Episode 593: Jean Chatzky: Personal Finance Strategies for Building Wealth Without Overcomplicating Money

Habits and Hustle

In this episode of Habits & Hustle, host Jennifer Cohen sits down with financial journalist Jean Chatzky to discuss how to build wealth with

Key takeaways

• Wealth building is driven by simple, repeated habits rather than complex 'rocket science' strategies.
• Automating a 15% savings rate for retirement is a critical target for long-term security.

Main topics

• Wealth building through automation
• Retirement planning strategies

Notable quotes

If anybody is trying to make you feel like it's rocket science, they are probably trying to sell you something.

Conclusion

The episode serves as a practical guide for anyone looking to gain con

Transcript preview

Speaker 1 (0:01) Hi guys, it's Tony Robbins. You're listening to Habits & Hustle. Crush it! Speaker 2 (0:07) Money has gotten way more complicated than it needs to be. Between investing advice, retirement accounts, 401ks, financial planners, and everything else competing for your attention, wow, it can feel like you need a finance degree just to know whether you are actually doing the right thing. So today on Habits & Hustle, I'm sitting down with Gene Chatzky to make all of this feel a lot less overwhelming. We talk about why even successful people can still feel financially insecure. habits that actually build wealth and how to make smarter decisions with the money you already have. Jean is a financial journalist, the former financial editor of the Today Show, and the founder of Her Money. She is also one of my favorite people to learn from when it comes to investing financially because she makes it feel very, very simple. Making money has never felt easier and more understood than speaking with her. Her new book just became a New York Times bestseller as we did the podcast, which was really exciting. So she made her own money mistakes, learned how to take control of the finances, and then spent years helping us all feel better about it. So now let's dive in. Speaker 2 (1:29) So we do this thing on the podcast to keep us focused and alert. We do these Magic Mind performance shots. Okay. Have you ever had these before? Speaker 1 (1:37) How do they Speaker 2 (1:37) taste? Oh, my God. In terms of what they are, they're very good. It has all sorts of lion's mane, ashwagandha, turmeric. These ones particularly have 50. milligrams of caffeine. We have, like I said, we have the caffeine free. We have, people love them though. Speaker 1 (1:54) Okay. They're very popular. Happen to try. Yes. Speaker 2 (1:57) I've had like three already today. I don't know if it's a good idea for me to have another one, but I'm going to have a little bit. So we'd shake it and then we just like do like a cheers. Speaker 1 (2:06) Okay. Thank you. Speaker 2 (2:08) Want to do it? Yeah. Okay. Speaker 1 (2:10) Here we go. Here we go. By the way, we do Speaker 2 (2:12) have Jean Chotsky. I always say your name. Chatsky. Chatsky. Yeah. Jean. Chatzky on the podcast, who, by the way, is one of my favorites in terms of financial information, investing, planning. And we're going to get really into her new book, which became a New York Times bestseller yesterday. But first, the shot. Cheers. Speaker 1 (2:35) Cheers. Thank you for being here. Thank you for having me. Yes, it's Speaker 2 (2:38) my pleasure. I'm going to take only... Do you like it? Speaker 1 (2:44) It's okay. Yeah. Speaker 2 (2:45) Okay. Listen, you can be honest. I don't care. I mean, like, I really like them because they really do work and they keep me focused and the ingredients are good. But you don't have to. It's not like. a filet mignon. It's just supposed to be something that kind of like- Gets you going a little bit. Yes, exactly. Excellent. I Speaker 1 (3:02) am so happy to have you here. You have no idea. Speaker 2 (3:05) Thank Speaker 1 (3:05) you. I'm very excited to be here. Speaker 2 (3:07) You are like, okay, so like, okay, first of all, you were at the Today Show, you said for how many years? 25. 25 years. You were there in-house. What was your title? Like your finance- Financial Speaker 1 (3:16) Editor was my official title. Speaker 2 (3:19) So I always thought you were- Like I asked you offline, like the difference between you and Susie Orman, because she's an actual financial. She's Speaker 1 (3:26) a financial planner. She's a certified financial planner, which I am not. I'm a journalist. I came up learning about this by interviewing really, really smart people. Right. Speaker 2 (3:37) So you kind of got, you kind of gleaned the best information from the best people in the business. And you were really good at breaking down some like seemingly complicated financial things. to like the everyday person to help them basically. And Speaker 1 (3:51) I was doing it for myself along the way. I really learned on the job how to manage my own money. I wasn't particularly good at it when I started. I've gotten much better over the years. But this is a topic that people make so much more complicated than it actually has to be. Really? It should be. presented in a much simpler way because getting it right, I love the title of your podcast so much because it's all about habits. Getting it right is all about good habits often repeated, but it's not rocket science. And if anybody is trying to make you feel like it's rocket science, they are probably trying to sell you something. Speaker 2 (4:39) That's a really... I like that you said that because right now I'm actually going through this whole thing about financial, do I need a financial planner? Because it's so daunting and overwhelming for me. I'm sure for a lot of people who are seemingly smart people, who are successful, like if they don't know this stuff, it could be daunting. And you're saying that, what's your take? Do you think everybody should have a financial planner or you can do it, it's better to do it yourself? It's a matter of Speaker 1 (5:09) time. Speaker 2 (5:10) So Speaker 1 (5:11) I have a financial planner. I've had one for a really long time. I like having a second set of eyes Speaker 2 (5:18) on Speaker 1 (5:19) the full financial picture. I also, I'm really busy. I don't have time to pay attention to it and do it myself. But there comes a point in your life where you're making more complicated financial decisions. You're trying to achieve multiple goals on multiple tracks. And you get really busy. That's the point at which you probably need an advisor. Before that, you probably need some advice, which is different. And you can get that advice from an advisor by just paying for an hour of their time. You don't have to put somebody on a payroll. I love it because people don't realize it could get expensive because they take a percentage. Most these days work that way. They take a percentage of assets under management and it should be around 1 % or a little bit less. It gets the more money you have, the smaller percentage they take. Speaker 2 (6:14) Right. Of course. And the more that obviously that's how it works. If someone does want to go that route of getting a financial planner, what should they be looking for? Speaker 1 (6:24) They should be looking for a CFP, somebody who is a certified financial planner. That makes them a fiduciary, which means they have to put your interests ahead of their own. They should look for somebody with at least five years experience in my book. They should know where the person came from. So financial advisors either come out of the world of investments, accounting, or insurance. And knowing sort of the background of that person is a nice way to line it up with your needs. And then I think you have a conversation with three or four that you find through a short list of people that your friends are happy with. And you see if you can actually talk to that person. You need to be able to be as open and honest with them as you are with a doctor. If you're going to... hide information from them. And a lot of people hide information from their financial advisors. Yeah, because they're embarrassed about debt or they're embarrassed about stupid investments that they made somewhere down the line. People don't tell them everything, which frustrates the financial advisor. If you're not able to talk to them. There's nothing wrong with them necessarily, but they're not right for you. Speaker 2 (7:42) Okay, so you started this podcast saying that it's not rocket science. It's not as complicated. What are some of the basic financial mistakes that people make because they are overcomplicating it? And what are some of the things that we can do that's super low lift and easy for everybody? Speaker 1 (8:02) So the nice thing about the financial world is that there's a lot of stuff that is. automated. Years ago, I came up with sort of five things that you have to do over and over again if you want to be successful. They're all pretty low lift. You have to make a decent living. You have to spend less than you make, which is where people get in trouble, right? That's where they're swiping their credit cards too much. They're not paying attention to where their money is going. It's leaking in a whole... bunch of different ways and they're not getting ahead. They're not getting to the third step, which is you've got to save and invest what you're not spending so that it is working for you just like you're working for yourself. You need to protect your financial world with insurance, with an estate plan. It doesn't have to be a complicated one, but everybody should have a will, especially if you have kids. And I like to think that everybody needs some way to give back because More money doesn't necessarily bring more happiness, but giving back in a way that is meaningful to you usually does. The nice thing about the system we have today is that most of those good decisions can be automated. You can automate paying your bills. You can automate putting money into a 401k or an IRA or an emergency savings account. And if you automate enough of those good decisions, they'll prevent you from making mistakes. And what is the number one mistake that you see people making? The most painful mistake, and it's a mistake that a lot of people are getting into more these days, is debt. Debt is a savings killer. High interest. I'm not talking about a mortgage. Speaker 2 (9:46) I'm not talking Speaker 1 (9:48) about a car loan for the car that gets you back and forth to work. Even a student loan. I'm really talking about high interest rate credit card debt for things that you don't really need. Like, give me an example. I mean, people's needs are all over the map. I don't love to get judgy about the things that people need or even the things that people want because it's your money. I just want you to make conscious decisions about how you're using it. But subscriptions are... They add up really, really fast. Speaker 2 (10:22) They're a killer. Speaker 1 (10:23) They're a killer. You know, online one-click shopping is really a problem for a lot of people. The kind of shopping that gets triggered when you go down an Instagram rabbit hole and you have to have that and that and that and that. And you didn't really plan on buying those things. But Speaker 2 (10:40) that's basically where we are right now in the world. That's how people are buying. Like, look at Amazon, right? Everything is a one-click thing. Right. And, you know, you go to TikTok and now you end up buying a bunch of stuff you don't need. So because the culture has shifted and changed from, let's say, 25 years ago or 10 years ago, what's the fix Speaker 1 (11:02) for that? You put up some roadblocks to stop yourself from shopping so quickly. The fix is really a little bit more time between you and the purchase, right? We used to talk about a 24-hour purchasing pause. Like you would see something that you like, you got to wait 24 hours before you buy it, which seems like a very, very long time for people these days. But taking your credit card number out of the search engines so that you can't just one click. Sometimes that's enough. Speaker 1 (11:38) space to just make you think about it again, which is what you're trying to do. Setting up email alerts when the balance on your credit card gets higher than you want it to be. Some people find it's helpful to just not allow themselves to shop in the middle of the night when they wake up and they look at the phone. Speaker 1 (12:00) they put the phone in the other room, which is, you know, a good habit, I'm told. I don't do it, but a good habit, I'm told, for sleep as well. So I think you've got to put some guardrails up that you can adhere Speaker 2 (12:15) to. It's hard, especially because everything now also, the other one, and you just mentioned it, is everything is on subscription now. So you don't even know what you're paying for half the time. I go through and I look at Speaker 1 (12:27) my subscriptions like every six months or so and get rid of the ones that I'm just not using or that I bought on some stupid whim. Speaker 2 (12:37) Yeah. I mean, we should all put that. That should be a guardrail that we all have. Speaker 1 (12:41) Emails too. If you can get off the email lists, which I went through my phone the other day and asked me if I wanted to look at all those email subscriptions because I unsubscribed from one thing and I got a little. notification, hey, do you want to look at the other things that you're subscribed to, which it had never done for me before, but I went down the list, got really like 50. That's a Speaker 2 (13:04) lot. Speaker 1 (13:05) Yes. Yeah. I mean, because sometimes I want the 15 % off and so I sign up. Speaker 2 (13:10) I do. I mean, that's, I probably have more than 50. I shouldn't say that's a lot. I mean, it's a lot, but I mean, it happens with me too, because if, you know, the one You know, if you're a first time buyer, you get the 15%. And I have most of my email. I can't even get through my email with actually legitimate emails because my spam doesn't like doesn't catch them. Everything Speaker 1 (13:35) is that. Everything is that. then it rolls over into your texts. I've just started. As soon as I get the first text from them, I get the 15%, but then as soon as I get the first text, I just stop it so Speaker 2 (13:48) that Speaker 1 (13:48) I don't get the texts anymore because they're Speaker 2 (13:50) really Speaker 1 (13:51) annoying. Speaker 2 (13:51) How do they even get your information like this so quickly? Speaker 1 (13:54) You give it to them. But like my phone number? Yeah, when you sign up for something, they... I guess so, but then I, like, don't they, I Speaker 2 (14:02) guess in very fine print, they're like, can we text you? Yeah. And you don't even see these things. And then you get stuck with these things. So can we just talk about credit cards? We can. Because right now, I mean, like the Platinum American Express, it's $900. It's expensive. Do you think something like that is worth it? If you use the benefits. So I Speaker 1 (14:22) canceled the Platinum American Express. You did. I Speaker 2 (14:24) had it Speaker 1 (14:24) for many years. And I canceled it because the lounge system and the other benefits with that card was not. working for me as much as the lounge system with the Chase Sapphire card. So I'm using the Chase Sapphire card and I use Citibank's American airline cards. Why? Because I live in Philadelphia. And if you want to fly anywhere, you have to fly American. So that's where I try to group my benefits. Chase built a fantastic lounge in the Philadelphia airport, much better than the other lounges. And so if I have to like hang in an airport, I'll use the Chase benefits. And Chase is also, I think you want a card that is going to give you some flexibility for other airlines, other hotels, other perks. Amex totally does that because it has a lot of transfer partners. Chase does it. Capital One does it. If you're going to upscale one card, you want to make sure that you can use the points in a variety of ways. Speaker 2 (15:41) That was my question. I know you can go online and you hear all these different reels and things about the MX versus the Sapphire card. But it looked to me, because I'm going through this right now, that... The Platinum American Express has much better perks. But if I shop at, if I shop, if I'm, if my bank is Chase, I don't live in Philadelphia. So if you don't live in Philadelphia and you don't have that lounge, what is a benefit, pro and con for these? So Speaker 1 (16:13) you should be basically going down the list of benefits and seeing which ones you'll use. Like Chase rolled out a whole bunch of new benefits yesterday. I think the only one that I have a shot of using is that they took their DoorDash credit from $5 a month to $15 a month. So if you use DoorDash, Speaker 2 (16:32) add Speaker 1 (16:33) that up, that's $225. a year. That goes a decent, goes a long way to paying for the card. But you got to look at all the things on the list and ask yourself, am I actually going to use these things? And then you just make a decision about what is going to pay off most for you. But most people really don't need both of those things. No. So do you think Speaker 2 (16:59) the American Express? the platinum is overrated? Because I feel like everyone just goes and gets it. I actually Speaker 1 (17:05) don't think it's overrated. I just, for me, based on where I was living, I had it for many years. And then I decided, you know, to cancel it. I still keep Amex Gold. It's a lot cheaper. And some of the time I want to have an Amex. Like there's some places where it just seems that having an Amex is valuable. Speaker 2 (17:29) All right. So overall, you're saying it really ends up, at the end of the day, it depends on who you are, what your lifestyle is, where you live, and then base it around those particular perks. And Speaker 1 (17:41) most people should be paying for none of these cards. Well, they're $900 a Speaker 2 (17:45) month.