the things I started doing a year and a half into running it full time was I opened up a brokerage account for Clever Girl Finance, brokerage/savings account. And in the brokerage account, we invested cleverbot, finance, money and other businesses. And we started, I started saving money for the business as a buffer. So that was really good to have when we made our courses. We while we were strategizing, knowing that I could still pay the people on the team because that this because this money had been put aside. And then in terms of, you know, just pivoting the way we earn money, when we dropped this income stream of our courses, then we started to do more of certain types of things that we hadn't done so much of the, done so much in the past, but the opportunity was there. So we now have a very diversified way of earning money from the business, whether it's through books or through brand partnerships, or through advertising or through content that we create for other platforms that nobody knows that we create as ghostwriter. We have different ways that we earn revenue in the business. And I think for any entrepreneur, I think going through the season was definitely an eye opener. And it makes you think about Okay, I definitely need to do we talk about diversifying our income streams and our personal finances is how we should be thinking about diversifying our income streams in our business. And the reason why I started that saving slash investing account for coverable. Finance was because I read a book A few years ago, and it talked about McDonald's business, and how a lot of people look at McDonald's and think that they make money from food, right? A bulk of their money, because everybody goes by McDonald's. But if you look at their balance sheet, you'll see one of the biggest holdings is actually real estate, and then some other things and then food. Right? So we look at this food company, but they're diversified in so many ways. And that will just like my ding ding Oh, my gosh, or you can be doing other things. And so yeah, I've, you know, we're working through it has been, we've made it work we've pivoted, we've, you know, and we're continuing to grow. So I'm really happy that you know, despite the madness of the year, it's still been good.
Jamila Souffrant 42:01
Yeah, I love thank you for sharing that. Because, again, being that we are also like you I'm in the personal finance space too and I feel like stabilizing my income. Similar to you where it's interesting, because I like the bulk of the money that I made, or the business made this year was in affiliate and brand partnerships. But there's other ways that Journey to Launch through via me whether that speaking workshops, can also earn money products, you know, sales of certain things that I'm doing. So I always find it interesting to see how other people are framing and looking at their business models and income streams. Because even if so one of the things, you know, I always say, you know, I don't like working for anyone, right or having a boss, but just because you own your own business. I feel like instead of one maybe boss, you just have like a million little bosses they don't, you know, like your customers become your like little bosses. They demand from you like, no, they're the market or if you're working with Brand Partners and people who want something from you. It depends on the things that you're providing value. So I think it's really interesting seeing how people are pivoting nowadays, diversifying their income streams, it's something that if you are a business owner, especially, you know, online, I feel like you know, we're uniquely positioned being online that we're ready virtual, but because we're talking about money, and money is like our main content, you know, it's more necessary than ever, that people like whether it's like the free resources or paid or whatever it is that they get even like, you know, a book like they have access to this stuff. It's important now, but I think for a lot of the other businesses that were on brick and mortar, obviously, it was a hardest transition because they couldn't open their doors anymore.
Bola Sokunbi 43:34
Absolutely. It was very difficult for many people, if anybody has been impacted by this pandemic, the most it's been small business. And when you really think about it, it sounds like well, that can be a big deal. But small business is the anchor of the US economy, right when small businesses impacted the whole economy is in fact, and that's where that whole idea for the stimulus check was from it was not free to save, it was free to go out and stimulate the economy by spending money with the small businesses. So yeah, you know, I feel I know a lot of brick and mortar business owners who have had to pivot who have unfortunately had to shut down and go find part time jobs who are relying on PPE or like other assistance programs right now, why they while they work to recover. But just going back to 2008, when the you know, the real estate stock market crashed all of that. A lot of people got super creative and step out of their comfort zones and did difficult things. And that window of time in recent history is the window of time that produce the most amount of millionaires prior to the last depression, which is like in the 1930s. So I think that we're going to hear the stories on the other side of this thing, the success stories, we're going to hear their struggle stories, we're going to hear the positive outcomes out of this. So if you're a business owner and you're struggling through this, find ways to stay motivated and to challenge yourself to get creative and step out of your comfort zone and sometimes the things you're going to do are not going to be glamorous, right. We all know that in business, it's hard work but you can definitely get through this and the fact that you're listening to this podcast you're already setting the intention that you want to succeed anyway.
Jamila Souffrant 45:09
all right, well, this was an amazing amazing discussion as usual so I know you're gonna be writing more books and I'm going to have you on again but tell everyone where they can find out more about you and then get your book
Bola Sokunbi 45:20
Yes, you can find everything about me Clever Girl Finance at clevergirlfinance.com. The book is available everywhere books are sold at Audible and Barnes and Noble etc. and we can find this also on Instagram at @clevergirlfinance.
Jamila Souffrant 45:33
Yes. And the name of the book is Learn How Investing Works: Grow Your Money, and you're in it.
Bola Sokunbi 45:40
Thank you so much for having me,Jamila. This is awesome.
Jamila Souffrant 45:43
Thank you Bola.
All right. I hope you enjoyed that conversation with Bola definitely go pick up her book Learn How Investing Works Grow Your Money, I'm so proud of everything she's accomplished and I know there's so much more in the works for Bola. If you enjoyed this episode, make sure to tag bola and I so we can see your feedback on @journeytolaunch on Instagram and Bola is @clevergirlfinance on Instagram tag both of us so we can see that you are listening and what you learned something you learned from the episode.
Now it's time for DCUs Tip of the Week. Car shopping tip secure your auto loan in advance. Before you start shopping. Your first step should be to plan your financing. securing an auto loan before shopping puts you in a position to get the most for your money. Going through the loan process with your credit union gives you even more options to get ahead financially. Know your price range. Securing financing ahead of time helps you estimate how much you can afford to spend. Instead of guessing about your price range and monthly payment, you can shop with confidence for your next car. It also provides an opportunity to review your budget and to see where your car payments fit in.
If you want to check out the episode shownotes that's where you can get links to anything that's mentioned, and even get a transcribed version of this episode that you can read. Go to journeytolaunch.com or click the description of wherever you're listening to this episode. Now you can also still grab your free journeyer jumpstart guide by texting, launch to 33777 or go to journeytolaunch.com/jumpstart.
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(This post may include some affiliate links)I'm listening to Episode 186 of the #journeytolaunch podcast, Learn How Investing Works & Grow Your Money w/ Bola Sokunbi from Clever Girl Finance Click To Tweet
Other related blog posts/links mentioned in this episode:
- Bola was a guest on episodes 22 (How Investing In Yourself & Starting A Business Can Lead To Financial Success) and 106 (Creating Financial Freedom & Wealth On Your Own Terms) of the podcast.
- Bola’s book “Learn How Investing Works, Grow Your Money” can be purchased at Audible and Barnes and Nobles.
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