Millennial Money Podcast: Taylor Schulte on The Top Five Investing Taboos
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What we like to do is separate out that hard-earned money that you've worked so hard to make and you get your education and get that job. Most of that money should go towards these proven investing strategies, stocks, bonds, cash, real estate, things that have that proven track record.

Welcome to Stay Wealthy San Diego, where award-winning financial expert Taylor Schulte reveals the stories behind the leaders, entrepreneurs, and innovators who helped make San Diego one of the most beautiful cities in America. Listen in to their perspectives and advice on what it takes to live an abundant life and become wealthy in your own way.

This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. This podcast is not engaged in rendering legal, financial, or other professional services. Hello, everyone. Welcome to the Stay Wealthy San Diego podcast. Thank you all, as always, for listening. I recently had the opportunity to join Shanna Game on her podcast called Millennial Money, and I wanted to re-air our conversation in the chance you missed it.

In this interview, we break down and demystify the top five investing taboos from I can't invest in the stock market because I have other debt to I'm thinking I should just invest everything in cryptocurrency because everyone seems to be making money there. We have a little bit for everyone in this episode.

I hope you enjoy the conversation and be sure to keep an eye out for my next interview with the founder of Signature Analytics, Jason Kruger. Jason has grown revenue from $4 million in 2015 to over $8 million in 2017. His explosive growth and path to starting this firm is one you don't want to miss. So keep an eye out for that. Enough from me. Enjoy the show.

So Taylor, it's always fun to have another certified financial planner on the podcast with me to, you know, mesh minds and share a lot of insight. But before we jump into talking about some of these investing taboos, I'd love for you to share with the listeners a little bit about yourself and maybe anything that you want to share about your own money journey. Any lessons, good or not so good, that you've picked up along the way that you think, you know, might really resonate with the listeners?

Yeah, absolutely. And thank you very much for having me on. Yeah, so my name is Taylor Schulte. I'm a certified financial planner and I own a financial planning firm in San Diego called Define Financial. And we work with two groups of individuals.

We work with high-earning young professionals, and we work with traditional retirees. But we have that planning-centric focus, so we strongly believe that I don't care if a client comes through the door with $10 million or $10,000. A financial plan is where we start every client relationship.

What have I learned along the way? Most recently, and you can hear my story in more detail on the Stacking Benjamins podcast, but just when I thought we had it all figured out, I'm a certified financial planner. I own a business. I've been doing this about 11 years. My wife is super organized and a planner. We thought we had everything dialed in. We saved a bunch of money for our first home. We bought that house and things didn't quite go as planned.

I won't go into the details here. Again, you can go find that podcast episode somewhere else. But things didn't quite go as planned. And I think the lesson that it taught me was that things happen and you have to plan for the unknown, that just because it pencils out on paper doesn't mean that that's going to translate to real life.

And although we preach that day in and day out, it was just a really good reminder for me because I wasn't 100% prepared. This was a really extreme situation. And although I had my emergency fund and again, the financial plan was pretty airtight, at least I thought it was, there are a lot of things you cannot plan for. And so that was a big lesson that

I learned recently and it was a challenge and now it's funny looking back at it, but yeah, it was a learning experience. Yeah. I think that's great to share because I,

I think, you know, even being certified financial planners, you know, I have been one as well in planning practice as long as you have. It's for listeners or people who are, you know, just new on their money journey or even, you know, those that are a little bit more established. I think that they think that there's, you know, this kind of like ideal place that you get to where you've got it all figured out and everything's airtight and, you know, you're making all the smart money moves. Right.

But then this thing, life comes along and, you know, it throws all sorts of monkey wrenches in that you haven't prepared for. And that happens to all of us, not just those of us that, you know, are maybe living paycheck to paycheck. It happens to people who have a lot of money, people who are, you know, kind of mid-career. I mean, it's just no one's really immune to money.

having life throw these twists. And so I think it's really important to share those stories. Yeah, absolutely. And what's the saying? More money, more problems. So yeah, it doesn't matter if you're living paycheck to paycheck or you've got millions of dollars in the bank. And typically when you're on that other end of the spectrum with lots of money, your problems are much bigger. So yeah, having a plan in place to protect yourself during those unexpected events and then just learning how to deal with them too is critical. Yeah, absolutely. So

In this episode, we are breaking down these taboos of investing, and we've got five taboos that I hear a lot. You probably hear these a lot, and so I think it'd be really awesome to dive into these. So taboo number one, we've got, I can't invest in the stock market if I have other debt. This is a common statement that I hear from a lot of people, whether it's student loan debt or credit card debt, just the thought

that having that debt then stops you from investing or moving forward. So what do you say to that taboo?

Yeah, it is a common one. And, you know, unfortunately, the student loan debt issue is a massive one. You know, I kind of take an unconventional approach here. Look, debt is really serious. And, you know, usually when you're holding credit card debt or student loan debt, you know, the interest rate is high. And so it's really important to put an emphasis and put a plan together on paying down that debt. So I'd say step number one is have a plan for paying down that debt. But

I'm a strong believer that you shouldn't ignore other pieces of your financial life. So just because you have this debt hanging over you doesn't mean, in my opinion, that you should just ignore saving for longer-term goals. Maybe it's retirement. Maybe it's buying a house.

Maybe it's getting married. So, you know, the debt should be priority number one. I get that. There should be a plan in place. That's super important. But don't ignore other pieces of your life. So, you know, maybe it's only putting $10 or $20 a month away for that wedding or that house or retirement. That's okay.

But just do something for it. Have a plan for it. So when that debt is freed up and it doesn't exist anymore, you already have that other savings plan in place. And then you can start to dedicate more dollars to it. But I just hate to see other aspects of a person's financial life get ignored because of this looming debt. So when you talk about having a debt strategy, a debt payoff strategy, what are some of the tips that you offer people who are maybe struggling to figure out how to get a handle on some of this debt?

Understand it, number one. The most important thing is to understand this debt, understand the interest rate that you're paying, how long it can be paid off for. If there's any loan forgiveness programs out there that apply to you, just get all the facts about that piece of debt that you

can and just write them down and understand it. So I say step number one is understand the debt that you have. And then you can start working towards putting a solution together. One of my favorite things, and it's super, super simple. I mean, there's a ton of stuff you can Google and pay off the high interest rate debt first. Of course, that's a no-brainer. But one of the things that I see work really well is, let's say you have five outstanding loans.

You're just going to zone in on one of those. And your goal is just to pay off that one loan. And maybe it's the smallest one. But what I see happen is you get that one win under your belt and it feels really good. And then you want to go tackle the next one. And then that one feels good and you want to go tackle the next one. So yeah,

If you're trying to pay off this massive $100,000 student loan that's going to take you 20 years to pay off, that doesn't give people a lot of motivation. So maybe you have a small credit card or something. Get that thing paid off and feel that win. And I think that's really helpful from a behavioral standpoint. Yeah, that's awesome. I love that advice. I think we always forget about the psychological aspect of money and how powerful that is and how –

Getting that win, that first even just small win under your belt, how that really starts to change how you think about paying off debt. It maybe can change it from a negative thing to like, hey, I can do this, like a good kind of challenge.

Yeah, absolutely. Yeah, I found a lot of success in it. I think it's super important. Very cool. So let's move on to taboo number two. So taboo number two is I have to invest too much of my salary each month to make a difference. So why would I invest anyway? What's the answer to that? Sure. Well, I don't know if I have the exact answer, but I do have some thoughts around it. You don't have the crystal ball? No crystal ball here. Oh, man. Yeah.

Yeah, one of these days, one of these days. You know, I guess the first thing I'll say is I just want to acknowledge it. Like, I get it, you know, putting away $10 per paycheck or $20 per paycheck or whatever it might be in your situation. Like, I get it. That's

that doesn't feel like a whole lot of money. You know, you might prefer to go spend it on a round of golf or a massage or something. You know, maybe that's that instant gratification means more to you or you think it means more to you. But so I get it. It doesn't feel like a lot of money, but I want to say this.

Number one, it adds up, right? Even at $20 per paycheck or $50 per month, it adds up. You'll be really, really surprised how quickly that money adds up, even that small of an amount. And then number two, we talked about putting these systems in place and being able to dedicate more dollars to it in the future. Remember, you're not going to invest the same amount forever.

forever. As your salary goes up, you're hopefully going to be contributing more. Maybe you get a bonus and you can put a percentage of that in there. So, you know, you have to start somewhere. I get it. It's small. It's going to add up and you're going to increase it over time. And I, you know, I thought the same thing earlier in my career. I started at Morgan Stanley at 22 years old and, you know, they had a great 401k program. And I'm like, what is my little contribution going to do? But, you know, before I knew it, I had $10,000 in this account. I'm like,

wow, this is great. I have $10,000 to my name. So you have to start somewhere and just know you'll be increasing it over time. Yeah. And so, you know, how would you, especially if you were, you know, just starting out in your career or maybe you've been, you know, afraid of investing, how would you figure out, you know, what is that percentage that maybe you should start with? Are there any tips or advice?

Yeah, I mean, if you're at a larger corporation that offers a company match to a 401k, the no-brainer answer is contribute as much into that so that you can get the full match on your contribution. So it could be 3%, 4%, 5% or maybe more of your salary. So make sure you get that match from your company. That's just free money. So that would just be stupid not to take it.

Outside of that, again, I don't want to throw out a large number and discourage somebody from starting. So if it's 1% of your salary, but you set up a process to increase it to 2% next year and 3% the following and 4% and 5% and 6%,

That's awesome. Don't not start because you can't put away 10%. What's really cool is some of these company retirement programs, they have an automatic tool built in that you can sign up for to say, yeah, please increase my contributions by X percent each year automatically. And that makes it really easy. You don't have to think about it. You don't have to log in. But

Yeah, that would be my answer. Yeah, I think that's awesome advice. So taboo number three, I feel like we could spend quite a while on. The market is obviously at all-time highs, even though we've had a bunch of corrections lately that maybe have given some new investors or even seasoned investors a little bit of a panic attack. But

What do you say to the tapu? I'm going to wait to invest until there's a market correction and I can buy at lower prices because I don't really want to lose my money. Sure. Again, I don't want to discount people's feelings. I get it. The stock market is scary. It's,

It's hard. A lot of people don't understand exactly how it moves and why it moves. So I do want to acknowledge that I get it. It can be scary. But when we talk about recent market volatility and all-time highs and blah, blah, blah, my answer is who cares?

cares, right? Like if you have a plan in place for the next 30 years, if you're not going to touch this bucket of money for 30 years, who cares what happens in the market today or last week or next month? Like it's going to be a blip on the radar 20 years from now. You know, I'm using these big 20 year, 30 year numbers. I would say like,

if you're not investing for 10 years or more, your money probably shouldn't be in the stock market anyways. So if you're saving for a house in five years or a wedding or something a little shorter term, like you shouldn't be putting your money in the stock market anyways, because anything can happen in a five to 10 year time period. But if we're talking about long-term goals here, 10, 20, 30 years from now, like,

Who cares what happened in the market today? The other thing I want to mention is the stock market, just stocks in general, they go up 75% of the time. So in theory, you would want as much of your money in the market for as long as possible based on those statistics because 75% of the time, you're making money. Who wouldn't want that?

You know, I mean, investing in the stock market is not gambling for this very reason. You know, if Blackjack had 75% odds of winning, like everybody would be at the Blackjack table, but that's not the case. Yeah. So for us young people that are saving for these long-term goals, you have to find a way to ignore the noise, tell yourself who cares what happens today. And then, you know, our guiding kind of philosophy is, you know, focus on the things you can control.

saving more money, spending less money. You can make some tweaks to your allocation, mitigating taxes, all these things you have full control over. You know, the market's going to do its thing. And again, three quarters of the time, you know, you should be making money in the stock market.

The last thing I want to mention, I know I'm kind of going on a long tangent here. You know, you don't have to put all of your money in the stock market. You can, you know, we look at, you know, call it two main asset classes, stocks and bonds. Stocks are the risky portion of the portfolio and bonds are the safer portion.

The worst, if you just split those asset classes in half and you put 50% of your money in stocks and 50% in bonds, the worst 10-year period in history for a 50-50 portfolio is low 2%, like 2.2% or something like that. That's the worst 10-year period for a 50-50 portfolio. So don't think that you just have to

dump all your money in the stock market and hope it doesn't drop by 50%. You can make tweaks to the portfolio to make yourself more comfortable with what you're investing in.

Yeah, I think those are great tips. And especially talking about, you know, the market's up 75% of the time, like when you really think about that, you know, I think that it helps to dispel the myth that you're always going to put money in and you're always going to lose your money. You know, I think, especially a lot of younger millennials who have seen, you know, what happened in 2009, you know, that has really changed.

Yeah.

Yeah. And this isn't a get-rich-quick scheme by any means. People invest in the markets so that their wealth keeps up with inflation because $100 today is not $100 30 years from now. So putting your money under the mattress might make you feel good, but 30 years from now, that money is not going to have the same value. So this isn't just a way to try and hurry up and get rich. It's not that at all. There's a real purpose for investing in

you know, I also want to say too, look, I went through 08, 09, it was brutal, but there's a lot of lessons that you can learn from that too. And you know, the big one is the market doesn't always go up, you know, and you have to be prepared for that because that 25% of the time, that's the hard part. The 70, the 75% of the time, that's easy. We're all making money or, you know, our jobs are going well, everything's,

you know, on the up and up. But that 25% of time is really, really, really, really hard. So, you know, I would spend more time on figuring out how am I going to handle that 25% of the time rather than that, you know, focus on the market going up that three quarters. Yeah, to me, it's just like being in a relationship with someone, you know, it's not 100% of the time going to be

roses, you know, birds chirping and, you know, everything's going to be wonderful. There's going to be some times where it's not so good, you know, but you don't focus on the not so good. You focus on, you know, those times where it's good to, you know, keep things going. So to me, it's very similar. Yeah.

Yeah, you're right. And, you know, a lot of successful marriages have some sort of plan for when things don't go so well and you guys disagree or have an argument, you know, whether it's marriage therapy or you have a certain communication medium that you revert to. But, you know, the successful marriages have some sort of plan for dealing with those periods. And the same goes for investing. Like you should have a plan for that 25% of the time. My plan during that 25% of the time is don't look at it. Don't look at my account.

Because again, I'm investing for a long period of time. So don't look at it and then go back to the drawing board on things I can control. Like, can I save a little bit more? Can I put some more money into the market? Can I cut some expenses in some other areas? But I'd rather focus on those things and worry about why the Fed's raising interest rates.

Yeah, absolutely. All right. So taboo number four, I hear this a lot. I have to be an investing expert to put together a good portfolio that works for my risk tolerance or riskiness. What do you say for, you know, the people who, you know, they might get their mutual fund options at work and just have absolutely no idea what to choose? You know, where do you start with this so that you don't have to feel like you have to be an expert to figure this out?

Sure. The first thing I'll say is – and this isn't like the be-all, end-all – but the first thing that you should look for before investing your money is the underlying fees.

That's usually a really, really good indicator of a good investment versus a bad investment. Again, it's not the only thing to look at, but that would be my starting point is to look at the fees. So for every mutual fund or exchange traded fund, also known as an ETF, there's what's called an expense ratio.

So I would start with looking at that expense ratio and finding the cheapest, the lowest cost funds that are out there. That would be my starting point. And these are your Vanguard funds, your iShares funds. They're super low cost. They're almost free.

So that's the starting point is find those low cost funds. Now, sometimes they're not available to you in a 401k at work. You're just going to have to do your best there, but it is getting better by the day. We're seeing that, which is really nice. Step number two, again, I would keep it really, really simple. Separate it between stocks and bonds. Pick a stock fund that's low cost and pick a high quality bond fund that's low cost and try to find a mix that you're comfortable with. I know it's not

The easiest thing to do, it could be a little bit daunting. And so there are some services out there that you can lean on to in your 401k. Every 401k plan has an asset allocation fund. So you can buy one fund and it'll do the work for you. You'll find that it's not the cheapest. So, you know, you kind of get what you pay for. And then there's other services out there, too, like your betterments and your wealth fronts.

Vanguard that will handle some of that allocation stuff for you as well. So you can lean on those third party or you can try and kind of piece it together yourself. But I would keep it really, really, really simple and keep it really low cost. Trust me, you don't need 10 different mutual funds to be a successful investor. You can have one, two, three really low cost, great mutual funds and be doing better than 99% of the investors that are out there.

Yeah. And I love that advice, you know, and also I think, you know, don't just choose whatever funds your friends at work are choosing or, you know, your boyfriend or girlfriend. You choose the opposite of them. Exactly. Right. Because they probably don't know what they're choosing. So, you know, find what works for you. You know, you can be totally different, even a, you know, a spouse relationship or boyfriend girlfriend relationship or, you know,

you know, whatever it may be, you can have a totally different risk tolerance and feel different about investing. And that's totally fine. You know, if it works for you guys, then that's perfect.

Yep. A hundred percent. We see spouses all the time that are on complete opposite ends of the spectrum. We'll have a really conservative husband and a really aggressive wife and, you know, combined they have a nice balanced portfolio. So yeah, you need to, you do need to find out what works for you. I, you know, I say, don't look at your account. I think that's really important. But in the beginning, when you're first starting to invest, I actually would encourage you to pay attention to the ups and downs of the portfolio and just ask yourself, am I comfortable with this?

should I be a little bit more conservative or more aggressive? In that first six months, you can monitor that and try to find that sweet spot for you. And then it's on autopilot. You don't want to look at it anymore. Yeah, that's awesome advice. All right. So we're down to our last taboo. One of my favorites, we hear a lot that you can just invest in cryptocurrency and Bitcoin, whatever it may be, and you don't have to invest in anything else. That is the

the jackpot, the winning token. And I think right now something that, although there's been a lot of market correction with it, I think it's still something that feels like that's where all the cool kids are playing.

Yeah. Hey, cryptocurrency is fun. It's cool. It's sexy. It's interesting. Everybody's talking about it. I get it. It's really interesting. It's fascinating. Look, if you're nervous and scared to invest in the stock market, you should be running screaming from the cryptocurrency market because Bitcoin or any of these cryptocurrencies will have

bear market in one day. They've been through several bear markets in a short period of time. So talk about risk and volatility. This is off the charts. The other thing, too, is I've given you some statistics today about the stock market going up 75% of the time and how portfolios have generally performed over long periods of time. We just don't have that data for cryptocurrency, right? It just doesn't go back that far. Even 10 years isn't that

far. 20 years isn't that far. You know, when we're giving statistics, we're talking about, you know, pre Great Depression here, like back to the early 1900s. That's how much data we have. So, you know, when we invest our hard earned money, like think about how hard you work for your money day in and day out. We want to invest in something that has a proven track record. We don't want to just throw a dart and hope and pray. So what we like to do is separate out that

Hard-earned money that you've worked so hard to make and you get your education and get that job, most of that money should go towards these proven investing strategies, stocks, bonds, cash, real estate, things that have that proven track record. Most of it should be going towards that traditional investment model.

I'm okay with you taking a small slice. We call it a cowboy account. Maybe it's 5% of your investable assets. I say no more than 5% can go into these cryptocurrency, marijuana stocks, whatever is of interest to you to just have some fun. And I have my own cowboy account and I play around and it just kind of gets that bug out of me. And it's interesting. I'd

you know, bought a little bit of Bitcoin and Ethereum just to learn the process. But I promise you, it's no more than 5% of my investable assets. So I'll stop there. I don't know where else you want to dig in there, but it is a really, really interesting category right now. No, I think that's, you know, that's awesome because...

You're right. Like if you're afraid to get in the market, if you're not comfortable with losing your money, but you think investing in cryptocurrency or Bitcoin is the way to go, that is reversed thinking.

And I think a lot of times we're not like stopping ourselves and thinking, okay, well, why don't we want to invest in our company 401k or start our own IRA or Roth? Because it's boring. Exactly. And the unfortunate thing is that boring sometimes works. No, boring always works.

The boring, low-cost stuff works. That's why we do it. Cryptocurrency has worked for some people over a really, really short period of time, and that's great. And if you're one of those people, that's awesome. My father was one of those people.

you know, he made some good money. And I'm like, hey, dude, give yourself a pat on the back. Like that's a once in a lifetime return. Like you'll never probably see that again. That was his cowboy account. He had fun and made some money. And but yeah, it's fun. It's interesting. It's sexy, but boring works.

Yeah, exactly. Awesome. I think that's such a great place to leave listeners. Sometimes boring is the best way to go. Just do the steps, make the moves, start investing in the stock market, even if you don't know what you're doing. I think getting started dipping toes in the water is how you figure out and how, yeah, you might make some mistakes here or there, but

All of us do that, you know, so none of us are immune to having that happen. So Taylor, this has been awesome to talk about some of the taboos with investing. Tell listeners where they can find you. Sure. You can, I guess you can go to our website, definefinancial.com. I also run a blog called staywealthysandiego.com, a spin on the Ron Burgundy, stay classy. I write there and I also host a podcast as well at staywealthysandiego.com.

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