Transcript
Paul Winkler: All right. Back here on The Investor Coaching Show. I actually did a quick switch-a-rooney. Anne came in. Hello, Anne Sawasky. She is a charter financial consultant, JD. What is Juris’ doctorate. I was like why did I have to think of what that stands for? That’s attorney, but, you know, so, and Jim and I were just talking and I just figured what I have swing you in here just for this part of the show. Cause we were just talking about some of the basics and how, you know, some of the advice that you were given early on or things that you did early on in your career, maybe in your twenties. Jim and I were talking about, you know, getting involved in the 401(k) and savings, making your savings, a bill and those types of things.
One of the things that you did or things that you avoided doing that were probably good moves on your behalf, you know, from, or maybe advice you gave to your kids, you know, it’s just.
Financial Regrets
Anne Sawasky: Well, I’ll tell you something that we did that I really regret. Oh, that’d be good too. Yeah. Yeah. That’s good. Because again, we were young and we had just had our first child and we had our insurance agents sell us a whole life policy to pay for education.
Paul Winkler: Oh, that’s pretty common. And that’s becoming more common now again.
Anne Sawasky: Yeah. And that of course was really not a good thing to do, but that’s what we had done because that’s what we were advised to do at that time. So I regret that one a lot.
Paul Winkler: It’s having then in that industry, you know, you look at the amount of time it takes just to recover what you put in 10, 15, 20 years. I, you know, so you’re literally, you do so much better.
Anne Sawasky: Oh, I know. I know. It sounds good. Well, it did. And we didn’t know. And at that time I had just started working for an insurance company and of course, of course they love selling whole life policies. So yeah, like you’re a team player when you’re exactly. Exactly. So,
Paul Winkler: You know, it’s funny you say that. Cause I was telling somebody that the other day it wasn’t about it. Wasn’t about the insurance, but it was about your own company stock and it was sort of the concept. It was a conversation with someone and she was saying, I don’t think I can get my husband not to do his company stock. And I said, I totally get where that, where that comes from simply because you feel like you’re not a team player. Right. I said, but a lot of companies now what they’re doing is if they put the money in, if they’re the ones that are buying it on your behalf, they may not let you get out of it. But I’ll tell you what ever since. One of the things that it has been happening is if you’re, if it’s your money going in, they will, they’ll let you sell it.
Paul Winkler: And they won’t argue with you if you go and diversify away from it.
Anne Sawasky: Yeah. Because there were a lot of lawsuits about that and the lack of diversification and ran was a classic one with that.
Paul Winkler: Yeah. I’m curious too. So did you have any other regrets or were there things that you say that were positive things that you did early on that turned out to be really good moves on your part?
Getting Out of Debt
Anne Sawasky: Well, I mean, we always did invest in the 401(k)s of course. Oh yeah. We did that. And I think just getting out of debt as soon as possible, I mean, you know, the best thing is to not have student loan debt, but I did have student loan debt from going to law school. And so we just sort of live life like church mice for a couple of years and paid it off, you know?
Paul Winkler: Yeah. I love telling the stories from, you know, now that I’m older, been there done that. I love telling the stories from early in our marriage because especially my kids, I love to tell because they look at us right now and they go, you guys have really done well and they don’t think, and they weren’t there and they may have been, there weren’t necessarily terribly conscious of what was going on because when you’re two years old, you don’t really understand what’s going on, but they don’t remember when we were eating those 50 cent pizzas. Right. And you know, I may be exaggerating, but not much. They were really, really cheap.
Anne Sawasky: I mean, I had to laugh because when we had bought our first house and we had vowed, we were not going to get furniture until we paid off the debt. So the debt of the house, no, the debt of my student loans. So, so I mean like, no, no, no. So I mean, cause we did have some kind of junky furniture from apartments. So for the first couple of years, while we were paying off our debt, we didn’t have any furniture in the living room. And we had, our nightstand was a moving box with a tablecloth over it. Wow. Then when we paid off our debt, we went and bought our furniture.
Paul Winkler: You know, and I think that’s certainly one way of doing it. I look at some of the people that I’ve worked with, I’ve been doing financial planning for over 30 years. And I remember some of my early clients and how they would be financing their furniture, they do Rent-a-Center, you know, whatever it was called, I forgot. Yeah. And they would go and rent the furniture or rent to own, or it was something like that. And they were way overpaying for this stuff. And I would ask them, so why are you doing that? Well, I know I’ll never forget this one couple. Well, we do a lot of entertaining on Fridays and you know, they had this really nice TV. They had a really nice couch. They had really nice chairs in a ratty apartment and it was really, really odd to me. So I knew something was off and I was looking at their budget and their budget was like $600 a month. And I said, you guys could own all this stuff. Wow. You know, in a matter of just a few months, if you would just quit. Yeah. Well we can’t and it was appearances. And I had a conversation with a young lady and it was about appearances and she was just talking about the generation and she said, it’s just a generation that, you know, we’re on Facebook and it’s what you look like.
Paul Winkler: And they’re having to perfect their faces. So they look better than others. And she, and she said, it’s a competition.
Anne Sawasky: Well, that’s, that’s probably true. But I think that was always there. I mean, you know, there’s always been this, keep up with the Joneses thing. And I mean, we were teased when we were doing that with our budget and we were trying to save, I remember my husband was teased, mercilessly about, about drinking cheap beer. You know, he still talks about that. He’s like, boy, your family used to give me a hard time for, you know, buying old style. That was a Wisconsin beer, you know, we’re like, Hey, we’re paying off our debt. You know?
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Budget or No Budget?
Paul Winkler: Well, it’s fun. And then, but one of that, that’s, I’m going to tell you one of the habits that we got into early on, it was not going out. You know? I mean, now, you can’t go out there. Right. And you know, it’s amazing what I’m finding with clients that are saying, well, you know, we’re right now, this year, we’ve done really, really well because we haven’t been going out to eat. And I think they’ve learned a lesson. Yeah. Well, they’ve learned a lesson that they actually can do it without going out all the time and they replaced it. I love it. I love going out and doing stuff, but we don’t. We developed a habit early on where we don’t go out very often.
I’ve seen some people that’s good. You know, they go out every day or they go out a couple of times a day, really expensive. It’s a very, very expensive habit to get involved in. Or, you know, the other thing that they tend to do is go and just spend money on little things. It adds up.
Anne Sawasky: Well. And I think actually on that note, one of the things we did early on when we first got married and it was really annoying to me, but it was very helpful is my husband suggested he’s like, let’s keep a spreadsheet of every expense for several months. So we see where our money’s going. And I thought, I hated doing that, to be honest with you. However, it was really a very helpful thing to do because you suddenly start seeing these little things that nickel and dime you and they really add up at the end of the month, you know.
Paul Winkler: Let’s see. Well, one of the things that I did was I always save first. I wasn’t a budgeter, but I saved first. And then I was just scared that I didn’t touch what I’d saved into. And I made it just, that was untouchable, even though it was touchable. And, you know, I talked about in Jim and I were talking about, I don’t know if you heard, but we, he and I were talking about in a previous segment that, you know, 401(k)s having that penalty is a great deterrent for people going in and reaching in and grabbing them, pulling that money back out. But you know, for me that was, I was never a budget or now I’ve seen people that do it very successfully.
I never could get myself to do it, you know, but that was something that I’ve seen people do very successfully. And I, so if you’re not a budgeter to me, saving first and then spending what’s left over is a good way of actually approaching life. And so let’s take a quick break. I want to see if there are other things that you did that ended up working out really well, you know, curious and so ASCII in here, which is just sneaking in and we can get Jim out just real, but let’s do this.
Don’t Go into Debt
Anne Sawasky: First of all, just don’t go into debt if it’s the big one. And if you’re in debt, pay it off, work hard to pay it off, which is what we did when we did have our student loan debt. But, you know, I had, my daughter was talking about going to law school and I told her, I said, the debt load for law school right now is just too high. I mean, you know, you’re talking 150,000. It’s like, that’s a big barrier to overcome. And I said, I said, I really wouldn’t recommend it unless you get, you know, a lot of scholarships to pay for it.
And so we did end up looking at some different places. And interestingly enough, we, we were looking at one school cause she got admitted to quite a few. And I asked them, I said, how many of your graduates are employed after graduation? And she said, I think it was less than 50%. Wow. It was really low. I said, or no, I think it was 75% with any year. But then I said, how many as lawyers?
And it was like about a third of that. And that was sort of the end of that with my daughter. I think she heard that $50,000 in debt to probably not get a job as a lawyer.
Paul Winkler: So you began with the end in mind, that’s a really good piece of advice. What can you do with this degree? Where can you go with it? Because people get very specialized degrees.
Anne Sawasky: Right. And it, and it there’s just so much competition out there with that one in particular right now. And that could, that could be applicable to any degree though, that your children are looking at
Paul Winkler: Attorney high-income when you think it’s synonymous. But I remember when I used to sell disability insurance and actually talk to attorneys, I can’t tell you how many of them I met in private practice that were making, you know, terribly, terribly low wages because they weren’t good at marketing.
Anne Sawasky: Well, yeah. Or, you know, there’s just more competition now. I mean, when I got out. And you know, I’m talking quite a while ago, I’m talking 25 years ago. This was, yeah. So it was even then it was I, and I had grown up thinking that means, hi, you know, so there may be jobs that you think are out there that are really, really high income that may not be nearly as high as you think.
Yeah. You have to do your due diligence and really with any, with any job that when my kids were talking about studying a particular line in college, you know, I would say to him, well, what are you going to do with that? How much do you think you can make on that? Because there’s a cost benefit analysis to any career. You know, if you’re going to spend, you know, if you have to get a masters to make $30 or $35 or $40,000 a year, no, that’s a no go. You know what I mean? Not unless you’re getting a full ride,
Paul Winkler: It could be a problem. Yeah, yeah. That’s a really good point. Yeah. And I, I think, you know, typically that is where I’m seeing a lot of people getting in trouble. And I think that, you know, it’s getting a lot more press now that people are thinking twice about going into a lot of debt on student loan debt and real. But I am really thinking about, you know, what can you earn and do the research before you go into a field, right? You know, some people have a, you know, there’s been a lot of talk about, we’ll make sure that whatever you do that you have a passion for. And there is, there’s some truth to that that they ought to be, you know, cause then you go to work every day and it’s not work, but realize that you’ve got to balance the two.
Oh, absolutely. You know, you’re not going to have passion for everything, every single thing that you do every single day. And I always tell people, look for a big problem to solve. And maybe something that you’re uniquely gifted to solve too, right. Is, you know, there may be things that you are really able to do and you’re really, really good at, but think in terms, don’t forget the economics though is really my advice in that. Yeah, totally. So what would be another thing, you know, that you would say that you would,
Cars and Car Payments
Anne Sawasky: Oh, well, you know, obviously cars are such a huge expense for anybody’s budget throughout their lifetime. Sure. So to go into debt, to buy cars and particularly the people that, you know, like I have family members that they just keep leasing a car over and over and over again.
Paul Winkler: Right. Sure. You know, so you’re basically financing depreciation with that. Right. Okay. So some, some final thoughts, you know, in the closing seconds here. Yeah.
Anne Sawasky: I think about not having a car payment, buy a car, pay for it and drive it a long time because cars can last a long time and then you don’t have, but what if it breaks down then? You know, what do your homework know exactly what you’re going to buy? You’ll buy it. It takes a day. Yeah. Yeah.
Paul Winkler: Will often fool themselves into thinking that, you know, Oh my goodness. But it breaks down. I’m going to be stranded and that’d be it. Well, yeah, you might need a tow truck, but yeah, exactly. Get a ride for a day and then go buy another one. All right. This is The Investor Coaching Show. You know, hopefully it’s, you know, younger people that these are some of the things you want to think about getting your finances in order so that, you know, later on down the road, you got lots of freedom where most people don’t have a lot of freedom later on in life. Look at how people live paycheck to paycheck, even in retirement, you don’t want to be there. paulwinkler.com is the website. This is The Investor Coaching Show.
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