Episode 358: Speak Your Voice with Your Money with Jannese Torres
In our Money Month finale, Doree and Elise speak with Yo Quiero Dinero host Jannese Torres about savings, retirement, and investing — everything from how to find an accountant for your specific financial needs to why you have to be a part of the capitalist system in order to change it.
Photo Credit: Amanda Lopez
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Transcript
The transcript for this episode is Ai generated.
Doree Shafrir (00:10):
Hello and welcome to Forever35, a podcast about the things we do to take care of ourselves. I'm Doree Shafrir.
Elise Hu (00:17):
And I'm Elise Hu. And we're just two friends who like to talk a lot about
Doree Shafrir (00:20):
Serums, and we are still in Money Month,
Elise Hu (00:25):
But this is the end of it. This is our big capstone to Money Month Today.
Doree Shafrir (00:30):
Yes,
Elise Hu (00:31):
We've had great guests across a range of expertise areas when it comes to finances and money and how to talk about money and our relationships with it and how it affects our relationships. We had Amanda Clayman, the therapist, the financial therapist on last week, and today we're going to get into a lot of the questions that y'all have sent in and asked about your own situations with somebody who can really get practical about money matters. Jannesse Torres. That's coming up though later in the show. That's our big conversation, but first we haven't seen each other in a few days. Dory, tell me about what's up? How was your first, we're one of the first weekends out of the school year. You're officially in summer now.
Doree Shafrir (01:17):
Yeah, I mean, I got to admit it was, I mean, it was okay. It was Father's Day. Abby Father's Day we're recording this right after Father's Day and Father's Day was good, but we didn't really do much. And Henry is a kid who needs to do stuff and I don't know, I find it challenging to plan. I find it challenging to plan stuff all the time for him,
(01:46)
Especially as it gets hot. Maybe it's me. I find it hard to plan play dates, people have siblings, and it always just feels like a lot. And I don't love having people at our house because of Bo, so this is where I'm like, I should just live near family. Then I would have somewhere to just go. I would just be able to drop in at someone's house. I just feel like I don't have that. And in the summer when there's not as much scheduled activities, baseball's over, soccer's over. I'm like, okay, what do we do now? And it feels like it's all on me. Sorry, that was more than you asked for.
Elise Hu (02:34):
No, I get it. I get it. One of the greatest regrets of my adult life is that I have raised my children away from my brother and my mother and my father. They have not only been far away, they've been on other continents from me or separated by bodies of water, like major ones like the Pacific Ocean. And I remember how close I was with my brother in our early twenties, and there was a period where we roomed together when we were in a summer break in college, and he just can solve all my problems. And then he's also known me since he was born, since the day he came home from the hospital. And he also has kids. And I'd love for the cousins to be closer. And so I do really long for that. And every time I hear about my friends going out on weekend trips or concerts because their mom came over, I'm just like, Ugh, I wish my mom was here more often. So I get it. And yeah, the cousin thing is hard because you do want your own brothers and sisters kids to be friends with your kids and kind of grow up side by side.
Doree Shafrir (03:40):
I think it's easier to not really think about it when we're busier, but when there's just this unstructured time, I think I'm like, oh, we don't, I don't know. We don't have the village in the same way as you do with family, and I know other people create that, but I guess I'm just not good at creating it. I don't know.
Elise Hu (04:07):
It could be proximity too. I'd be happy to help drop off and pick up Henry and things if he were close
Doree Shafrir (04:12):
By. Right, but you live so far. Yeah, totally.
Elise Hu (04:14):
Right, exactly. My friend Rachel, who is my podcast production partner and business partner as well, we became friends through her husband because her husband Tim was my college dorm mate, and they specifically chose this neighborhood and they moved to the neighborhood where I live because we wanted to replicate what we had in college, which was like, Hey, just stopping over in his dorm room to hang out or like, Hey, I need to just drop off my kids. I have parent night. Can you take 'em? And there've been so many times where I forgot that I have something to be at and I don't have anybody to pick up Issa from dance, and I'll just text him and say, Hey, go grab Issa from dance.
Doree Shafrir (04:53):
Totally.
Elise Hu (04:54):
Really living close to each other and trying to live close with your chosen family I think is a solve. It's just so hard in Los Angeles because once you find your place, what are you going to do? Move across town? That sounds like an impossibility.
Doree Shafrir (05:12):
Yeah, it's really challenging. So I don't know. I feel like this time is when I start to think about that kind of stuff. So anyway, how are you?
Elise Hu (05:25):
I am pretty tired. I got up at five in the morning to fly back to Los Angeles from San Francisco. Wow. I had a taping for another podcast that I had to be in studio for, and there really wasn't enough time to get there, so thank goodness the guest was also late. Oh my gosh. So I landed at LAX at eight 50 and needed to be there for the 10:00 AM interview in Hollywood.
Doree Shafrir (05:54):
Whoa. Yeah, it was tight as someone who knows that commute like landing at LAX and then having to get over to that part of town intimately. That is, yeah.
Elise Hu (06:09):
I also wasn't dressed, nor did I have a wardrobe to do an in studio interview, so I had to stop at my house first, which only added more time. I just went ahead and threw money at it and had the Uber black come get me. If you get Uber black, they'll come straight to get you. I also dismissed my dog. I did not go pick up Oscar from Waterland, his doggy daycare or his overnight stay because we wouldn't have had time. So I left Oscar at his overnight place, rushed home, changed, got there. I was eight minutes late, the guest was half an hour late and it all worked. Oh my
Doree Shafrir (06:50):
Gosh.
Elise Hu (06:51):
Yes.
Doree Shafrir (06:51):
Wow. It all worked out. Okay, good. Yeah,
Elise Hu (06:55):
We made it. But I was in San Francisco for just a beautiful wedding in the Redwoods, and I'm so happy for my friends, Sarah and Kevin who got married, and they have a baby on the way in October, so congratulations to them. And they just had an awesome wedding. It was all good vibes. I love that. Great people. Yeah. I go to so many fewer weddings than I did 10 years ago or even five years ago. So when I get to go, I really celebrate it. And they had the dog as the ring bearer and he was such a good boy. He was such a good boy. And there was a Raphael Nadal lookalike who showed up.
Doree Shafrir (07:44):
Yeah, you posted that. And I was like, wait, is that Nadal right? Yeah. I was like, what would Nadal be doing at this wedding? But maybe there's some random connection that is
Elise Hu (07:54):
How much he looked like Rafa Nadal funny. The same tan, the same eyes. At first, I had only seen him outside at the cocktail hour with sunglasses on, and I was like, dang, with sunglasses on, that guy really looks like Rafa Nadal. But then inside he took his sunglasses off, still looked like his doppelganger. That almost never happened. That's so funny.
Doree Shafrir (08:22):
That's so funny.
Elise Hu (08:24):
No, but it's just a dude named Steve from Vermont.
Doree Shafrir (08:26):
Oh, does he get that a lot? Has anyone else ever? Oh, he does. Okay. Yeah, I was going to say he really looks like him.
Elise Hu (08:39):
I kept talking about it at my table and I was seated next to this guy Neil, who then decided to talk to Steve and say like, Hey, we were just observing that you look a lot like Raphael Nadal. And then I don't know what their conversation was. And then Neil turned back to me and he goes, it is Raphael Nadal just to mess with me. Oh my
Doree Shafrir (09:03):
God. It was fun, fun, fun, fun. It's really funny. Well, should we intro our guest?
Elise Hu (09:12):
Yeah. Delighted to Jannese Torres is an award-winning Latina money expert and the author of Financially Lit, the Modern Latinas Guide to Level Up Your Dero and Become Financially osa. She became an accidental entrepreneur after a job loss inspired her to turn her food blog into a six figure business. With over a decade of experience as a serial entrepreneur, Jannese now teaches her clients how to identify and harness their talents to turn them into online service-based businesses. She's an avid money nerd and a self-taught personal finance educator. And in 2019, she began to notice a gap in the conversation around money. So inspired by the J-Lo and Cardi B song Dero, she decided to start teaching marginalized communities on topics like investing and financial independence through her personal finance podcast and platform. Yo Kiro Dero.
Doree Shafrir (10:11):
And before we get to Jannesse, just a reminder, everything we discuss is on our website. We have links there Forever35podcast.com. We are on Instagram at Forever35 podcast. Our Patreon is at patreon.com/forever35. Our favorite products are at shop my us slash forever35. Our newsletter is at Forever35podcast.com/newsletter. And you can call or text us at (781) 591-0390 and email us at Forever35podcast@gmail.com. And here is Jannesse. Janesse, welcome to Forever35. We are so excited to have you on the show.
Jannese Torres (10:53):
Thank you so much for having me. I'm super excited to talk all things money with y'all today. Yay.
Doree Shafrir (10:59):
Yes. Well, as we were kind of chatting before we got started, we have a ton of questions from our listeners, but we do just want to get a little bit from you about yourself and your show. And we always start off by asking our guests about a self-care practice that they have. So we're wondering if there is something that you do right now that you would consider.
Jannese Torres (11:22):
First of all, I think needs a rebrand because oftentimes it looks very superficial like going
Doree Shafrir (11:28):
To get
Jannese Torres (11:29):
Your nails done, go to the spa, and while all that stuff is all good and well, I think real self-care has to do with your finances. And so for me, I've discovered that I am very good at taking care of future me. I have no problem dropping a thousand dollars in the stock market, but if you were to ask me to spend a thousand dollars on myself, I have a very hard time with that. So part of my self-care is actually working on my mindset to make it okay for me to spend money today and not just on future self, because I think some of us, especially the folks who are pursuing early retirement and are really aggressive about our financial goals, we tend to just be really intense with delayed gratification. And you can internalize this feeling of guilt, of spending money in the now. And so that's pretty much what I'm working on is just being okay with today spending and not just focusing on tomorrow spending.
Elise Hu (12:28):
That reminds me of my mom because she's a very good saver, but I'm sort of like, well now you're 68. I mean, what are you saving for,
Jannese Torres (12:37):
Right? Yes.
Elise Hu (12:39):
You're 68 and you're retired. Spend the money, give it to me. That's true. Alright, Jannese, so your whole origin story, for listeners who might not know your whole origin story as a financial expert actually traces to a Cardi B and J-Lo song.
Jannese Torres (12:56):
Yes.
Elise Hu (12:57):
Can you fill us all
Jannese Torres (12:58):
In? Absolutely. So I like to call these my shower moments. I feel like the most brilliant ideas come when you're listening music in the shower. And so I was listening to the Cardi B and JLo song Dro and the chorus goes Jo Dero, which translates to I Want Money. And at that point I had been listening to personal finance podcasts for three years, but I had identified that there was a gap in the market where there was just not a show specifically catered to Latinas and women of color that were talking about things like investing, entrepreneurship, debt, freedom. And I had been thinking about a show, but it's like, sure, okay, yeah, everybody starts podcast, whatever. And it wasn't until I heard that song that I realized, oh crap, that's the name of the show.
Doree Shafrir (13:45):
Yeah, love.
Jannese Torres (13:45):
And I literally ran out of the shower, hopped on my computer, did a quick Google search, realized that nobody had taken it, snatched up the social media handles, Googled how to start a podcast, and within a week I had launched the show from the closet of my bedroom. Love it. Love it. And here we are, six years later, over a million downloads, an incredible community of people that listen over a hundred different countries, a book deal over 200,000 followers across social media platforms, all from the chorus of a song
Elise Hu (14:22):
And creator economy. Baby, you're
Jannese Torres (14:25):
Really maximizing. Absolutely. Who knew when I was growing up, I did not realize you could have your own career that you manifested out of thin air.
Elise Hu (14:34):
Yeah, well I'm sure it's more than just manifesting because you do a lot of work for it too. Absolutely.
Doree Shafrir (14:44):
Alright, well let's get into some questions from our listeners. We've gotten a bunch of questions from listeners these days, but also I feel like over the years about side hustles and just like we'd love to hear from you just ways that people have brought in extra money, whether it's like creative or super boring, what sticks out to you?
Jannese Torres (15:15):
I think first and foremost, there's not a lot of clarity for people on what a side hustle is and what differentiates that from just a part-time job or an extra second job. For me, I feel like a side hustle is this unique thing that you're merging the things that you're good at, but also the things that you're curious about or you're passionate about and then figuring out a way to monetize it. I don't think side hustles are one of those things that you just do to make extra money. I think it really is an avenue to explore things that you might be curious about that maybe you just don't get to do in your daytime career or you didn't formally go to school for it, but it's something that piques your curiosity. And so for me, side hustling has been primarily in the space of content creation.
(15:57)
I've been doing it for over a decade and as a blogger now as a podcaster, social media influencer. And so I like to tell people kind of start with what are you good at? Both from a professional standpoint and a personal standpoint because you can make a side hustle out of cooking, sewing, painting, singing, dancing. It doesn't just have to be the thing that you do at work. Kind of make a list of all those things that either you're really good at, the things that people ask you about all the time, who are you the go-to person for maybe all the best restaurants in New York City. All those skill sets can potentially turn into a side hustle, whether it's something that you sell as a service, you could teach folks through digital courses or downloads, eBooks, workshops, speaking engagements. I really like to tell people the side hustle is easiest to start when you're not physically selling a product. You're not having to buy inventory and build this thing. You can start with selling what's in your brain and selling your talents. I think that's a great way to start.
Elise Hu (16:58):
Okay,
Jannese Torres (16:59):
Great advice.
Elise Hu (17:00):
Alright, we have so many questions. Here's another, as someone who is not yet forever 35, but trying to be more mindful of my finances, I wondered if you have any tips for finding a good accountant? I have an especially strange income and tax status and none of the free online tax calculators really know what I'm supposed to do. Plus I would love to be more proactive about investing and saving money for the future, but it's difficult to figure out what is actually realistic to save in this day and
Jannese Torres (17:31):
Age. That's a great question and I think it's going to require some research and some nuance because it's not a one size fits all thing when it comes to hiring a financial professional. And that includes accountants, especially if you're in the creator economy. You make money in ways that are just not traditional or newer in the sense not every account is going to understand your business model. And so I like to recommend folks make sure that the person that you're considering has experience working in the arena that you are making money in. So for me it was important to find an accountant that understood the creator economy because we tend to have really weird income streams and we tend to have more than one. So it's not just like a traditional mom and pop business revenue model that's very simple and not everybody gets it. My first accountant was like, you make money doing what the hell's a blog? So
(18:23)
Just having to explain to someone how you make money is part of the battle that you have to wrestle with when it comes to figuring out who's going to be your best advocate. And so I like to do my own research, go on Google, Instagram, LinkedIn. There's a lot of different places you can go to find folks who are niche accountants in specific areas. And if all else fails, like talking to your friends, talking to colleagues, maybe you go to conferences, trade groups, network with people and see who they're working with too. Because nowadays there's a lot of folks who are running side hustles even part-time and might have professional support that you don't even know about. So talk to your network for sure.
Elise Hu (19:07):
Yeah, actually to this particular question, I believe the context around it was that she worked abroad, she's an American citizen and pays us taxes, but worked abroad. And I had a similar situation and what I recall is that when I was kind of working internationally or being taxed in a foreign country and then in the US, I had a different kind of accountant back then than I do now. Now that I live in the US and work as primarily a freelancer. It's true. And so yeah, you should find the right accountant for the type of problem that you need to solve Absolutely world that you need to understand.
Doree Shafrir (19:42):
So we're just going to take a short break and we will be right back. Jannese, when you were talking about your self-care practice, you were talking about spending money now versus waiting to spend money, but we get a lot of questions about retirement and retirement planning and so I wanted to read a couple of them and see kind of what your thoughts are, especially in this time. I think of great economic uncertainty. So this specific question is from a listener who writes, I'm considering pulling from my 401k to give myself a temporary financial cushion just enough to get through the next few months while I stabilize things. I know there are tax penalties and I'm not sitting on a massive 401k, but it's enough to help a bit. I also don't have much in savings. We just bought a house last year, which had been our big savings goal, so we're still rebuilding. My question is pulling from a 401k in this situation a terrible idea or it make sense as a short-term relief option. Are there any ways to reduce the penalties or taxes on an early withdrawal during times of economic hardship?
Jannese Torres (20:56):
That's unfortunately I think a scenario that a lot of people are finding themselves in. I do want to preface this by saying we, especially millennials, have pretty much grown up in financial crisis. I grew up, I graduated into the great recession and I feel like we haven't gotten a break, we haven't gotten any breathing room. So this idea that we're in this unique turmoil, this chaotic time, I would argue that that's maybe not necessarily the case. When you think back to the Great Depression and World War I and two, there's always just been crazy shit going on in the world. That's true. And we just got to figure out how to navigate it based on where we are in life and what your goals are. So I want to kind, let's relax because crazier things have happened and
(21:44)
Maybe crazier things have yet to come, but we don't know. That being said, there are opportunities and circumstances that could qualify you to take money out of a 401k without a penalty for financial hardship. And typically you're going to have to demonstrate what that hardship is. It could be like a job loss, it could be like you're become permanently disabled because you can't work. There are different circumstances. And so it's important to talk to an accountant, to a tax professional who can help you understand what those implications are and if you can make those withdrawals without a substantial financial penalty. But I do think that if it, it's sounds like it's a short-term thing, there might be a solution that doesn't involve withdrawing money. I would see are there opportunities for you to supplement your income through some gig economy, work through a side hustle, through maybe getting a part-time job that maybe doesn't help you pay all the bills, but can help you at least bridge some of the gap just because there is something to be said about letting your money sit there and continue to compound, take advantage of the growth that comes from the stock market.
(22:49)
Every time that we withdraw a dollar out of these accounts, you're basically withdrawing a dollar away from your future self and it's hard to get back that growth when we think about time being on our side now. So I would say kind of leave that as the last resort. There could be other opportunities for you to shore up your finances, especially if it seems like it's going to be like a short-term thing.
Elise Hu (23:10):
Yeah, I believe the situation was that she was recently furloughed without a return date, so it's functionally a layoff. I'm wondering if that can help with the reduction in penalties for withdrawal from a,
Jannese Torres (23:24):
I had have to see what the IRS rules would be for this year because I know during COVID they made a lot of exceptions for folks to withdraw money. That might not be the case anymore, but I'd also say if you're furloughed without a return date, you should definitely be eligible for some unemployment assistance through your state. So definitely make sure that you're taking advantage of that. Because a great example that we dealt with here in Florida recently was a lot of folks were inadvertently laid off because of the hurricanes. If your restaurant gets destroyed and all of a sudden your job disappears, you actually do become eligible for unemployment assistance because you're basically involuntarily unemployed because your place of employment doesn't exist anymore. So you could have opportunities for state help. So I would investigate that as well.
Elise Hu (24:09):
Okay, very good.
Jannese Torres (24:10):
Alright, next retirement
Elise Hu (24:11):
Question. If you are contributing to an IRA or retirement account, how do you make sure that when you put money in it's being used to buy stocks and not just sitting as cash in your account? I have wondered this for so long and should probably call my brokerage firm, but thought that maybe other people have this question
Jannese Torres (24:30):
Too. This happens all the time and the telltale sign for me as a financial coach is when somebody's like, I put $5,000 in my IRA like five years ago and it doesn't do anything. It just sits there. It's still $5,000. I'm like, oh god, that makes my heart hurt. Because all that time you could have been growing that money. But see, people think that an investment account is like a bank account where with a bank account you literally put your money in there and it sits there with an investment account, there is that additional step, not only are you putting the money in there, but you have to actually choose investments that you're going to purchase with that money because that's where the actual growth comes from. So oftentimes people forget about that third step and that's why you're not seeing anything as far as growth in your account.
(25:16)
So I think the great place, especially for beginners to start where they're thinking, I don't know what the heck to buy, what are all these symbols mean? I have no idea what to purchase. I like what's called a target date fund. Target date funds are set it and forget it investments that are associated with the date that you want to retire. And when I say date, like the year, so let's say you want to retire in 2055, you would go to your brokerage site, do a search target date fund 2055 and select that as your investment. You can set up automatic deposits and automatic purchases of that every time you get paid or whatever frequency you feel comfortable with. And it is the ultimate set it and forget it investment vehicle because what it does is as you age, it changes the makeup of stocks and bonds, kind of the allocation that you have in your account to make sure that you are invested properly and appropriately for the risk that you should be associated with your age and with your retirement goals. So I love a target date fund for beginners who just don't want to be worried about am I buying the right thing, am I buying the right stock? It's a very easy way to start. Great advice.
Doree Shafrir (26:28):
Okay, another investing related question. Is there a way to invest my money that is one free while also being hands off? I don't want to manage the money FDIC insured and doesn't require thousands of dollars two available well before retirement. I feel like there's a catch to any investing option I consider I'm already investing in retirement and just want a secure place where I can make my money beat inflation. I don't think my bank offers a way to do this.
Jannese Torres (26:54):
Okay. Well the first thing I would recommend is if you want FDIC insurance, you have to be using a bank account because FDIC only covers banks. It does not cover brokerage firms. There's a separate entity, the SIPC, which is what oversees investment firms and kind of gives that same level of production.
Elise Hu (27:12):
Okay,
Jannese Torres (27:13):
So that's that. One thing that I do love is a high-yield savings account. So for anybody who doesn't know what a high yield savings account is, it is basically typically an online only account that you can put money in. There are no restrictions around how much you can put in or when you can withdraw it or for what purpose. And typically you get about 25 times the national average from an interest rate. And so right now a high yield savings accounts are paying around like 4% interest. So it's a nice way to just have your money growing, not really exponentially, but at least it's safe and it's earning some interest. If you want some higher returns, you're definitely going to want to have to be invested in the stock market. I like a regular brokerage account for investing for all purposes. What's a regular brokerage account?
(28:02)
So a regular brokerage account is the most fundamental type of investment account that doesn't have any restrictions around when you can withdraw it. It's not a retirement account, it is just an investment account. So the money that you're putting in there can be used for any purpose you can save for a down payment on a house just to grow extra money. And so there are no restrictions because there are no restrictions about what you can use the money for. There are no tax benefits the way that there are for retirement accounts. There's no tax sheltering per se. So I love a brokerage account. And as far as free investments, a lot of people don't know that Fidelity offers what are called zero fee mutual funds. And so this is a pioneering move in the investment industry because typically most investments will have a fee associated with them, but Fidelity has created 0% expense ratio funds and they start with the letter or they end with the letter Z. So you can go on Fidelity's account type in 0% expense ratio funds and there's ones that invest in the US market in international markets, in bonds, in small startups, mid-cap companies, and that's a way to literally invest in the stock market with no fees. It's like the best hidden secret in investing.
Elise Hu (29:22):
Yeah, thank you for sharing and not gatekeeping this. I love that. I had no idea.
Jannese Torres (29:26):
Yeah, when I found out about them a couple years ago, I was like, why would they do this? But it makes a lot of sense because it's almost like this is how they entice you to join their firm and then hopefully you go and sign up for other products that have some fees associated with them. But I mean you can really invest for free. And the cool thing about mutual funds is you can set it and forget it. You can set these up to automatically invest and just kind of let your money grow.
Elise Hu (29:51):
Love that. Okay. This is a listener question that has nothing to do with investing, but more to do with just life. She wants to know the best or realistic ways to cut grocery spending without sacrificing food quality and health. For context, she's part of a family of six who eats almost all their meals at home and does all the right things, meal plan and make a list that we rarely deter from shop sales where possible and buy stuff. We use a lot of in bulk at Costco and use up their leftovers, but she says she still can't seem to get her grocery bill below $500 a week. Well,
Jannese Torres (30:33):
Feeding six people is not a small endeavor. And so I would first say, let's just give ourselves some grace because everything is more expensive, especially after COVID. So I think you're doing amazing, sweetie. That's number one. Okay. Number two, I have found that the biggest game changer for me has been grocery pickup. Why?
(30:56)
Because when you walk into a grocery store without a plan, you usually don't know what you're going to spend until you're at the cash register and you're getting rung up. But with the grocery pickup, you can actually see the bill before you check out and you can remove things from your cart if you want to stay within budget. And typically this pickup service is going to be free. You can do it at Walmart, you can do it at Target. There's a bunch of different places that you can go grocery shopping for free with the pickup option. And so I think the most important thing is see what you're spending before you get to the cash register. So you're not surprised. For me, that has been the biggest game changer in how I stay on budget because I can literally see like, oh wow, we don't need that $25 pack of steak, let's save that for next week. Whereas you really don't know what you're going to be spending when you go and do it the traditional way.
Elise Hu (31:46):
Yeah, good point. Good point. Jannese, I'm just curious, what is your approach to budgeting for your household or your family?
Jannese Torres (31:54):
So I have evolved in my budget methods as my goals have changed. When I was pursuing debt freedom, I was very meticulous about tracking where every dollar goes. Now I'm a little more flexible in my budgeting. I like to take the pay yourself first approach. And so essentially what that looks like is I like to fund future me before I fund current me. And so what that means is I am allocating money towards my savings and investing goals before I'm spending money on anything else. So it's almost like you're giving yourself a boost for the future and then you're putting the reins on your spending in current time. And what that has helped me do is really get on a path where I'm going to be able to retire at least a decade before traditional retirement age because my investments have been my priority for such a long time and it forces me to just work with the bucket of what's left versus spending everything and then hoping that you have some money left to save and invest at the end. So I think when you prioritize the saving and investing first, it makes you kind of more mindful about holistic budgeting versus Oh, it'd be nice if we could save at the end of the month.
Elise Hu (33:05):
Yeah, the only way I save is because it's automatically withdrawn.
Jannese Torres (33:10):
You got to force it sometimes. So I
Elise Hu (33:13):
Never see it. I'm like, oh, I guess this is all the money I have.
Jannese Torres (33:19):
I mean, you are playing into how human nature works. Most of us are just not going to have the discipline to be deliberate and make those manual contributions and set aside that money. So the more we can just take the decision away from ourselves and just set it and forget it, the more likely you are to hit those financial goals.
Elise Hu (33:37):
Okay. Let's take a break and we'll be right back.
Doree Shafrir (33:47):
I'm wondering what sort of general advice you have for people who are trying to get out of debt. I know some people follow the Dave Ramsey snowball method. There's all these kind of catchy ways, guru, that I think guru type things that you see on TikTok or whatever. And I'm wondering if you have just sort of general advice on this.
Jannese Torres (34:12):
I think the biggest hindrance for a lot of folks to even start a debt-free journey is not actually knowing how much money they owe and to who. I think there tends to be a head in the sand ostrich behavior sometimes when we
Doree Shafrir (34:23):
Know
Jannese Torres (34:24):
Because it's just easier to just deal with each bill as it comes in versus seeing the real picture. And so I really recommend to folks to get an entire bird's eye view of what's going on with your finances by calculating your net worth. I love a tool called Empower. It's a free dashboard that you can link all of your accounts to and you can see what you have in investments, what you have in debt, what you have in savings, and it gives you just a map of your finances. And once you know that like, oh, okay, I owe this much for student loans, I owe this much for credit cards, here's my car note. And just being able to see everything in one place I think is how you start to be able to understand what's going on and then formulate a plan. And so for me that was key in understanding what my financial picture was and how much I was going to need to pay off to certain accounts to become debt free.
(35:18)
One method that I don't think enough people know about, and I actually write about it in my book, is called the debt lasso method. So the debt lasso method has a caveat. It is for folks who have decent credit because it involves opening a new credit card that has a promotional 0% a PR, and using that new credit card to consolidate other credit cards that you're paying 25% plus on interest. And so that's actually how I got out of debt. I lassoed my credit card debt onto a new card that had 21 months of zero interest. I made a plan to pay off that debt in 21 months, which is the key, right? You need to be able to take advantage of that promotional period by having an actual plan of what am I going to pay each month so that I don't end up paying any interest on this? And I think it's a really underutilized way that if you have decent credit but you're just trying to make headway, especially on expensive credit card debt, this can be a very, very big opportunity for you to get out of debt in a way that is realistic and that won't cost you any money besides maybe a small balance transfer fee of two to four, two to 5% that the credit card will charge you to move your balance to that new card.
Elise Hu (36:35):
Yeah. Where are you on the general advice that we should have about two to three months or is it three to six months of living expenses for a rainy day?
Jannese Torres (36:46):
Yeah.
Elise Hu (36:47):
Do you do that or?
Jannese Torres (36:48):
Well, I think recommended. I think the blanket advice is not necessarily applicable to everybody because you have to understand your own career field. How quickly would you be able to find a new job if you're self-employed like me, I don't think three to six months is enough. I think you need to be closer to nine to 12 because there can be terrible years in business. You just never know what's going on. So I think it's important for folks to know their personal situation, know how quickly you could potentially be able to get back to work if you were laid off or things like that. But three to six months I think is the bare minimum for most people to just be able to weather a short-term financial emergency. But the more the better honestly. And it's not even just a good reason to save for an emergency. There's a lot of folks who want to potentially make a career pivot or take a sabbatical or maybe you want to take a couple years off to raise your baby. There's a lot of reasons why we would want to take a break. And when you have that financial runway of a freedom fund, which I like to call it because it's a little more empowering than the emergency fund,
(37:58)
When you have a freedom fund, you can kind of do whatever the hell you want and know that you have the money to do so. I think we need to rebrand the emergency fund because there's a lot of other reasons to spend money and to save money other than just emergencies.
Elise Hu (38:12):
Okay. Okay. Sorry, I'm going to tack this on because I realized I left something off from a listener. Where do you start in midlife if you've been lazy with retirement planning previously? She's a teacher with a future pension, but it's probably not going to be enough.
Jannese Torres (38:29):
Yeah. Well, the fact that you have a pension is already giving you a headstart. So I think it's important just acknowledge that you do have something, you're not starting at zero. But unfortunately, the reality of it is, is that the older you are when you start planning for retirement, the more money you're going to have to earmark and throw at the market in order to make up for all of the lost time. And so I like using a calculator on investor.gov to do some calculations where you can basically put in how much do you currently have saved? When do you want to retire, how much can you contribute on a monthly basis, what's your estimated growth? And it'll tell you basically when can you retire based on your financial goals. So I think that's a good place to start just to see what that number is.
(39:16)
And then it might require some creative planning. One of the things that a lot of people consider in retirement is maybe moving somewhere where the cost of living is less. I think it's a lot more common for folks to be considering becoming expats and living out of the US for retirement. Mexico has become a popular place for that. Other parts of the Caribbean, Latin America, Asia. So it is a real thing that your biggest expenses in retirement are going to be healthcare costs, which are, that's not what America's known for. It's not affordable healthcare and we're not known for an affordable cost of living in period, but
Elise Hu (39:56):
Healthcare is especially egregious.
Jannese Torres (39:58):
Right. Okay. So just knowing that, I think it is a good idea to just consider what are all those options beyond money? Can your location be something that you get creative with? Maybe you're planning on living in a multi-generational household where you live with another family member. I'm loving the ideas of family compounds where the family just buys a property or two on a big piece of land. I think it's going to require creative planning is my message. And just don't be afraid to confront the numbers because yes, they can be scary, but there's always a way to make 'em work.
Elise Hu (40:32):
Alright.
Jannese Torres (40:33):
Alright,
Doree Shafrir (40:34):
Janus, is there anything else finance related? Are there questions that you get a lot that we have not addressed that you feel like our listeners should be looped in on?
Jannese Torres (40:47):
Yeah. One of the things that I think there's been a lot of folks wrestling with this idea of, am I contributing to exploitation or am I part of the problem as an investor in a capitalist system? And that's a real question, that's a real existential dilemma that a lot of people think about and it does encourage some folks to not invest. But what I say is this, we didn't get to choose the system in which we're born into. The only thing that you can do is kind of understand how you can use the system to create financial security for yourself and for your loved ones. And so I don't think that it makes sense to kind of opt out because that's just not going to be beneficial to anybody. And I do honestly think that the more diverse pool of investors that we have, the more women we have investing people of color, we can change the system from within when we are majority shareholders of these companies.
(41:46)
You can hold them to a higher standard when you are the ones in power. And so I really like to help folks reframe that. In order to change the system, you have to be part of it. And as long as you are being mindful about the companies that you support and where you're deploying those dollars, I think that we can be a force for good. So that's just some encouragement I want to give folks because there's a lot of questions about am I part of the problem? And I think the only problem is having women and people of color continue to struggle financially and continue to perpetuate these, the wealth gap and the pay gap and not being able to break these generational cycles. That for me is really important. And until we figure out a better way to do it economically, we kind of have to work with the cards that we're dealt with.
Elise Hu (42:37):
I love that answer. And I love the advice to invest your values too. I am a Costco shareholder.
Jannese Torres (42:44):
Absolutely.
Elise Hu (42:44):
And especially so after the way that the shareholders stood up against anti DEI policies from activist shareholders. And so this is why you can kind of speak your voice with your money too. I invest in what is the type of fund, it's like
Jannese Torres (43:01):
A social E-R-G-E-S-G-E-S-G
Elise Hu (43:03):
Funds. And so I explicitly don't invest in extractive industries like oil and
Jannese Torres (43:09):
Gas
Elise Hu (43:10):
Or there's some industries that you can carve out and say, this is a no-go for me. And I think that's a great thing to remember too.
Jannese Torres (43:20):
Absolutely. And I think that's one of the reasons why it's important to be an educated and an empowered investor because oftentimes when you do hand off that money to a financial advisor, they're just not going to have the same thought process for you. And you could be inadvertently investing in companies that build bombs or guns or tobacco or whatever. And if those things don't align with what your money's doing, then you are kind of part of the problem. So it's important for you to educate yourself to what exists, what your options are, so that you can come from a place where your money is aligned with your values.
Elise Hu (43:50):
Very good.
Jannese Torres (43:51):
Alright, Jannese, where can listeners find
Elise Hu (43:53):
You?
Jannese Torres (43:53):
So you can find me wherever you're listening to this podcast. My podcast is Yo Ro and we're everywhere. And also on YouTube, you can find out more about me@joderopodcast.com. And yeah, this has been so much fun. So thank you guys for the invite.
Elise Hu (44:08):
Yeah, we have loved having you on. Thank you so much, Jannese, for taking so many of our listener questions and giving us good sound advice
Doree Shafrir (44:18):
And just that was amazing. Just
Elise Hu (44:20):
Schooling me. There are so many things where I'm like, oh yeah, okay.
Doree Shafrir (44:24):
Seriously, Elise, have you been sleeping one hour later?
Elise Hu (44:28):
I have tried to go to bed one hour earlier.
Doree Shafrir (44:32):
Oh, okay. So I've
Elise Hu (44:33):
Made up for the sleeping issue on the other side of the clock because as it turns out, after getting up at six o'clock in the morning, way too early for me in the morning for the past school year, your body kind of gets used to it. And now it's hard for me to wake up later. And so to make up the sleep, I'm just trying to go to bed after Ava does when my older one goes to bed, which is about 10. And that's been better for me. I feel pretty good. I feel pretty good.
Doree Shafrir (45:04):
Going to bed early is such a life hack.
Elise Hu (45:10):
What about you?
Doree Shafrir (45:11):
Last week, my husband and I were going to start to dig out. We have made a little bit of progress. I think it's going to take a little bit more time. And then also relatedly my intention this week we had a death in the family, so I am leaving tomorrow to go to the East coast. So things have been sort of thrown into flux there. And my intention is to just make it through. Who did? I'm sorry. Do thank you. We had a guest once who remember we asked, what's your self-care practice? And they were getting through the day.
Elise Hu (45:52):
Just getting through the day. Yeah. She had had an awful year and she lost her mom.
Doree Shafrir (45:56):
And I think that was Nicole Hill from our ancestors were messy, right?
Elise Hu (46:02):
Yeah. Yeah, I think so.
Doree Shafrir (46:03):
So anyway, I'm feeling that. I'm feeling that right now. Things already felt sort of precarious and then this just kind of threw another wrench into the whole situation.
Elise Hu (46:16):
Yeah. I'm sorry. Thank you. I'm glad you're going to go and be there with your family members.
Doree Shafrir (46:21):
Me
Elise Hu (46:22):
Too, too. All be able to be in community with each other.
Doree Shafrir (46:26):
Yeah. What about you? What do you have going on this
Elise Hu (46:29):
Week? I have the kids finally in a camp all week. So I am going to, I have to unpack my parents got a storage cabinet or a storage unit worth of stuff sent to me because they don't think they're going to revisit it and they don't want to keep the storage unit and keep paying for it. So I'm going to dig out of stuff so I'm not digging out of paper work and financial spreadsheets, but I'm digging out of just actual stuff that has been unloaded into the back house. So my friend Justin is flying in from Austin on Thursday and he's always helpful with a lot of these kinds of manual tasks. So I'm going to welcome him to LA and set him on some tasks. Oh my gosh, what a dream. Yeah, we're going to go through things and figure out what to save and what to take out to bulk trash.
Doree Shafrir (47:27):
So that sounds
Elise Hu (47:29):
Wish me luck this week. I'm
Doree Shafrir (47:30):
Digging out luck. Honestly, that sounds like that will be very satisfying. I
Elise Hu (47:33):
Hope so.
Doree Shafrir (47:35):
Godspeed. All right everybody. Thank you for listening Forever35 is hosted and produced by me, Doree Shafrir and Elise Hu, and produced and edited by Samee Junio. Sami Reed is our project manager in our Network Partner is Acast. Thanks everyone. Talk to you later. Bye.