Let's Talk Money

Always wondered about Roth IRAs?  Join Tiffany as she breaks down what they are and how to best utilize them.

This is a listener request episode.  If you want to have your question featured, please submit on our website.

Definition

Alternative Investments are any investment that is not cash, equities, and bonds

Why It's Important

The list of alternative investments is very broad and includes real estate-backed securities, mortgage-backed securities, limited partnership interests, hedge funds (explained here), private equity, collectibles, natural resources, cryptocurrency, precious metals, and even options and futures contracts. Whew!

Alternative investments can play an important role in the development of a diversified portfolio (explained here). Most financial assets are positively correlated (when one moves up the other moves up) but with alternative investments there is typically a low correlation, no correlation, or even a negative correlation (when one moves up the other moves down) making it a good way to hedge (protect yourself) in the event of a lost.

*Beware* They are typically higher in risk than other investments so tread lightly unless you know what you are doing!

This was a $5,000 unplanned expense that I almost panicked over!  Has this ever happened to you?  Did you have a big unplanned expense that came out of nowhere?  It could completely derail your progress on your financial goals.  Listen to how I made it work by using my company benefits and some clever financial hacks to get it to less than $2,000.  

Definition

A basis point is equal to one hundredth of one percent

Why It's Important

You have probably heard the talking heads on your favorite financial shows or news site mentioning basis points. They may have said something like "interest rates have gone down 25 basis points". 25 basis points is equal to 0.25% or a quarter of a percent. You may be thinking why use basis points? Well, usually the differences in interest rates are so small, it takes a smaller unit of measurement to describe the change.

Do you have a budget?  Lost on what a budget is or how to start one?  Look no further!  Tiffany talks about her favorite topic, budgets, and easy ways to put one together.  You will learn why she loves budgets so much and why you should come to the dark side!  Muahahaha

Get motivated on your financial journey as you follow money nerd and financial coach, Tiffany Grant, on her journey to be debt-free by 30!

She makes complex financial topics surprisingly simple. You will get practical tips and tricks with an inside look at the strategies she uses on a daily basis. Tiffany gives you straight talk on all things money.

Episode Transcript:

 Welcome to Money Talk With Tiff, a podcast where we discuss everything money, from tips and tricks to current events. Follow me on my journey to become debt-free, and meet other cool people along the way. I am your host, Tiffany Grant, now let's talk money.

So, I wanted this first episode to just briefly go over what Money Talk With Tiff is how it got started a little background history about myself, and then what you can expect from the Money Talk With Tiff podcast. So, Money Talk With Tiff began as a blog. I started it in December of 2017. And it was just a way for me to get financial literacy out to the...

In this episode, we discuss emotions and how they affect our money decisions.  Will you do things differently or the same?  How has your family affected your relationship with money?  These are some questions to explore as you listen to this episode.

Episode Transcription:

Welcome to Money Talk With Tiff, a podcast where we discuss everything money from tips and tricks to current events, follow me on my journey to become debt-free and meet other cool people along the way. I am your host, Tiffany Grant now let's talk money. 

I want to talk about something extremely personal. And that's relationships with money. Everybody's experiences with money and their role models with money are different from person to person. So a little bit about how I got interested in money. Growing up, I didn't really have solid financial role models. Everybody in my family is a spender. So, I had to learn how to be a saver, rather than following the same path as everyone else....

Definition

Cash flow is how money flows in and out of your account and/or business

Why It's Important

Cash flow is crucial to financial freedom. If you aren't sure how money is coming in and going out, it is virtually impossible to get your financial footing. You will always blow in the wind without making any headway on goals. A budget is an absolute necessity to help you figure out cash flow. Let me give you an example...

I was speaking with a client not to long ago and they did not have a budget. We sat down and put all of their numbers in black and white. Not only were they making more than they thought, they were also spending more than they thought! We found that they were spending a TON on insurance policies and the cash flow wasn't there to cover it. My recommendation: Get rid of some insurance policies to free up monthly cash flow.  Once they did that, they immediately had more money to pay off debt and/or save. It's that simple!

So,...

Definition

The federal funds rate is set by the Federal Reserve and guides the interest rates used by financial institutions. As of Today, it is 0.25%

Why It's Important

When you hear that the "Fed has decreased interest rates", this is the rate they are referring to. They are not talking about your savings account or your credit card (at least not directly). The Fed Funds Rate is the interest rate that the government charges financial institutions. Financial institutions then use that rate to establish loan rates, savings rates, and even student loan rates. So, this is a big deal! 

Pay attention to those announcements because they also affect the market. When the Fed rate goes down, stocks tend to go up. Why? Because loans become cheaper for businesses to get so they are able to invest more in their operation which in turn (should) increase profits. Savings also tend to go up. Why? Because financial institutions are able to raise their savings...

Definition

APR, also known as Annualized Percentage Rate, is the annual rate charged for borrowing or earned through investment.

Why It's Important

APR is typically used when you are borrowing money while APY (annual percentage yield) is used when talking about interest (getting money) from accounts. DO NOT GET THESE CONFUSED! 

APR does not take into consideration compounding (remember that? If not, click here) APR is only the simple interest rate. APY, on the other hand, is the compound interest rate. The APY rate will tend to be higher than the APR on the same loan for that reason.

So, be careful when shopping around for interest rates. You want to make sure that you are comparing APR -> APR and not APR -> APY because it could be misleading!