Do I add money to my emergency account before maxing out my IRA? When do I put my funds into a taxable account? What makes the most sense for ME? In this episode, we cover the order of events of how to pay yourself -- and some of the nuances you may want to consider as you enter various life stages. This is not a one size fits all formula. We'll help you think through that!
1. Save for a rainy day: This is where you start to focus on building up an emergency fund. Your funds should be parked in a low-risk investment vehicle. The intent of an emergency fund is to be able to access funds in the case of emergency. If you have no other savings, you have to focus on this first. Which means if you should start with this, really is determined on your personal financial situation. If you have $100,000 in a brokerage account, a large 401(k), or even a lot of home equity. You have created investments that could potentially be used for a rainy day. Ideally, you do not want to touch these types of accounts. However, it is good to know the breadth of possibilities.
2. Max out company benefits: This one is really simple: does your company have a 401(k) match? If so, you should contribute the amount up to the match. There is a reason this is called free money, it is because you make a deposit, and someone else is as well. That is a 100% return.
3. Pay off credit card debt: Credit card debt is what separates the middle class from the higher classes. It is what can hold you back from a lot of life’s possibilities. Because it comes with the highest interest.You do not want this weighing you down. You may be able to find an introductory offer with a 0% interest rate for a balance transfer that may help with this process.This is allll personal.
4. Pay off high interest rate loans: This could be student loans, personal loans, anything with a higher interest rate, let’s not weigh ourselves down.
5. If you have a high-deductible insurance plan, fund your HSA accounts: This can be a secret IRA hack in the long run. Funding this offers tax benefits, you can withdraw the funds for qualified medical expenses at any age. And after the age of 65, the HSA account essentially acts like a traditional IRA account because you can withdraw penalty free. AND you can invest your funds within the HSA.
6. Retirement Investments: This again comes as a personal preference, if you qualify for a Roth IRA, then this may make sense. Just remember when you fund an IRA or a 401(k), you are making the funds less accessible. However, there are tax benefits. It really depends on your personal situation. Higher income earners may want to max out their 401(k) first to get the tax benefits. Lower income earners may want to max out the Roth IRA because you are on the road to higher income and may not qualify for contributions in the future.
7. Do you have a minor you are saving for? Save for them. Even if it $20 a month, this will eventually compound to a lot of money because of time. You should do your best to increase this amount when you can as well.The best gift you can give your child, besides unconditional love, is a head start and no debt. This doesn’t have to be your child, it can be your niece nephew or any loved one.
8. Invest in taxable account – Now if you have anything excess, put a big chunk in here. The reason why this is very last on the list is because you are doing your best to not touch the other accounts.Time in the market is extremely important. You are getting on the rollercoaster and are in for the ups and downs. A taxable account is a non-retirement account.
9. Pay off low interest rate debt – Last and certainly not least is your low interest debt if you have any. This is most likely your mortgage if you acquired it prior to this restrictive fed cycle. But again, this is a personal preference. With mortgages, you pay more interest upfront. Which means your 3% mortgage is not actually 3% per year. It is much more. Paying down additional principal will help move more interest to more principle.
Remember, financial situations are very personal. Everyone’s situation is different. This list is a general rule of thumb. You’re not general, you have a specific situation.Think about what makes sense for you and conversations with financial advisors are free. You can call your major brokerage firm and have a conversation, ask your questions, and assess your personal situation.
Jessie: You are listening to Market MakeHer the Self-Directed Investing Education podcast that demystifies the stock market from her perspective.
Jess: We're your host. I'm Jessica Inskip, the resident finance expert with 15 years of industry experience and was licensed for ten of those years. I gave up my licenses to be able to freely create and share financial literacy knowledge for you all, which we all appreciate very much.
Jessie: Thank you. And I'm Jessie, didn't we? You are a guide on this journey to financial empowerment. Learning how the stock market works with you. As I ask all the questions you were thinking while keeping Jess out of financial jargon land
Jess: but not Taylor Swift Land. HAHAHA. I'm sorry I can't help it, but today's episode is an important one. We said in the past we don't really talk about budgeting because let's face it, all the other stock market podcast do. And we're not that.
Jessie: However, we did say we do an episode covering some of those budgeting basics to make sure we are all keeping track of our money, where it's going and how it's growing. So today we're going to get into that a little bit.
Jess: Yes, this is how to pay yourself the order of events. There's all these accounts. What do we do? In what order? What does it mean? Let's talk about it. Obviously, you got to pay your expenses. You've got bills. You got to eat. You know, you've got to have like a little fun. Enjoy life here and there. You're budgeting out your expenses. You have money left over. So what should you do with it? All right now, there is a list of payment schedules to pay yourself that is traditionally recognized. It really changes based on your personal preferences. The reason why we say this isn't personal financial advice is because financial advice is literally personal, and this is for a broad base audience. So we're going to have to talk about some nuances. This is not that. So important to know, but
Jessie: never financial advice, Never
Jess: disclosure, Disclosure, disclosure. First and foremost is saving for a rainy day that emergency fund, low risk investment vehicle that everyone talks about, emergency fund is number one.
Jessie: Like that's not even feasible for everyone. A lot of people are living paycheck to paycheck. But if you can, like somehow figure out a way to store a little bit of extra money for an emergency because things happen, stuff comes up, so your car breaks down like things, the unforeseen will always happen.
Jess: So the rule of thumb is 3 to 6 months, but sometimes that's not feasible. And also that might be too much like it literally depends on your situation. My emergency fund situation has changed with different stages of my life. At one point in my life I was a single mom and there wasn't anyone else bringing an income and I had another tiny human. Still have a tiny human, he is bigger now, but depending on me. So in that case I needed to have like really focus on building my emergency fund because if something happened, I'm going to end up having to move in with my mother or, you know, these other type of circumstances. And so I want to make sure that I can pay my bills and support my child. So in that case, you may need more of a cushion. It makes more sense to. Whereas now I'm in a different stage of my life where that's a young adult, but I'm now married and there is a dual income, right? And that can help with my emergency fund situation, basically. Do you have a means to access something in case of an emergency if you haven't built up your 401k already, as in if you end up losing your job and you have a hardship, there is probably ways for you to pull out of your 401k without getting a penalty. And that's a means of saving too. So it's like worst to worst scenario. What makes sense and where and what state are you in your life all around? Do you have actually in your whole like there's so much more to think about than just, I need an emergency fund?
Jessie: Yeah, that's a good point because I don't think I don't really hear people discuss that too much. Like, I hear everyone like put it in a high yield savings account, have money stashed, emergency. But there we're talking about like liquid money. We're not thinking about all the other assets you might have that could help money. Yes. You need. Yeah,
Jess: exactly. Emergency fund is easily accessible assets in the time of need and that can be in so many different way. Shapes or forms and high yield savings accounts are great, but they've been great because interest rates are great right now, right? Yeah, Those are going to come down. I don't think they'll ever go back to where they were, but they're going to get lower projected to be. Well, it was as early as March. That's got away May now, but that's coming. But there's other really liquid investment vehicles. You can also put your funds and like short term T-bills, things like that. Money markets like this, your emergency fund is just a very low risk investment vehicle that you can easily access.
Jessie: Yeah, get that money out when you really need it.
Jess: Exactly. So that's that's step number one.
Jessie: I think some people are a little bit more surveillance mentality. Don't trust banks and I understand all of that. We had an ice storm like in the Pacific Northwest few weeks ago. Electricity was out. Like sometimes you do need cash. You don't want to have all that and you don't want it to just like sit there and lose value either, because as we know, interest rates go up. You know, if you're not making interest on that money, the money is losing value like the cash value.
Jess: Yes. Watch the inflation episode. That's the reason why you invest, because your cash is going to sit there and you're going to lose the purchasing power. Such a great point you have you seen that investing trend where it's budgeting in its cash envelopes. So you literally just save like there's certain envelopes for certain things, but you stash cash in it? Actually, what I first started saving, that's how I did it. I had an envelope and I took cash out of my paycheck. I'm talking like 17 years old, and I would put cash in envelopes, but I didn't know what investing was then. And that's a great way to start because it's visual, but
Jessie: Yeah, and you're getting used to the like, habit of it.
Jess: You are. Yeah, but also go put it in a money market.
Jessie: Yeah. A place where you can't lose it yet.
Jess: So there's, there's your cash now number two. Once you have your cushion, now it's time to max out your company benefits. And we're talking about this. We're saying you have excess money, you have budgeted, you've paid all your bills. Now you have excess money. What do I do with it next? number one is that cushion we're talking about. Number two is at least contribute up to the company match of your 401k. So they give you
Jessie: That's free money that's money they should be giving you anyway you're taking you're taking it you're not going to just leave it on the table.
Jess: I had this conversation with so many people that like, well I'm only going to work at this company for a year. So what? The stock market was up 30% last year, right? That was one year.
Jessie: Yeah. Take that extra money. Yeah. And as we know time in the market is what's most important. So exactly where that money like that one year of money could be in 30 years from now.
Jess: Exactly. And of course there's vesting and there's things like that. But you want to save for your retirement and that is a huge piece of it because the first thing that's coming out of your paycheck is Social Security anyways. So, yeah, keep it going. That one's really simple. It's getting a little harder now. This is where you should think about your credit card debt. Yeah, that normally has the highest interest rate. It's something you want to make sure you paid out before you start investing.
Jessie: Now, if you're in like a ton of credit card debt, if you have more than one credit card, see what the highest interest rate one is and really work on getting that paid down first, because that's going to charge you so much more money a month.
Jessie: More interest. But if that's not really possible and the debt is kind of high, I still like would kind of like to put a little bit into savings or investing or whatever. This is like make sure I'm like still saving for the future. So work on paying off that immediate debt been kind of debated lately. Yeah, on forever credit like paying off your credit card debt you might not ever get around to investing in.
Jess: I think that's a good point. And that that's where you have to think about what you're investing for. You may have a goal where you say, You know what, I have a wedding coming up really soon. Or I mean, if you're in high credit card debt, you should not have an extravagant wedding. Let's keep that. noted but maybe you want to buy a house or you something like that. You're going to need to save up for that. So that's where you have to make the decision. But then if you think about your interest rate, you can still do balance transfers with introductory offers of 0% interest for 12 months. That's a better solution to pay off your credit card debt
Jessie: Or if it's like under a 1% interest rate, but like it's for 12 months or 24 months, whatever your highest percent interest rate credit card is. And you could transfer that balance to that like low interest rate that will help you. That'll give you just buying more time basically without racking up more debt.
Jess: Yeah, that it is Well and then it moves up moves differently on the scale of paying yourself because the whole point of having pay off your credit cards kind of as number three is it's really just high interest rate debt that you want to get rid of. Personal loans will fall in there, things like that. You want to get rid of those because they're going to take forever and ever and ever and ever and ever to pay off. And it's okay to still invest at the same time because then again, you want to have accessible funds.
Jessie: And also you might have to consider like your debt to income ratio if you are trying to get a house or apply for a like bigger level, it's like a mortgage. Yeah, and you have a lot of credit card debt. It's going to make things a little harder. But the investing in other things to the side, if you just really need to focus on paying down that debt so that you can get a good home loan or whatever it is you're trying to do, if you stop saving up to save, but you can start taking all those little factors into consideration. How often do you think that people should be evaluating their their personal situation or what they should maybe be doing or pivoting towards?
Jess: So I think you should always look at your investment accounts quarterly just that's for reassessment more of an investment. And I know we're kind of taking a step back there. We call it a life event and actually it's all triggered out of your brokerage firm too. Look at how we can bring it back to that, but it's when things change where you have to reassess and that could be positive and negative life events, right? I mean, I would consider divorce positive. So yeah, but that's a change where you're not going to have a dual income any more or you get married, you're going to have a dual income. Or you move in with someone. or you have a child or you now owning a home or Yeah, those are all life events. And when that happens, there is a shift in your finances. And remember, this is their journey to financial independence. And I think it's such an oversaturated as an overly used word. Financial independence to me means I am able to leave a situation that's not serving me anymore because I'm not dependent on anyone to survive. That's financial independence, but that also means that you're able to take more risks. Like I was able to give up my financial licenses because of financial independence, right? I had to take a pay cut. It was not a corporate America streamlined job. It's worked out really, really well for me. But I didn't know that at the time. And the only reason I was able to do that is because of financial independence. So that's that's all really
Jessie: I know you at some point talk about are like risk tolerance too because that changes throughout those does life in stages of your life?
Jess: Yeah, it absolutely does. Everything changes constantly, but it's important to talk about. I like debating the way you should pay yourself and how it can change and adjust. I think that makes perfect sense and it goes all the way back even to like emergency fund. If you get up to where you're in your brokerage accounts and then all of the sudden you've got a couple hundred thousand dollars in there and you drain your emergency fund, who cares? You have your easily accessible funds in your brokerage account. You know what I mean? Things change as it grows it.
Jessie: Yeah, it's not a one size fits all approach I think is the take away here. Like it's very personal. It depends on you what you got going on.
Jess: We can give you the intent of each reason and I think that's really great. So. All right, review, real quick. Number one, Accessible funds. Something happens to you, can you support yourself for six months somehow. Number two, max out those company benefits that 401(k) match. Number three, credit card debt, if it makes sense. And then we'll pile in a number four any high interest rate loans that could be student loans. Depends on where you have them. But we want to get rid of those if we can. And then this actually, I think a was a question from a user, Jessie, about their...
Jess: I did it again. A question from a listener, I work for your brokerage firms, so when I talk to them all day. I say users say this so...
Jessie: That makes sense.
Jess: It does. So, HSA accounts. So this only comes into play if you have a high deductible plan. And also might be a company benefit as well. So back when I worked at Merrill, I had to be on a high deductible insurance plan, but it comes with HSA account benefits. If you contribute like $500, they would contribute $500 too and you may only need an HSA account, the tax haven vehicle, because you're going to have higher medical expenses, right? And if it comes with a company benefit like some type of matching, snap that up for sure. There are definitely their own rules and regulations within the HSA account, but they normally are investable. Like you could literally buy mutual funds, ETFs and lots of stuff in your HSA account. And that really is that all or a whole another investment vehicle. But the intent of it is for medical expenses, right?
Jessie: Yeah, always learning.
Jess: always learning on this show. Number six after HSA accounts if applicable. Now we're going into investment accounts that you're opening but this also may not make sense. Very big debate here and I disagree with a lot of money gurus on this one. They're going to say, Max out your IRA at this point. But remember, when you contribute to your IRA, it is not accessible and it may not make sense for you. You're literally locking the funds away from yourself until the age of 59 and a half. And that's right, which is great. But you could also do that in a brokerage account. And the funds are still accessible if you have the ability to be more aggressive. Remember that.
Jessie: Yeah. And you're okay with the potential of a loss, if you like. Need to go take the money out in the market down or things that are down in your account, then you're not going to get as much as you thought you were because you were investing for a longer term. You have to keep that in mind. Yes, you're investing. Yeah,
Jess: but that's when we talk about risk. So that really depends on the investments that you put it in. But that's a that's a big debate depending on your personal situation. But rule of thumb generally is this is the part where we start maxing out our IRA, the limit's $7000 if you're under 50, $8k if you're over 50
Jessie: at this time of recording, which is February 2024.
Jess: That's right. It's tax year, tax year 2024 and it does change every year.
Jessie: Now, remind me again, we just said the IRAs have a limit of 7000 if your under 50, 8000 if you're over 50, but you can also have more in your 401k like you have a 401k limit and an IRA limit. Those are separate. So like if you have a 401k with an employer, but you also have your own IRA, you can have more money in the 401k than you can the IRA.
Jess: That's right there are a lot of different skills of contributions so we can link them. But you also want to max out your 401k and that limits $23,000 if you're under 50 and if you're over 50, you can do an additional $7500. But the IRA limits, as long as you're under 70 and a half, you contribute to your IRA, up to the limitations, it's just the limits will tell you if it's deductible or not, or if you can contribute into a Roth IRA. But everyone can contribute to a traditional IRA as long as you have income, very important working income of some sort. But the deduction, the income limits change depending if you are eligible or enrolled in a 401K plan with your employer. Or not or your spouse's. And so we will have to link that big table.
Jessie: If you're personally confused by that you can just call up your good old brokerage firm and like ask them, right?
Jessie: Or if you are doing something wrong.
Jess: yes, if that happens are something called an excess contribution. It's really easy to get the funds out of your account. You got to take out the earnings, too. We can talk about that at some point. Like contributions and conversions. You are going to know if you're not eligible to contribute to an IRA and it's just a table. It's depending on how you file your taxes and how much money you make. It's a table based on your tax status and your income. And if you make too much, then you just can't mark it as deductible.
Jess: that's it.
Jess: Then we move on, which is maxing out your 401k and you may want to do that before your IRA because you might need those tax deductions.
Jessie: Yeah. Again, assess your personal finances
Jess: It is, This is why this this is literally like a little maze. Yeah. We're helping you navigate. So once you've done that, then we move on. Well, and again, this is a personal preference I save for my kid before I save for myself.
Jessie: So selfless of you.
Jess: I love him to death, even though he's so grounded right now.
Jessie: Does he know how lucky he is?
Jess: Thank you. I hope so. But you know, he is about to be 13
Jessie: Maybe Auntie Jessie needs to remind him
Jess: Somebody does.
Jessie: To stay out of trouble.
Jess: I've given Cole $20 a month since he was born, and I've kicked that up now to $250 a month. And he has a very hefty account, and you give what you can. I think that's the best gift. Yes. For your nieces and nephews is set them up some type of custodial account and we can talk about what those are on another episode.
Jessie: Yeah, we get questions around that. So that will be a good one.
Jess: Yes, but save for them. I that think that's the best gift you can give a child is is no debt and a head start in life. There are some advantages for those type of accounts. We'll have to get in to. That are tax wise and within the gifting limit so good. But earnings up to a certain amount are normally taxed at their tax rate, which is very minimal. Yeah, you know, should be zero.
Jessie: And it's interesting because you can open this account for a child and they don't have to be making money. Like to contribute.
Jess: Yeah, they do not except for the custodial Roth IRAs which we'll talk about.
Jessie: Okay. Yeah we are going to do a whole episode on that are that clearly
Jess: we are yeah
Jessie: it's like a lot goes into that
Jess: it does. that account is my most aggressive account too because I let my son pick whatever stock he wants within the S&P 500.
Jessie: Yeah, well, within limitation. That's good, though.
Jess: And he beats the market. All right, well, after you save for your very little ones and again, if you don't have kids but you have nieces and nephews or a child in your life,
Jessie: that's true.
Jess: That's a piece of it, too.
Jessie: I think it's a good habit to to like put into a child's mind, too, because, it's the world we live in. You kind of have to have money saved.
Jess: You do, and it can seem like such an elephant, and it's such a daunting task, but you have to realize it starts so, so small. And then it does compound because $20 a month, you would say, Oh, that's not going to get me anywhere. Yeah, actually, will, over 18 years it will get you really far, but it takes time. 18 years time. But that's okay. You could pick your kids. College at least, community college. Yeah.
Jessie: Yeah. Something to help them out, get them a car, whatever they. Whatever that thing is, they need that financial burden. Not being there, really like makes a big difference for people.
Jess: It does. Same principles apply for what you should do next, which is now we are in the taxable account. Everything up into this point are funds that you are going to do your best not to touch. Right? And it's because there are restrictions. If you touch them, you pull funds out of your IRA too early penalty, right. Pull funds out of your 401k, penalty, within reason. Those are the accounts that you're focusing on time in the market. Now, when we get to number eight, we can access these if we want. We sell a securities can generate a taxable amount, but we can talk about all these things in different episodes. So we talk about portfolio management and rebalancing. We've got a whole lineup for season two. Are you ready for it? Share this with your friends. That's when you start taking your excess and putting it in a taxable account. And if you have a lot of excess, go for it.
Jessie: And when you say taxable account you're talking about like a non-retirement investing account, right?
Jess: That that's right. Yeah. Just a brokerage account depending on your personal situation could be a trust even. But this is funds that there are no penalties of you touching like actually I love the way to separate this and this is the way I used to tell it to clients when I worked at Fidelity and Merrill is when you have retirement accounts like every these are all this is all a house. Everything always goes to the house by your retirement account in that room, the IRS does not care about what really goes on in that room. They just care who goes in and out of that room. Right. There are penalties. Yes.
Jessie: So we're talking about that. This is the analogy we came up with in I think it was episode 12, How to invest in the stock market. Whereas basically, like you're building a dream house, which is different for everyone, you have the foundation, which is the knowledge of your first layer, second story, but then you're saying your 401(k), IRA accounts are like a room in the house.
Jess: Yeah, they are your retirement accounts. They have rules from the IRS, as in how much you can put in them and how much you can take out and when you can take it out. So entering and exiting the room is something you have to care for your taxable accounts. The IRS just cares what's going on inside the room. You can go in and out of it as many times as you want, meaning you pull pull funds in and out. But inside the room it's if you're out buying and selling stocks, those are all taxable events. Whereas on the retirement side of the house or the lower story, this is all an analogy for a course that we're building that if you want to sign up for, you should probably go on our email list because it's probably only going to be like $10. So there's a but the retirement room. It's just in and out. There are rules of who can enter and exit the retirement room, whereas once you're in the non-retirement room or taxable account room, it just matters what's going on inside of it. Go in and out of it as much as you want. There's more freedom and it makes sense.
Jessie: It does. Picturing the retirement room.
Jess: like I got like a bouncer at the door. That's the IRS and it's, you know, but then you're
Jessie: like it's a hotel to get in and out of like one of those hotel room keys.
Jess: Yeah, like that. If you go into the elite club and then the your taxable one is just like toddlers going nuts.
Jessie: They are just making a mess.
Jess: Yeah, because you can, that's what my brain just did. And last but certainly not least on the how do you pay yourself we move on to low interest rate debt, your mortgage or things like that. Now there is also a big debate on this as well. Your house is an investment and you get equity in your home. It may make sense to rent at some point and things like that, but so buying a home is absolutely an investment. I personally have a 2.9, 9, 9, 9, 9, 9, 9. I know it's very annoying. It's frustrating because on my mortgage. But remember, the way that mortgages work is you pay interest upfront and then principal on the back end. So saying that you're paying 3% a year is actually an incorrect statement. And it may make sense depending on your personal situation, to pay additional principal to that. You're the architect in your life, whatever you want to do.
Jessie: that's right.
Jess: We're not here to say, hey, we're the experts. No, all they learn from us, right? No way.
Jessie: Yeah, there is so much free information out there.
Jess: Yeah. We don't want to prove to you that we're the best experts. What we do want is you to be better at investing and know your tools and resources. That's the goal here.
Jessie: But we can always point you in the right direction too.
Jess: Yes. Jessie, since you're a freelancer. How about tips for freelancers.
Jessie: Yeah, this is something I've actually struggled with. I had a big corporate job and got laid off in 2020 and been freelancing ever since, and it kind of made me have to change some of those automation habits. I don't really just have the automated money going into different accounts right now because my salary changes from month to month. That depends on like how many clients are taking on what I got going on. I still have an emergency fund. I definitely still have my high yield savings account that's out of sight, out of mind. I pretended that doesn't exist. So that that forces me to try to keep hustling and getting my clients and paying my bills through my work income and not going to that high yield savings account. As like, a back up. I go, I don't have to work as hard this month because I have that money. And then once you feel comfortable with the amount you can save and you'd start figuring out like what extra you might have maybe one month, you know, you're getting a bigger check because you have extra clients that month or you have a big projects that you're going to get paid more for. For the like the next two or three months. So you can start applying those same rules and splitting it out, say like, okay, after I cover my bills, I'm going to have this much in excess. What do I want to do with that excess money. Because I think having a plan for it is better than just sitting in your bank account and then you end up spending it like I do on food delivery. Or is it more important to like, go ahead and fund your IRA a little bit or your retirement accounts a little bit, whether you're freelancing or getting a raise at your corporate job or whatever, it is. Just kind of like having in your head or writing it down somewhere like when I have extra money, I need to put it towards this and like, list out the the importance.
Jessie: We hope this episode was helpful for you, and if it was, please share it with your friends, family, everybody you know that you think could benefit from sharing the Fin lit wealth,
Jess: That's right. Even if you just, you know, good small talk, I just listened to this podcast, you know, that we'd appreciate that. That would be great. And please feel free to leave us a review to help us grow. That really helps the algorithm. That's the thing is the reviews. So if you're just sitting there and if even if you don't want to do that, that's okay. That little button where it says the stars do that too, that also helps, but it really helps us grow and share our mission of financial literacy. And we want you know, we want everyone to benefit from knowing all this important information and understanding the stock market using mostly Taylor Swift analogy. That would be really, really great
Jessie: when Jessie allows it. So you do, although you do the editing, so I guess you allow it.
Jess: I cut out so many at the beginning because I got it. I got to put it together at some point.
JessieL And if you'd like to join the Money Coven, you can subscribe to our mailing lists or we have a Facebook group that you can come, you know, chat with us and follow us on all of our social channels. We, you know, obviously respond there and listen to us wherever you listen to podcasts because we're on all of the platforms, Be sure to turn on your notifications, learn about new episodes, or like I said, join the email list and we'll send you out a reminder and submit those questions to us at any of those places just mentioned. It's also linked in the show notes.
Jess: Yes. And if you're on Spotify, start doing a little, little knowledge check quiz on the polls.
Jessie: Test your knowledge. Tell us what you've learned.
Jess: Actually, there were some wrong answers on the last one and maybe we should bring that up.
Jess: So our last poll was what does owning a stock represent A. a loan to the company? B. a donation to the company, C. a fixed interest rate or D. ownership of the company?
Jessie: D ownership.
Jess: Nailed it.
Jessie: Okay, good.
Jess: Yes. So so so many put so many put a fixed interest rate. But if you were listening to the podcast for the first time because we definitely condensed that was three episodes in one. So it was actually very and I noticed that there was so much more jargon than before, but that's because we've been graduating you, Jessiw.
Jessie: But if you started if you just heard about us and started with the most recent one, then yes, you could be a little confused. And that's why, you know, you can always go back to the beginning and do those more in-depth, you know, what is a stock? What is it? There's like a whole episode for each one of those points. So yeah. Or, you know, answer your questions, of course,
Jess: Always. And for your explanation, you know, a stock is an ownership of a company. You're literally investing in that company. That's why it's called investing. If they make money, you make money too. Potentially.
Jessie: But it doesn't mean you're giving that company money directly. No, it doesn't. That's one thing I think always surprises people. It's not like it's not like buying a product from that company, like it's a secondary market. So now we're just, you know, that's right. We're like second hand shopping it and then selling it more to someone else who wants to buy it from us later.
Jess: Yeah. I mean, if you're super wealthy, you could buy more than 51% of the shares outstanding. And then you control the company. Yeah,
Jessie: it's. Yeah, well, I super wealthy and I'd be doing that. Telling these companies what they can and cannot do anymore. Showing them who's boss.
Jess: But it's like Pinky and the Brain. Today we are going take over the world.
Jessie: Yeah. So fun.
Jess: All right, remember, keep learning, keep growing and build knowledge, keep breaking those barriers.
Remember investing involves risk. There is always potential to lose money when investing in securities. Market MakeHer provides educational content and resources for informational purposes only. We are not registered financial advisors and do not provide personalized investment advice. Any information provided by Market MakeHer on our website or podcast is not intended to be a substitute for professional financial advice. Market MakeHer is not liable for any investment decisions made based on our content.
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