Are We Choosing to Be Poor with Estelle Gibson - 138

[00:00:00] Are We Choosing To Be Poor? How To Choices In Our Circumstances Impact Our Money? Let's talk about it in today's episode. Welcome to Money Talk with Skyler Fleming, where we break down financial complexity into everyday conversation. Let's get talking.

[00:00:14] Welcome to Money Talk with Skyler Fleming. I'm your host Skyler Fleming. In today's episode we'll explore the concepts of financial dependence and independence. Why achieving financial independence is so crucial? And how our choices impact our financial state.

[00:00:28] We have a guest on today's episode, Estelle Gibson, who will share valuable insights and personal experiences on this topic. Estelle is a CPA, TED speaker, international bestselling author and a holistic financial coach.

[00:00:40] Stay tuned as we uncover practical tips today and thought provoking questions to discuss with your friends and family. The Money Talking Points for today's episode are... Are you financial dependent and if so, what are you dependent on? Two, what does financial independence mean to you right now?

[00:00:56] And three, what choices can you make to move towards financial independence? With the Money Talking Points in mind, let's get talking. Hello everybody, welcome to today's interview on Money Talk with Skyler Fleming. Joining me today, I have Estelle Gibson

[00:01:19] and I'm excited for this conversation because we're tackling a question that my strike accord with people are we choosing to be poor? I'm excited for this money talk and I hope everyone listening is as well. Estelle, do you go ahead and introduce yourself for everybody?

[00:01:32] Sure, so I'm Estelle Gibson. I'm a CPA, a TED speaker, an author and a holistic financial coach. So I have about 40 years of experience in my professional career and about 20 years experience

[00:01:50] in my career as a coach. That's a lot of experience, so this is going to be great. We're going to learn some great things. So thank you for coming on, this is going to be great but let's talk

[00:02:01] out right at the beginning about financial independence and financial dependence because so often here everyone say, oh we're chasing financial independence and that's kind of what the Money Crowd can all funnel towards, but what is financial dependence? Yeah, so a couple things, certainly,

[00:02:19] I don't know it down because I want to specifically talk about financial independence in addition, but financial dependency as defined by me is when someone is dependent on a person, a job or situation for money. And people fall into two categories, Skyler, they're dependent by choice and dependent

[00:02:40] by circumstance. So for me, in my personal story, I was dependent by choice so I was moving along in my career and five years into my marriage and my husband came home with me and said he wanted

[00:02:53] a divorce and just like that, my life changed because I wasn't right. My life's changing, like that's crazy. No, no thank you. Wow. How did the blue? How did the blue? And even though

[00:03:07] I'm a financial professional, he managed the Money and because I had worked all day long with people's money and he was really good with managing our money, I didn't stay involved. And I

[00:03:21] say this to clients all the time that is part of the problem. They don't stay involved. So many people I talked to Skyler will rely on other people, whether it's a spouse, whether it's a business

[00:03:35] manager, whether it's someone in their company, they trust them to manage the money so they don't really worry about it and that was the problem. So you can have somebody manage the money but you

[00:03:45] need to stay involved so that you understand what's going on. So then at the time of my divorce, I was left with a house that couldn't afford bills that couldn't pay and I wasn't prepared because

[00:03:54] I had spent so many years not paying attention. So I had to rebuild my life financially and emotionally because this was a shock. So that's the process that I went through. But that was a choice for me

[00:04:07] to hand over my financial power and people do it all the time in many different types of relationships. So that's dependent by choice. Now, dependent by circumstance is when someone is dependent on another

[00:04:21] based on maybe they're stuck in their job because they have to have insurance or they have to have their income or they're taking care of loved ones or maybe they've had an illness and they

[00:04:32] have to move in with family and friends so they're dependent on others because of the circumstance of their life. So that's the two types of dependencies by choice and by circumstance. Yeah, I mean just out of the gate, I'm thinking here, I'm like you're describing the divorce situation

[00:04:50] and I'm sitting here thinking well that's obviously a that's obviously dependence by circumstance because that wasn't something you maybe anticipated but also I wanted to kind of humbling to here

[00:05:01] you say it was by choices made many years prior and I think that's where we have to kind of refocus and reframe our mindset is we're making choices now that are going to impact our circumstances

[00:05:13] and we can't just say oh it's purely circumstantial that I'm $25,000 in credit card debt. It's like no you chose not to pay off your credit card in full four years ago and now you're buried so

[00:05:26] that's really I'm just we're only what four minutes into this and I think everyone's eyes are a little bit wider and that's really fascinating. So yeah and one more piece today you brought up another

[00:05:36] thing that I fell into a pattern that I learned growing up, that one person manages all the money because that's what I saw in my family and we'll get into that in in a little bit that we are

[00:05:48] the result of our programming because people don't teach about money because people don't talk about money they revert back to what they see and experience in their environment. Yeah and then you're preaching the message I love of talk about money more that's how we get on

[00:06:09] those right? It's like you're probably sitting there hopefully most of my audiences, young adults or anyone really you look at your parents and you say how would they make in these financial decisions it's obviously a better way yet you get 20 years down the road 30 years

[00:06:22] down the road and you're in such a similar circumstance so take it and talk about it now but you wanted to bring up financial independence and I had there as well. My thought is why is it so crucial

[00:06:32] but what kind of what note did you take down? I want to hear what you had to what came to your mind. Well one of the things I wanted to talk about because people talk about financial independence financial

[00:06:40] empowerment financial freedom and that is a term that has to be defined by you because it means different things to different people. So financial independence can mean that I don't have to work. Financial independence can mean that I have money freedom and time freedom. It could mean that

[00:07:02] I want to take care of loved ones it could mean that I want to be philanthropic you know it so there's so many meetings to it, Skyler and a lot of times people try to shoehorn themselves

[00:07:14] into it just being about having so much money or being a part of it but it really is unique to you and people need to define it for themselves. So it's really important for people to number one

[00:07:26] define what it is for them and then as far as being independent why it's important is so the people have the power to choose. If you don't have I mean can you think of an area of your life

[00:07:40] that money doesn't affect right? Doesn't exist right so because of that and we live in a world where we have to deal with money it's important to have non-dependence to not be dependent so that you

[00:07:57] actually have the power and the freedom to choose what you want in your life. Yeah and I love your idea of defining it for yourself because often I've said on multiple episodes that really a first stage

[00:08:09] of financial independence for me and my wife is that we can budget on last month's income and because that's independence from paycheck to paycheck so I love the idea of defining it for yourself. Because maybe you're sitting here thinking you're listening to all the financial

[00:08:23] independence podcasts and they're saying 25 times your annual expenses and you're saying that's impossible and while it's not impossible and you can certainly get there it's certainly bigger than you can really grasp right now and I think that's a little bit of what I think your definition

[00:08:37] is getting to. Define your next step and say hey I'm closer to independence there's an independence in this area in my life and honestly that's what it is and I love that and even

[00:08:48] maybe the big the big idea of financial independence why is that so crucial to get to as well like as you take these steps how does it really help you out? Well you know I start people out by defining

[00:09:00] what their big dream is in their life and if they you know a big dream you probably heard of it a big dream a big why and then setting your goals and if you want to move in that direction

[00:09:11] just like you said, so I learned a matter of what it is you know having that financial independence will help you achieve those goals and in my book I talk about people having a money life cycle

[00:09:27] and this is really key and you're talking a little bit about that when you said you know your first independence is moving from paycheck to paycheck. We'll go through a money life cycle you start

[00:09:39] on his children then you go to teenagers first job then you go to your college a accumulating debt and you're you know whether you're going to school or not we're getting a trade and then you get into

[00:09:50] whether you want to have a home getting a apartment, build a family and then now you're in that stage and then the legacy page whether it's moving on to your next act of retirement and in

[00:10:01] those different phases there are different meanings to independence right? Yeah exactly like as a kid independence is I have enough money to afford a bike but that's not enough money when you're

[00:10:13] in a dull like 300 dollars to get a bike isn't going to get anywhere. Exactly exactly and as people there's the baby boom generation is and me myself is moving into you know the final phase of

[00:10:25] our life it becomes like okay all the things that we've the toys and the things and we've accumulated a lot but now it's health right? It's legacy it's I want to stay in my home it's

[00:10:38] do I need long term care insurance you know those things all those things shift and change based on where you are in your money life cycle. Yeah that's fantastic and that's why it's so crucial that

[00:10:49] you have those different stages of independence and you have that goal in mind so that's awesome we're rocking and rolling here right out the gate but I want to get into how we're choosing to be

[00:10:59] poor how do we end up that way how do we make choices that fall in that line and end up with us being poor? Yeah you know my book is called Poor By choice and it has a few meanings the first one we've talked

[00:11:11] about already is are you poor by choice or circumstances it's you know pretty basic it's the definition the second one is really a rhetorical question if we believe that we have a choice in

[00:11:23] everything in life are we making do we really have a choice is thinking I don't have a choice a choice is right? It's your constantly able to choose what are you choosing you might be choosing

[00:11:40] to live by your programming or be stuck in your situation so you know the question is do we have always have a choice and the next meaning is you know there are times in our life during

[00:11:51] our money life cycle Skyler that we make choices we have a crossroads for me my parents said we can't pay for you to go to college I had a choice am I going to try to get scholarships go into

[00:12:04] debt stay at home not go to college you know we have a wide range of choices and you also said when you were talking about somebody going into debt and wondering how they got ended up with $20,000

[00:12:17] there were some choices made along the way right? I hope they're definitely what? Right there could be some circumstances that was do happen but you know there are times when I got divorced

[00:12:27] I could have spent money got on vacations done a whole bunch of stuff but I decided to invest in my financial future and start to save and invest so throughout our money life cycle

[00:12:40] we have choices that we can make and then the last one is that are we really making choices or are we operating out of our environments and I have a framework in the book that I call

[00:12:52] the four levels of beliefs so our beliefs about money because we don't talk about it and we don't teach about it our built on four levels the first level is the society that we live in

[00:13:04] our country versus other countries have different beliefs about money a third world country you know probably is nothing about debt and credit and bankruptcy we are right? They're thinking about trading and just the very simple part of it.

[00:13:18] It gave me the right so it's completely different based on the society and the generation that you've grown up in if you are world war if you don't anybody that's a grandparent that grew up in World War 2 they think about money a whole different way than people now

[00:13:38] and you're talking about 9-11 and the recession in 2008 and the pandemic all of those generational societal happenings affect how we think about money the next level is the community whether it's your geographical community your sports community your your

[00:14:00] profession I know there's a lot of beliefs about money when doctors and athletes and you know there's all these beliefs that people come into the community that they're in about money and let's just talk about social media what now that we have internet and social media those

[00:14:17] communities people are watching what people are doing whether it's fake or real-skyler and saying oh my gosh I should buy that or oh my goodness I should be able to afford this so

[00:14:29] those communities that were in is another level of beliefs that we we think and choose about money at the next one is the family most families have a belief about money whether they're taught

[00:14:40] we have to fight about it we have to live paycheck to paycheck we have to work hard we have to you know take money from the government there's all of the beliefs in that and then finally

[00:14:50] as your personal level whether you've been bankrupt divorced started a business lost to business lost money lost money and gambling you know whatever that is so when people say well just change you beliefs about money it's not that easy because it's layered it's so layered based on the

[00:15:08] environment and because throughout those environments no conversations no education so the question is are we poor by by the environmental choices that we've been a part of right yeah wow there's

[00:15:23] a lot to consider when you start thinking about why am I broke why am I why am I why do I feel poor is it because you grew up in a generation where you feel like you need to have a ton of money and

[00:15:34] maybe you do and just fine is your community have a ton of money so you feel like your broke compared to your neighbor when if you moved three blocks down the road you'd be the wealthiest

[00:15:42] person there wow that's fascinating to think about yes exactly but there are there are choices too that can leave us feeling poor and that's the question I want to get to next is what are

[00:15:54] some of those choices how do we or what are some of the choices that we can maybe warn ourselves against that leave us feeling poor well I think that question could be answered by having

[00:16:07] something to work towards so understanding thing we just talked about but also having what is my definition of financial freedom and independence what are the goals that I have that I'm moving towards

[00:16:24] and that will keep you out of some of the things that you may be choosing Skyler that will take you off your your gold trajectory and it can be choices that you make in a lot of the choices that

[00:16:40] get us into poverty or poverty thinking can be spur of the moment emotional a type you know transactions purchases behaviors so it really is based on what's going on in our life and

[00:17:01] being aware that you do have choices I think the first key is awareness and I have a framework called your levels of awareness you're either asleep aware or in awake and if you're asleep and most people are asleep because they're just operating out of all the things we

[00:17:19] talked about unfortunately most people wake up when they have a problem either they are in debt or they're getting divorced or they've had and you know something happens and they go I got to do things differently but until that point people are operating out of their programming

[00:17:37] or out of the need to want to feel that they want to belong that happens a lot in families I can tell you I've worked with people that have set the goal that we're not spending for holidays

[00:17:51] we're not taking vacations whatever and then they get invited to something by their family and they spend where they said they weren't going to spend they go into debt where they said

[00:18:02] they weren't going to go into debt so those are some of the choices that we make in their emotional choices most yeah we have to stay strong on our choices and I even I've said in

[00:18:13] past podcast episodes to practice ahead of time like adding up a so this time last year where I said Christmas is coming and it was meant to be a headline that people are like what is June Christmas isn't

[00:18:22] coming but we have to think about that sort of stuff. Yes because if you can sit down sit down with your spouse or by yourself and say hey I want to spend $500 on Christmas or a thousand or whatever your

[00:18:34] number is how do we get to that amount of money so that we can spend it comfortably but also is that reasonable so those are those goals like you said if you can get ahead of them it helps you

[00:18:43] so much more when you get to maybe beginning in November nobody's mentioned Christmas plans and you can start planting the seeds that you want to do at cheaper this year rather than getting invited

[00:18:53] December 15th to this big expensive thing that's happening on the 23rd. It's going to head of it and I think the key to all of that skylors having a big why having the why of what you're moving

[00:19:06] towards in your financial independence freedom what it is that you really want because you have to make a decision and if your why is stronger than this other these other factors you will continue

[00:19:23] to choose towards your why and so you have to have a bigger why I have a quote in the book that says pain pushes until your vision pulls you've got a why and a vision pulling you forward

[00:19:36] then you won't be subjected to the pain and the pressure that will take you off course. Yeah that's a great one that's a great saying thank you for that one how do we work together

[00:19:48] to break us out of these choices so I just mentioned talking six months before hand could be maybe something just talk about it a lot of it. What we're going to do is huge because you never

[00:19:59] know and I work with couples a lot communication is huge couples and in the air relationship and in families because you never know skylor you might you might share your dream and your big

[00:20:13] why with your family and they might get on board yeah yeah my change of Christmas works forever and it's cheaper for everybody. Right or they might go you know that's a really good idea why don't we

[00:20:24] all do that you know it's you just never know we just keep operating out of past paradigms and you know you can you can communicate and work together with people and and create you know something positive and working together so communication is key. Yeah absolutely and that's

[00:20:44] where money talk comes from that's where really everything I think every aspect of our life when you get down to it and you ask someone who's maybe a coach or an expert in that area and you say

[00:20:53] how do I improve X or Y or Z and they're going to say talk about it and that's what's so awesome like we just have to get talking we have to stop maybe doing everything on social media and trying to learn

[00:21:03] from everyone via articles and actually talk to people so fantastic how do we educate each other about money how can that I know communications a great way but is there maybe thoughts you have

[00:21:15] that people can do to make choices to educate each other and talk about money more? Oh gosh there's so many resources almost too many resources. Yeah. On line because you look at one resource and that's contradicted to another so

[00:21:28] you know I start the conversation Skyler and just sharing about you know how you grew up and what you're thinking and your different goals it could start with simple as you know

[00:21:38] this is what financial freedom means to me and that of course just the basics of saving and investing and there's tons and tons of information and books out there but um learning and then talking

[00:21:53] about it but you've got to get some kind of financial literacy and even in the schools you know as son was he's 23 and when he went to high school he took two financial literacy classes

[00:22:04] and he would come on and I go what did they teach him like oh my goodness that's not relevant so here's it has to be relevant it's okay to teach about the stock market to ninth graders

[00:22:19] it's okay to teach about fika and withholding but it's not relevant he's like we learned about fika and I'm like what are you going he's like I don't know I don't have a job it doesn't

[00:22:27] matter to me now. Seriously right so I think relevancy to where people are I teach at I've tried it a couple times it as a guest in high school and I had to bring it down

[00:22:41] to their level you know what is the thing that you want to purchase right now? What is the thing you talk about in your house how do you guys manage money in your home it could be those simple

[00:22:51] conversations if you had $500 what would you do with it? Are you done I mean just simple how is it impacting right now that's I mean that's perfect because there's there's always more

[00:23:03] we can learn there's a countless things that I've hosted a podcast for two and a half years and there's still many things I don't know they're not relevant they don't matter but

[00:23:11] I teach about the basics and that's what I like to learn and say people out there they're listening to this and they're like wow right now my stage is that I don't feel like I have control over

[00:23:19] my money and then they say I just need to make a decision right now to talk about it and get in control so extra where you are really that's what that's like as far as basic financial information there are

[00:23:31] your local banks and credit unions have seminars there's things on the line libraries there's lots of basic good basic information but it can be simple Skyler as I had a client once that was going to

[00:23:44] the mall with her kids and she was all stressed out because she's like we're gonna get there and my kids are gonna want to spend money and so we just put together a little play and I said

[00:23:54] what would you give the kids to spend and she said I want to give them $10 each I think there were three kids and so it was a it was a learning lesson so the kids she talked to them beforehand okay

[00:24:08] we're gonna get each get $10 you can spend it on whatever you want you know you can one my son was little he was like I don't know four or five I gave him $2 and I said this is all you've got you

[00:24:19] got to go around the store and you've got to decide to make choices on what you want not getting any more I mean it can be that simple Skyler that take the kids to the school store if they get money for

[00:24:30] their birthday that's a learning lesson all right you've got twenty bucks what do you really want what are the three things you want and what do you think is the the better value you know you can have

[00:24:41] all those conversations in ways just going to the store yeah it's kind of limitless because like I thought they came to my mind as they go to purchase something and then their sales tax so then you

[00:24:51] get a chance to teach about taxes you get a chance to go earning the little bit extra maybe they need another dollar and you say well how can you how can you make that happen so there's yeah there's

[00:25:00] so many ways with just a little bit of money and as that translates to adults is there's so many ways with just your situation right now that you can learn about money so don't get ahead of yourself looking

[00:25:10] up how blockchain works when you are struggling to track your expenses like keep yourself grounded where you are that step one you've got to understand what you're doing right now yep there we go

[00:25:23] we've throughout this whole episode talked about some simple choices people can make to begin to shift their situation so we won't dive too deep into that question because I think throughout this episode

[00:25:33] there's been a lot and I'm going to talk about it in the rest of the episode as well but two final questions here the first one is how can people contact you and then the second one after that will be

[00:25:43] what is something you wish you would have known sooner when it comes to money so to let you think about that a little bit first maybe share work with people learn about learn about you work and they contact you

[00:25:52] things like that okay they can find me at a stallgipson.com and I'm on social media at youtube Facebook and linked in and if you go to my website at a stallgipson.com you can click on the

[00:26:05] let's connect button if you're interested in talking with me further on how I can answer your questions and help you in different ways and then what the question I think and you're not going to

[00:26:20] believe this but you know when I became I got out of school and I became an auditor and that was back in the early 80s and at the time I don't even think they had iris at the time I'm not sure what

[00:26:31] I don't even know if they had four or ones at the time but I wish someone would have told me Skyler to start investing my money at 21 years old because I started it in my 30s after my

[00:26:47] doors divorce and my 30s that's when I started it but it would have been great if I would have started it earlier right so you know I talked to young people some of the time and the key is

[00:26:59] to get started as early as you can to take advantage of compound interest and I also think that I was always a saver so I've been saving on and off my whole life but the investing piece

[00:27:12] I didn't really get into that until my 30s I wish I would have known about that earlier so I could have capitalized on that earlier. Yeah wow I asked that question every guest and I was

[00:27:26] hopeful that it would get a different answer every time but what I've learned is everyone wishes they would have started sooner nine out of ten answers is down all start out saying yeah every single one so if there's someone listening that their 10 or 15 episodes into my podcast

[00:27:41] and they say what should I do today start now like start investing now that's what everyone says at the end of the episode. Start now and in the Skyler start where you're at do not look at the

[00:27:53] it's got to be 10% of your income what stop that start with five dollars start with $10 start where you're at saving and if you're not going to get an investing then start in a savings account

[00:28:04] and then build the money up and then go to investing but so many people wait because they don't think they have enough to get started you can start with wherever you're at so that's the key.

[00:28:13] Yeah that's fantastic because five dollars is better than zero if you're trying to get to $250 five dollars is a whole lot closer so I love that that's a fantastic place to leave this start simple start where you're at ignore the big rules of thumb and like financial independence

[00:28:30] 25 times your expenses start where you're at figure out independence for you and keep moving forward so this has been fantastic a sell thank you so much for coming on I'm sure everybody learned a time

[00:28:40] thank you for having me Skyler. Thank you so much for listening to today's interview and thank you for a stealth or coming on today's episode I want to start with the handy hint today

[00:28:59] and that's about staying involved with your money you don't want to find yourself in a circumstance where your money is out of control because of a choice you made a while ago like what a

[00:29:07] stealth said with finding herself being divorced and such it means whether you're married or not you need to stay involved with your money if you're not married you have to stay on top of your

[00:29:16] money so that you know what's actually going on with it since you're the only person who's going to be in control of your money and if you are married means you need to be aware and a

[00:29:24] part of the decisions it's a choice to give up your control and it can lead to bad circumstances but you need to remember it's a choice that you made when you find yourself in bad circumstances so

[00:29:34] I would say if you're not married one of the thoughts that just came to my mind is are you letting marketing control your money are you letting the companies that you're buying from control your

[00:29:43] money through their advertising and such so make sure you're staying involved with your money in today's handy hint the next let's talk about the money talking points all right let's talk about today's money talking points the first money talking point is are you financially dependent

[00:30:06] and if so what are you dependent on well I would say my wife and I had dependent on work for insurance because it helps cover a lot of the costs right now and of course we need a paycheck

[00:30:15] so naturally we're still financially dependent on work in order to live which is fine it's a good place to be and while we may not be fully dependent on it with some short term savings we do need

[00:30:25] it for the long term we need it to invest and save for the long term but like I said we're not fully dependent on it if something were to happen right now would we have to go out and find another

[00:30:35] job yes but are we fully dependent on having work 24 seven no matter what no there are options of course which is fantastic and a great place to get to which is leading us right into our

[00:30:46] second money talking point which is what does financial independence mean to you right now right now it means having the security to make changes that we need to make in the short term

[00:30:55] like I said while we are dependent on having a job we're not dependent on the specific job that we have right now because we're beginning to think oh maybe we could end up moving as Rebecca

[00:31:04] approaches PA school graduation maybe we need some of that money very soon to be able to spend so it would be financially independent means to have options for us right now and it may be different for

[00:31:14] everybody maybe you want to have options in the long term so you do need to stay in your job and it's not quite doesn't mean the same thing to you right now but I can guarantee a great financial

[00:31:24] independence point for everyone to get to is to where you have some extra savings behind usually you don't have to live paycheck to paycheck and you've likely often heard and heard me in the interview call budgeting on last month's income the first step of financial independence

[00:31:39] because it allows you to get out of that paycheck to paycheck style and into a here's my money and here's what I want to do with it style so consider the second money talking point and especially

[00:31:48] talk about this one with a friend what does financial independence mean to you right now that can be a very eye-opening conversation because you can say it doesn't have to mean 25 times your annual

[00:31:59] expenses it doesn't have to go all that way it can mean something as simple as I don't want to be paycheck to paycheck that is a great place to be the third money talking point is what choice

[00:32:10] can you make right now to move towards financial independence for my wife and I is having a little extra in a normal savings account so our options are available for you it might be to invest more to

[00:32:20] have a longer term goal or head towards full normal financial independence and like I said it your choice right now may be to get a little extra savings in that emergency fund the steps are different for everyone and that's something I learned today honestly being able to identify

[00:32:35] your financial independence and what independence means to you right now can be great and it can change and progress so you can start out at that oh we just need to get a little bit of extra

[00:32:44] savings in our bank account and it can progress too oh we need 25 times our annual expenses so we never have to work again so there's a lot along that path so make sure you're considering it

[00:32:54] and talking about it with a friend but today's money talking points were one are you financially dependent if so what do you depend on two what does financial independence mean to you right now

[00:33:05] and three what choice can you make to move towards financial independence but next let's talk about the personal finance power up today's personal finance power up is to understand your why and my wife and I is why right now is flexibility and options and that includes saving for

[00:33:30] our future for retirement because it does include long-term options but right now we're also focused on paying off student loans in the short term and that's the power of understanding your why how can

[00:33:40] you figure out your why what is your big why well a couple steps that I came up with and research just to reflect on your values and passions that you have right now visualize your ideal life

[00:33:51] set some short term goals to get quick wins and motivate you towards that ideal life find out what motivates you and I think you can do that with those short term goals next is to

[00:34:00] revisit it and iterate on it so set those short term goals find something that motivates you set another short term goal about it keep going and as you keep revisiting and iterating

[00:34:09] you can set those long term goals and that's where it gets really fun so start with short term goals get some motivation it'll allow you to adjust and continue to grow as you find your why

[00:34:19] and then set some longer term goals and go for them keeping aligned with your actions is how you make sure your why keeps you moving forward so that's why you keep iterating and revisiting what motivates you but that's today's personal finance power up next let's talk about the

[00:34:33] many talk mastery in today's money talk mastery segment I want to talk about the common definition of financial independence because I know we talked about financial independence and defining it for yourself but I want to talk about that common approach so everyone's aware of what is

[00:34:56] commonly referred to as financial independence F.I. or financial independence is commonly known as having 25 times your annual expenses invested in the stock market so that you can take advantage of the 4% rule this came from what's called the Trinity Study in the 1990s where they did a bunch

[00:35:12] of research on different types of portfolios to figure out how long you could last uncertain percentages that you were taking out of your investment funds and your investment portfolio so here's an example calculation is let's say you have $1 million portfolio you have a $1 million

[00:35:29] portfolio invested in the stock market you can withdraw $40,000 for your first year of retirement and then you can account for inflation so that if inflation is 2% then you can withdraw $40,800 the 4% rule can be a really good rule with them but you do still need to consider your goals

[00:35:45] to understand what you actually want to do maybe you don't need to get to a million because you're going to live on less money than that or you're going to do some sort of still earning some money

[00:35:54] in retirement so maybe you don't feel like you have to have a $3 million portfolio maybe you can have one and a half million and have a little bit less money coming out of it there's a lot of

[00:36:04] things you need to consider and ultimately it all comes down to your goals and the kind of lifestyle you want to live but you really need to make the choice to start paying attention to your money

[00:36:11] now because the 4% rule and getting that much money invested takes time to work towards it takes a long time it's not quick it's not like just choosing to save I don't know maybe an extra $100

[00:36:23] per paycheck whereas that can be implemented within the next 15 days when your next paycheck is it's very quick to do that the 4% rule takes a long time to work towards but the 4% rule ultimately

[00:36:34] suggests that we continue to take 4% out of our portfolio without running out money for a very long time and it's likely the rest of your life so that's what financial independence is commonly considered

[00:36:45] and the 4% rule equates to 25 times your annual expenses that piece of math is always something I struggle to remember but it does work out 4% of the $1 million also equals 40,000 times 25 so that's why you can hear those exchanged very easily is because 4% equals 25 times

[00:37:07] and it's likely that money's going to last you for a very long time but it's also going to take a long time to get there so consider that from today's money-talk mastery segment but next let's

[00:37:15] talk about the transformation you can go through with the choices that we were talking about today so what kind of transformation can you expect what you can expect to transform your entire life by making decisions right now go and look at some simple compound interest calculator

[00:37:39] if your decision is centered around investing and that will certainly get your motivation going I also think it'll get your motivation going for anything else because you can consider it as compounding

[00:37:48] in other areas of your life so what action steps can you benefit from starting sooner and help you more in your life by starting sooner just like compound interest well defining your big

[00:37:57] why can help you get on a passionate path right now and find your motivation if you define financial independence for you right now you can understand what you need to work towards and you could

[00:38:07] also decide to break off the autopilot and working on tradition and the things you were solely taught or maybe the things that you were shown if you decide to break off that autopilot and start your own journey towards financial independence that can be huge and have a long

[00:38:21] lasting impact for you and everyone in your family you can also begin to make your own choices on how you want to handle money maybe you're told you need to budget and you need to budget

[00:38:30] every single month but you don't like it maybe there are other options for you reach out and ask me I'd be happy to help start a conversation and if there's someone who's like I really hate budgeting

[00:38:39] I don't want to listen to anyone else talk about budgeting let's come on the podcast and let's talk about ways you could not budget there's many choices to be made and they're all going to have lasting compounding impact on your life but that's today's transformation and that's

[00:38:53] today's episode I want to wrap it up next with some talking about what other people have said online and then ultimately we're going to summarize today's episode so next let's talk about

[00:39:02] what are others saying thank you so much for listening to today's episode as we come to the end here I want to talk about a little bit of what people are saying on social media we had some great

[00:39:20] follow up on one of our money talking points from my episode titled a financial guide for your 20s with Greg Davis it was episode 136 from a week or two ago when I asked people about

[00:39:30] common money mistakes they made as a kid I got some great responses one listener said for me I didn't know what to do with my savings so it could benefit me and make more money I just left

[00:39:39] it in my checking account with that grimacing emoji that you see everybody use so that's a great one that's a common mistake of that a lot of people make they don't know where to put their money

[00:39:48] to even get it started in a simple savings account is miles better than a checking account and then you can move to investing and things like that another listener said not learning how to

[00:39:57] save money properly when I was younger and this goes back to today's interview where we were talking about maybe some of those routines and traditions with money that you were taught as a kid

[00:40:06] that maybe you need to break out of and that could be definitely not knowing how to save it properly and the choice you need to make today is saying I want to save money properly from here on out

[00:40:15] that's what I'm going to do and it can be hard because there can be behavioral things that play that make you spend money and stuff so there's a lot to consider there but that's a great

[00:40:22] common mistake that people make is they just don't learn how to save money so there you have it we have all made money mistakes so feel free to go and comment on my social media post if you have

[00:40:31] more to add or send me an email I'd love to hear the common money mistakes you've made in your life but rest easy knowing that everyone's made simple mistakes and understand that's why we have

[00:40:40] to talk about money so that we can avoid those simple mistakes and all do better with money together but let's wrap up today's episode next. In today's episode we delved into some crucial financial concepts of dependence and independence exploring how our choices and circumstances shape our

[00:41:04] financial reality our guests to stealth gifts and shared valuable insights into understanding and navigating these aspects in our financial lives we started by delving into financial dependence discussed the importance of staying involved with our own money and a stealth emphasize the need

[00:41:19] to recognize patterns from our upbringing and make it conscious effort to change the ones that are detrimental to our financial lives then we moved onto the significance of financial independence and make sure you understand you need to define it personally and discuss how it enables us to pursue

[00:41:33] our passions it's a great money talking point and discussion to have with other people we can also use financial independence to support others achieve our big life goals and still introduce the idea of a money life cycle explaining how our financial needs an independence evolve through different

[00:41:49] life stages because it's different for everybody when you're an infant financial independence is not something you're worried about because you're entirely dependent on someone for everything but as you get older financial independence is something you maybe really need to consider

[00:42:01] we tackled some critical questions about how choices lead to financial hardship or prosperity even a stealth point that would be important to setting clear goals making informed decisions and staying aware of our financial habits one key takeaway was the power of communication

[00:42:17] really communication applies to everything but it's especially important in breaking bad financial habits openly discussing money matters and challenging maybe harmful money routines that are in our lives we can help support each other by talking about these things and challenging them and it

[00:42:31] can help us make better choices also but today's discussion was a great exploration of financial dependence and independence thank you to a stealth for coming on and providing some great actionable insights and practical advice to all help us take control of our financial futures

[00:42:46] remember to find your big why and define financial independence for you and stay proactive about moving forward towards greater financial freedom and security of course all of a stealth

[00:42:56] links are in the show notes so you can find her and ask her more of your questions for her but thank you for listening to money talk with Skylar Fleming I'm your host Skylar Fleming have a great week

[00:43:04] thank you for listening to today's episode if you want to stay connected the best thing to do is to sign up for my email list at moneytalkwithskylarfleming.com you can also send me an email at any time

[00:43:13] by or playing to one of my newsletters or sending an email to Skylarfleming.com thank you so much for listening and supporting money talk with Skylarfleming you can find my website at money

[00:43:23] talkwithskylarfleming.com the best way to show support for this show is to share it with a friend and then go and have a money talk thank you for listening to this episode of Money Talk I'm your host Skylarfleming have a great week