Student Stories: Finding your finance mentor
Everyone, meet Steven. He first learned about Yield & Spread on the Giving What We Can podcast, where we talked about the intersection between financial independence and philanthropy. I have a love-hate relationship with Steven's story. I LOVE that he found the Learn To Invest course and completed the whole thing in just a few days. I LOVE that he took action right away to build a new financial plan. I LOVE that he is on the journey with a partner that supports him. But I HATE that he spent the past few years googling around trying to find the right personal finance education that fit his needs.
I am the first to admit that not every book, blog, or course is for everyone. It's all about finding your person or resource who will be your guiding voice. For Joe, it was Mr. Money Mustache (practical, gritty, straight-to-the-point, and also a software engineer). For me, it was probably a combination of MadFIientist (thorough, illustrative) and my friend Jess from The FIoneers (empathetic, open-minded, and focused on the important stuff in life).
I can only hope that Yield & Spread joins the ranks of these amazing finance gurus. So when I meet someone like Steven, I'm inspired to stay on this two-fold track: promoting financial literacy and encouraging people to do a little more good in this world.
Read on for Steven's story.....
Hi, I’m Steven. My wife, Jena, and I live in Augusta, Georgia. Though I’m from a rural area, I’ve lived in small, medium, and larger cities across the state. I find it so interesting to see how similar and different people are based on the size of their city.
I am extremely passionate about building bridges among people from various backgrounds and at different stages in their lives. While I've met many great people who hold beliefs that are very different from one another, I myself have held pretty different world views throughout my life. This led me to my strongly held belief that people generally are far more similar than they realize; they just often need some help communicating and collaborating across their perceived barriers
My current focus is on community building for high-impact businesses. I’m the Co-founder of Good Business Better, a community of businesses that share the values of collaboration, effective altruism (maximizing social impact), and sentientism (helping all living beings, not just humans).
As for hobbies, I’m a bit of an information junkie, so much of my time is spent listening to podcasts and reading books and articles. My wife and I love going out to eat and traveling (particularly to relaxing, scenic locations).
What does money mean to you?
Money has always simply been a means to an end for Jena and me. We care very much about creating opportunities for experiences (traveling, dining out, spending time with family and friends), and much less about material possessions (luxury cars, clothes, jewelry). We wanted a way to learn about personal finances, without having it take over our lives. We were looking for a passive, risk-averse investing strategy that was as automated as possible. Yet we still wanted to understand how the process works….without boiling the ocean.
Where did your personal finance journey begin?
Both our parents’ backgrounds in banking and our formal education (graduate degrees in law and public administration) had introduced us to a few basic concepts, but we had a hard time coming up with a way to implement these teachings and create a financial plan. Though we knew what a 401(k) was, we weren’t confident the moves we were making were the best choices for us. We knew we should invest regularly in a diversified portfolio, but we didn’t know the best accounts to use and the funds to invest in.
Our interest in personal finance got kicked into gear once we graduated and got full-time jobs. It was clear we urgently needed a financial plan, and after some light exploration, we stumbled upon Dave Ramsey. I listened to his podcast religiously and read The Total Money Makeover. We learned a lot, but the focus of our education was the horror of credit cards and the evils of debt. After a few months of managing our personal finances in the Ramsey way (detailed line item budgeting, putting off investing until debts are paid off, etc.), I gave up on it. It was simply too time consuming to reconcile every small revenue and expense each month and too restraining to put your life on hold until all debts were paid off. I already considered myself to have a good handle on spending, so this didn’t feel like the right focus to me. But I didn’t know where else to go.
I completely stopped managing our personal finances regularly and just tried to spend on things that mattered. However, I was left with anxiety over lack of control of our finances and not knowing if or when we’d end up spending more than we had. Where did you hear about the Learn To Invest course?
I heard Rebecca’s interview on the Giving What We Can podcast, which focuses on effective giving, high-impact charities, philanthropy, and effective altruism. I found this interview incredibly informative. I hadn’t known much about the Financial Independence movement. I didn’t know of many advisors and educators that I trusted, but Rebecca came across as very clear and rational. Within a couple of days, I had purchased the Learn to Invest course, and within a couple more days, I had completed it! I loved the content so much that I had trouble not watching the videos and reading the lessons. It was the answer to most of the questions that I had:
How can my wife and I take a holistic, yet manageable approach to wealth management?
What funds should we invest in and in what amounts?
How soon can we retire?
What are the biggest changes you've made?
We’re investing our retirement contributions in low fee index funds. Previously, I didn’t really know much about investing, so I was just hoping I was putting my retirement contributions in “good” funds. Fortunately, my wife and I had already been contributing to low fee index funds, but now I have the security of knowing our money is in the right place.
We’ve switched to high-yield checking and savings accounts. We previously had accounts with both Truist and Regions Bank. Both had very low APYs, and Regions was charging me $8 per month in fees for the checking account for not meeting its minimum number of transactions. We switched to SoFi which currently has a 3.75% APY on savings and a 2.50% on checking. Instead of losing $8 in fees last month, we get $20! (And we hadn’t transferred all our accounts over by the end of the month, so I estimate we’ll receive $40 this month!) A 3.75% return makes me feel a lot more comfortable having a cash emergency fund.
We can see our net worth and total revenue and expenses in one place. We had a car payment, student loans, a credit card, checking accounts, and retirement accounts… leaving us with 8 separate accounts to monitor across different platforms! It was too much. Now, by using Empower (formerly Personal Capital), I can easily see my net worth, cash flow, fees, and much more
What are your goals for next year?
We’re saving up for a house. We plan to buy a house in the next few months, so we’re putting most of our extra income in a high-yield savings account. Again, the 3.75% return is wonderful with this cash just sitting in a savings account.
We’ll invest more in our 401(k)s. Once we have enough for the house downpayment and move-in costs, we’ll begin investing 15% of savings toward retirement.
We’ll invest in a 529. We don’t have a child yet, but we plan to soon. We’ll ensure that they are prepared financially to face their future.
(Rebecca here! PS Did you know they changed the 529 rules recently? Starting in 2024, you'll be able to rollover funds from a 529 plan into your beneficiary's Roth IRA. In other words, if the beneficiary does not use all the 529 funds available to them, you can still support them by rolling those funds into their Roth IRA. The max you will be able to rollover per year is $6,500, with a lifetime limit of $35,000. And one more thing. The 529 plan itself must be at least 15 years old before you can do any rollover, and and contributions less than 5 years old are ineligible) Any advice for other students?
Find the right finance mentor who speaks to you. For me, it wasn’t quite Dave Ramsey, but if you are focused on cracking away at debt, it might be! As someone who is also passionate about high-impact businesses, Yield & Spread as a social enterprise (one that gives 100% of its profits to charity) really spoke to me. And the fact that the course was low-cost and easy to digest was the icing on the cake!
A huge thanks to Steven for sharing his story with the Y&S community!
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