Let’s talk investing and WTF happened to the stock market in 2020
Interview Transcript
Megumi | Today we’re speaking with Stephanie Xenos from Money Muse about the Investing State of the Union! She’s a self-described recovering rocket scientist and money nerd, and a member of the Financial Independence, Retire Early community, aka the F.I.R.E. community. She started investing at age 18 and retired at 32 from a career at NASA and SpaceX. Badass. Stephanie then founded her company, Money Muse, with the sole purpose of helping other women reach financial independence by speaking at events and working with women one-on-one as a financial coach. Thank you so much for being here, Stephanie. |
Money Muse | You’re so welcome. I’m so happy to be here. |
Megumi | Before we get started, I want to first ask you what was the best and worst thing you spent money on in 2020. |
Money Muse | That’s a great question. I would say the best thing I spent money on in 2020 is charity and supporting all of the movements that, frankly, needed money last year. It was the first year that I also opened a DAF, which is a donor advice fund, which is basically an investment vehicle where you invest your money and then the money goes to charities later or now, but the money can grow and then go back to charity. So that was by far the best thing I spent my money on last year. The worst thing was probably in the beginning. So much take-out food as we transitioned to getting used to cooking at home basically for every meal. I don’t totally regret it because I was supporting local businesses, but yeah, that was probably a lot of money. [laughter] |
Megumi | So how did you get into money? What sparked your interest in the F.I.R.E. community? |
Money Muse | Yeah. So, I grew up an only child to a single mom. Definitely grew up poor, didn’t have a lot to our names, and somehow I was still quite happy. As a kid, I didn’t really know. You don’t really know that you don’t have things until you start comparing yourself later in life. But along the way, my mom remarried, and my stepfather ended up being not too great of a guy. And he was abusive to my mom and also to me. It was a situation where we couldn’t get out. My mom couldn’t leave him because of financial reasons. And so, I learned from a pretty early age just what the power of money was, and I was bitter. I was a really bitter teenager about it, and I made all of these pacts with myself that I would always be independent, that I would never rely on anyone. And I started learning about money kind of right then, so that sort of kicked off my financial education. |
Megumi | Yeah, that’s powerful. |
Money Muse | Yeah. I think it’s a different story than you always hear, and as much as I don’t love to share it — ugh, I’m getting sweaty up in here [laughter] — I think it’s really important because sometimes in the F.I.R.E. movement, you see all these tech nerds and they’re like, “Well, I have this super high-paying job, and I grew up knowing about money from my parents, and so I did all the right things because I had all the right resources.” And certainly there are people that are coming from situations that have it even harder than I did. So, it’s not like a pick-yourself-up-by-the-bootstraps thing, but I like to share the background anyway just to make it more relatable for some people. |
Megumi | Thank you for sharing. I’m really excited to have you here to talk to us about the Investing State of the Union because 2020 was – amongst many, many, many other things – the year that everybody from financial analysts, talking heads, friends, your aunt, uncle, your neighbor, everybody was coming out of the woodwork to share their opinions and talk about the stock market. And there was understandably so much worry and anxiety over investing in the stock market and everything else. And just for listeners, we are recording this in early 2021 where so much has happened already. But we will primarily be focused on the last year. So, Stephanie, this feels like such a loaded question. But what was notable about 2020 when it comes to investing? |
Money Muse | Oh my gosh. Yeah. Let’s first start by zooming out a little bit and just looking at the year as a whole. So, if you kind of zoom out and look at the S&P 500, the graph, it’s not going to look that interesting. And especially as time goes on, it’s just going to look like kind of a slope. We know that the market gained 15% from the beginning of the year to the end of the year. And then, of course, there is that big cliff right in the March-April timeframe, right? But at a high level, despite the extreme volatility of the year, the market was still up 15%, which I think is really notable. It’s not often that you have a market year like that. And so, yeah. Just had a high level of 15% sounds pretty good. And then, of course, it took us on a pretty wild ride. |
Megumi | Yeah guys, 2020 was a great year! I don’t know what you’re talking about. [laughter] |
Money Muse | Right! And that’s the other part, too, is that it seemed like the market did respond to what was happening a little bit in March-April, but then the rebound was kind of unprecedented. I don’t think anyone would have expected that quick of a rebound and that the market would have performed so well during such a crazy year. So, yeah. |
Megumi | I know that one thing you advocate for is holding ourselves accountable for the investing decisions we made or didn’t make in the past. So, taking a look back at 2020, let’s recap what was happening, what people were saying about the market, and what would have happened if we did invest despite all of the craziness and the noise. |
Money Muse | Yeah, I think it’s super important to hold ourselves accountable because our emotions can really get involved in investing. And that’s one of our main problems as humans when it comes to money choices, is that a lot of times we’re getting emotional signals and emotional messages from our brain about our money. So, the more we can kind of remember how we were feeling and maybe even take notes about why or why we didn’t invest and then look back on them, I think, is so, so powerful. For 2020, for a little recap: let’s start in early 2020. Because I remember in the winter, the first few months of 2020, what I was hearing from people all the time was that this is going to be the year that the market loses value like, “Oh my gosh, it’s so overvalued. How could you possibly be investing like normal? We’ve had this amazing run. There’s no way this can continue. Wow, don’t invest now.” And the funny thing is, of course, we had been hearing that for years. It was like, “This is the year that the market’s going to drop. This is the year.” And in reality, if you had invested — let’s say you had an automated investing schedule the first of the month. If you had invested on January 1, as of today, your money would be up 17%. February 1, it would be 14%. And March, it would be 28%. So, going into March with that dip, if you had just been like, “Whatever, I’m ignoring it and I’m buying when I always buy.” On March 1st, you would have made 28% on your money since then. So despite the fact that it was this frothy atmosphere of all-time high – which, by the way, we’re there again, right? Still, if you had continued to invest, you would have done quite well. So, that was kind of winter. I don’t remember like– do you remember anything about winter, that kind of- |
Megumi | No. |
Money Muse | -time frame? [laughter] You’re like, “I’ve blocked it out.” |
Megumi | That was like 5, 10 years ago now, I think. [laughter] |
Money Muse | Oh, God. Yeah. What is time? So that takes us to spring, right? And so, spring was the craziness. I remember because we had driven cross-country. We moved from Seattle to Austin in March and if we had delayed our trip a few days, we probably wouldn’t have made it out because COVID was just kind of coming on the radar for shutting things down in Seattle. We had higher numbers in Seattle then. And so, we were like, “yeah, it doesn’t seem like that big of a deal. We should probably just get out of here and make the move.” So by the time we got to Texas, it was like full-on lockdown, right? And by April, again, the market was way down and everybody was like, “oh my gosh. This thing is a huge deal. COVID is going to be wild. All the businesses are shutting down. The market is never going to recover from this. This isn’t the bottom. Whatever you do, don’t invest,” right? [laughter] That’s the crazy thing too is like when the market is dropping, a lot of times people have so much fear about losing the money they have and then it continuing to drop. So again, people were saying don’t invest. This is way too big of a deal to just blindly go into the market at this point. And yeah, even as it started to recover a little bit in May and June, coming up a little bit, people were saying the same thing like, “this wasn’t the bottom. It’s going to drop again. Nobody’s working. Look at the job losses.” And, of course, COVID was a really big deal but the market wasn’t necessarily responding to the big deal that COVID was in the way that we expected. So, if you had ignored what was going on, ignored what the financial analysts were saying, and invested again, April 1st, you would have made 37% on your money since then. May 1st, 30%, and June 1st, 19%. And if you happen to get super lucky, weren’t feeling emotionally involved, and decided to invest kind of near the bottom of that cliff, you would be up 65%. I’m not advocating for timing the market here, but just as a note that’s kind of the numbers for that spring. So that’s crazy, too. To me, that’s just wild. |
Megumi | Yeah. I mean, I remember around that time – spring, summer – after everything crashed and people were realizing, okay, this COVID thing is not going away. This isn’t just a two, three, four-week lockdown. We’re in this for the long haul. And then the stock market started rebounding eventually. And there was the Black Lives Matter movement and whatnot, and people were like, for sure, the stock market is going to crash, don’t invest, so on and so forth. And then after that, there started to be all this discussion about why is the stock market not reflecting the economy, and the stock market does not reflect the economy, and all this chat on Twitter and amongst Finance Twitter and everybody trying to explain, “okay, so the economy is not the stock market.” I mean, I remember I did an episode on that as well because everyone was just like, what is happening? The world is falling apart around us and yet stocks go up, so. |
Money Muse | Right, yeah. We have to remember that the stock market is an exchange, right? So, people are buying, people are selling. And to some extent, it’s not completely removed from the economy because, of course, our emotions are driven by what’s happening around us and maybe we’re buying or selling more based on our emotions. But they’re not exactly tied, meshed together. And you’re right. This was also a time of civil unrest. So, for me, in times like that, I’m really glad I actually have the automated investing because I would probably, one, not be in an emotional state to make great investing decisions. And two, if I was, I might change my normal habits and then be sorry later. So yeah, that’s another good point. That was another thing that was going on that, really, the whole country was kind of gripped and watching the movement and maybe even participating, so. [laughter] So a little distracted during that time, yeah. And then, of course, summer came. And I think in summer, we were talking a lot about the upcoming elections. And always when there’s an election – right, always – you have people being like, “If so-and-so wins, the market is going to crash. If the other person wins, the market is going to crash,” right? So, you always have the same financial analysts, all the bears coming out and being like, “Oh man, this is the end.” Like, “All the terrible things that will happen.” I do remember hearing a lot about that. And of course people said, “If Biden wins, the bad things that will happen is tax rates for corporations will go up and that will impact the economy. However, they’ll be more stimulus money, which will impact the economy in a positive way.” So, you can’t win with a presidential election. You’re always going to be in this fear-mongering state. So that’s kind of– I remember people talking a lot about that and asking me, my clients, like, “Is it a safe time to invest? Should I wait for the election?” I was like, “No. Don’t wait.” I’m always advocating for that regular investing. So, again, just to go over the numbers, July 1st, if you had invested, you’d be up 20%, August 1st, 14%, and September 1st, 14% also. And that’s the same as our yearly gain. So, it doesn’t sound quite as sexy compared to the bottom of 55%, but still very solid returns. |
Megumi | Yeah. Absolutely. |
Money Muse | Yeah. That was kind of the summer going into fall. And then, of course, the end of the year, like, “Wow.” [laughter] Wow. We had coronavirus coming back again. We had the election results, but of course, being contested and everyone feeling, I think, really insecure about what was going to happen with the country. We had the holidays and the news of like, “Don’t go see your families.” Like, “Stay in your homes.” So just so much, I think, kind of negativity and kind of fear about the future. And so, again, that would be another time that would be hard to invest if you were having to go in and make those investing decisions without automation. And it’s been a shorter time period since then. So October, November, December is like 9, 8, and 4 percent gains. But still, if we take a step back, there isn’t a single month that if you had invested on the 1st, you wouldn’t have made money as of today, right? So, for all the volatility and wildness, negativity, drama, anxiety [laughter] — |
Megumi | All the above! |
Money Muse | Absolutely everything, right? Taking all of that into account, it was still an absolutely amazing year to be an investor, especially if you were just doing that automated investing stuff and letting it ride. |
Megumi | Yeah. Oh, man. That was a solid year recap. But for once, a 2020 recap with positive – [laughter] |
Money Muse | Yeah– |
Megumi | Positive news. |
Money Muse | –good news. |
Megumi | Good news. |
Money Muse | Yeah. One bright spot in 2020. |
Megumi | I remember, too, at the end of the year, you were seeing — with the holidays, there was also people who were maybe trying to keep up with the news, business news, reading Finance Twitter. There was all this discussion, right, especially as COVID was coming back and holiday shopping, of, “E-commerce sales going through the roof. Will companies transition to remote work or hybrid work permanently or on some sort of regular basis? What does that mean for real estate as people move? And brick and mortar versus the–” there was all this discussion nonstop. You were seeing people speculating about different companies. And another 2020 big thing was Peloton, right? Everyone hated on Peloton after the holiday ad with the girl who looks terrified and so scared to be on her Peloton, and now everyone’s all in on working out at home on their Peloton. So, it was just so hard to, like you were saying, keep the emotions out of it but also trying to keep up with what everybody was saying. One person might say, “Oh, you got to invest in this thing,” and another person might say, “No, don’t do that. This is what’s going to happen, not this.” And it’s just constant overload, overwhelm. |
Money Muse | Totally. And I love to speculate. Don’t get me wrong, I would love to go through those line by line and be like, “All right, let’s talk about real estate. Let’s talk about this. [laughter] Let’s talk about where everything’s going.” I love it, but that doesn’t necessarily mean that you should change your investment strategy based on that, right? So, yeah, you can talk all day until you’re blue in the face about Peloton and what’s going to happen – and I just love that stuff – but for 95% of investors who are not choosing individual stocks and who are buying these broad-based index funds: just keep buying. And then if you love the drama, talking about where things are headed, and you love to speculate, fine, wonderful. [laughter] |
Megumi | So then, what are some of the lessons that we can learn from 2020? What can 2020 teach us – other than the fact that we all should have been investing on first of the month? |
Money Muse | I mean, I think the advice is always the same from me: figure out how much you can afford to invest and have it automatically invested either once or twice a month. Those of us who have the luxury of a 401(k), we already have that twice a month where it just goes in automatically. That’s so great. So, we want to get that dollar-cost average into the market. |
Megumi | Just set it and forget it. |
Money Muse | Exactly. Exactly. Actually, this is great because I just posted an article a couple of days ago. Fidelity released a study that was like, “The best investors at Fidelity are either, one, dead because they forgot about their portfolio that long or just, two, didn’t know they had an account, so they just had their money in there and they completely forgot. And those are the investors that have the best returns.” And while it seems obvious, it still blew my mind. But now we have this data where we’re like, “Look, it’s really good to set it and forget it. You think you’re lazy, but actually, you’re doing the perfect thing.” So, yeah, I think the lesson is that. Not to beat a dead horse on that one, but, yeah, get your automated investing set up and then just let it ride. And the other thing, too, is that I want to talk about taking advantage of a market dip without talking about timing the market. I like to define timing the market as trying to predict where the market is going in the future and then choosing your investment decisions based on that. And in opposition to that, is looking at where we’re at today and deciding, “Is it an extra good time to invest?” or, “Is the market on sale?” or, “Are we at an all-time high?” So, in addition to my regularly scheduled investments, I can look at a day in the market and be like, “Is today a good day to put in extra money if I have it?” And certainly, when the bottom was dropping out of the market in March, April last year, that was a time where I said, “Well, in addition to my automated investing, it looks like the market is on sale right now and it’s a good price. Can I afford to buy extra?” So that’s another thing that I would encourage people to do in addition to their automated investing, is if they do want to invest more to ask themselves, “Is now a particularly good time? Is the market high compared to the past or low compared to the past?” and never try to predict the future. Because if we tried to predict the future last year, [laughter] I don’t think we would have — |
Megumi | Look how that went for so many of us. |
Money Muse | Yeah, yeah. So yeah, I think it’s not the sexiest advice, but. |
Megumi | But it’s the smart advice. It’s what we need to hear. I think, also, that reminds me of hearing someone talking about how one of the reasons why dollar-cost averaging or, like you were saying, automating and regularly putting money in is important is because if you’re like, “Okay, I’m going to start investing. I just need to wait for the market to go down,” so say you wait. Or, you’re like, “Okay. But what if I put it in now and it keeps going down tomorrow? I should just wait one more day.” And then it starts going up and you’re like, “Oh, I missed it.” And then it keeps going up and you’re like, “Okay. Well, now I can’t invest.” And you’re just forever waiting, when it’s like, “Just do it. Just put it in no matter where you are.” Like you are saying, 2020, you put money in and it would’ve– yeah, at some point it probably went down, but it comes back up. You’re not putting it in for just a day or an hour. You’re putting it in for the long haul, for most people. So just get started. Just get in now. |
Money Muse | Yeah. And that reminds me of so many things. When I lived in L.A. in my 20s, my friends were like, “Oh, it seems like it would be really smart to buy a house.” Meanwhile, my then-boyfriend and I were both working at SpaceX, tech jobs, couldn’t afford to buy a house, but people were talking about buying a house. And they were like, “Oh, well, we should really wait for a dip.” And every year the market just went up and up. And same, we moved to Seattle, we’re like, “Whoo, wow. Compared to L.A., prices are wonderful here, but let’s wait till we know what neighborhood we want to live in.” And then over those three years, prices just went up and up and up. We’re like, “Oh, my gosh.” There’s never going to be a drop that’s like, “Oh, now this house is affordable,” right? So, yeah, I always encourage people to get in– if they can afford a house, to get into what they can afford sooner than later. And same with the market: it’s just to start investing right now. And then stay the course, hold it forever. Don’t listen to what people are saying – especially if it’s sounds like fear mongering or any kind of fear related stuff. If the article is like “five tips you have to do right now!” Any of that kind of clickbaity stuff, I’m like, “Just try to ignore it.” |
Megumi | [laughter] Especially because that’s what they need to do, right? It’s media. Their job is to try to get you to read something exciting so that you keep coming back. Their job isn’t to be like, “Hey, guys, just keep investing today.” |
Money Muse | Yeah, yeah. |
Megumi | “Put in more money in tomorrow.” |
Money Muse | Absolutely. And we know that one of the most powerful emotions for humans is fear, right? And the fear of loss or the fear of losing our money is so much more powerful than the gains we make on our investments. And so, of course, that’s where they target us. They’re like, “You should be scared, you need to do this otherwise. Dun, dun, dun.” So, yeah. |
Megumi | Stay tuned. |
Money Muse | Yeah. |
Megumi | So then, what are– I think I’ve talked about this before on my podcast as well — but I feel like for women especially, investing is something that doesn’t get talked about. I know even among some of my friends, for example, I’ll hear my guy friends talking about how– they do talk about investing with their male friends, but their girlfriends don’t really talk about investing. And it’s so much more common to hear about guys investing. You go on Finance Twitter and there are women, but it’s so many dudes, right? So many bros talking about buy this stock, sell that stock. What are some of the most common things that you see are holding women back from investing? |
Money Muse | Yeah. I mean, just to back it up. Do we talk to our daughters about money and investing as much as we talk to boys? No, absolutely not, right? I have so many clients that have said, “Oh, well, my parents never talk to me about that, but they talk to my brother about it. And so he knows more than I do. And I just am starting at square one.” I’m like, “Wow, that needs to change.” The very beginning is just how we think about gender and whether money should be gendered. Of course, how we think about gender is changing, too. But the point is, let’s talk to everyone about money, right? And make it something that’s not taboo. And especially women, too, are kind of brought up to think that talking about money is rude, or if you’re taking care of your money as a woman, that it’s selfish. There’s all of these ideas about how women should not be focused on money, shouldn’t be talking about it. So, I think that’s the first thing, is kind of changing our ideas about talking about money and that starts with us. So for me, now, I will talk to my friends from home who didn’t know me as Money Muse growing up, right? And now I’ll just drop some money questions in and sometimes their eyes get all big. I’m like, “It’s cool.” [laughter] So that starts with us having those conversations and offering information about yourself before you ask people about their financial situation. But yeah, now that I talk about money, people come out of the woodwork to talk to me about money, which is awesome and I love it. And then I see those women kind of passing it on and telling me like, “Oh my gosh, now I’m having conversations with my kids about money and I actually know what to say.” Or, “now I’m having much deeper conversations with my friends about money.” I just love that. So, first of all, talking about money, right? |
Megumi | It is such a taboo thing, and that’s– one of my goals with the podcast is just get people to talk more about money. And I feel like it’s this– almost like this endless cycle because it’s taboo to talk about money, so you don’t talk about money and we don’t get any sort of financial education. So, we don’t feel like we know enough. I don’t know anything about investing so I can’t invest, but I’m too embarrassed to ask my friends about it and it feels rude. And even in terms of negotiating your salary, I don’t want to ask people what they’re making. And not that we should just start going around asking every single person what they’re making – there’s a tactful way to go about it. But all of these things combined keep limiting us. Whereas if we were just like, “Hey, guys, let’s talk about it. If you don’t know something, that’s okay. Many other people don’t know either.” I didn’t know anything when I started this podcast and that was one of my goals. Why aren’t we talking about this super important and empowering thing? |
Money Muse | So important, yeah. And that reminds me a little bit, too, of something that I see with women a lot and something that they’ve studied with women is: women only apply to the job if they think they have all of the qualifications. Where guys are like, “That’s cool. I meet half the criteria. Let’s do this.” There is a confidence there, and sort of a desire to understand and know everything before we get started, which is another thing I see all the time with my clients is like, “I’ve been wanting to invest for five years, but I felt like I didn’t know enough and that I needed to understand the ins and outs and absolutely everything before I made a decision. I didn’t want to make the wrong decision.” I love to show this picture of me at 18, which is when I opened my Roth IRA. And I’m wearing some ridiculous outfit and I’m going, “Ahhhh!” It was a terrible photo in college. And I’m like, “See me at 18? Trust me. You don’t need to know everything about money to start investing because look at this girl. She’s a hot mess.” But that’s another thing that I see a lot with women specifically is the desire to understand and master it before we get started. And of course, we know time is– time is our best friend with investing. So even if you choose investments that maybe aren’t perfect for you from a risk perspective or something like that, it’s still better to get started and not have the perfect portfolio, and that’s okay. |
Megumi | Right. I love that. I love that. It’s so true. I love that you bring up that sort of perfectionist aspect of it. Because I have seen that study, as well, of how women feel like they need to meet or be able to meet every single criteria on the job description. And it’s so true. Even in terms of investing, going back to the 2020 numbers. If someone had waited months and months because they were like, “I need to have everything set. I need to do all of this research,” versus if they’re like, “Okay. I’m just going to take– even if it was just like a couple hundred dollars, I’m going to put this in and then I’ll do some research. But I’ll just keep putting money in regularly and just get better.” And yeah, sometimes you’ll make a bad decision, but that happens. We’re all going to make bad decisions at some point. But the importance is to just get started. And I feel like part of it is just getting started, right? Whether you’re starting a new project or writing or what have you, sometimes just dipping your toe into the pool is the hardest part. And once you get started, you’ll see that it’s not as scary or as intimidating as it seemed before you get started and when you’re just hearing people talking about it. |
Money Muse | Yeah, absolutely. And I think another point to that is that sometimes women, because they want to understand everything, maybe they’re thinking about doing it on their own for investing. And there’s no shame, also, in getting help – especially in the beginning, right? So even though most of the time I advocate for—“financial advisors are really expensive. Don’t pay 1% of your money!” If you’re going to have a financial adviser in the very beginning, so you can kind of learn the ropes get to know the terms, or you’re going to hire a financial coach like me to educate you, or you’re going to use a robo-adviser and pay a little bit of a fee. That’s okay, because it’s a long road and you can always take more and more control slowly and take more of your money and fees off the table slowly. So, there’s no shame in starting with someone helping you as well. |
"There's all of these ideas about how women should not be focused on money, shouldn't be talking about it. So, I think that's the first thing, is kind of changing our ideas about talking about money and that starts with us."
Megumi | I love that. So then, what does it take to be a great investor for both men and women? |
Money Muse | Yeah, I think one of the main things is recognizing how much money is emotional for us and doing what we can to, not remove the emotions, but say, “yes, emotions, I hear you, I see you, I’m not ignoring you, but in light of the data or in light of the history that I have as an investor, I’m going to continue to proceed via automated investing despite my emotions.” So sometimes I think those emotions just need to get acknowledged and talked about. And be like, “I’m actually really scared to invest this month.” Or, “I’m actually really scared to buy a house.” Or “I’m actually really scared to” whatever it is with your money or even look at my checking account to see what’s in there [laughter], what I’ve spent this month. Right? |
Megumi | Or what’s not in there [laughter]. |
Money Muse | Or what’s not in there. Yeah, exactly. So there’s all this fear. And I think we need to acknowledge that it’s okay to be afraid and that in learning and in practice and in getting used to dealing with our money, it’s going to get easier. But it is really scary at first. So, I think that the first thing is just acknowledging the emotions around the money and doing what we can to not ignore them, to accept and to give them their due, and then still try to make rational decisions with our money. The other thing, I think, is learning from our past. I really like to take notes sometimes when I am buying investments, and I’ll write down what I was thinking at the time when I chose this investment. Or, if I ever sell something, I will write down why I sold it. And that one I have learned– I’ll give you an example. I owned Apple stock in college because I had my little– I don’t even remember what they’re called anymore. Those little clip-on music things. Was it an iPod? |
Megumi | Oh, yeah. |
Money Muse | It was the little tiny one. |
Megumi | Yeah, yeah. yeah [laughter]. |
Money Muse | It was whatever that thing was called. I could have like 100 songs and it blew my mind [laughter]. I was just, “Oh my God, this is amazing.” And I was like, “I’m going to invest in this company because all my guy friends were talking about Apple.” And I bought Apple and I held it for a couple of years. I made good money on it and I was like, “Oh my gosh, look how much money I made on this.” It was probably a couple thousand dollars. And I was like, “This is so much money [laughter].” As a college student, right? And I sold it. And I thought like, “What a good investor I am! Yeah!” And now, looking back, of course, if I had written notes to myself back then, I probably would have been like, “I made all this money. This is great.” But really, the main thing I’m learning is that, wow, the opportunity cost of selling back then versus holding until today is pretty monumental. So, I really encourage people to buy investments and then try to never sell them. And if they do make big changes, like they’re buying or selling something different, to take notes and then see how that works out for you, to actually hold yourself accountable and see if you made a good decision or not. Because I think that’s a great learning experience. And a big problem with a lot of financial analysts and people who are like, “Buy this stock, sell this stock,” is they’re not holding themselves accountable. They’re not scoring their picks. I mean, here’s how much money I made versus the market. Without that accountability, it’s kind of just like blowing smoke, frankly. |
Megumi | Yeah. And I feel like it’s the same way with Finance Twitter. I’m not trying to hate on Finance Twitter, by the way, I just — [laughter] I think it’s great that people are talking about it. I just happen to be pointing some things out that bother me sometimes. But it’s the same thing, where people might be like, “Oh, yeah, I invested in Bitcoin at this time, and look what’s happened since then.” But they’re not talking about whatever other stock that they might have invested in that did not do as well, and you just hear about all these– like you were saying, you’re not seeing them hold themselves accountable. You’re not seeing their learnings and I love that idea of writing things down, too, because I feel like that might also help you realize if it was an emotional decision. If you look at these notes and your like, “Ugh, I thought I was being rational, but I let the fear take over and that’s what told me to sell when really I should have just stuck it out and tried to be more objective or more rational.” |
Money Muse | Yeah, absolutely. And I think the transparency piece is so important for people who are in the money space. So, I made a four-part series recently called A Glimpse into My Portfolio and in one of the videos, I talk about my biggest wins and my biggest losses – so my best investing decisions and my worst decisions, which I have these notes on – which is amazing now looking back and just kind of sharing those learnings. It’s so valuable, and I think the more we talk about it with people, the better. So, yeah, that was really fun for me to make that, because everybody loves the story of you screwing up [laughter] and everyone loves the story of you doing really awesome, right? Yeah, I think it’s I think it’s a wonderful thing to do and then to talk with people about it; It’s so fun. |
Megumi | Yeah, especially now, I feel like this ties into sort of the larger theme we’re seeing, right, with social media where people are always talking about their yacht vacation and, “Look at me working out,” and, “Look at this delicious, healthy thing I’m eating.” They’re not talking about, “All right, so I just spent 10 days on the couch in my sweatpants,” or, “Yeah, I lost all of this money.” They just want to present this perfect view of themselves. And especially, like we were saying before with money, money can be so emotional. It can come with so much built-in shame or guilt or whatever it is from when you were a young child growing up with your family and all of these things combined, make money super, super, uber taboo so that it makes it even more loaded to share your failures of money of like, “Oh, people will think I’m stupid and irresponsible and this is so shameful. I can’t share the fact that I messed up when I made this investment,” when it’s like, no, this is a learning opportunity for everyone. And you don’t all have to be like Stephanie and share it publicly, but even if you’re just talking with your friends, like, “Ah, guys, I thought this was going to work, but it didn’t. How are you guys doing with your investments?” and just talking about it and making it totally okay. |
Money Muse | Yeah. I mean, we would all be super lucky if we had a group of women friends to talk about that stuff with, so, yeah, I really encourage people to try to have those conversations. I mean, that was the whole reason I built my online communities. I was looking for women who wanted to talk more about money and specifically, now, let’s talk about buying individual stuff. I want more women in my life who actually do that and so how can I find that? Well, as someone in the money space, I’m just going to put out feelers like, “Is anyone interested in this topic because I’d love to talk about it,” so. But even with basic stuff, a lot of people have these big milestones in their life that really scare them like buying a house. And so many of us have been through that and there’s so much knowledge kind of in the collective, if we would just reach out and ask for help and ask questions. We know a lot more than we think. And some of us have consolidated loans, some of us have purchased a house, some of us have investments, and then there’s others of us who have some of those things, but not others and– yeah. It’s like if it was one big Craigslist where it was just women talking about money, like, “I know about this, but I don’t know about this. Can anyone help me?” wow, that would be awesome. |
Megumi | That would be awesome! I would sign up for that 100%. I feel like — because when you’re talking about– I don’t know. Look at all the YouTube videos on makeup, for example, or clothes. There’s so much of that. It should be more like that, right, but I think money, again, with the taboo-ness and it feels so personal and rude to be like, “So did you buy your house, or did you inherit it, or what? What’s the deal there?” Just asking, you feel like you’re prying into someone’s secret. |
Money Muse | Yeah, absolutely. Well, I mean, I pride myself on basically answering any questions. Especially people love to ask me, “How much are you living on? You’re financially independent. What does that mean? What does your budget look like?” And I’m like, “Let’s talk about it [laughter]! I love to talk about that stuff.” So yeah, I’m trying to lead by example there [laughter]. |
Megumi | Do you have any final tips for women who want to become more financially independent, or for anyone who wants to become a better investor? |
Money Muse | Yeah. I would love to say one more thing about market volatility and setting up accountability or a plan that you can check against. So, one thing I have done in the past is — I have looked at the market and I have made guidelines. If the market drops 10%, I will buy X – and you could even set this up in your brokerage account to do it automatically if you wanted – or if the market drops 15% I will invest Y, if the market drops 20%, etc. so that you have an outline of what you think would be intelligent if you did have money that you wanted to invest on a dip. Then I tuck that away somewhere. And then, if the market does drop, you pull out that list and you say, “Okay I told myself that if the market dropped 15%, I would invest this much or 20%, this much.” And this is an idea that– actually, there is a writer that I just love called the Mad Scientist, and he’s like a F.I.R.E. guy. And he does really mathematically theoretical and wonderful tools that you can use for your F.I.R.E. journey. And so, he kind of introduced this concept – I’m sure he didn’t invent it – but it’s something that stuck with me and something that I have put in time to think about. And so, if you are that person that is excited about buying on a dip and you’re always thinking about, “One day when the market drops, I’m going to do this big thing.” Write it out, map it out, and figure it out – just between yourself or even between yourself and someone else. Talk to them about it, about the plan, how much you would actually invest if the market were to drop at the various tiers and then– yeah, then when it’s in that emotional state, is it going up or down, is going to drop more, you just follow your guidelines and that makes it a lot easier. |
Megumi | Yeah, absolutely. I love that. Another way to take emotion out of it, which is, it seems, the theme today [laughter]. |
Money Muse | I guess so. Yeah. And what an emotional year, too. We’re like, “Oh jeez. We got all that emotion out, huh [laughter]?” |
Megumi | Lessons to be applied in 2021 as well [laughter]. |
Money Muse | Yes, absolutely. Absolutely. All of these apply basically for investing forever. |
Megumi | Yes. So where can people find you? Where can people find Money Muse? |
Money Muse | You can go to my website, themoneymuse.co and that lists all of my information on coaching, on all my workshops and also the community. I am on Instagram, although lately I took a break from Instagram in December and guess what? It’s now January 13th and I haven’t been back, so I’m contemplating a full move outside of Instagram and — |
Megumi | Wow! |
Money Muse | What does that do to a small business? That doesn’t sound good, but at the same time, I just love my life without Instagram. I heard you talk about Twitter a lot and I’m like, “Maybe I should try Twitter.” I’m like, “Is that the same?” Anyway, so I would say you could find me on Instagram. You can find all my contact info and all of my offerings are still up to date on Instagram. And that’s @money__muse with two underscores because all the other ones are taken. |
Megumi | But you’re THE Money Muse to me. |
Money Muse | Oh, thanks [laughter]! |
Megumi | Thank you so much for your time today. This was super helpful and I hope that everyone – men, women especially – feel a little more confident, even feel empowered, or even if they don’t feel as confident, they at least feel empowered to make a dumb mistake because we’re all going to do it and that’s okay. |
Money Muse | Yes, absolutely. Thank you so much for having me. I really appreciate the time. And it was so fun to talk to you! |
Megumi | Yeah, you too! Thank you again to Stephanie for joining us at Ms. Money Moves. I am really inspired by her journey and her commitment to helping other women, and I hope that all of you feel more confident and inspired to start investing ASAP! |
Find Stephanie at themoneymuse.co and follow her on Instagram @money__muse!
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