“A huge pill I needed to swallow early on was that, though I achieved high levels of success and got the same award as Peyton Manning and Kobe Bryant, standing on the same stage, the three of us walked into very different retirements. Their hustling days were over, and mine basically were just starting, because I had to re-create myself. A terror really came over me, the realization that, “Wow, I’ve got to start over. What am I going to do?”
What Abby Wambach, Goals Based Investing, and You Have in Common
Abby Wambach, literal highest scoring soccer player EVER, shares in this super insightful article in The Cut, she shares that she feared for her financial security when she retired from soccer at age 35. Post soccer, she had to develop a whole new business and career in the second part of her life.
When I think about the fact that Abby Wambach, who has made in a day what I have made in whole YEARS of work, was worried about having enough money to live on, it gives me pause. How can I, a mere mortal, possibly save and invest enough money for anything if the woman who can kick a soccer ball with the strength of Zeus, can’t?
Investing Ninjas Retire Rich
And then I remembered that I am an investing ninja, and investing ninjas have a plan.
Here’s the truth: investing in the stock market is a way to grow your wealth, beat inflation, and make yourself financially resilient.
Many of you know this. You feel the call to investing in your soul. But the road to investing is overgrown with weeds. The path is hard to see, and you find yourself stuck, not knowing which way to move and not wanting to scratch up your legs or lose any money in the process of figuring this investing ish out.
Part of what Bravely does is host pop up events around the US to bring this information to you in real time. On July 23rd, we did that in Boston with our event ‘How to Not Die Broke.’ And what was overwhelmingly clear is that women are ready and able to invest, but that there is a huge fear of making a mistake with it because there is just so much information to consider.
What’s the right account?
What’s the right stock to buy for that account?
How can I trust my brokerage?
Which brokerage is right for me?
All these thoughts swirl together, gaining strength, until they overpower the voice that said ‘I should start investing’ that brought you to this state in the first place! A twist in our investing story, but not one that needs to stop you altogether.
More on understanding how to invest
The Answers You Seek Are Out There
The investing industry has been changing over the last few years, and it will continue to evolve as more people demande clearer answers to their questions, and easier ways to get involved in the stock market.
In 2012 robo advisors emerged as an investing tool for the 21st century. A couple of dudes realized that there was a HUGE amount of people that couldn’t start investing because traditional brokerages often had high minimums to start investing.
Like, if you didn’t have anywhere from $1,000- $10,0000, simple folks like you and me couldn’t get our money into most brokerages.
Robo advisors decided to offer investing opportunities, everything from retirement accounts to everyday brokerage accounts, to investors without many of the fees and high minimums of other brokerage firms. You’ve heard of some of them: Betterment, Robinhood, Ellevest, Acorns.
You download them, answer a few questions about your age, money, risk tolerance and goals, and poof! They create an investment portfolio for you. And because this is the digital age, robo advisors can do a lot of things. Some of them offer regular checking and savings accounts, in addition to investing accounts. Some of them offer retirement accounts, some don’t. They all have their own fee and payment structure as well.
Not all robo advisors are created equal. Choosing one over another is more than just a split second decisions over which app to download.
Knowing What’s Right For YOU: Goals Based Investing
I talk a lot about values based spending. And when it comes to your investing, I’m going to advocate that you start your robo advisor search with your GOALS in mind. Values based spending, meet goals based investing.
Your goals are not going to be the same as your friends or your family. If you want to have three kids and your best friend wants none, you’re going to need different financial plans.
Goals based investing: Creating investment strategies based on your long term life goals.
Think about your life and finances in a one year, five year, and 10 year timeline. What’s on your horizon? How much money do you need to make those things a reality?
Want to save money with your boo for a house?
Ok, you’re going to need a place where you can both contribute to the same account, and you’re going to need to figure out how much money each of you can contribute.
Want to throw money into the stock market so in 15 years you can move to part time work?
Ok, you need an investment account that you can fund now, and take money out of penalty free in 15 years.
Don’t know what you want, but know that future you is going to like money just as much as current you?
Ok, you need an investment platform that has low fees and flexible investments so that you can just tuck cash away now for whatever life brings your way.
Finding a robo advisor that works for your specific financial plans, AKA goals based investing, is the name of the game!
Let’s take me as an example.
I don’t want kids, so saving for children is unnecessary. I DO want a house, and I want it pretty badly. Saving for a down payment is a go!
I also have a partner, Tbone. We have different finances, and as of now, we don’t want to combine them. I currently make more than him, and he has student loan debt. Saving the same amount of money each month into a joint savings account doesn’t work for us.
So when it comes to saving for the house we’re both going to live in, what’s the solution?
Enter the robo advisor that works for us, Twine.
Twine allows its users to set up an account that we can each save different amounts into. It’s not a joint account, so there’s no fear of someone emptying the account without the others permission. (Which happens more than you would like to think!)
We each connect our bank accounts, set up an automatic contribution amount that works for us, and viola! We’re in business. I can contribute more, since I have more cash. Tbone can increase his payments as his debt goes down. Progress is being made each month towards our joint goal.
Twine is also a good choice for us because once we hit $100 in the account, we can uplevel it to an investment account, rather than just a savings account. We can also just open a joint investing account with $100 at any time, if we want to keep our savings as savings.
But Kara, what if I am a single pringle and don’t need to save with a partner?
No other parties need apply. OR you can use the same Twine account to save for that 30th bday trip with your besties. All y’all can contribute to the same account and then spend the money on the trip on whatever y’all want.
And if these are not your goals? Cool, there are other robo advisors out there! We are spoiled for choice today. Remember it comes down to goals based investing. My biggest short term financial goal is to buy a house, so Twine fits the bill perfectly.
Figuring out what your short and long term goals are is hugely helpful. Just like values based spending helps keep your budget in check, goals based investing keeps your investments on the right track.
The biggest lesson from our investment events and materials? Starting NOW, like literally today, with any saving or investment goals you have, is the biggest favor you can do for your future self.
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