6 Tips to Grow Your Wealth

How do you set yourself up for financial success? In this episode, Josh and Austin share 6 tips to grow your wealth, including the importance of setting SMART goals and budgeting effectively. They tackle the often-overlooked aspects of debt management, provide insights on wise investing, and the importance of seeking guidance from financial advisors and protecting your wealth. Tune in!
 
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Chapters

• 1:18 Tip 1: Set Financial Goals That Are SMART
• 3:04 Tip 2: Budget and Save Well
• 5:26 Tip 3: Have Strong Debt Management
• 7:46 Dad Joke of the Week
• 8:32 Tip 4: Invest Wisely
• 11:52 Tip 5: Seek Guidance From a Financial Advisor
• 14:03 Tip 6: Protect and Preserve Your Wealth

Transcript

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, a podcast where we take you on a journey to better your financial future. I'm Austin Wilson, Co-Portfolio Manager at Hixon Zuercher Capital Management.

Josh Robb:

And I'm Josh Robb, Director of Wealth Management at Hixon Zuercher Capital Management. Austin, how can people help us grow our podcast?

Austin Wilson:

Please subscribe if you're not subscribed, so hit that plus, follow whatever that icon is on your podcast player. That way you get new episodes when they drop. And we would also love it if you'd leave us a review wherever you can leave a review that will help us to be found and ultimately help more people with their money. So today, Josh...

Josh Robb:

Yes.

Austin Wilson:

We are going to talk about some tips to grow your financial wealth.

Josh Robb:

That's right. And we're going to be looking at six tips.

Austin Wilson:

That's a nice even number.

Josh Robb:

It's nice, can be divided between our dad joke, three and three, but the idea is, this is not all inclusive, but just a couple pointers, some tips to help you grow your wealth. When we're talking wealth, we're looking at your full financial picture, not just investing tips on finding the hot stock, but how to overall improve your life.

[1:18] - Tip 1: Set Financial Goals That Are SMART

Austin Wilson:

That's right. So, let's just start off tip number one, you can't really have financial success unless you have some goals. So, setting financial goals, tip number one, talk about that a little bit.

Josh Robb:

Yep. So, we've talked about this in other episodes, but if you don't know where you're going, growing your wealth, you don't know if that's... Am I growing fast enough? Am I doing the right things? And so the first thing you got to do is set your financial goals to know where you're going. Then that helps you go backwards to say, if this is where I want to go and here's where I'm at, I can then get a plan to get me from here to there.

Austin Wilson:

That's like getting in your car without knowing where you're going.

Josh Robb:

Yes.

Austin Wilson:

So, if you don't know, I'm going to work.

Josh Robb:

Do I have enough gas to get there?

Austin Wilson:

Where are you going?

Josh Robb:

Yeah.

Austin Wilson:

So how do you get there? You need to have the destination in mind. So set some goals.

Josh Robb:

And make sure you have a clear and achievable timeline, because you may say, "Hey, I'm 20 years old with nothing invested, and I want to be a millionaire by 22 years old."

Austin Wilson:

That's a great goal. Could you start with 100 grand?

Josh Robb:

Yes. That growth rate may not be achievable, and so you may be making decisions that are harmful than helpful, so make sure that you're clear on where you're trying to go. But then also that it's a realistic timeline

Austin Wilson:

And I think of SMART goals, right?

Josh Robb:

Yes.

Austin Wilson:

S-M-A-R-T acronym. We love acronyms in this business.

Josh Robb:

Always.

Austin Wilson:

There are actually probably thousands.

Josh Robb:

There are tons.

Austin Wilson:

So SMART, specific, measurable, attainable, realistic, and time-based. They all have to... When you set a goal, it has to check all those boxes, do you know exactly what you're going to do? How can you measure and track yourself as you go along? Is it realistic? Is it attainable? It's a time-based. Do you have a goal? Do you have a timeline? Do you know what year you're trying to get that by or what age you're trying to get that by. Make sure those goals are SMART.

Josh Robb:

Yes, SMART goals are always good goals.

[3:04] - Tip 2: Budget and Save Well

Austin Wilson:

SMART goals are good. So number two, this is again, not necessarily the investing side of things. We're looking more holistically at your finances today. So talking about budgeting and saving and how important that is. So Josh, talk a little bit about that.

Josh Robb:

Because when we're talking about growing your wealth, there's two sides of it. It's your spending and your saving. And we're going to get to the saving in a minute, but the spending can help you grow your wealth because if you have less money going out, you actually have more money to save.

Austin Wilson:

Absolutely.

Josh Robb:

And so, when we talk about growing your wealth, this side I think is... It's harder. It's not as much fun. And people kind of neglect this side in that when they're saying, "Oh, I need to get wealthier, I need to grow my wealth." They focus on, I need to find those stocks and all that fun stuff. But really if you look at your finances, if you track your expenses, you can find ways to save and saving is growing your wealth.

Austin Wilson:

Absolutely.

Josh Robb:

And so, track your expenses first. There's a lot of cool apps out there that can help you with that. They can pull in all your expenses and then show your reoccurring to say, "Hey, are you still using this subscription?" All that fun stuff, A budget, creating a budget's really important. We've done podcasts on how to create a budget, so you can always check that out if you're interested, but that just helps you track how you're doing. Budgets are great. They help you know where you're at and what adjustments you can make. This is important is automate things, automate your savings and automate as much as you can so that you know what's coming in and out and it's easier to track. Again, with today's technology, it's a lot easier. Fewer handwritten checks going out, hopefully.

Austin Wilson:

I think that that's something that I really hope everyone takes away as this is like step one is automate everything. So when you have a credit card, you should never actually go pay your credit card bill. Oh, that sounds bad, right? No, that doesn't sound bad because when you-

Josh Robb:

Auto-pay.

Austin Wilson:

... Got the card auto, you set up auto-pay and you never thought about actually having to go pay the bill again. Same with all your insurances and everything like that. As much as you can, never manually pay anything.

Josh Robb:

And I think the hardest one is, to me, is taxes.

Austin Wilson:

That's a little tricky.

Josh Robb:

You ought to pay those things, but other than that, yeah, most bills-

Austin Wilson:

People do auto-pay the taxes.

Josh Robb:

In that they have it deducted.

Austin Wilson:

In that they have it withheld.

Josh Robb:

But like property tax-

Austin Wilson:

That's a tricky one.

Josh Robb:

... And all those fun ones yeah.

Austin Wilson:

Talk to me about self-accruing, I can give you a whole spiel. Pretty fun times. All right, number three, so we have goals.

[5:26] - Tip 3: Have Strong Debt Management 

Josh Robb:

Yep.

Austin Wilson:

We're doing pretty good at managing our cash flow, managing our ins and outs. Now, let's talk a little bit about why debt management tip number three is so important for building wealth.

Josh Robb:

And there's two pieces to this. The first one is reducing current debt, and that's again, the less debt you have, the more wealthy you are because that's a liability.

Austin Wilson:

Yeah it's -

Josh Robb:

On your balance sheet.

Austin Wilson:

Net worth, right?

Josh Robb:

Yes. Assets-

Austin Wilson:

Minus liabilities.

Josh Robb:

... Minus liabilities is what your net worth is. That's your value, your wealth. And so reduce your current debt. Prioritize that. We had a full fun episode on that where we talked about different ways to reduce debt, and we're not going to go into detail today.

Austin Wilson:

You know what the answer is? It depends.

Josh Robb:

It depends really which one are you going to stick with.

Austin Wilson:

That's right.

Josh Robb:

That's all I care about is find one you'll stick with, but get rid of the high interest debt. Get rid of the shortest one. I don't care which direction you go, but knock that debt down and then avoid new debt. And that's the other piece of this is as people gain wealth, they also gain the opportunity or ability to utilize credit.

Austin Wilson:

Yes.

Josh Robb:

And that can be a problem if you don't understand and know what you're doing. And so be very careful about new debt. Just because you have the ability to borrow or leverage doesn't mean it's necessarily best for you long term.

Austin Wilson:

And I think that as a culture, we've gotten to a point where it's very acceptable to have all kinds of different debts. It's normal. In fact you're looked at like a freak-

Josh Robb:

If you don't have any debt.

Austin Wilson:

... If you don't have any debt. And I think that that's actually not great for people's financial wellbeing, right?

Josh Robb:

Correct. Yep.

Austin Wilson:

So we don't want people to have, especially consumer debt, we would call it. So they're on a credit card or it's a car, it's a depreciating asset. Consumer debt is not helping your financial situation.

Josh Robb:

Correct.

Austin Wilson:

Obviously, most people don't have the cash laying around to go buy a house with cash. Some people do, and that's great if you can. But we would say something like a mortgage, like a fixed rate mortgage is not necessarily the worst thing in the world, but other debt outside of that is really going to be hurting your overall financial picture. Because it's debt, it's negative, it's liabilities against really no assets or depreciating assets. And that's not necessarily so great. So work to pay those off as soon as realistically possible. And like you said, prioritize those high interest rate debts first.

Josh Robb:

Or the shortest one, which is the snowball.

Austin Wilson:

Or the shortest one.

Josh Robb:

We've talked about that.

Austin Wilson:

Depending on how you want to do that. But I would say-

Josh Robb:

If you have a 22% credit card-

Austin Wilson:

... Credit card debt.

Josh Robb:

Debt-

Austin Wilson:

... Probably get that knocked out first.

Josh Robb:

... Knock it out. Yes. That's it. I Agree.

[7:49] - Dad Joke of the Week 

Austin Wilson:

All right, so we're going to take a break. I got dad joke of the week for you, Josh.

Josh Robb:

Okay, I'm ready.

Austin Wilson:

Now. You know me.

Josh Robb:

I do know you.

Austin Wilson:

I love a good steak. I love meat in general. I think it's superfood, right?

Josh Robb:

Yes.

Austin Wilson:

Why don't cows ever invest in the stock market?

Josh Robb:

Why don't cows invest in the stock market? I don't know. Austin.

Austin Wilson:

Because they always beef their investments. Mess them up, come on.

Josh Robb:

Oh they beef them... oh man, there it is.

Austin Wilson:

That's why cows don't invest in the stock market.

Josh Robb:

Yes.

Austin Wilson:

So we're-

Josh Robb:

What do you call a cow with no legs?

Austin Wilson:

Ground beef.

Josh Robb:

Yes.

Austin Wilson:

How many times have we heard that?

Josh Robb:

I love that joke.

[8:32] - Tip 4: Invest Wisely, Build Wealth 

Austin Wilson:

I think it's a really good one. I think I told that to Jensen and he thought it... He had to think about it for a second and then he got it. It was pretty good. All right, so three down, three to go. Tip number four on how to build wealth is investing wisely.

Josh Robb:

Yes, and so now we're getting into the other side.

Austin Wilson:

Now we're talking about the investment side of things.

Josh Robb:

Investing so-

Austin Wilson:

Because everyone wants to talk about.

Josh Robb:

Reduce your spending, track, get rid of debt. That's one way to build wealth. The other side is grow your money. And so, one thing that maybe isn't available to everybody is start early. So the easiest way to grow your wealth, and we've talked about this, the power of compounding-

Austin Wilson:

It's huge.

Josh Robb:

The more time you give your money, the more it can compound and grow. And so this is a tip, but it may not apply to everybody, but the sooner you can get started, the better.

Austin Wilson:

I mean it does apply to everyone. The answer is start now if you haven't started.

Josh Robb:

Yeah, start 10 years ago, but if you can't-

Austin Wilson:

But if you can't, start today.

Josh Robb:

Start now.

Austin Wilson:

Right? That's the Warren Buffett-ism

Josh Robb:

Yes.

Austin Wilson:

When was the best time to plant a tree?

Josh Robb:

Yep.

Austin Wilson:

30 years ago. When's the second best time? Today.

Josh Robb:

Yeah. So the earlier you can get going, the more time your money can compound. The second thing, and this is an important tip which goes contrary to TikTok and Reddit and all those places.

Austin Wilson:

Time out, while you're on that note.

Josh Robb:

Yeah, side note.

Austin Wilson:

This is a bonus tip.

Josh Robb:

Bonus tip.

Austin Wilson:

Don't take financial advice from TikTok or Reddit or Instagram or Facebook.

Josh Robb:

That fits into my next tip in a minute, but yes, you're right.

Austin Wilson:

Good.

Josh Robb:

So diversify. That's where we're going. TikTok, they're always like, "Buy this one stock, it'll go up." Or Reddit has those sub channels that are all about meme stocks or anything like that. But the key to long-term growth of your wealth is a diversified portfolio. Because guessing right all the time is impossible to do. People can have stretches where they get things right, but you can't always get it right. And the more diversified you are, the less risk you're taking on any one of your bets not working out.

Austin Wilson:

I mean, the easiest way to do that is to buy some sort of pooled investment vehicle, whether that be an ETF or a mutual fund that holds many different stocks or many different bonds. You're not putting all your eggs in one basket. I would also say this topic kind of ties into invest in what's proven to work. There are a lot of... You alluded to it a little bit, get rich quick schemes, whether that be meme stocks or crypto. That's not saying that no one gets rich doing those because some people have, even real estate investing is the one I see all the time. People make it sound like it's the most foolproof investment and way to make millions of dollars. And some people do it very well, but it's not as easy as you think.

Josh Robb:

It is not.

Austin Wilson:

So what has worked and what will work over the long time because it's backed by data are sticking to a plan of a lot of times stocks and bonds.

Josh Robb:

Yes.

Austin Wilson:

Diversified stocks and bonds portfolios have done and we would anticipate to do well over time.

Josh Robb:

And then consider, we've talked about this when it comes to your overall planning, but consider your time or horizon when it comes to your investing as well. Because that comes back to that stocks, bonds, cash. Question is, if I'm saving for down payment on a house, my aggressive level for that growth is different than my long-term retirement savings potentially because I'm going to use that sooner. And so when you're investing wisely to try to grow your wealth, you got to know your goals and got to know your time horizon, diversified portfolio and then stick with it.

Austin Wilson:

Stick with it.

Josh Robb:

Just stick with it. It takes time to grow wealth. It is not a get rich quick scheme.

Austin Wilson:

No.

Josh Robb:

It is a slow and steady grows your wealth long term.

Austin Wilson:

Yep, absolutely.

[11:52] - Tip 5: Seek Guidance from a Financial Advisor 

Josh Robb:

All right, number five.

Austin Wilson:

Number five. This is, we kind of just touched on it a little bit, but continuously learn and try and get better as you go along with your wealth building journey.

Josh Robb:

Yep. I'm going to jump to the one-

Austin Wilson:

Jump to it.

Josh Robb:

... That applies to it, but seek guidance. So we say a financial advisor, and I may be a little biased, because that's what I am, but I think they're very helpful in helping you develop that plan, choose a good investment, helping you stick with the plan. But this is where it comes back to that Reddit or TikTok, they're not financial-

Austin Wilson:

They're not.

Josh Robb:

... Pros.

Austin Wilson:

Nope.

Josh Robb:

Most of those do not have a background in it, nor are they even regulated like we are on what we should and should not be saying to somebody. They're just on there for entertainment. So be careful where you get your advice, but we encourage you to seek guidance from a professional to help you with your planning.

Austin Wilson:

I may be biased too. I think you're pretty great at your job, Josh.

Josh Robb:

Well, appreciate it. The second one is, and this is true for some people, is educate yourself. Some people say, "You know what? I want to do this on my own." Totally fine. But make sure and understand the risks that you're taking, the investments that you're putting in and understand how they play with each other or overlap. Because you might buy two things that are about the same and you're just spreading your costs out that way and then stay informed. That's the other thing is I learned a lot in my education in college. I learned a lot when I got my certified financial planner designation, my CFP designation.

Well that was a little while ago. I need to continually stay up to date on what's going on in the industry, in the news so that I can give the best advice and help our clients out. Same is true with anybody building their own wealth. It's just know what's going on, right? What's happening around the world, what's happening around, we had inflation number come out-

Austin Wilson:

Inflation.

Josh Robb:

... That impacts a lot of different things.

Austin Wilson:

It's already impacted a lot.

Josh Robb:

Yes. So those are the things that education matters. And it's not a one-off, oh, I learned, I read this book, I'm done. It's a continual ongoing thing.

Austin Wilson:

And it's even one of those things where the more you know, the better you'll be at it, whether you're working with someone or doing it on your own. But there are certain things that as you're investing timeline changes and your goals change, you need to be willing to make changes and things that are going on can change that or time can change that. You need to know how that's affected and you really won't unless you educate yourself or work with someone who was already educated.

Josh Robb:

Yep.

[14:03] - Tip 6: Protect and Preserve Your Wealth 

Austin Wilson:

All right, number six.

Josh Robb:

Yes. Last one.

Austin Wilson:

Protect your wealth.

Josh Robb:

Yes. So we talked about reducing your spending, which helps grow your wealth. We talked about investing, which also helps grow your wealth. Two different sides of that wealth growth. Now the last piece is as you get wealth, you're going to want to protect and preserve it. You don't want it to disappear from some tragedy or accident. And so there's two main things we have here for protecting your wealth. The first is emergency fund. This is that kind of base layer of protection that if something unforeseen happens in your life, you have some cash outside of this wealth growth piece to use to take care of that emergency. That way you're not forced to sell something of your investments or take on that high interest debt to cover that cost.

So emergency funds are great. We say three to six months of your living expenses. There's a reason the range comes in that how likely are you to lose that income if there's two people earning in your household versus one, are you in a job that's easily replaceable? All those things, if you're concerned, go longer. If you're pretty comfortable, go to the shorter end. That's kind of that range, three to six months. But even before you get there, if you say, "Well, should I wait until I have enough money to do that?" No, put some money aside, a couple thousand dollars if you can find it, a couple hundred dollars if you have it, whatever you have, get it started. Because if you go out and you have a flat tire tomorrow morning, you got to take care of that or else... Your income's going to be in trouble and it compounds.

Austin Wilson:

Keep putting it aside until you get to where you want to get and you can grow. Now, we are not saying that this is meant to be used for growing at all. However, there are some options where you can actually get a little bit of growth on top of that, that's very, very safe. So number one, you could just put it in a money market fund at a brokerage account, no risk. It's insured, and you're going to get 4 to 5% depending on what their interest rate is at that time. High yield savings account online, same sort of thing. You're going to get 4 to 5% no risk.

Josh Robb:

45%!

Austin Wilson:

45 would be great. Four to five, not 425, but 4 to 5%. And these are things that that just kind of helps you. It's kind of fun to be chipping away and see that dividend coming in or that interest coming in.

Josh Robb:

And it's a way to grow your savings with minimal work, right?

Austin Wilson:

And no risk.

Josh Robb:

Yeah. So yeah, you're right. And then the other side is when you can't protect it on your own, which is the emergency fund, you go out and get insurance and insurance is there to make sure to protect you from those bigger events that emergency fund may not cover. So you have health insurance, you have life insurance, you have disability insurance, you have property insurance including car and home, then you have umbrella insurance. And so depending on where you're at in your growth of wealth, some of these may apply. If you are renting, you don't need home insurance. You need renter's insurance to cover your stuff. Life insurance, how many people are dependent on me determines whether or not you need life insurance. So there's all these different insurance, depending where you're at on your progress of wealth, that may be important.

The last piece is that umbrella policy and umbrella insurance policy is, think of it as an umbrella, covers over top of things. This covers over top of you to protect you in addition to your other insurance. And so that's for people who have a little bit higher net worth, have a little bit more wealth accumulated. That really just helps prevent that hard work asset that you built from being taken away from some tragedy. So again, as you go over time, those things become more and more important. But that's a way to protect at a lower cost than setting aside a bunch of money to safeguard. It's hard for you to self-insure you got to pay somebody to take that risk for you.

Austin Wilson:

And on the flip side, at the other end of all this, like you mentioned, self-insurance is a great thing. So maybe you have quite the network, quite the amount of assets that exceed your liabilities and no real need for excess insurance because you could cover it all with cash if you want to or with your investments. That's great. You don't maybe need anymore at that point, but it depends on your stage of life.

Josh Robb:

So wrapping it up, grow your wealth has kind of two ends of the barbell. The one side is reduce your expenses, get rid of your debt, cut down on your spending, which grows wealth. And the other side is grow your investments by saving and choosing the right investments long term.

Austin Wilson:

Yep.

Josh Robb:

Those two things together help you grow your wealth and that's where those tips are. Then that last tip is protecting that wealth so that all that hard work you did isn't taken away.

Austin Wilson:

So the question, Josh, I have is what would someone do from here? And the answer is, look at your situation right now.

Josh Robb:

Start at tip one.

Austin Wilson:

Start at tip one.

Josh Robb:

Get a plan.

Austin Wilson:

So get a plan. Understand where you are today and where you want to go. So work that out and then identify all the steps that we talked about in the middle to kind of fill in those gaps over time. And then once you have that plan, stick with it.

Josh Robb:

That's right.

Austin Wilson:

And you can do that yourself. Everyone can do that their self. But if you don't want to or you don't feel comfortable doing that, that's great. That's what there are professionals in the world for. So we would say seek a professional, seek someone who can walk alongside you, help you stick to the plan, help you meet all those goals, and answer any questions you have along the way. And to that point, if you have any questions about your financial situation, you can check out the Invest With Us tab on our website. We'd be happy to talk to you. Maybe we'll be able to help you out over time. And other than that, until next time, thanks for being here.

Please remember, you can share this episode with friends, family. If you had questions about building wealth, email us any ideas at hello@theinvesteddads.com, and as always, check back for the next episode.

Josh Robb:

All right, talk to you later.

Austin Wilson:

Thanks. 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 guests 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 statements, opinions, or forecasts 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 principle. There is no assurance that any investment plan or strategy will be successful.