Rachel: Hi, this is Rachel, and I'm delighted to welcome you to this episode of what the Finance? One of our strongly held values to What the Finance team is that our families come before anything else, which is why you'll be hearing a whole lot of my voice with our guests over the next few weeks.
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Finally, this episode was recorded on the land of the Dakota, Menate, Shani, Wayanda, Miami, Ottawa, Podoatomi, Chippewa, Kikapu, Wi, Pikachu, and Kakashi peoples we recognize and support their sovereignty, express our appreciation for their stewardship of our natural resources, and seek to demonstrate our commitment to dismantling the systems of oppression that negatively impact our black and brown kin. Now on to the episode.
Rachel: Hello, everyone. Welcome to another episode of What the Finance. I am joined for this episode by Nick from Show Boys. Nick is a really active member in our discord server, and also co host his own podcast called Show Boys, where they talk about popular culture. I think it's fair to say, I don't know, Nick – is that a good soundbite for Show Boys?
Nick: Um, yeah, I think we like to defer to nerd culture, really, to kind of like, sum it all up because it's very show media oriented. Um, but we really touch on everything in between, too. Whether it's like, collectibles, gain, like, it's just everything in the nerd culture thing. So really, I think that's where we've settled, um, in the past, like, year, for sure.
Rachel: That's fair. And maybe this just speaks to kind of where I'm at culturally. I always think of nerd culture as popular culture because it is my popular culture. Yeah, but if you ever try to talk to most people about right, like Star Wars or I was about to say Assassin's Creed, but I feel like that's one of the more mainstream things that, um, you guys talk about. But a lot of people are like, “What? What are you talking about?”
Nick: Yeah. And I've always found, um, the podcast and just being very forward with these hobbies, as I would describe them, really kind of lets you figure out who out there is also maybe like, closet nerds as well. They don't own it up right away. But, um, today is a good example. We had a new person start at my work and, um, I went on one with her, just introduce myself and get to know her, but through discussions of just like, what our interests are. And she's like, oh, so you're a nerd. I'm like, that is correct, that's basically the sum of it. Um, and then she divulged that for the past many years, um, her and her friends have been doing like an ongoing DND campaign. So, um, I always just enjoy kind, um, of weeding that out of people, like, really early. I want to get to know them. Um, and that all really kind of starts with being very forward with like, yes, love Star Wars, love video games, movies, all that stuff. So it's been a really good experience just to have that very forefront in my happenings.
Rachel: Well, and I think one thing that you and at least Mike do really well in the server is a lot of these nerd spaces are very male dominated. And so when women come in, they were like, okay, so I really do actually like this DND or Star Ah Trek is kind of my case, but people are just going to assume that I like it cause my boyfriend or my husband likes it. So like, you guys do a really. Good job of being like, no, come on guys. Girls and women like these things too. I think that's a credit to what you guys do. Um, with the Show Boys. I appreciate it.
Nick: Yeah, we appreciate that. Um, we always like to joke when we, uh, borderline cancellation topics on the podcast, but we like to think we keep the community otherwise pretty well oriented, even though our live streams, um, they're there for entertainment. But yeah, we try to keep it tasteful, um, and very open to everyone. Even though we're show boys, um, we just kind of show people. Maybe that's the updated term.
Rachel: Maybe, you have to get some more women on your team apart from, uh, Amy.
Nick: Yeah, um, our wives, they've helped out different capacities and stuff like that. And, um, it's tough though, with everybody's schedule and everyone just being busy. It's hard to find the people that want to commit their spare time, their free time, and just kind of be hobbyist content creators. I think that's the other issue.
Rachel: Right? 100%. So we're not actually here to talk about nerd stuff, even though I think we could probably both talk about nerd stuff for a really long time and have actually. Just to be on your show and we spent like 3 hours, I think, talking about nerd stuff. Um, we are actually here to talk about retirement and saving for retirement. I think we both have kind of had our own experiences, kind, uh, of with the topic or whatever. So Nick, I don't know if you want to share a little bit, uh, what your experience has been even before you started working. People talk to you about saving for retirement as like a kid or a teenager or were you like adulthood? Here it is. I should probably start thinking about this thing.
Nick: Yeah, I always talk about this with my wife and, um, it just stretches so far back, um, in terms of each person's understanding of money and understanding of, um, assets and just what is currency, and just all those nerdy topics, if you really kind of get down to it. And it always stretches all the way back to your childhood and how, um, your parents or who raised you just kind of talked to you about those things, if at all. Um, right. And if anything, mostly, I think most people's experiences, it comes off as just, like, passive habits that they just see from observing, um, how their family or surrounding environment uses money and thinks about money. So my family was very, um, cash oriented, I would say. They valued cash over all other resources, I would say. So the way I think about it is there is money, right? That's a resource. There's also time, and then there's effort. So to me, those are three equal resources and you can independently trade them out for one another.
Rachel: Yeah.
Nick: Um, so I always took that approach, whereas still to this day, good portion of my family, they would rather save the money and spend more effort and time, or they could in my mind, you could just spend money and you would have got time and effort back. So, um, really early on, it was a lot of, like, you earn the money, you have the cash, you buy it. Credit was used very differently. Like, credit was mostly like, put on the credit card and then you pay it off right away. So very fiat driven mindset, and never really kind of a conversation of, like, oh, you should start saving now, or savings. Um, because it was cash oriented. Savings is always a very important part, I guess, of my mentality by default. And I always take that as, um, like, in high school, I worked at a grocery store and, um, whatever minimum wage was back then, I think it was like $6.85 when I started. And then it creeped up to like $7.25. Um, but I was able to save $200 a week. My paychecks would be like two hundred dollars to two hundred and fifty dollars, maybe on a good week. Um, yeah, but I would save, like, all of that outside, just paying for gas and like a $5 Sub from Subway across the lot. Um, and I would save $1,000 a month, more or less. Um, and I would take that physically to the bank, um, like the cash and deposit it. So I kind of saved for college in that sense. I didn't work my first year of college. And that was kind of like the basis of, um, the idea of saving money, um, which starts the form, like, anyone's understanding of retirement when you start thinking about life beyond the next four years, let alone the next year. Because in college, I didn't think about life in longer than one year, stretches of how long I had planned courses, right?
Rachel: And sometimes that's even just a semester at a time. Right. Depending on what you signed up for in that term, I made it another week. Do I withdraw now? Do I stay? Right. At least that was my experience.
Nick: Yeah. So it wasn't anything I really started to think about until I got my first job. And, um, obviously you start having the benefits be placed in front of you and you're like, you know, you start to think about that. Um, but, you know, I tell the story of the whole like, cash oriented, self reliant bit that's instilled in me. Because to me, I felt like that deterred me from instantly saying, I'm going to start a I'm going to start a retirement savings thing. In my mind, it was more like, no, I'll just do it myself. I will save physically my money.
Rachel: Yeah.
Nick: And then until I get to a point where I feel like I have enough of this savings to then start maybe like. Higher class problem of having a retirement fund. I didn't mentally picture myself as someone there. Yet at the same time. I just passed away red things and they're like “Hey, every year in your 20s that you're not starting your retirement account puts you back an exponential amount versus starting it.” Into your thirties, forties where you get really behind in terms of typical goals. So it was always, to me, kind of like a ticking thing toward 30. Whereas I need to start it every year. I don't start it, I'm just setting myself back or just not being as far as I could be. Yeah. Um, and I guess the reason I put that off really, until I was like, 30 was because I had the cash mindset where it's like, I'll just save the money and that will make do for now and I can make up for it later, maybe by just like, dumping in savings into my retirement to make up for the lost time. But even then, it doesn't equate out once you really start understanding how these things work long term.
Rachel: Had a very similar experience, but I think kind of compounded onto that for me is, um, I grew up in a home where my mom stayed home with the kids. And every other woman that I knew also was a stay at home mom, which probably totally fine. And when you think about the cost of daycare and whatnot, this still seems like a pretty attractive choice.
Nick: Yes.
Rachel: Man as a sidebar, it's been kind of a blessing to not have to pay for full, uh, time daycare the last several years as a result of the pandemic. Um, so for me, in addition to nobody being like, “Hey, Rachel, you should probably think about saving for retirement,” there was also nobody who was saying to me, really, “You should probably think about what you want to be when you grow up.”
Nick: Mhm right.
Rachel: Um, because all the women that I do stayed home with their kids, and, like, maybe they had a college degree. But mostly it was so that you had something to think about while you were making endless peanut butter and jelly sandwiches, apart from the fact that you're super bored from making endless peanut butter and jelly sandwiches. But then when I went to college and I got my first adult job, and I did work full time, actually, all through actually, I'm, um, from my associate's degree, my bachelor's degree, and my master's degree, just work 40 hours a week for the whole thing.
Nick: Grueling.
Rachel: My parents actually still are paying off their own student loans. So it wasn't like I could go to my parents and be like, hey, I could use your help, please. They didn't have the money either. Um, but when I finished my bachelor's degree, kind of like you just talked about, right? You get the package of benefits. And my boss, I think at the time, she was like 40 to 45, kind of in that age range. And she was like, so, “Rachel, what are you going to do about retirement?” And I was like, I don't know. Right? I'm not really sure what I'm going to do. I don't think I'm going to sign up just yet. I was 24, retirement felt a very long way away. And she said, “you might want to think about putting in, like, one or 2%, because we do match.” She said, and I'm close enough to retirement now I'm putting in about 50% of my paycheck into retirement. And the organization I was working for only matched up only, but they match up to 5% or something like that. So most of what she was putting in was not being matched. And I went, oh, okay, well, cool. And so that's what I did. But my spouse and I are also very fortunate to both be public employees in the state of Minnesota, which means that part of well, so I'm in a labor union. My spouse is not. But, um, for my labor union contract, we are mandated to save her retirement with matching. And so I think that for me, has also been just a huge benefit in the sense that it doesn't really matter if I want to or not. Uh, I work in a state where state employees are unionized, and we save for retirement. Dang it, right? I don't have to think about it. I appreciate that a lot.
Nick: Yeah, that is nice.
Nick: With anything with money, like we talked about in the discord or anywhere, um, it's such a personalized experience all the time. Everyone's a new equation when it comes. There's only so many combinations at the end of the day, really. But it's hard to really blanket statement these things. But there are at least some general blanket statements in there. And one good one is like, well, if you work for a company or organization that matches, you on any certain percent, you should at least match them on that percent. There is no reason not to because it literally adds to, um, your compensation directly, um, depending on if they match 5%, you better put 5% in because you just increased your income by 5% even though you lost 5%. It's doubling in there into the account.
Rachel: Right.
Nick: Um, exactly. Little things like that. Now, my first job, they didn't have good benefits. Um, they certainly didn't match. And that's why I thought, um, it would also just be better not to. I was like, yeah, they don't match. There's no reason to. Um, I will just try to self invest and try to save, um, and do it that way. That didn't really work out as great as it could have. Um, honestly, just this idea of save money. But that paycheck gets eaten away, um, a hundred different ways.
Rachel: And I think my experience has always been that, um, whoever it is that's coming up right, like the young adults that are coming up, the older folks. And I feel a little bit uncomfortable that I am now kind of a little bit in that group. Uh.
Nick: Um, you're older and younger folk at the same time?
Rachel: Yeah. I don't know. I'm 34, so I'm like right there in the middle where I'm like, Rachel is a real adult. But also the actual real adults are like, no, you don't know what you're talking about.
Nick: Right.
Rachel: Um, but right, you're always like, what are these young people spending their money on? They're just throwing it away. But at the time, I would feel comfortable making a blanket statement that most people who are like, fresh out of college and working their first jobs aren't really throwing their money away. Right. Um, when I think about the stuff that I spent money on, where I'd go, oh crap, what am I going to do? It was, uh, sometimes really stupid things that I learned, right? Like, all the fruit in your house goes bad and like, well, I still need some fruit, so now I'm going to go and buy more. Or like, if you're like a parent, you've got kids, you're like, oh shoot, we went through way more diapers than I was expecting. So now we got to go and get more diapers. Or like, you drove a friend in an emergency and so now you're spending more on gas than you had budgeted for.
Nick: Right.
Rachel: Like, stuff like that. Um, to my mind, you're not ever like, throwing your money away. But you're totally right. Those paychecks, they're just gone.
Nick: Yeah. And I think that's why, um, we have to be proactive in how we throw away our paychecks too. Um, almost like we need to find ways to throw it away before the world finds ways to throw away our paycheck. Um, and a good example of that is I taught my wife this. Once it goes into your savings, don't even acknowledge your savings, pretend it doesn't even exist. Like, if you can somehow block out your idea that your mind that the savings is untouchable. In my mind, I don't take money out of my savings to buy special things. I take that out of my checking. Um, that eats into my general spending budget. So once it's in my savings, it's locked away. Same thing with retirement. Like, if you allocate that percent of your check before it even hits your account to go into a different account, you never had it in the first place. And you are chopping out of your paycheck before anything else in the world tries to chop up your paycheck. Whether it just be as simple as like, oh, I want to go see that new movie that came out. Um, you go to the movies and all of a sudden you spent $50 there. And somehow you realize walking out, you're. Like, man, that was a terrible movie and that was a half a car to groceries. Um, I could have gotten stabbed. Um, everything equates to groceries these days. That's the current metric for how expensive everything is.
Rachel: Um, I mean, yeah, it's the same. On my side too, uh, because school lunch is not free anymore. So we are buying way more food than we were last school year. Um, and I think also for folks, if you're thinking about, um, the implications of pulling from your retirement fund for some kind of an emergency, um, there are also tax implications to that as well, right? So if you're pulling out of your 401K for any reason before your 65, you're going to get a tax penalty. So you might not feel it right away, but you're definitely going to feel at a tax time like 100%. But on the flip side, um, and I have personally never done this because I just don't have this kind of money laying around. But, um, there are also tax benefits, too. Like, if you have a separate IRA from whatever your employer provided 401 is, then if you max out your contributions Tto that every year, and I think right now it's $6,000 for the year, um, then you also get a break in your taxes. And I think we don't talk about that either.
Nick: Have you ever heard of ah Rich Dad, Poor Dad? It's a book that was written and it also looks kind of like, uh, this guy's, uh, a book and almost like a philosophy around money.
Rachel: It is vaguely familiar, but I'm struggling to recall anything.
Nick: The bottom line there is really kind of talks about really how much of it is a mindset, right at the end of the day. Um, and it all points out, like, the mindset is there is like a rich mindset and then there's like a poor mindset. And not to mean either one is better or than the other. It's just two different models of looking at money, and it also has to do with your own risk and so many personal factors. Um, but in terms of how you use credit, some people think credit is bad, but actually in, like, richer, mine says credit is very good. And this is the idea that making sure your paycheck gets eaten away by your own design is there's no reason really, to have savings right. Through tons of fiat. Like, if you have 100 grand savings, that's not smart. It just kind of really isn't smart unless you're a multi, multi millionaire or whatever. But if you have 100 grand savings or even 10,000 in savings, um, you should do something with that money. Um, invest it, um, put it into a retirement account. Obviously, you need that kind of nice three to six months, like emergency fund, if you lose your job and do all that. So there's those certain milestones to check off your list. But m, whatever your personal threshold, like, yes, I need cash right.
Rachel: For emergency, an easily accessible form of liquid money.
Nick: Right. And beyond that, you should not need any more form of that liquid money. It should be sent somewhere else to do work for you. And I think that's the big thing that it's complicated to think about, because so much we are instilled to either save, live, debt free, um, all those types of phrases, while they are very applicable to certain situations, they're not applicable on the whole spectrum.
Rachel: Right. Well, and I think, too, that we talked about this, I think, a little bit in the discord, and you were talking about it just now, is that your personal experience with money is also, I think, often in the United States especially, can be tied into your racial identity as well.
Nick: Oh, for sure.
Rachel: People of color super used to essentially getting screwed over by the system. So then you kind of got it for whatever your risk tolerance is, there are tons of extremely super valid reasons, and that was redundant, um, to kind of go against the grain in whatever financial decisions you're making, whether it's saving or, um, being debt at first, or whatever it is. Because we don't have a great history with treating certain people fairly. Just like, generally speaking. Right.
Nick: Yeah, generally speaking, I think that's lost on a lot of people, or they just don't care about that nuance empathetic portion. For wider groups of people, when it comes to particularly money, it certainly does matter in a very general sense that you have a family unit that is well off or isn't dirt poor. Right. All of that matters. So I get a lot of people like to argue that we all have the same opportunities. Yes, you could argue that everyone has a, uh, general same opportunities, or can put in the work right. To achieve the same level of equity or equality. But at the end of the day, uh, my life would be very different if based on just pure fact of my family's financial situation.
Rachel: Right.
Nick: That just in the background matters. Because that's just a little stuff from the day we're basically born that impacts our environment, how we're raised.
Rachel: Exactly.
Nick: Not just your parents. Your parents are off a certain way because of their parents. And if somewhere along your generations behind you was thrown off for any weird racial injustice reason, which there's plenty of them, that affects you down the road. Right? Yes. People turn it on a dime because of their circumstances. But generally speaking, not everyone can just do that. Right?
Rachel: Right.
Nick: Whether it's luck, whether it's just the perfect storm of, like, I was able to get out of whatever the prior situation my lineage was in. Other than that, the wide majority of people are heavily impacted by their ancestry. Whether we like to kind of really. Think about it like that or not. Uh, the same thing that goes for, like, there's no racist laws or systems today, so it's all good. Well, no, there were 1020, 30, 40, 50 years ago, which impact all the way forward. Right. It's not like someone snaps their finger and everything's better, um, for everyone.
Rachel: Right. And I think even saying that right. Like, there's still, like, systems and policies on the books that have not ever been rescinded that are still the way that we're I mean, now this is getting away from money, but, um, I spend a lot of my regular day to day life in education. Both K12 and post-secondary and on the K12 side, we're still referring to laws that were written immediately following the Civil War. Come on. Right. That was years ago. Yeah, it was. And, uh, we're still living in those systems and following those laws today. So maybe we could, uh, change the systems and those laws to months for today.
Nick: That would be yeah. All that stuff has very unforeseen impacts on every group of person. Like, a lot of those benefit, like, certain people, really? Well, probably people who, like, wrote them, other ones not so much. Um, same reason, like you said, if you have a secondary 401K and you max out the contribution for the tax break, well, guess who that applies to? And guess who it kind of doesn't apply to.
Rachel: Right.
Nick: I mean, they're written all across the board. But the issue is, like, at one end of the spectrum where the very beneficial policies like that could be very beneficial all around the board, like a very net positive. You're putting money somewhere for your benefit, and then you also get a tax break benefit back on that. Whereas policies that are written to help or even try to correct maybe those disenfranchised groups, um, they're not written in a way that holistically corrects the problem. They just kind of, like, treat the symptom of the root problem.
Rachel: Right. Um, do you watch The Crown at all?
Nick: I'm on season three, I need to finish it.
Rachel: Okay, well, I think this reference is, um I just started season four, actually. Not that a week or so ago. Um.
Nick: Is that where the actors change?
Rachel: No. Uh, so the Queen is still the same one as in season three, but um, this is when Princess Diana gets introduced, as in season four.
Nick: Okay.
Rachel: So yeah, we're like moving into modern times, but uh, in The Crown, they talk about how the Crown papers over the cracks of problems in British society. I feel like we're doing anyway, this is really a uh, circuitous route. That's uh, kind of what we're doing here, right. Like with the systems and policies in our own country.
Nick: Right.
Rachel: We're just papering over the cracks.
Nick: Correct.
Rachel: Instead of rebuilding the foundation. But for the people who think the foundation is cool, they're like, hey, look at all these great improvements we're making. Doesn't it look nice? It doesn't really matter if it's probably underneath, right?
Nick: Exactly. Um, it's good with just covering up the cracks, not filling them in, or completely just pouring a fresh pavement.
Rachel: Right. To be respectful of your time and knowing that you have some other things to do this evening, do you have anything else that you want to just kind of like rapid fire share about um, saving for retirement or just the future in general?
Nick: Yeah, um, in general, I think the biggest thing is throw away your paycheck faster than the world can throw away, um, your paycheck. Get that where you want it to be, but out of your direct control and just get that retirement started. Um, if someone matches, if a company matches for you, definitely take advantage of that. Um, and definitely understand, um, it's like a reverse mortgage kind of in terms of mortgage. Um, they make you pay all the interest up front. So how your, um, mortgage is paid off, the principal starts going way down, like later on term, whereas like, at the front end, you're paying mostly, uh, the interest up front. So the banks get their interest now for retirement on your account. Like, the sooner you start that right. That principle you're paying into is earning on top of itself and compounding that much sooner. And that's why the first ten years is probably more important than the next 30, right. Or however many you have in that term. So that's why it's like, really, once you kind of turn 25 to me, everything I've read there very much is like, uh, a ticker on 30 and then here's what it looks like by 40. And like the case of, uh, your one boss, they're putting half of their paycheck part because that's what she needed to do to kind of hit her ideal retirement payout. Uh, yeah, and the other thing, um, just to add in my own experience when I started my new job, um, they match. And so obviously. I match that. I feel good about that. But the general idea that you want to get that going and kind of just let it sit, um, don't look at it right, just um, know it's there. But the same way I treat my savings, know it's there. Um, it's great to have, but don't think of it as like some sort of liquid asset. Like you were saying earlier, people kind of like taking it out and stuff. Um, there's definite tax implications there. And um, when I was trying to figure out do I do a rough, do I do like a regular 401K? Like, what do I do? And it kind of comes down. They're both fine and everyone can argue either way. But really what I read at the end of the day was like, it's a personal preference that, um, do you want the taxes taken out now or you want them taken out later? And that could be really reflective on your kind of larger view of the world. Are taxes and finances better off now or are they going to be better off later? I think I'm a little bit of a pessimist on the long term. And I was like, I'll have them taken out now, um, and then I will get a tax free and already taxed bit later. And I know my retirement is like, here's what it is, this is what I'm getting. Um, taxes have already been taken care of for um, many years ago. So that was kind of like a personal thing. I was like, I need to make a decision. And I was like, this way I'm going to go with it. Everyone's always like, oh, which one should I do? And all my research, I was like, I think it's just kind of up to what I want to do.
Rachel: Right, there's not really one that's better than the other. They're equally valid.
Nick: Right? Yeah. I read something or when I was looking, I was just like, oh, so it's like, do I think taxes are better now and I want them taken out now? Or am I going to be better off later? I don't know. They might raise taxes. They could lower taxes. By the time I take it all.
Rachel: Or, there could be no taxes because the whole thing just explodes.
Nick: Yeah. Um, and it just comes all down to your personal temperament and whatever you're kind of comfortable with, um, I guess it's like the bank. A lot of jargon and a lot of options in front of you to try to confuse you.
Rachel: Agreed. And also, where can people catch up with the Show Boys or anything else that you want to plug?
Nick: No. Yeah, definitely. Ah head over to showboysmedia.com. We recently launched that website, uh, this summer. Um, it just kind of went over through an overhaul. So definitely head there. Kind of the homepage will guide you to all of our different kind of segments and subscribe to our YouTube. Definitely do that. Uh, definitely like to watch the subscriber count there go up and we live stream there our episodes. So it's kind of a focal point. But the website is a great place to kind of get the full breath of what we're trying to do.
Rachel: Yeah. And you guys have a merch shop on your website as well? I visited when you launched and now I haven't been for a while.
Nick: Yeah, we have a merch shop. Um, we have, um, a Patreon, um, those are two and seller things that we like to kind of pump around from time to time. But really we're just kind of generate traffic and just get the word out there. All, um, the other stuff can come later. Awesome.
Rachel: Um, well, thank you again for your time tonight, Nick. I appreciate it.
Nick: Yeah, of course. Thank you for having me on.