Growing Your Wealth with a “Personal Financial System”

The Money with Katie Show

Money with Katie

Investing, How To, Self-improvement, Business, Education

4.8 • 1.3K Ratings

🗓️ 20 September 2023

⏱️ 27 minutes

🔗️ Recording | iTunes | RSS

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Summary

I recently read an r/personalfinance post about someone's financial position: "I have $5,000 in a 401(k), about $10,000 in my Robinhood, $15,000 in Chase, and $1,000 in stocks, and some cash. Am I on the right track?" While this mental model is logically reasonable (where you're physically putting the money vs. the vehicles themselves), it reminded me how powerful it can be to think about the structure of your finances accurately. I dive into a few tools, tactics, and lenses at which we can assess and optimize our financial ecosystem—and how we can supercharge our wealth for the long-term. Transcripts can be found at https://podcast.moneywithkatie.com While I love diving into investing- and tax law-related data, I am not a financial professional. I have no formal financial education. I am not a financial advisor, portfolio manager, or accountant. This is not financial advice, investing advice, or tax advice. The information on this podcast is for informational and recreational purposes only. Investment products discussed (ETFs, index funds, etc.) are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. Do your own due diligence. Past performance does not guarantee future returns. Money with Katie, LLC. — Mentioned in the Episode Building a Spending Plan: https://podcast.moneywithkatie.com/everythings-an-investment-building-your-epic-spending-plan/ How to Set Up Money Management Systems: https://podcast.moneywithkatie.com/how-to-set-up-money-management-systems-for-short-term-long-term-goals/ I Invested in My First Startup: https://podcast.moneywithkatie.com/i-invested-in-my-first-startup-and-it-was-terrifying/ Investing Outside Your Retirement Accounts: https://podcast.moneywithkatie.com/investing-outside-your-retirement-accounts/ How to Build a Diversified Stock Portfolio: https://podcast.moneywithkatie.com/how-to-construct-a-diversified-stock-portfolio-of-major-index-funds/ — Follow Along at Money with Katie: https://moneywithkatie.com/ Watch on YouTube: https://www.youtube.com/@MoneywithKatie Follow Money with Katie! - Instagram: https://www.instagram.com/moneywithkatie/ - Twitter: https://twitter.com/moneywithkatie Subscribe to The Money with Katie Newsletter - Sign up for free today: https://www.morningbrew.com/money-with-katie/subscribe/2 Follow the Brew! - Instagram: https://www.instagram.com/morningbrew/ - Twitter: https://twitter.com/MorningBrew - TikTok: https://www.tiktok.com/@morningbrew Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Welcome back to the Money with Katie Show Rich Girls and Boys.
0:13.5	I'm your host, Katie Gatti Tossan, and today we're talking about what it means to build
0:18.2	a healthy financial ecosystem.
0:21.9	Let us begin today with a story.
0:30.2	The other day I was reading a post on our personal finance, the subreddit, wherein someone
0:35.1	described their financial situation as follows.
0:38.8	I have $5,000 in a 401k, about $10,000 in my Robinhood, $15,000 in Chase, and $1,000 in
0:45.9	stocks, and then some cash.
0:47.9	Now the person was seeking advice, they generally wanted to know if they were on the right track
0:52.6	or what else they should be doing, and it struck me that they were mentally chopping
0:57.4	up their finances by institution.
0:59.8	As in, I have X dollars at X bank, and I have Y dollars at Y bank, and then occasionally
1:05.9	deviating from that structure, like saying I have $1,000 in stocks, because presumably
1:11.3	the money in the 401k and in Robinhood were also in stocks, right?
1:16.4	And while this mental model is logically reasonable, since you're physically putting
1:20.7	money in these various locales that feel a little more concrete than the slippery investment
1:26.6	vehicles themselves, it reminded me of just how powerful it can be from a planning perspective,
1:32.4	but also from a financial confidence angle, to think about the structure of your finances
1:37.4	accurately.
1:38.8	Now, one of the clearest ways to gauge someone's understanding of their financial situation
1:44.2	isn't quite what questions they're asking, but specifically how they're asking them.
1:50.2	My favorite example of this is the question, should I invest in my 401k or in the stock
	...

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