Episode 194

Money Planning with Farnoosh Torabi

September 18, 2018

We know that money is a favorite boss topic, but it’s also one of the biggest boss struggles, so we’ve invited one of America’s leading personal finance authorities, Farnoosh Torabi, on Being Boss to talk all about earning, saving, spending, and investing—like a boss.


Learn More about the Topics Discussed in this Episode
This Episode Brought to You By:
"So much of building wealth is mindset, habits, and establishing a plan."
- Farnoosh Torabi

Discussed in this Episode

  • Farnoosh's background in finance
  • Investing and saving money when you don't have a lot of it
  • What is money?
  • Cultivating a healthy mindset around money
  • Common money mistakes
  • Dealing with money mishaps and emergencies
  • Practical ways to save for retirement and additional savings
  • Finding financial freedom


More from Farnoosh Torabi

More from Kathleen

Braid Creative

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Almanac Supply Co.


Kathleen Shannon 0:02
Hello, and welcome to being boss,

Emily Thompson 0:04
a podcast for creative entrepreneurs. I'm Emily Thompson.

Kathleen Shannon 0:08
And I'm Kathleen Shannon. And I'm farnoosh Torabi and I'm being boss.

Emily Thompson 0:17
Today we're talking about money planning with farnoosh Torabi. As always, you can find all the tools, books and links we reference on the show notes at WWW dot being boss dot club.

Kathleen Shannon 0:29
Alright bosses Caitlin here works with us behind the scenes here at being boss. And today she's popping in for a minute here to talk about money. So you work over here on the beaten boss team, but you're also a freelancer, how do you use freshbooks to manage your client invoices?

Caitlin Brehm 0:47
Well, I send my invoices through freshbooks. And I'm lucky enough to not have to think about them from there because my clients pay me. But even if they didn't, I could set up reminders through freshbooks just set it and forget it. And then I don't have to feel like I'm nagging. How about tracking expenses. If I have to buy something for a client or if I have travel expenses related to work I'm doing it's super easy to just upload a photo from my phone they have a great app, or from my desktop, a confirmation email or something like that and then just add it as a line item on the invoice.

Kathleen Shannon 1:23
Fresh books cloud accounting makes keeping track of your books so easy get paid faster with their invoicing systems and keep track of your expenses year round. Try fresh books cloud accounting for free today by going to fresh books comm slash being boss and enter being boss in the How did you hear about us section.

Emily Thompson 1:43
Now we know our bosses and we know that many of you are looking to easily sell online courses and memberships and digital downloads to your audience. Well, we found a solution for you in podia you're all in one digital storefront where you can sell your online boss creations in one place. With no technical knowledge needed. No third party plugins required and zero transaction fees start selling today with a 14 day free trial of podia and as an exclusive offer to the being boss listeners 15% off for life by going to podia.com slash boss that's pod eia.com slash boss farnoosh Torabi is one of America's leading personal finance authorities hooked on helping Americans live their richest happiest lives. From her early days reporting for money magazine to hosting a primetime series on CNBC and writing monthly for Oh, the Oprah Magazine and mint.com she's become a favorite go to money expert. Millions of Americans tune into for new shows award winning podcast so money, which made its debut in January 2015. On the show, she interviews leading experts authors and influencers about their financial perspectives, money failures and habits.

Kathleen Shannon 3:09
farnoosh Thank you so much for joining us here on being boss, we are so excited to have you because for as much as we talked about the mindset and habits and routines and making a living doing what you love, I feel like the biggest block always comes back to money. Yeah, money money. So let's dive in.

Farnoosh Torabi 3:29
Well, thank you for having me on this incredible podcast, you guys I bow to you. So I'm really excited to dive in and try to tackle this this topic. It's something that I don't think I've figured it all out. But that's probably a good thing because it keeps me curious. It keeps me just hungry for more information around this is why I've gotten to where I have with my podcast, as you know, you know, you have to really love the topic in order for it to sustain. So anyway, all this to say thank you for having me on the show. And I'm excited.

Kathleen Shannon 4:05
Well, and let's mention like you're kind of a creative in your own right. And I want to make sure that our listeners know that you can be into personal finance and you can crunch the numbers and you can be creative. So can you just share a little bit of your journey as to like how you're doing what you're doing today? Yeah.

Farnoosh Torabi 4:21
I mean, I don't think anyone grows up dreaming they're going to be a financial author or podcaster or expert as people say. And I have a hard time with that title. You know, I always say like my Instagrams like financial enthusiast, financial architect, you know, like, the expert word like really, I feel should be reserved for like doctors and astrophysicists. But that aside, I totally started my professional career thinking I was going to be a journalist and I am still very much a journalist, but I went to journalism school at Columbia. Prior to that, I I had a degree in finance from Penn State. And I think I always had this this conflict of like, whether I should go the straight and narrow or try to be a creative. I think a lot of people have that struggle and coming from this immigrant family, Middle Eastern, my dad's a physicist, my mother is like the most rational person. I was encouraged to have extracurriculars in the creative space, like do theater furnish, go for it. And I did. I loved theater, I loved debate I loved

I loved journalism, I loved writing, I love speaking, I loved I loved all of that, but but when it came down to like, actually having a career and making money, they were like, do something where you can get a job, just please, you know, like, we need, we need to have a legacy here we move from Iran with two suitcases, like, please don't screw this up for us. Like, don't be, don't be living on our Prop, no pressure, no pressure, no pressure. So when it came time to choosing a major, my father was like, please, like, I know, you have all these interests, but law, business medicine, like take your pig was like, Alright, so I picked business, and specifically finance because you know what, I didn't see a lot of women in that space. And I thought, well, you know, I'm not terrible at math. I don't hate it. But let's go somewhere where I feel like I can really shine because of my differences. And that's something that I we can talk about later. Like, I didn't always appreciate my differences. It was sort of a coming of age thing. Come up in so to speak, like, you know, I always struggle with being different as a kid, but then I come and collect, like, in college, I was like, No, being different school. And even now, you know, it's all about our differences. So I went, and I pursued finance, but always there was this voice inside of me. That was like, like, could you maybe like, also do stand up comedy in the evenings? And maybe, you know, you could direct a play, and maybe I maybe I shouldn't apply to film school. You know, there was there was still a lot of this, the creative side of me nagging at me. And finally, I just decided sophomore year of college, I was like, Look, I know I majored in finance, I'm not going to back out because I'm not a quitter. But I want to learn how I can build upon this to still feel like me, in the pursuit of business, you know, so I realized, during an internship in college that I was working at CNBC, on the marketing sales and finance side, that really, I was more fascinated by what was going on on the other side of the business, which was the news gathering, and the storytelling and the stock market and all that kind of on your feet live excitement. And so I decided to apply to journalism school as a graduate degree. And I went straight from undergrad to journalism, graduate school, and from there sort of working in financial journalism. And even there, I mean, it's pretty straight and narrow, like you get your you get your assignments, that money magazine, you do them it's like, it's very every month, you know, there's not like a lot of room for creativity when you're writing about mutual funds and tax credits. But still along the way, it was lots of opportunities for storytelling. And then fast forward, you know, when I was now in my mid 20s, I was poor, as many journalists are in their 20s. In New York City, I had to find a way to find many ways to supplement my income. So I was not just working at a staff job as an automatic in a magazine. But I was also freelance writing on the side, I was babysitting. And I was also toying with the idea of a book about personal finance for young people. And all that kind of came to a point around 2625 26. When I left, you know, one job went to the next job. And I don't know what it was, I just, I think I also got laid off. And that was part of the fuel in my fire was that I had to now make something of all of these experiences. And I realized that the media world was and at the time it was shrinking. Now it's growing again. But at the time it was shrinking my job was, was few and far in between, as like a financial reporter at us, you know, on a staff at a media company. So how could I sort of be my own person and be an entrepreneur. And that's really where I feel like the creative.

The creative. doors opened, because I was able to really do play by my own rules. And at that point, I had a book, I published the book that helped. And I just was this. I think I'm this consummate hustler, like even because I had to in my early 20s string together so many revenue streams just to pay rent. But that taught me how to make money and how to make something out of nothing like I would just propose ideas and people would hire me and pay To do them, do things like write stories or give speeches or, you know, host things, host events, and write more books. All of this takes a lot of convincing you to no one like knocks on your door and like, hey, do you want to write a book? Hey, do you want this job? Hey, do you want to give this speech like you have to really put your be your biggest advocate that's another thing that I learned is to in not in like a saleswoman II way like to be really proud of my work, but to lead with this desire to help. And that always makes for a great case for yourself, you know, like, no one's ever gonna think like, Oh, she's just in it for herself. No, I'm doing I don't teach personal finance because I want to help myself. I might not help pays the bills, but it doesn't. You know, it's it's it's not a very selfish industry, you have to really be motivated by other people's desire to improve their lives. And that's what keeps me going. I mean, that's To this day, like I I tell people follow me on Instagram, direct message me your questions, I'll probably answer them within 24 hours. I just love like toying with people's issues. And people are like, I can't believe you're responding, like who are you? I'm like, I know, I don't know, I maybe need any more hobbies. But I'm really invested in your marriage. And the fact that you and your husband can't get over this financial issue, really, and I

Kathleen Shannon 11:31
think that this is what's so interesting about personal finances that you brought up, you know, the stories that we tell ourselves, and there's so much individual, like baggage, even that goes into the money stories that we have, like, it's not just a simple formula that you plug your numbers into. And while we all wish it were that easy. There's so many different aspects that go into personal finance. And I want to talk a lot about that. I feel like personal finance is something that we should all be chatting more about. But first, I want to talk about you being a broke journalist writing about personal finance and overcoming probably some feelings of maybe resentment writing about like really wealthy, like hedge fund, whatever stock market stuff, but also maybe even the frosty feelings. That's a word that we use for imposter complex here is like the frosty feelings that come up with this because I know that even a lot of our listeners can't afford the the services that they sell themselves. Like, for example, let's say someone is a business coach and their offering is $10,000. They might feel like, well, I couldn't afford myself. So who am I to be selling my offering at this much money or a painter selling a painting for $1,000? and saying, well, I could I couldn't buy $1,000 painting right now. So who am I? So did you combat any of those feelings when it came to writing a book on personal finance and feeling broke yourself?

Farnoosh Torabi 12:51
Well, you know, yes. And so my way around, that was to really be clear about who I was, you know, I wasn't trying to be this. This person that necessarily knew more than the reader, I was, I think, and that was my competitive edge for against all the other books that were out there who weren't that are written by people who are super rich and kind of removed from mainstream. And I felt like I needed a book. First and foremost is 20, something broke journalists who wanted to build wealth, who knew that there were ways to get to the other side of this equation. But I felt like I didn't have an advocate, I didn't have someone who was speaking my language, who also understood where I was like the Zeitgeist of the 20 something year old at the time, or, you know, even the 30 year old, there's really no demographic anymore, right? It's just people living their lives. And we're all like, moving around the Earth, like through space and time, like there's not really like just because you're 25 these are your goals. And this is necessarily how you think it's very fluid. So but I you know, generally the young the young adult section of the of the Barnes and Nobles was very empty to me, Dell and I was had this great platform and this great privilege to be able to have access to all of these great minds and all these tools and resources and media, that every day I was getting educated and I felt like okay, well, I'm learning so I want to now teach my friends my I was that friend that my you know, that people would come to like, what should I do with my 401k? Or, you know, I don't even know what is an IRA and I want to buy a car, like where do I start? And so I kind of wrote the book from the perspective of farnoosh in the trenches with you, I'm still learning but I've amassed all a good bit of knowledge and now I want to share with you because this is the biggest questions that I get given that you know, this is my job and this is also I share in the in the in the goals that you share, and I think I think that's why it you know, it did well and why i think i think it's what helps me differentiate myself from the market. Like I didn't try to pretend I didn't fake, I didn't fake it till I made it, I just, I was like, I don't have all these. I'm not that great, but I do know certain things. And if you want to get on my boat, let's go. But and people did you know, I

Kathleen Shannon 15:23
think people really appreciated that. You they felt like they were being talked at, but talked to and with and this is I love so much your content, because I do feel like you're in it with us. And I feel like a lot of the money stories that we're hearing is like I made a million dollars, let me tell you how I did it. Even though that's typically the exception and not the rule, and people are packaging it up and selling it as the rule, if you just follow it, check off these boxes, right. And I feel like you're not this like, but at the same time, I think that people can get really paralyzed and feel like if they're, if they're not making a certain amount of money, they can't start saving, they can start putting money into a 401k they can't buy a house or do the things that you really can do with more limited resources. Like you don't have to be a millionaire to start behaving in ways that help you build your wealth.

Farnoosh Torabi 16:18
Yes, so much of this. So much of building wealth has, yes, having money helps. But 80% of it is mindset and habits. And establishing a plan. So many people don't even have a plan. So it's it's not even about the amount of money in your bank account. And there's this great quote that I repeat, I don't remember who said it first. So I don't own this quote. But it was something like it, you don't have to be wealthy to invest, but you need to invest to be wealthy. And very, you know, this is where I think young people, this is where we have the most opportunity, the most privilege our youth, the fact that we are young, we have, okay, we don't have a lot of money, but we have time. And the one thing that I hear on and on from people who are our parents generation, our grandparents generation, they say today, I wish I had started saving earlier. And you know, I don't have to run the compound interest calculators on this podcast, I don't want to. But it's true that the earlier you start, even with a little bit of money, even with less money than when you start in your 30s. If you keep at it, and you stay consistent, and relatively speaking, you're going to have more money in at the end of you know, 30 years or 25 years, and that you're investing that money. And so I think that's always helpful and encouraging to hear and be reminded of that. Because you get with $5 a day, I mean, just start so right. That's the thing. I always say like, once you start it's like muscle that you flex, and it's just gonna get stronger and stronger and easier and easier to save. And once you see the money pile up, there's a great app called digit. Have you heard of it? No. Tell us about it. So I interviewed the founder way back when when he just kind of launched this app. And now it's exploded and it's only been a few years, it's really caught on. So digit is this really easy tool, you hook it up to your checking account, your bank account, and digit has an algorithm, it starts to see how you make money, like what's your income versus your expenses. And every day or every so often it'll say, hey, do you want to save $3 today, or I think we should save $17 very nominal amounts, like who doesn't have $4 or $6 or $12. And it's not every day, it's you know, you can actually set the pace. But over the course of a month, you could have over $100 $200 more. And in totality digit has saved its users over a billion dollars since it has launched. And people love it because they're like, it's a no brainer. It's not money that I don't have it's money that I do have it sitting my bank account that I'm not using and digit has been is wise enough. It's like figured it out. And I have no relationship with digit. I'm not like promoting this product, because I'm going to be making any money. I just really like it. And it's easy digit. The founder really understands that we don't like to save money, like who likes to save money early on. I like to spend money. I like much prefer to buy something than to put money in a bank account. I mean, I like the idea of having money for a rainy day and saving up for a goal that excites me. But in the moment i'd Of course, like it's more fun to spend like and to receive something it's more instantly gratifying. So knowing that, and knowing that we'll have to our own volition, we don't save them. He just like done I'm gonna make an app. And in the beginning, it was actually asking you Hey, can I save $5 for you? When you prompted people to reply Yes or no? People just didn't reply because they were that lazy. So just started to say hey, I'm saving $5 for you. And as part of the agreement, you allow it to do that you can then go in and stop it. But like who's going to do that? So when they made that slight change in behavior, everyone started to save more money.

Kathleen Shannon 20:11
That's fascinating. And is it saving to a savings account that is hooked up to your bank account? Or is it sending it into like a 401k,

Farnoosh Torabi 20:19
it's saving it into an online digit account, like a virtual digital a branded account, which is basically like any other online account, and you can transfer the money. And, yeah, so anytime you want, you can withdraw the money,

Emily Thompson 20:34
I want to talk for half a second about the like, a million little mindset shifts that happen in like this single tool, this idea of making it as easy as possible for you to do something like you know, tuck $2 in that other pocket, or whatever it may be, or, you know, the idea of saving two versus $2 versus $200. And how it's so much easier for us to do those small amounts than ever to do a large amount, or also just the amazingness of having technology at our finger tips these days, that allows us to do those sorts of things. I mean, I feel like Actually, my partner told me the other day, he had read some article about how you know, Millennials are like the poorest generation, more or less of all time in the grand scheme of, of where all the money is these days. And that's had several factors playing into it. But we're also the most digitally minded, like, we're also we also have the most access to these tools and have the understanding of them. And how fascinating it is that you know, at a time when there is that whole generation who is struggling, we also have everything literally at our fingertips to help us overcome it. I think all of that is super fascinating to me, I'm so glad to be around in a time when we can see things like this in action,

Farnoosh Torabi 21:58
and so much transparency now than ever before. And I think we're, you know, I looked at the recession as a terrible thing, but ultimately a terrible thing that taught us so much. And I do think that we are benefiting now from the learnings of the recession, we're asking the good questions, we're building the technologies and the tools to create transparency, so people can see where their money is going. We know what the fees are associated with our investments, or we're supposed to know, now there's there needs to be some level, a better level of disclosure. Financial Advisors are coming out and saying, you know, what, picking stocks ain't so great. Maybe just buy an index fund, you know. And so I think that that's, I think that where we are today, like you said, is, in some ways, unprecedented for for good, and some difficult reasons. But I think ultimately, it's a positive I look at is it a net positive? Because if we have all these tools and resources and the speed of having these resources, and the robustness of these resources is unparalleled to our parents generation, and we should take advantage of that. And some people are apps like digit and acorns, and it's which is like digit, but it's for investing in a, an investment portfolio. So

Kathleen Shannon 23:20
okay, so this is kind of a stoner question, but I know that whenever I quit my day job and somebody wasn't just handing me a paycheck and I felt like I was really working for my money. I started asking myself like, wait, what even is money? I could work in trade, I could work in any sort of way. And then with like Bitcoin and cryptocurrency, like, even further cracking open the question of like, wait, what is money? Right? So I don't want to spend too long on this, like total stoner question. But have you thought about this very much? Oh, yeah. Is money like, what have you come to with that? Answer?

Farnoosh Torabi 23:55
For me, money is a resource. It's a resource, like any other resource, it's not good. It's not bad. It's not evil. It's not. It's just a resource. It's its currency. It's Deepak Chopra, Khatami, he thinks money is energy. So that's a resource, right? And literally a resource for you to use to accomplish whatever you want to accomplish. Whether that's to improve your life, improve other people's lives, build things, destroy your life, I mean, like you can, like whatever you want to do, this is a resource and that also tells us that because it is just this thing, we are the ones humans are the ones that kind of make it a bring it alive, right? So when we say like, oh, money is the root of all the love of money is the root of all evil. Well, who's loving the money? It's a thoughts right? So so it's not the money then the money gets the bad rap, but it's really the people behind it who sometimes do it for destructive things. And I think that money can be is a resource that can be used to earn power, it can be a resource to earn freedom, it can be a resource, it can be a great resource, we just have to learn to serve, first have the right positive mindset, and relationship with money to be able to use it in a way that is fulfilling and impactful and meaningful and right. And that's going to be different for everybody. I don't think that that there's like a one definition of what how money should fulfill you for everybody.

Kathleen Shannon 25:27
So some of those people that you have seen using money and a really impactful and powerful and, you know, positive way. I mean, you've had access to some of these like brilliant, wealthy minds, what are some of the mindsets or perspectives or attitudes that they have had around money that us, you know, who aren't making a bajillion dollars, or even a million dollars, or even six figures could start to incorporate into our own money, attitudes and mindsets.

Farnoosh Torabi 25:56
So I think before they think about money, they think about themselves in a way that like, I am a resource. So money is a resource, but mostly I'm the resource, my ability to create and build and put good energy out in the world to then receive the money, right? So how do you get the money in the first place? And I think that when you have the confidence in yourself to say, you know what, I'm awesome, I'm valuable, I'm smart, I'm creative. I know how to make an impact. And so then you go and do those things. They believe that when you put your best foot forward, when you do the hard work, when you do the good work, the Money Follows, and it's not manifesting that's actually going out there and doing the dang work and sometimes asking for the money, because no one's just gonna give it to you sometimes. Right? Like, they don't just see you doing the good work. And like, Here's the money, like, here's my good work, here's what I'm worth, here's what I'd like, please give it to me. And so that comes way before they really think about the money, they think about themselves and their ability to go out there and produce and be moneymakers. And then they get the money. And I think at that point, it's it's, I mean, it sounds cheesy, but they really think about other people and think about how to make an impact. I've worked long enough for Oprah Magazine. And I've done enough stories in like, you know, sort of mindset and wellness space, and how money kind of ties into that to really believe now more than ever, that when you are a generous person, when you are a giving person, the money comes back. You know, it's just it is because maybe if you do at the end of the day think that money is energy, you know, you give your take comes back, it's circuitous. And that's a little woowoo it's a little more woowoo than I like to get but it I've seen it in my life. I've seen it in other people's lives. As soon as I donate some money, like then I get a check that I wasn't expecting. You know, so what I don't know, what is that the secret? I don't know what that's called. But it is. It's something it's something. And I like to think that there is a force behind that. A beautiful force behind that. And so but people like whether it's Bill Gates, or it's john paul dejoria, who's a billionaire, I interviewed him on CNBC. These people donate a lot of their money. Warren Buffett, you know, he wants none of his money remaining in his estate after he dies, he has started an organization of other billionaires trying to convince them to say look, you know, a little bit money for your family, but like half of your wealth, please give it back to the to the earth, give it back to the world and like, however you want, but I would love for you to think strategically along those lines. I think that's really amazing.

Kathleen Shannon 28:47
I always think about it was a Bill Gates who isn't giving his kids any money. I like one of those. And I think about that all the time, like how then what they are inheriting is perhaps an attitude because I've no doubt that Bill Gates, children couldn't go out and make some money, probably with connections. But that connection again, is that resource and that confidence of like, okay, I can do this. So I think about sometimes like whenever I'm feeling low about money, I'll just think, okay, I'm Bill Gates kid, I've been just thrown into like the middle of the woods, right? I've got to get myself out. So like, what would I do if I were them? I would trust that I can make money that I have connections, I have contacts, I have resources and talents and skills, etc. All of the things.

Farnoosh Torabi 29:30
I think also when you have a parent, we have parents like Bill and like Melinda and Bill Gates, that their legacy is one that you want to uphold, like, okay, a different picture like smaller scale. My parents who moved here from Iran who are not Bill and Melinda Gates, but you know, they've they're definitely incredible people and they they came here with nothing and they built a magnificent life for themselves and their children. I feel like I can't screw up because Cuz I need to make them, I need to not slip, because I'll make them happy. I mean, sure, we all want to make our moms happy. But I think also, it's like I want to not screw up to be able to let their legacy and hard work live on in a way that is meaningful. And it's a lot of pressure, I think I would be in some ways, very difficult to be their children, Bill Gates, child could feel like I could never add, like, measure up to my father or measure up to my mother. But I think in some ways, with the right mindset, with the healthier mindset and some therapy, it could be more like, okay, I've been given this gift right of having these two amazing people raised me, they've taught me so much. And it's not about becoming them. It's about becoming me. But I want to I'm so empowered to do something great in the world, and so motivated because of the examples that they lead by. And I think that's, that's kind of like the hope is that, that is why they become successful, and why they will inevitably become successful. And it's not because they had money in the bank.

Kathleen Shannon 31:05
Totally. Okay, what are some money mistakes that you see people? Like, probably ages? I don't know, I'd say 23 to 40 years old, like, what are some of the like, we're still young enough to build some wealth and invest, but we're, I don't know, maybe getting old enough where we feel like it might be too late to start investing? I don't know anyway, what are some of the money mistakes you see us making around our age.

Farnoosh Torabi 31:29
The first is like, we just don't even have a plan. We don't have a plan. We don't have goals, or we think we know we want but we're not living the lifestyle, like our spending does not align with what we actually want. So what we think and what we do, there's a big disconnect in terms of money. We think we want to become homeowners, we think we want to have, you know, we want to retire early, or we want to just have money in the bank, yet we our actions, negate all of that. So it's really kind of getting clear. And it's hard. I think in your 20s, you're overwhelmed. There's like peer pressure, you're thrown out of college into the real world without any real job experience first time. So first of all, a lot of us making money. So we feel a little lost at sea. But I think as soon as you can kind of gather and collect yourself and think about where do I want to me in the next six months, one year, five years, like really make a business plan for yourself, business plan, personal plan, all of that and and really know who you are. And don't be shy about it. If you're somebody who wants to backpack through Europe for two years, or you want to live in a kibbutz or you want to start a business, or you want to become super rich, at any cost, like whatever you want, I'm not judging, just figure it out and make a plan and reverse engineer it with your money. You can't be taking Uber every day, if you want to buy a home in three years, not unless you have a lot of money coming in. And I think that these days, we talked about technology, it's gotten a lot easier to connect. But it's gotten a lot easier to spend too, because these apps make it so easy, like seamless and Uber and I never again prime I got today I ordered amazon prime now. So like I get it in two hours. We can wait a day like I'm so on the one hand, I'm like, oh, I've saved time and time is money. No, let's be honest, I'm, you know, I'm also paying a premium for these services. And unless I have money in the bank to afford it, it's going to be a net negative for me. And especially if you have other goals, you want to try to tackle like getting out of debt, buying a home, buying a car, starting a business, going back to graduate school, going back to school. I think that once you have your once you put the flag in the ground and you're like, Okay, grad school in two years or biz, I'm going to start my business, I'm gonna quit my job. Well, what does that require? You know, if you're gonna quit your job tomorrow to start your business, can you could you pay your bills for a year because like, that's probably how long it's going to take before you start to eke out a profit as a business owner conservatively. So, you know, it's not impossible, but I think people just need to, like, have a plan because too often we arrive in our 30s in our 40s going, Okay, now I want to buy a house. And we're like, wait, I need how much of a downpayment I knew what kind of a credit score, um, what's my tax bill gonna be, you know, and we just thought it was going to be rent but a mortgage, but it's got all these other costs. So that's the first thing and it's, it's, it's nothing to do with money, so you know it and then so the other thing is, I would say not sharing those goals with other people like create a community around it. Again, these are not like dollars and cents rules. These are just like habits, behaviors, actions. that anyone can do at any income level, start to talk about what you want to accomplish in your financial life with others. And don't be apologetic about it, don't be shy about it. Others

may be on that same path, and you guys can connect and talk and grow together and share. And in other cases, you can find a community online, you can start listening to podcasts, you can start to read blogs, you can, there's a community out there for whatever goal it is you want to achieve. And there's actually a study, the Bureau of Economic Research found that when they had two control groups, the one group that shared their savings goals, versus the group that didn't share their savings goals with others in the group, the group that shared was able to save more and more frequently, versus the other group. So find people you trust, and people who you feel will support you and talk about the fact you want to buy a house that you want to go back to school that you want to have kids not like how does that how do you afford that? So I just had coffee with a listener on my podcast who reached out local Brooklynite, and she's not married yet, but she's sort of like five years behind me, age wise, it's like, I want to get married, when I'm kids want to start a business? You know, those are her goals. So great. Step one, she's figure that out. Like, those are the things that she wants to do. But she's like, how do I manage my money to support all of this? So through my experiences, I gave her some advice, but I think and she was like, Wow, I didn't, I didn't realize this, you know, there's a lot of other women like me, who have all these same questions. So I said, you know, what, start the support group. You know, you've got friends, and I'll come in and once a month, and we'll talk. But it's, that is a big mistake. And saving, I mean, just start Little by little, if you have a 401k at work. And there's even a company match. Do it. Like, if I didn't know about this, when I started working my HR manager, Mary, she's like you're doing this farnoosh, our company matches dollar for dollar up to 6%. It's free money. I mean, you put in the money that we put in the money. And when I left that job, after two and a half years, I had $30,000 saved what I was making $45,000 a year. So I basically saved like almost a year salary.

Kathleen Shannon 37:21
Oh my gosh, and it's so I want our listeners to know that even if you work for yourself, you can still contribute to a 401k. And you can match yourself. So even in my company over at braid creative, which is a branding agency that I own, we were able to install a 401k program through a company called gusto, or is it gousto gusto that runs payroll for us, and I'm matching myself, it was like a way to give myself an instant 4% raise Nice. Yeah. All right. So you have to think of it like that, too, is that like you're giving, you're not only investing, but you're also giving yourself a raise whenever your company is matching you and you can match yourself. And I have found that whenever I commit to things like that, including like hiring employees or investing, eventually, like you find the money like and I think that that's part of that digit app that you were talking about is that you can find the money and it's like little bits here and there. And you will like rise almost to the occasion. Once you do set those goals or set those systems in place.

Emily Thompson 38:24
I want to move on to the next thing, though. And this is that. So you set up the goals, and you have this sort of path laid out in front of you. And then the money shit hits the fan, or something happens in your life where you know, your plans are sort of blown off course. So I'm going to talk a little bit about these like money failures, or these moments where your plans aren't going as you wanted them to. How do you deal with that? Or how does one I think one day what the mindset of you know, knowing that this like hard, hard path that they've chosen is being blown off? And then to practically How do you get back on track.

Farnoosh Torabi 39:06
Everyone makes mistakes, everyone, rich people, poor people, middle income people, we all make mistakes, and the ones who live to tell the story. And live well to tell the story are the ones who are like, you know what, I made the mistake I'm going to move on, I'm not gonna make that mistake twice. I'm going to learn from that mistake, and whether that's because you, you know, you didn't have an emergency fund and your car broke down. And so therefore you had to take the bus for a month or hitch a ride for a month. And that was really difficult on your career because you got to work late every morning or you gave money to a friend and she never paid you back. You gave money to a relative and he never paid you back. You've had a medical scare, and that cost some money and you didn't have insurance or you didn't have the right kind of insurance. And so you know, these are I feel like when you're young to like, let me fit As often and as quick as possible, like I just need to get the failures in now, because it's a lot easier to fail in your 20s. And when you're 40, and you have children, and you have bills that are bigger than you ever imagined. So just kind of like look at the bright side, like it can't be worse. I also feel I had Tony Robbins on my way on my show my very first episode and I allowed listeners to ask him questions, and a couple of people were like, Tony, you know, I don't have a job I lost my job in the recession. My 401k is diminished. I don't My house is underwater was all these like sad stories. And Tony and true Tony Robbins style is like, Get over yourself, you know, this is America, you have resources, like you're healthy. Think of all the things that you do have, I interviewed a woman who lost all her money to Bernie Madoff, okay. And I was like, What did you do? How are you like, alive? And she's like, every, it was hard. I cried a lot. It was devastating. How could it not be, but she said, You know, I made it my job to wake up every morning. And think of the things that I still had little things like, I still have my tea cups, I still have my socks, I still have food, I still have my husband, I still have the books that I've written, I still have my health. And so you start to add those things up. And you realize, like, you're still this amazing, strong, invincible person. And that money was just an aspect of your life that you know, where you had a boo boo, and now you got to fix it. And so that as far as mindset, I think a lot of it is like trusting yourself believing more in yourself having the faith that you can recover, and that you have a lot of the resources to help you do that, that are not even about money, then how do you actually do it, I mean, it's really about identifying where things went wrong and sealing that hole, you know, if you realize you didn't have an emergency fund, and then shit hit the fan, and then you fell in the hole or you whatever, start saving, and it's not about tomorrow, coming up with your six month emergency account, it's you have to also be of the mindset that this is a gradual thing that you're going to have to this will take time, nothing happens overnight. But the best day to start saving is yesterday. So just start and start little by little. And I do think that when you start to see the account grow, you'll be more motivated. And you'll start to make trade offs a lot easier. Like I don't want to go to this event or I don't want to go to this concert, or I don't want to buy this, whatever, take this Uber because I'm saving more. It's really exciting. I see it growing. And you don't have to save all day all the time. Once it hits a certain amount. I'd say for young people like a five, six month expense cushion, you can stop and move on to your next goal. And giving yourself time is important. Like, also forgive yourself, you know, like, it's okay, I screwed up. A lot of people have screwed up before me and not the first person to make this mistake. But it's really important to learn from them and not make them again. And you know, to, to just take those tactical steps, start the savings account, get the insurance, pare down your expenses. And there's nothing like fear to move us in the right direction. Like sometimes it's good to get really close to failure. Like when you can taste fear, you can taste failure, like, that's not a good taste. And so you who usually that motivates you to, like make some changes and do the right thing, the thing that you knew you had to do five months ago, but now you're like, Okay, I better do it now, or else it's really gonna be ugly, things are gonna get bad.

Kathleen Shannon 43:56
I feel like um, as creative entrepreneurs, we are in an interesting position where we can we have a like an unlimited earning potential. Like at the end of the day, you can earn as much money as you want. No one is writing your check or you know, maybe you have a day job and someone is writing your check, but you have a side hustle where you can earn as much as you want. And so one thing I want to ask you is do you so I kind of think about money in a few different categories. I've been really focusing on investing and saving lately, like that really excites me, but probably even before that it was about how much can I earn? Or where are my expenses? Like how much am I spending? And so for a while it was kind of like the Suzy Orman like stop buying latte, stop going on vacations and then probably around 27 I was like, What No, I'm drinking my lattes and I'm going on vacation. I'm gonna find a way to fund this like, I'm gonna hustle to make more money. So, um, and now it's like really about saving and investing and like how can I start to really leverage the little bit of extra money I have to make more money. So whenever it comes to like saving spend Earning, like where it is your focus lie? Or if you had a pie chart of those things like, Do you ever think of it in that way? As far as like, where you can like get the most out of your money? Is it cutting your expenses is it

Farnoosh Torabi 45:14
I am obsessed with earning, like, for me, I would much rather go out in the world and bring home an extra, whatever $1,000, then to find the $3,000 to cut out of my budget, but I still look at my spending. You know, critically, and you know, if there are, it helps just to look where your money's going. I mean, I think you can do a little bit of everything. But for me what leads is the air is the earning variable. That's more exciting to me. I don't like living, I don't like to be frugal. And I don't but I don't spend when I don't have to spend like if I know that I can get something on sale, buy it on sale, if I know that. I signed up for this subscription. And I was a mistake. And so I stopped it, you know, I don't let things go out of hand. And that's important because I like to also extrapolate, like, Okay, so this $100 a month subscription. If I'm not if I haven't used it in two months, I'm getting rid of it. And if I save that $100 every month for the next year, that's 12 $100. And if I put that in the stock market over the next 20 years, that's 10s 1000s of dollars. So, you know, looking at saving your money, not just says how much is today, but how much is it going to be for me in five years in 10 years, like there are easy calculators online. And that's kind of a we used to write this article all the time. Every time a new iPhone would come out, I worked for the street comm our editor would say Okay, time to write that retirement story now about how much your iPhone could be costing you in retirement. So we would take the cost of the iPhone and the monthly payments. And if you didn't have to pay this, if you didn't go for it, if you didn't splurge it, how much would it be in retirement, it was like hundreds of 1000s of dollars. Your iPhone habit is costing you hundreds of 1000s of dollars in your future life.

Kathleen Shannon 47:08
That's like I have a car payment right now. And it's about to be paid off in November. And so I've got all the car people calling me like, hey, someone wants to buy your car, and they're just trying to get me into another loan. And then I think, wow, I could spend that money. Like I could just put that money that I've been finding and spending on my car and put it straight into a savings account. Yeah, so I want to talk about savings a little bit. My strategy is buying real estate. I really like that way of investing. And I've talked about this before on the podcast and I've even been on like other real estate podcasts. I am not a millionaire by any means I save up enough money to put down a 20 or 25% downpayment on like a 60 to $85,000 house. And this is also like location specific in Oklahoma City where real estate was super cheap at the time and just kind of jumping into that like this market that everyone else is kind of scared to invest in. And that's what I did. And it would almost get my bank account down to zero. And I don't know that that was the smartest thing. But now I'm back into like I made a move to another city. And that's not as realistic. So now I'm like exploring my options with different retirement funds. And I don't even know where to begin. So I've got a 401k but is there anything else that I could just be dumping like 500 bucks a month into?

Farnoosh Torabi 48:27
Well, it really just depends on what you want this money for?

Kathleen Shannon 48:33
Are you this is just like straight up retirement. Okay, straight up retirement 60. Like, okay, a Cush life,

Farnoosh Torabi 48:40
do you have the 401k which you're paying, would you or would you are matching yourself? Yes, I would also look into a brokerage account where you can just create a portfolio there are a lot of online platforms, I work with Charles Schwab. I'm an ambassador for them. But I also have a, they have this online platform called the Intelligent Investor. And it's basically a robo advisor. It's all ETFs low fee. And they they create a portfolio for you that is catered to your risk tolerance, your age, all that and it's like, basically what you're probably investing in your 401k you can replicate in this account. But it's one of those things where you can pull the money out at any time. But the idea is that you're going to have it for retirement. So I have one of those in addition to a SEP IRA, which is I don't have a 401k. But I'm self employed, I have a self employed on IRA. And I also have a for money that I don't need in the next year, or two or three, but I don't want to put it in the stock market because I'm worried about those fluctuations in the market and losing the value and then needing the money. I have them in CDs. So you can find CDs these days because interest rates are Going up, it's gonna be a good market for saving in these kinds of vehicles like the lock your money in for a year, you might make 2%, which is not the stock market, but it's also not point oh 1% in your bank account, right, so maybe anything like after that six months like cushion that you feel good about, you could put into a CD and brokerage account your 401k, I would start with your 401k. Because if your lol You know, or your self directed IRA or your SEP IRA, like whatever your retirement account is, once you've maxed that out, you have more money to play with, then it's maybe it's an IRA, it's like a Roth IRA if you can qualify, or it's a brokerage account, in which you're putting index funds, ETFs really low fee investments so that you're not paying stupid money like that. And then I think like you, it's about, well, what interests me like, Where does my risk tolerance lie, you have a lot of risk for real estate. So you're going to go for that. So do I. So that would be something that I would be interested in other people would say, absolutely not. I don't want to be a landlord. I don't want to have investment properties. What else can I do? Well, alternative investments, right? This is where we're looking at. You could look at crypto, you could look at investing. crypto, do you man, I'm not, it's not for me,

Kathleen Shannon 51:25
I would I see I was asking my husband about it. I was like, let's just put $1,000 in $1,000. Fine, there's mutual funds, you can do 100. And he's like, I'm not touching that.

Farnoosh Torabi 51:34
I mean, the problem is, if you want to buy bitcoin that's like, but I think that getting in the crypto, I don't think crypto is going away. Okay, I'll say that I don't know about Bitcoin and some other currencies. But I think like the crypto model, this idea of like creating blockchains transparency, I think that's something that people can really get behind. I don't think that's going to go away, necessarily. So I like the idea of being in that market. And there, I think there are mutual funds, where you can kind of play in a variety of crypto currencies, okay. So I'm not sure about that. Because again, I'm this is not where my passion isn't smell, smell, spark joy in me. But I like I just invested in a business, I had someone come to me with a business plan. And I gave her money I gave her family, his friends and family round. So you know, I never thought I'd do something like that. But I really like that you can think about donating. I mean, donating is not investing. But if you're now looking at like kind of ways to make your money, do things that are beyond just like saving for your rainy day and putting money for retirement. Now you can I mean, that's a really privileged place to be in, right. So looking at other ways to take risks with your money, calculated risks, but also to help people if that's something that is also important to you. Gosh, there's so much art, I bought a few pieces of art in the last couple of years, I don't buy them because I think they're going to appreciate but uh, it would be like icing on the cake. And frankly, I would like for this to go down in the family. But um, some people really look at art as an alternative investment. Gold, you know, there's all sorts of things. It's really more about like, you have to answer these questions. What is my risk tolerance? What am I interested in, so that I can keep up with it? For some people, it's purely stocks, like open up a portfolio and just pick stocks and not i'm not of the camp where you know, pick stocks and trade them every day and watch them every day. But if you believe in companies, and you think that they will last the test of time, and you want to have them in your portfolio for retirement go for I just had a woman on my podcast, Danielle town, who wrote the book invested if anyone's looking for a book on investing, and she is the daughter of Phil town who is wrote the book rule number one, and he's a very famous invest investment educator. Like he has investor seminars. He's, he's very well known in that world. She's like, I never really cared for it until I got into my 30s. And I said, Well, what are you investing in? She was I'm investing in one stock right now. I said, Really? I thought you're like the investor expert. She's like, Well, I know like, what's going on? She said, Well, I'm I'm building my portfolio. And you I kind of wrote this book more about like the How to but my picks, she's got one pick. And that's AAA. Which I would have never bought because I was like, Well, now it's like $400 I mean, but she bought it after the E. coli crisis. Oh, yeah. When it tanked and now they have a new CEO and they're on the right trajectory. And she's like, I just really believe in the company and people love the food and I was like, Okay. I don't have like the stomach for stocks. I think I'm interested in I'm like, fascinated by how companies grow in the business of stocks, but I, to put down money for a stock, I think I just don't really think the ROI is for me. Now, okay, I

Kathleen Shannon 55:14
want to start to close out the conversation with the conversation about financial freedom, because I feel like that's what a lot of creative entrepreneurs really crave whenever it comes to living and working on their own terms. And it's this freedom and flexibility whenever it comes to their schedules, but also whenever it comes to their money, and I found that people using the word financial freedom in a lot of different ways. For me, it means having enough money and investments that I can live off of the interest. I've calculated the amount, I know exactly how much money I need, it's $3.25 million to live, like the lifestyle that I want, it could be a lot less if I was like, in a tiny house or something. But um, what does financial freedom mean? For some people, it just means making enough money in their own business to pay their bills, like it could mean a lot of different things. So what does it mean for you?

Farnoosh Torabi 56:07
financial freedom, for me, means never having to worry about money. Plain and simple. It doesn't mean I don't think about it, I doesn't mean that I don't plan my life around my money. But it's, it's also about like not having to worry about it, I think to think about can I afford this thing that I really want, you know, and if I don't have the money, knowing that I have the financial ability and capability to go out there and make the money. So I don't really see it as this finite thing. But I don't think you just like hit freedom. And then you can just stop, you know, for me, it's like, it's an ongoing thing that I'm always trying to kind of enhance my financial freedom. So I'm financially free today. But I don't want to sustain this just, I don't want to keep status quo, until I die. Like I would like to build on this sort of sort of freedom place that I'm at. And by that I mean like to do more with my money, to be able to give back more, to build more, to create new experiences for my family and for others, and to keep working and bringing home the money. Because I happen to like what I do. So that to me all is what is behind my definition of financial freedom. And I think that it's it is why we all have different definitions. And we should know what life is similar. And I think most important, though, when you're thinking about achieving financial freedom, think about ways that your money can fulfill you, as opposed to just give the appearance of success. Right? So Oh, you have the house and the car and this and that like that, you know, that's on the resume or on the on the LinkedIn profile or on your dating app, like that's successful. But is it really are you really into it? Are you is your money really aligned with what makes you happy? Money doesn't buy happiness. But I do think that it can definitely get us to a happier place, if we do the right things with it that are really meaningful to us. And I think that's financial freedom, too, is being able to exercise that.

Kathleen Shannon 58:20
I love that. I think that I've just redefined my definition. I'm taking yours for now. Okay. I like that so much better than five. I like that so much better than 3.2 5 million I haven't I have an invoice in the mail that seems so much more accessible. Right. I

Emily Thompson 58:38
do love that. And I think that I think it's really important for that success versus fulfillment piece. They're aware, I think, even us, you know, we're always talking about defining success for yourself. But I love the idea of even switching that word for fulfillment, because success these days is such a loaded word, such a loaded word, but I think fulfillment is simple.

Farnoosh Torabi 58:59
Yeah, the pursuit of success. It just seems like so finite, and limiting when you talk about success. And I know so many young people who and entrepreneurs who like they feel like they just did all the right things to be successful. But they did all the right things that were already stated for them. You know, they didn't make their own path. They didn't create their own rules. They didn't take the risks. They they did it sort of like they follow the proven path. And then they got there and they're like, Oh, this is not really what I thought it would be like and I'm not happy and I'm something's missing. And it's probably because they didn't mess around enough on the, you know, just get their hands dirty and do things that scared them and do things that excited them and made them sometimes feel not safe. not crazy, not safe. But you know, like, take a risk. Don't endanger your life. That's not what I'm saying. But I'm also saying you know, be A little more mindful of the fact that you are a collection of all of your life's experiences. And if all your life experiences are what other people have been telling you what to do. That's no fun. Not at all.

Emily Thompson 1:00:13
I love that. Thank you so much. I one more question or actually, two more questions. First of all, what makes you feel most boss?

Farnoosh Torabi 1:00:21
Most boss? Oh, my gosh. I answered a no one. I really don't. I mean, I answer to my kids.

Kathleen Shannon 1:00:32
We all nothing to make us feel less boss and our kids.

Farnoosh Torabi 1:00:37
I think I just feel really in control of my life. In so many ways, I feel in control of my mornings, which I never was, until I became my own boss, I had to get up and go to work and do like get on the subway. And now I can get up and I can make breakfast and I can go for a walk. And I can take my kids to school and I can work on work at 11am instead of 830 in the morning. And I think every day looks different. And I think that's because I am boss because I can I can design my days to look different to feel different. And my my life and my work. And so I'm very grateful for this. I didn't really know what it was going to feel like when I first embarked on it. I knew Oh, don't you be your own boss, it's great. You know, it's like great saying, but to really be living it now. It's not always great in the sense that, you know, it's it comes a lot of responsibility and a lot of pressure to maintain this. But it is a great privilege. And I know that I've been able to do it for as long as I have. There's no thing why I can't continue to do it. So I just have to have that confidence. And believe it or not even I can have self doubt sometimes, you know, like, Can

this really keep Can I really keep this going? Right? You know, are they gonna pull the plugs on me? I can turn off the lights. Yeah.

You know? Yeah, yeah. But I feel boss because I can design my life when I want how I want and, and I'm the only one to blame for it. Yeah.

Emily Thompson 1:02:14
True. Wonderful. Well, what are you currently working on? And where can our listeners find you? Sure. Thank

Farnoosh Torabi 1:02:20
you so much for having me on. This was such a such a great conversation, it fed my soul Really? Well, I have the podcast. So money, which I'm really excited about. I have a monthly column in the Oh, the Oprah Magazine, and the financial ambassador for chase slate. So if you are a chase customer or chase like customer or not. One of the things that we're really proud of is that we really promote credit health. And you can get your free FICO credit score every month through chase slate, and we do lots of fun videos. And it's been a really great collaboration with them. And what else? You know, it's been four years since I wrote when she makes more my book for female breadwinners but I just saw Allie Wong's Netflix special. And she talks about being the female breadwinner in her marriage. And she just brings so much humor and freshness to it that it was trending on Twitter, like this whole female breadwinner thing. And so I feel like my book is forever going to be relevant for but I don't know how I feel about that. I thought I was gonna like have a shelf life like we were going to like, we're going to match the female breadwinner thing in marriages, but it continues to be an issue of confusion and contention and complexity. So that's a book that I'm really still excited to share. And and that is that thank you for letting me talk a little bit about myself there. Of course, thank

Emily Thompson 1:03:45
you for coming in check. And money is one of those things that Kathleen and I will talk about all day. And Oh, sure.

Kathleen Shannon 1:03:52
You know where to reach me money. Like let's just talk all day every day about it? Well, sure. Instagram. I'm

Farnoosh Torabi 1:04:01
all over that. fo shizzle. And I'm always answering people's questions. So if you have a money question, sometimes that's the fastest way to reach me. farnoosh turabian.

Emily Thompson 1:04:10
But love it. Thank you so much for coming to chat with us. Thank you. Hey, bosses,

Kathleen Shannon 1:04:19
I want to tell you about the CEO day kit. The CEO day kit is 12 months of focus planning for your business in just one day. So Emily and I have packaged up the exact tools that we've been consistently using for years that have helped us grow from baby bosses to the CEOs of our own businesses. gain clarity, find focus, get momentum, prioritize your time, make better decisions and become more self reliant with the CEO day kids. Go to courses that being boss club to learn more and see if it's a fit for you and your business.

Emily Thompson 1:04:55
Thank you for listening to being boss. If you're looking for more help and being boss of yours, work in life accom check out our website where you can find Episode shownotes browser archives and access free resources like worksheets, trainings, quizzes and more. It's all at WWW dot being boss dot club. Do the work. The boss