The 3 Most Important Investing Principles

Brought to you by the EveryDollar app. Start budgeting for free today. So I've changed positions in the company that I've been working for for the last couple of years and I'm making a significant amount of money over what I was making initially and it's kind of just piling up in the bank. I haven't invested any of it aside from just the company 401k which comes out automatically and I'm pretty illiterate when it comes to these things. So I've been back and forth reading different things online about what I should be doing with my money. Never really done anything with it thus far because I haven't had any professional advice just what I've read online. So I'm hoping that you can maybe guide me in a direction of where I should be putting my money to work for me as opposed to earning less than one percent interest Well, the good news is it's not rocket science. It's not that hard. This is not like learning a foreign language. It's much easier. And so it is a bit of a foreign language but you just have to learn the vernacular and then you'll know what to do. What do you do for a living? So I'm in sales. Good. What do you make? By myself or my wife. Your household income. Why is this money piling up? Probably just north of 200k gross between my wife and I. Good for you. Well done sir. How much money do you have saved? Shane, you said it's just sitting in the bank and piling up. Yeah, so right now I have about 50,000 in the bank. I've only been in sales for the last six months and I probably had 10,000 when I started. So I probably have saved 40k in the last six months. Well as far as investing goes there's two principles that if you'll follow these two principles you'll find your way through and do just fine. Actually there's three but I'll give you two. I'll give you all three of them. Principle number one, don't ever put money in something you don't understand. You have not violated that. Congratulations, you've done very well. I met with an NFL player one time and I sat down with him and his wife and he said, Dave, you're going to kill me. And I'm like, what'd you do? Did you blow all your money? He said, no, I got $10 million. I'm like, well, what is it? Why am I going to kill you? You got $10 million. He said, it's all in CDs. It's horrible. No, that's not horrible. That's so much smarter than all the other people you play football with because they've all blown theirs or put it in their brother-in-law's pizza company that went broke, you know? So, you know, very smart. Don't put money and stuff until you understand it. So I don't care how flashy the TikTok thing is, or what Dave Ramsey says, or what Rachel Cruz says, you understand it before you put money in. Principle number one. Principle number two, plan to go slow. The fastest way to get rich quick is don't get rich quick. The tortoise wins the race over the hare every time I read the book. Okay. And I've read it a bunch over and over. He always wins. And investing, you always win if you're slow and steady wins the race. That's the Aesop's fable. Okay. And then the third thing is don't get financial people in your life of any kind, real estate, insurance, investing, tax, whatever. That sound like Charlie Brown's teacher. I have no idea what you're saying. You might as well speaking German to me. Okay. And if they can't speak to you in such a way that they can teach you, they don't have the heart of a teacher. Then they're just a salesman. They're not a financial person. And financial people are the world's worst because a lot of us are nerds and we like being impressive with our nerd knowledge more than we are concerned that you learn. Sure. And that goes back to the first one. Don't put money in stuff you don't understand. So if you sit down with a financial advisor and you and your wife and your wife says, I got a bad feeling about him or her. Don't go with them. Or if you sit down with them and you leave more confused than when you went in, don't go with them. Okay. They might be okay, but they're not okay for you. Now, now that we've established that we can start talking about some of the cool stuff you could do for investing. Now we teach a process for building wealth that we've taught for 30 years plus called the baby steps. You probably heard of that, right? I do. I have, I actually have your total money makeover book. Okay. So you know, then that we're going to have, you have an emergency fund and have all your debts paid off, except your home before we start investing. Do you have any debt other than your home? Uh, yeah. So just my car or my truck and my wife's car. And how much is all that? Um, total probably 70,000. Okay. We're going to pay all that off before we do any investing. Okay. That's what we call baby step two, if you remember the book. And then once that's done, I want you to set aside three to six months of expenses in for an emergency fund, being out of debt and having the rainy day fund is foundational to keep your investments safe. Your investments. Otherwise I'll turn, you'll pull money. I'd stop your 401k temporarily and knock those car debts out, take all that 40 K and throw it at the smallest car debt. Let's get it all cleaned up. So if you got no payments, but a house payment and you got, I don't know, in your case, 30,000 bucks setting there in a money market account only to be touched for emergencies. It's not a, I want to go on a trip fund. That's one change. I was going to say, open up a high yield savings account. Fairwinds credit union's amazing. Um, but they have a great smart bundle. So put it not in a traditional savings account, but in a high yield savings account. Cause it goes from negative. I mean, basically not even 1% to at least you're getting three to 4% sitting there for your emergency for your emergency fund. Right. And then with no payments, now you start really stacking money. You start putting 15% away in your 401k and Roth IRAs and Roth 401ks. And you can talk to one of the smart investor pros at Ramsey solutions.com and they can help you. They will have the heart of a teacher. They don't get the Ramsey name, but on them, on our website, unless they have the heart of a teacher. We won't, we won't put our name beside somebody that, and if we find out someone I'm doing the Charlie Brown's teacher thing, we fire them and get them out of the system because we are hardcore about this. So if you do all of that, you're going to have so much stinking money. Cause I got to tell you one of the highest paid professions in the United States today is a good salesman. Yeah. It's a, it was pretty night and day. It's about three times what I was making, uh, with this same current company prior to this position. And it's just, uh, had a lot of nights where I didn't really know what we were going to do for certain things, read through your book, paid off some debts, credit cards, uh, medical bills. Um, and now it's, and now we're just at a point where I have too much money and I don't know what to do with it based off of, uh, you know, my own, my own ignorance with, with, uh, with finances. So with investing, with investing, you start investing in good mutual funds and they're real easy to understand. It's 90 to 200 stocks. You look at the track record of the fund that was mutually funded by you, me, and a bunch of other people together. And you go, okay, that, that group of that pile of money has been growing at an average rate of 11% or 10% or 22% or whatever it is. And you look at, oh, it's done that for 32 years. Oh, okay. I feel pretty good about that. That's like buying a house in a good neighborhood. Yeah. And Shane, when you get to that, that 15%, honestly, the investment advice, as you, if you dig into more of what we talk about, it's not going to be a lot of flashy stuff. I mean, honestly, the 15% into retirement, 401ks, Roth IRAs, you know, the standard and anything beyond that is just mutual funds. I mean, index funds, like it's, it's nothing, there's no day trading, no crypto, like there's nothing big and flashy real estate, Airbnb, you know, Airbnb investing. Like there's, you'll find none of that because again, it's, it's quote unquote, not exciting investing advice, but the amount of baby steps, millionaires that are at it have done this and have built wealth slowly over time because it is the most stable way to build wealth versus all the flashiness. Um, so again, it's not, it's not super exciting, but it is consistent. The difference is it actually works. It works. Yep. Create your free, every dollar budget today. 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