The small money habits that actually make you rich

Transcript:

CAROLINE WOODS:. Joining me now Haley Sacks, a.k.a. Mrs. Dow Jones. Haley So good to have you here at the desk.

HALEY SACKS: So good to be here. Thank you.

CAROLINE WOODS: So, Haley, you've built a career on offering financial advice, helping your followers become future rich people. I think a good place to start would be. Tell us, I guess, a piece of advice that you wish you would have taken earlier?

HALEY SACKS: Oh my gosh. Definitely to have a money date. Like have a set time every single month that you force yourself to sit down with your finances. I think that this would have made me a future rich person a lot sooner.

CAROLINE WOODS: What do you think as you start to look at what you're spending money on, what people are spending money on. What's the dumbest thing people are spending money on right now?

HALEY SACKS: Well, I mean, I feel like dumb sort of shames people. And there's already so much of that around our relationship with money and everyone's relationship to money. What they like to spend on is different. So I don't really like to judge it in that way. But I will say any sort of junk fee really gets me down. Like if you forget to cancel a subscription or, you know, you see things that you got absolutely no value from that. We're just sort of a, you know, error in your accounting system. I feel like that makes you feel a little bit stupid.

CAROLINE WOODS: Do you feel like social media too is encouraging kind of over consumption at this point. It used to be keeping up with the Joneses, and now it seems like keeping up with your Instagram feed or your TikTok feed?

HALEY SACKS: Oh my gosh. Yeah we are the most advertised two generation ever. Like you go on Instagram for one scroll and you're seeing, like more ads than people 60 years ago saw like in a month. It's so crazy. And Yeah, and I think that we, you know, it's such a highlight reel. You're really only seeing the best parts of people's lives, which of course, you know, includes all of these purchases and trips and successes. And so it can make you feel bad about yourself, and you feel like you need to have those same things and spend money in the same way in order to, like, have as fabulous a life.

CAROLINE WOODS: So what are some quick tips on becoming a future rich person?

HALEY SACKS: Well, I would say the money date is a really big one. And then I would also say know what you value because you can have basically anything, but you can't have everything. So, you know, really understanding what you love spending money on. Like if you love, you know, going to concerts or you love travel or you love filling your home with plants and you want to go every weekend to, you know, get a new one. But understanding what you really love spending money on and makes your life better versus those. We all have those purchases where we're like, cool. Yeah, that one didn't really work for me, you know? And then really narrowing in on that.

CAROLINE WOODS: Yeah most every time I order anything from Amazon, I'm like, did I really need this.

HALEY SACKS: No or even like, sushi delivery I feel like always gets me where I'm like, you. Like, I should have just gone to dinner. Like with a friend. That would have been, you know, a really great way to spend my money. But, like, this is sort of gross.

CAROLINE WOODS: Yeah not paying all those extra fees. What's one piece of financial advice that you actually ignore?

HALEY SACKS: Definitely to that you have to buy your home. I am all about renting. I think that it is, you know, gives you so much more flexibility. There's so many less costs that you have to incur. I find it I would rather be investment and cash rich versus house poor than the opposite, which I see so many people struggle with where like their fixed expenses are. So high, just because they Chase this idea of the American dream that we need to be homeowners and it just causes them so much stress.

CAROLINE WOODS: Yeah, I see that a lot. I see you touting it, which makes someone who pays an exorbitant amount of rent. But hasn't bought yet. It makes me feel like I'm making the right decision. I've also really seen it framed as renting is the most you will spend per month, whereas buying is the least you'll spend per month.

HALEY SACKS: Oh, I love that. Yes like, I had friends who bought an apartment and then immediately they had to buy a new HVAC system and it was like, cool. 25k just right off the bat. And that was just the beginning of it. And I was like, OK, yeah, I definitely made the right choice here. Every time I see my friends that own, like, have a leak in the roof, I'm like, I just press an app and someone comes and fixes it and it's part of my rent.

CAROLINE WOODS: I know. What's your most controversial financial advice? And maybe that's it. Renting versus buying.

HALEY SACKS: Well, I mean, I don't think that all debt is bad. I live and breathe by the 7% rule. So any debt under 7% you can sort of 7% interest rate. You can sort of just pay the minimum on and then put whatever money, you were going to use to aggressively pay that off towards other financial goals, like investing. But if it's a debt that's over 7% I believe that you should definitely focus on paying it off.

CAROLINE WOODS: And where does the 7% come from?

HALEY SACKS: Well, because the stock market, over time, adjusted for inflation, will return around 8% to 10% So the idea is that if you invest, you will be making more money than you would be saving by paying off your debt.

CAROLINE WOODS: All right. So you have millions of followers across all platforms. I'm assuming you have a good sense of how people are doing and feeling and what they're spending money on, how much debt they're in. What's the temperature check. How are people doing right now? Because there seems to be a big disconnect between what the stock market's doing and how people are actually feeling.

HALEY SACKS: That's such a great question. I mean, Yeah, we're seeing every day stock market highs are being reached. All the Dow is going crazy. But then you're seeing numbers about inflation and about layoffs and student loans. And it is so hard to, survive as an everyday American. I think that if you are in if you're a rich person, it's a great time to be in America. You know, you're, you're owning the stock market. You feel awesome. But for more Main Street it's very difficult and I definitely feel that with my followers. And so it's about getting them the right financial advice and encouraging their financial literacy so that they're able to make the right moves despite what's happening around them.

CAROLINE WOODS: You've talked about financial advice, including money, dates, and not all debt is bad debt. And, you know, renting versus buying. Is there one piece of financial advice that you've given on one of your platforms that has been the most well received?

HALEY SACKS: You know, I think people love anything to do with generational wealth, because it does feel like this rich person's secret. Like you need to be a Rockefeller in order to, you know, grow wealth for your children. But when you actually break it down, which I've done online in videos, it's really as simple as just opening an account for your child when they're born, putting, you know, $100 or as much as you can per month, and watching it compound. And just because of that power of time in the market, which we all know is like the most powerful force on Earth, that's really what builds wealth. These kids can have so much money, so it feels almost like a magic trick that you're never taught. And it's like, no, it's an easy magic trick. We can do this one.

CAROLINE WOODS: Yeah, I've done that for my young son. Although there is a part of me that's like, I didn't get this. Why am I doing it for him. But no, you hope that the next generation might have it a little bit easier, but still be financially responsible.

HALEY SACKS: And also like instead of buying them like New LEGOs or something like that, you just put that in the stock market. It's going to give them so much more in the future. Small apartment living. The worst thing you can do is get more plastic toys.

CAROLINE WOODS: So that's the investment side. Then there's the emergency fund side. How much should people actually have in their emergency fund for, you know, if we talked about lay offs, if they potentially get laid off or if, you know, an emergency actually happens?

HALEY SACKS: So, you know, the classic advice is 3 to six months in an emergency fund. And you should keep that in a high yield savings account. So you're earning some interest, but it's still super liquid. But I think that understanding where you fall on that scale is very specific to your situation. Like if you have children, if you're in an industry that feel that is very hard to be hired in, you know, if you have chronic conditions, maybe you are spending more on medical care, then you'll want to be on the higher end of that scale. But if you're single, you're in a, you know, maybe you work in I, you work in tech. There's a lot of jobs going on there right now. Like, well, actually there were just a lot of layoffs. But you know, Yeah, you're in an industry that is doing really well. Then you can be closer to the three month spectrum. But an emergency fund is so important. Like that is the first financial goal. Like before even paying off your debt, you have to have your emergency fund.

CAROLINE WOODS: OK, so a lot of good advice. We have to wrap one final thought as people think about becoming future rich people?

HALEY SACKS: You know, I think that we can all think of all the reasons why not. And all of these systemic issues that are happening and they're so real, and it is such a hard time to grow wealth and to feel like you are, you know, building something. But I really believe that with financial literacy and just taking small actions every day, you can really improve your financial life. So you just have to think about, do I want to be in the same place as I am right now, a year from now. Or do I want to take these small changes and make progress. So it's really, you know, just about taking control.CAROLINE WOODS: Yeah making that choice. Yes Haley Sacks, Thank you so much. It was such a pleasure to have you here. That's Haley Sacks a.k.a. Mrs. Dow Jones.