Today I have this week’s installment of our segment: Interviews with money experts. I talked with Robert Farrington from The College Investor.
Without further ado, here’s the interview.
What got you interested in finance at such a young age?
I’ve always loved money! Some of my earliest memories of making money were in middle school. I remember going to Costco with my mom, buying the king size Snickers Bars, and then reselling them at lunch to my friends. I would double my money and repeat each week!
I also distinctly remember watching my dad update Quicken growing up. He had this big, old computer, and I’d sit on the floor around his desk while he entered his checkbook transactions manually. I enjoyed spending that time with him managing his money, and it must have rubbed off on me.
How has your financial knowledge and money management changed over the years?
My financial knowledge has significantly grown over the years, but my money management habits have always been strong. One of the biggest changes I’ve had is in investing philosophies.
When I started The College Investor, I was really all about sharing my random insights about the stock market, stocks, etc. Over time, I’ve realized that I don’t really agree with that approach, and instead believe most people (including myself), should focus on building the right allocation of low-cost index funds and ETFs.
I think the trick is finding the right allocation for your risk tolerance. I still don’t think there’s anything wrong with buying individual stocks, but it’s definitely speculation versus investing and should be done with a small portion of your money.
For someone just starting out with investing. How do they go about finding what their risk tolerance, time horizon, and appropriate asset allocation is?
That’s the most difficult question in the investing “book” to answer. You have to know yourself, know your goals, and then do some homework on what to invest in.
Here are a couple guides that can help:
You recently came out with a Student Debt Movement. Could you tell me what that’s all about?
I’ve had this idea for years to see how I could translate my content around student loans into action. The goal of The Student Loan Debt Movement is to not only educate, but to inspire action, and show others the results. That’s why we have the combination of educational tools, giveaways, and the leaderboard.
I hope to appeal to people’s desires to win, desire for competition, desire to see what others are doing with the money, and hopefully their own desire to get debt free.
Are there any tips you can give to students or graduates with student loan debt to help reduce that financial burden?
The biggest tip I have for getting out of student loan debt is get organized. You don’t know where to start if you don’t get financially organized. Know your income, expenses, loan balances, interest rates, etc. Then you can make some rational decisions on the best course of action.
After that, I’m a big believer in side-hustling to achieve your financial goals. Budgeting is a starting point – but you can only cut and reduce so much. Earning extra income is what will eventually help you achieve your financial goals – whether that’s paying off student loan debt, buying a house, saving for retirement, etc.
What are some lessons you were taught growing up that you appreciate now?
My parents were very strict about allowances and not buying things we couldn’t afford with our own money. If I wanted something, did I have enough saved myself to get it? My parents weren’t about to give me any extra.
Of course, as a kid, you hated that. But today, it really makes me value what I purchase. My wife and I are also pretty minimal. I wouldn’t go so far as to say minimalists, but we definitely don’t need or want extra stuff. In fact, I love selling stuff we don’t use!
What are some lessons you hope to teach your kids?
I hope to ensure that my children are extremely comfortable with money. I want them to know how it works, how it’s used, why you should save, and, all around, not be afraid of it.
I’ve seen too many people where money becomes an issue because it’s not discussed, not had much of it, and then it turns into a real problem when they get some. I don’t want that for my children, and so I want to have regular conversations about money all the time! Money is a part of life!
If someone is from a family where money was a taboo subject and they dug themselves a hole right away, do you have some tips as to how they can start improving their finances?
I’m a no-BS kind of guy. Just because your parents treated money as taboo doesn’t mean you need to. You can make a choice to be open, honest, and accountable for your money. Nobody in this world cares more about your money and financial health than you. No advisors, No parents, Nobody. So, don’t make excuses, take action. And it’s not hard:
- Get organized: starting using Mint to track your spending and expenses
- Make a plan: It’s just simple math. Spend less than you bring in. If you can’t at this moment, you can either cut expenses or boost income.
- Start side hustling: Go drive for Uber or Lyft. Sell some stuff on eBay.
- Be honest with your family: I’m working/hustling to achieve a better life. Sorry, I’m not going to go to the movies with you tonight. You don’t need to be mean about it, but you must take care of yourself first.
What is the main issue you see how people handle money and investing? How do they go about changing that?
The biggest issue I see a lack of organization. It’s the first question I ask anyone that’s having difficulty. How do you organize your money? Mint? Personal Capital? Excel? Budget Planner? There’s no one-size-fits-all approach, but the one thing that is certain – you have to be organized with your money. You need to know what comes in, what goes out, what you own, and what you owe. If you’re not doing that, you’re probably struggling with your money, and you need to start here.
What’s an app, a book, and a podcast/blog (either one or both, if you’d like) that you would recommend to someone who wants to improve their financial literacy?
Book To Improve Basic Financial Literacy: The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness
How do you track your financial progression? How often do you review?
I personally use Personal Capital. It free and does everything that I need it to do. I check it daily from a transaction perspective (and categorize things) and really analyze things about once a month.
Where can people go to learn more about you and The College Investor?
If you want to learn more, come to TheCollegeInvestor.com.
Also, if you want to get out of student loan debt, join our free 5 Day Student Loan Email Course.
That concludes my interview with Robert Farrington. I hope you gained some new insights into how to improve your Financial Health and grow your Wealth. Come back next week for my interview with Shawn from The Smart FI.
So readers, what was your favorite point made here? Anything you want me to follow up with Robert about?