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Only One Mic Podcast
Carl Jerard, Brooklyn Dre, and JRob welcome you to The Only One Mic Podcast. We are joined each week by authors, activists, advocates, community leaders, and professionals from several walks of life who would like to offer their experience, expertise, or commentary on the various topics you will be interested in learning.
Only One Mic Podcast
How To Manage Your Money, Invest Wisely, & Secure Your Financial Future
Dr. Paris Woods returns to take us on a financial empowerment journey that goes beyond her triumphs to become your guide to financial literacy and independence., We discuss the FIRE movement and the importance of understanding the "why" behind each financial decision. We also share our investment missteps and the wisdom we gained from them, dissect common financial pitfalls, and emphasize the crucial role of emergency funds. We delve into the unique challenges families face, particularly within black households, stressing the necessity of increasing income and diving into the intricacies of investments, from cryptocurrencies to index funds. Finally, we celebrate the transformative effect of financial literacy and encourage you to pass on these lessons. Our discussion is about embracing our collective responsibility to ensure everyone can achieve a legacy of prosperity. So plug in, absorb, and share because we all advance when one of us grows.
Click on the links below to learn more about Dr. Paris Woods and purchase her book: The Black Girls Guide to Financial Freedom.
https://pariswoods.com/
https://www.amazon.com/Black-Girls-Guide-Financial-Freedom/dp/1737606607
https://youtube.com/channel/UCLHtabwKhqgLCr6CehorJMA
Brothers and sisters.
Speaker 2:Give me a moment with your friend. I've never been up to my thoughts before.
Speaker 3:Welcome to the Only One Mic Podcast Calls you Rob, brooklyn Drelyn dre j rob is off. We're joined by a very, very special returning guest coming to join us once again. Dr paris woods, how you doing thanks so much for having me.
Speaker 3:I'm excited to be back yes, yes, and we happy to have you back and, as a lot of our listeners know, that, that paris sorry, dr paris was is the author of the black girl's guide to financial freedom.
Speaker 3:So, like I was telling you behind the scenes, uh, paris, that that last episode when you came on and we, we had our conversation about getting to the financial freedom, you know, getting to the bag, and everything, as we said, that was very informative and we had a lot of people that was hitting us up, you know, asking us questions, and I'm like I'm not the financial expert. She was already on, you know what I mean. So it was like questions that I couldn't answer and things like that. But I said I definitely wanted to have you back on the show to give some new perspective, being that it is Financial Literacy Month, so I couldn't let the month go out without having you on. So, paris, if you can, for those that's just now tuning in and getting in tune with the show, can you please give us a little bit of your background?
Speaker 1:Yeah, so I am a native St Louis in which I always start there because it's definitely been a full circle place for me to be from. But grew up sort of in your stereotypical low income family Right which, unfortunately, especially with what's going on in the economy and what's going on with all these layoffs, a lot of people are finding themselves in that situation, so it can be more typical than we would like for it to be. But definitely grew up experiencing lack. You know we moved around a lot and I have to think back to remember like what was it like to sleep in my mom's car or to sleep in family members' basements or to spend time living in housing projects, like all of those things are part of my experience growing up and you know I had a very loving and supportive mother and family who encouraged education for me and so I did well in school and education became my personal ticket out of poverty.
Speaker 1:So I ended up getting a full scholarship to Harvard University where I did my bachelor's and master's degrees and went right into education because it was such a powerful lever for me and I wanted other folks to have access and have been working in education for 20 years. So I still sort of work in education with the intention of helping young people access economic mobility, but certainly, I would say, even after all those degrees and you know all these really cool work experiences certainly realized that I had not received a financial education. And so at age 30, you know we have all kinds of wake-up calls at age 30, right, like I'm like guys get married at age 30.
Speaker 1:All kinds of things happen, but for me, age 30 was a financial wake-up call, and so that's when I really had to pursue a financial education for myself and really start turning things around. And so the book that I wrote is really me retelling that story, reliving a lot of the mistakes that I made so other folks can learn from them, and then also helping folks either skip over some of those mistakes or recover from them and start to experience the kind of financial freedom that I really think you know we deserve.
Speaker 3:Right and now being at his financial literacy month, I guess financial literacy is the precursor to financial discipline. Can you tell us what are some tips that you have in terms of being financially disciplined? And especially, like the last time we spoke, we spoke more to the younger people out here who kind of get money and it just pipes right through their hands and they get a bunch of useless things that they probably is not going to add up to nothing in about another five years, but that's a point of being, you know, undisciplined financially. So can you kind of give us some tips on what it takes to be financially disciplined?
Speaker 1:Yeah, it's interesting, you know, if I were to go back to the person that I was at age 30, you know I was following the rules that I had been given by society. So I got my fancy degrees and I thought I deserve a new car. So I went to a dealership and financed a new car. That first degree was free, but the second degree I paid all in loans. So I had student loans and then I got to get some dental work I'll take out a loan for that, right. So you know, by the time I was in age 30, I had accumulated quite a bit of debt. And you know, I remember you know no one questioning me taking out loans or questioning me financing a car and in my mind I was doing the things you're supposed to do, like you're supposed to have credit cards and a card note and all of those things.
Speaker 1:So you know, the first thing I think we have to ask ourselves a really challenge is our thinking around the role of money and the role of debt. The whole first half of the book talking about debt, like reframing how debt is used and sort of some of the ways that debt can harm us, particularly if we want to be building financial freedom right, so instead of paying back debt, we could be investing for the future. And so often the reason why we don't have wiggle room in our budgets is because we're making debt payments, and so often the reason why we don't have wiggle room in our budgets is because we're making debt payments. So you know, the first part of financial discipline has to do with the mindset, like a mindset around the money that you're bringing in, what your goals are with that money and then the choices you're making as it leaves your hands, hopefully keeping more of it over time instead of spending it, investing it so that it grows over time.
Speaker 1:And you know, at the end of the day, the big thing I'm pushing is automating the process. So I'm as regular person as they come like. Getting into debt is easy for me. When I see something nice, I want to get it, and so for me, in order to master my behavior, it required automations. It required sort of setting up systems around myself to make it easy to make good choices and make it hard to make bad choices or choices that didn't align with my personal goals, so that when the inevitable temptations arise throughout the month, I didn't succumb to them. So those are just, you know, some things that made the biggest difference for me First of all, shifting my mindset around money and then, second of all, creating the systems around myself so that I could be automating the choices that would lead me to the goals that I had set for myself.
Speaker 2:So when you say invest, I mean how did you start? I mean when you had this? You know, you had this change of mindset in your thirties. When you say invest, what did you start off investing in? I mean, like, did you start off something simple like 401k? Or I mean, did you go into the stock market? Or how did you start off? Yeah, so I like many of us cause.
Speaker 1:I was on my debt freedom journey, like many of us, because I was on my debt freedom journey was reading and listening to Dave Ramsey, okay, and so you know he, as part of the baby steps, recommended starting to put away a percentage of your income in your 401k. So that is where I started. And then, you know, as I started feeling more in control of my money, started seeing momentum, started seeing the debt disappear, I started reading more about investing and sort of thinking about well, what is the purpose of this? Like, what am I creating in my life? And so often I think, like, identifying the purpose, identifying the why, is the missing piece for all of us who know what we should be doing with our money. Right, we all have an idea, a list of things that we should be doing differently, but the reason why we're not taking action on those things is because we really don't have a compelling reason why, like, what kind of life are we trying to create on the other side of making these different choices? So, you know, I happened to land upon a blog of a guy who was following the FIRE Financial Independence, ret retire early movement and just started reading it, just started learning about this community of people who were investing to give themselves sort of the ultimate freedom, which is the ability to live without needing to work. You can continue to work, you can work on and off, you can do projects right. But for you to be able to choose to go to work you can work on and off, you can do projects right, but for you to be able to choose to go to work because you want to be there and because you don't need that next paycheck, and that was compelling to me. Freedom is one of my core values, and so it sort of opened up this whole new world to me about what freedom could look like.
Speaker 1:And even though it was a white guy's blog I was reading, as a black woman I had to say, well, wait a minute. Like I think there's a deeper meaning here. To be a black woman, to have you know ancestors who are enslaved in this country, and to have gotten all these opportunities, Like my community poured so much into me, and so to think about you know what, what might these people have dreamed of for me? Like what price has already been paid that I just need to walk into. And so the financial freedom, the financial independence movement resonated with me for that purpose and so, because of that resonance, I really started following the tenets of that investment strategy, which is very similar.
Speaker 1:So we're still talking about 401ks. At a certain point many people don't know you can actually max out your 401k. There's a limit to how much money you can put in there. So, thinking about other places, opening a Roth IRA if you meet the income requirements, because there's also an income limit and even just opening up a regular brokerage account, so in terms of the accounts. But what's unique about the FIRE movement is that there's a very simple investing philosophy using index funds, and that resonated with me as well. So just thinking about the math and the science, like people have run all sorts of simulations to prove why index funds are actually the smartest investment strategy, and not just the simplest, but that resonated with me as well. So that's been the investment strategy that I've been following since then.
Speaker 2:Did you have any growing pains starting everything off? I mean, my only reason I'm asking because I had growing pains. I mean I had the same idea, Well, not at 30, but at 35, whereas I started like going directly into the stock market. I think I took like 15% of my check and I went directly into a 401k. I think I put like 9% in the regular 401k, the other I put into a Roth and my growing pains came, going like directly into the stock market, Whereas I didn't get index funds initially. You know what I mean. I was actually just trying to get whatever I could get for cheap. You know what I mean. I started off like that and I lost a few dollars and that didn't. You know. I had the growing pains coming up. Did you have the same thing or no? Did you just, you know, did your research first and then, you know, everything kind of worked out smooth.
Speaker 1:Oh man, yeah, I wish I were that good. Right, things always go smoothly. I'll make a mistake Like that's what I, what can be true, and figure it out and sort of come around to something that works better. So I, you know, I've been the type of person to read about money ever since, you know, I was 16 and my friend's dad handed me a copy of Rich Dad, poor Dad. Money has been on my mind and so I had a Roth IRA right out of college. In my first job I set up a Roth IRA. You know, the mistake that I made that so many folks make is raiding that money, right. So you save it up over time. You're doing well. Some emergency comes up and or something you just want, and you go in there and rate the funds. So nowadays, you know, when I talk about investing, I talk about this as the most common mistake, but I also talk about sort of the difference between what the number in your brokerage account means and the number in your checking account right.
Speaker 1:Because a lot of folks think when they open up their brokerage account and see $10,000, that that's the money that they have in that account. That's not true. That $10,000 actually represents the value of the investments that you own. So you might own who knows? 100 shares and even if the value goes down, you still own that 100 shares. And so I think you know for folks who see the number go down and start to freak out and they sell their shares now you've just sold those shares at a discount, like you still owned them. And you know.
Speaker 1:For folks who follow FIRE, one of the big studies that these folks have looked at is a study called the Trinity Study, which looked at these 30 year periods in history and they tracked all the way through the entire history of the stock market.
Speaker 1:So we're talking about the Great Depression, right like the entire history of the track stock market and over any 30 yearyear period in history, the market has gone up and it's gone up by around 7% for the past 100 years.
Speaker 1:That number is around 10%, and so sort of what these folks do when you run the numbers is you start to realize that if all you did, if your entire investing strategy was to buy index funds that track even the entire stock market, just the total stock market index fund and left it there for 30 years, you would make at least 7% to 10% on your money, if not more, and you might be in a really lucky 30 years right where that number is much north, much farther north. And so it sort of reduces the stress and reduces sort reduces the anxiety around constantly checking your account, constantly checking my up and my down Do I need to sell, do I need to buy? Removes all of that anxiety and really just a buy and hold strategy for folks who are investing for the long, long, long term. So I like that. I like low stress, I like low anxiety. I'm like life is stressful enough.
Speaker 2:I can't be stressed opening up my account and looking at the number. So that was a lesson that I had to learn the hard way as well. Yeah, finally invest and get into the stock market. I mean, how do you talk them out of not, you know, taking money when things start going the wrong way? I mean because I noticed I've been working with well, I don't counsel anybody, but you know, because I started investing and I started getting good with it over the years.
Speaker 2:So now when I see a young person that might work with me or something like that, I might give them you know what I know and they start. And then you got to tell them like, listen, you got to calm down. You know you might lose a few dollars or something, but you're not losing money. Like you said, you still got the shares. So as long as you're investing to, you know, like you said, an index company or something that's on the, you know S&P or something like that, then you should be all right. So how do you keep people from cringing and pulling out their money and getting out of their early?
Speaker 1:Yeah, that's the hardest part, right.
Speaker 1:I think I remember when we were young and the things we didn't listen to. So what I tell young people to do, and even older people, is to make sure we're doing things in the right sequence. So we don't start with investing, we start with saving and making sure that you have a robust emergency fund in place for the unexpected things that we know will inevitably arise. Right, like your car is going to break down, you're going to have a medical expense, like some emergency is going to come up in your family, and you never want to put yourself in a place where you're so stressed for money that you now got to make choices that don't align with your values, whether that means going into debt, whether that means raiding the money that belongs to your future self. And so the way we prevent that is by creating an emergency fund. Good rule of thumb three to six months worth of your bills in that emergency fund before you even start filling up your investment fund, which is long term money.
Speaker 1:To the buy and hold, long-term strategy, I would say don't even look at the brokerage account. Like. Don't even tempt yourself. Automate the money that goes in there, get it straight out of your paycheck and just pretend it doesn't exist, like if you could forget about it and wake up 30 years from now and have a lot of money in there. That's the best case scenario, especially if you're like me and good for temptation. Then we got to get it out of our awareness, out of our daily decision-making and just automated as much as we can.
Speaker 2:Started to laugh. I said you sound like.
Speaker 3:Fannie Willis when you said you keep six months of money in the house.
Speaker 1:That's another generation. For months I'm going to have mine in a savings account, but I appreciate her just having that cash.
Speaker 3:Right, right, right. So you know, as you mentioned, you know off air that you were about to get married and I wanted to say congratulations on that one. Congrats, man, yeah, definitely, and starting your new life and all. So let's talk about family. You know how does this work? Because we I'm looking at the Pew research and they're saying like, the median income for the black family in the U S household is $50,000. It's $50,000.
Speaker 1:So what are some tips you can have as a family in terms of, like, managing debt? Ooh, yes. So this is also reminding me of an important thing for us to note, which is that we cannot budget our way out of poverty. So you know, I talk about making, managing and multiplying money like it starts with making money and, on average, we understand that people of color are underpaid Black women especially, are historically and tremendously underpaid, and so it's hard to do any of this unless you're bringing in more money right in the front door. So that's where I start and that's where I encourage people. When you're thinking about I don't have enough money, you can do the budgeting, you can work on saving and all of that, but I really would emphasize, working on earning and earning more.
Speaker 1:So I think that's a good place to start. It's so interesting Then thinking about combining your finances with another person, because I mean you're bringing more money Right. So now you got two incomes, but you also got two personalities and two sets of values and you know spending habits and all of that. So it's not just as easy as getting double the income if you are with someone who makes the same amount, but it's back through that same values process. So when folks ask me, how do I get my husband on the same financial plan? How do I get my wife? Well, wait a minute. That's not where we start. Let's start with why. What are y'all creating? What is the future that you're dreaming of for yourself? Why would you bother doing any of this stuff, unless there's some deeper reason? So that's where I start and that's where I encourage other folks, particularly in relationships. We got to start with the why.
Speaker 2:And you got to think about that before you get married too.
Speaker 1:That's right, that's right.
Speaker 2:Yeah, you got to discuss that before you learn. And it's good that you said you know, good that you said you know you gotta increase your income, because I think that's the biggest problem. I noticed that with you know some people I talked to about you know, um, you know trying to invest and stuff like that, because I'm like you know you can budget all you want, but if you don't have the money, there's nothing really that you can do. And uh, sometimes I tell people which they, you know it seemed like it's hard to do. I'm like you might have to get this, you might have to get a second job, especially if you don't. You know you don't have that type of job that you know, where you make that kind of money, where you can do those type of things. So you know, sometimes you gotta double up and get that second job you might need a third or fourth.
Speaker 3:It's 2024. The way things are rolling, you know what I mean.
Speaker 1:Right. I mean, that's how I had that light bulb moment myself, I mean. So I was getting out of debt and it occurred to me I need more money to get this done faster and started taking on side hustles and doing consulting, right, and just working seemed like every hour. It's incredibly exhausting. So I don't think that's a long term plan. I think at the time I was probably making 75K as an executive director of a nonprofit and then I was bringing in enough side hustle money to like push me over six figures.
Speaker 1:And so that was a moment where I said I started to think, you know, like wouldn't life be great if I just had a six figure job? Like if I could just, in my nine to five, make six figures? I'd be healthier, I'd be happier, I can make better decisions, I'd be more creative, right. And so that, I think, was the beginning of me starting to think, you know, I actually just need to make more. Like it's not about me like trading more of my life away, it's about me charging more for every hour of my life that I'm giving to a job. So I would encourage folks especially you got to do what you got to do. So if you work in two and three jobs. That's fine, but at the end of the day, I want you to also start brainstorming. What could it look like to make more, and then let's start to think about the types of roles or opportunities that could drive your regular day job income up.
Speaker 2:Also you're kind of, you're kind of unicorn, I seventy five thousand.
Speaker 1:I was already a lot Right. Fifty K yeah, I'm also an overachiever, so I'm like oh, right, it's a good thing.
Speaker 3:It's a good thing, it's the next goal.
Speaker 1:Yeah, I'm also an overachiever, so I'm like Ooh, right, right, right, it's a good thing. It's a good thing, it's the next goal. Yeah, I'm steady pushing it.
Speaker 3:So, uh, what was something that you was telling me about Dre, about the, uh, like a family investing plan?
Speaker 2:Yeah, you know, recently, um, I've been trying to get my family to get together and get like a um, like a group investment. You know where we all chip in and, you know, do maybe like a little couple of dollars a month or something like that, to put together some money and put it into like an investment group. I mean, is that something that you suggest?
Speaker 1:Yeah, it's sort of like I'd be curious sort of what the goals are and what you guys are going to do with the money. But I've seen lots of examples of folks Like I have a friend whose entire family it's sort of what they expect of the family to be given back and he now, of course he's Sudanese. So it's a lot of different culture, right, because he had the opportunity to come to the US and, you know, makes a lot more money than other folks. It's almost like tithing, but we're tithing back into the family. So that I mean that really appealed to me sort of thinking about like, what does it look like for us to pool our resources? And those of us who have more resources we have a greater responsibility to think about what we're doing with those resources.
Speaker 1:Another great example I have a friend who bought a couple hundred acres of land in rural Missouri formerly Black-owned land in rural Missouri and so getting it back into Black-owned hands but has started a reparations project where she's accepting donations and then has a community board that decides where they invest that money back into the community. So it's not straight out like investing in index funds but more so investing back into the community. So I think all of those are great ideas. It's like folks who have a shared vision and want to join together and do something collectively. I mean you can't lose.
Speaker 2:Yeah, I think we got to do this more in the Black community because I used to work at Bank of New York some years ago and I used to work kind of like in that area and I used to, you know, see all of these investment groups come through and I'm like man, I used to think like an investment group was something that you did with your job or some sort of business or something like that at the time and I didn't know that you know, just a couple of family members or something like that could just get together and start something and I used to look at you know some of their reports and everything. And I'm like to see, you know, it's something I was telling my brother. I was like man, I want to see our nieces and nephews and everything like that get involved in this type of thing. That way you know somewhere down the line that the family wants to start some businesses and different things like that, then we can also do that.
Speaker 1:Mm, hmm.
Speaker 2:Yeah, use that money to do so.
Speaker 1:It's like folks for example, I invest with a friend of mine who does multi-unit real estate development and you know it's all legal Right Like I'm not just handing her money and saying I hope I get a return on this, like there are documents to be signed et cetera, but it's like there's power in aggregating funds to make even larger investments than you could do alone. So, you know, for folks who are just getting started and just trying to like what is a 401k, like start there, learn, but we have additional resources to pool. You know, do your research, make sure that the things that are being done with your money agree, like align, with your values, and then let's aggregate the funds and do bigger and better.
Speaker 3:What are your thoughts on cryptocurrency?
Speaker 1:Oh man, this is the one I hate. You know what I do Tell us why you hate it.
Speaker 3:Tell us why you hate it. You know what I do.
Speaker 1:I follow the advice of people who have more money than I do, who are smarter than I am Right, so I like to go to conferences of folks who are already financially independent and wealthy and not working and just living off their investments to see, well, what are you doing with your money?
Speaker 1:Like, are we out here playing games with our money or are you still following the strategies? And so what I have heard folks saying is that, even though cryptocurrency itself feels very much like speculating, like it's a very risky thing to do with your money, they are investing in companies that are investing in the blockchain. So the blockchain is the technology, like that's the technological advancement that cryptocurrency is built on, and so it's like why not invest in the organizations that are investing in the technology that, whatever the next iteration, the cryptocurrency that becomes mainstream? I mean, there are hundreds of cryptocurrencies. Right, let's say the world does make that turn. You sort of have your money, you're sort of betting on the technology, and even still, those folks are saying that's our fun money, like that's 10 percent no more than 10 percent of my portfolio that I'm doing for fun and the rest is just in our stable, predictable investments that we know are going to do well over time. So that would be my recommendation.
Speaker 2:OK, that's a good idea, good recommendation, because what did you say? You follow people who are making money, I guess, or who are good at it. You know in so many words, and I think that's one of the what is it? It's not the laws, but you know what is that book?
Speaker 1:Richest man in Babylon. I read, or something like that years ago I took that lesson to heart. I'm not taking your advice if you haven't been working.
Speaker 2:Right, right, right, right, right, and that was one of, like, the biggest things in there, cause I was like again, you know um, when I first started out investing, I think I I should have probably took somebody else's and you know somebody's advice and stop you know, just not jumping in and waste money and stuff like that, so that's good.
Speaker 1:I mean, the great thing is for those of us who didn't mess up and learn the hard way, at least we can give advice and folks, can you know, skip a couple of steps. Yeah.
Speaker 3:So speaking of speaking of advice, I mean just off the cuff, what is the worst financial advice you ever heard or actually have received? What's like the worst thing you can.
Speaker 1:Buying life insurance.
Speaker 1:Oh, speak on it, my life insurance OK yeah, I think I mean there's all kinds of bad advice, but I it just. It's one of the ones that irks me because, like we work hard for our money, right, like I really believe we're trading valuable hours, like the hours of our life or the things we can't get back. It's a non-renewable resource, it's the most valuable possession we have. So if you trade that for money, like what you do with that money is so important and I don't want people to be taken advantage of, and so so often I see so many TikToks about that.
Speaker 1:It's like a thing, because a lot of people get into jobs where their job is to sell life insurance, to tell people this is an investment and you're going to get rich and this is what the rich do, et cetera. It's complicated and there are fees and there's all these ways for you to lose your money, and people I feel like are getting swindled over a hope and a dream, when there's really just the things we're talking about are so simple, like anyone listening to this today could go to their job and put some money in their 401k and find an index fund or go to vanguard and open a roth ira right, it's so simple, um, and we have been led to believe that these things have to be complicated and that you're not smart enough to do it. So you got to give your money to me and then I'm going to make you rich. And we just got to that. That just troubles me Like I really hate to hear it.
Speaker 2:Yeah, that's the beautiful thing, I think now, because, um, like I said, I mean when you know when my parents were coming up, you know this stuff was, you know you had to go get a broker and all that other stuff like that. Like now everything is pretty much at your fingertips. You can go online, you can start your brokerage account and do your own thing. So you know no longer need really like a middleman, to do anything. I mean, if nothing else, you just need somebody to give you some information or, you know, start you out, but you really don't need to give anybody any money to get money. You know what I mean.
Speaker 1:Yeah, that's right you can get a book. My book is in the library, like you literally don't have to pay anyone any money to get this information.
Speaker 3:Yeah, and I think that's the thing is that a lot of people don't look for these things, especially what our young people like. I was talking to someone the other day who said, well, we was talking about credit and the person said, well, I have a house and once I got my house, I didn't care about my credit anymore. So you know, this is like the mentality that a lot of people have, but not knowing that you're going to probably need this somewhere down the line for something else. So, like, what's the best advice you can give young people in terms of credit, because a lot of them don't really understand it. So could you kind of break that down and give a message to the young people in terms about keeping a healthy credit history?
Speaker 1:Yeah, it's multiple sides to this. Yeah, I think this is the number one question young people want to ask. Like, if I'm on a panel or something with young people for questions they want to know, tell me about credit scores, like how low can it go? How do I build it? Right, and it's one of those interesting things about society that every young person knows about a credit score but every young person doesn't know about an index fund, right? So I'm struggling with that. But I'm like we got to start meet people where they are and then we can layer on some information For the credit score.
Speaker 1:You know, I like to remind folks, like, the top three things that we're even looking at with your credit score has to do with your balances. How are you maxing out these credit cards? Are you keeping it around 30% or less? That's the golden ratio 30% or less of your balance. If you have a $1,000 card, never put more than $300 on that card. Pay it off every month. So at the end of the month this should be a 0% Um, but so the utilization rate is what that is called Um. And then the length of credit history which you'll just build over time Um, and then thinking about what.
Speaker 1:The third one is I lost it off the top of my head oh, on-time payments, of course. So making sure you pay your bills on time. I think those are reasonable, like I think if you, you know, charge something, paying the money back is a reasonable expectation. So I think for young people, you know part of it. We're talking about your integrity. We're talking about making wise choices. We're talking about and I think you know I'm not a, so I'm not a fan of credit cards, because I've gotten bitten a lot by being an overspender, by saying, oh, I'm just going to charge a little bit more this month and I'm going to pay myself back and all this. Like my brain can do all of those things.
Speaker 1:So my recommendation is to set up really strong guardrails for yourself. I like to say find a bill, a recurring bill, your phone bill or something like this. Set it up on that credit card for auto pay and then don't carry the credit card around in your wallet. It's not for everyday expenses. If you're just building credit, put a bill on there, pay that bill every month and your credit score is going to go up and put the credit. You could cut the credit card up and throw it in the trash, right Like after you've got it set up on autopay. What are you going to? You're not going to be swiping the card, so I would encourage folks to be cautious, to listen to their adults around them who've gotten themselves in credit card debt and know how easy it is to sort of be caught in the debt trap and then to build those smart guardrails so that you don't sort of fall into the same traps that a lot of us have.
Speaker 2:Would you suggest over-investing your 401k? Like you know, recently I Recently I've done it I gave 15%. I think at the time my job was matching 6%, or something like that. Recently, someone was telling me that once I got knowledge to get into, investing myself directly into the market, he was like well, why are you putting the rest of that money in there? You might as well just invest it yourself. What do you think about that?
Speaker 1:Yeah. So once you get to the part, to the point of your life, where you've got all the basics done right, you've got your emergency fund set up, you got your income straight right, folks will remind you that the greatest culprit, the greatest thing that's going to eat into your money, is taxes, and so we've got to start getting smart about our tax strategies, and this is why we start with. You know, these tax advantage accounts. Even better than the 401k is the Roth IRA. So what a lot of folks will do, if you have enough money to be maxing out these accounts or you're trying to build up to it, is to start with the match If you have that at work, because that's I mean you're automatically doubling your money to go max out a Roth.
Speaker 1:Max out the Roth IRA, which you know for folks who are learning about Roths, it's after tax money, so you've already paid the taxes, but all the growth? So, years down the line, when you take the money out, all that money is tax free, and that I mean it can't be beat, which is why there's a limit on how much money you can put into a Roth. If you make too much money, they start to cap who can put money into a Roth and you got to. You know there's some tricks you got to start doing to find ways to access it. So max out the Roth and then go back and max out your 401k, which is another tax advantage account. So folks are always going to try to max out the tax advantage accounts. Some folks will have HSAs, which is another tax advantage account through your healthcare. So maxing out the tax advantages is key and then, beyond that, of course, you can go get a regular brokerage account. That's certainly fine, but I would max those out first.
Speaker 2:That's good information right there, good information.
Speaker 3:Yeah, most definitely. So now we're going to switch gears. Let's talk about the book. Okay, I just want to follow up with you on the book. I know you mentioned it's in the libraries. Now all this information is there. What is the feedback that you've been getting on the book since you put it out? I know you've got to get a plethora of notes and emails and people dropping in your DMs all types of stuff like that.
Speaker 1:So just tell us you know the book, tell us about the book and how it's affecting people out here. Yeah, no, the book. I mean, I have been completely blown away, I think when I wrote the book so I had this burning desire to just get this information out. I'm like, how come nobody told me this? How come people in my community aren't talking about this? I'm just going to bring my Black woman voice and do it Right, like it just had to be written. But even so, we put the book out 2021 and almost $90,000, 90,000 books have been sold to date and just Okay, I applaud that. Wonderful and just Okay applause. Wonderful, no, it's crazy.
Speaker 1:So when I say blown away like I'm blown away in multiple ways, including the sales, but people are constantly reaching out to me to say this book has changed my life I suddenly have hope. I finally took action on something I've been meaning to do. So there's something about, I think, if I were thinking about, what made the difference because I read a lot of books, like there are a ton of personal finance books is being able to connect with the stories in the books. I'm telling you know my personal story, but being able to see someone you can relate to make these mistakes, recover from them, right starts to make you think you can do it too.
Speaker 1:And because my background is in education, you know I definitely approached it from this sort of action oriented. It's almost like a textbook. I have worksheets in there, right Like I really want you to take action on these things and to make it digestible and easy enough to understand. So that was my hope, and so I feel like you know, it's such a blessing for people to say, yeah, I did do that. Yeah, I use the tool that you gave me and I opened that account. You know, I'm just so grateful that folks are receiving it and that is actually making a difference for folks.
Speaker 2:You know it's funny to say, because I was telling my brother this and I was like you know, because once you start investing you start getting money or you start watching your money grow, you know you get kind of excited about it, right, and I was telling them that you know, a lot of times I'll speak to people at work and we'll just talk about it, and then it kind of makes you happy when that person actually goes out and actually starts their own brokerage account and stuff like that. So you know, and then they'll come back and ask questions. And I got one young lady that works for me right now, man, and like she's gone home every Friday. She's like you know, andre, what do you? What do I invest in today? What am I putting my money into? And I'm like, wow, you know, it's beautiful to watch her. You know, you know, be young. And I said, man, I wish I was that young and somebody gave me that information.
Speaker 1:You know on yeah, I mean time is on your side. It's so tricky because when you're young you want to make mistakes. That's how you're going to learn. But for those young people who are willing to take advice find good people to take advice from, are willing to take it, Just time alone. It takes so much less money to build wealth if you start early than if you start in your 40s I'm 40 now than if you start, you know, in your 40s, like I'm 40 now, Right, so like if you're at my age or older, we got to. You know, we got to move some bigger numbers to get where we're trying to go. Even for those of us, even if you are moving bigger numbers, you can pay that forward by mentoring a young person to start early with those smaller numbers and get there faster.
Speaker 2:That's right.
Speaker 3:Have any of the bigger big name like financial, quote unquote gurus reached out to you, probably after seeing you speak or, you know, reading your book or hearing someone talk about you and, and you know, try to pick your brain about certain things.
Speaker 1:I don't know about that. Um, I did. Uh, I will tell you. When I was writing the book, um, I reached out to a lot of folks to say will you read my book? You know, you give me some feedback and I was so lucky to get yeses from some of my favorite people and so their, their names, are like in the cover, Like those are people I personally reached out to to say will you read my book and review?
Speaker 2:it.
Speaker 1:And was able to put their quotes in there. And then I loved so for a while, my book. I think my book came out at the same time, around the same time as Tiffany Alashae's book, the Budgetnista. So I remember someone had posted something on Instagram about both of these books and she replied and said I love your book, paris, you know, which was so dope. I'm like, ma'am, you are a celebrity, you know. Just those little things have really stood out to me, but I haven't, you know, gotten on the phone with anyone or anything like that.
Speaker 3:Well, at least not yet. At least not yet.
Speaker 1:Not yet.
Speaker 2:You know, what's funny is I remember like I'm not a big fan of Dr Lamar Johnson, but I remember in the beginning when he was talking about starting school and stuff like that, and that was one of the things that I was intrigued by because he was saying that how he was going to teach kids financial literacy and teach them how to invest and stuff like that. And I was like man like you know, he's a little weird for me here and there but I was like it would be nice to see somebody that would come through, that could come through and start a program like this and, like you said, start children out early and understanding you know what's going on, as opposed to waiting until you know you get 30 or 40 and trying to put things together. You know on a on a on a global scale, or you know not well, just, you know all over the United States, I should say, if nothing else, you know, especially in the community, in our community.
Speaker 1:I agree, and they're, and I feel like schools are hungry for this information. A lot of states are starting to require some sort of financial literacy course for students in K-12. So certainly appetite for it. I just want to make sure that we have people of color represented and folks you know. Let's make it interesting, let's make it entertaining. It doesn't have to be dry and boring, and you know, banker, banker, boring is what I call it.
Speaker 3:Um, hopefully we can bring some diverse voices into the classrooms as well yeah, a teacher friend of mine actually did that with her fifth grade class where they had like an investment team. They were in like a competition and actually won in terms of the investment team had to pick, I guess I guess was companies or stocks that they had to get together and invest in. They watched the stock, the stocks grew and the competition, I believe, was whose stock was the highest at the end. So they competed against other schools for this and I thought that was so cool. But it was something that was not publicized and I'm like why is not the whole school doing this? Or you know, I know she probably reached out to someone to to get this started, a person like yourself. So it's like why is the whole school not doing something like this? Why is the whole it's not a curriculum based around this?
Speaker 1:it still baffles me till this day hopefully, uh, maybe someone listening to this is going to be inspired, just like I was, to write the book, to create the curriculum that normalizes, because I think the risk I feel like most often we see investment clubs, the risk is sort of this gamification of investing, when really investing should be boring and basic and just like this is what we all do, of course, like, of course, okay, um, and so I think someone's got to get creative to make that engaging in and of itself. Um, folks understand just the basics of what to do with your money to build wealth without having to do all the extra stuff exactly exactly so, um, is there going to be a second book that you're working on?
Speaker 3:I know you got a lot going on right now, but is there? Are we getting that black man's guide to financial freedom that we talked about last?
Speaker 1:Maybe Dr Umar is going to write it, I don't know.
Speaker 2:I don't know if I'll give Dr.
Speaker 3:Umar, my money at this point.
Speaker 1:I don't know. I'm waiting. You know I'm open to inspiration. It was inspiration that struck, that resulted in this book, so if it hits me, I will do it.
Speaker 3:We'll see, sounds good. Maybe you should do something autobiographical, you know.
Speaker 1:Yeah, you never know.
Speaker 3:You never know Is my life interesting enough.
Speaker 1:Maybe, on this other side, we can talk about being married and all the other. Maybe, on this other side, we can talk about being married and all the other. I know there's more for me to learn in this next week, so we'll see, Plus more money to make.
Speaker 2:Now you can split it down the middle, you know, throw a lot more money into it.
Speaker 1:you know yeah the complexity, Even like I might become a mom.
Speaker 2:You never know.
Speaker 1:There's lots more lessons to learn that I'm happy to turn them around.
Speaker 2:God bless you with that mom thing, God bless you.
Speaker 3:I'll tell you what that kid is going to be sharp when it comes to investing. Oh yeah, man, I hope so. I hope so. Money mistakes here. All right, so before we let you go, can you let everybody know what your handles are, where they can reach you at, where they can get the book at? Let us know what your handles are, where they can reach you at, where they can get the book at. Let us know what's going on.
Speaker 1:Yeah, author Paris Woods, on all social platforms, and then the book is available everywhere as well. The lowest price I've seen is on Amazon and that might be the best place to start. And then I have a free toolkit that you can download to start. And then I have a free toolkit that you can download and the URL is right on the inside of the book, but it's just Pariswoodcom slash book bonuses with just some extra trainings and things like that to get you started.
Speaker 3:Okay, and I see you getting out there on the socials making your shorts and everything like that, keeping the people informed. I'm loving it. I just want to let everybody know. Go out there, you know, I mean if you're on the instagrams and all of that and, uh, check out a lot of this stuff, youtube, and all check it out, all right. So, dr paris woods, thank you once again on a mission to help more women of color build wealth while living a life they love. That's right. We appreciate you for that one sis, for real. All right, and with that being said, we're going to get ready to sign off. So, yeah, thanks again for once again, another informative conversation.
Speaker 3:All right, the Only One Mike podcast is available on all platforms you stream your podcasts on. Also, check out our Only One Mike Podcast YouTube channel to catch up on the past and current episodes and please don't forget to rate the show and subscribe. Check us out on Instagram and x slash Twitter at the Only One Mike P1, facebook and LinkedIn at the Only One Mike Podcast. And you can email us at theonlyonemike00 at g. And you can email us at the only one mic zero zero at gmailcom, or call us at three zero, two, three, six, seven, seven, two, one, nine, to have your comments and questions played on the show. We thank you once again for your time.
Speaker 3:Dr Paris was to be the audience and we encourage you to please speak your truth quietly and clearly and listen to others, even the dull and the ignorant, because they too have their story to tell. So until next time, please keep in mind in fact this one is a good one, paris, each one. Teach one. If you can't find one, talk to the little ones and you'll see they'll listen to feel the missing piece, to rise and shine. Thank you everybody for showing up and peace.
Speaker 2:Peace.