Rumba & JOMO-LUFS19

Financial planning is not just about investing, it's about saving. Saving should be the primary focus, as investing is the easy part. The financial industry needs to shift its focus to helping people save and pay themselves first. Saving early and consistently is crucial for achieving financial independence and retiring by a targeted age. A target date retirement fund is a simple and effective investment option for most people. It's important to match the fund's risk tolerance with your own and make adjustments as you approach retirement. Women tend to outperform men in investing because they stay the course and avoid excessive risk-taking. The financial industry needs to prioritize helping people save rather than just providing investing advice. Saving is the hard part, but it's the most important aspect of financial planning. Hello, Catching Up to Fires. This is Bill Young coming to you pre-episode with an update. Becky had technical difficulties, aka her power went out in her house, so you won't hear her for about the first 20 minutes of this episode. Don't worry, she jumps in and loses no time. I was in the world of investing, doing it all day long, yet I wasn't saving. What are we doing? We're out there telling everyone that financial planning is synonymous with investing. No, it's not. It's saving. It's saving, it's saving. We should be talking about saving 90 percent of the time. Investing is the easy part. Remember, the financial world is still thinking that the service that we are providing to people is investing advice. Until we completely overhaul this financial industry to say, no, no, no, no, no. The best advice we can give to people is to help them pay themselves first, as early as possible. It might be at age 50, it might be at age 40, whatever point we're starting, we need to focus all of our attention on helping people get money out of their paychecks and throw it into some kind of investment vehicle. The investing part is easy, it's never been easier. The hard part is the saving, right? The most important number that's going to come out of that financial plan is not some ratio of stocks to bonds. That's not the number. The number is, what should your savings rate be, so that you can retire by a targeted age? This is what we're trying to do in our retirement plans, is to inspire people who feel like the ship has sailed, why even bother? Hi, and welcome to Catching Up to FI, a podcast on mindset, money, life, on the journey to financial independence. I'm Bill, and I'm a late starter. I'm Becky, and I'm also a late starter, and we're your hosts. We're here to help you with your journey to financial independence, no matter where you're starting from. We're going to talk to other late starters, experts, and we'll explore topics related to our mission. Join us as we Catch Up to FI together. Hello, and welcome back to Catching Up to FI. This is Bill Yount with my co-host, Becky Heptig, and we have, as mentioned, our truly exciting influencer and game changer of a guest for you today. As I write this introduction, I'm sitting in our backyard. The brook is babbling, the birds are chirping, and the frogs are croaking. The fish are swimming in the koi pond. There is an explosion of spring color, symbolizing growth and regeneration. The seasons of life and FI are similar. We late starters wake up from a winter of silence, loneliness, shame, regret, and unconscious shock with our money. We pause, we plan, we pivot, and start anew. Spring, summer, and fall follow. Our backyard garden needs tilling, planting, water, sunlight, bees, weeding, and more. We cannot do this alone. Sarah Catherine CFP, aka Lady Splitting Money, is a flat fee only fiduciary financial advisor to all walks of life. The founder of Aptis Financial, a national speaker, author, and co-founder of Save 10, a campaign to empower women to save for life in retirement. She's also a passionate salsa dancer and marathon runner, and like I said, a game changer in the financial literacy movement. She holds a BA from Salem College and an MPP from Harvard University. She'll be the first to tell you, however, that she sucked at math. Sarah Catherine's book, at first Save 10, The One Simple Money Move That Will Change Your Life is a groundbreaking book. She takes the complicated word salad of finance and explains it in simple terms for everyone to understand. We follow her protagonist, Olivia, on her journey to financial independence. While her primary audience may be 18 to 30-year-old women, at the beginning of their journey, this book applies to everyone, including late starters. I recommend it as the first book to all beginners of all ages. My son has read it, and at 23, he is saving 10 to 15% of his gross income into his Roth IRA. This is a proud moment for any parent. I wanna read you a few book reviews and quotes. This is a must read, especially for women entering the workforce. Nasima McElroy, financially intentional previous guest on this podcast. This book that will teach women en route to financial freedom. This is Jim Dolly, the White Coat Investor. Concise and clever and laugh out loud funny, Linda Bessette of Mindful Money. The exact book I want my daughters to read and learn about personal finance, Jimmy Turner, MD, the position philosopher. And finally, this book should be required reading for all college grads. In a world hell bent on telling us to spend, spend, spend, we need more voices like Sarah Catherine's incurring us to save, save, save. This is Diana Miriam, founder of Economy Conference. This is a long introduction, bear with me. I first met Sarah Catherine at the inaugural White Coat Investor Conference in 2019. She spoke passionately on cashflow planning and the tax efficient waterfall. She is my five first love in the financial independent space and has profoundly changed my life. Heck, I even owe my love of sinking funds to her. Sarah Catherine has stepped back from social media and reduced her online presence in order to improve her quality of life with her husband and three children, but she is accessible, empathic, transparent, and honest. I could go on and on, but you want to hear from her. We are incredibly lucky to have her with us here today. You will love her too. Welcome to Catching Up to Five, Sarah Catherine. Let's dive in. Thank you so much for having me on. What a kind introduction. Becky, it's been so great getting to know you through the podcast and live here today. All right, Sarah Catherine, we always start with the beginning. We'd like to hear a bit about your personal, professional, and money script path. Well, like many people, it did not start the way I would have wanted to start in hindsight. It's funny that my money start began after I graduated from grad school and moved back to my hometown in Little Rock, Arkansas. I actually entered the world of finance. Now, I should say it's lumping out a really big piece of my past, which is I joined the Jesuit Volunteer Corps out of college and served the homeless through that organization for a year and then stayed on in the area of homelessness for two more years. And that developed a real passion for public policy, which will be kind of relevant when people kind of hear about why I do believe that we need to have a lot more societal calls for saving. So this is all part of this public policy passion. But when I left grad school and came back to Little Rock, I came into the financial world aspiring to be a sell-side stock analyst. And so what you're doing there is, you get a list of publicly traded stocks. In this case, we specialized in mid-cap stocks and more specifically defense stocks, government services stocks. And you take a list of these stocks and your whole goal is to be right on whether it's gonna go up or down. And what's interesting about that is not so much what the job was, but what was interesting is that here I was in the heart of investing, right? So everyone talks about investing, but I was literally in the middle of the storm of it because our job is to decide what's gonna happen with the stock, predict it, and then sell that information to people who would then make the trades in these mutual funds that are in people's 401ks, that people can buy in their retirement plans. And it's so funny to look back at myself at that time. I was in the world of investing, doing it all day long, yet I wasn't saving. So here I was in the investing world doing that all day long, but I wasn't saving. So I would have a little bit of money, $50 here, $100 there. And I was so focused on buying this next hot stock or this hot stock, but it wouldn't even move the needle on my actual material wealth compounded by the fact that the investments never did well. And I look back at that time and I had been auto enrolled into some small percentage in my retirement plan. And to this day, that is the only money that I accumulated out of that period of time for long-term retirement purposes. But what's interesting is those four years being in that world is really where I started to notice, my goodness, I'm 26, 27, 28, 29. What is happening? What am I spending my money on? And start asking that question. And so it was through that period of time and being able to look back on those four years where I'm quote unquote in the investment world. That is what everybody talks about is investing, yet I wasn't building wealth until I got a good old Excel spreadsheet and the same model that we were using for building out a P and L, a profit and loss on a company, I realized I could build that for myself. Profit being my income, loss being my expenses, right? So building that out and seeing where I was landing. And when I realized that my expenses pretty much nailed the amount of my income, that's when I realized, wow, is it a good idea to go to Starbucks every day? What if we cut that down to once a week? And it was through this process that I could see the power of saving. And it was through that saving that actually led me to get into this world. First of all, as a financial planner saying, my goodness, what are we doing? We're out there telling everyone that financial planning is synonymous with investing. And I'm like, no, it's not. It's saving, it's saving, it's saving. We should be talking about saving 90% of the time. Investing is the easy part. And this is what led to my own path to more aggressive saving, or saving in the first place, really. And then to also taking that as a concept and saying, we need to get this out to people. We've got to stop people thinking is the whole goal. Does that make sense? Absolutely, people take investing first. They want to take care of the math. They don't focus on their mindset. They don't focus on the saving piece. They want to do something sexy. And that's only 20%, 80% of it is your mindset and changing it and saving first. Paying yourself first. It is wild to think of the kind of life I live now that I got to afford because of that decision to save. Because of the fundamental decision to spend less than I made, led to being able to have enough money to live on for several months while I pursued starting my own company, being able to live on that cash and build the company that I wanted to build. It was that original mindset of this is a priority. I don't know what this cash is for, right? When you're saving, sometimes you don't even know what it's for. But trusting that you know that it's going to eventually benefit you and then be able to reap those rewards eventually is really incredible and can't be overstated. I agree. And you're a financial advisor. You're also a life planner, which I think is the more important part of financial advising. Who needs one? Now, I'm not a certified life planner, but I do love that side of, I love that business. I think it's a great idea. But what I think is really important is that people look out at their lives and be able to understand why they are paying themselves first. And so this is not just paying yourself first for some retirement goal. I think that's what people get hung up on. It's like, I'm 23 years old. Why am I inspired to save for stopping work? I'm starting my job. I'm starting my career. Why am I investing in ending my career? I think there's cognitive dissonance there. But when we think about financial planning as not just there's this one ultimate goal we're trying to get to, but by saving now and saving early and not missing so many years like I did, these are the things that I can achieve. I think a lot like your son getting to a 15% savings rate, he's setting himself up to be able to, at the age of 55, maybe if he's not wanting to do that particular career, he can make a job change into something where he's making less money. I see people who save early in their careers and they're able to take a sabbatical, take their kids around the world. I've seen incredible things afforded by people who get this message to pay themselves first early on. And it's not deferring gratitude until age 65 because you can start reaping those rewards at a much earlier age when you start earlier. Yeah, we're gonna eventually talk about late starters, which is our primary audience. The path is no different, but the savings rate is with the delay. Let's come back to the financial advisor piece. Who needs one? And this is accessible to the young saver. I think a lot of people need financial advisors and the kind of financial advisor people need is gonna depend on where they are in life. We focus primarily on physicians who are transitioning out of their residency, their fellowship, their training, and going into their regular job. And so we think that that is the most important time for them to do a financial plan when you're starting to make the kind of money that you're gonna make for a lifetime. What I always tell these physicians is get the money out of your checking account before you ever see it, and you'll never have to make a painful decision again on having to reduce your lifestyle. So we believe in financial planning at these major life transitions because it makes it easier. Now, I have worked on our retirement plan side, which is the side of the business that I primarily work on now. I've worked with folks that have never saved anything, 50 years old, and saying, I've actually never talked to anybody about money. And in a brief conversation, can go from a 0% savings rate to a 10%, and then six months later to a 20%, and then six months later to a 30% savings rate, and realize, oh my gosh, doing this, I'm setting myself up to be able to retire. So there are some people who need more complicated help. And so I think about like a physician who in order to hit their savings rate, they have to have multiple accounts that they set up. You know, they've got their retirement plan at work. They set up a backdoor Roth, or they set up a taxable account, and it's just kind of complicated. So they've got to make sure that they've got the right savings rate or the age that they're getting out, and then putting into the right place. But most people are not making that kind of money. And we see normal people making median income salaries in these retirement plans. And the advantage you have to not needing a financial planner, not necessarily needing to hire a financial planner, is that you can put your entire savings rate into your retirement plan. And then that's it. It's that simple. And the reason I encourage people to think that way is because if you're median income in America and you go look for financial advice, you're going to probably be found or find yourself in the office of someone who is trying to sell you something because you don't have assets to manage. If you don't have assets to manage, you don't get access to that the only fiduciary world. No, no, no. You're put into the world of someone who is going to make money when you go buy their financial product, their whole life policy, whatever it is that they're selling, their annuity. And they're going to say these real like jargon heavy, smart sounding things. And you're going to be like, gosh, they sound like they know what they're doing. This seems like, this is what the wealthy are getting and people like me are not getting. And so you buy into these products and then you wonder five or 10 years later, gosh, I keep putting money into this thing and I don't feel like it's really going anywhere. The retirement plans that 50% of Americans are covered by a retirement plan. This is where people can build significant wealth because you can make one good decision. You can automate that decision of 10%, 20%, 30%. It auto invests you maybe in a target date retirement fund, great funds accessible to most people. And then you can set it and forget it. And then wake up 15 years later at age 65 and say, oh my goodness, I have the choice to retire right now. Isn't that amazing? That is amazing. And there are challenges, drawbacks and advantages to a target date fund. One of the ones I find is that if you set your retirement date 10 years from now, your risks that you need to take probably is a little too little. And you can set it a little further down the road, five years, 10 years. And that way you'll improve your glide path that you probably need to take over the next 10 to 15 years. If you say, start at 50, what do you think? I mean, I think that everybody needs to look at their target date retirement fund and make sure that it matches your own risk tolerance. And risk tolerance is basically reflected in the allocation that you're gonna have between stocks and bonds that you feel comfortable with. It's how able are you to handle the stock market falling and your money falling with it when you're getting closer and closer to retirement. So that's really what you're trying to reflect. And so if you are looking at your finances and looking at the market and you're a disciplined investor and you know you're gonna work until 70, not 65, maybe you have a five year further asset allocation in your target date. So maybe you're choosing a target date fund that's to your point five years later than when you turn 65. And that better matches what you predict is gonna happen for your money and when you retire. So I'm very comfortable with them. I do think that they get very, very conservative as you get into your 60s. And I think people do need to make some decisions about their allocation at that point. But I think that the bigger lesson to me is that you don't have to have complicated investment strategies to do well. And in fact, Bill, you're gonna love this. And Becky, I don't know if you saw this in my book. This is a reminder, the studies out there, the original Berkeley study and many studies from Vanguard and Fidelity, we're seeing that women outperform men in investing. And is it because we're smarter? I don't think so. No, it's not. I think women are better at staying the course, taking an action and not taking on too much risk, not investing in individual stocks, not getting fancy. They keep it simple. Yes. And it's a more fundamental thing. So the cause of wanting to get fancy, the cause of over-trading is over-confidence. So over-confidence leads to over-trading and over-trading is correlated with a lower performance. So it's wild to think that you can take a room full of Ivy League grads and physicians and just some of the smartest people in the world and out there trading and trading and trading and someone making $50,000 a year who puts their money into a simple target day index fund in their retirement plan could end up with a better performance. Isn't that wild? But this is what we're talking about is people don't have to necessarily seek a lot of guidance in order to do well with their money. Remember, the financial world is still thinking that the service that we are providing to people is investing advice. And until we completely overhaul this financial industry to say, no, no, no, no, no, the best advice we can give to people is to help them pay themselves first, as early as possible. It might be at age 50, it might be at age 40, whatever point we're starting, we need to focus all of our attention on helping people get money out of their paychecks and throw it into some kind of investment vehicle. The investing part is easy, it's never been easier. The hard part is the saving, right? Exactly. That's always what I've believed and I have people ask me from time to time, what is the most important thing or where do I need to start? And the conversations always seem to head off into something complicated, something that includes all this jargon that we don't know what people are talking about. And it was so refreshing when I was reading your book to hear you say, saving is the first and most important thing you need to do. That's been sort of what I've been trying to preach all along is, let's get the saving muscle working first. And the investing part can come and it's pretty easy. I didn't know that at first, when we got our life turned around at age 50, I did not know anything about investing. I tried to do it the hard way. I tried to get a financial planner to help me with it. And finally, I've never even heard of index funds. I'm like, where has that been all my life? The idea of an index fund, and it turns out it's so easy, it's so simple. Like you said, it's set it and forget it. So I was just so thrilled to read what you put in your book about, we need to think about saving. Well, thank you so much for saying that. That is exactly it. And we didn't get this message early on, but if you read Millionaire Next Door and then their next book, The Next Millionaire Next Door, if you read the anecdotal, I saved 10% because my dad told me to save 10% or my uncle pulled me aside one day and said, no matter what you do, save 10% of everything you do. It's amazing the power of just telling one person, hey, when you get that first paycheck, make sure you save 10%. And here's the thing, like I get criticized a lot for telling people to save 10% and I'm totally fine with it. I agree. Some people need to save 15. Some people need to save 20. It's really fine. But do you know how much most people are saving into their retirement plans? Oh, I'm sure it's single digits. Whatever they're being auto enrolled at. Oh, okay, okay. So I was in front of a group of resident physicians a couple of weeks ago and I said, how much are you all saving for retirement? And they kind of look around at each other, like, is it okay to say this? And one woman bravely raised her hand. And she goes, well, I think they put us in at 4%. And I happen to know that that was what they auto enrolled at this hospital. And I said, oh my goodness, what a coincidence. What a coincidence. You're all saving 4%. That happens to be the exact amount that you all need to save right now in life. And they're all kind of looking around like, was I supposed to make a decision out of this? Isn't that amazing? Just the auto enroll is telling us what to save. And I don't see many auto enrolls that are 10% or greater. So I would rather err on the side of asking someone to save a little bit too much, because there's some people that could probably save in the single digits and if they do it early enough and make it. I want to give people a number. I want you to know a number, a number, a number. And you know what? If you change that number, fine. But we've got to start conditioning people so that there's not this, oh, remember, you got to pay yourself first. Well, pay myself what? Because if we don't give people a target, if we don't give people a number, then they're just going to either not save and then have to catch up like we did, or they're going to save whatever they're auto enrolled at. Or if you're a physician making a lot of money, maybe you're capping out on what the federal government tells you you can save in that retirement plan and saving nothing else is what a lot of physicians do. We have to have our own pay yourself first kind of backstop for people who are simply not thinking about it early on. But then from a financial planning perspective, when people come to us and say, I want to run a financial plan, the most important number that's going to come out of that financial plan is not some ratio of stocks to bonds. That's not the number. The number is what should your savings rate be so that you can retire by a targeted age. Some people that might be a 25% savings rate. Some people it might be 15. That's the number we need to be focusing on. Okay, so it's a complicated financial planning world. You're one of the fee only fiduciary planners that does flat fees and hourlies. How do we figure out which financial planner is a good fit for us? What questions do we ask? What resources do we use to figure it out? And who do we avoid and not engage with? Also, what should it cost for us? That's a lot of questions, but I know you have the answers. So right now there are people who will fit just really well into the fee only fiduciary world that manages your money, right? You have maybe 500,000, a million dollars in assets. You've never managed your money before. You're about to retire. You're gonna have to take that 401k and put it somewhere. And the thought of managing your own money is really daunting. I think that is a great place and role for a fee only financial advisor who's gonna charge an assets under management percentage fee. If it's 1%, yes, that's a lot of money. If you have a million dollars, they're taking $10,000 out of your account. That's a lot of money. But if you are gonna be paralyzed by decision-making and operate out of a lot of fear, it's worth every single penny. Now, I and my firm, we are part of a new movement that we're trying to get accessibility to financial planning at a much earlier age where people are saving their first dollars. And so instead of us taking that money and managing it, flat fee and what we call advice only advisors, we're saying you do it. And we'll teach you how to do it. We'll show you how to do it. We'll sit on Zoom while you pull up your Vanguard account and we'll make sure you're hitting trade on the right fund. But guess what? If you are managing and buying those funds from your first hundred dollars, your first thousand dollars, then when you have a million dollars, are you gonna say, oh, now I'm scared? No, because you've had a lifetime of doing it on your own. You're gonna be competent and confident. When we talk about fees, we charge a few thousand to run a whole financial plan and then we have our ongoing kind of fees for you to stay with us so that we can help you get on your feet until you're ready to take it on your own. And this is very similar to a lot of flat fee folks out there. And if you look at the impact of our fees versus the traditional fee industry, we keep a lot more money in people's pockets this way. So I do think that flat fee financial planners, especially who are advice only, are not taking a management fee. I think that this is gonna be the way of the future and that more and more people, because they're getting in earlier, are gonna feel confident in this strategy. Now, there are people who are not as risk averse, who have that million dollar rollover, who feel like this is something they could do, who I do think can fit into this advice only flat fee model and learn from the beginning, right? Learn how to manage their own money and not pay that 10,000, 15,000, whatever the fee is, depending on how many assets they have when they go to retire. The biggest fear I would have is what we do see a lot, which is people saying, hey, that 1% management fee is way too much money. That's $10,000. I'm not paying it. But then they get the money and it sits in a money market where it sits in cash while they're waiting to become an expert on investing. And meanwhile, they're losing out on the compounding on their money. That 1% fee would have been a way better fee than the loss of the incremental 4% or 5% return that they could have had over the years while that money was sitting in cash. So I hope you see, I'm not giving you a great answer because it really, the answer is it really depends. I don't want anybody to ever feel a lot of shame for going and paying a 1% management fee thinking they're getting ripped off because I actually think it's a great thing for people to pay and do if it prevents them from being in cash. What I do think people need to avoid is the elephant in the room. You know, probably 80% of the industry, and I made up that number. It's a big number. And that is people who are selling products. Stay away from them. Those are not your advisors. That's not an advisor. That is someone selling you something. I mean, can you imagine that we have an industry where you go for financial advice? They literally will say, come here for financial planning. But the way they make money is you have to sell, you have to buy the product that they're selling. So they're sitting here and saying, oh, there's thousands of ways that you can invest your money. But coincidentally, the one way we think you should invest your money is in this whole life policy, which as a coincidence, I'm gonna make a 3% return on immediately or 10% of the premiums for the next year or so. It is wild. It is wild that that is still something that people fall victim to. I'm not saying life insurance is bad, but should that be your advisor? No, we need term life insurance and control it ourselves. You can stack it and have a couple of different policies that peel away as you increase your financial capital and don't need the insurance. Whole life, I was there. I bought it. It probably cost me $30,000 in commissions. That's horrible. You can pay a financial advisor to keep you away from that for 10 or for one visit, and you'll find these things out. There's so much that you can get from coaching and a one-time visit and finding people like you is hard. How do we do it? Yeah, so I would Google flat fee advisors. We have a lot of a growing industry of advisors now who are doing flat fee or advice only. Google that. Obviously, I think Aptis Financial has a great platform. We are focused on early and mid-career folks. That's our passion. I'm trying to help people avoid what I went through, which is getting the message too late, right? That's what we're focused on, but there are flat fee advisors who are focused on folks nearing retirement. This is where I think people need to be looking for advice if they think that this model of managing their own money is gonna be the best one for them. No, I think there's a lot of late starters that just get frozen with fear. They end up doing nothing because they think I can't understand this. I'm too old to learn something new. I've never understood it, but I mean, my goodness, get help. I mean, and the point is get the right help. Don't go to somebody that's just trying to sell you something, but we wouldn't hand the car keys to our 15-year-old and say, go learn how to drive. We need education. We need, get the tools in our tool belt for anything that we're trying to do in life, and our money is so important to do this with. That's a great point. What you've told us today is really important about advisors. Let's move on to another topic that you're an expert on, cashflow planning and the tax-efficient waterfall. What do you mean by both of those terms? Take us through briefly what that means to you, how you do it in your life, and how can we as early, mid, or late starters do it in ours? This is great. So if we back up big picture, my first piece of advice that you could actually stop there is to pay yourself first, right? Especially if you have a retirement plan at work, pay yourself first, 10%, 15%. Whatever your savings number needs to be, put it in your retirement plan, set it, and forget it. Now, if you are ready to move to the next step, you've got your savings rate, and then you move into, how do I make my money stretch further than it would otherwise? And that's where we talk about the tax-efficient waterfall, which is how do I waterfall my savings rate through a series of buckets so that I can get the most bang for my bucket? Okay, so let's go through, let's just go through the first few, because I think people will be surprised. So your first bucket that you wanna flow your savings rate through is where are you gonna get free money? So obviously, if your company is matching you dollar for dollar on your first 3% that you put into your retirement plan, start there. So your first 3% of your savings rate should go into your retirement plan. But then let's say you have some credit card debt, and a lot of people right now had some credit cards sneak up on them because of inflation, and they're having to do a major, major shift right now. And so we're seeing a lot of this in our retirement plans. Like, before this gets out of control, we have to pause our retirement contributions because we've got to get this credit card debt taken care of over the next year. It's just a reality. And so with a 26% interest rate, if I guaranteed you a rate of 26% on your money, would you take it? Absolutely. Absolutely. So let's lay that, that's a good use of money, right? Good use of money. Let's pay off that credit card debt. Okay, so then let's move to our next bucket, which is we still have money that we can put into our retirement plan beyond the company's match, right? Beyond the free money that the company is giving us. And that's this deal that the federal government is offering through that retirement plan. And most people have one of two deals that they can choose from. The first is the traditional 401k, 403b, 457, pre-tax option, where maybe if we're a little bit above middle income or higher, we can get an immediate tax deduction on our money. And we're saying, wow, I'm looking at my paycheck. It's amazing how much money they're taking out in taxes. Well, guess what? Did you know that when you put a dollar into your retirement plan, because we're in a progressive tax system, you're taking the most expensively taxed dollar out of your paycheck, and you're throwing that into your retirement plan. That is major leverage. If you're at, you know, over 20% tax rate, you're basically not paying those taxes, which means you can put more money than you would otherwise into that retirement plan. Calculate accordingly, right? Put more money into the retirement plan than you would otherwise. Okay, so let's keep going. So now you've got, oh, sorry, bucket, and then door number two. Hope that's gonna get cut out. Not at all. This is the real world. Row clearing. So then the other option is your Roth, right? Which maybe if you're 23 or 24, maybe if you're like Olivia that we'll talk about in my book, and you're not at your earnings potential, and you're not really paying that much in taxes, you say, hey, federal government, I'm not paying that much in taxes anyway. You go ahead and take those taxes out. No problem. Because I will get to take whatever's in that Roth 401k, row it in stocks and bonds, and never pay taxes again, which that sucker can grow for decades. And you can have five times the amount that you started with. And when you look at that Roth bucket, what you see is what you get. You don't have to pay additional taxes on it. That's a great deal too. Either door, great deal. Okay, so you've maxed out the federal government's offering through your company retirement plan. And but wait, there's more. We have now moved to a crippling healthcare system for many, which is high deductible healthcare plans, which my understanding is, these are one of the largest sources of bankruptcy right now in America, because people are opting for these lower premium plans, but not protecting themselves from the thousands of dollars of medical exposure that they can have from these high deductibles. So the next tax efficient waterfall is a dual purpose. So on one side, people can put money in pre-tax. So a dollar you put in does not get taxed. And then as long as you use that money on healthcare expenses, you don't pay taxes. So for some people, they need to use the HSA as just an emergency fund for health expenses. But if you're pretty healthy, you don't have any chronic conditions, and that's the best health insurance policy for you, you picked it independently. You can use that HSA ultimately as a retirement vehicle. So you put the money in pre-tax. Most HSAs now are offering the ability to invest in index funds, stocks and bonds. You can put in a target date retirement fund in a lot of places. Grow that money over decades. As long as you use it in retirement for health expenses, what's the number one cost in retirement? Healthcare. You don't pay taxes on that end. That is an incredible retirement account. So if you get to the point where you can put that money into your HSA, and even if you have a health expense, try to cash flow it if you can in your budget so that you can leave those amazing tax efficient dollars in that HSA, that's gonna be one of your most valuable accounts for retirement. Then for people who are making a lot of money, have run out of these tax efficient buckets, they're looking at a backdoor Roth. And then there are still people who make a lot of money. Maybe they're making 300, 400, $500,000 a year. Maybe they then need to start looking at a taxable brokerage account, where yes, you're getting very little tax advantage, but it's still a very efficient way for you to put money in, automate it, and then be able to save and have another bucket long-term accumulating your wealth. So that's the tax efficient waterfall. And so we've got pay ourselves first, we drip that money down through our tax efficient, interest efficient buckets. And then from there, we can stop, right? Because we've paid ourselves first, we've put into tax efficient vehicles, and we've invested it in passive index funds or target date funds. We can stop there. Now, some people say, well, wait a minute, I wanna use my money in a way now that I can get a lot more satisfaction out of it. That's where cashflow management comes in. That is where we can say, hey, I want to make sure that my current income after I've saved that's coming into my checking account is being used to maximize my own security and happiness. And that's where we move into the second phase. The first phase of cashflow management is pay yourself first. Second phase is save for future expenses. Why don't we all have six or seven savings accounts? I think I hear sinking funds. Sinking funds. They're sexy, as you heard in the prior episode. Oh, they are so sexy, aren't they, Bill? Bill, tell me why you love your sinking funds. Wax poetic about it. Well, Sarah Catherine taught me about them. Her lecture, this is a lecture I heard that changed my life. And I fell in love with sinking funds, as you know, for these future expenses. I pay myself my car payment every month, so wait for a new car and pay it in cash. I pay myself first every month for the travel we love to do. We used to use credit cards. Now we pay for the trip in cash, and we don't go unless we have it. We can do smaller trips, we can enjoy life, and you can't not enjoy the present and put everything off in frugality for the future. You can save for goals. You can save for a wedding. You can save for gifts at Christmas. You can save for almost any goal that you have. Just make it, name the bucket. I use Ally. There's plenty of online high-yield savings accounts to do this. You'll achieve it. Now, if you run into trouble like I did with cars, as we talked about earlier, and it stressed my sinking fund, you move money from another one. You cut somewhere, and this is, I guess, fundamentally zero-based budgeting, and you bring it elsewhere where you need it. And you have your emergency fund, which comes first in the sinking funds, but it's the last one you use. It's if you lose a job. It's if you want to start a business. It's sacrosanct. It stays there. And you use your sinking funds to protect your emergency fund. Now, with regards to emergency fund, I have a specific question for you. People talk about leaving it in cash. People talk about your portfolio is your emergency fund. People talk about, oh, credit cards are my emergency fund. They talk about HELOCs being their emergency fund. I think a HELOC can be part of that plan as far as a catastrophic plan for a job loss that extends and pay yourself back. Even a loan against your 401k can be part of your emergency fund, and you pay yourself back. Now, you don't want to do these things unless there's a big emergency. What do you think we should do with our emergency funds? Where should they sit? Or should they sit in a couple places that are a graduated approach, and as you have more and more need, you work your way back into the emergency fund waterfall, just like you talked about a debt payoff waterfall. It's all waterfalls. It's all buckets. It's such a great question. And here's the thing. I understand the use of HELOCs or the bond piece of your portfolio. I understand what people are saying technically, but we are not technical humans. We are emotional beings. Now, there are gonna be times in your life where you're gonna be at decision points where you might need a leap of faith to take this new job, or there's something happening that requires you to take on a little risk. I believe in having cash, cash. Cash is, to me, where we can find the ultimate security. And in our case, my husband retired in his 40s from his full-time chemical engineering job to start a salsa dancing nightclub where he worked one night a week. Do you think that we would have done that if our entire access to emergency capital was in our HELOC in our home or predicated on us drawing down our future investment that we had worked really hard to save into? Would we have made that decision? I can tell you we would not have. Cash, cash has an emotional component to it that you cannot define with numbers. It's like when people say, I really want my house paid off. I'll never argue with that. Go pay off that house. If it's gonna help you make better decisions in the future, if it's gonna help you take new risks, pay off your house. I think that, no, financially, it's not the best decision, right? But it might help you make better decisions which will improve your finances to have it paid off. So for that reason, I say keep your three or I love six months of cash, that's what we have. And then as far as where to put it, go, first of all, if we haven't learned from Silicon Bank and our bank failures, like keep, don't put more than the FDIC insured amount in any bank, right? I think we learned that the hard way. Make sure that if you're in an FDIC or if you're in a regular bank, make sure that you are under the FDIC limit, but go chase after your yield. We haven't had our emergency fund parked in the same account for more than a year in the past seven years because it has changed so frequently. We have chased banks giving us a higher yield. We have moved from banks to money market. If those yields got higher, just, it's easy. Just move the money, right? So move your emergency fund around. There's no reason to be loyal. There's no reason not to do it. It doesn't take very much time. And if you can make more money on your money, why not? Yeah, there's a lot of chatter out there right now about chasing yield in your emergency fund. And I split it from Ally into a money market at Vanguard just for yield purposes. I like to keep it simple. I don't like moving things around quite as much. I like consistency and the KISS principle. Yes, you can do it. I think the marginal gains aren't great unless you have a large amount you're moving though. Yeah, so for us it is, because we do keep six months. So it actually, the effort pays off for us. So do you keep it, like how accessible is it? Do you keep it where you can get to it directly from your checking account or is it in a different bank? So that you do have a little bit of a pain to barrier to entry. Yeah, so it would be a three-day lag. So, and that's a great point, Becky. We keep this money. So our sinking funds are in separate savings accounts but they're easily transferable and in the same bank and in the same app, we can see them at all times and we can easily move money between our main checking account and those sinking funds and back. Our emergency fund is locked away. I mean, we psychologically, we would never dip into that money. And so I think that having it in its own place with its own definition, emotionally, it's really helpful. And a three-day transfer is enough for an emergency but also enough of a barrier that we have kind of created that, no, this is different. This money is not for everyday usage. You can't just transfer it over because you had put too much on the credit card this month. You got to figure something else out. Well, we have a bit of a multi-tiered approach to this. We keep $10,000 in our checking account, joint 10,000 in each of our business accounts. So number one, we're not going to overdraft our accounts. Number two, we have an immediate access to cash that's an emergency fund. Then we go to Ally and we have the three days. Then we go to Vanguard. It's all in cash essentially, and there's a tiered approach. And when you have enough money, even if you don't have enough, you can still do the same thing. You don't have quite the yield of having it be all in one bucket, but you have access, you have those barriers and you have immediate, intermediate, and midterm protection of your emergency fund. And then you graduate into all the other waterfall. You reverse the waterfall basically, if it becomes more than that. As far as waterfalls go, you mentioned briefly paying off high yield or high interest credit cards. What do you see, two things with regards to debt. What do you see as the debt flow waterfall and why is it so important to attack that first? Almost first. Yeah, that's great. So, well, and I can I just also address one thing too on having the money and the checking account. One of my better talents than attempting to run a marathon, I had to crack the record on that. I haven't run one yet, training to run one and salsa dancing. My third great talent is that of spending. I have an incredible talent that if there's money in the checking account, I can truly efficiently and quickly spend it to zero. And so that $10,000 buffer in my account would be very, very quickly assimilated into my lifestyle due to this incredible, unique talent that I have. So we live on the edge in our checking account. We get that money in and it goes to zero, but that is fine because we constantly look at it, we constantly monitor it, and all of our money shoots out into those thinking funds and we've paid ourselves first. So then my brain gets the satisfaction of being able to pay to spend down to zero. Doesn't that sound so satisfying? Well, yeah, I just use 10,000 as zero. No, no, no, no, I would see that. See, I'm too smart for that. I see 10,000 as spendable assets in my checking account. Bill, maybe you're just not as smart as me. Maybe- Are you calling me dumb? Okay, I can deal with that. I can deal with that. But I do use 10,000 as zero and I top off that bucket as part of my topping off accounts. If we go under it, it's part of my pay myself first. It doesn't just migrate down. I think of it as zero. It's part of the immediate emergency fund, but it's also part of the, you replenish this regularly. So maybe I'm not as dumb as you think. So Sarah, Catherine, talk us through, because we've talked about paying yourself first and the emergency, not emergency funds, but the thinking funds. So, and then you're talking about spending whatever's left in your checking account. So talk us through that as a step in the cashflow management. How do you avoid eating rice and beans at the end of the week? Oh no, we love rice and beans. We eat a lot of rice and beans in our house, especially on Sundays because, so yeah. So what we do is, you know, so you think about pay yourself first. So think about money about, you know, your money comes in and then it gets whisked away. You know, as soon as it comes in, it starts getting whisked away. So it gets whisked away towards your savings. With your Roomba. Yeah, with the Roomba, very good. Yeah, tell us about your Roomba. I think of it like a Roomba. Roombas are so amazing because they just go in there without you having to worry about it. And they like suck up this stuff. Like, so what we're doing is we're sucking out our money before we can look at it. And so my intelligent brain, if it sees money in there, it'll quickly figure out how to spend it. So this Roomba has to get that money out real fast before my brain sees it. So it gets out of there. It gets into my pay yourself first retirement accounts, into those buckets. It gets out of there and goes into my sinking funds. And so then what's left is there to pay for my bills and then to pay for everything else. Now I've got to pay my bills. I signed up to pay these bills. So that has to be the third step is paying my bills. What I do there is I levelize my bills because I need, you know, when you have, when you've reduced your budget because of these sinking funds, you have a lot less money left to deal with. I can't hand, I can't have variability of our bills. So we make sure to have levelized bills as much as possible in utilities, et cetera. And then the job I have is every six months, I routinely go into my bills and make sure that they are as low as they can possibly be and what bills can be eliminated. So everybody has that $2 thing that shows up every month and you're like, I don't even know what that is. And I'll just get to it next month. Okay, every six months, get to it, right? Cancel it, go into your apps on your phone. You know, you can go into your settings and go look at your subscriptions, delete, delete, delete. Okay, so end these things. And if you can't delete it from your phone, you don't know where it's come, just have your credit card do a stop payment. I have to make an admission here to the gym membership, the ever-present gym membership. I haven't gone to the gym in months. I pay it every month, it's $75 a month. I play squash, it's the only place in town I can play squash, so I should go. But there's a lot of friction here because I have to get my shit together. I have to get in the car. I have to drive 20 minutes to the gym and I have to get ready. I have to have a partner to do it. I have to schedule it all. And I've succumbed to the friction. The Roomba eliminates friction, right? Yes. So maybe to avoid your friction, you need to have a standing squash game, have your stuff in your car. So set yourself up to succeed. I love, you know, I tell people cancel your gym membership all the time if it's just gonna be a layer of guilt. But a squash game is probably really fun, something you do with someone else. So keep that $75 as an incentive to go to the gym and set yourself up to succeed, I would say. But otherwise, if you've got the gym membership and you hate going, cancel it. Okay. Cancel it. Well, I try to reduce the friction in my life because that's a goal, just like, you know, the Roomba and whisking things away. Over here next to me sits a rowing machine. It has a layer of dust on it too. I have to walk upstairs. I have to get dressed at home. I thought I was doing exactly what you said. Now, I do do it occasionally. I don't do it as regularly as I like. You're addicted to running. I was once addicted to running. I was possessed by exercise. I was 20 pounds lighter. Losing weight is like trimming the fat in your finances, right? I've tried to reduce friction. I think everybody should. But the guilt, the human brain is a powerful source. You need an accountability partner for that. It's right there in the room with you. So you have reduced the friction. I can listen to podcasts or music. I can do lots of things, but maybe in admitting my guilt, my shame, I get on the rowing machine later today. Okay, I'm going to text you tomorrow and ask you if you've been on the rowing machine. Okay. I'm going to send you all kinds of emojis. Well, there, you know, you can use money as your, you know, pay money into a jar, right? There's lots of things you can do and then go out for fun. We used to do that playing card games. Everybody lost. All the money went into a pot. And as soon as you lost less or more, as soon as you got to a certain amount, we went out to dinner and had a social event. There's lots of tips, tricks, and hacks that we can do to increase memories and experiences in life, which are the primary source of dividend income. Memory dividends, they call it, and Paid to Zero by Bill Perkins, I think was the name of the book. I want to circle back to a couple of your quotes because I love them. And saving and spending are the things we're talking about here today. And when you address how do we tend to approach spending, you say, quote, most people are spenders convincing themselves they are savers, just like me and my gym membership. They curiously look at other forms of spending as frivolous, but somehow they don't see their own. Another quote from your book, a piece of our brains will always convince us that we need to buy just a thing or two more and life will be complete. It has convinced me that we can shut it up if we just go buy that one more thing. With regards to spending, you say, there are basic concepts of investing you need to understand, like compounding. God, I wish I'd known about that. God, I wish I'd known about net worth tracking. God, I wish I'd known about savings rate. If you know these three things, you're set. You're set for life. So, quote, your savings and time can work for you, but savings matters most of all. Spend your efforts on saving first. And lastly, instead of funneling our money through the, and you use a funnel often in your book. Instead of funneling our money, and you reverse the funnel, actually, you invert it. Instead of funneling our money through our daily lifestyle, let's turn this, oh, there we go, upside down and funnel our money through saving and debt repayment and allocate for the rest. The question that comes from this is what is JOMO that you refer to your book? Oh, Bill, it's so great. The joy of missing out. You know, you said something, I wish, you're gonna have to go back and pull this from what you just said, but something about getting enjoyment out of that dollar. I just have to ask, like, when your mortgage payment comes out, do you feel warm fuzzies on it? My house is paid off. I made an emotional decision there. It's part of my disability policy. Just like my wife working is part of my disability policy. And I have disability insurance. Again, it's a waterfall of disability planning. I don't wanna have to, at this point in my life, age 57, I don't wanna have to worry about it. I wanna go into retirement with a paid off house. Honestly, I think everybody should. The math of it says you can pay your mortgage payment, leverage the difference and invest it. But do most people invest it? That's- No. No, the math doesn't work. That's why I recommend the debt snowball over the avalanche. You can do a hybrid approach later, but get the wins. Take your brain out of the equation. Use a Roomba. It's all the same. No, that's a great point. And maybe a house payment isn't the same, but think about like your cell phone bill, right? Like Becky, if like your cell phone payment comes out, do you feel like warm fuzzies? Absolutely not. Absolutely not. In fact, I mean, it just feels like an obligation, but yet I can go spend $1,200 on tires for my track car. That makes me happy. Yeah, so I mean, I think what we have to do is, I think bills are probably our biggest and overhead, people stretching to go buy that second home or put your kids in the elite private school for the social standing or things like that, that we buy for affluence, for membership, for a lot of things. And we sign ourselves up for this ongoing overhead that just pressures ourselves. We pressure ourselves. Like a lot of people think that our finances are doomed because of that cup of Starbucks. Actually, that's really not it. It's the $600 car payment, right? It's all of these things that are just burying and pressuring us and they're squeezing out any kind of flexibility that we have in our budget. So the joy of missing out is being able to say, wow, no, I don't need to get that incrementally more expensive house. I can drive my old minivan and I can keep driving my old minivan, even though it doesn't look as cool as a newer kind of electric car. Like we can miss out on these things and feel a lot of joy from not doing them, from, and I'll tell you this, I hope anybody listening, I hope you will listen to me on this because there's not a lot. I think the older I get now, the less certain I am on anything. But I have just finished a two-year experiment where I got off social media and I am missing out and I've never felt so much joy in my life and spending less has never been easier. I have an ad-free life. I don't look at what everybody else is doing. I don't look at what everybody else is wearing. My life has changed by getting off social media, fundamentally changed. And I left a 6,000 person group that's called Save 10 that's still sitting there. I don't even, I had a lot to lose by walking away. It has been the best decision I've ever made in my life. I don't know if y'all have experienced anything like that before. Well, I am a little bit of an addict quite honestly, but the reason I am now is because social media has expanded my community immensely. I have friends everywhere. They go from being virtual to personal. It's hard to make friends locally when you're older. It's been incredibly easy in this financial independence community and I love them. I wouldn't have it any other way. And then I go to conferences to meet them in person. Heck, Becky and I had never met. We met virtually. We started this podcast and only after we were into it do we meet at a conference, Economy, which is wonderful by the way and everybody should go. So yes, I think there's advantages. You've got to have a little bit of discipline and control and we're also building a podcast. We need to get the message out there. We wanna get the message out there that late starters are the silent majority. We are not alone. We can do this. We can do hard things. We are resilient. We can start now and we can have accountability partners where we're not doing it alone. One of the things in our community that I've been so impressed by and being in other communities is the vulnerability, the transparency, the cathartic nature of people posting a picture that we encourage, posting their story and the stories are incredible. We do post stories in this podcast. Your story is incredible. This is a niche that nobody is serving. Who out there is focusing on late starters? And like I said, we are the silent majority. Everybody gets caught up in the funnel of life, raising kids. 20 years goes by in the blink of an eye if you're not paying attention. And if you don't partition your paycheck, your first big boy or big girl paycheck into these buckets we're talking about, you'll forget to. You'll put your head in the sand like I did and it won't come out for years until somebody pulls you aside and says, just save 10, okay? You know, I wanna speak to this too. You know, I do think that there are ways to responsibly use it. I think most people are not. And I do think that the impulses to spend are largely coming out of social media at this point. And so for people who are using social media entirely to be around their own group that's not spending, that's a totally different deal. But remember, social media is being driven by marketers and these are very smart algorithms and they are designed to make us feel like we don't have enough. And so that is why I highly recommend if you're still on it, use it responsibly. Stay in your group, get out of the feed as quickly as possible because this is, I think, where people are getting the most pressure to spend money. And, you know, to your point as well on creating this community, the reason I think this community is so great, you know how you talked about the gym membership? James Clear, he was on this amazing podcast with Atomic Habits. He was making this case and I don't wanna misquote him, but I think I've got it right. You can adopt a habit for a few months, but it's not gonna work unless you surround yourself in a community of people who either have the same habits or are attempting to have the same habits. And so I think what you're saying here is you're creating a community for people who are doing something bold because if you're catching up to five, you gotta have a big old savings rate and that is what you're doing. You're creating a community of people. So this isn't like, oh, I'll do this for three months, but then I'm around people who are spending more than they make, living paycheck to paycheck, not thinking about retirement. Like you only live once, YOLO. Like there are people in their fifties, right? That are living this life. And if you're surrounding yourself with these folks, you're not gonna probably statistically be able to maintain a habit of the kind of savings rate you're gonna need to have in order to retire on time. My boat was named YOLO. Yeah, that's right. And I suffered from not as much FOMO as I did YOLO. We only lived in the present and we were burdened by our past. We were burdened by the lack of money education and we chose to live. We had deprivation for years and then lifestyle inflation took on and YOLO took on and it was a runaway train. We were on the hedonic treadmill and it took years to get up before we realized what we were on and years to get off. I wanna ask you now, where is Olivia now? What is her new financial path? And you quote, I saw Olivia as a young person failed by our system before she had a fully formed prefrontal cortex. Mine wasn't fully formed until I was still a financial teenager till I was 50. Well, she took on crippling debt. And as late starters, maybe our prefrontal cortex is a little deficient too and we have remained an underdeveloped financial teenager. It's time to grow up people, get some balls and quick and take action I think. What do you think? Couldn't have written it better myself. Maybe you should write the next edition to my book. I love it, I love it. Olivia, who is the 23 year old that has two paths that she can follow in the book and I'm giving this path that we don't teach which is the pay yourself first path, right? Like don't get into credit card debt, have these thinking funds. Like imagine a 23 year old getting out of college who sets this up right away. That is what I'm doing in this But First Save 10 book. I want people learning and normalizing it from day one. But again, we didn't all get this message from day one. We might get this message when we're 30 or 40 or 50 and it's never too late to get on this exact same track. You know, it's funny. I got a request to write a book with this really cool publishing firm and they sent me the outline and it was geared towards high net worth people or sorry, high income people. And then they said, but we could also do a separate book for people who don't make as much. And I said, but it's all the same. There is nothing more complicated or less complicated. I don't understand this, right? I totally agree. And you know, our late starter audience needs to do the same thing now that we all wish we had done, but it's the same work. We just have to do it faster which means it's going to be harder. I mean, you can't sugar coat this. If we're going to catch up, we have to work harder. We have to have a larger savings rate, but it's not different. The steps we need to go through aren't different. But you know, the comment that you made about the social media, I think that's one of the really cool things about our audience because we are surrounding ourselves by people who look like us. You know, we're all now figuring out what we need to do but the person next to us is doing the same thing and we're all there to encourage and pull each other up. But I love that. We still have to save and invest and pay attention to our bills. That's right. And here's the thing. I have literally watched people. I think there's something about turning 50 that it's like the most, that's where I've seen the people make the biggest, most boldest financial decisions. I feel like there's like a path that you can go down, the bill's pointing at himself. And you realize that you're 15 years away from being 65. And I think there's something about turning that age for people who haven't ever saved, that it actually becomes more accessible to save that rate than if you were 45. There's something psychologically to use that momentum. If you're here and you're on the fence, I can tell you as a financial planner, but not on the financial planning side working with physicians, but on my side watching normal, not that physicians aren't normal, but people making a normal median income who are facing, I don't have any savings, I'm 50 years old and I'm scared. I don't know what my future is. I've seen people sell their houses and downsize and never regret it. You can always increase your lifestyle. Remember, if you're that miserable, you can always go buy the bigger house again, right? I've never seen anybody once, no one has ever regretted it. No one who has taken that on downsizing house. I've had couples move to one car, one Uber couples. Steps you have to take to go from zero to 30% savings rate, it is no joke. So you're right, Becky. I'm so glad you pointed that out. I don't wanna make it sound like this is like, oh, you just change your savings rate and then it's like, poof, you've got enough money. That is not the case. You are making major lifestyle changes. But I have never met anybody who's regretted it. I mean, you're talking to people all day long who are making these choices. Do you see any regret in your group? No, no. And we've asked people that multiple times on the podcast, once you downsized in order to increase your savings rate, did you feel deprived? And the answer has always been no. And so I'm really curious about your anecdotal experience of people who were older and started. I mean, we're talking sometimes about the major decisions like selling your house and downsizing. I mean, the decisions aren't easy, but oh my gosh, are they doable? And will they make such a difference in your future? I think that we humans forget that we care about our own ability to have choices more than we realize. And so if having a bigger house takes away my choice to retire and stop working on my own terms, I think when we start thinking about in that framework, then we start realizing, oh my God, I don't want people telling me what to do. I mean, like I just think, I think about my kids, you know, like don't tell me what to do. Like we have this human desire to do what we want to do. And I think the ability to retire and to stop working is the ultimate ability to do what we want to do. And there is not one thing we could buy or one thing we could experience through a vacation that could replace the value that we have deep down. That is why when people start seeing that money, because when you have a 30% savings rate, your money starts growing real fast. I mean, that's the cool thing about it is you start watching it go up in a way that our 10% savers, they have to wait a long time. They have to wait years to see it. You start seeing it immediately and you start watching that account and you're like, wow, that feels really good. And I think that the feeling is, is you're thinking to yourself, I'm setting myself up to have choices that I didn't have six months ago or a year ago. So even though you're not there, you're not at the choice point, you know you're heading there. Don't you think that's really what's at the, it's hard to describe to people why they should do this. Well, Becky, and I'll tout her, she started at 50 and you may not know this, with a net worth of zero. And in 13 years, they retired comfortably. Becky, that is an amazing story. That is incredible. Thank you. And it wasn't, I mean, like I said, it wasn't easy, but it was decisions. You know, first of all, you got to get your mindset and your emotions wrangled in order and reign that in. But oh my goodness, once you start making those decisions, they get easier and easier and easier. And, you know, we had to put big chunks of money away, but it worked. It worked. And we got our kids out of school with no student debts. Amazing. What a story. Yeah, I mean, I went from a spender to a saver and having the joy of spending with the absolute abject joy of saving. I mean, it's something I look forward to. You know, that dollar that goes into things. We had a guest earlier that had a hard time getting her husband on board. And that's one of the challenges. You're not doing it alone. You have a partner often. After he got on board, she stated literally that he was looking under couch cushions for dollars and coins to put in the market. It's addicting. It is. I mean, it's a lot of fun. Oh yeah, exactly. You can be addicted to spending and be a great spender, but we want to get people addicted to saving, just like you said. It's time to close. We've talked about a lot today. I think I'm going to run this at its full length because breaking this up just doesn't make any sense. You've been a pure joy to have on the show today. What's up next for you? Well, that's so kind of you to say. It's really been a joy to talk about this. This is actually one of my favorite topics. This is what we're trying to do in our retirement plans is to inspire people who feel like the ship has sailed. Why even bother? We're trying to inspire people to get into this and we'll use your podcast on our retirement plans to help people get the inspiration to join this community. So I'm grateful to you both and I can't wait to share this as a resource for helping people to find their community to get on this path. What's next for me is I'm grateful we have a growing, Aptis Financial is growing. We are at 12, 13 employees. We have eight financial planners, but what I'm really interested in is really being able to grow on the retirement plan space side. That is still an industry that is focused on investment, investment menus. An investment menu is not gonna get your employees to retire. We're trying to change the retirement plan industry to making it that financial advisors who are running these plans need to be not responsible fiduciaries on the investment menu, but fiduciaries to people being able to retire one day. We gotta catch people who are not saving enough in these retirement plans. And so that's kind of the Aptis 2.0 that I'm really passionate about is being able to be part of this very exciting time of reform and change and growth in the retirement plan side and of course, running my first marathon in December. Aside from being a mom of three of the most amazing kids and amazing husband, that's kind of what's on my plate right now. So you are a force of change and I've actually heard you say, and you may not remember this, in your charitable nature that you hope also to match people's 401ks with your own money because- One day. I mean, that's maybe where we need to go. Parents can match their kids' savings. They can incentivize their kids. You wanna incentivize the world, which I think is a noble goal and for you, a reachable one. Do you have any final tips on life or money hacks for late starters in particular? Live your own life. Live your own life however you need to live it. Define your own values, create your own schedule, create your own, live the life you want to live. Because I think that where people get messed up is we're trying to live other people's lives, other people's expectations, other people's aspirations. And so my driving goal is to figure out how to live my own life as authentically as possible. And I encourage other folks to try to do the same. I think there's a lot of happiness there. That's great advice, Sarah Catherine. So I know that after hearing this, our audience is gonna wanna connect with you also. So where can our audience reach out to you? Awesome, well, we would love to connect. So there's two ways. If you're interested in the work that my firm is doing, for sure, that's at aptisfinancial.com. If you're interested in my book, I would love that. If you buy it on my publisher's page, you get a signed copy. And so you can go to butfirstsaved10.com and that will take you to at Alia Press, which you can directly buy the book and have it signed by me. Or if Amazon is easier, it's there as well. And then finally, I do have a newsletter that I email about every two to three years, I'll send out an email. So you're welcome to join that at ladiesplainingmoney.com. It will be the only email that will never spam you. You can join that. And occasionally I'll get a thought that I think is good enough to send out to my subscribers. Sarah Catherine, I think we have provided so much value in mindset, money, and life in this podcast. You've hit a home run. I think our audience- Oh, kind. Thank you. I think our audience is gonna eat this up. I think we're gonna go viral. Well, I just hope that they really dig in to these actionable tips that Sarah Catherine has shared with us, because this is exactly the kind of thing that our late starters need to be motivated to get going. Start saving today. That's it. That's it. Start saving today. Pay yourself first today. All right, Sarah Catherine, you've been very generous with your time and we appreciate it immensely. We want you to have a great day. Make the change that you want in the world. We hope you've enjoyed this episode of Catching Up to Five. We would appreciate it if you could leave a five-star review so that our message can reach others. We are not lawyers, financial advisors, accountants, or tax experts. Please consult your own professional advisors before making any important decisions. Our content is for entertainment and education purposes only. We'll see you next time on Catching Up to Five.