7 Scorching Money Hot Takes That Will Make Your Financial Advisor Cringe

Mindy:
Personal finance is personal for a reason. Everyone is going to approach spending and saving and investing differently. So how are you supposed to navigate through the millions of different opinions online and in books, and even on podcasts? Hello, to know what the actual right answer is when it comes to your finances. Well, today we are going to be taking out the guesswork and sharing some of the most controversial financial opinions out there and what hot takes are, right, wrong, and how they could be impacting you as you are working towards your financial future. Hello, hello, hello and welcome to the BiggerPockets Money podcast. My name is Mindy Jensen and with me today is the she Wolf of Wall Street, Amanda Wolf. Hello. Hello. I’m excited to be here, Mindy. Amanda is a personal finance educator and I’m always excited to have her on. I am so thrilled to have her join me today to help debunk some of these seemingly absurd financial hot takes. Okay, Amanda, to start it off, before we get into these controversial financial opinions, I want to hear from you, did you ever believe something about finances that ended up being completely wrong?

Amanda:
I feel like I could probably have a whole show dedicated to just all of the wrong things that I thought about money growing up. But I would say one for me that sticks out really at the forefront of my mind was that investing is only for rich people. When I was younger and especially right after college, I always thought don’t invest in the stock market. It’s very, very risky. You could lose all of your money. And of course now I know and hopefully most people out there know, but if not, you can lose all of your money if you buy the wrong things. But once you have a little bit of basic financial literacy education under your belt, you realize no, the way people get wealthy is by investing in the stock market. So I think for me, that was one of the big aha moments as it relates to money lessons in my life. What about you Mindy?

Mindy:
One of the biggest ones I think that has really shaped my life once I debunked it was you work until you’re 65. You early retirement is age 55 maybe, but that’s if you’ve hit the lottery or you’re a CEO or something that’s not for regular people. And then my husband found that super simple math to early whatever that Mr. Money mustache blog post is, and it turns out that you can retire early. You don’t have to work until you’re 65. And that was quite eyeopening when we discovered that article that was just

Amanda:
Changed our lives. I remember the first time I learned what PHI was, financial independence, retire early, the fire movement and being like, well, I don’t want to retire early. I’m going to be bored. I like working and jokes on me. I was like 24, 2 years into the corporate world and I learned about this, but I realize that it’s so much more than that. It’s just the freedom to decide. And I think that’s what money does for us, right? Money is power and gives us the ability to make these types of decisions and leave situations that we don’t want to be in and all of that good stuff.

Mindy:
Yeah, that is if you love your job, that’s awesome. I love my job. I don’t need to leave. I’m not going to leave anytime soon, but I have the option should things change. Alright, let’s get into these controversial financial opinions. What’s the first one you want to bring up, Amanda?

Amanda:
Okay. The first one that I want to bring up that I found was around sabbaticals and temporary breaks. So this one says sabbaticals and temporary breaks from work are just as financially irresponsible as purchasing a Ferrari and can easily be more expensive when you consider the full opportunity cost of missed earning and contributions. So for me, I could not disagree with that more, Mindy, I think that we are allowed to take breaks and I feel like a lot of us, it’s been ingrained in our head that we need to work as hard as possible all the time for our whole life until we hit 55 or 65 or 69 or whatever that age is that relates to your industry that you work in. But I think if it’s done right, if you have the means to live off of your savings, it’s not like I wouldn’t recommend taking a sabbatical and just loading up your credit card by any means, but if you have the savings in place and you have a good plan in place, I think that a sabbatical and a temporary break is an amazing idea for your mental health, for your physical health.
There’s only so many years you can go hike Machu Picchu or climb Mount Everest if that’s what you want to do or go scuba diving. And I think if you have an opportunity in your younger years, in your prime healthy years to go do something like that, I say go for it. I don’t think it’s financially irresponsible if you have a plan.

Mindy:
I agree with you, with an asterisk. You didn’t say, I want to make sure that you can afford this sabbatical. So 24-year-old Amanda who just discovered the financial independence movement and is two years into her corporate career probably is not set up to take a sabbatical. First of all, how burned out are you after two years in corporate? Although I take that back, I spent many years in corporate and I can see how that would be real easy to get burned out. But if you don’t have the money to cover your entire expenses during the sabbatical and for a little bit afterwards, if your company isn’t going to keep your job for you and you want it, you have a difficult time getting a job, you’re in a specialized field, something like that, then maybe a sabbatical isn’t the best choice for you right now. But if you can afford it, if your company’s willing to hold your job for you, if you have a job or a career that’s easy to replace, then absolutely 100% with everything you said.

Amanda:
Yeah, so I think of course, like I was saying, don’t go at it, throw it on a credit card and just hope for the best. But I don’t think that there’s a right age. I think for a 24-year-old, if they have been living at home and they’ve saved up some money and they go work in the corporate America and realize, oh, this isn’t that fun, I thought it was going to be, and they want to take a break, I think they should be able to, especially because I remember for me, one of the hardest things about going from college to corporate America was that there was never an ending. And for me that was really hard for me to wrap my head around. Like in school you had for all these years, you’re in school, you have assignments, you have deadlines, these things are done.
Whereas in corporate America, you’re never done. When you’re done with that project, there’s a hundred more that you could do now go help your teammate. You’re never done. And if you don’t know how to set boundaries when you get home from work, you could easily be on that hamster wheel where especially working from home where you’re just working all the time. So I think you could get burnt out at 24, but if you’ve been doing a good job saving and you have the means to go do it, and at that age you might be fine sleeping in hostels and riding the train and you don’t need fancy things, you could probably do it a lot more cheaply then as well. I don’t want to sleep on the ground at this age, but I might not have minded then.

Mindy:
Okay, I’ll amend that. Take the sabbatical that aligns with your current financial situation. Are you saving enough for

Amanda:
Retirement? We’ll cover that and more after a quick

Mindy:
Break. Welcome back. I am so excited to be joined today by Amanda Wolf.

Amanda:
Okay, Mindy, so now it is your turn. What is a controversial financial opinion that you want to highlight?

Mindy:
So I was browsing Reddit and I found this thread called What’s your controversial opinion and personal finance. And in that thread, the very first comment was, I do not budget. Money goes in, a fixed percentage goes to savings and I spend the rest on whatever I want. And when I read that I was like, wow, that is so anti all of the advice that you see in the personal finance space. You need a budget. I mean, there’s literally a company called you need a budget, but you need to budget so you know what you’re spending on. And this is a very controversial take. I don’t budget, but also I know a lot of personal finance bloggers and podcasters and YouTubers, and this is actually a really common thread among them. They don’t budget with a formal budget where they’re saying, I’m going to spend $700 on groceries and $300 on gas this month.
They just prioritize putting money into savings. I am going to save 35%, I’m going to invest 50%, whatever it is. They take that off the top and then they spend whatever’s left with little regard to where it’s going. I do think that they have some idea of where it’s going just loosely. They’re not buying $10,000 purses. I actually don’t budget either. I have an amount that goes into our investments, but I’m also financially independent. So I would say that just because I don’t budget doesn’t mean that the people that I’m talking to shouldn’t budget. If you’re struggling with your expenses, if you’re struggling with your spending, why do I not have any more money? I think I’m only spending this, then I think you absolutely should budget. But I also think that there’s a time and the place for people who need a budget and people who can get by with not budgeting. Amanda, do you have a budget?

Amanda:
Before I answer that, I want to say that I kind of disagree with what you’re saying because I think that you are budgeting, you’re just not neurotically budgeting to the penny, just like the person in this Reddit thread, right? Money goes in, a fixed percentage goes to savings hopefully, and investments, and then I spend whatever else I want. So you are doing what is called paying yourself first. So you’ve already decided how much you want to save and invest and then you spend the rest. So you are budgeting. I think that not budgeting is when you get a paycheck, you then decide what to do with it. It’s like, oh, maybe I want a Birkin bag and that’s my whole paycheck plus more. Again, I dunno how much a Birkin bag is either. If you are getting paid 50 grand every two weeks, you do, you boo if that’s what you want.
But I think that you are budgeting, you are just not budgeting line by line by line to the penny. So to answer your question, I do budget, but I also do not neurotically budget in the spreadsheets line by line by line. But there was a time and a place in my life where I did need to do that where I had some debt and it’s like, no, I need to know where all the pennies are coming from and where they’re going right now. And then once I really had a good grasp on that, then I went to what I like to say, it’s the no budget, budget. You save and invest what you want in advance. Then if you have a quarterly bonus or you get a chunk of money, then you get to decide what to do with it at that point too. But then you spend the rest and it doesn’t matter if you decide you want to go to Nobu one night and then you’re going to eat rama noodles with the rest of the cash that’s in your account. Again, whatever works for you. I don’t think you need to neurotically track it if you have a good graph. So do you see what I mean? I think you are budgeting, Mindy, you’re just not budgeting the way that some people think of budgeting.

Mindy:
Okay. I think that’s a

Amanda:
Great way to look at it. So I do budget just not formally Mindy. It was a budgeter. But also I agree if you are financially independent, that is different. But also I think it’s a good idea to check in, make sure lifestyle inflation, lifestyle creep hasn’t seeped into your life too much in that you’re going to potentially run out of money one day, right? You got a lot more free time when you’re financially independent a lot of times.

Mindy:
Speaking of running out of money, Amanda, what’s your next controversial take?

Amanda:
Okay, so this was a good Reddit thread. So the one I found was around savings and it says I believe we are all overestimating our needed savings for retirement. And I disagree with that. I think that most people are not saving nearly enough for retirement, at least I would say the millennial group whom I interact with the most, I would say is not saving nearly enough money. We have grown up in a YOLO culture where we are not doing the budget or no budget budget we just talked about where we’re just saving and investing whatever is leftover versus making that decision upfront. So don’t think, I do not think that most people have nearly enough saved for retirement.

Mindy:
I read this comment and I took it a little differently. I thought it was more like the people in the financial independence community are saving too much. We’re overestimating our needed savings for retirement. In which case I would tend to agree because just because of the people that I interact with on a daily basis, on a weekly monthly basis are people in the financial independence community who decided that based on the 4% rule, my financial independence number is X, they reached that. They quit their jobs, they stop working, they stop generating meaningful income. A few dollars here and there I’m not going to worry about, but they stop generating meaningful income. They start withdrawing from their retirement accounts and their retirement accounts continue to go up even as they continue to withdraw their funds. So a perfect example of this is Christie and Bryce from Millennial Revolution.
We had Christie on the fire show a few months ago and she said that she and Bryce have been withdrawing 4% from their portfolio of X. Any money that they generate outside of that, they’ve written a book, they’ve got a blog, any money they generate outside of that goes into a different account. So they’re just living off of the 4% rule and they have more money now than they did when they retired 10 years ago, but they’re still pulling 4% out every single year. So I agree that the financial independence community is probably saving too much for retirement or rather not spending enough during the course of their life. I’m not saying look for ways to spend, but I’m saying get the helicopter ride when you’re in Hawaii because it’s amazing and don’t look at the fact that it’s $1,500 per person or however much it is, I don’t remember. But do the things that will bring joy or add richness to your experiences while you’re in the moment. Don’t be so

Amanda:
Cheap. So okay, I could see where you’re coming from there, but also that is assuming that our most recent performance will continue, that the s and p 500 and the stock market in general has really been on a run. It’s been in a really good place over the last 10 years and I don’t know how long you’ve been tracking yours and I don’t know what that percent is off the top of my head. I would probably have to go Google that, but that is assuming that things continue the same. So I would say that you guys are like count your lucky stars. Some of it is just luck, right? You got in at a good time, you saved a lot of money at a really good time, but we always hear past performance doesn’t equal future performance. And so I think that’s something that you have to also remember.

Mindy:
Yes, and that is a really great point. I just quickly looked up the historic stock returns, the average annual return of the s and p 500 over the last 150 years is 9.352% assuming dividends are reinvested, okay, adjusted for inflation, the average return is 6.99%. So this is taking into account all the ups and downs. The 10 year return is 12%, the 30 year return is 9%. Again, the 50 year return is 8%. And you are absolutely right. Past performance is not indicative of future gains, but it’s still, there’s this 150 year history that says if the stock market goes down, it will recover. And I can’t guarantee that it will always recover, but I do have faith in the economy of the United States. I mean I can’t predict the future. Oh, I wish I could do, how much money could I make? I’ll Biff tannin in back to the future two or three if I just had that book that told me the stock market returns, if you have a crystal ball email, both of us because we’re both interested in that, what is the next hot stock tip? But you’re right, we can’t predict the future. We can only go by what’s the historic information that we have. But again, I still think that we might be saving too much. Did that stop me? No. Is it stopping me when I’m talking to other people from saying, oh, $150, you’re good. Quit. I’m not going to say

Amanda:
That either. One more thing though that we have to take into account is hopefully this other show is coming out before. Tell me if not, but if you remember show that we did with the Kyle one. Yeah, if you remember the show that we did with Kyle and Scott, we were talking a lot about inflation and I think that inflation has also been on the rise over recent years. And again, we don’t have a crystal ball, at least I don’t. And it sounds like you don’t either, Mindy, but what is that going to look like? I think that I would rather have more money than less money. I’ve never in my life been like, I wish I had less money. So I think that we have to also remember inflation has been a little cray cray and is probably going to continue.

Mindy:
Yes, I can’t argue with that because you’re completely correct. There is no prediction about where inflation’s going except up the prediction is up inflation, it’s going to go up, it might come down and then it’s going to go back up again. But there’s this concept called Coast Fi where you reach the level in investments that will allow you to have a comfortable retirement at age 65. And I think that’s a great first goal. I’m going to get to my Coast Fi number and then I’m going to take stock. If I’m going to be Coast Fi and I work in a job that I hate, maybe I start looking for a new job while continuing to invest and continuing to save. But I’m not going to just go with any job that I come across. I’m going to find a job that’s a really good fit for me. And then regardless of what the income is, I’m not saying go from 150,000 to 20,000, but if you’re going from 150,000 to 130,000 but your quality of life is so much better, I would absolutely get behind that. I have worked at jobs where I hated everything about it and I have worked at jobs where I loved everything about it and lemme tell you the I love everything about it is way better

Amanda:
Snaps for Mindy. I completely agree. I feel like we started, we disagreed. I think we’ve come around. I totally agree with everything that you just said there. So why don’t you tell me then what is your next one? What is your next controversial finance take? Sort of

Mindy:
Different from what we were just talking about. Frugality is kind of overrated. Income matters more and 80% of your efforts should be dedicated towards getting higher paying jobs, chains, fields get a new degree, move companies, cities, countries, whatever it takes. It’s way more effective once you’re at a reasonable level of frugality. I think that I spent too much time being cheap and being frugal just for the sake of putting more money away and I didn’t take time. What does that phrase stop and smell the roses. I didn’t take time to stop and smell the roses. So I agree that with, although again that’s not just carte blanche to spend on everything, but your income does matter and if you’re in a low paying job right now, how can you get more money? How can you take a class or get another degree and increase your income in that same field or can you change fields and significantly increase your income?
We had two episodes almost back to back episode 98 with financial mechanic and episode 110 with a Purple Life. Both of them talked about how they systematically job hopped to much higher incomes and the reason they were able to do that is because the hiring budget is much larger than the retention budget. So if you’re in a job where they don’t appreciate you, they’re not paying you well, maybe it’s time to look at what you can do differently, but if you are in a low paying job, frugality is going to be a better choice than spending everything. We have to take one final break, but stick around for more after this. Alright, let’s jump back in. So you are saying that you do think frugality is overrated? I do. Just based on all of my personal years of experience of being super frugal and really worrying and stressing over the money that I was spending when I didn’t really have to be, does it matter if I have a 95% savings rate or a 90% savings rate? I mean we were really saving so much money it doesn’t really matter.

Amanda:
But then I think you also made a really good point in the beginning when you were talking about the difference between being frugal and cheap and will you tell me what you think those two, how those two are different?

Mindy:
Being frugal is making smarter choices with your money. You compare the cost of laundry detergent and oh this off brand is less expensive than the main brand and I know that they’re going to be similar in quality. Cheap is I’m buying the off brand even though I know I have to use twice as much or it doesn’t get my clothes as clean because it’s cheaper. You make decisions based solely on price and have nothing to do with anything else. Sorry, case in point, I once bought a gallon of $15 paint. I was painting my wall and I’m like wow, I can see all the paint behind it. So I painted a second coat and I could still see it took five coats of paint to cover up that wall and I had to go back and get another gallon. So that’s $30. Well okay, the good quality paint is 25 or $30 and it covers in one coat. So I did five times the work for and spent the same amount of money and that was just a waste. But because it was $15 I went with the price. Maybe frugality is an overrated, cheapness is overrated, but it’s difficult to change the two.

Amanda:
Totally. Well I was wondering what your definition is because when I think of frugality I think of a cost analysis like you said, but also doing things that sometimes don’t make sense Going to a different grocery store to buy your blueberries, they’re a dollar cheaper. To me I’m like is that worth your time? I guess that’s the equivalent of your five coats of paint. When I think of the super frugal people, I think of that whereas I think me comparing two laundry detergents and if I know they’re the same thing and one is just the private label brand and I think that’s just being smart with your money. I don’t think that’s even being frugal. I think it’s just carrying what you spend your money on. And then when I think of cheap, I think of cheap being like I am depriving other people or hurting other people along the way.
Or I guess maybe even myself. So I think I need caffeine in the morning, but I’m going to get the crappy Folgers. You guys don’t have a partnership with Folgers, right? Hopefully not. I’m going to get the crappy Folgers even though it doesn’t taste good and I don’t like it. To me that’s being cheap or not tipping your waiter or waitress, that’s cheap. Going out with your friends and having them all buy around and then you don’t, that’s cheap. So I think for me that’s how I think of cheap and then frugality I think of as going out of your way, like I said, the blueberry example. But then I also think it’s okay to compare prices. So I think frugality is overrated to a degree. I think if it deprives you of life’s experiences or your hurting other people along the way, no bueno not for me, but I think if it helps you cut a couple of things along the way to get you closer to your goals all for it.

Mindy:
That’s a great way to say it.

Amanda:
Alright Amanda, what’s your next controversial take? Okay, the next one that I found is around hustle culture. So it says hustle culture is mostly spinning your wheels and wasting your time. Focus on your primary income first. Once you level up your career trying new things or spinning up profitable side projects, it’s infinitely easier. So for that one, I don’t think hustle culture is mostly spinning your wheels or wasting your time, but I do think there is a time and a place for it. I think that while you are younger and you have more time and energy, you don’t have a family or kids, that is the time to go hustle baby, go get a side job, go learn a new skill, make some extra money because we know how compound interest works. The more time it has, the better. So I think do that in your younger years, I feel like hustle culture was super popular with the boss babe movement and then it was like we don’t like the boss babe movement. Everybody’s tired and wants to take a nap. And I think that there is a happy medium in there somewhere where I don’t think it’s just spinning your wheels. I think it’s leveling up your finances and I would much rather see somebody do that for a few years in their twenties or thirties, then have to do that in their fifties or sixties because they don’t have enough. So while I do think HU culture can get a bad rap, I don’t think it’s all bad.

Mindy:
I will agree to a point. I think that what this guy is saying is hustle culture is mostly spinning your wheels and wasting your time. If you are working in corporate America, you have a decent income. Going out and driving for Uber for $3 a ride or whatever an Uber driver gets is going to be wasting your time. You should be focusing on your income, your primary income more than that kind of side hustle. Scott is actually, Scott Trent is a perfect example of this. When he was younger and he wasn’t married, he wasn’t working at BiggerPockets, he would do all of these huy things and he quickly learned that he’s not really making any money off of it. He’s putting wear and tear on his car, driving for Uber or doing DoorDash or things like that. And he’s not really increasing his savings, his net worth, his ability to invest. And he stopped that and I think that that is, if that’s what this guy is talking about then great. But you’re a perfect example of side hustle being a really great idea. Amanda has this tiny little side hustle project called the She Wolf of Wall Street and she is teaching people how to get their finances in order, teaching them the basics, teaching them things that they don’t know all while happening to make income that is more than $3 a Uber ride. Right? Right.

Amanda:
Definitely, definitely. But I’ll say I did drive for Lyft at one point as well. I did not know Scott did that. So that is a fun fact. But I made decent money. But of course once you find something you’re passionate about doing, if you hate driving a car, don’t go drive for Lyft or Uber If you hate social media and it makes you sad every time you go on Instagram, don’t start an Instagram. Right? But I think it’s being aligned with what do you like doing? For me, Lyft had a time and a place in my life. I made a few hundred bucks a week, I got to do it in my free time. Then I started she Wolfe of Wall Street and I made no money at first. I didn’t make a single dollar for six months and I spent an enormous amount of time.
So it’s like sometimes you have to put some time into something like that with no return and just hope it works out. So I think that a lot of people probably in the beginning would’ve been like, you are spinning your wheels with this side hustle, but if you are passionate enough about it and you have a long-term vision, especially for something like that, I say go for it. I think that are I that so many people don’t understand, nobody can see inside your head. So nobody really understands what it’s like to take a risk like that. And I think if it’s something you’re passionate about, you should go for it. If it’s just to make a few extra bucks, do whatever is easiest and you don’t hate, especially if it’s a second job,

Mindy:
Amanda, I think that’s awesome. I think that’s a really great way to look at it. And how long did it take you when you were doing your she wolf of Wall Street? How long did it take you before you clicked, before you started making money and feeling like this really has some teeth?

Amanda:
Like I said, I started it in, what was it, July and I think I did my first, let’s see, August. So I guess it was about seven months later I did my first brand partnership for a thousand dollars. And to tell you that it was the most exciting thousand dollars I have ever made is an understatement because I don’t think a lot of people understand how much work goes behind content creation and engaging with your community and answering questions and dms. There’s so much work behind the scenes. So being on Instagram constantly for seven months, finally making a thousand dollars, super exciting and that’s when I was like, oh, okay. I hadn’t actually really initially even expected or planned to make money. It was just something I was passionate about. Then I saw things growing and I realized that there was a need for financial literacy. Then I started doing some coaching on the side. So I think after that first year that I made money, it was probably, I don’t know, maybe like $25,000. So not enough to live on at all. Obviously not enough to live on, but it wasn’t nothing. And as your audience continues to grow, then your brand partnerships can get bigger, then you gain a little more legitimacy. So then things really, I would say snowballed from there. But yeah, six and a half, seven months of daily nonstop work before I made a thousand dollars

Mindy:
I, and that’s something to consider. The hustle culture can feel like spinning your wheels. So just something that you’re not hating doing. I mean otherwise you’re just creating an unpaid job.

Amanda:
Exactly. Well and I think that’s also when we think of hustle culture, are you just looking for a little side job to make money or are you looking to own your own business and become an entrepreneur one day and do your own thing? Those are two different goals. So I think that really depends on your view of it as well. Okay. Mindy, what is your next controversial take?

Mindy:
Well, since this is BiggerPockets money, BiggerPockets is all about owning rental real estate. This one says I prefer to rent and invest the difference between an apartment and a mortgage in a high cost of living area in retirement, I’d expect to buy in cash, a lower cost of living area where rent versus buy comparison makes more sense or pay for rent from all the proceeds from investing. I get Filesadmin.coarre looks from friends when I mentioned my total lack of interest in owning a home. So all of my landlords out there from BiggerPockets who are listening to this, who is going to rent your house if everybody’s buying, I think that especially in a high cost of living area, but in any cost of living area, if you don’t want to own a home, that’s the best time to not own a home. So I love owning a house, but there are times when I am shoveling water out of the basement and thinking to myself, man, I wish I could just call a landlord and have somebody else take care of this too. So if you don’t want to rent, then don’t rent. Buy a house. If you don’t want to buy a house, then rent and anybody telling you that you are wrong is themselves wrong.

Amanda:
I completely agree with you 1000000%. I think that society puts a lot on us and makes us think that we want things we don’t want. And to be able to break free from that mold and think independently is huge. The American dream is you have a house with a white picket fence and 2.4 kids or whatever that is, and it’s like you’re allowed to want different things. If the idea of maintaining a home or staying in one place, if the idea of maintaining a home or staying in one place sounds like zero out of five stars fun to you, then don’t do it. Ignore the noise. And if somebody gives you crap for that, you said people look at you crazy because you don’t want to own a home. If people look at you like that, then just say we’re allowed to want different things. And I think that’s what it comes down to at the end of the day. But don’t get bullied into buying something especially as expensive as a house. It’s not like a dinner.

Mindy:
Exactly. Don’t get bullied into buying something like a house. If you don’t want to do it, don’t do it. I love that. Alright Amanda, I think we have time for one more. What is your last controversial financial take? So my

Amanda:
Last one says having a six to 12 month emergency fund is totally unnecessary. Once you have a decent nest egg and a high credit limit, I have enough for about a month and a half. Anything bigger than that is covered by my credit limit or I can wait a couple of days and sell stock. I so disagree with this. I know several people, even in the personal finance space who say, I don’t have an emergency fund because I have a big enough brokerage account or I have enough investments. And I think that that is very shortsighted. I think it’s really optimistic of you. We love a glass half full queen out there, but we got to be realistic sometimes and I think that we have to remember that sometimes things happen. Anybody remember Covid where you could lose your job, your stocks could tank all in a freaking day and then cash is king again. I think that is so shortsighted to think that you only need one and a half months worth of cash. I think it also probably depends on a few different situations where you are in your life if you’re financially responsible for anybody else. I don’t think everybody needs six to 12 months worth, but I think one and a half months is not nearly enough. What do you think, Mindy?

Mindy:
I agree with you and we’ll extrapolate even more. If you have one and a half months of security or emergency fund, what’s going to happen at the end of the second month if you still haven’t gotten the job? I mean we were shut down for what, five or six months you said? Does anybody remember? Yeah, I do, but I don’t remember how long the country was shut down, but essentially the country was shut down. You weren’t working and you went from you have a job today to you don’t have a job tomorrow. It was in a snap, in a heartbeat. So even having a six to 12 month emergency fund during Covid would have maybe gotten you through. Okay, I think this is even more important when you are self-employed. We spoke with Far Robbi who said that in terms of monthly spending, she keeps around 18 months of spending in her account. I believe she’s either the primary breadwinner or the main breadwinner of her family. And if something goes wrong, you’re a content creator, Amanda, if the internet went out for seven months, doesn’t matter how many videos you’re making, nobody is seeing them. You’re not making any money when nobody is seeing your videos. So I don’t think the internet’s going to go out, but I also didn’t think a pandemic was going to happen four years ago. So gosh, it would be awesome to have a crystal ball.

Amanda:
Yes. Well, and to your point, the amount of time, I just did a quick little Google search while we were chatting and the stock market, the stock market has always recovered. We know that. But it took about four months to get back to where it was. So if you’d been sitting on one and a half months worth of cash, you lost your job overnight, you’re going to be taking a loss on your investments. That’s why we want to only invest money that we don’t need in the short term and for the long term because you would’ve had to dip into your investments and taken a loss if you could not wait four months. And the 2008 financial crisis, I graduated college in 2009 and I remember it was real hard to get a job. So I was struggling to make any money at that point and if you had just planned to sell your investments, I think you would’ve been sorely disappointed if you didn’t have a little bit of cash to tide you over because you’re going to have to take a loss on that money. Let’s look at the 2008

Mindy:
Financial crisis. If you have a month and a half of emergency fund and this guy says anything bigger than that is covered by my credit limit or can wait a couple of days for me to sell stocks. So your stocks are down, you’ve got a month and a half, you can’t find another job for six months. You’re going to cashflow on your credit card for six months. I mean, how much interest are you racking up? How much are you able to pay that down like nothing because you just used up your emergency fund and your stocks are way, way, way down. You don’t really want to sell. I wasn’t keeping track of our net worth prior to I think 2013. So I’m not sure what our stock portfolio dropped by in 2008. Someday I’m going to do that homework and see what we lost on paper. You’re only losing it on paper until you sell, but once you sell, that loss is now cemented. So I think that six to 12 months is a really great start. And again, this is determinant on your job until 2020. I have historically said, oh, if I lost my job, I’ll just go get a waitressing job. How many restaurants were open in April of 2020?

Amanda:
Not a whole lot

Mindy:
Or they were but there weren’t any waitresses.

Amanda:
Yeah,

Mindy:
You’d be a line cook. Yeah, you could be a line cook. Waiting tables is a great way to generate some pretty instant cash if you’ve got anybody to wait tables on when you can’t sit in a restaurant, you don’t have any tables that you’re waiting on. And I think it’s shortsighted to not be cognizant of the fact that you need access to cash

Amanda:
Easily. Absolutely. More than a month. Again, I don’t think 12 months is necessary. I mean I think it’s necessary for some people. I don’t think it’s necessary for me. I don’t have 12 months worth, but I think one and a half months is like you are live risky out there because anything could happen in a flip of a switch. Things that we never saw coming because again, we’re going to bring it back to that crystal ball. Mindy, none of us have a crystal ball, but my crystal ball tells me you need more than one and a half months for sure.

Mindy:
Absolutely. Alright, this was really fun, Amanda, thank you so much for joining me today. What is going on over at She Wolf of Wall Street?

Amanda:
What is going on over at She Wolf of Wall Street? We are as usual talk and money, so we’re talking about how to budget a no budget budget. That is my go-to like we chatted about earlier, how to invest in the stock market. We’re talking about how to take care of you regardless of what is happening in the world around you.

Mindy:
Okay. And where can people find the She Wolfe of Wall Street?

Amanda:
So you can find me on Instagram, she Wolfe of Wall Street and that is Wolf with an e or she? Wolf of wall street.com is my website if you are taking a social media hiatus. And I have lots of good freebies, newsletters, and all that good jazz over on my website.

Mindy:
Awesome. Amanda, again, thank you for your time. It’s always great to talk to you.

Amanda:
Yeah, thanks again for having me.

Mindy:
Alright, that wraps up this episode of the BiggerPockets Money podcast. She of course is the Amanda Wolf, the she Wolf of Wall Street. And I am Mindy Jensen saying Goodbye Little fly.