The Sober Butterfly Podcast
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The Sober Butterfly Podcast
Wealthy Girl Glow Up: Smart Spending and Investing Tips with Rachel Talks Money
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In this episode of the Sober Butterfly podcast, Nadine welcomes back Rachel Covert from Rachel Talks Money to discuss the financial aspects of sobriety and managing spending during the summer. They delve into topics such as the increased tendency to spend money during the summer, alternative budget-friendly activities, and the importance of setting financial priorities. Rachel shares valuable tips on mitigating unnecessary expenses, saving for future goals, and investing wisely to build long-term wealth. The conversation also explores various avenues for wealth creation, including online businesses, affiliate marketing, 401-plans and the benefits of investing early. Listeners are encouraged to examine their spending habits, make informed financial decisions, and plan ahead for a financially secure future
Listen to Part 1 of this conversation 🎧
https://podcasts.apple.com/us/podcast/stop-overspending-on-self-care-in-sobriety-how-to-reframe/id1633341419?i=1000646323522
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https://www.youtube.com/watch?v=JnHun07vFvk&t=5s
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Hello, and welcome to the Sober Butterfly podcast. Today we are joined with a very special guest, we have Rachel Covert with us over at Rachel Talks Money. Hi, Rachel. Welcome to the show. Welcome back, actually. Welcome back to the show. How are you today?
rachel-covert_2_07-19-2024_154838Hey Nadine, I'm good. How are you? Thanks so much for having me back.
the-sober-butterfly_2_07-19-2024_104837I am excited to have a part two conversation. People were just really interested in learning about self care in relation to sobriety and how self care doesn't have to cost a million bucks. And we don't have to do things. Quote in the name of self care to uplift our sobriety. I loved when you said like it really does come from within and so many people resonated with that. So right now I think a hot topic is that summer glow up and you and I were discussing backstage this idea of. What does a summer glow up entail? And what does that mean for my pockets? Because as a millennial girly, I would even say sometimes I'm a zillennial because I definitely can relate to Gen Z. Anyway, we're out here in these streets spending a lot of money in summer. Do you feel like overall, you notice an uptick of spending? As it pertains to summertime is it just me in my head? Or do you also see that people spend more in summer?
rachel-covert_2_07-19-2024_154838So I don't know about everybody, right? But I do think that overall, it becomes easy to spend more money than you realize in the summer. And there was a meme or a trend on Instagram a while ago where people were like, stepping outside the door and like the dollar signs were popping up. And every time their foot crossed the threshold, it would be like, Starbucks, Target. lunch and however much money they were spending in a given day. And I think that just the nature of leaving your house a lot, which is what I think a lot of us do in the summer, especially if you're like a New York city girly, or if you live somewhere where actually summer is a tolerable temperature. Although I think right now, these days it's really hot in New York, but as soon as you leave your house, the sun goes down and you're like, I'm going to go out for a walk. You find yourself. Getting a 9 ice cream and like a mocktail for 13. And all of a sudden you're like, before you know it, you've spent 50 bucks. Maybe you bought like a cute little skirt this afternoon while you're out shopping. And so I personally think it's quite easy to spend money in real life. Like maybe there's a little less online money being spent, but it becomes very easy. to spend money in real life. Plus a lot of people travel in the summer, right? So like you intend to have a summer vacation and you might book the flights or something or the Airbnb and January or February when it's dreary and miserable. But by the time you're actually on that trip, you're buying a whole new wardrobe for that trip. Then you're shopping while you're on the trip. You're eating in restaurants every meal. You're taking tours. You're hiring guides. You're taking Ubers and all that stuff, it stacks up.
the-sober-butterfly_2_07-19-2024_104837Even the 13 mocktails, they're out of control. I went to the Moxie last weekend because my girlfriend was in town. And that's another thing. When friends come to visit, you think that you have to do all the things. It's like a mini vacation. Anyway, so we go to the moxie. A mocktail is 15. And I also saw a meme something like, I need mocktails to remember what they are not, which is alcohol. I actually need them to stay in their lane and remember that dude, there's no alcohol. This is juice. Like, why am I spending 15 for a cup of juice and ice? Anyway, I digress. You are essentially financially free. And so you do a lot of coaching, but you live right now in Portugal and be discussed in that first episode, which I'm replugging for people to listen to this idea that you keep your living expenses quite low. Because you are obviously saving for the future, but as it relates to somewhere like Portugal, in general, the cost of living is lower. So I would be really interested in learning because you were at one point in New York City, girly, you lived in New York for a long time, working in fashion. I would love to hear from you what tips do you have for us to mitigate some of the spending that we're doing? all of the things that you just mentioned, hopping in Ubers, buying outfits to go here and there, planning for summer trips and then having to plan our wardrobe behind the summer looks. So yeah, what tips do you have? I'm mainly asking for myself, not just for a friend, but I think other people can definitely relate to this idea of what should we be doing to make sure that we are still planning for a rainy day or planning for the future?
rachel-covert_2_07-19-2024_154838So a couple of things, number one, the mocktail thing enrages me and also it's 50 percent seltzer. So do not tell me that this is like hydrangea leaf, like some special thing. It is seltzer with a couple of little drips and drops of something else in it. I'm not an idiot. I know this. I used to work in fashion, so I really understand like the way that margin works and the way that businesses make money. And I bet mocktails are a huge driver of profit for bars and restaurants because you want that experience. So maybe my first tip for saving money is make a mocktail night for you and your girlies at your apartment. Buy some lavender extract, do something like that, right? Like you want to be in the air conditioning anyway. So in first of all, like you can hang out with your friends in your own home. I know that this is a wild and crazy idea in the New York city landscape, Yeah. Like you can have your friends over. You can play board games in the air conditioning. You can make popcorn. You can make mocktails. so that's tip number one is just remember that you don't actually have to go to a bar restaurant or coffee shop to see your friends. Okay. So that's number one. Number two is especially in New York city, but really, honestly, most places, there are an enormous number of either free or very affordable events in parks and in public spaces. Look at the calendar ahead of time so that you can plan some of this stuff with your friends. And I have a friend who's a finance creator as well, and I believe that she lives in Des Moines and she posted a photo of. an outdoor movie night. And she was like, does anyone else just go on Facebook to look for free community events, right? And a lot of free community events, like they will be sponsored by somebody. So there might be like free food or free soda or whatever. And you can really plan around taking advantage of free community events. Like they are for you too. Another thing is what are your cheap community events, right? What about going, taking, it's a bit far from Jersey, maybe from Jersey, you want to take a ferry to the Jersey shore. If you're a Brooklyn girlie, maybe you want to hop on the A and go out to the Rockaways. Go to the beach, pack a lunch, pack your stuff with you. Like these are all things like just not being in bars, restaurants, and stores is going to save you so much money. We have gotten into this like habit where we just assume that we're going to go out. That is how we are seeing people and seeing friends going out. It costs so much money.
the-sober-butterfly_2_07-19-2024_104837Yeah, I'm nodding rigorously with so much of what you shared. Yeah, we want to be outside and I think maybe it's the aftermath of COVID. So many people were stuck inside that plus the weather around the country. Everything is warm, so we're like, yeah, let's go outside. But going outside is expensive as you mentioned. I can have people over. I can host. It can be a potluck situation where everyone brings something. It doesn't have to necessarily mean that we are going to a venue because when you go to a venue, you spend money I know here in New York, there's so many different like live shows you can do. You can go to the park and have a movie night. As you mentioned, you can go to it's just like lots of festivals and things that are absolutely free. Timeout magazine is a great resource for anyone. timeout plug in your city and it will give you a rundown of like, all of the weekend or week events happening that are like, free, usually for people. I know these things, but it's a great reminder to myself and hopefully for people at home that you do not have to spend money to have a good time.
rachel-covert_2_07-19-2024_154838So the only thing I want to add to this is like I know it seems obvious, but I just want to give you permission to not spend money just because you can spend money to enjoy yourself does not mean you have to And while you might really want to go to this restaurant on a friday night and enjoy it for the night You will not remember in three weeks that you didn't do it. And if you can create memories with your friends and your family without doing that, and it can open up the space for you to, for example, take a big trip, right? Because this isn't all about saving money just so that it can sit in a retirement account and you won't touch it for 30 years. This is about making space for the experiences that you will really remember for the next 30 years. So it's also important to be thinking about, like, Why do you want to save money? What are your goals? Is the goal to save money for an amazing trip? Or maybe you want to buy, put the down payment on a house. Or maybe you want to go back to school, right? Like, why are you putting in the effort to save money? Because if you keep that goal in mind when you're making decisions, you can ask yourself, hey, can I live without this so that I can save money? X, Y, and Z, right?
the-sober-butterfly_2_07-19-2024_104837Yeah, thank you for making that distinction for us, because I think when you make a certain amount of money and you are comfortable in your lifestyle, you think that you have to keep spending the money that you're making I think we all know best practice save money. Everyone knows that. However, it doesn't aid in your decision to actually put money to the side if you don't have a clear vision. And so I like this idea of vision setting and thinking about okay, why are you doing this? And so I'm wondering, how can people prioritize or get super clear about what to actually save their money for? Versus what they can spend and feel less guilt around spending money towards things that they actually care about. Does that make sense? That key distinction between what's a priority and what should I actually be saving for?
rachel-covert_2_07-19-2024_154838Yeah. So this is actually a, quite a nuanced question. It's not as, and the answer is that you will hear financial folks like this all the time. The answer is it depends. But the truth is at the end of the day, you don't want to feel like you're constantly sacrificing, right? That's not what you want to feel with your money. You want to figure out what are the things that I have been thinking about a lot. Not just I walked by Zara and saw a cute pair of wide leg pants that I feel would really supplement my current summer look.
the-sober-butterfly_2_07-19-2024_104837Are you following me?
rachel-covert_2_07-19-2024_154838Maybe I've been in that position once or twice Nadine. But yeah, by having a goal in mind and really deciding, I actually typically recommend that you sit down and you think about, what are three things that I actively want to spend money on, right? that's going to help you make decisions. for me, I want to spend money on traveling. I don't love spending money on skincare, makeup, and nails. That is just not who I am because I don't get that same like anticipation, excitement, long term return from thinking about my nighttime skincare routine as I get from knowing that on Wednesday, I'm getting on a plane and I'm coming to the United States. I'm going to see a ton of my family. I'm going to three different states. It's going to be awesome. I'm really excited about it. So for me, I know that I can prioritize those two things. And so you can do an exercise where you basically look at every dollar that you've spent and categorize it over any 30 day period. And just look at it and be like, look, am I happy with how I spent this money? And if the answer is yes, that's great. If the answer is not really Oh my God, I had no idea I spent so much on DoorDash and poor DoorDash. I pick on it all the time because it is so expensive. It takes a 14 salad and makes it 32. It's insane. but just do this exercise of looking at where your money went so that you know if it's in alignment with your goals. And then beyond that, the question of how much should I be spending versus how much should I be saving? And again, that kind of depends. There's a bunch of different like rules where the, you break your total income down by percentages, but I think they're a little tough in New York city because most of us are take home pay is getting eaten up largely by our rent. And I know that you recently moved an 80. my goal for myself and for my clients, and this is a tough goal, so I'm not saying this is easy is for 50 percent or less. of your income to go to food and housing and if possible transportation. That's a pretty tight budget. is that something that you can visualize that you would be able to achieve?
the-sober-butterfly_2_07-19-2024_104837think before I moved, I was probably around 30%. My rent was dirt cheap, but you and I talked about this backstage, this idea of can you put a price on peace of mind? Because I'm so much happier now that I live alone, but I haven't done the numbers. So this is an exercise that clearly is something I need to actually sit down and think about Because my cost of living was so much lower, I had savings, but I know my savings are being chipped away at because my rent is just quite literally so much higher than it was before. It's like almost three times more from what I was paying before. I recognize that's a big shift in my lifestyle. And this is what I was thinking of earlier too, Rachel, when you were breaking down this idea of okay, prioritizing what is important to you. I do prioritize travel. I love it. That's probably my number one thing. But then look at me like nails done, hair done, everything did I'm that girly too. I love the skincare. I love the makeup. And so I'm having a hard time. Adjusting my lifestyle to reflect my current updates. So I keep upgrading my lifestyle as a point I'm trying to make in short, I keep seeing like girl math, I think like 2. 0. Now the new girl math is not like, Oh, I returned something to Zara. So I made 75 bucks. The new girl math is this idea that Oh, I love. Everything and I want everything and I am a luxury girly, so I need to make more money and I think I'm more connected to that girl math 2. 0, which is I want to strive for more money versus change my lifestyle. I know that I need to make some sacrifices, that was a great word that you used, but I just don't know where to trim the fat. So that's something I'm working on right now.
rachel-covert_2_07-19-2024_154838So here's what I would say about that. If you had savings at your previous income level, like with your previous housing and you were able to consistently save, that does tell me that probably you do need to earn more money because you will go back to saving. If you are a person who's listening to this podcast and you basically like run out of money every single pay period, like you live paycheck to paycheck, you're not really able to save and you're making way more money now than you ever have in your life, which might be the case for you as well Nadine, like if you're making more money now, but you actually aren't. Seeing your ability to retain money increase, then your lifestyle inflation is outpacing income. And the one thing that you have to know about this, and I'm going to be the one who says it and nobody wants to hear this is that There will come a day that you no longer want to work, and right now you're trading your time for money and then you're trading that money for stuff and that stuff is gonna end up in the trash can. So you're buying stuff that you know you're only gonna own for a short period of time, and then you're going to get rid of it. And while I understand that you like all of these things, I too also want to be able to buy more things and spend more money than I can. But I've just personally come to the conclusion that. For me, and this is not to say that this is right for everybody, but for me personally, would rather decline to do some of the more luxury things that I want to do. Like a good example of this is I love boutique fitness. It's not something I do a lot because it is a very high price for a very short period of time. Like I would love to do Pilates. I'm not going to pay 50 to go to a Pilates class. I'm just,
the-sober-butterfly_2_07-19-2024_104837Don't make me start a Rachel like that is another issue. travel and fitness. Those are my 2 things. Would you say I need to cut back on the makeup and the shopping and the things that yes, bring me, we talked about this, those dopamine hits quick rushes of joy, but fleeting at the same time and then really get serious about the things that truly bring me long term joy.
rachel-covert_2_07-19-2024_154838It depends. Can you increase your income fairly significantly, right? So you increased your cost of living by threefold by just, in just your housing. Plus we know food has gotten more expensive than ever, right? What can you live without? Because the real question is, what can I live without? Not, what doesn't bring me joy? Cause like tons of things bring me joy, right? If I could spend money on everything that brought me joy. Girl, I'd be getting a massage every week. I'd have perfect nails. I'd have someone else doing my brows. I'd have a haircut every month, so it's always the perfect shape. And for my curly hair girlies, you know exactly what I mean. I would be doing all of those things because of course they bring me joy. But the truth is I can live without a lot of them. And in exchange for that, my portfolio, because I've been investing for so long, went up 79, 000 in the last 90 days.
the-sober-butterfly_2_07-19-2024_104837Wow.
rachel-covert_2_07-19-2024_154838feel like I sacrificed. Yeah, I know. So I don't feel like it was a huge sacrifice because the return on that sacrifice has been massive.
the-sober-butterfly_2_07-19-2024_104837Okay. Let's get into it. So your portfolio has grown larger than some people's salary in the last three months. It reminds me of something I actually wanted to run by you. So I'm not sure if you're familiar with this book. It's called the fast lane. And I believe the author is Michael. I see you nodding. So maybe you've heard of it, but he categorizes this idea of wealth. Creation into 3 separate categories, and I'm just going to give a quick run down here. There's like the sidewalk, which is like, people who are living paycheck to paycheck. This is not wealth creation. This is you are struggling to make ends meet. Then he talks about the slow lane, which is, the sort of philosophy that my parents try to instill in me, which is this idea that you work hard, you get a job. Job a career you invest in the stock market for one K And then by the time you're retirement age, which is 65 plus. You'll have a little nest egg and you can, live. Not me, really, that's a bit extreme, but you can live comfortably off of that retirement income. And then there's a fast lane, which he talks about, which is people think that the fast lane means. easy wealth creation. It's not easy. There's no like quick get rich quick scheme per se. It's this idea that you have an idea that you can actually monetize and make money. And then he talks about different avenues, which I won't get into all up here, but I guess I wanted to pick your brain around this idea of do you think there's a key distinction between the slow leaners, like the people who are investing small amounts into their portfolio that will help them retire. At hopefully 65 versus the fast laner, which is I'm going to take more risk because there potentially can be more reward. what are your thoughts around this?
rachel-covert_2_07-19-2024_154838I haven't read the book. Full disclosure, I'm commenting on something that I have not read. But, with that in mind, I think takes all kinds, right? And this idea that just putting a little bit in your 401k does not result in huge gains is a total misnomer, especially if you start young. So for the girls that are listening to this podcast that are in their twenties or their early thirties, like even at your age, Nadine Putting in an extra couple hundred bucks a month into your portfolio for 30 years can easily result in a quarter of a million dollars more wealth by just 50 bucks a week extra going in there, which, for some folks, they might be like, okay, but 200 a month is a lot of money for me right now. And I hear you. But for a lot of people who are listening to this, who are enjoying boutique fitness, who are getting, their nails done, who are doing all these things, that's actually not that much money for you, right? Like when I say 200 a month, it's not a crazy amount for you, right?
the-sober-butterfly_2_07-19-2024_104837No, it's definitely not. I think you knew the answer to that. Literally I go outside and it's a 100 dollar day, just by noon. Yes. So 200 is very feasible.
rachel-covert_2_07-19-2024_154838So I want to argue that maybe there's like a middle lane between the slow lane people who are just getting their employer match in their 401k and the people who are getting their full employer match, maxing their 401ks out, maxing out their Roth IRAs, investing in brokerage accounts there's a certain amount of this, like concepts that, like the more that you have invested, the more that it can grow. So that's why mine has grown so much is because I just have a lot already. And it's the same thing. If you think about interest 10 percent interest on a hundred dollars is 10. 10 percent interest on a thousand dollars is a hundred dollars. It's way more money. And so what I think people forget is that. the output of your growth in your portfolio is determined by the input, especially in the beginning. if you are not a person who inherently wants to be an entrepreneur, who inherently feels comfortable taking risks, I would argue that you can do some things that are pretty not risky for a fairly long period of time and still result in amazing amounts of wealth, which I would say is basically what my parents have done. My parents lived a very unfancy life, invested in retirement accounts, invested in the stock market. My mom still has a 2007 Toyota Corolla. It is 2024. Now, to be fair, they also have a Tesla. So like they've really they've really gone to extremes here, my parents are multimillionaires because they invested a lot. When I was a little kid, my mom made a peanut butter and jelly sandwich and chopped up an apple and some carrot sticks. And I ate that for lunch. every single day for years. She wouldn't even buy lunch meat because she was so preoccupied with our financial situation when I was a kid. And because they got into the habit of just under spending under their means because they had some real poverty in their twenties, they never wanted to go back to being impoverished. And so they just lived below their means and they really were able to do something big. If you don't want to, open a business or try to become an influencer or do all these things that you can do to build wealth, I would argue you don't have to. Now, if you do want to do it, there's a huge potential upside, but you have to have the perseverance to stick with it until it works because a lot of these things take way longer to take off than you would imagine.
the-sober-butterfly_2_07-19-2024_104837I think the biggest asset is time. And we know this, and I want to free up my time. I don't want to work for the rest of my life. I guess with that being said, like not everyone is an entrepreneur, as you mentioned, not everyone wants to gamble with finances. So what are some sound tips that you can offer for someone aside from like the 200 investment, if you can find that Or you can fix that rate based off of how much money I guess you can put towards saving or investing. What other tips do you think would be helpful for someone who is looking to not work for the remaining portions of their life and maybe doesn't want to start a business?
rachel-covert_2_07-19-2024_154838there's a lot of different ways you can do this, right? So there's like the real estate girlies. I'm a stock market girly. Cause I believe in passive income and real estate. No matter what anyone tells you, it just isn't that passive. And I'm sure that I'll get some hate mail for saying that, but I really think it's true. So number one is to get us like, and nobody wants to hear this either, but to just get a sense of where you're currently spending your money and deciding if you're happy with it. Are you comfortable? If you look at how much money you earned over the last 12 months, Are you comfortable with how much of it you retained towards your future goal? And once you know that, you can say, Okay, I either do want to increase my 401k contributions, or set up my Roth IRA and start contributing to a Roth IRA. These boring, unsexy things, like 401ks and Roth IRAs, They actually really work. And that's the thing. And it's not fast and it's not cute. And it's really hard to convince people about this. Everyone wants there to be something else that's better and short of you having the ability and the passion to start a business and stick with it While it's really hard. I'm starting a business is generally pretty hard. Not that you shouldn't do it, right? I am a six figure business owner. So I'm here. I'm telling you, you should do it if you want to do it, but just know it's a 24 7 job. And so I think there's also this misnomer that When you start a business, you're suddenly going to have all this free time, but definitely in the beginning, when you start a business, you're going to have way less free time. So understanding that everything is hard and you're just choosing your heart. So if you want to For example, have a portfolio that's bringing you passive income. Then the thing you have to do right now, say, okay, which things am I going to test living without, let's say you love boutique fitness, right? So let's say you're doing class pass right now. And you have an Equinox membership. Can you test. Letting go of one of those and just committing like I'm going to go to the Equinox classes or I'm just going to do class pass And I'm going to work out on like my phone at home or whatever else in the meantime I'm going to join a running club for something free and social to do Whatever it is like you have to start to test and challenge yourself and also learn to say no to the people around you and say who are inviting you like hey I want to make a reservation at like I don't know wherever on Friday night Do you want to go And it's I would love to spend time with you, but that's actually, I can't do that with you right now. And I know that nobody wants to hear this, but the truth is like these unsexy things are super, super easy and they work and you don't have to be a genius. You just have to pick a couple of index funds and you can super easily Google like a two fund or three fund portfolio and you will find a million YouTube videos that tell you exactly what to buy. And how much of each to buy. And you can have the kind of portfolio in a matter of years, that's bringing you 10, 15, 20 K of passive income every year.
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the-sober-butterfly_2_07-19-2024_104837Going back to something you mentioned earlier. It sounded like it takes money to make money. If I'm just starting out with, say, 200 bucks a month in a year, what is that? 200 times 12, 2400 dollars. Going into the 2nd year of investing, I have a bit more of my portfolio baseline, you would want to keep what you invested in that portfolio. I guess my question is, at what point do you think you'll actually start to see gains and returns long term? I don't know if that's a fair question to ask, but I'm just trying to think about someone who is. Living, a fairly comfortable lifestyle who only has 200 bucks, but that running with that number to invest at what point do you think it's going to start moving the needle for them so that they can actually feel like, hey, I want to take more calculated risk or hey I can actually maybe eat. Think about investing more money because I'm seeing a real return.
rachel-covert_2_07-19-2024_154838Yeah. So the first thing I would suggest before we even like dive into that is if your employer matches your contributions to any type of retirement account, So that would typically in the U. S. be a 401k, a 403b, a 457, a TSP, anything like that, you absolutely want to invest up to the match, even if it feels scary and hard for you, because you are getting a, often a 50 to 100 percent return. So if you put 200 into a 401k that your employer matches that full 200 at, you're going to be able to make a lot of money. You immediately have 400. So to me, a 100 percent return on your investment is wild. You will never see that again anywhere else. So definitely you want to take advantage of any type of employer match first and foremost, before you do anything else. Now, in terms of how long it takes to start to see some growth you'll see growth after probably, significant growth, it takes time. So if you're only investing 200 bucks a month, after about 10 years, if you're getting a 7 percent rate of return, which is what we see. The stock market grows by about 10 percent per year. Not always. It doesn't grow like linearly, like in a straight line, 10%. it just averages out to 10 percent over like super long periods of time. So if you invest, and I happen to have just done this math for a webinar that I'm doing tonight. So 10% sorry, a 7 percent return on a 200 a month investment. would be about 33, 000 after 10 years, but after 20 years, it's 99, 000. You've set aside 48, 000. It has doubled to 99, 000, but it took 20 years, right? If you're only setting aside about 200 a month, you're not gonna see these huge returns. And really, the rule of thumb with this is, with kind of inside of the personal finance investing community is the first 100, 000 that you invest is the hardest. For a lot of folks, it's going to take between 10, usually it takes around 11 years to get to that first hundred thousand. Or, if you invest a lot of times we talk about investing 500 bucks a month. This is a very common number to talk about. So if you invest 500 bucks a month, it takes about 11 years to get to a hundred K. But then it only takes six years to get to 200k. And then after that, it only takes four years to get to 300k. So you've been investing for over 20 years. The first 100k took over a third of that time to get there. Does that make sense, what I'm saying?
the-sober-butterfly_2_07-19-2024_104837I'm following that. I'm curious to get your take as well on inflation. So what would naysayers say in regards to that a hundred K, 10, 11 years from now, isn't going to be worth as much as it stands today. Any thoughts about that? Or is that something to consider?
rachel-covert_2_07-19-2024_154838Yeah, and it's a valid concern. So in terms of inflation, there's only one way to stay ahead of inflation ever. If you put your money in a savings account, you're immediately losing value to inflation. Now that's not to say you shouldn't have savings. You should. High yield savings accounts are better than the ones that Bank of America and Chase offer you and Wells Fargo and all the local banks. But those banks are never going to pay you enough to keep you up with inflation. Investing is the only way to stay ahead of inflation. To stay ahead of, or at least at, but typically ahead of inflation. And yeah, I hear you. It's really hard to say in eleven years, a hundred K buys you less than it buys you today. But you actually don't have a hundred K today, do you? And in eleven years, would you be happy to have a hundred K?
the-sober-butterfly_2_07-19-2024_104837absolutely. I think any money that you don't have today that's guaranteed in the future is worth more than what you don't have. So I agree with that.
rachel-covert_2_07-19-2024_154838Yeah, and it's not to say that like I see why it's so hard. It's really hard to grasp a concept that's really like amorphous like this because you're just hoping that it's going to pan out and there isn't really a guarantee. But on the other hand, the only thing I can guarantee you is that if you don't invest when you get to retirement. You're going to really wish that you had, right? Because the thing is the biggest factor for how good your returns are going to be in the stock market is not actually how much you put into the stock market, it's how long you invest it for. So the most important factor is investing for a really long period of time, rather than investing a really large sum. So if you are in your early twenties and you start investing two, 300 bucks a month now, you could easily invest just two or 300 bucks a month. For your entire adult life and still be a millionaire at 65. If you wait until you're 40, it's going to take over a thousand dollars a month to get up to that million dollar mark by the time you're 65, because of the, and it's literally more expensive for you. You end up having to put way more in because you get so much less growth. So I don't know if that inspires people to start. But I hope it does.
the-sober-butterfly_2_07-19-2024_104837love it. No, that's inspiring for me. I do invest. I also have my pension. I have a different account, which I'm able to invest into, which is separate. And I'm at 8%, so maybe I should up that. I don't know if jobs offer pensions anymore, and I don't know the true value of it, if I'm being honest. You're shaking your head. I don't know how valuable it is, but I know that at a certain age I'll be able to have that guaranteed vested pension coming my way.
rachel-covert_2_07-19-2024_154838If you have access to a pension, typically you're a teacher or you work for a state or you work for the government in some way. Not very many private companies offer pensions. the key to a pension is length of time. So if you have access to a pension, you typically are automatically enrolled. You want to have worked for the company for a good 20, 30 years so that it will actually be enough money to help you. One of the things that I want to emphasize here, I feel like I've been really doom and gloom this time on the podcast, Nadine, I feel like last time I was fun and this time
the-sober-butterfly_2_07-19-2024_104837We need to hear these things like
rachel-covert_2_07-19-2024_154838I
the-sober-butterfly_2_07-19-2024_104837fluffy.
rachel-covert_2_07-19-2024_154838I just need to give people a little bit of a realistic kick in the pants, because what I really genuinely believe is that most people have no idea how big of an impact investing a few hundred bucks a month would have if they would simply just get started. And I think that's why I'm so like, be careful about your spending. You really could be investing more, but it sounds like you actually might be in better shape than even you realize if you're investing 8 percent of your salary and you have a pension, that's the other thing is I would really encourage all of you. So if you look at your 401k statements, see what it tells you. Because if you look at your pension statement, your 401k statement, see what it says, it'll tell you on that statement, Hey, you probably need to invest a little bit more if you want to have this amount of money per month. And one thing to think about here is that we just said, you step out your front door in Brooklyn or in Jersey City, and by the time brunch is over you've spent a hundred bucks between Pilates and brunch and coffee. It's real easy. Ubers. Think about, what if you were no longer capable of working and you still wanted to be able to spend that much money? Which is what retirement is, right? So you want to help your future self. You're just deferring this spending. This isn't not spending. You're just deferring it so you can spend it later when you no longer are able to work anymore. I don't know if that's inspiring either.
the-sober-butterfly_2_07-19-2024_104837And by the way, you have been really inspiring because sometimes we just need the hard truth and like that. The reality is you have to think about your future self. and prioritize that girl as well, not just like this moment I do want to have a somewhat balanced conversation though, in case I have girls who are, I think, more like me. Yes, I have a traditional nine to five. I'm a government employee. It doesn't get more grounding than that. But I also very much have an entrepreneurial spirit. So for my girls who are, looking for wealth creation from a less typical route, any suggestions or advice or tips that you could offer for people who are, like, But Rachel, I am an entrepreneur. I'm going to make money any avenues that you would offer for them to maybe consider. I know that you mentioned real estate earlier, but just in general for people who are like, more aligned to put in the time that Requires to actually build a business.
rachel-covert_2_07-19-2024_154838Yeah. So of course I'm an online coach. Like I have a six figure business as an online coach. So I definitely think if you have a skill that other people might want to learn from you, you should leverage being able to teach your skill. Even if you're uncertified in whatever it is that you are teaching, if you've had a huge amount of success or you feel really confident in it. And that would be through online courses or online coaching. You do not need a massive number of followers or a huge community in order to make money online. And there's also affiliate marketing. Especially if you like social media, There's TikTok shop, which, like inherently goes against my grain of who I am as a human being. But because I'm a finance girly and I'm a finance creator I get a lot of videos in my feed that are people who are like, this is how much I made on TikTok shop this year and, or this month. And like the numbers are crazy. And of course, that's not to say that everyone is going to have those numbers or have those results. But again, it's about perseverance. a lot of people will come to me and they're like, Oh, I want to open a store. I want to become a florist. I want to do my own nail designs. I totally hear you, but those are trading your time for money, right? So you want to do something that's more either one to many like what I do. So I work with my clients a little bit, some one on one, but mostly in a group setting. So I can have multiple people paying me at the same time and I can help multiple people. And I actually think group helps, like maybe in the same way that Some folks, choose the path of AA with sobriety, being in a group and a community and going through the process together. And so for the girls who are out there who are like, I want to make money online, learning marketing and sales are also huge skills. You can't make money as an online coach if you can't sell. So you have to be able to have sales conversations and sell yourself and you have to be able to market. But the thing is there's some great resources to teach you how to do it. And honestly, it's your own fear of what other people are going to think of you that holds you back. I really struggled to get started with creating Instagram content around personal finance. I felt really icky and really weird about it. But now I have, like in the last couple of days, I've had a viral video. I have over. 50, 000 followers. It's been two and a half years in the making. Like to some people, it looks Oh my God, look, she has all these followers. But I worked really hard over the last two years to learn how to use social media to bring people into my ecosystem. So opportunities have never been bigger. And if you are fired up about it, absolutely go after it because there is so much money flying around on the internet.
the-sober-butterfly_2_07-19-2024_104837Congrats on your viral video. That's amazing. And that's the thing that I love about social media. It feels limitless and like the numbers of people that you could reach an impact and also going back to what you mentioned about Tik TOK shop, I cannot tell you how many times I've been doom scrolling and they get you. I have a face mask right now coming from South Korea, And it's literally like the glassy Oh, this will make your skin look insanely beautiful afterwards, like porcelain. And yeah, it will get you. So all of the things you shared, like I think are great avenues to start thinking about building something online and this idea that money exists on our fingertips, quite literally on our phones. Not that it's easy, but just knowing that you can teach a skill or provide a service or share. Through more influencer style content creation videos that speak to you and other people will either want to sponsor that or connect with you. I think is really valuable for people to hear because some people aren't traditional and some people do want to think about other ways in which they can maybe elevate or maintain their lifestyle without reducing. I'm talking about myself early without reducing their quality of life., it's just nice to get that balance and hear different perspectives around long term investing and also investing in yourself or like your business idea, because it makes sense. That part is, I think, critical to making sure you do the market research and making sure that it's actually going to make profit, but some of these things are free to set up. It's not like you mentioned opening a florist or getting a brick and mortar. It's just simply okay let me experiment and let me see if I can make 5 on Amazon storefront. Maybe I can make 500. Maybe I can make 5, 000. And then going from there. So thank you for sharing all of that. I want to like wind down and open the platform just to ask you, because I know you mentioned that you have a six figure online business. I know you do financial coaching. I would love to just hear how a people can connect with you further. Be what you're currently working on and just see if you want to leave us with any lasting impressions. This is how we met in real life. Like you just have this like light to you. You have so much knowledge. And I feel like when you share, whether it's more like tough love, like today, or in part one of this conversation where it's like lighthearted, like self care can be fun and be free. I'm all ears with anything that you have to share. So please. I'm opening up the mic for you to drop some lasting gems with us, Rachel, today.
rachel-covert_2_07-19-2024_154838Okay, so I would say, first of all, if you want to get in touch with me, my Instagram handle is at Rachel underscore talks money. Send me a DM, say hi, tell me you heard me on the Sober Butterfly podcast chatting with Nadine. I always like to hear from people. And if you aren't sure where all of your money is going, let's say that you are earning a lot of money and You know that you're spending it like you're not confused that it's going out the door But you're not really clear on where it's going. I have a free mini training and it's called the financial snapshot So if you also just DM me the word snapshot, I will send you a link to get access to it. And is it going to be a little painful? Yes it is. But is it going to be ridiculously valuable? Yes it is. And I think the one thing that I want to just leave everyone with is that every part of your life has a chapter, right? And one of the reasons I like talking to you is that you have this really like definitive change in your life when you got sober. And I think the listeners here can look at their lives with this like line in the middle of the like. before sobriety and the after sobriety line, right? And your financial life also has chapters, right? So whatever you were doing in the past financially or wherever you are right now today basically is meaningless for what your future holds. And like I said, there's money everywhere on the internet, so Increasing your income is amazing and make sure that while you do that, you're also increasing your saving and investing. Because one thing that I see a lot, and I talk to a lot of online entrepreneurs, is that they end up with tons of debt from trying to take a lot of coaching programs and figure out what it is that you need to do. So just make sure that you are, as you are growing your business, also growing your wealth simultaneously, because you can absolutely do that. And I want to just make sure that everyone understands that okay. the future is wide open to you. The world wants you and they want what you have to offer. just can't get it until you start offering it to them, right? So whether it is in the form of affiliate marketing or TikTok shop or online coaching or fitness or whatever is your thing, whatever is your jam, like people want you in the same way. And even like when I met you, I was like, Oh, this girl's a vibe. Like I'm into it. So it's the same thing, right? Like you just connect with people naturally. And I think social media opens that door for you. And if you have a little bit of money right now already, if you're already earning a lot, but you're thinking about becoming an entrepreneur, You can also run Facebook ads and Instagram ads. So even if you don't have any audience whatsoever, that is not a barrier to entry. So just know that there's so many things that you can do. And I'm super excited. I really hope that someone from your audience reaches out to me and says, Rachel, I started an online business. Thanks for inspiring me. And thank you so much for having me. It was so nice to see you again.
the-sober-butterfly_2_07-19-2024_104837Agreed. I feel like there should be a part three. I definitely feel like more conversations need to be had on this very topic. And I love how you. Broke down like this defining chapter between the before times before getting sober versus the aftermath or life now. And I've made tons of positive strides, and I think most people can agree their lifestyles have exponentially. Increased in value since getting sober, but sometimes the pieces don't always align in other assets of their life. So I think this is a great conversation to have I do make good money. I think I'm very comfortable and I am able to save portions of my income, but I don't know where all of my money goes. You were speaking to me. So thank you so much. I need to take advantage of that free resource and actually do some accounting to see where my money is really going. Thank you, Rachel for opening my eyes, and I'm sure that you've helped other people think more clearly about their finances in today's conversation.