047 Sick of Ramsey: Why Investing on Your Own Terms Matters
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Investing is giving somebody else your money and then they pay you for it. That's all it is. - Regan Bashara
Tired of feeling pressured to catch up in financial knowledge? I'm sick of the narrative and messaging that women are now receiving about money: that we need to start investing it using the same advice men have been given this whole time. This week's episode of Money Through Ease, I rant for awhile about the gendered messaging around investing and why it's not the truth that everyone can save or invest $5, $10, or $100 every month.
In this episode, you will be able to:
Gain financial empowerment and take control of your financial future by challenging the gendered narrative around women and investing.
Discover how to overcome the pressure to catch up in financial knowledge through practical strategies and expert insights.
Learn why prioritizing investing in the startup phase is crucial and discover the unique challenges women face in this entrepreneurial phase.
Redefine your relationship with money and achieve financial empowerment on your own terms.
Understand the importance of financial organization and record-keeping for long-term success and stability in your financial journey.
Navigating Financial Knowledge Pressures
There is a pressure on women to prove their knowledge in finance and investment spaces, often induced by a male-dominated narrative. This pressure results in an environment where women are expected to catch up, instead of being acknowledged as capable financial players. Navigating these pressures involves rejecting the narrative of deficiency and embracing alternative trajectories to financial fluency and empowerment.
The resources mentioned in this episode are:
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Leave a rating and review: Once you've listened to this episode, I want to hear what you think. Please take a minute to leave a rating and review. You can click whether or not you liked it or leave a couple of stars. Your feedback is greatly appreciated.
Subscribe: Make sure you subscribe to Money Through Ease to stay updated on all things related to money, specifically as it relates to small businesses and entrepreneurs in the United States.
Research: If you're interested in learning more about the history of women and money, especially in the United States, I encourage you to do some research on the topic. Understanding the past can help us navigate the present and future.
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00:00:00
Hey, y'all. Welcome to money through ease. This is your host, Regan. If you are just tuning in for the first time, please let me know. Sign up for my email list.
00:00:10
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00:00:25
Make sure you subscribe. For everybody else who's been subscribed for a while and hasn't left a rating or review, why have you not done that yet? Please take a minute and leave me a rating. All you have to do is click whether or not you liked it or leave me a couple stars. That would be amazing.
00:00:44
Thank you so much for tuning into Money Through Ease, where we're talking all about money, specifically as it relates to small businesses, right? To entrepreneurs in the United States specifically. But if you're tuning in from somewhere else in the world, hello and welcome and thank you for tuning in. Anyways, so I've been investing in my business for the past, let's see, year and a half ish I started my business in may of 2022 and have been investing my time and labor and experience and money, my personal money, my personal credit, all has been pretty much going into my business to get my operations kind of up and running. The goal is eventually for the business to make a profit and also support me financially, personally, like paying my mortgage and bills and all the good stuff.
00:01:41
But right now I have a husband taking care of that. Thanks, husband. But I've been investing in my business with my time and my money. And before I started a business, I just want you to know that I was one of those hashtag girl bosses that was really great at investing money in the stock market and stuff. I am not a girl boss at all.
00:02:04
I hate that phrase. But it has been a trend recently, at least on my timeline, that everybody's talking about how women were never taught to invest. Women's focus on money should always be to budget and to save money and to spend wisely and not to spend money on superfluous extravagant things and things that are just for your pleasure and your interests and doesn't benefit anybody else. That's what women are taught, right? And then we're also told that men are taught to be risky and to take financial investments light heartedly, like to just spend money, put money in the stock market, invest in hedge funds and capital adventure.
00:02:53
What am I even trying to say? Capitalist Ventures Capital venture Capital. That's the word. That's the phrase. My goodness.
00:03:02
Anyways, so, yeah, men are taught to take risks with their money and to invest and to spend money even if it's not going to get a return, because that's just like, the point of money, right, is to spend it. And I see so much discourse about the messaging that women get versus what messaging men get from the time that we're very young, which is crazy. Gender roles are wild, y'all. And I just want you to know that I never took any formal training about investment or even learned it from anybody specifically. I just kind of researched some stuff myself.
00:03:45
But I've always kind of had my background in bookkeeping and accounting and taxes and finance, kind of informing the way I invested money when I had money to invest. So anyways, I was good at it. And by that I mean, like, I was gaining money like my stocks appreciated in value. When I was investing in the stock market, I've had a money market account that I deposit money into, which makes a higher interest rate than just your average everyday savings account at a random bank. So I want to talk to you about investing coming from the place that I've done a couple of different types of investing.
00:04:27
And I was really good at it and I enjoyed it and kind of where I was at on my financial and career journey at the point where I was investing versus now where I'm running a business and I don't necessarily have the disposable income or cash to just invest into the stock market the way I used to be. But this is what we're being told now as women, that we should invest, that we should learn how to invest, that we should be like men and take the advice that men get and do that. I think that that's kind of silly. That's like that girl boss feminism stuff where we're not trying to be equal to anybody. We're just trying to have what the men have always had, which is like access to money, access to their own money and to be empowered by money.
00:05:20
So you probably already know, but if you don't, it hasn't always been the case that women could have a bank account where she was the only signer. Like that was her money. There was nobody else that had to co sign on an account. Yeah, like, just a checking account, like a bank account that we all have now. Women it was the case that they couldn't sign for a mortgage without a man co signing on her behalf to say, yeah, she's actually going to pay it off and I'm a man, and so I get to say that.
00:05:52
I know that she'll do that in the future. And women couldn't get credit cards without a man's signature, blah, blah, blah. We all kind of know that story. If you don't, feel free to go look up women and money and the history of that, especially in the United States. But now we're being told that because men have had this different kind of narrative and messaging about money, that we need to listen to that.
00:06:15
And we should all become invested in the stock market or real estate. And we should follow all the rules that the men have been following all the time because they're the ones with more money, right? I don't think that's actually the case, though. I think there's some statistics out now that are saying like, women have more spending money. Like a woman's dollar is going to go farther, further in the market than a man spending money.
00:06:43
I'm not sure about that. I'm not going to look up the statistic. But regardless, this is what we're talking about. We're talking about the fact that women now are getting the messaging that they're behind. They didn't get the right messaging.
00:06:55
So we need to catch up to the men and we need to do what the men are doing, which is like, invest in the stock market and be good at Bitcoin or whatever. I don't even know. We're not talking about bitcoin. I refuse. So here's how investing works.
00:07:09
This is what investing is. Investing is giving somebody else your money and then they pay you for it. That's all it is. So this is how banks work, if you didn't know already. That's how banks make revenue is by loaning your money to other people.
00:07:31
What banks do is they loan money, but they have to have money to loan in the first place, right? They take the capital that their checking account and savings account clients have money in the bank and then they loan that capital to other people and they just charge a higher interest rate to the people that they're loaning the money to. But they're paying you nothing at all. Or if you have like a savings account, usually it's like 1% or less, right? And when I say a percentage, I'm talking about the interest rate.
00:08:06
Banks will tell you when you open an account with them. Some checking accounts are doing this now, but for the most part it's savings accounts where you earn interest. You open a savings account with the bank and they tell you, yeah, best we're going to do is 1% interest on whatever balance you have. And you're like, cool. So if you put $100 into your savings account at a 1% interest rate at the end of the month or the quarter or the year or whenever they pay out their interest to you, they're going to pay you one dollars.
00:08:37
Because 1% of $100 is one dollars, right? Stay with me. I know you don't like percentages of math, but that's how it works. 1% if you have $100 in your savings account is one dollars. That's not a lot of money.
00:08:54
The bank is usually loaning that money to other people in the form of revolving credit, like a credit card or a line of credit for a business. Sorry y'all, I just had to go stop my roomboat because it's about to go wreak havoc and I can't have that thing going while I'm trying to record. Anyways. If you put $100 into a savings account at 1% interest rate, they're paying you a dollar, right? But the bank is loaning that $100 that you gave them to hold onto and they're loaning it to somebody else probably at a rate of 15, 20%.
00:09:29
So the bank is taking your $100 and they're making $15 to $20 off of it by loaning it to other people. Now, you can definitely go get your money at any point. It's not like they're taking money out of your account and giving it to somebody else. They're loaning people money based on the capital that they have in their clients accounts. If you've got $100 sitting there, that means that the bank can say somebody else wants $100, here you go.
00:09:55
But you have to pay it back. And on top of you paying that money back to the bank, you got to pay fifteen dollars to twenty dollars of interest over the lifetime of that loan. So the bank is lending money based on the capital that you put in there. They're lending money to other people at a higher interest rate than what they pay you to put your money in the bank. You make a dollar off of the $100 in your savings that's your 1% interest earned.
00:10:22
The bank's loaning that same $100 out to other people for fifteen dollars to twenty dollars of interest. So the bank has a pretty good profit on that. And this is totally fine, right? This is just how things work. I'm not saying this is a bad thing because it's actually a better idea to keep your money in an FDIC insured bank account.
00:10:42
Like the federal government's going to back it up if something were to happen. Like you're going to get your money no matter what. Up to $250,000, I believe, per deposit or per bank. So there's no issue with the bank loaning out your money, right? But that's how they make their money.
00:11:01
The bank is a business. It's a for profit business. They have people to employ, they have services that they provide. They charge money for other people to get loans. And that's called interest.
00:11:16
And the bank needs to make a profit. It needs to at least cover its expenses and overhead and all that. So it's not a problem that your money could be sitting in a bank with an interest rate where they're making more money off of your money than you are. It's not a problem. Really?
00:11:31
Truly. I want you to know that I've known people who have put thousands and thousands of dollars, like cash dollar bills, in a shoebox in their closet. And that makes me almost have a heart attack. Because what if something were to happen to your house, god forbid, but accidents happen, and if your home were destroyed or you were burglarized and hopefully you're not home if that happens, but now your money's gone and it was not insured. There's no way to go file a police report and say, yeah, I had $5,000 of cash in my closet.
00:12:07
And they're going to be like, sure you did, prove it. No one's coming to your house to audit your shoebox money in your closet. Which is why we put money into banks in the first place. So that's what I mean when I say this is not a problem, that the bank is holding your money for you, paying you a little bit of interest, but they're charging more interest for somebody else to loan it. That's how they make their money.
00:12:29
And this is just the system, right? This is just how it works. But I want you to know how it works. So when it comes to investing and us being told, and not just women, but everybody being told that we should figure out how to buy stocks in the stock market, we should all be good and have a diversified portfolio and blah, blah, blah, whatever the fuck any of that means, I don't care. I'm here to talk to you today about banking and investing practices and also to get rid of the messaging that you've probably heard that you need to be good at all that in order to be good with money.
00:13:08
What I'm focused on here in my business and on this podcast is financial organization and record keeping. Why? We already know why. Because when you have financial records that are organized and you have data to look at and you have your reports that you can pull and read what's going on in your business, that's where you're empowered from, right? That's when you can say, yeah, I have a rainy day fund saved up and now I have some extra income or some disposable cash.
00:13:37
And by disposable, we mean you can do whatever you want with it. It's not going to a bill or going to payroll or going to your mortgage. Disposable income and cash can be invested somewhere in the stock market. Opening a money market account, a high yield savings account, whatever you want to do. You're not here for those kinds of tips from me.
00:13:58
I mean, if you are, that's cool. Go open a high yield savings account. I have a money market account. Put some money in there, earn a little bit more interest there than at your bank's regular savings account. Totally, go do that.
00:14:12
I encourage you to. I do it myself. But we're here to talk about financial organization and making that easier on ourselves for the whole purpose that we get to pull that data when we need to and when we want to look at it to make informed decisions. So that is kind of how investing intersects with what I've got going on here. And the reason I talk about myself and my investing kind of history and where I'm at with investing right now is because I am in the process of starting a business.
00:14:42
I've been in business for over a year, but I'm still in the startup phase, right? We know that most small businesses in the United States, like over half fail or close within the first like five years. I'm still in that window, y'all, I am putting my blood, sweat and tears into starting this business up and getting it functional and operational so that it can start supporting me financially, right? So I'm not at the point in my life and my career where I'm investing a lot of money. I used to be able to do that, I used to want to do that.
00:15:14
That used to be something that I enjoyed doing and learning about. And there are all sorts of resources that you can go learn from about how to invest money, like what is the smartest way to do it, what kind of risks are involved, what you should consider before you start investing in the stock market or anything like that. All of that information and resources are available to you and it's not on this podcast, this podcast I'm sharing with you. My experience as a small business owner. Sometimes we need to set aside the investing thing and here's what I'm hearing from all of the messaging and discourse about women in investing and putting your money into high yield savings accounts.
00:15:56
We're being told now that we should be good at investing and good at the stock market and good at saving money at the same time and good at spending money and budgeting and all that crap, right? We're just getting all of the same messaging while also being told that we need to catch up to how the men have been doing things for the entire time. And I just disagree with that. There's a time and place for everything and no, it is not feasible for everybody to spend or save or invest 510, $100 a month. Sure, you could go put your $100 a month into a Roth IRA and you can calculate how much interest you're going to have over the next ten years.
00:16:36
Go do that. There are calculators online for you. What I'm saying is that right now, in this economy, at this point of where we are at, many people can't even afford to build up a rainy day fund. Maintain a rainy day fund, start a rainy day fund. And that's what all the Dave Ramsay people tell you to do anyways, is to start with a savings for 3612 months of your expenses so that if something were to happen, you'd be covered for a little while while you figured things out.
00:17:12
Many people, doesn't matter if you're single, you have kids, you're married, divorced, whatever, have roommates, live by yourself, have a dog. It doesn't matter who you are. Many people are struggling with just the concept of having that savings. And Dave Ramsey and all of his goons will tell you that that's the first place to start and then to pay off, like, your high interest credit and stuff like that, loans, and then start investing money. And I just want us all to take a step back and acknowledge that it's okay to be at this point right now where we cannot have a rainy day savings fund.
00:17:54
You know what I told somebody the other day because they brought up that phrase rainy day, like, savings, rainy day fund. I was like, yeah, I had a rainy day fund saved up when I had a job where I was being paid hourly in commission and I was not running a business. I had rainy day savings saved up. I had money that I was investing continuously. I was paying off credit cards.
00:18:20
I was paying my student loans. I was doing all the things you're supposed to be doing to be good at money and managing it all extremely well, saving up, going on vacations. I had cash to spend on the things that I wanted to do and spend money on. And then I started a business and I quit that job. So it's perfectly fine that I'm here in this place now.
00:18:43
And I don't want to sound like I'm coming off like crazy or like, guys, it's totally fine. No, it literally is just fine that I'm not at the point in my career and in my life where I can be investing in the freaking stock market. Like, that's fine. I'm okay with that. Because you know why?
00:19:01
The investment that I'm making is in my business. And I'm happy this is what I wanted to do. I'm happy to make that investment in my business and work tirelessly to get my business operating and fully functional and supporting me with an income. I'm here for that long haul part of it. I'm here for the startup phase of my business.
00:19:23
I am fully present in it, trust me. And it's okay that I've put off investing. And no, I do not have 510 $100 extra a month to put into a Roth IRA or a high yield savings or the stock market because I used to be good at those things. And by good, I mean I put money into things and it would grow. Technically, I was doing the right thing and getting the results that most people would want.
00:19:50
But it's okay that I'm not doing that now. And no one is going to sit here and tell me that no matter what, they know for a fact that I can afford to save 510 $100 a month. I'm sorry, but I'm better at finances than you are on the whole. And also I'm better at my finances because I'm the only one that really knows what's going on, right? I'm kind of the household financial manager.
00:20:19
I make sure that our household bills get paid. And this is not like something that was dumped on me. I chose that in my relationship with my husband and my partner. We decided that was going to be my thing. Because I'm an accountant.
00:20:32
That is just one of the things that I manage about our household. So I'm good at all of that. I know where I stand and I know that I'm not at the place where I'm going to be saving 510 $100 a month. And I just want you to know that that is okay. That is an okay place to be in.
00:20:51
And while our economy is the way that it is and inflation is ridiculous and we're approaching the holiday season where statistically so many people go thousands of dollars into debt during the holidays, it is okay that you cannot do what all the girl boss, investing, financial girlies are telling you that you should do. It is okay. So that's the message that I wanted to impart on you, that yes, it can be a goal to want to invest and play around in the stock market or buy real estate and invest in real estate and land and build generational wealth and all of that is amazing. But there's also a time and place for that. And it is not true that everybody who's listening and everybody out there has the ability to save any money at all every month, much less enough to build up a rainy day fund with 3612 months of expenses.
00:21:57
If I were making twelve months, that just doesn't even make sense, honestly. If I were making twelve months of expenses and income every month, I would just be telling you a completely different story on this podcast. Most people aren't able to save up that much for like if you need three months of expenses saved up, it takes a lot longer than three months to save that up. That's what I'm getting to, is that there's no shame in this of listening to that advice and feeling like, just don't let it make you feel like shit. That you cannot do that.
00:22:36
It is the case for so many people. And if you want to one day get good at investing, the core part of this is good financial record keeping, good bookkeeping, even in your personal life, managing your finances, or at least knowing and being aware and present with what is going on with your finances, personal and business. That's the core of it. Because in order to determine what you can invest or if you can invest or if you can save, how much you have saved, it starts with good data and that comes from good financial record keeping. Which is why that's what we talk about here on this podcast.
00:23:17
And I don't tell you how to invest in the stock market. Now, if you are an individual or a client of mine who has a specific question about investing or saving money or record keeping at all, of course you can reach out to me. And on a case by case basis, I'll be able to say, like, yeah, I can totally give you some tips for this situation. Or, I can say, that's really not my wheelhouse. Let me recommend you somebody else to go talk to about this.
00:23:43
So just in general, I want us to kind of shed the shame of whatever comes up. Guilt, shame, disappointment, frustration, all those feelings that come up when we see people saying, you should be investing $100 a month into a Roth IRA so that in ten years, you're this rich, blah, blah, blah. It's totally okay if that is not the position you're in right now, because, hey, guess what? I'm right there with you. I love that for both of us.
00:24:12
Thanks so much for listening to this episode today. If you're on my email list, the next time you see email from me and you've got thoughts about this episode, just hit reply. Send me your thoughts. I'd love to hear from you about kind of what you see as far as what people are telling you to do when it comes to investing and saving your money. I'm not here to tell you what to do.
00:24:33
I'm here to impart some my knowledge and experience and to encourage you just to keep up with it and to be aware and present about what's going on with your money. Thanks for listening. Make sure you subscribe, leave a rating and a review, and I'll catch you next week. Bye.