YouSaid · the spoken record

Katie Gatti

lines on the record: 66
first: 2022-06-12
most recent: 2022-06-12
sittings or episodes: 1
sources: podcast

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“Thank you so much. And likewise, really enjoy your content as well. I'm excited to have you on my podcast. Shameless plug. So, yes, blog is at www.moneywithd.com. I publish every Monday, rain or shine. So there's always a new blog post out on Mondays. Money with Katie Show on Apple Podcasts, Spotify, wherever you get your podcasts. And we publish a new episode every Wednesday. If you're, you know, listening to this right now, I assume you like podcasts. That's probably a good fit. We cover all sorts of topics from the very technical to the very juicy, like this week's episode is about prenups. So that should be fun. And then Money with Katie on Instagram and Twitter. I'm trying to take a little bit of a social media break right now, which is kind of hard when your full job, like full-time job as being a content creator, but trying to get a little bit of distance right now. So yes, money with Katie on Instagram and Twitter is where you can find me. And we are posting every single day, whether I like it or not.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“And, like, is there a particular cause that I can set up a recurring donation to? Because I know that charity is really like that, because then they can budget for it. And it helps their cash flow if they have the same amount coming in every month, as opposed to just waiting till the end of the year and then giving some big amount or waiting till the end of your life and giving some big amount. They're obviously not going to turn that down. But like from a planning perspective on your side and like from their side, I think it is preferable to have like that recurring money coming in. So I think I'm more a proponent of that. But again, not until you are in a position where like you are cruising, you are at cruising altitude, we'll put it that way, to extend our plane metaphor.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Like I've met people that were already kind of struggling that were still trying to tithe and give away 10% of their income. And you kind of have to have that tough conversation of like your heart is in the right place. And I'm amazed by your selflessness, but you are never going to be able to retire if you keep doing this and you are going to eventually put that burden on someone else, whether it be the state or your kids or someone is going to have to fund your lifestyle when you can no longer work. And if it's not going to be you, it's going to be somebody else. So it's, you know, it's good right now that you're giving so much and it's amazing that you're so generous, but you want to make sure that you are protected and set up first. So I think beyond that initial level of like, I am tracking toward my financial goals at an appropriate pace. I do think I am more in the camp of like I'd rather give it away as I go. And a lot it into the budget. Like what is an appropriate amount of money that I feel comfortable giving away every month?”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Definitely, it's funny time in that you ask this too because recently we just did two kind of substantial fundraisers on money with Katie Instagram. Instagram will allow you to attach a fundraiser to a post and raise money for things. So we just did one a couple weeks ago that raised, I think, $21,000. We set the goal at $10,000. We did one last week that raised last I checked. We hit our goal. We wanted to raise $5,000 for something. And it's become more of a focus for me recently because I finally feel like I'm at the place where I can give generously without feeling like I am disadvantaging my own future by doing so. So I kind of think about it like the oxygen mask analogy on the plane. I wouldn't recommend putting on someone else's mask first, but like if yours is on, then it's probably okay to look around and see if other people need help.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Parameter like as long as you're actually calculating a safe withdrawal rate and have a solid plan in place and you are properly diversified, I think within those parameters that you're checking all those other boxes and you're being responsible about the way that you're approaching and stewarding your wealth. I think that most of us will come to the point where cutting those types of corners and being unnecessarily frugal will start to feel a little bit silly.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“It took them like three years of drawing down assets before they actually got comfortable. And we're like, oh, it's okay. Like, we're not going to run out of money. We're going to be fine. Look, we have more money than when we started with. And I think that that's probably like a realization that each person, while you can cognitively understand that, it's almost like when the market goes down, you think you're going to be fine. You think you're going to hold. You don't know what you're going to do until you actually see that number on that screen going down. I think it's the same thing. You don't know how you're going to react in retirement until you're actually putting it in reverse for the first time. And if you got to go a little bit slow at first, I think that's okay. But I think it's something that we have to actually experience for ourselves, that like the world doesn't end when we buy the appetizer or we select the more expensive option on the car or we book the first class flight. Like, oh, what do you know? I didn't bankrupt myself. Everything's actually okay. And I think within a reasonable...”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Sort of thing. I kind of think about it in two different ways A, it's going to feel unnatural, I think no matter what, if you're someone that has been, even if you're not frugal, like I used to be very frugal, I would not describe myself as frugal anymore. Like my cleaning professionals are downstairs as we speak, we have food being delivered this afternoon for the week from the local chef service. We definitely pay a premium for convenience now and we do like to enjoy some of the money that we have. But I think even if you're not frugal, that mindset switch from, okay, I'm working, I'm working, I'm earning, I'm earning, I'm saving, I'm saving, I'm saving. Now let me throw it, put it in park, throw it in reverse, and just immediately start going backwards. That's going to feel crazy no matter who you are. So I think it's something that I was talking to Chris Peterson from Paul Merriman's financial education foundation the other day, and he said that when they retire,”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Well, and the one thing I want to say about Buffett is like I hear stuff like that all the time or like, oh, he's still eats McDonald's. Oh, he still lives in his same house in Omaha. And it's almost touted as like, that's what you have to do to be a billionaire. It's like the dude also has a private jet and we don't talk about the jet very often. But like frugality is not what got Warren Buffett to be a multi-billionaire. That was not the path forward. It's not like he was like buying generic brands at the store and woke up one day. So I think it's, I always like to call that out when I see that because I think it's very misleading. And it does put that unfair expectation on people that like once you have wealth, you shouldn't even enjoy it because it almost makes it like a moralistic thing. Like there's something wrong with enjoying your money or that it's irresponsible to spend your money. And I just don't think that that's true. I think when we talk about like mindset shifts around that.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“$500,000 a year as a partner at a tech company. And I'm actually cool with just shoveling hundreds of thousands of dollars a year into the market and doing practically nothing for my returns. So I think it depends on your circumstances quite a bit, especially like I know people that got into rental property investing because they didn't make much money. And so it was a way for them to use leverage to their benefit and to kind of compensate for the fact that maybe their jobs were not as highly paid as they would have wanted. So I think that those are some other considerations that help determine whether something is best for you or not.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Pretty clear that that's going to be the easiest and best path forward, but I think it totally depends on your energy level and your comfort level with risk. Because in both the small business space and the real estate rental property world, you're dealing with leverage, often in a way that you're not dealing with when you're talking about investing in index funds. Of course, you can trade on margin, but like that's not super advisable because obviously leverage is going to magnify your gains and your losses. I think for me personally, we've definitely, I mean, our entire net worth is in the stock market. We don't own any real estate. We don't own any businesses. Despite my best efforts recently. So I think that it's probably the best way for everybody to start. And then from there, you can make that call about do I want to invest in something that's going to be higher risk, higher return, higher energy output? Or am I making...”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“It is much harder to find a real estate deal that is going to cash flow, to rehabit appropriately, to find tenants, to get your property management in place if you're going to use property management or on the small business example to find the deal where even if things go sideways, you're going to be okay liquidating what you've gotten. You're going to be fine. You've got a good operator in place. You are paying a premium for that premium and it's typically coming at the cost of your own time and energy. So I think if you're okay with that and you're interested in that and you want to do that for the higher returns, then great. Those are probably asset classes that make a lot of sense for you. I think if you're somebody that has two kids and works full time and just wants to like passively build wealth in the background, I think it's probably hard to make an argument that just investing in passive index funds is not the best thing to do. Like I think that it's probably.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Totally. Well, for one thing, I think we have a bit of a recency bias with these types of comments. Like the last couple years, I mean, everything's been going up until right about now. So yeah, if you were like, oh, real estate's the best investment possible. If you said that in 2021, people are going to have a hard time disagreeing with you. You say that in 2009, people are going to call you a moron. So I do think that like the recent history of what we've seen impacts kind of what camp gets an edge. You know, there are numbers that you can look at that will tell you that if you are a really good rental property investor or you have a holding company that acquires small businesses and you're pretty hands off, that yeah, those higher effort exploits are generally going to outperform just buying a broad-based index fund. But in exchange for that overperformance, you are putting in a lot more legwork.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“That even just adding a few different indices will likely protect your downside, especially in periods like the 2000 to 2009 era where I'm pretty sure the S&P 500 was lower in 2009 than it was in 2000. But it's hard to say. And I think especially with things like small cap value, like the historical precedent is there. But I think since the 90s, like the value premium in the US has been not really observable. So I don't know. I don't know what's going to happen in the future, but I do think that there is a fairly compelling case to be made in the data that diversifying beyond the US total market is generally a good idea.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“That had a 10% average annualized return. So you've got a full 1% higher return over each year over those 25 years, which is a pretty substantial outperformance when you're talking about something that's compounding over time. And then all of the other portfolios I tested outperformed the 100% total stock market portfolio. Everything that had even a little bit of diversification outperformed, it was just a matter of like to how much did it outperform. The only one that did not beat 100% total stock market was the 50-50 portfolio. And that got about 8%. So it didn't even underperform as much as I would have expected it to. So yeah, I think it just speaks to the fact that you don't have to be a day trader and you don't have to add a ton of complexity to do a little bit better and to have a little bit of diversification.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“50% large cap growth, 50% small cap value. So like polar opposites, a 90% US large cap growth and then 10% total bond market and then a 50-50 total stock market total bond market. And then a really random grab bag one that was 50% large cap growth, 10% emerging markets, 25% small cap value, 10% global stocks, whatever the allocation was in portfolio visualizer that it gives you for international, and then 5% bonds. So very random allocations. And then a 100% small cap value just to see what would happen. And it was interesting because the top performer was the 50% large cap growth 50% small cap value. It had an average annualized return of 11% every year for that 25-year period. So that is compared to the 100% total stock market portfolio.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“So one day I just sat down with portfolio visualizer and I truly built random portfolios. Like there was no research or like rhyme or reason really that I like diversified outside of the total stock market in these back tests. I just wanted to see like to what degree do randomly assorted diversified portfolios underperform or outperform a 100% US total stock market portfolio And I did a 25 year look back because I felt like that was a little bit more in line with like an average investing timeline would have gone back 40 years but because of the way some of these tickers have changed and asset classes have changed over time I felt like that maybe would have skewed it a little bit so in any case I did 100% you know US total stock market as my baseline test”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“To include some small cap and to include some value and maybe some emerging markets and maybe some global index funds. And what about bonds? Like there were just so many things that I felt like we were completely ignoring by saying that.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think when I started learning about Phi, it seemed like everyone was beating the drum of VTSX. And it was almost like a foregone conclusion that just owning the total stock market and not even the total global market, but just the total US market, that that was always going to be the best path forward and that that was totally diversified because you own everything. And the more that I learned about it, the more I realized that that level of diversification that you think you're getting by owning the whole market, air quotes, is a little bit misleading because it's still a cap-weighted fund. So you're still very overweight, large cap companies. And in many cases, large cap growth. So the more that I kind of dug in, the more curious I got about, hey, it seems like we would be well served.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Take me a pretty long time, so that's how I personally think about it for myself, but I know that there are people like you who really enjoy it and get enjoyment from it. And in that case, it's probably both the monetary return of when it really pays off and also the hobby aspect of it, you know, so I don't think it's necessarily something that I'd say someone should never do, but I think if your ultimate goal is to have as much money as possible, then statistically speaking the way to do that is probably pretty clear.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Allow yourself to lose money before you say maybe I'm just not that good at this or maybe you do really well for a year but how are you going to know whether you're actually good or you're just lucky? It's very challenging to make that distinction with any level of certainty. And I think when we're talking about like long-term wealth building and something as consequential as that, I would be very leery to put up too much of my net worth to that level of risk. My husband's a little different. He does like to, you know, I think like between five to 10% of his half of our net worth is like allocated to individual stocks and bets that he's making. But I don't know. I just think when I think about it practically, like the amount of time and effort that I would have to spend analyzing fundamentals to find something where I'm confident that it has not already been priced into the market, I think it would probably”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“A 100% return on something is only going to net out to be a thousand bucks, it may not be worth your time. And so for me, I've found that like A, I don't trust myself enough with individual stock picking to take that risk. I think the risk reward analysis for me is a little bit lacking. Like sure, I could, you know, strike it rich and have it really pay off or I could totally like blow my entire bet. And so for me, I think it comes down to that risk reward. I'm like, or I could just put it in an index fund where I'm fairly certain it's going to do what I want it to do. And it takes me no time to do that. I'll take that bet all day long. But I know that that's not how everyone's brain works. I just think that you've had Nick Majulian before. I think his philosophy on this is probably the most persuasive, which is just that it's very hard to know if you're actually good at it. You know, how many years are you going to?”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, well, for me, the answer has been no. And the reason the answer is no for me personally is because I think there's this guy named Jack Raines. He's a great writer and he wrote an article recently that I think encapsulated it perfectly where he basically talks about the true cost of alpha. And he's like, if you make a winning pick and let's say it nets just making this up, you know $10,000, right? Well, if it took you 50 hours to analyze that stock and to determine that that was going to be the one you wanted to buy, then that $10,000 was not free. It cost 50 hours of your time. So it's like getting paid out $200 an hour. Now, in some cases, that's going to be a pretty good trade. I think $200 an hour is a great return. But, you know, in some cases, if you don't have much to invest or even a”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“And the bond interests that they're paying taxes on as they're accumulating wealth over time is probably pretty insignificant compared to the overall amount in the account. And so I think in exchange for like the level of flexibility you get with respect to no contribution limits, no penalties for early early. really no rules whatsoever i think it's a pretty fair trade so i tend to put roth and taxable on fairly equal footing the roth edges it out a little bit but i think um i do think that when you're in that like drawdown period the taxable is actually a pretty dang tax efficient means for you know living off your own wealth”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“First 83,350 of gains is taxed at zero percent, and then you've still got a $25,900 standard deduction. So at that drawdown period, as long as you're not withdrawing hundreds of thousands of dollars, the chances that you're going to pay nothing or next to nothing on those capital gains is pretty good. The only, I guess, caveat to that that I would make is that the Roth is preferable from the standpoint of like every single year that passes, it is tax sheltered. So if you're doing any rebalancing, you're not going to pay taxes on gains that are realized. Or if you have dividend income or like interest income from bonds in a Roth IRA, you're not going to pay any taxes on that every year. You're paying it up front and then you're done. But typically, I think for most people, the dividend income.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think the so when we're talking like pre-tax traditional stuff versus taxable accounts up front, I think it's pretty hard to make the argument for the taxable. But when we're talking against something like Roth, particularly in the drawdown phase, I think we don't give the taxable account enough credit. And the reason I believe that is because capital gains tax brackets are so favorable to investors as opposed to the way ordinary income is taxed that I was just looking at this this morning. I'm pretty sure a married couple, like if you were a married couple in 2022 and you had no other ordinary earned income, like you were just retired living off of your assets, I'm pretty sure you could withdraw $109,250 from a taxable account this year and pay zero dollars in taxes.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Of different vehicles, but I do think that while that tax diversification is important, and you probably want to have some money in a taxable account, I do think it's silly to completely ignore something like the 401k or to not take any advantage of something where you're going to be able to significantly reduce your tax bill. I think we reduced ours this year by like 30 or 40,000 dollars by using solo 401k and 401ks”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“All the loopholes and all the tax footwork that you have to do to get out this money early with no penalty and in some cases completely tax free. So once I learned about all of those loopholes and kind of how to enact them in my own life, I became infinitely more comfortable with the idea of locking up my money because I knew it wasn't truly locked up. And I knew that each year that I'm clocking in that $5,000 plus tax savings, that that is just bolstering my path forward and creating even more investable income that I can now turn around and put somewhere else. So I'm a huge proponent of pre-tax. I love traditional 401k solo 401k, what have you. And then there's obviously also the Roth options. You can do a Roth 401k, no upfront tax savings, but I think everyone probably listening to this understands the benefits there. You've got your Roth IRA. So there are plenty.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“In Robin Hood, for example, or anywhere else in a taxable brokerage account, I now my tax bill is, you know, I'm paying that full $5,000 in taxes. Or I think it's like $4,920 or something. I don't remember exactly off the top of my head, but that just means that now whatever I invest in in that taxable account has to make an extra $5,000 this year just for me to break even with the tax savings that I gave up by not investing in that 401k. I think for a lot of people, the reason that there may be a little bit hesitant about some of these tax advantaged accounts is because on the surface, like they are locking up your money, so to speak. Like, oh, I can't access this until I'm 59 and a half. What if I need it earlier? But that's the beauty of all these nerds who read the IRS website for fun is that in the financial independence retire early community, they've all figured out.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Not but if you have access to an account like that where you can put in pre tax dollars and for the self employed this would be solo 401k or CEP IRA it is hard to overstate how valuable that upfront tax savings can be particularly as you start to make more money so for example if I have let's say my investable funds this year comprise just that 20,500 amount that I could put into a 401k that's your maximum contribution for 2022 if I put it into a 401k pre-tax and I am in the 24% tax bracket that is about $5,000 worth of tax savings that I'm getting that's money that stays in my pocket that I no longer have to pay to the IRS this year because I put $20,500 into that 401k if I were to take home that 20,500 and then invest it on my own”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so I think Robin Hood really is kind of a gateway drug. Like it was what got me into investing because I had a friend that, you know, I wanted to start. I didn't, I was very intimidated by like the Vanguard website, the Fidelity website. I didn't know how any of that worked. Robin Hood was like built by millennials for millennials. So I'm like, okay, cool. I'm going to go buy some ETFs. So it's not that I necessarily think there's anything like inherently wrong with it. Just that I think we tend to underestimate the tax savings that we are giving up when we invest our investable dollars in a taxable account instead of a tax advantage account. And so for me, the big neon flashing light is like if you have access to a 401k, whether that's through your employer, maybe you have a 403b or a 457, like there are plenty of different types depending on industry and”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Oh, I did put X amount of dollars into this solo 401k for my side hustle. And, you know, that was an overcontribution. So now I need to go take some out. Like it just is, I love having everything in one place. So I kind of mix and match the automatic with the manual to have a system that works for us.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Been paying these like $10,000, $15,000 invoices, so our budget looks ridiculous this month. And then what we've saved and invested and where that money went. So just so we kind of have a track record of, okay, we put in this much to our 401ks this month. We put this much in the taxpayer brokerage. And then I really like the wealth planner. This is like such a shameless plug because I built it. I really like it because it does show you this like bird's eye view of throughout the year what your overall save rate is, how you're progressing toward your Feigal, your tax advantage invest.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Because I'm always like, I just want to know where it's going, what we're spending, and to make sure that it's actually you, too. Because there have also been times where like I'll see a charge coming and I'll be like, that looks weird. And it was fraudulent. So it's helped me to catch that kind of stuff in a way that I absolutely would not have if it were on me to be logging into all 12 credit card accounts every day and keeping tabs and micromanaging every single little transaction. Anyway, I'll use Copilot throughout the month to make sure all the spending is captured and, you know, daily go in, make sure things are being categorized correctly. And then at the end of the month, I'll sit down with the wealth planner. I'll plug in how much we earned, how that kind of tracked to what we thought we were going to earn, the final totals for every budget category to see like how much we've actually spent. I had to add a new one this month because our wedding ceremony is in two weeks. And so we've”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Bucks a month. I mean, it does cost some money, but for me, the benefit of having all my credit cards, all of our cash accounts, like checking and savings accounts, all of our investment accounts, aggregated in one spot where every transaction is neatly categorized automatically has been such a game changer because I can go in and know that anything that happened in our financial universe is going to be cataloged in that app and I'm going to see it. So I'll always joke like my husband will buy lunch at work when I thought he was bringing his lunch. I'll be like, what was this $14 charge from this Mexican restaurant? Like he calls me.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so I kind of use a hybrid approach. I have a spreadsheet called a wealth planner that I use, but I also use an app because we do have, we're into like the credit card hacking, travel rewards, all of that. So we each have five or six credit cards that we're going to be using for different things, depending on if we're trying to hit a spend threshold to get a signup bonus or we're buying something where it's 5x points versus 2x points. And so I think once you get to the point that you're dealing with, you know, 10 to 12 credit cards between two people, that's a lot to keep track of manually and a lot of accounts to kind of be like keeping tabs on. So I really like this app called Copilot. It was founded by an ex-Google software engineer. And so the user experience is just amazing. It's available in the US and on iOS systems, so not Android yet, but I do believe they're working on it. And it's like six or eight.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“I know some people don't like to have it in checking because it's tempting to spend it or it makes them feel like, oh, I have more money than I actually do or I actually want to spend. But I think once you get to the point that you've mastered your cash flow enough and mastered your own kind of self-discipline around spending, and especially if you have multiple sources of income, I think it's okay to just have it in a checking account, especially like in today's day and age where there's no ostensible difference between your checking and savings account interest-wise. It's not like you're really going to get any benefit from putting it in savings except for maybe that additional friction step of having to move the money over. But for us, it just is kind of the easiest path of least resistance to just have the cash that we've got sitting and checking. And if we need it, we need it. And if we don't, we don't. But we just try to keep it at or right around that 15 or 16.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“That checking account, and then anything in excess of that that comes in from income or from paychecks, I will just immediately move it into our investment accounts. So as long as there's more money coming in every two weeks, that threshold should never really be breached, even as we're like paying off bills or, you know, paying credit card bills that are coming in that may be $5,000. But as long as there's more money coming in, it's constantly being replenished. Beyond that, we tend to just treat our tax bill brokerage account as like a backup emergency fund. Like if for some reason we needed more than $16,000 in one fell swoop immediately, we could tap that taxable account. But I tend to think like, hopefully your emergency fund is not so large that you're really giving up a ton of interest by having it just sitting in cash.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, totally. Well, and I do think like you want to have some cash, no doubt. The worst case scenario, I think, is finding yourself in a position where you're strapped for cash and you're having to sell equities at a loss. It's like, well, you played yourself because now you're locking in a loss that you wouldn't have had to. So I definitely don't think you should invest every single dollar. But for us personally, we don't have kids and we do rent. So that does change our risk profile a little bit. My preferred method is to just have two months worth of full expenses. So like our normal budgeted expenses with nothing cut down in checking at all times. So we spend between $7,500 and $8,000 a month, just the two of us. So at any given time, I want to make sure we have 15 or $16,000.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“On a personal basis to determine what is an appropriate amount of cash to have on hand. And the reason I think those questions are important is because I find that more often than not, a lot of the people that I talk to, they have an under saved, they have over saved. And that cash has become a bit of a security blanket for them. And it's preventing them from investing more aggressively because they have this notion in their head that it's not safe for them to have less than $60,000 in cash in their savings account, when in reality, if I'm like, what is going to happen to you that you're going to need $60,000 on that short of notice? And typically people can't think of an answer. It's really just like a psychological barrier. So I think to avoid cash drag, especially when you're young and to like avoid that scenario where you are over saving or like way too cash heavy because”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Ten thousand dollars we thought were coming in next month is no longer coming in anymore. I also think it's worth thinking through in those types of worst case scenarios what other resources are available to you if you are somebody that is married and both of you have good relationships with your parents and those parents are financially secure you might actually be able to move home in a situation where something goes super awry long term or you may be able to borrow money from those parents or go on unemployment. Like I think the worst case scenario for most people is a lot less extreme than we think. And sure, you probably don't want to move home or borrow money from your parents. But if push came to shove, I think it's worth acknowledging consciously that like that is an option on the table. And maybe I don't need $100,000 in cash sitting in my savings account. So I tend to think that like those are the types of things that we want to be asked.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Be through something like as routine as a layoff or as extreme as you become disabled or like something like in your life majorly changes. And I found that when I was thinking through worst case scenarios, you know, the worst case scenario, I think Tim Ferris calls it fear setting, like actually allowing your brain to go to the worst case scenario and then thinking, okay, well, what would I do? And I think in a total loss of income situation where all of our sources of income went away overnight, The first thing that I start thinking about is, well, okay, that vacation that we planned to Scandinavia, probably not taking that. Probably not booking the five-star hotel. Probably not, you know, going out to eat three times that week. Probably not shopping for new clothes. Like, very immediately there are things that are baked into our regular budget that are most likely going to get slashed if we find ourselves in a position where the”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“And I find that when we talk about emergencies, we think about them in kind of two general camps. There's the stuff like, oh, the tire, I ran over a couple nails and I had to replace two tires unexpectedly or I need a new HVAC system because that broke. Well, if you own a car in a home, chances are you know that at some point you're going to need new tires and a new roof and a new HVAC system. Those are not unexpected emergencies. They're actually quite predictable from the standpoint of like, you know, if you own those things, you're going to have to pay for those things eventually. The timing might be unpredictable or a surprise, but hopefully we're thinking about those things before they're happening and planning for them. The other side of the stuff that usually gets brought up in this emergency fund discussion is something like job loss or like total loss of income, whether that”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, well, for one thing, I think you nailed it when you said it probably came from Dave Ramsey. I feel like it's arbitrary. Like when I found myself thinking about it one night, and I was like, what is the emergency fund really for? Like, why do we have a cash cushion like that? And the reality is that it's to prevent us from going into debt. If we need enough money in cash on the side to prevent us from going into debt, it probably makes sense to think about, well, what types of things could send us into debt? And that is dependent on your lifestyle. If you are a childless renter, the extent of the emergencies that are going to impact you are probably different and smaller in scale than the extent of the emergency that's going to impact the homeowner with four kids. So I think it's worth thinking about on the personal basis. Like what really constitutes an emergency?”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“And I think that that just speaks to like truly living beneath your means and choosing fixed expenses that are not going to stretch you thin or require you to have a banner year in order to like service those debts or service those payments.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“An emergency fund, but almost like a floater, if you will, where if you are having a lean month income-wise and you're going to need a little bit more to make ends meet, you can pull from that kind of like floater fund. Whereas if you're having an amazing month and like you're crushing it, well, then that's a month where you would maybe replenish what you took out the previous month where things were not as good. But I think ideally you want to get it to the point, I think, that like your cash flow is predictable to the point that even in a lean month you're not going to have any trouble paying the bills. I think that's obviously everybody's hope is that they're not having to dip into savings in a month where like their income”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“For people that have variable income, I think you almost just have to walk it one step back and assess your lifestyle based on, you know, more stringent like fixed needs versus discretionary spending. Obviously with your fixed expenses, those are bills that have to be paid every month. It's not like you can scale up or down on how much rent you pay depending on how much you're earning. Like that is what it is. Whereas you might have an amazing month and decides you're going to go out to eat a little bit more. Well, that's discretionary and you're, you know, reacting to your income. So I think for people that have super variable income, I would recommend really having a solid grasp of what is the bare minimum you're going to need every month to survive comfortably and then making sure that you have a few multiples of that in like a low month fund separate from.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“And say, okay, if I spend more or I spend less, how does this timeline shift? And it gives you, I would say like more evidence-based footing for making those types of decisions versus just being like, I don't know, I hope it works out, maybe.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Okay, but like I'm still on the same planet. I'm still in the same universe of what I'm actually going to need. Whereas if I've never thought about this or never bothered to run the numbers for myself, I have no idea how much money I need to have invested. I don't know how close I am. I don't know how much longer I need to work. And I find that when we don't know the answers to those questions, it's very hard to make strategic decisions about your life and your lifestyle. Maybe I should scale up into a bigger home because maybe I'm five years away from FI and I have no intentions of stopping working and like I'm making great money. Okay, well then maybe increasing the mortgage payment by $500 a month is truly not a big deal. But if you're 20 years away and a higher mortgage payment is going to make it such that you are 30 years away, well, that decision is going to look very different. So I find that it just gives you a really nice baseline that you can then tweak those variables.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“Invest invested to where you are now work optional, that you do not have to do work for money anymore, that you could like feasibly live off of this investment portfolio and theoretically never run out of money. Obviously, there are myriad assumptions baked into that, like sequence of returns risk is kind of ignored because you're just assuming a flat 7% down the line. It's also assuming that inflation stays relatively consistent and that the actual holdings that you have are invested in such a way that they will reliably produce seven percent per year, which no one knows for sure, but we know what types of indices and decisions will get us closer to that than maybe like YOLOing everything into Tesla. Like nobody knows how that's going to pan out 40 years from now. But what it does, I think, is it gives you an estimate, right? It gives you a helpful ballpark. So even if I think I need 2.3 million, but what I actually need is 2.7.”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT
“How that income is going to change. And then really, it's just what are you spending right now? What is your monthly spend? Do you want to pad it a little bit? Assuming you might want to spend more in the future? Or are you maybe living like the high life right now and you actually think once you're retired, things are going to get tapered down a little bit. And then it uses those variables along with the average estimated return, which usually will use 7%. I like to do 7% before inflation just so that we're being super, super conservative and accounting for the fact that like we may have higher medical expenses in retirement or something may come along and change or it may be inflation will be higher than we're thinking it's going to be or returns are going to be lower and then it projects out a timeline for you to say based on what you currently have what you're currently earning and what you're currently spending this is tentatively how many years away you are from having that critical mass”
2022-06-12 · We Study Billionaires · TIP456: How to Build a Wealth Plan for Financial Independence w/ Katie Gatti · IDENTIFIED FROM THE TRANSCRIPT