Ask an Advisor #3: College Edition (ft. Ashley Miller)

Welcome to The Invested Dads Podcast, simplifying financial topics so that you can take action and make your financial situation better. Helping you to understand the current world of financial planning and investments, here are your hosts, Josh Robb and Austin Wilson.

 

Austin Wilson:

All right. Hey, hey, hey, welcome back to The Invested Dads Podcast, the podcast where we take you on a journey to better your financial future. I am Austin Wilson, research analyst at Hixon Zuercher Capital Management.

Josh Robb:

And I’m Josh Robb, director of wealth management, also at Hixon Zuercher Capital Management. Austin, what can our listeners do to help us with our podcast?

Austin Wilson:

Well, we first of all, would love it if you would subscribe, if you’re not already, which if you’re listening to this on a Thursday, you probably are. But if you’re not, on whatever platform you listen to us on, whether that be Apple Podcast, maybe someone has an Android, and they use Google Podcast-

Josh Robb:

Google Podcast, the best.

Austin Wilson:

I don’t know. There’s a million others, Spotify, Shopify. No, that’s where you go shopping.

Josh Robb:

Pandora.

Austin Wilson:

Pandora?

Josh Robb:

Yeah, we’re all over. We’re everywhere.

Austin Wilson:

We’re everywhere. Stitcher.

Josh Robb:

I’ve never heard of that one.

Austin Wilson:

I think that’s one.

Josh Robb:

Probably.

Austin Wilson:

So, anyway, wherever you’re listening, go ahead and subscribe and please visit our website. You can sign up for our weekly newsletter and get notified each and every Thursday when a new episode drops, you’ll get a nice little synopsis of what we talk about.

Josh Robb:

That’s right.

Austin Wilson:

It’s pretty handy, as well as a link to listen. So that’s where we’re at.

 

[1:14] – Introduction of Ashley Miller

Josh Robb:

And speaking of that newsletter, we have with us, joining us today, Ashley Miller.

Austin Wilson:

Ashley Miller.

Josh Robb:

Ashley is our marketing intern and she’s the one that puts together that awesome Thursday newsletter as well as edits all these podcasts. So everything we mess up today-

Ashley Miller:

I get all the bloopers-

Josh Robb:

That’s right.

Ashley Miller:

… that don’t make the final cut.

Austin Wilson:

I bet she’s like storing them off to the side-

Josh Robb:

Blackmail for later on.

Austin Wilson:

… and then, one day, there’s just going to be a-

Ashley Miller:

One day.

Austin Wilson:

… “Oh, you said you weren’t going to help me with that. Well, look what I’ve got.”

Josh Robb:

That’s right.

Austin Wilson:

… “You were talking about your dog in a mean way.”

Josh Robb:

That’s right.

Ashley Miller:

Yeah, you won’t know.

Josh Robb:

Well, you do that anyways. And you do that and publish it.

Austin Wilson:

That’s right.

Ashley Miller:

It’ll just come out of the blue.

Josh Robb:

That’s right.

Austin Wilson:

It sure will.

Josh Robb:

So, Ashley, thanks for joining us, first of all.

Ashley Miller:

I’m happy to be here.

Josh Robb:

And we will start with just tell us a little bit about yourself. You are in school.

Ashley Miller:

I am.

Josh Robb:

Tell us a little bit about where you’re going, what you’re majoring in, and your favorite things to do.

Ashley Miller:

I am in school. I am a junior at Bowling Green State University. I’m a marketing major and-

Josh Robb:

Go Falcons.

Ashley Miller:

Go Falcons, and I’m an advertising minor, a pretty busy girl. I’m president of Women of Business Leadership Organization at BGSU, largest organization in the College of Business at BG.

Josh Robb:

There you go.

Austin Wilson:

Congrats.

Ashley Miller:

Yeah. It’s pretty exciting. Additionally, I’m a figure skating coach for Findlay Silver Blades.

Josh Robb:

Oh, there you go.

Ashley Miller:

I’ve been coaching for a few years. It’s super rewarding. I love coaching. I know, Josh, you have some experience coaching. I don’t know about you, Austin.

Austin Wilson:

No, they don’t let me coach.

Josh Robb:

Not ice skating.

Ashley Miller:

Not ice skating.

Austin Wilson:

Josh would coach in falling.

Josh Robb:

Yes. I always said, though, if you’re going to get hurt, that’s the place because you can get ice on it right away.

Ashley Miller:

That’s what my dad always said, yep.

Josh Robb:

That’s what all dads say. It’s in the manual.

Austin Wilson:

Please ice it. Oh wait, you’re already icing it. Good job. Good stuff.

Josh Robb:

That’s right.

Ashley Miller:

Yeah. My dad’s like, “Why’d you come home? You already had ice there.”

Josh Robb:

Just put some ice on it.

Austin Wilson:

Put the peas back in the freezer.

Ashley Miller:

Exactly.

Josh Robb:

All right.

Ashley Miller:

Another recent endeavor I’ve taken on is running an e-commerce small business of my own called Ashley Nicole Clothing.

Josh Robb:

There you go.

Austin Wilson:

She hasn’t made me the blazer I asked for yet.

Josh Robb:

You need a blazer?

Ashley Miller:

I don’t specialize in blazers, but maybe I can work something out for you.

Josh Robb:

That’s right. Good deal. Well, that sounds like you’re really busy. We know you’re busy here because we need a lot of help on our podcast.

Austin Wilson:

We give you a lot of work to do.

Josh Robb:

That’s for sure. But like we always do, we love having our interns join us on the show and we just open the floor. We do not know ahead of time what questions Ashley’s going to ask us.

Ashley Miller:

Nope.

Josh Robb:

And so, she has them ready to go and she’s going to ask anything she wants about finance.

Austin Wilson:

Now we gave her no restrictions.

Josh Robb:

Yes.

Ashley Miller:

I gave them the topics; I didn’t give them the questions.

Josh Robb:

And I just now looked at the topics so I’m way ahead of things.

Austin Wilson:

We’re going to try and not tick the explicit box, Josh. So, watch your language.

Josh Robb:

I will be very careful. Okay.

 

[3:52] – Questions from a College Student: Taking Out Loans

Ashley Miller:

Very careful. All right. So, my first question came from another college student, someone I know, and it’s about student loans so very popular among absolutely college students.

Austin Wilson:

Absolutely.

Ashley Miller:

So, say I take out a loan for college. I work over the summer and make money. The next year when I need to take another loan, should I use the money I made over the summer to pay off the old loan or should I take out a smaller loan this year?

Josh Robb:

Good question. Well, there’s two different types of loans. There’s student federal loans that are subsidized and then there’s unsubsidized. While you’re in school, those loans do not accrue any interest.

Austin Wilson:

The subsidized.

Josh Robb:

The subsidized loans. And so, either one, it’s the same result at the end because you’d have the same dollar amount of loans. So, if you paid off the other one and then got a higher loan or just got less of the second loan, you’re probably going to end up with the same dollar amounts. And since they don’t accrue any interest while you’re in school, you’re going to end with the same dollar amounts once you start paying interest.

Ashley Miller:

Ok.

Josh Robb:

So, from that standpoint, if they are the subsidized loans, then it’s really indifferent which one you do. You should do one or the other, but it doesn’t matter because you’re going to end with the same dollar amounts once they start accruing interest at the end.

Ashley Miller:

Alright.

Austin Wilson:

Correct.

Josh Robb:

There’s no wrong answer there.

Austin Wilson:

But if they are unsubsidized loans or private loans, which usually what a lot of those are, those you are accruing interest from day one.

Josh Robb:

Yeah, so you’d want to pay them off.

Austin Wilson:

And those, if you did have some extra cash available, it would probably be prudent to put some, maybe not all of it. But if you have the availability, you could knock some interest off for sure.

Josh Robb:

Or if the newer ones are a higher interest rate, you’ll get less of that.

Ashley Miller:

Right.

Josh Robb:

That would be assuming they’re the same interest rate, but if interest rates have gone up, let’s say your first student loans were 5% and then your next ones are six, you may want to get less of that 6% interest because you’ll have less accruing interest.

Austin Wilson:

Yeah, you have to pay more cash for the current semester or whatever that you’re going towards.

Ashley Miller:

Okay, that makes sense.

Josh Robb:

Good question. A lot of nuances in student loans. Huh?

Ashley Miller:

There is, yeah.

Josh Robb:

Good times.

 

[5:44] – What’s the Fasted Way to Eliminate Debt?

Ashley Miller:

Yeah. And with that, what is the fastest way to eliminate debt?

Josh Robb:

Winning a lottery.

Austin Wilson:

Yes. We just had an episode about winning the lottery.

Ashley Miller:

Yes.

Austin Wilson:

We’ve talked about this numerous times. If you think about ways to eliminate debt, there’s generally two thought processes.

Josh Robb:

We should wait till the winter to talk about that.

Austin Wilson:

We should wait till the winter because right now you don’t have beach bod.

Josh Robb:

Well, because they’re both named after snowstorms.

Austin Wilson:

Yeah, exactly. There’s the avalanche method and the snowball method. So, Josh, maybe just give a two-sentence description of each of those.

Ashley Miller:

Yeah. Explain those for me.

Josh Robb:

So this is the approach to if you have multiple debts. So when you have student loans, you usually have more than one loan and they all have maybe different rates and terms and stuff. So the snowball method, if you think of rolling a snowball down the hill, it gets bigger as it goes. And so that concept is you start with the smallest loan value-

Austin Wilson:

In dollars.

Josh Robb:

Yes. And so not the interest rate, but smallest loan value. So if I have a $5,000 loan, a $10,000 loan and a $15,000 loan, I would first target the $5,000 loan because I’ll be the quickest at paying that off, the smallest dollar amount.

Ashley Miller:

Right. Yeah.

Josh Robb:

I’ll pay as much as I can to that, pay the minimum on everything else. So any extra money goes to that one.

Ashley Miller:

Okay, yeah. That makes sense.

Josh Robb:

Once that one’s all the way gone, that payment is no longer due, I take all that money and move it to the next one and I snowball, keep building on it. The avalanche method, which is just the opposite is instead of organizing by dollar amounts, you target the highest interest payment. So the same three, five, ten to $15,000 loans, if one is a 6%, one’s an 8% and one’s a 10%, I would take the 10%. Regardless of the value sizes, that’s the one that’s causing me the most interest. Between the two, you actually save money on the avalanche, but you’re more likely to stick with it in the snowball method because you get victory sooner and you see the progress. So either one is fine and, in the end, you’re talking minimal difference. And so I always say the snowball method makes sense because you get to see progress. “Oh, I got that one done. Now I move to the next one.” So that’s the first one.

Then the second one is prioritizing because we’ve talked about this too. When you’re young saving, you get the most value because you have the longest time for that to compound. So you got to kind of weigh the two. Everybody wants to get rid of those student loan debts and we agree with that, but don’t forego saving something. Like if you get a 401k, make sure you’re at least getting the match early on because you’ll love what that money is doing in 30, 40 years when you’re getting ready to retire because it has compounded and grown along the way. So, it’s kind of splitting your priorities between the goal of removing all debt and also starting to save forward.

Austin Wilson:

So, our general advice for students entering the workforce after college, which we’ve said before and we’ll say it again, is you get a full time job and you’re offered a 401k match. Take that. Don’t put more in than you need to get the match. Then do your debt on top of that- [**Noise**]

Josh Robb:

Ashley just heard him hit his water over –

Austin Wilson:

I almost knocked over … I get really excited.

Ashley Miller:

I tried not to laugh into the mic.

Austin Wilson:

Young people not taking advantage of that is one of my pet peeves. So yes, that wasn’t even your question.

Josh Robb:

And then you just wait and maybe the government will pay off your student loan debts anyways.

Austin Wilson:

Please don’t count on that. It’s not going to happen.

Josh Robb:

But yeah, so just pick a method and stick with it. That’s really the bigger key, whichever one makes sense to you. I’m a math numbers guy-

Ashley Miller:

I am not.

Josh Robb:

… so I can build a spreadsheet and I would say, “Oh look, how much interest I can save.” And that alone is motivation for me to stick with the avalanche method. But for most people that don’t live and breathe in an Excel sheet and see those numbers, saying, “Oh, you know what, in five months I’ll be here. In two years, I’ll be here,” and you can see that progress a lot faster. That’s usually the better way.

Ashley Miller:

Yeah. That makes a lot of sense. Yeah. All right. I’m going to move on to kind of the flip side of that. So you guys have talked about how to eliminate debt and people who are taking out student loans. What about those students who are in a good place financially? What’s the first step that these individuals should take to stay on top of their finances and make the most of their money?

Josh Robb:

So, in a sense, college is taken care of. Maybe they have scholarships or some money coming in.

Ashley Miller:

Right.

Josh Robb:

And so, what should they be doing to get a-

Ashley Miller:

Exactly.

Josh Robb:

… head start on the game? Okay.

Austin Wilson:

That’s so exciting. It doesn’t happen very often, but it’s a great situation.

Josh Robb:

And so that debt is not there. And so, they can kind of supercharge that savings. But the bigger thing is, and this is really true for that group of people, is that the habits need to be formed. Because if they’re in that situation, chances are throughout probably most of their life they didn’t have to worry so much about money and there’s nothing wrong with that. But they have yet to build those habits of responsibility for their own finances.

Ashley Miller:

Yeah, saving their money. They might think I have that extra money; I need to spend that.

Josh Robb:

Yes. It always shows up there. Somehow there’s more money. And so that concept is just now that I’m becoming my own adult and I’m going to slowly get maybe separated a little bit from that money source of parents who have provided and helped along the way, the habit is the key. So, setting up a budget, setting a standard of here’s the first thing I’m going to do with my money is save it. I’m going to put some aside for a purpose. That habit is the key.

They’re going to have a head start in that they don’t have to worry about that debt so they’re going to have more cash flow. So, they could probably add a little for their 401k or maybe start a Roth IRA, but setting the habit will be their key because, up to this point, they’ve had a backstop. And so, it hasn’t been as high a priority as somebody who has had to work part-time jobs and make sure they had the funds to get the gas for the car. All those things that maybe built those habits automatically, someone in the other situation has to intentionally create those habits for themselves.

Josh Robb:

But that’s not a bad situation to be in.

Ashley Miller:

No.

Josh Robb:

And it’s not saying you can’t, and you won’t be successful. By far, someone who respects and understands the work that was put into giving them that opportunity will be likely to want to pass that on and do the same for their kids. So it’s a great spot to be in. It’s just a matter of understanding, realistically, where your cash flow is going to go and making sure you prioritize some of that savings.

Austin Wilson:

And I think one thing is that once you do graduate, you won’t have to have that huge chunk of your income going out towards repaying student loans or whatever, which differentiates you from most of your peers. So don’t let that fall through to your spending. That’s why you talked about saving but save more intentionally and you were already given a gift to be set up really well for a long time. So, use that and make it actually work for you by saving more intentionally in lieu of putting that towards debt. So, it’s awesome.

 

[12:19] – Dad Joke of the Week

Ashley Miller:

And I’ll let you guys talk about that a little bit further after I take a little break and go into the dad joke.

Austin Wilson:

Oh, dad joke of the week.

Ashley Miller:

Dad joke of the week.

Josh Robb:

Yes. Love it.

Ashley Miller:

The dad joke of the week. Are you ready?

Josh Robb:

I’m ready.

Austin Wilson:

Born ready.

Ashley Miller:

Okay. So, this is really, really weird, but the other day I heard music coming from my printer.

Austin Wilson:

Uh-oh.

Ashley Miller:

I don’t know what it was, but then I went in and turns out it was just jamming.

Austin Wilson:

It was just jamming. I love it.

Josh Robb:

Oh man.

Ashley Miller:

Yeah, when I think of that joke, I just kind of picture a printer dancing in a little office.

Josh Robb:

Just rocking out, just rocking out.

Austin Wilson:

With big headphones on the sides of each of them. Oh, there’s a meme out there for that for sure.

Ashley Miller:

There definitely is.

Josh Robb:

I like that.

 

[12:56] – The Importance of Budgeting as a College Student

Ashley Miller:

So, we’ll get back into it. I want to talk about budgeting. You touched on it a little bit, but I kind of want to dive deeper into that.

Ashley Miller:

So, I know you guys have stressed the importance of budgeting. First explain why budgeting is so necessary for college students.

Austin Wilson:

Well, at the most basic level, it is essential to know that your outflows are less than your inflows. Otherwise, you’re going into a worse financial situation month over month. So the way that we’ve always approached the starting of budgeting is really to start with understand what you’re spending and make sure that what you’re spending is less than what you’re bringing in. So that’s level one and then start looking at what you’re actually spending on and you might be surprised because there are a lot of things that add up very quickly, but there are definitely certain categories, such as required spending and discretionary spending.

So, understanding where that breakdown is very important. And then you can kind of fine tune and tweak over time to get that to where you want it to be. Obviously, we’ve looked at different ratios you could use or whatever, but I think, as a college student, it’s most important first to just understand what you’re spending and that it’s less than what you’re bringing in or less than you’re allotted. Maybe you’ve got some help or whatever through college or whatever but making sure that you’re not going into a worse financial situation by spending more than you’re bringing in is key. As a college student, it looks a little bit different. You need to even have more visibility as I think you have more money and bigger income coming in after college. But during college it can be relatively simple, but just know where your money goes.

Josh Robb:

The college aspect is you go from probably being under your parents’ household into either a dorm or an apartment or somewhere where you’re picking up more responsibilities. It’s no longer “Oh, there’s food in the fridge. I’m going to eat that,” and it magically reappears.

Ashley Miller:

Yeah. I’ve discovered that this past year, yep.

Josh Robb:

So, then you’ve got to prioritize. Okay, I have X amount of dollars from my employment or whatever I’m doing in college, and I got to pay for food, and I got to pay for my stuff that I have going on, whether you’re renting an apartment or all that stuff. And then I probably want to do some fun stuff.

Josh Robb:

And so budgeting in college is really about prioritizing and getting used to things you have to do and things you want to do. In high school, most of the time it’s gas for your car, maybe insurance or things like that and then all my fun stuff I want to do. Right? You’re still getting your food at home. Maybe you’re buying your clothes but, for the most part, it’s just my spending.

Josh Robb:

Then you move into my spending plus things I have to do. Then, like Austin said, then once you graduate, you kind of start adding to the things I have to do because then savings starts showing up more, retirement savings-

Ashley Miller:

Right, all that fun stuff.

Josh Robb:

Then maybe I’m moving out of a dorm and into more permanent housing so then I have property tax or things like that. And so, as you make those transitions, doing it in college gets you the framework to say, “It’s not all just for fun and I can’t do my fun first. I got to make sure I have enough for the things I have to do.”

Josh Robb:

And so, it’s kind of the baby steps into you’re dipping your toe in the pool of adulthood, but there’s still life jacket there and you’re still kind of in the shallow end. You’re not going to drown, but it gives you a chance to get used to it before you get straight into it.

Austin Wilson:

We’re going to coin the term progressive budgeting.

Josh Robb:

Progressive budgeting. I like that.

Ashley Miller:

It sounds fancy.

Austin Wilson:

That could actually be something.

Josh Robb:

That’d be good. Good question.

 

[16:15] – Resources to Create a Budget

Ashley Miller:

So along with that, what resources should I use to create a budget?

Austin Wilson:

That’s perfect because we live in a lot different world than we did even when I went to college. And now you can do everything, almost everything really easily-

Josh Robb:

On an abacus.

Austin Wilson:

… on an abacus in your pocket. No, actually-

Josh Robb:

Do you know what an abacus is?

Ashley Miller:

No. I was like, “What’s that?”

Austin Wilson:

What’s an abacus?

Josh Robb:

Oh, I made a joke that’s too old.

Austin Wilson:

Yeah, I know. Well, it’s 2,000 years’ old.

Josh Robb:

So, before calculators, so that’s how far back we’re going-

Austin Wilson:

Older than Josh.

Josh Robb:

… little slide beads on a bar. You may have seen this somewhere.

Ashley Miller:

Oh, I think I’ve seen one before.

Josh Robb:

That’s an abacus and you use that. They’re 10 so they’re power of tens.

Ashley Miller:

Yeah. Unfortunately, I don’t have one of those.

Austin Wilson:

But actually there’s a lot of really cool, usually even free apps that are really helpful. And even some of the not free ones are very affordable, but you can link your accounts and it’ll automatically bring in all the things you spend or transactions or whatever which is great and then categorize them for you. So that’s super handy. I think there’s one called Mint is a huge one.

Ashley Miller:

I’ve heard of that.

Austin Wilson:

You need a budget. That’s a huge one. Dave Ramsey has one I think as well.

Josh Robb:

Gazelle.

Austin Wilson:

Gazelle.

Josh Robb:

Or something like that I think is what his is called.

Austin Wilson:

And then obviously you could do it in a spreadsheet, which a lot of people love to do. That would be-

Ashley Miller:

Yeah, good Excel.

Austin Wilson:

Yeah, you could do it in Excel or Google Sheets or whatever that is and then really get your transactions that way. And then some you actually have to manually type in the transactions which actually makes it a little bit more difficult to do, but you actually have to think about your spending more when you do it that way.

Ashley Miller:

Yeah. So it might have benefits there.

Austin Wilson:

Right. So there are a couple different ways to do that, but we live in the digital world and now you can do almost all your budgeting very digitally, even automated, which is huge. So then at the end of the month, you can look at what you spent, adjust some goals or whatever for the next month, and it’ll give you how much in each category you have throughout the month which is super neat.

Ashley Miller:

That’s awesome. Yeah.

Josh Robb:

It really comes down to how does your brain work, what is the easiest way where it makes sense to you. There’s some people that just like to write it down. Right? There’s nothing wrong with a paper budget. You could just take a blank sheet of paper and start at the top and say, all right, here’s my income. You write that number down. Then underneath it, you just start subtracting off. So you say, “I have rent of X amount of dollars. I pay the water bill for X amount of dollars. My gas is X amount of dollars.”

Josh Robb:

You just work your way all the way through and then, when you’re done, does it zero or is it better than zero? That’s the goal.

Austin Wilson:

Don’t forget your favorite word. The envelope method.

Josh Robb:

Oh, envelope method.

Ashley Miller:

It’s definitely envelope.

Austin Wilson:

It’s definitely envelope. But some people, that is the best method of budgeting. They literally say, “I have got, aside from my mortgage or my rent which is automatically subtracted, whatever, I have a thousand dollars a month of discretionary spending where I need gas and food and fun things and shopping and all this stuff.” And you say, “Okay, well I have $100 for gas and $200 for groceries,” and you just break it out and you make yourself envelopes and you carry your envelopes around as you know you’re going to spend those things. That’s the most simple way people actually have had a lot of success with.

Austin Wilson:

And that also makes you, again, mentally think as you’re giving out that $20 bill like, “Ouch.” That’s why Dave Ramsey is a big proponent of that.

Josh Robb:

I like the hybrid version of that where you do that for certain categories where you tend to overspend. So, if you tend to eat out more than you should, and every month you look back and, “Man, I spent that much on food,” if that’s your issue, move to cash for just that thing for a little while and it will really make you aware of it.

Ashley Miller:

Yes. So, you’re only paying that amount.

Josh Robb:

Because carrying cash around is hard because it’s just a pain. Not everybody takes it.

Austin Wilson:

It stresses me out to have cash. I’m afraid I’m going to lose it.

Josh Robb:

Yeah, and so if you just kind of focus in on those pieces where I’m more likely to overspend, people find you spend less when you’re actually handing out cash. So, you kind of take your envelope method and you go from there and say, “I’m just using it for X things.” For instance, in our family, filling up for gas is not a good option because when you have kids in the car, you don’t want to unload everybody, walk into the gas station, pay the cash, go back out, pump it. Then there’s a difference. Then you got to go back in and then get your-

Ashley Miller:

Yeah, it’s a hassle.

Josh Robb:

So there’s certain categories it’s just not convenient for.

Ashley Miller:

Right.

Josh Robb:

But yes, that’s another method.

Austin Wilson:

The problem with that is, with the envelope sometimes, is can you imagine if you go to a couple of stores and you’re using cash and you’ve got like 89 cents of change in your envelope just weighing it down, man. I don’t want to be weighed down. I got enough problems.

Josh Robb:

It’s hard.

 

[20:45] – Can College Students Financially Plan for Their Future?

Ashley Miller:

Yeah. All right. My next question is about a financial plan. So, a good chunk of college students are very future driven so maybe settling down after graduating. Maybe they’re getting into long term relationships. So, what is your advice to these people? How can these individuals efficiently set aside and save money for the future, including buying a home or family life, stuff like that?

Josh Robb:

The biggest thing when you’re financial planning for young people is you got to leave a lot of flexibility in there. So you’re going to set goals, but you’re going to keep them pretty loose and pretty fluid because 20 and you say, “I want to retire at 50,” or whatever you want to do-

Ashley Miller:

There’s a lot of life left.

Josh Robb:

…There’s a lot of in between there, right? Kids could show up, marriage, houses, relocations, all things that could disrupt or change your plan, not for the bad, it just changes your plan. And so I always think for young people, the biggest thing is to say, “Okay, if this is where I’m trying to get to, what are the things I need to do now?” And make sure you’re really focusing on the now. Say, “Okay, my goal is to retire earlier than normal.” Let’s just say you don’t know exactly when, but you think, “A normal time is somewhere between 62 and 65. That seems a long time. I want to do it sooner. Okay. So, what things do I need to do now to at least be on the right path for that?”

Ashley Miller:

Yeah. So, would you recommend setting up a Roth IRA then?

Josh Robb:

Yeah. So, Roth IRAs are great. So first you want to get that match from the 401k because that’s free money. Above that, you’re probably in a lower income part of your life than you will later on, right? As you progress through your career, whatever your career is, your income will probably go up. So starting to save early on into a Roth means that you’re paying less tax and it grows tax free for the whole rest of the time.

Ashley Miller:

Exactly.

Josh Robb:

So that’s a good spot for money to go.

Austin Wilson:

Also, I just had this thought that if you want to make long-term plans about money, you need to make sure that your career path is oriented with your goals. So if you’re in college and you’re like, “Okay, I want to retire at 40 in a mega millions mansion in Hawaii,” you probably don’t want to go into social work or basket weaving.

Josh Robb:

Yes

Austin Wilson:

Yeah, sure. You need to be thinking about, “I want to have a career in a field that has a lot of jobs, good paying jobs with good benefits, so that I can achieve my goals,” if those are what you want to do. Some people have different goals, and they can have different kinds of jobs, but I think making sure that going in you’re aligned with what you want to be doing can fund my hopes, dreams and goals, whether that be supporting my family, which we would say obviously that’s number one, but also retirement and stuff beyond that.

Josh Robb:

Yes. For sure.

Austin Wilson:

Basket weaving. That’s my go to.

Ashley Miller:

Me too.

Josh Robb:

That’s it. Used to be underwater basket weaving.

Austin Wilson:

Yeah.

Josh Robb:

The more complicated one.

Ashley Miller:

Austin’s a big basket weaving guy, sewing.

Austin Wilson:

My dad told me if you’re going to have clothes, a guy’s got to learn to sew. Just simple repairs-

Ashley Miller:

Yeah, make them yourself.

Austin Wilson:

But I can fix a hole.

Ashley Miller:

Yeah, you can make your own blazer.

Josh Robb:

Yeah, make your own blazer-

Austin Wilson:

Well, I wouldn’t go that far. You’ve never seen me try and sew a straight line. I can sew a hole. Yeah, that’s fine. But a straight line? I don’t … no sewing machines.

 

[23:50] – Josh & Austin’s Biggest Tips for College Students

Ashley Miller:

All right. I have one more question for you guys.

Austin Wilson:

Bring it.

Josh Robb:

All right.

Ashley Miller:

It’s a fun one, kind of. Biggest tip for college students, could be financial or non-financial.

Josh Robb:

All right. I’ll get one and it’ll be non-financial.

Austin Wilson:

Mine too.

Josh Robb:

Enjoy your free time and flexibility.

Austin Wilson:

Oh, preach.

Josh Robb:

So in college you are very busy. You especially. I’m looking right at you. You are busy. But, in general, college students are busy. They got classes, they got homework. They have probably jobs. They have groups, organizations they’re part of-

Ashley Miller:

Editing The Invested Dads Podcast.

Austin Wilson:

That’s a lot of work. I can tell you that.

Josh Robb:

Editing The Invested Dads Podcast. You are busy. You’re busy in a different way than you will be in future years. You have a lot more flexibility. If you think of your class schedule, you have a couple of classes a day. They’re spread out. Usually, you’re done maybe early afternoon. The flexibility of your time at this age is huge and, as you get older, it changes. So, enjoy that freedom and flexibility while you have it. Take advantage of it. That means hanging out with your friends. I mean I remember when I was in college years ago after we lit the candles and everything to get the light in our rooms, but we would go out in the middle of the day and be playing sand volleyball. Can I do that today? Not really. I would hurt for a while too. But the things you can do in college, you just take advantage of them. That’s what I would say.

Ashley Miller:

Yeah.

Josh Robb:

And early in, post-college too, if there’s things you want to try, that’s the best time. Like you’re a marketing major and there’s marketing opportunities all around and you think, “Man, that sounds interesting.” It’s a lot easier to try careers before-

Ashley Miller:

Yeah. Try it now, rather than later.

Josh Robb:

… large families show up and you’re making decisions for a bigger group of people that rely on you.

Josh Robb:

So those are the things I look back on and think there was things I didn’t do in college that, man, that would’ve been cool. Even like opportunities at college, sometimes there’s trips and stuff you can go on that the college helps sponsor to make it a little easier to do those things. So that’s my thought. Non-financial.

Austin Wilson:

Now I have two, one of which is semi-financial, one is not really financial.

Austin Wilson:

One is don’t get a dog.

Josh Robb:

Every time. That’s not even a college thing.

Ashley Miller:

Don’t get a dog, in general.

Josh Robb:

You can be a one-year-old kid to a 95-year-old person. One advice from Austin, “Don’t get a dog.”

Austin Wilson:

I knew college students who got dogs and it tied them down in college. And then young professionals getting dogs is a terrible idea because you can’t travel. You always got to find a sitter. Dogs are expensive. They get sick. They get old. They die.

Ashley Miller:

Yeah. I have a question, Austin.

Austin Wilson:

Yes.

Ashley Miller:

Dogs or cats?

Austin Wilson:

I mean I’m going to go with dog asterisk because I have two dogs. So I’m saying this as a recovering dog owner.

Ashley Miller:

Recovering?

Austin Wilson:

But my little dog is named Samson. I named him Samson because he’s big and strong, but he’s very small.

Josh Robb:

Small and mighty.

Austin Wilson:

It’s funny. But he is like half cat. He’s like a hybrid because he’s so small.

Ashley Miller:

He’s half – Ok I understand. I was like, “what, how did that come to be”.

Josh Robb:

Not literally. It’s not cat dog. It’s not-

Austin Wilson:

I had to pick him. He’s very cute and nice and he loves me a lot more than he loves my wife.

Josh Robb:

There you go.

Austin Wilson:

But I like the fact that cats are cleaner than dogs. It’s nasty that they have litter boxes-

Ashley Miller:

It is.

Austin Wilson:

… but they do clean themselves. Dogs do not clean themselves.

Josh Robb:

No, they’re just content.

Austin Wilson:

They’re just content being gross.

Josh Robb:

Content being muddy or whatever.

Austin Wilson:

So that’s my answer to that. So, as a young person, I say just caution yourself on committing to pet ownership. That’s my first part of the answer.

Austin Wilson:

The second is learn contentment in life and this is really when it comes to, financially, really where it kicks in because I think that it is very easy for people to get out of college where, even if you have a job and relatively low expenses, you still don’t have a lot of money. So you live like a college student. And then, as soon as they get that first job, they’re all like, “I’m going to buy a gigantic house and a brand new car and a-“

Josh Robb:

A dog.

Austin Wilson:

… “all the bougie things.”

Ashley Miller:

Not a dog.

Austin Wilson:

A poodle, a fricking poodle, whatever. And then you’re jumping on the other end of the spectrum where you’re trying to get into adulthood really fast because it makes you feel like an adult where really you should enjoy that transition where you can still have used furniture for a while, and you can still share an apartment for a while and you can still drive an old beater car.

Ashley Miller:

Good opportunity to save money too.

Austin Wilson:

And what that allows you to do is to learn how to be content with not the latest and greatest things. And then you avoid lifestyle creep as you make more money. This is something that I try to do myself is I don’t need to have the biggest house in my neighborhood or that the people my age are doing, or I don’t need to have the newest car all my friends have.

Josh Robb:

Or an inferior phone by getting an iPhone. Are you content with that?

Austin Wilson:

Well, yeah, I would not stoop as low as to buy an Android just to save money.

Ashley Miller:

Josh.

Josh Robb:

It’s a great phone.

Austin Wilson:

But anyway, that will go a long way because, first of all, it will allow you to save more. It will allow you to have more financial flexibility and it will allow you to just be more conscious of what happens going forward. So that’ll make retirement planning easier because your cost of living hasn’t crept up as much and it’s going to pay dividends. So just learn to be content. Be content driving that older car. Be content wearing hand me down clothes. Be content wearing hand me down everything. I don’t know. And don’t get a dog.

Josh Robb:

That’s right.

Ashley Miller:

Don’t get a dog.

Josh Robb:

Don’t get a dog.

Ashley Miller:

Yeah. Well, thank you guys for having me on. It’s been a great time.

Josh Robb:

Yes. Good questions.

Austin Wilson:

Yes.

Ashley Miller:

Thank you.

Austin Wilson:

Thank you for doing what you do and making us sound like we know what we’re talking about because clearly, we don’t, but thank you for listening and we would love it if you would follow us on our social medias. We are on Instagram, Facebook, Twitter, everywhere.

Ashley Miller:

Everywhere.

Austin Wilson:

Just follow us, like us, subscribe us, all those things. We’d also love it if you would share this episode with someone who you think might enjoy it. If you had someone who might have been asking, “Hey, I’m a college student, I got some questions,” this is probably the episode they should listen to.

Josh Robb:

That’s right.

Austin Wilson:

Send that to them and, as always, feel free and we would encourage you to send us any ideas to hello@theinvesteddads.com and we would love to talk about it on the show or help you in any way we can. So, from the bottom of Josh and I’s heart, thank you Ashley for being here and doing what you do to make us sound good-

Ashley Miller:

Thank you, guys.

Austin Wilson:

… and we will talk to you next Thursday.

Josh Robb:

That’s right.

Ashley Miller:

Bye.

Austin Wilson:

Bye.

Josh Robb:

Bye.

 

Thank you for listening to The Invested Dads Podcast. This episode has ended but your journey towards a better financial future doesn’t have to. Head over to theinvesteddads.com to access all the links and resources mentioned in today’s show. If you enjoyed this episode and we had a positive impact on your life, leave us a review, click subscribe, and don’t miss the next episode.

Josh Robb and Austin Wilson work for Hixon Zuercher Capital Management. All opinions expressed by Josh, Austin or any podcast guest are solely their own opinions and do not reflect the opinions of Hixon Zuercher Capital Management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Hixon Zuercher Capital Management may maintain positions in the securities discussed in this podcast. There is no guarantee that the statement’s opinions or forecast provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.