Ep 48: Better W/ My Finance-Sis Mini-Series, Pt. 1: Stock Market Essentials

Jess: You know that concept of learning by teaching others? Well, that's what we're doing today in a new mini-series we're calling Better With My Finances.

Jessie: That's S-I-S, get it, that our very own Jess InSkip came up with? Merch coming soon.

Jess: And by we, I mean me, Jessie DeNouy, I'll be teaching back some things I learned to our newest Money Coven member, JC Sage.

Jessie: Hey! Welcome! And then Jess InSkip, of course, is still here as our omnipresent fin mom, here to make sure we're stating everything correctly and I'm not leading JC astray.

Jess: This will be a cute little mini-series to refresh our brains on the foundational knowledge we've already learned from Jess, but hopefully now that we've learned so much, it will all click in our brains and we'll make it all make sense.

Jessie: So without further ado, let's teach back the stock market in simple terms.

Jess: Cue music.

Jessie: You're listening to Market MakeHer, the investing education podcast for all self-directed investors that breaks down complex financial concepts in a relatable way from her perspective.

Jess: That's us.

Jessie: We're her.

Jess: There's lots of us now.

Jessie: Finances.

Jess: We're your hosts and we each have our unique stories and backgrounds as to why we're here.

Jessie: And since we're kicking off this new mini-series, we wanted to give you some brief background as to why we're doing this podcast, which you might know, but maybe you don't.

Jess: You know that trend on TikTok where it's like, this is why I do this, but on a deeper level, we're going to a deeper level today.

Jessie: Near is the deep.

Jess: She's on trial.

Jessie: Yeah.

Jess: It's because of JC.

Jessie: JC helps us.

Jess: So first and foremost, we all come from different journeys in our life, but we have to think about wealth.

Jessie: Normally it's from our parents.

Jess: It's passed down.

Jessie: It's not taught in schools.

Jess: And so it's by circumstance and by luck, you're lucky that you're born into a family that can teach you those type of things.

Jessie: And even when I first started investing or working in investing, it costs $7 a trade, which means if you're trying to save $20 a month and invest, that's already almost like 40% of your investment gone.

Jess: So it didn't make sense.

Jessie: It wasn't easy.

Jess: But now literally within the last five years, that's come down and the barriers to entry has come down and technology has really progressed with all of this financial literacy and access to social media, which means we have a job to do.

Jessie: If you're not born into that, you have access now to all of this financial literacy.

Jess: But what's our real important mission is Gen Z has an F unfortunately in financial literacy.

Jessie: Millennials aren't doing that great either.

Jess: And really that's because of a lot of misinformation that we're seeing.

Jessie: So the whole purpose of this podcast is to spread financial literacy.

Jess: Doesn't matter where you are, how you identify, where you come from.

Jessie: It should make sense.

Jess: You should have access to it if you want to.

Jessie: And that's completely our goal.

Jess: And the beauty of what we have today is one of us is in our 20s.

Jessie: You'll never know who.

Jess: One in our 30s and one in our 40s.

Jessie: Again, we're not telling you our age or yeah, we will probably will.

Jess: But that's important.

Jessie: Different journeys, just learning, been doing it for a while.

Jess: I've been a single mom.

Jessie: There's so many different perspectives.

Jess: And since finance is personal, especially with that term finances, the reason why we say that, first of all, it sounds amazing.

Jessie: You're better with your finances, like your finances and your finest finance.

Jess: Yeah.

Jessie: But it's not a battle against the finance bro saying we don't need a man to help you or don't go get a male advisor.

Jess: No, it just means we're better together.

Jessie: You can't time the markets, but you make better decisions.

Jess: And that's why we coined our phrase.

Jessie: When you build knowledge, you break barriers, because when you learn something and you understand a concept, you feel supported.

Jess: And when you feel supported, you're going to make better decisions.

Jessie: Yeah.

Jess: Period.

Jessie: And that's why we found JC and bringing her on.

Jess: So I would love JC to introduce herself.

Jessie: My beginning into finance was an accident.

Jess: I was actually accidentally put into a business class my junior year of high school.

Jessie: I was actually really bummed about it because I was because the class that I wanted to take, not enough people took it so that I couldn't.

Jess: So they were like, oh, you could take a business class or like AP environmental science.

Jessie: I was like, oh, my goodness, both of those sounds terrible.

Jess: But I knew the business one didn't have a final.

Jessie: So I was like, I'll take that one.

Jess: I ended up learning about the stock market, credit cards, interest, compounding interest.

Jessie: And I really fell in love with the security that it gave me.

Jess: I was like, oh, I'm going to be a better adult and I'm going to be more secure because I know these things.

Jessie: And then I started looking around me and realizing how many of my peers did not know these things and they needed to know them.

Jess: And the earlier, the better.

Jessie: So I started recording my journey on TikTok and on Instagram, did vlogs of my days, and I actually chose to start studying for my financial license because I was like, if I'm going to be positioning myself as someone who is teaching people social media, I need to be reputable.

Jess: And I realized that you cannot be licensed and posting on TikTok because of the specific regulations that are in place at the moment.

Jessie: Or you can, but it is very difficult.

Jess: Then I realized that a lot of our financial influencers are not licensed, have never been licensed.

Jessie: And that doesn't necessarily mean that their content is bad, but there is definitely an issue in that.

Jess: It means that people who have experience, people who've been verified, been AOKed by Inra are not the people teaching us.

Jessie: And that simply should not be how it is.

Jess: We should have people who are in the industry, like every other industry, you can be on TikTok and you're teaching us and you're telling us.

Jessie: And I made a TikTok and Jess and Skip, our girlie, she assisted.

Jess: And that's how we became friends because she was like, yes, I gave up my license because this is a problem.

Jessie: And the only way that I could teach people on social media.

Jess: Another key point is like, Z, if we're going to learn something that isn't taught in school, it's going to be on social media.

Jessie: And that's why it's important to have good, educated, correct content on social media.

Jess: I love that.

Jessie: I commend that so much.

Jess: I can't believe I'm going to use a sports analogy, so I'm freaking out right now.

Jessie: But yeah, but you can't, like you can't try to play soccer on a basketball court.

Jess: And I think that's Jaycee's point is because when I worked at the brokerage firms, they'd be like, how do we get Gen Z? How do we get Gen Z preparing for the Great Wealth Transfer? And it was all about robo-advisors, but we can't post on TikTok or things like that.

Jessie: So they would just do all these other marketing mechanics.

Jess: And it was literally like that.

Jessie: They were going to the basketball court, which they're used to, but they were trying to play soccer, which is impossible, I would suppose.

Jess: I don't know, or football.

Jessie: This was your chance to get a Taylor Swift analogy in and you blew it.

Jess: I know.

Jessie: I know.

Jess: Because that's the one that came to my brain.

Jessie: I'm really, really, really- You were in corporate America way too long.

Jess: I was.

Jessie: I'm really sad.

Jess: But you know what? They should be afraid of little old us.

Jessie: I'm rusty.

Jess: All right, Jessie, your turn.

Jessie: Yeah, here I've turned.

Jess: In my mind, I will say that when I found out from you that actual licensed financial advisors and licensed professionals were not allowed to talk about this stuff on social media.

Jessie: And I'm so glad you gave up your licenses, Jess, so that we could do this podcast.

Jess: So I'll talk about my perspectives.

Jessie: As an elder millennial who has been through a lot of economic twisted turns and hardships thus far in my hundreds of years living as a millennial, I will say I'm a little disillusioned in this whole investing game.

Jess: And I'm the kind of person who feels like all these rules are made up to benefit a certain group of people.

Jessie: But I also like to know the rules so that I can play the game because I don't think investing should only be for a certain set of people.

Jess: And yeah, those barriers are gone now.

Jessie: So there's a lot that we can all learn and investing is for everyone.

Jess: Everyone is able to do it.

Jessie: We just need the knowledge and the confidence to do it, I think.

Jess: So I love that Jess was always willing to teach me and have these conversations around investing with me when I would go to her confused about my from K or where to even start.

Jessie: And I think we're here to break these barriers for everyone by teaching us all how to invest the way that's easy to understand.

Jess: So I'm your weirdo, witchy auntie that's going to try to make this all very simple to understand.

Jessie: But if I get anything wrong, Jess is here to keep me in line like a true fid mom, right? Of course.

Jess: And I will say I think you both also flip the script because yes, thank you also for the kind words.

Jessie: It was a risk giving up my financial licenses, but I think it is a bigger risk as women flipping the script and saying I don't know this publicly.

Jess: Yeah, I'm not afraid to admit that I don't know things and I will ask all the questions.

Jessie: We're going to just start with the basic question today.

Jess: What is the stock market in simple terms? And I will let you all know that in episode two, we covered this if you want to go back and listen, but we took a big deep dive into what the stock market is and how it works.

Jessie: So let's try to simplify it today.

Jess: The stock market, it's in the name.

Jessie: It's a marketplace where you buy and sell stocks and other securities.

Jess: So that's a simple answer.

Jessie: And let's try to break that down.

Jess: So JC, I'm going to turn it to you.

Jessie: Do you know what a stock is? So a stock is intangible and it is equity and equity is ownership of a company.

Jess: So when you purchase a stock, you are purchasing the ownership or a very, very, very small bit of ownership of a company.

Jessie: That's right.

Jess: You're owning a piece of a company and you get voting rights.

Jessie: So a stock is a security.

Jess: Like I mentioned, the stock market is just a marketplace where you can buy and sell stocks and securities.

Jessie: Do you know what a security is? Okay.

Jess: I am going to take my best hit at security.

Jessie: So security is like a catch all term for investments.

Jess: It's just a term of like a product.

Jessie: So the stock market is a place where you buy and sell securities.

Jess: And in the past, we've compared it to a secondhand marketplace before, like Poshmark, Depop, Rebag, or even eBay, where you take a product that you have previously bought and sell it to someone else.

Jessie: So when you go to the stock market to buy a stock, you're buying it from someone who has previously owned it.

Jess: You're not buying it directly from the company.

Jessie: So that's why it's a second hand or secondary marketplace.

Jess: And the value goes up or down based on demand, just like anything you're selling.

Jessie: Supplying a dress and I want to go sell it on my Poshmark account.

Jess: I might have paid $40 for this dress like eight years ago.

Jessie: And now because of demand and you can't buy these anywhere anymore, the value has gone up to $80.

Jess: So I've profited off of this dress.

Jessie: And you can do the same with stocks and securities.

Jess: So the stock market is a secondary market.

Jessie: The primary market is what the initial public offering is.

Jess: So when we say a stock or a company is going public and they are going to issue stock, that is what the primary market is.

Jessie: But not everyone really participates in that.

Jess: Companies create stock.

Jessie: Why is that beneficial to them? So they always have stock in a way.

Jess: Market MakeHer, we have stock, quote unquote.

Jessie: It's not worth anything, but technically we have two shares of stock.

Jess: One Jesse owns and one that I own.

Jessie: A better example would be Reddit recently went public.

Jess: Did it really? It did, yes.

Jessie: So they would take, they took pieces of their company and they do it to raise capital.

Jess: So normally it's when a company is a little more mature.

Jessie: We're not a mature company here at Market MakeHer Podcast, but VC funders kind of leave at that point.

Jess: They get their last influx of cash and that usually cashes out VC investors.

Jessie: And then when they go public, you're now subject to a lot of regulation where you have to be able to see those companies balance sheet.

Jess: Literally, it's why it's called invested.

Jessie: You are invested in the company's success.

Jess: That's why it's called investing.

Jessie: Everything's in the name.

Jess: So the reason why you issue stock is to get more money to do things.

Jessie: That's it.

Jess: To get cash.

Jessie: Because you're giving up rights of your company.

Jess: Market MakeHer was a multimillion dollar company, super, super mature.

Jessie: And we wanted to go public on the New York Stock Exchange when we, after all those fees and we IPO'd, we would get a lot of money.

Jess: And then we would take that money and we probably make some super awesome AI cool product.

Jessie: But that's the point.

Jess: It's just to raise money.

Jessie: That's why companies do it, but they always have it, but it's the way you quantify.

Jess: Capital for the listeners, capital is money.

Jessie: And a VC or a venture capitalist is the kind of initial investor in a company.

Jess: Like the first people that are like, oh, here's a thousand or $10,000 to make your company.

Jessie: I love it.

Jess: And this is why we brought JC on because she's amazing.

Jessie: Yes.

Jess: And now I'm forgetting to stop and do that.

Jessie: So this is your job now, JC.

Jess: I got it.

Jessie: I got it.

Jess: And we actually have a episode talking about like the top 20 or 30 investing terms in order to where it kind of like goes.

Jessie: Like first, you need to know what capital is.

Jess: You need to know what a stock is.

Jessie: So we do have an episode on that too.

Jess: If you need a vocabulary refresher.

Jessie: Okay.

Jess: So stock market in the name, a marketplace you buy and sell stocks.

Jessie: So do we know what a stock market is versus a stock exchange? I don't know that.

Jess: Like back in the day, you'd have a physical stock certificate.

Jessie: You needed a place to exchange it because you got to remember this was before technology.

Jess: That's why it's called the stock exchange.

Jessie: I would literally exchange my piece of paper with you.

Jess: In the name.

Jessie: Yeah.

Jess: So the stock market is like the stock market as an intangible hole.

Jessie: And then the stock exchange is like where we're swapping them.

Jess: Stay with us.

Jessie: We'll be right back.

Jess: Ready to plug into the future? Join myself, Sean Leahy and me, Andrew Maynard on Modem Futura, where we explore the technologies shaping our futures.

Jessie: We bring the experts, the insights, and a whole lot of curiosity to every episode of Modem Futura as we boldly go where no one else has gone.

Jess: So join us as we navigate the intersection of innovation and humanity, uncovering the stories that will define our collective futures.

Jessie: Subscribe to Modem Futura wherever you get your podcasts.

Jess: We'll see you there.

Jessie: See you then.

Jess: Yeah.

Jessie: And the stock market is the collective of the exchanges.

Jess: Okay.

Jessie: And are exchanges brokerages? No.

Jess: The brokerages connect to stock exchanges, New York Stock Exchange, Nasdaq.

Jessie: Stock market and stock exchange can sometimes be confused.

Jess: But yeah, you go to a brokerage firm, you open an account, you fund it with some money, and that's how you can buy stocks or bonds or ETFs or mutual funds.

Jessie: This is how you start investing.

Jess: You start with your brokerage firm and they're the ones that basically facilitate you buying these stocks.

Jessie: So you can't just go stock exchange like the New York Stock Exchange in New York.

Jess: You can't just like walk in there and be like, hey, I want to buy some stocks and here's my money.

Jessie: It doesn't work that way.

Jess: You have to go through a brokerage firm basically to purchase something from the stock exchange.

Jessie: They broker the transaction.

Jess: So do like say Fidelity and Vanguard, are they tied to a specific like New York Stock Exchange or? No.

Jessie: They connect you to the whole marketplace.

Jess: The brokerage firm just literally connects you to it.

Jessie: Will you list like who's of who? So it's like stock market, the exchanges, the brokerages.

Jess: So we have the stock market.

Jessie: It's in the names two words.

Jess: So on the top we've got stock market.

Jessie: Stocks are just a bunch of companies measured by indices.

Jess: Markets, exchanges.

Jessie: So you've got like New York Stock Exchange, AMEX, Nasdaq, all these places.

Jess: That is the stock market collectively.

Jessie: Your brokerage firm is like the plug into that.

Jess: Yes.

Jessie: And you choose your brokerage firm.

Jess: So you choose who's going to plug it into it.

Jessie: So it's more of like a circle you're accessing.

Jess: What is the New York Stock Exchange doing? What are they doing? It used to be a really loud place because they would literally buy and sell securities like those certificates.

Jessie: Because think about no computers.

Jess: Computers do not exist.

Jessie: Think about no computers.

Jess: Yeah, no computers.

Jessie: There was a time, believe it or not, when there were no computers back in the day.

Jess: But they would have physical certificates, though.

Jessie: And that's what would go back and forth.

Jess: My things are online.

Jessie: Okay.

Jess: Like the pharmacy, maybe.

Jessie: You know how you put like literally your prescription in the tube and then it goes up? They did that.

Jess: Yes, I know.

Jessie: I know the pharmacy.

Jess: They did that.

Jessie: They put the papers.

Jess: Like a sticker.

Jessie: Yeah.

Jess: Oh, my God.

Jessie: Wait, I have one.

Jess: I'll show you.

Jessie: All right.

Jess: This is cool.

Jessie: I'm going to cover up this person's name.

Jess: There you go.

Jessie: But this is a real order ticket from back in the day.

Jess: Oh, cool.

Jessie: You can see it from the Stock Exchange.

Jess: But literally, if you're buying or selling, you'd write it down and you'd go pass these around.

Jessie: And that's why it used to be really loud.

Jess: People would scream at each other.

Jessie: Like going to an auction.

Jess: This much, this much sold.

Jessie: Right.

Jess: But aren't these cool? Look, this is two different people.

Jessie: I have this guy's whole pad.

Jess: They're like look different.

Jessie: Yeah.

Jess: But you connect them and you'd be like, okay, I got this.

Jessie: I got this.

Jess: So that's how you used to have to do it back in the day.

Jessie: But that's the point.

Jess: You can see why it's only certain people were able to do that.

Jessie: And yeah, you had to have, didn't you have to have more money to kind of invest too? Yes.

Jess: The reason why it's important to know a little bit of the history is it helps you understand why it's called a stock exchange.

Jessie: Because now we're exchanging it, right? Whereas now you don't have to do that.

Jess: You just do it on the internet.

Jessie: Yeah.

Jess: Everything's digital.

Jessie: Yeah.

Jess: I remember it didn't exist.

Jessie: They did.

Jess: There are brokerage firms, but they're on the floor.

Jessie: Like right now, this one's from Merrill.

Jess: Merrill is a brokerage firm and they also have a presence on the floor.

Jessie: But now if you go into the New York Stock Exchange, it's quiet.

Jess: It's very quiet.

Jessie: Very quiet.

Jess: I'm still confused.

Jessie: I don't know how I'm still confused.

Jess: So, okay.

Jessie: Say you had to be on the New York Stock Exchange or you had to do that in order to buy and sell.

Jess: All of a sudden the internet comes out and they're like, wait, we don't have to pay all these people to be here.

Jessie: They could be at the high rise over in New Jersey and do it on the internet because they're just computers we have on the floor now.

Jess: That's what happened.

Jessie: Like literally.

Jess: So, the stock market is a marketplace where you buy and sell pieces of publicly traded companies.

Jessie: Stock exchanges are platforms that facilitate the buying and selling of stocks like the New York Stock Exchange or the NASDAQ.

Jess: And there are stock exchanges all over the world.

Jessie: Yeah.

Jess: And your brokerage firm is the one that connects you to the stock exchange to facilitate the process of buying from this digital marketplace.

Jessie: Yes.

Jess: And JC, those stock exchanges, before the interwebs, they just turned to technology.

Jessie: So, they were outsourced.

Jess: Just like if we were outsourcing writing to AI, all of a sudden that's going to remove a department.

Jessie: It's just innovation.

Jess: It still exists, but in the digital realm.

Jessie: Yeah.

Jess: It exists in the digital realm very efficiently.

Jessie: Ask again, what are they doing at this New York Stock Exchange? They're just listening to the brokerages and then doing it? So, they do a lot of different stuff.

Jess: There are IPOs, are a lot of the processes.

Jessie: Okay.

Jess: Yes.

Jessie: Yes.

Jess: So, if you go, if you're initially there because you're listing with the stock exchange, it becomes a big media event.

Jessie: So, it's a media place.

Jess: I physically go there for media quite often.

Jessie: There are really big orders.

Jess: There's called intermarket sweeps that they would facilitate.

Jessie: There are opening and closing crosses every single day.

Jess: There are shows like Bad Money and then the Schwab Network.

Jessie: Yes.

Jess: That makes sense.

Jessie: That's going to take you one day.

Jess: I will.

Jessie: You'll go.

Jess: You'll get a whole tour and everything.

Jessie: She's taken me twice.

Jess: It's been great.

Jessie: Okay.

Jess: That makes sense.

Jessie: So, they're doing IPOs and they're doing big money business things.

Jess: They are.

Jessie: There's still reasons to be there because you're brokering a transaction.

Jess: So, if you've got weird trades, they'll take care of it.

Jessie: I've only had to call them once or twice when I was working at a brokerage firm.

Jess: Okay.

Jessie: Okay.

Jess: I get it.

Jessie: Yeah.

Jess: Great question though.

Jessie: So, you will hear about how the stock market is performing.

Jess: It's down a certain amount of points.

Jessie: You're going to hear about the S&P 500, the Dow Jones, the NASDAQ.

Jess: Those are the top three indexes or indices that help us measure in general how the stock market is doing.

Jessie: But there are a bunch of indexes.

Jess: So, JC, do you know about the three major indices? I know the S&P very well.

Jessie: Do you know what the S&P 500 is? The S&P 500 is a list of the 500 top American companies.

Jess: I believe that it's also the biggest American companies.

Jessie: Is that the correct word? That's probably the methodology.

Jess: Each index or indice, it's like an elite club that has their own set of requirements of what gets you into that index.

Jessie: And yes, the S&P 500 is the top 500 companies.

Jess: The company doesn't get to choose that they want to be in that index.

Jessie: The index decides.

Jess: So, the S&P is the one deciding who's in and out.

Jessie: And if you are buying something like an ETF, an exchange-traded fund that mirrors the S&P 500, it's just mirroring what is in that index.

Jess: Someone else is actually going in there and mirroring what the index looks like at the time because it changes, if that makes sense.

Jessie: Attempts to mirror.

Jess: Disclosure.

Jessie: Attempts to mirror.

Jess: Yeah.

Jessie: So, the S&P 500 is a list.

Jess: And then there are funds or ETFs that are mirroring that list that you can buy.

Jessie: Tons of indexes, indices.

Jess: And the top three that we discussed, S&P 500 is basically the number one index that we kind of use to measure how the stock market is doing overall because it's got the top 500 companies in it.

Jessie: So, it gives us a good gauge of how the market is doing, how the market is performing.

Jess: We kind of look to the S&P 500 as the top source for that.

Jessie: We can also look at the NASDAQ and the Dow Jones Industrial.

Jess: Dow Jones has been around the longest.

Jessie: It's only 30 stocks, though.

Jess: So, it's not a great representation of how the market is doing overall.

Jessie: And NASDAQ is a little bit more tech-focused.

Jess: And when you hear that it's up or down so many points, points basically means dollars, right, Jess? Yes.

Jessie: Also, fun fact.

Jess: We say S&P and we know everyone means S&P 500, but Standard & Poor's has a lot of indices.

Jessie: There are a lot of S&P indices.

Jess: What are some other ones? They're on sectors.

Jessie: They've got mid-caps, small-caps.

Jess: They've got all the things.

Jessie: We did talk in episode two about mid-cap, large-cap, small-cap.

Jess: Don't worry about that.

Jessie: Go to episode two.

Jess: If you look up a stock right now like Apple or Microsoft, it says NASDAQ colon and then the ticker symbol.

Jessie: Why is NASDAQ there? That's its primary listed exchange.

Jess: I got to say, girl, I don't know about that.

Jessie: When Apple decided to go public, they listed on it.

Jess: But that can still be listed on other exchanges, too.

Jessie: Yeah.

Jess: So NASDAQ is an exchange and it's also an indice? Yes.

Jessie: Okay.

Jess: You can also pull up all New York Stock Exchange stocks.

Jessie: Think about it.

Jess: Apple went public.

Jessie: They chose NASDAQ to help them go public.

Jess: Okay.

Jessie: So NASDAQ's considered their primary exchange because they're the listing requirements.

Jess: They do all their filings and stuff.

Jessie: But you can still access them on the New York Stock Exchange.

Jess: And they can be dual listed, too.

Jessie: The difference between a stock index versus a stock exchange, an index is a grouping of company stocks that measures change in the broader stock market or a sector of the stock market.

Jess: And exchanges are the actual places where the stocks are bought and sold.

Jessie: So the famous exchanges that we know are the NYSE, New York Stock Exchange, and then the NASDAQ is also an exchange where traders buy and sell the stocks that make up the NASDAQ index.

Jess: So it's all stocks traded on the NASDAQ.

Jessie: That one has like 3,700.

Jess: People overcomplicate it.

Jessie: The indices are just a bunch of companies.

Jess: And when all the companies are doing well, the stock market's doing well.

Jessie: Because the stock market is just a bunch of companies.

Jess: I think the purpose of knowing what these indexes are, other than how you see performance, is because when we get into the difference between stocks and funds, mutual fund or an exchange-traded fund or an index fund, it just kind of shows you that you don't have to just buy a stock, like a piece of a company, if you don't want to spend however much it costs to buy an Apple stock right now, which is probably pretty high.

Jessie: You can also buy an ETF, which is an exchange-traded fund, which would have that stock in it.

Jess: But it's a lot cheaper.

Jessie: It kind of helps diversify your portfolio a little bit.

Jess: But I think people need to know what a stock index is.

Jessie: And that's why that's important.

Jess: Because a lot of people get into investing by buying SPY, VOO, VTI, like all those things.

Jessie: But what actually is that? How is it measured? How does the stock market move? And that's the important component.

Jess: So this is the foundational aspects that set you up for that.

Jessie: Because really, the hierarchy should be, you put $10,000, once you have your emergency fund, $10,000 into something passive, like SPY, QQQ, if you want to be a little more aggressive, which is a NASDAQ 100.

Jess: And then you can start picking stocks.

Jessie: But when you start picking stocks, you need to understand if something is overvalued or undervalued versus the overall market.

Jess: So you need to understand what the overall market is first.

Jessie: Very, very, very good foundational aspect.

Jess: And all this is to say, the ultimate power we have as people is where we decide to put our money.

Jessie: And you get to decide how you want to spend your money, where you want to put it, who you want to give it to.

Jess: And like we said before, when you buy a stock, you're not giving that company your money directly, but you are invested in its success.

Jessie: And so it's up to you, and we can get into ethical investing on another episode.

Jess: And we know that with inflation, if you just put your money in a regular old checking account or savings account, that money loses value over time because inflation goes up and your money doesn't go up with it, unless you put it somewhere where it's gaining interest, it's gaining money on top of the money.

Jessie: And we want to save for things, get ahead of the game, save for retirement, save for a house, save for a vacation, whatever it is.

Jess: You want to learn how to take any extra money you have and put it away somewhere where it can make interest and then compounding interest so that that money grows and it's there for you when you need it for whatever your goal is.

Jessie: Yes.

Jess: I think we should rebrand retirement.

Jessie: You really got me thinking, Jacy.

Jess: Because I'm talking to Gen Zers and they're like, who cares about retirement? What if I don't make it? That's so far away.

Jessie: Because it's like gratification.

Jess: There's delayed gratification and instant gratification.

Jessie: And anything that I talk about on my account has to be pretty much instant gratification.

Jess: I have to instantly learn something, instantly see a way to get money.

Jessie: And so, yeah, it's really hard because it's like retirement is what you should be investing for.

Jess: I'm thinking about future me.

Jessie: The dream is to be on a yacht with a computer looking at the stock market all day, but I can't do that unless I save early.

Jess: I'm not going to win the lotto.

Jessie: Manifesting, really? Yeah.

Jess: It's the way to get to your money manifesting goals.

Jessie: You're manifesting some future version of yourself and you see yourself somewhere nicer than where you are now.

Jess: How are you going to get there? These are the steps you take to get to that future you of however you're envisioning your life to be.

Jessie: What are some reasons people even decide to invest in the stock market or invest in general? And I guess I'll turn that to you.

Jess: Why did you start investing, JC? Oh my goodness.

Jessie: That's a great question.

Jess: This goes back to school.

Jessie: I had the absolute privilege to go to this private high school that was really tailored towards me.

Jess: I loved it and it had a very high tuition.

Jessie: My parents were like, okay, JC, we're going to have to remortgage our house to be able to afford this and you're going to have to pay some of the tuition.

Jess: And so I had to pay some of the tuition.

Jessie: I had to pay my train ticket to get there, my gas, my food, because it was in the city.

Jess: It was the whole deal, right? And I very quickly realized that I was not going to be able to live the awesome high school life that I wanted on a minimum wage salary.

Jessie: Weekend job that I had the time for was simply not going to cut it.

Jess: So I was like, okay, girl, we got to figure out how to be smart with our money.

Jessie: So I started listening to podcasts and investing.

Jess: And then I was simultaneously accidentally put into this business class.

Jessie: And I was like, oh, part of it is like fear being like, oh my goodness, the system does not work for me to be making more money if I want to live the life that I want.

Jess: Because again, I was going to this fancy private school.

Jessie: So a lot of kids were drinking Starbucks every day.

Jess: And I just couldn't afford that.

Jessie: Or like a lot of girls had their nails done and I just like really wanted to have my nails done.

Jess: And I was like, I'm going to have it all.

Jessie: I'm going to pay for this tuition.

Jess: I'm going to get on the train and I'm going to have my nails done.

Jessie: Watch me.

Jess: And so I was like, I got to be really smart with my money.

Jessie: High-yield savings account.

Jess: That's where I started high-yield savings account.

Jessie: And then investing in the S&P is where I am now.

Jess: I haven't really gone much more than that is S&P target date fund.

Jessie: Did you use it as like a short term money goal? I mean, like was it so there's a lot of reasons, I guess I'm getting as why people invest.

Jess: Like obviously we all have like retirement is one.

Jessie: I personally don't want to have to work until I'm in my nineties.

Jess: So I really wanted to learn how to maximize my retirement account so that I can eventually stop working.

Jessie: And other people, there's other reasons too.

Jess: You can have a non-retirement accounts if you're trying to save for a house or a wedding or some life event.

Jessie: Or yeah, if you're trying to do it as a way to make extra income, maybe with dividend stocks, things like that.

Jess: So there's different reasons people invest.

Jessie: Yeah.

Jess: But I think the heart of it is security.

Jessie: Yes.

Jess: Security.

Jessie: Because I was like, okay, I'm not making enough money to do the things I want to do.

Jess: So I had to like figure out how to be smart with my money and then retirement.

Jessie: And I try to not say the word retirement because every single Gen Zer after they hear the word retirement, their brain switches off.

Jess: Like young people.

Jessie: I didn't care about it in my twenties at all.

Jess: I was like, that's older me's problem.

Jessie: And now I'm in my forties and I'm like, oh no, I got to protect older me.

Jess: She's around the corner.

Jessie: What am I going to do for her? And I had to like figure it out.

Jess: But yeah, I tried not to say retirement, even though that is where my money is invested in a Roth IRA for retirement.

Jessie: Because after getting smart with my money, I was like, okay, so the biggest expense of my life is going to be retirement.

Jess: And the earlier I start, the better.

Jessie: So like 18, 19, I was like, all right, let's start now.

Jess: Even if it's just, you know, a hundred dollars is what I could do at that time.

Jessie: I love that.

Jess: I don't think I've ever shared my reason why I started investing ever to anyone.

Jessie: Would you like to? Well, I mean, I did a very stupid decision at the age of 19, which I realized sourced from a childhood trauma and got married at 18.

Jess: But it was really for me.

Jessie: It was for security because I was dependent on another person and I couldn't leave a situation that wasn't serving me.

Jess: And when my first semester of college and I came across this internship at Scott trade, it was paying 10 bucks an hour back in 2009.

Jessie: That was very, very high, way above minimum wage.

Jess: And so I'm like, hold up, I can get paid.

Jessie: I can get college credit at the same time.

Jess: Sign me up.

Jessie: Then I got pregnant.

Jess: And then I really was like, okay, I'm in a situation where I need to figure my life out.

Jessie: I need to live for someone, a child bringing a tiny little human into this world.

Jess: And I was a baby myself.

Jessie: And that was my road to financial independence.

Jess: There's no way would I have ever been able to give up my financial licenses if I didn't learn that lesson very young, because otherwise I wouldn't have been able to take that risk because that's a risk.

Jessie: That's giving up my whole career.

Jess: And the only way you can do that is with financial independence because I took a huge pay hit, but I believe it's working out.

Jessie: It's done wonders for me.

Jess: You're turning that generational trauma into generational.

Jessie: Well, there we go.

Jess: I love that.

Jessie: That's a great saying.

Jess: What I think Jesse is trying to point us back to is, are you doing this for retirement? Are you starting with your emergency fund? Are you trying to get income? What is that? And it does have to start somewhere and there's a hierarchy of that.

Jessie: We made a whole episode on that.

Jess: We all come from different backgrounds.

Jessie: We're all different generations, age groups.

Jess: We've all either learned a little bit about investing from maybe our parents or maybe school if you were lucky, or we didn't.

Jessie: And that's why we're here because no one's taught us, unfortunately, in this country..