When people ask us about the target demographic of Bitches Get Riches, we tell them “It’s for the children.” You can tell because of the G-rated content!
True, our readers-slash-listeners trend young and untested in the ways of the financial world. We wouldn’t have it any other way, of course, which is why so much of what we write concerns the problems of early-career personal finance.
But what about those who have “made it”—gotten through the lean years and succeeded financially? What do we have to say to the children once they grow up and leave the nest?
In today’s podcast episode, we’re talking about Advanced Financial Steps: the shit you want to get to, but can’t until you get through the boring slog of paying off debt and establishing a financial safety net for yourself.
To this end, we focus a lot on investing: investing in yourself, in your goals, in your community. We don’t simply mean stock market investing, or even financial investing. Treat those investments like the horcruxes they are and spread ’em around—diversify! (Just fulfilling our contractual obligation to include one Harry Potter reference per episode. Read the fine print.)
But how does one determine those post-making-it goals? How do you choose where to stash your
horcruxes investments once you’ve joined the ranks of the rich? What’s the most effective way to spread the wealth and lift up those around you?
I wish I could say “all will be revealed in this week’s episode” but really, that’s a lofty fucking goal for a twenty-minute podcast by two day-drunk dumbasses with a microphone. So, uh… adjust your expectations accordingly!
This week’s question
Today’s letter comes to us from Piggy’s dear friend Anneliese. Anneliese asks:
What do you do when you finally have money for the first time?
I don’t have consumer debt, I’ve paid off my student loans, I have an emergency fund, I’m maxing out my 401K… so now what? So many blogs on money stop at this point. But for real, what do “rich” people do with their money once the basics are covered?
Is it worth it to have a financial advisor? What percentage of your money should be kept in savings versus investments? What kind of investments are smart? How much should you be giving to nonprofits anyway? What else can you do with money other than save for retirement and invest in the stock market? Should I be thinking about rental properties, partially investing in a business, starting a business, or whatever? How does money make more money? What do you do when you’ve “made it”?– Anneliese, righteous warrior leading the charge for justice
That’s the tea! But if you want more…
- Ask the Bitches: How Can I Make Myself Financially Secure Before Age 30?
- The Real Story of How I Paid Off My Mortgage Early in 4 Years
- How to Make Any Financial Decision, No Matter How Tough, with Maximum Swag
- The Financial Order of Operations: 10 Great Money Choices for Every Stage of Life
Last but not least… we want to thank our Patreon donors. They are, collectively, your favorite color Skittles, which you save to eat last so you can savor them the longest. Taste this fucking rainbow of brilliance and generosity, you guys! Without them, our little podcast would disappear from the face of the Earth. So if you want to join the ranks of our Patreon donors, click the link below pretty plz.
Episode transcript (click to reveal)
This episode, like all of our episodes, is brought to you by our Patreon donors. This time, thanks go to Christy, Jenny, Carl, Memprime, Rachel, Mel, Ariella, Bev, Katie, Roberta, Trish, Ashley, and Harlan. And an extra-special thanks go to Allie, Cheyenne, Jessica, and Matthew. Allie is a succulent pincushion. And Cheyenne is an intricate villanelle. And Jessica is a pirate queen. And Matthew is a whole brass band. And this podcast would not exist without your support. So thank you, to our beloved Patreon donors.
Oh my god, you and your fucking sticker phobia—
Don’t say that.
Oh, what? Sticker?
Don’t say that word. It’s a disgusting word.
Alright, alright, alright! I’m going to explain to you why they are disgusting and revolting and vile. I grew up with animals. So like if you just had one loose in our house at any point, there would immediately be a bunch of hair or dust stuck to it. I think they’re disgusting and the worst thing you’ve ever asked me to do as part of this enterprise that you and I are on called Bitches Get Riches is to add this most hated item as merchandise into our store. And your justification was great—
You were like well, you know, we have buttons, buttons are fine. Buttons are made of pleasing metal which does not adhere to anything unless you are a magnet. And you were like, you know, I want one other thing in the store that’s less than $5 that anyone could just go and buy this. And I was like [sighs] alright, I’m just going to power through this but then I don’t ever want to see one.
—are available at the Bitches Get Riches—
You’re just throwing around these disgusting terms, these horrifying visuals. And here I am knowing about your not-short list of things that you loathe, and am I throwing any of them in your face? No.
You’re not going to see it coming.
Shiiiit. That was a massive strategic error. Okay. Well, listeners be aware that there is a bitch storm a-brewing. There will be retribution for making fun of Kitty’s sticker phobia.
Oh, there will be a reckoning.
There will be a reckoning.
A reckoning, she said!
THERE WILL BE A FIRE FIGHT!
Theme Song 2:38
If you need some dough
You don’t know where to go
In this patriarchal capitalist hellscape
Well here’s the ‘sitch
We’re gonna help you, sis
Because bitches get riches
Bitches get riches
Bitches get riches
Bitches get riches
And so can you
Alright. I’m Piggy.
We’re the bitches in Bitches Get Riches.
We are the social justice warriors Tucker Carlson warned you about.
And we’re here to destroy everything real America holds dear.
Our time on this planet is limited.
So, let’s get started.
Alright, today’s letter comes to us from Piggy’s dear friend Anneliese. Anneliese asks: what do you do when you finally have money for the first time? I don’t have consumer debt, I’ve paid off my student loans, I have an emergency fund, I’m maxing out my 401k…so now what? So many blogs on money stop at this point. But for real, what do “rich” people do with their money once the basics are all covered? How does money make more money? What do you do when you’ve “made it?” Quote unquote.
This is an awesome question and not just because Anneliese asked it while we were hiking and I had miles and miles of wilderness to ponder it. But I think there’s really 2 parts to it. Alright. Well, you’ve reached net worth zero. Where should you be putting your money from now on? And then the second part of it is the much more cerebral question of what do you want your money to do for you? You know, what are your goals? What are your values, your priorities? When you look ahead, 10, 20, 30 years, what do you see your money enabling you to have in your life? So I really think it’s the concrete, like literally what do with money? And secondarily, what money do for you?
Yeah, I like that and you said it so “eloguantly.”
Eloguant. It was eloguant, wasn’t it?
It was really eloguant. I think it’s really critical that like what you want to do with your money in the long term, our recommendations would change based on what was important to you. So you may have to be a bit more aggressive if what you want to do with your money is maybe to retire early because that requires you to make a lot of money up front as quickly as possible. And it’s not quite so focused on stability. Whereas if you’re like, actually I love my day-to-day job and I want to keep doing it, I just want to do the most good for myself and those around me with my money, then that would be a different answer. So if you want to kick us off getting into that.
I know a lot of personal finance advice-givers don’t really focus on the mindset stuff because they take it for granted that people know what they want out of life, but for a lot of us, it’s kind of hard to be focused on that. It’s hard to sort of make up your mind and think ahead to the future. I know there was a time in my life where I was just like, I literally don’t know what the next year of my life is going to look like. I don’t know the value of money nor what it can do for me. So deciding what to do with my money is really hard because like, I literally—like do I buy a boat? is a boat something that I should buy? I don’t know. Spoiler alert: bought a fucking boat. I have never let my husband live that down. Anyway, let’s talk about setting goals. So I think people like Anneliese who have reached this wonderful moment where they’re like, don’t have student loans, I’m maxing out my 401k, I’m doing everything that I should, they’re in a really wonderful and enviable position where they have the means and ability to design the future they want for themselves. So I would just encourage everyone to, as an exercise, do the 5, 10, 20, 30 year thought exercise where you sit down, you’re like alright, what do I want every aspect of my life to be like 5 years from now? 10 years from now, 20 years from now? Do you want to own a house? Do you want to own 2 houses, with one of them being a small cottage in the country? Do you want to have a houseboat à la Joe Manchin? Thinking, do I want to continue working a 9-to-5 job? Do I want to run a small business where large profits are not necessarily the goal, but it covers my daily expenses with a little left over for retirement? Thinking about those kind of lifestyle decisions at the point where you have just reached financial independence, or even just solvency, can really help direct you for the next steps of what to do with your money.
Yeah. I think it’s important to think about like, what are your dreams? And what do they actually literally cost? So I think a lot of people have very vague ideas about what they would do if money were no object, where it’s like, well I’d take a year off and hike the French Alps or something. Like they have goals that are related to travel or family or being creative. And I think we’ve talked about this a little bit in the past, but it bears repeating. It’s really important to actually sit down at some point and figure out, so what does that cost, right? If you want to spend 6 months backpacking through Europe, go ahead and just do all of that math and maybe for the sake of planning for the future, then just stick an extra 10 to 20% on it to assume that prices have risen by the time I’m actually able to get around to doing this stuff. But it’s very empowering to actually know hey, if I want to take 6 months off to write a novel, I would probably need about $15,000 saved up to cover my expenses in that time or if I wanted to buy a cottage in the country, that would probably be a $250,000 investment. Like it’s very empowering to actually know roughly what the cost of those things are so that you can break them down further into more achievable goals. So I think that’s definitely part of it.
I want to focus on a word you used there which just gets me all hot and bothered. And that word is empowered.
Say it with us, listeners—
I AM EMPOWERED. Yes, that was a He-Man reference. If you were not alive in like 1985 or whatever, you just got got. You just got played.
By the power of Grayskull. you got got.
Fucking nerds. Alright so speaking of empowerment, a musician friend of mine got downsized, which is a very business-speak way of saying he got his ass fired or laid off, along with a bunch of other people at his company, and that was the moment that he decided that he was going to be a professional musician. And ever since then, for the last three years, he’s worked on his music career and he’s a fucking huge success. He gets paid to play gigs. He has enough money that he can pay for their comfortable house and hold up his half of their spousal expenses and whatever. So for him, getting laid off was a great moment for him to be like, what is my life going to be like if I’m empowered to make that decision entirely free from monetary constraints, entirely free from the pressure of needing to make dollars so that we don’t lose our home? And for him that was, I’m going to fulfill my dream to be a working musician. His idea was, I have enough money and I have enough sort of squirreled away in investments. My goal is to be a working musician. That’s what makes me happy, that is my dream. I’m going to do that because I am financially empowered to do so.
Yeah, I think that’s a beautiful story. Like that’s an example of someone knowing what they want in the long-term and kind of making adjustments and being willing to sacrifice some things in their current lifestyle to make it happen. For some people, as with Piggy’s musician friend, wealth and riches is not what they want. Instead what they want is something that will subsidize their other dreams. Whereas for other people, they want to be billionaires. Which. Good luck. Good for you.
Get the fuck out of here, Bezos.
Answering the more practical question of so what do rich people do with their money? Boy, this is easy to answer. They invest it. You need to invest your money. The reason that you need to invest your money is that our economy is engineered so that cash will lose its value slowly over time.
Yes, if you put $100 into a bank account and you don’t touch it for a year, when you take it all out, it’ll still be $100, but it will be worth about $97. Our economy is designed to work that way, because we do not want to incentivize the very wealthy to put their money in a bank account and do nothing with it. Because now that money isn’t re-entering the economy, it’s not being invested anywhere. If you think about someone who has a wardrobe of 40 total pieces of clothing, they’re using every one of those throughout the 4 seasons of the year. Definitely, like no doubt. If someone had a wardrobe with 4,000 pieces of clothing—
God, if only.
That’s a lot of clothing that is never being worn, ever. So our economy is engineered so that cash will lose value slowly over time for exactly that reason. We don’t want to get into a situation where millionaires and billionaires are just sitting on gigantic hoards of gold because being financially conservative and keeping it in a savings or a checking account makes them a lot of money. Right now that’s a great way to lose money. So they’re investing it. There’s a bunch of different ways you can do it. You can invest in housing, by buying a house that you do not live in and renting it out. That’s one thing that you can do. Another way of investing is to invest the money in the stock market. That’s pretty common for a lot of people. Anneliese mentions that she’s already in the stock market because she’s got a 401K. There are other ways to do it, too. You can invest directly in a business. There are a bunch of new opportunities that are just kind of starting to get off their feet. Now, in the same way that we do social lending to people who are maybe having a tough time, they’re kind of realizing oh, we can use the exact same technology to connect people to small businesses so that you can invest directly in small businesses, even if you’ve never met that person or you don’t live in the same town or even state as that business. So there’s a lot of different ways that you can invest excess money. The worst thing you can do is to Liz Lemon it, and to have $12,000 sitting in your checking account. That money is losing value.
That literally gives me full body hives, to just hear that statement, “$12,000 sitting in checking.” Like that’s—
Right, but we’ve done it, right?
Yeah, we have, totally.
I’ve totally done it. It’s okay.
Yeah, it’s fine. When you grow up, when you have that debt gone, when you know better, don’t just let your money sit there wasting away. Again, depreciation is fucking real. I want to talk a little bit about my experience investing in a small business, just because that’s an example of a marriage of these two concepts. You know, it’s a way for me to grow my wealth through investing. So I’m beating at the very least depreciation expense but also gaining wealth in the long term, and it’s also something that’s important to me. It’s a goal of mine. So I invested in a local lesbian-owned brewery, which we’ve talked about on the podcast before because I’m basically obsessed with it and it’s the center of my social universe. Anytime I do a drunk AMA on our Tumblr, it’s from that brewery. And I invested in it during Covid because it was important to me that this queer-owned, woman-owned community center of a business thrive when we were so short on those places. So I found myself in a financial position where I could help make sure my neighborhood and my local community and my community of feminists and queer people would have this space and have this supportive business that was welcoming to them. So, I invested money. And yes, I will be getting a return on that investment. Yes, this will increase my my wealth over the long term, but more importantly, it was a way for me to support my long-term goals, which is as somebody who wants to make the world a better place for feminists, for queer people, and for marginalized communities of all kinds. That sounded like a real humble brag, but basically what I’m saying is, you know, even if you are investing in order to reach a goal to make the world a better place, consider that investing can itself be a way of reaching that goal. It doesn’t just have to be the money that comes out of it.
Yeah, I think in general, the 3 things I think make the most sense to think about for future investment is personal interest, diversification, and cost.
Obviously, it’s better to invest in enterprises that you have a personal interest in. It’s also always better to be diversified. So Piggy would be very wise, maybe, to go out and invest in her local neighborhood brewery, but she’d be really foolish to invest in 10 different neighborhood breweries. Because if something goes wrong in her local economy, or if something goes wrong in the brewing community, that is potentially like she’s one disaster away from losing everything.
Yes, we have described in the past diversification as horcruxes, which if you’re familiar with the Harry Potter universe—
Yeah, like so you want to split Voldemort’s soul up into multiple containers.
Yeah, make one of them a snake, make one of them the main character, like who cares? And low-cost. Low-cost. It’s got to be affordable. The easiest way to make a decision is to look at how much money are they going to cost me in the long run? If I invest $1,000 with them and it grows to $10,000, how much money are they taking away from that? Are they taking away $100? Or are they taking away $800? That’s mainly what you want to follow. And if you’re not sure about what specific stocks, funds, indexes to invest in, if you just follow that, your interest, diversification, low-cost, you’re going to find something that works for you. There are a lot of mutual funds that are for socially-responsible, socially-conscious collections of funds that have to meet specific criteria around like, hey you gotta have some ladies on your board of directors, it can’t be a big sausage fest. You can’t be like, dumping pollution directly into our oceans right as I’m standing here before my very eyes. There are lots of things that you can do your research on and find investments that feel right to you. But I think in general what we’re saying is the worst thing you can do when you do finally get money is to put off making an investment decision for so long that you’re losing out on the number one benefit of investing, which is—
—the time that you have those funds invested is the number one predictor of how much you’ll be able to gain. It’s not like choosing a rockstar or like, picking the hottest cryptocurrency and then getting out having quintupled your money in 6 months. No, that’s not how you reliably make money on the markets. It’s having the investment for a long time. If you happen to buy IBM stock in 1960, even if you only had one stock, If you were still holding on to it in the year 2000, you would be making a very pretty penny off of that stock.
A very pretty penny.
So it’s better to make an okay investment. Like a ho-hum, this is going to perform mediocre investment. If you’re holding on to it for a long time, that is better than just sort of waiting for the absolutely perfect opportunity to strike you. That kind of thing very rarely happens.
Absolutely. If you take nothing else away from this when it comes to growing that wealth over time so that you can meet your goals and create a life that you want, it’s interest, as in your passions, what you like to do, diversification, as in not putting your eggs all in one basket, not you know, making all your horcruxes the same snake, and low-cost, which is fairly self-explanatory I hope.
Yeah, and for our listeners who are not yet at this very nice place in their lives, I hope that this is inspirational to you. And I also hope that—one of the things that I think it’s important to capture is that paying off debt, you know, getting financially secure, it tends to look a little bit same-y, right? But there’s also a lot of rewards built into it like the feeling when you have a credit card just get back to 0 and you don’t have to pay that monthly payment any more, such a freaking nice feeling.
Mm, love it.
It’s kind of its own reward. And when you reach the point where your net worth is 0, you are not going to get those rewards basically until you hit a point where maybe you could retire. Like, you have to choose what your own rewards are and find a way to make sure that you’re giving them to yourself at the intervals that you need to stay happy, stay motivated. So it is a harder question. So get ready cause it’s going to hit you when you finally get there, and hopefully with Anneliese’s question, our listeners will be more ready for it.
Anneliese, I hope we have answered your question, and really this is all about designing the life that you want to live, which you get to do now you’ve quote-unquote “made it.” Are you good with that?
I am good with that.
Listeners, if you want us to answer your question, go to BitchesGetRiches.com and click “Ask the Bitches.” This podcast is listener-supported. We are committed to never ever putting our best content behind a paywall. So if you like what we do and you want us to keep doing it, you can support the podcast by joining our Patreon at patreon.com/bitchesgetriches. And if you need even more Bitches in your life, you can read our articles or follow us on social media at BitchesGetRiches.com.
Hey, is there anything else they should know?
God yes. I recently had an argument with my sister-in-law about lotion because she loves how she feels when she’s all freshly lotioned up. And I, like if I lotion up after a shower, I need at least 3 hours to air dry before putting clothes on or getting into bed under the sheets. Otherwise, I just feel like a sticky, clammy mess.
I’m totally on your side. Lotioning is like, if I do it right before bed, I sleep on a towel that night because I don’t like the feeling.
I’m so glad we’re in agreement on this.
I don’t like the way that it sort of like sticks to your skin. And now you’re like, hi, it’s me. I’m moist.
Kitty & Piggy 22:33