3670: How Do You Get Comfortable Investing Your Savings? by J. Money of Budgets Are Sexy on Investment Advice

[00:00:00] This episode is brought to you by Accenture. When your advertising operations fall out of sync, everything else follows. Spotify and Accenture are working together to reinvent the rhythm of ad sales, using automation, analytics and smarter workflows to simplify campaign delivery and access better data across the business. The result? Less time spent on operations, more time connecting brands with the moments and fandoms that matter most. Learn more at Accenture.com slash Spotify.

[00:00:31] This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome? That's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required compatibility and availability varies 18 plus.

[00:00:54] This is Optimal Finance Daily. How do you get comfortable investing your savings? By Jay Money of BudgetsAreSexy.com. And I'm Justin Malek. I read you articles every single day of the year with permission from the authors to help you save more, make more, all that good stuff. So with that, let's get right into it as we optimize your life.

[00:01:22] How do you get comfortable investing your savings? By Jay Money of BudgetsAreSexy.com. Are you really good at saving, but not so much investing? If so, you're not alone. Meet Dave, our new friend who asked for some help in this area and to whom I shot some thoughts over. Putting this out there for anyone else, it may help too. Here's what Dave sent in. Quote,

[00:01:50] I'm new to your podcast and hear you guys talking about net worth and where your money is. I'm currently sitting on savings and haven't put my money somewhere. I hesitate moving money with the idea that I might get fired or need the money to pay for emergency situations. How would you approach that? I know I'm doing this wrong and should be investing it. There's just something comforting about having money in the bank. End quote.

[00:02:16] I didn't have the heart to tell him I quit the podcast at episode 26. I love it that they're still up in the archives though. But I did do my best to answer him as real as I could. Here's what I wrote back. A few things. Number one, you can never go wrong holding on to cash. Who cares if you don't earn much off of it? If it makes you comfortable or happy or both, keep doing it.

[00:02:44] Number two, that being said, yes, financially, it's much smarter to invest it somewhere to help that cash make more cash babies. And their cash babies make babies and so on and so on. I personally go the index fund route with a look for the way future decades ahead. But others like to put it into CDs or individual stocks or even real estate. Pros and cons to all of it in terms of risk and reward.

[00:03:12] But there are options out there and I guarantee you can find one you'd be comfortable with once you spend some time researching. And number three, the biggest question is how much money we're talking and how much you need for feeling safe. As well as how much you spend as that can be the matter of having one month of security or one year of security.

[00:03:35] For me, anytime I get a big chunk of money, I look to see if I have any debts and then pay that off right away. Credit card debt, loans, maybe mortgage depending on how much we're talking and your strategy. And then I move to my emergency or comfortable fund and see if that's topped off. If it is, I move on. If not, I fill her back up. And after that, go to maxing out all my retirement funds, 401k, IRA, and so on.

[00:04:06] Then, if you have more after all that, would be a blessing. I move to extra investing, which is where most people turn to the stock market or real estate or whatever else they like, gold or silver. I'd also make sure the money for my kids is set up too, like for 529 college savings accounts. Again though, it depends on how much we're talking and what your overall goals are.

[00:04:30] If you're trying to retire early, it's probably going to be different than if you wanted to go out and start your own company one day. But either way you go, if you want your money to grow exponentially without much work on your behalf, you'll definitely need to put it into something at some point. Start small and get a feel for it. You don't have to rush into anything. Make sure you have a decent chunk saved up to feel comfortable or safe, and then take it slowly from there.

[00:04:59] Check out some ways to micro-invest, like financial app Acorns, which will automatically round up your transactions and drop the difference into an investment portfolio for you a few pennies at a time. I've been using them for a year and have $495.25 banked so far, and haven't missed a single dollar. Ultimately, you'd want to be investing way more than that, but this would help get your feet wet,

[00:05:25] and you can also up the settings to invest even more each month as time goes on, if you'd like. Also, make sure you're getting your 401k match if you have the option. That's free money, and it's all automated, helping you invest without even thinking about it. Not to mention saving on some good taxes up front, too. Load it up and take a break from saving for a while. Even without matching, it can be an easy way to invest more.

[00:05:55] HR can help with this, as well as what funds to invest in based on your comfort levels or goals. There's even super conservative options in there, like cash, too, though I'd recommend the other options, since you're already cash-heavy. At any rate, there are tons of ways to get started growing your money. Just take your time, and you'll be fine. And again, it's not the end of the world hoarding some cash. Hope this helps.

[00:06:21] I didn't put it in there, but the good thing is that if you've managed to save a good chunk of money, you've already done the hardest part. Another nice thing about holding on to cash is that it gives you tons of options, not only for growing your wealth, but from staying out of future trouble, too. This is why I don't have a problem with people stacking up all their cash for a while.

[00:06:45] It's not optimal in a return sense yet, but wow does it put you in a good position for future opportunities. As Mark Cuban once said, You aren't saving for retirement, you are saving for the moment you need cash. Cash is king for those wanting to get rich. For any of you who've stashed some savings aside, you're doing great. Pat yourself on the back, and then slowly start testing the waters from there.

[00:07:19] You just listened to the post titled, How Do You Get Comfortable Investing Your Savings? by J. Money of BudgetsAreSexy.com I'll be right back with my commentary. Support for today's episode comes from Square, the system powering what feels like half the places I go. If you've ever tapped to pay and thought, whoa, that was fast, it was probably Square. Payments, point of sale, inventory, payroll, invoices, all connected in one system.

[00:07:46] My favorite bagel spot down the street runs on Square, and businesses that use it just feel more put together with quick checkout, easy receipts, loyalty points I didn't have to sign up for twice. And on the money side, that's what I like. No contracts, no hidden fees, and you can see sales in real time. Sellers using Square online earn 36% more revenue on average. If you're starting a business or running one that deserves better tools,

[00:08:14] Square helps you sell, manage, and grow without slowing down. Right now, you can get up to $200 off Square hardware at square.com slash go slash OFD. That's S-Q-U-A-R-E dot com slash G-O slash O-F-D. Run your business smarter with Square. Get started today.

[00:09:03] Learn more at Accenture.com slash Spotify. Thank you to Jay Money. I really liked how reassuring this one is, because I think a lot of people feel exactly like Dave. They're great at saving, but the idea of actually investing it feels scary, so the money just sits there. And Jay's first point is one I don't hear enough, that there's nothing wrong with holding onto cash for a while.

[00:09:30] It's not optimal in a pure return sense, but the peace of mind is important. And like you said, you've already done the hardest part just by saving it. The one thing I'd emphasize is the 401k match, if you have access to one through work. That really is about as close to free money as it gets. You put in a little, your employer adds to it, and it all happens automatically in the background. So if there's a match sitting on the table,

[00:09:59] it's at least worth looking into. And I like his advice to start small. You don't have to move everything at once. You can dip a toe in, get comfortable, and go from there. That's really the theme of the whole thing, comfort. There's no rule that says you have to feel confident on day one. So if you've got some savings in the bank, and you've been meaning to do something with it, maybe just take one small step this week, and let yourself get comfortable with it.

[00:10:28] So thank you to Jay for this one, and thank you for being here every day and optimizing your life along with me. Have a great rest of your day, and I'll see you tomorrow as usual, where optimal life awaits.