Dec. 28, 2022

The Best Mic Drops of 2022: Financial Truths for 2023

The Best Mic Drops of 2022: Financial Truths for 2023

Our major takeaways for 2023.


When we were plotting our content for the last week of the year, our executive producer Henah had the brilliant idea of revisiting some of our most powerful mic drop moments from our 52 (!) episodes of The Money with Katie Show this year. We identified some of the best truths to carry forward into the new year.

And since our entire team produced the original episodes, we figured it’d be fun to include everyone’s perspectives on these favorite clips. Whether you’ve diligently downloaded every episode or just started listening last week, this roundup is sure to get your mind right headed into 2023.

Thanks to Henah, Christie, Sebastian, and Kate for joining me for this episode.

Learn more about our sponsor, Vin Social: http://vinsocialvip.com/.

Transcripts can be found at podcast.moneywithkatie.com.

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Transcript

Katie: In 2022, we've released 52 new episodes, including this one. Which ones left the Money with Katie team shook to our cores, and reframed our relationships with money, personal finance, and the economy? Let's get into it. Welcome back to The Money with Katie Show, Rich People. I am your host, Katie Gatti Tassin. And this week we are doing something a little different. If you missed a few episodes throughout 2022, or you're just now joining the Money with Katie community, hello, welcome. This will be a timely roundup.

So when I first started this podcast at the end of 2021, it was just me with my hottest takes, 12 listeners, including my mom, and a subpar microphone. 

2021 Katie: Hello, and welcome back to another episode of the Money with Katie podcast…show…question mark? I don't know, what are we calling this? I wanted to call it Rich Girl Summer, but I didn't know if that was gonna have some limited seasonality. 

Katie: Technically it was my cell phone on the Voice Memos app. So we've come a long way, clearly. Today, The Money with Katie Show has passed 2 million downloads in a 12-month span—thank you—and it comes to life each week with the support of five incredible people. So as we head into 2023, we thought it would be fun to do a little retrospective. So you'll get to meet some of the voices behind the show, and we will talk about some of the biggest mic drops from our guests this year, and why we loved them. Consider this your TL;DR, or I guess, in this case, your “didn't watch or listen.” So without further ado, let's welcome Christie, Sebastian, Kate, and Henah to the show. Can y'all hit us with like a quick little introduction? Christie: Hey everyone, I'm Christie. I'm one of the video editors for Money with Katie. Special thanks to Katie for having me on the show this week. So excited to be here and share some of my favorite moments from this past year. 

Sebastian: Hi everyone, I'm Sebastian. I am another video editor here at Morning Brew, and I also help and work with the Money with Katie team.

Henah: I'm Henah; it's nice to be here with our full team, and I'm the Money with Katie senior editor and producer. 

Kate: Hey everybody, I'm Kate. I'm a copy editor here at Morning Brew, and I love working with the Money with Katie team, and we have so many great mic drops from this past year. 

Katie: Awesome. And we also have Nick, our audio engineer, who is not with us today, but shout-out Nick. He will get to hear this shout-out when he edits this episode. So thanks, Nick. Anyway, I can't wait to get this show on the road. But first a message from the sponsors of today's episode.

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Katie: All right, y’all, to start us off, this is first and foremost, as we know, a show about money. So let's talk about some of the best investing takeaways we heard this year that will help us in 2023. One of my favorite forward-focused nuggets—and I would say apparently a favorite of our listeners as well, since this is one of our most popular episodes to date—had to be from Liz Young at SoFi, when she perfectly encapsulated today's market and the possibility of a recession in 2023. You know, at this point in the year, we are still down year to date, but it did leave me feeling hopeful about the market recovering at some point next year, and that we would be grateful that we doubled down at the end of 2022 with our investment contributions. So take a listen. I saw you on CNBC the other day, and you said something that I wanna touch on because it was oddly comforting for me. You said, I have a feeling when we look back on this period in 10 years from now, the next few months are when we're gonna say, man, I wish I would've bought a little bit more. Can you speak to this for our listeners who may be feeling a little bit dicey about investing in general right now?

Liz Young: I'll walk through just kind of the thought process there. There's a few different things that people need to keep in mind when you're investing, and first of all, it is completely natural to be trepidatious right now. There's a lot of things going on; there's a lot of headlines that come out. The market is clearly down on a year-to-date basis. It's very anxiety-producing for everyone. And as much as people like me say things like “Try to keep the emotion out of investing,” it's impossible. It really is impossible, especially in a year when there's a lot of things that are just making us nervous, and we're looking around the globe and you're hearing about things from other countries that are happening that are starting to really scare people. So totally natural to have those feelings and have some of that trepidation.

What you have to try to do is remember these things. So, markets and economies go down in a certain pattern, and it happens like this almost every time. What you usually see is that the market drops first; the economy breaks later. So the market is a forecasting mechanism; it's a forward-looking mechanism, and it tries to predict where the economy will be and where corporations will be, where their corporate health will be, in six to 12 months from this moment right now. Okay, so the very simple way to say it is that the market bottoms first; the economy bottoms after that. If you wanna get even more detailed about it, usually what happens is the market bottoms first, corporate earnings second, the economy bottoms last, okay? By the time the economy bottoms, the market is already recovering, usually. So what I meant by that statement was that we are in a time right now, obviously the Federal Reserve is raising interest rates. That's put a lot of stress on the economy. That's put a lot of stress on the stock market. It's put stress on the bond market. But we're in a time where people are increasingly nervous about the idea of a recession and that this recession is getting closer and closer. So what happens when people are nervous about something like that is that it gets priced into the stock market present day, okay? So we feel the pressure in the stock market sooner than whether or not we find out that we're in a recession.

So let's assume the recession starts in the first quarter of 2023, if we're going to have one. The stock market is going to go down right around now-ish, and obviously has already gone down this year, but it's gonna try to get ahead of that. So my statement about, I think we're gonna look back on this period and wish that we would've bought more now, was because if we do have a recession, I feel like it probably comes early in 2023 or it begins early in 2023, which means that the market is going to feel the stress now, and when we look back on it over a long-term period, this will look like a time when things were attractively priced, from a stock perspective.

Kate: I like the way she laid out the historical framework for recessions followed by recoveries. It helped me relax a little bit about this weird situation we're in, of like, are we or are we not in a recession, rising interest rates, all this stuff. 

Katie: Totally. I also remember when that episode came out, Kate, and you were working on the transcript and you were like, “this woman exudes competence.” It's like, she really does. There's something about Liz that just makes you wanna listen to her. So check out this other quote from Liz from that episode. 

Liz Young: I can guarantee you this, at some point, we will have another recession. Shortly thereafter we will have a recovery. That is just how this works. And if you are in your twenties, thirties, forties, you are probably going to live through, in your working years, multiple more. So you just kind of have to get used to the idea that there's a business cycle and there's a market cycle. But if you can leave your money alone and let it compound over many years like that, you will be amazed at how quickly it grows. This is gonna sound maybe a little like tough love, but if you wait for the day that you're ready, you're never gonna do it. If you wait for the day that you're not afraid, you're never gonna do it, because none of us know—no matter how much education we have, no matter how long we've been watching markets, I've been a student of the markets now for over 18 years, I still don't know what's gonna happen every day, every week, every month. I just know that over a long period of time, it'll go up. So you can't wait until you're not afraid of what might occur, or until a period where you feel like there's no risk. There's no such thing as no risk. 

Henah: I love this entire part, especially because so many people have been anxious about this time in the market, myself included, and that we have to start somewhere. And so I thought her further point about “Don't sell everything unless you want to realize your loss” was a really helpful point, especially for people in my parents' generation who are nearing retirement. And so on a related note, one of the episodes I really loved along the same vein was actually from the week that I started at Money with Katie. Katie chatted with Brian Feroldi about crashes in the market. And you touched upon this analogy that I thought was so brilliant. So listen to this. 

Brian Feroldi: The reason that the stock market always rebounds from crashes is that business profits always rebound from market crashes, and business profits and stock prices are 100% correlated in the long term. The tricky thing is they're not at all correlated in the short term, right? So as long as businesses return to profitability and continue to grow their profits over time, the stock market will always recover. 

Katie: So fascinating. I've never thought about it as a culling effect, that on one hand, you're gonna have the weaker businesses going out of favor and leaving, but then you'll also have people starting new ones. It's really fascinating, and it almost paints this picture for me of a very natural cycle, almost like in nature where the wildfires will clear out the land, but like if you don't have a fire for too long, things overgrow and it creates problems for that ecosystem. So it's really fascinating to think about it in that sense. 

Henah: What a great way to put it, right? So it also drove home the point that both Brian and Liz touched upon, which is that these major indices, the S&P 500 included, are all supporting the best of the best businesses, right? And they need to be the best in order to stay competitive. And so in turn we as investors can reap the benefits too. 

Katie: Totally. Yeah. I think the financial truth that we are trying to keep in mind in 2023 is that this is a long-term game, right? But if you believe that the global economy is going to continue producing new value over time, the stock market will rise over time. And so continuing to dollar cost average into the market during the turbulent times is so important. It's like that Buffett quote: “Be greedy when others are fearful, and fearful when others are greedy.” I feel like that is perfectly encapsulated, both the volatility in the stock market this year as well as how I feel looking back on the “Have fun staying poor” cryptomania of last year. But anyway, that's just my slight dunk that I had to slip in. 

Henah: It's Warren Buffett, so he knows what he is saying, right? So it's a really welcome reassurance. And then switching gears a little bit, our team internally, Katie, we talked a lot about the rent versus buy episode this year, especially with the interest rate hikes from the aforementioned economy. Christie and Sebastian, you're both in Texas, and I know you were both considering buying at one point. So where are y'all at now, having heard the episode?

Sebastian: Yeah, definitely. Well, before the episode I really liked the idea of buying. I mean, I still want to someday. Maybe I'm not ready, but so before the episode, you know I'm in Texas, I've heard a lot of hype about, well, you know, if you just put a similar amount of money towards a mortgage as opposed to a rent, then you don't really have to worry about rent increases. Plus in a sense, you know, you're building your financial portfolio at the same time as you kind of pay off your house. 'Cause one day you could rent it or sell it. But Katie, that rent versus buy episode, it kind of really opened my eyes to unrecoverable costs that you incur when owning the home. So you are not just paying for the mortgage, and you have to be really ready for anything. I feel like that aspect we don't really hear as much. 

Christie: Yeah, I also really wanna buy in the next couple of years, like I think I was talking to Henah about this the other day, but it's something I've really been marinating on since listening to that episode. You know, if I do decide to buy in this market, I've considered maybe refinancing later down the road, which is something that Andy, one of our guests from Credit Karma, talked about in that episode, and I found super eye-opening. He walked us through, you know, all the additional costs that can go into re refinancing your house, even at a lower rate.

Andy Taylor: To get to your specific question, like what are those considerations that you need to evaluate when you're thinking about refinancing, what are those extra costs? Well, like I said, you're taking out that new mortgage when you refinance, so you have to pay the same or similar costs that you did when you got that original mortgage. That's things like origination fees, taxes, appraisal fees…

Katie: So like closing costs, again? 

Andy Taylor: Closing costs, et cetera, et cetera. Someone's gotta pay the lender; they wanna stay in business too. And so they're taking it out, and everyone in that value chain is making money somehow. Technically speaking, you know, when you also, you have to look and see if you have a prepayment penalty to refinance, because you're essentially paying off the former loan to get a new loan. If you have a prepayment penalty, you also have to ask your lender if they're willing to waive that penalty. Now there's a lot of lenders out there that if you go and you talk to them directly, you can ask them, “Hey, would you waive this prepayment penalty if I was to refinance with you?” And oftentimes they just don't wanna lose that loan. So if you can work with the same lender, then they might be willing to waive it. And you know, given that those fees that come with that refinancing, you're just gonna wanna make sure you crunch those numbers to make sure it's worth it. And so just like you hopefully shopped around for that first mortgage, you're gonna want to do the same thing with shopping for a refi: getting a few quotes, negotiating with your lender to maybe cover or reduce some of those fees, especially if you're sticking with them. 

There's some other things that are involved in this that aren't like specifically fees-related that actually do factor into the overall cost of this too. One of which is just simply, are you almost done paying off your mortgage? So what I mean by this, well, in the early days of your mortgage, most of those payments that you're making are actually going to paying off interest. As you get further along, slowly but surely you're making more and more towards the principal, or the amount that you owe. And there's like, you know, about halfway through you kind of switch and you're paying more principal than you are interest, and…isn't always necessarily halfway; it depends on the terms. But let's say even paying off your current 30-year mortgage for 10 years, if you refinance into a new 30-year mortgage, you're just pushing that big old red Reset button. So you start over, and you're gonna be paying more in interest, and therefore you're gonna be making less in overall equity that you have on that house.

If you're thinking about, like, where is that break even point, meaning the amount of time it's gonna take for you to recover those closing costs and all the other expenses that you're gonna be paying that I was just talking about, you just wanna make sure you plan to stay in that current home long enough to actually reap those refinance benefits. 

Henah: Yeah, I thought that was such a great reminder too from Andy, because I think millennials, myself included, we’re always ready to settle down with the house, but it's good to keep in mind that it may not be a decision that's always a financial investment in the way that we assume, even though you have the place to live. So it really depends on the interest rates, how long you're gonna be there, all of those things. 

Katie: Exactly, and as I have been torched online before for saying, I will repeat now. The second financial truth heading into 2023 is, even if the housing market does cool down a little bit, you have to run the numbers for yourself, calculate all of your recoverable and unrecoverable costs as best you can, and decide if it's worthwhile. Like if it's something you really want once you get the full financial picture, because it's probably going to be the biggest expense you take on in your life, and it's not a purchase to make lightly. So we will link the New York Times rent versus buy calculator in the show notes. It just makes the calculation really easy. It has a ton of variables and inputs and then kind of does the math for you. Or you can do the longhand long division math by yourself by relistening to episode 40, which we will also link in the show notes. 

Kate: Yeah, Katie, you know, in your rent versus buy episode, you talked about if somebody bought a house this year—now, granted we’re in a higher interest rate environment now, but if somebody bought a house this year for $400,000, over their 30-year mortgage, they would be paying more than twice that, and more than half of that amount would be interest only. So I do own a house, but I've been kind of in denial about how much it's actually gonna cost me in the long run. 

Sebastian: Yeah, that is, that's such a crazy number. And I guess like seeing you do the math in the episode, Katie, I think that was like pretty eye-opening, and again, it's not something that you hear about a lot, you know. I feel like owning a home is like really fantasized in a lot of ways and it seems awesome, but that's a lot of money. So I'll definitely be keeping that in mind when I'm scrolling through Zillow. 

Katie: Totally, yeah. I mean, I never want people to feel like it's like a scare tactic; it's more just I don't want people to be surprised by it. And one thing that this conversation with Andy sparked for me was this idea that owning a home has long been perceived as the American dream, and I think it's worth interrogating why that is, and historically where that came from, because I think contextually when you put it into that historical framework, things start to make a little bit more sense. Like, who's profiting from all of us believing this sentiment? And I know as Henah just said, we often do dream of having that home, but we've also talked a lot about how far out of reach that goal can be for young people in 2022 and 2023. The two-part episode that we did on the topic this year was something we had never done before. I don't think we've done a two-parter since then, either. And I really loved how that one turned out. I know a lot of work went into it, especially with our incredible guests, Gaby and Malcolm. 

Henah: Honestly, it was mic drop after mic drop for both of these episodes that it even feels hard to pick just one or two nuggets. But I guess if I had to, there's this one clip from Gaby, from Bad with Money, and it stuck with me for a really long time because not only does it help challenge what we believe to be true about poverty, which Katie, you and I have talked about on the blog, like we've talked about this, you know, in our personal lives as well. We'll link the blog in the show notes, but it's also just such a neglected area in the personal finance space. And so when I was actually at a volunteer program like a decade ago in DC, I remember I heard from this speaker who was unhoused, and they used to work for three different presidents. They were making a ton of money and eventually, you know, they had a loss in their life and it led to depression, and eventually they lost their job and they were without a home for over a decade. And it just goes to show that, you know, as much as we often talk about, like get that higher income and cut costs and save money, we're not talking about how being poor is paradoxically also super expensive. And it's a scenario that any one of us could find ourselves in probably more easily than we would assume, and how hard it is to change once you've gotten into it. So I'll let Gaby take it from here. 

Gaby Dunn: I understand the impulse to not pay attention to these things and to think that every situation is equal and if it doesn't affect you, why would you pay attention to it? But if  you knew the history, you would say, oh, certain people start off, you know, behind the eight ball. Like certain people are not in the place where they can just start budgeting. I mean…and there's also this thing where stuff keeps happening. So if something…it's true, and people don't realize it. Like if you are in college and your mother passes away, that doesn't mean that your student loans will stop wanting payment or gathering interest. If your kid gets cancer, god forbid, or whatever, that doesn't mean that suddenly the government will be like, actually, we're gonna be lenient on your light bill. People give advice as if, like, one bad thing has happened. Where they're like, oh yeah, so probably like you're dealing with, you know, maybe the unexpected death of a spouse or something. Okay, but what if that happens and then your car is in a fender bender, and then you end up with medical bills. Like when you see people who are unhoused, multiple things have happened to them. Mental health crisis, eviction, death, unexpected illness. Most people don't have $4,000 saved for an emergency. People don't realize that they themselves are like…I always say like three things away from being in a place that they would judge someone else for being.

Katie: Yeah, I thought this was such a powerful clip too. And Henah, like you mentioned, we have talked about this on the blog before. One statistic that comes to mind is if you are in poverty, living below the poverty line for a single year, your chance of escape is truly a coin flip. I think it's like 51% of a chance that you're going to escape poverty. It also reminds me of a tweet that we included about the paradox of riches, and that the vast majority of us are closer financially to the unhoused person down the street, who we probably don't identify with very strongly, than we are to our friendly neighborhood billionaire. So it's kind of this idea of class consciousness, solidarity, and really, empathy. When we consider wage stagnation, inflation, everything from student loan debt to medical debt, a lot of Americans are facing a lot more economic precarity now than ever before in recent history. So thank you for pulling that quote. We will be right back after a message from the sponsors of today's episode, to continue this fabulous conversation. 

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Katie: So I've talked about this before, but I constantly have this underlying fear that I could lose all my income, too. Like, none of us are impervious to any of these situations, no matter how much financial progress we've already made. And I think it's just a good reminder to have humility and empathy and really reserve judgment. You just never know what someone else has gone through, and the personal finance world can be so judgmental, but the world is not a pareto optimal perfect meritocracy, like outcomes are not always indicative of effort or capability. It is just so much more complex than that, and I feel like I've really learned that very deeply this year. 

Christie: Yeah, I'm definitely in the same boat when it comes to money anxiety. The episode that you did on financial fear also really spoke to me for that same reason.

Henah: Me too. Katie had to actually talk me off the ledge about not hoarding cash anymore and actually start investing once I built up my emergency fund. So I get you. 

Christie: Yeah, I'm also working on that too. I find myself taking notes when I'm listening to all these episodes, and especially the one about Mariel Beasley back in September. She talked about the financial psychology and how to set ourselves up for financial success even if we're feeling anxiety or stress around our finances. So let's hear a little bit more about what she had to say about that. 

Mariel Beasley: A lot of behavioral science sort of gets characterized as sort of nudges, and thinking about the important ways that small differences in the environment influence outcomes. It's super relevant across lots of domains, but especially finances. When we think about how many decisions people are making every day regarding their finances, right? Every day we're making decisions about to spend, to save, to borrow, and they have huge consequences, which basically means that the small details around those decisions are extremely important. 

Katie: So if our environment is so impactful, how do you think about behavior-hacking ourselves to do the things that we know are good for us? 

Mariel Beasley: My sort of number one tip for people in like how to behavior-hack your way into better finances is to understand your own shortcuts that your brain is going to make. We have these limitations, psychological limitations, that it's hard for anybody to think really concretely about the future. What I mean by that is like, you know it's gonna be hard to plan for your future, so sign up for an automatic retirement savings program so that you don't have to then, every time, think about how to do this. Make sure that, you know, sit down and put a date on your calendar and you're like, okay, this is the day that I'm gonna do it, and set it and forget it and then don't worry about it. And then similarly, there's tons of products now in the market that are designed to help with short-term savings, knowing that it's really difficult to control your spending. There are new products all the time that are getting added. Fintechs that are, you know, coming up with creative ways. Digit is an app that has basically said, hey, we know it's difficult to save. Basically they look at your income and your expenses and then they have an algorithm that predicts every day how much money they could move without you missing it. Today they move $2 over in savings, another day they move $7 over, because they just look at your normal income and spend pattern and figure out, like, oh, you're not gonna miss this money today, so I'm gonna move it over and hide it from you. And then all of a sudden you realize, wow, I actually end up having a lot of money in savings. 

Katie: I'm always a big fan of the, you analyzing your own spending and then deciding, how much can I afford to set up for an automatic contribution? But this is even easier, because this doesn't require any work from you. So I like that. That's actually really cool. I like this idea of finding products that are gonna help you kind of trick yourself into making better choices. 

Mariel Beasley: And essentially what you're doing is you're outsourcing your self-control. 

Katie: Ooh, that's a good line. I like that.

Mariel Beasley: Yeah, it's just, it's super difficult and everybody fails at times. Outsource that self-control. Understand your own limitations. 

Sebastian: I think it's really cool that we have products like this now that kind of just make it so simple to invest in the background without having to really think about it. 

Christie: Feel so seen.

Henah: Same.

Katie: Same, guys; don't worry. So looking at these two clips, I would say our 2023 financial takeaway is, to the extent that fear can be a motivator that fuels you to take your finances seriously, great, but you don't wanna let it get in the way of taking action. And I think more broadly, just recognizing that the economic ocean in which we are all paddling our little personal finance canoes? It's really choppy right now. So to the extent you can give yourself grace and celebrate the progress you are making, I think that goes a really long way. Christie, it seems like you are dipping your toes into investing more this year. I already know Henah is, 'cause we've had several one-on-one calls about it, you know, just generally getting more comfortable. Sebastian, talk to me about your current situation. 

Sebastian: Yeah, definitely. I've definitely taken advantage of having a 401(k). Katie, I think in one episode, I think you said your mom bullied you into your…

Katie: Yes.

Sebastian: Okay, okay. Yeah, right. I remember having almost the same thing happen to me. Like everyone just kept telling me, you know, “Up that percentage, like, don't leave any money on the table.” And I was like, I don't know what they're talking about, in terms of like matching my company's percentage and using the 401(k) properly. So in a similar sense, I was also pushed to use it properly, and I'm glad I did. But outside of that, you know, I've been investing in some brokerage…been doing some like brokerage, you know, like money market investing as well. Very cool to hear that you use M1. I was using it before I got here and then I was like, oh, awesome. Katie's using M1 finance too. This is legit. 

Henah: This is not sponsored. 

Sebastian: This is not sponsored. 

Katie: Yeah, not sponsored by M1 Finance. 

Sebastian: Not sponsored. Just a great app. 

Katie: Oh my gosh. Well, I love that. Congratulations. Yeah, that's funny. See, sometimes bullying can be a good thing if you're being bullied into doing things that are good for you. So were there any episodes, Sebastian, that helped you get into this mindset this year? 

Sebastian: All of them? No, but a ton of them. A ton of them, definitely. You know, I really like when you talk about these overarching concepts. I know we just did an episode with like Easter baskets and we're talking about 401(k) and Roth IRA and things like that. I feel like those are always really good reminders and super helpful even though it's like simple concepts, but they're kind of like the entry concepts, right? So a little straightforward but not something that you might think about a lot, have loved those episodes.

But also another thing that's been really interesting that you've talked about when it comes to saving and investing is that it's sometimes not just about cutting costs, but also increasing income too. 

Henah: Yeah, which is interesting timing, because we all started new jobs this year. 

Sebastian: Yes, yes. 

Kate: Can I just break in and say something about 401(k)s? 

Katie: For sure. 

Kate: I was able to actually borrow against my 401(k) when I bought my house, which is not something I realized I could do. And the most brilliant thing about it is, the interest that I'm paying is to myself. It was a total win-win, and such a great tool to use. And I know, Katie, you're probably like, okay, pay your 401(k) back so it can keep growing. But hey. 

Katie: So I like that you bring that up because that is, I would say, more of a controversial should you/shouldn't you in the personal finance world. But what I love that you're highlighting is that sometimes I think people don't invest in the 401(k) because they think it's locking them into something specific with that money. But you've just highlighted so beautifully that if you have that money in a 401(k) with your name on it, that's actually opening up optionality for you, because to Kate's point, you can borrow against it. So if you're really concerned about, oh, I don't wanna invest in the 401(k) 'cause it's not money I'm gonna be able to touch for 40 more years and yada yada yada. It's like, well, there are actually, there's some flexibility baked in there. But anyway, I digress. 

Sebastian: Yeah. And on the topic about increasing income, I thought the episode, Katie, that you did with Flynanced was like a really interesting one, because I think she went into talking about how a nine to five in some sense can be a good thing, and you can kind of scale up in that sense. 

Katie: Oh my god, yes. I love Cinneah. Her energy was so good. I was just cheesing throughout the entire recording with her, especially when she was talking about shifting to this “remote nine to five hottie” and demanding her worth. Because so often we hear this like glorification of the side hustle, and I'm personally guilty of this, so this isn't meant to call anybody out. I mean, I'm calling myself out in that way. But her point about, like, guys, just focus on the full-time job. Like you can have a multiple six-figure income if you are strategic about it. So let's hear from Cinneah on the remote nine to five hottie topic. 

Cinneah El-Amin: What's the saying? You gotta walk around having the confidence of a mediocre white man. 

Katie: Yep. Amen. 

Cinneah El-Amin: I can't think of a better scenario than going into a job where you're just like, yeah, I mean, I can do most of this. Like yeah, knowing that you guys are gonna teach me everything else, I don't need to be an expert in any of this stuff. It is 2022, sis. You can literally go onto TikTok and learn how to become a UX writer, learn how to become a product manager. Like, we just gotta stop putting these limiting beliefs on ourselves because it's literally impacting how much money we have. Like it's literally stopping us from getting from the big bags, yeah. If I listen to those naysayers back at AmEx, I'd probably still be sitting in the same role twiddling my thumbs, and now I'm a fully remote hottie and I'm just like, not being micromanaged, making more money than I've ever made, and also still being able to show up as a creator. Like, it didn't take me that long to do it. I didn't have to put in all of these years to prove myself. It's like, my average that I've worked at a company is two years. Two years. Like, two years is gonna go by fast anyways, sis, like you may as well use it to say, well, yeah, and these last two years I've grown my salary by $70,000. Like that's…those are the wins that I want you to have, not, oh yeah, I took on all of this work and now I'm in the same place and I'm not promoted. No, no, no, no, no. That story ends today. 

Henah: Now that is a mic drop. So I know, Katie, that's something you've also seen me really lean into this year, and beyond that too, I really love what she says about being able to get her bag at work and still have time as a creator on the side. You know, I freelance and I have side hustles on my own, and that's helped me to scale up my income this year.

Christie: Yeah, Henah, I was just talking to you about this too, about how I wanna start exploring side hustles in 2023. So this episode you did, Katie, on building side hustles and budgeting with changing income every month was really helpful in helping me gear up for that. 

Katie: Totally. Although I will add, none of you are ever allowed to leave me. So let me just throw that out there. So on this topic too, cause sometimes it feels like we inadvertently leave out stay-at-home parents from this conversation. So I wanted to also loop in the Kim Davis interview, the author of The Fiscal Feminist. Kate had actually pulled this clip that I thought was incredible, because it was a relevant perspective for people who are contributing to their household's financial health and general well-being through raising children. That working does not necessarily mean in a context where you are literally being paid, but that you should consider the financial consequences of an arrangement like that in the event things don't go as planned, because you are absolutely contributing to pretty much all aspects of your household if you are a parent who is staying at home to raise a family.

Kim Davis: So I would say you wanna money-proof your relationship from the get-go. So what does that mean? That means, have a talk and find out what exactly the other person currently has going on. What are their debts, what mortgages, what credit card debt do they have? What other obligations do they have for supporting other people, whether it's child support, alimony, maybe they have to care for an elder parent. There could be other obligations that you haven't really discussed with this person, and you wanna understand their full picture. Have they had bankruptcies? Are they in the middle of a bankruptcy? So that's the first thing. You also wanna understand what their financial assets are.

Say I'm gonna stay home and be a caregiver and you might be the primary breadwinner. Well, that doesn't give you the right to dominate all the financial decisions. That is just not cool at all. And so we need to talk about that from the get-go, right? So that everyone's on the same page about this. So both people need to have a stay. If you go through mediation or you end up having a litigated divorce where a judge decides, then you're in the hands of some human being that doesn't even know your life, and they're deciding how things are getting split up. Splitting stuff down the middle is often not the fairest and most equitable way of distributing property. And that is especially true for someone who stays at home to be a caregiver. Now, 75% of caregiving in this country is done by women, even if they are breadwinners, even if they are primary breadwinners. I know not why, but that is how it goes. And all of this is something that I think has been really neglected in the divorce/separation kind of negotiations. And lawyers are not completely equipped to deal with this. You can get a certified divorce financial analyst…I have that designation. They're very good at understanding tax mitigation and tax consequences and also being able to run actual cash flows to show you where you might be under certain circumstances.

But my thing is, and something I've been banging the drum about and talking to divorce and family lawyers about is, I would like to see a formula for people who stay at home, that make that choice. When you're staying at home, you're not living off the fat of the land, right? You're doing a job, you're bringing up the children. I mean women, unfortunately, or fortunately, 'cause being a mom is very fulfilling. But you know, we're expected to work like we don't have children and to be moms like we don't work. That's not possible. And what we do is valuable for society, because that's how society grows and prospers, by having children in it. But you know, if people are gonna be penalized for having children and aren't gonna get down the road what they need to have to live an appropriate lifestyle in retirement, well then, I would say people aren't gonna wanna have children anymore.

Katie: Sounds like a raw deal to me. 

Kim Davis: It is. 

Kate: I loved how Kim basically described prenups as this very sensible, empowering thing. It doesn't mean you don't love each other. And Katie, this year you've talked a lot about how taking time off to raise kids has such a huge impact on women's lifetime earnings and retirement savings. And I'm much more conscious now that, you know, if a guy wants his wife to stay home and raise the kids, he needs to split his pay with her and fully fund her retirement accounts. 

Katie: Bingo. You're doing work, people, you know, and we say “women” because it is, statistically speaking, more often than not the woman who takes that role in a heterosexual household. But I think this goes for everybody in households where, you know, maybe in a heterosexual context, the woman is the breadwinner and the man is staying home. I mean, it goes both ways. So definitely don't mean to discriminate there, but at this point in time, unfortunately it is still pretty skewed. 

Kate: Regardless of the sex or gender of the partners, if there is a stay-at-home parent, then the working outside the home parent needs to split their pay and fund their partner's retirement accounts. 

Katie: Amen. And in the financial realm, for those people who do have traditional income from full-time work and side hustles, I thought Lauren Anastasio from Stash gave really good tips in that episode on the process or transition from going from side hustle to full-time entrepreneur, and the things that you need to be conscious of financially, and some of the foundational things that you wanna get in place first. 

One of the chief complaints that I hear from entrepreneurs and other people that have variable income is that variable income makes budgeting and investing really challenging. I think, often because so much of the typical financial advice we hear in the space is all about the power of automation and automating your savings. And I think that that is typically harder when you don't have a set standard biweekly paycheck that you're counting on. So what types of mistakes do you often see people making with variable income? 

Lauren Anastasio: I would probably say it falls into one of three categories. So there are some pretty common ones. The first is not having enough cash. The second would be failing to separate your personal finances from the business finances. And then the third would be either failing to save or invest for retirement or in a tax-efficient manner of some kind. You know, first say, regardless of where you are in your self-employment journey, if you haven't separated your personal finances and your business finances, you'll want to try to do that as soon as possible. And you know, we'll talk about this probably in a little bit more detail, but you'll also wanna be mindful about keeping capital available. So this is true whether you're self-employed, but also if you have variable income like commission or large quarterly or annual bonuses, the nature of variable income makes cash more important, to smooth out those choppier inflows. 

And as far as, you know, the struggle to save and invest is concerned, especially when it comes to retirement, making that transition from having a regular paycheck, where maybe a percentage was going into a 401(k) every paycheck, it is harder to figure out how to put money aside consistently for the long term, but it's just as important, if not more. So I would say, try setting a target percentage, and invest and save at that percentage regardless of what your inflows look like. And again, that's just another reason why cash is so helpful. So that you can still pay yourself consistently and therefore try to save and invest consistently, even when the income for the business is a little less predictable. 

Katie: The way you earn will almost definitely impact the way you approach your finances, right? So I think our takeaway here for 2023 is, if you are self-employed or you have variable income, having that larger “oh shit” fund will help smooth out those lower-income months. But if you're not self-employed and you do have the reliability of a steady paycheck, advocating for yourself in your current role…and I mean, I would add to exploring those scalable side hustles, if that interests you, that you can maintain while you rock the nine to five thing, can help increase your income, too. And hey, if you are in a position where you have a predictable income, take advantage of that predictability. Set up the automatic transfers to the 401(k) from every paycheck, or even to accounts outside of your employer-sponsored options. That if you know the same money is coming in every month, just take that decision off the table, make it once and move on.

Henah: I dunno if you guys know this, but Katie actually forced me to do this. She was like, hit the button, hit the full 401(k) this year. 

Katie: Oh yeah! We were, were we on Slack screensharing? I can't remember. 

Henah: I think we were on FaceTime or something, and I was like, oh, I'm so scared to hit this button. It's like 21 whatever. And she was like, “Do it, Henah. You can do this.” And so here we are. 

Katie: Effective bullying. 

Henah: Yeah. But yeah, I think to your point, like I, you know, have been able to scale my side hustle and rely on the paychecks here. 

Katie: I would love to close out by asking each of y'all if there was a moment that really turned things on their head for you. Like something that often goes against conventional advice or something that maybe reframed the way that you understand money. 

Henah: I know for me, the one episode that blew my mind this year was our interview with Nick Hanauer on how our economic system today is, you know, kind of backwards and wrong, so to speak. And there were so many times that my jaw was on the floor, but the biggest mic drop for me was his point about Wall Street bonuses versus raising wages for workers. So I love that part. 

Kate: Yeah. Nick is so amazing. He's my boyfriend now, so all the rest of you can get in line. 

Katie: I guess I'll have to cancel that outgoing email that I had planned for later then, Kate. I respect your relationship. No, I love Nick so much. All right, let's throw it back to that interview.

If somebody is getting paid a billion dollars, that's money that probably could have been better spent on other things. 

Nick Hanauer: That's absolutely right. And you know, the thing is, is that coming back to neoliberalism and that way of thinking about economic cause and effect, how many times have you heard in your life that if you raise wages for like working people it will kill jobs? 

Katie: Oh yeah. The Big Mac is gonna cost $20. 

Nick Hanauer: Yeah. And there have literally been thousands of studies now on the effect…I mean, there's just giant amounts of economic research on how many jobs…turns out, zero. The answer is zero. It didn't kill any jobs. But how much this issue has been studied. But to my knowledge, not one economist in the entire world has ever run a study analyzing how many jobs Wall Street bonuses killed. 'Cause here's the thing: If you take, I mean, just add up the incremental compensation at the tippy top—hundreds of billions of dollars—and then say, instead of that, we spread that through the economy in $50,000 per year chunks, which is how much the average, the median full-time worker in America makes. You know, it's tens of millions of jobs. 

This is what neoliberalism is. The evil part is not believing that when the rich get richer, that's good for the economy. The evil part is believing that when the poor get richer, that's bad for the economy. That's the thing about a market economy, is that inevitably it compounds both advantages and disadvantages over time. And what that means is that the middle classes are always deliberate artificial constructions; they don't happen. They're not the happy byproduct of economic growth. They must be the objective of policy. 

There's a reason that there's been this $50 trillion transfer of wealth from the bottom 90% to the top 1%. That's not because the bottom 90% slacked off over the last 40 years. It's because we allowed policies to concentrate advantages and disadvantages, and we didn't used to do that. And so middle out economics takes that into account, and basically is a deliberate effort to generate prosperity by ensuring that every citizen is robustly included in the economy as a consumer, as an innovator, as a citizen, so on and so forth. Because that is what makes the economy go. The economy is people. It's not money.

Katie: You don't say. 

Nick Hanauer: Yeah. And the more people we robustly include in the economy, the better it will work. Full stop. That is just the golden rule of economics. Inclusion is not this thing, this sort of liberal nicety that we should do if and when we have economic growth. Including people is the cause of economic progress in market economies. And so middle out economics is all about getting everyone in the country to be able to robustly participate in as many ways as possible, whether as consumers with rising incomes, or as highly trained workers or innovators making cool new things to solve human problems. And it's effectively the opposite of the trickle-down approach, which was simply, if you just give enough tax cuts to rich people, somehow it will all work out for everybody, which is always a con job and a nonsense. You could go on and on and on about what the policies of middle out economics are. They include things like making sure that every single person who works for a company, particularly a big company, earns enough to live a dignified and secure life without the assistance of other taxpayers. If a company cannot afford to pay its people enough to get by without food stamps, it's not really a company, it's a parasite.

Henah: What? That point was so good. 

Katie: I know. 

Kate: Yeah, when Nick said the middle class doesn't just magically, naturally occur, but is a deliberate result of government policy, that was such a huge mic drop, jaw-dropping moment for me. And I wish he could just work for the Biden administration. 

Christie: Right. That was such a great point. It also reminded me a lot of the episode I really loved with legendary Rebecca Walker on bootstrapping, which I think also falls into that bucket of like, reframing what we're often told about money in the economy, especially for women. 

Katie: I think that's interesting because more research that kind of piggybacked on that found that families with a financially sophisticated husband are more likely to participate in the stock market than families with a wife of equal financial sophistication. So the paper from the Journal of Finance chalked it up to, well, we have these like gender identity norms which constrain a woman's influence over intra-household financial decision-making. That gender roles are incredibly pervasive, both societally, but also like in that nuclear family individual level, that stereotypically the woman tends to manage the bills, the day-to-day budget, while the man is typically managing like the grander task of long-term wealth accumulation and strategy. And I just think it highlights, like, our relationships with money as women do not exist in a vacuum. Like they exist within this broader cultural context and familial expectations for what it means to be a “good woman.” I'm curious what you think about why challenging this stuff matters, how we kind of challenge it, especially when you still have sub-segments of society who either don't think it's real, that like these are imagined barriers, or that oh, it's just the way it should be. 

Rebecca Walker: The most important thing for women to educate ourselves and to become more and more comfortable talking about money, managing money, and realizing that it is completely within our purview. It is not rocket science. We should not be intimidated by it. And that it is a lever of power that is being wielded, you know, against us. And part of that process and why I decided to do this book Women Talk Money is to really get in touch with your money story, to figure out, as women, what narrative we're holding about our money. And when you really start to get women's stories about money, what they grew up learning, what they've thought about it their whole lives, you start to see these kinds of institutionalized gender and racial inequality within the very story, right, that they tell. So I think it's important for every woman to think about what we're holding, and then educate ourselves. 

I think we live in a great moment in terms of the information that is available to us, but we've gotta strip away these our feelings of, you know, not smart enough, not savvy enough, like, oh, you know, the men do that. It's the men's space, you know, money and economics, that's too hard. I remember somebody telling me when I was quite young, you know, “You're not good at math, so just forget about it,” you know? And to me that was like…and I held that idea for a long time and somehow I translated that into, oh, I'm not good at math; I must not be good at managing money, right? Because math and money go together. So I had to really let go of that idea and say, you know what? Actually I'm very good at math, and even if I'm not very good at math, I can still understand how to budget, invest, plan for my future. 

Katie: Yeah, I loved both of those interviews, especially because…also Kate, I would note, I think Nick does work with the Biden administration. He's somehow connected with them. I don't know it's directly, but yeah, there is some influence happening there. But anyway, I really liked what Rebecca said about things that we need to unlearn or maybe un-internalize, like things that we've been told about our competency around money. So amen to that. 

Kate: Right, and the fact that the economy as we know it is built on a power imbalance and that our experiences with money reflect gender and racial inequality. 

Katie: Totally. Haley Hoffman Smith also touched on this a little bit too, like how we internalize these root wounds around our finances that impact how we interact with money as adults, and that we may not even realize where these emotions or predispositions are coming from, because to us it's just normal. Like that's just based on our foundational childhood experiences with money. 

Haley Hoffman Smith: And I believe too, with money, going back to the root wounds around money from your upbringing can be very powerful. So, how was money used as a bargaining chip in your relationship with your parents? What did they teach you about money? What is your perception of your worthiness of money, like your rate per hour? Do you have weird memories or beliefs because of a boss that didn't pay you your worth, and it was really hard to get a raise? Like really pulling back the curtain and looking at what's going on that's fueling those beliefs around money, but also your self-concept, is a really powerful place to start.

So we all have things we want materially. I most recently just one week ago got my dream car and for me, if you would ask me this, I guess two weeks ago before I had the dream car, okay, what would you feel? What would you feel if you had the dream car? I would've said, I would've felt free. It would've felt expansive, it would've felt, you know, luxurious. I'd feel excited. Okay, fill in the blank. All the things that I believed it would make me feel. And then a question you can ask yourself is, okay, well, how can you provide yourself that feeling right now? Or why do you believe that's what you need to get there? Or is there something else that you can do on your own where you don't have to like open your wallet or go pay for anything that can get you there? 

Katie: So for me, my perception of money growing up was something very precarious and precious and scarce that you were supposed to hoard. And that is why my chief product is a spreadsheet for tracking. Anyway, Sebastian, let's end with your favorite clip. 

Sebastian: Cool. Yeah, no pressure. A standout clip for me was maybe how to become a millionaire in 10 years or less, because why wouldn't we wanna be rich? 

Henah: Touché, touché. Besides Katie walking us through the math, which honestly made me realize that it's easier to make a million dollars over 10 years than I thought it would be—fingers crossed—it gave me a lot of hope now, because I'm, as we talked about, learning to invest more and be really intentional, and Delyanne, the guest in that episode, talked about how she had a high net worth or high income, and it didn't translate into saving a million dollars either. And so that part she said also about being optimistic over the long term really stuck out to me as well. 

Sebastian: Yeah, definitely. I mean when it comes to investing, you know, it's an interesting time lately, seeing headlines about the market and you know, what she said about instead feeling hopeful and kind of reminding us to take advantage of this time or those times, instead of being scared. Those were kind of interesting and it kind of stood out. 

Katie: One thing that I noticed you posting about a lot during the bear market, which I really appreciated in the first half of 2022, was this idea that like, y'all, now is not the time to slow down or to stop investing or to like pull back and wait it out. Now is the time to double down. Can you share a few words of wisdom about the temptations of market timing and why young people should paradoxically be excited about bear markets? 

Delyanne Barros: Yeah, I mean young people should be excited, but honestly like it was the 30s and the 40-year-olds that I was yelling at, because those are the people who like come at me in my messages where they're like, “I feel like everything you post is for the young people. Like what about us oldies?” And I'm like, yo, I'm turning 40 this year. Like what are you guys trying to say? Then I was like pumping out content saying, hey, for all of you who are always telling me “I'm 30, I'm 40, I'm just now getting started,” this is your chance to catch up right now. The market's been up 15% in the last two months. That's your chance, right? And so I was kind of trying to get their attention because if anything, it's the younger, the Gen Zers, they have more time, they have more time. They can afford to invest 5% or 10% of their income and kind of coast along those lines for a bit. But it's the 30- and the 40-year-olds that really have to be like, oh my god, I need to be investing 15%, 20%, which is a heavy toll on your paycheck, but that 15%, 20% is gonna go much further during a bear market than it would when the market's hitting all-time highs. And I think people miss the other side of an equation of a bear market.

So on one side, yes, it's so painful to log into your account and see the balance go down. I completely understand that, but you're also missing the other side of it, which is, ooh, now it's also cheaper to load up and bring my cost basis down, and people just forget like cost basis. I always say, imagine walking into your favorite store. You're there to shop; you're gonna buy the thing that you want. You've already made up your mind, you got the money in hand, and then the manager walks up to you and is like, “By the way, everything is 50% off, just today,” and what are you gonna do? Are you gonna turn around and walk out of the store? No, you're gonna get two of everything. You're gonna get it in every color, right? And so that's how you should be thinking about the stock market. If you really believe that it is a wealth-building tool, that it is a long-term investor's game to win. If you really believe that it's going to recover over time, there's no reason why you shouldn't be shopping the hell out of the stock market when it's red. 

Kate: Yeah, that was a total lightbulb moment for me. Like, why wouldn't you wanna buy stocks when they're half off? 

Katie: Hell yes, people, I love it. This is great. I love seeing how these episodes have impacted all of us, 'cause I think we've all kind of taken little nuggets maybe without even realizing it. But anyway, what a great clip and reminder for us to end the show on.

So taking all of these kind of counterpoints, if you will, to what we often hear in the mainstream into consideration, as a final truth for 2023, I think I would wrap it all up by saying there's a lot of juicy paradox in this space, right? It makes it a fun one to explore, because it's true that things are more challenging now than they were in, say, the 1950s financially. But it is also true that to your point, Henah, going from $0 to a million dollars in 10 years or fewer, if you're a couple that's earning median to like I would say slightly above average wages, it's actually more achievable than someone might think. It's true that money can be complex and emotionally loaded, but it's also true that your own perception of your ability to master your money may be negatively skewed, and you may be far more capable than you're even giving yourself credit for. 

So anyway, one thing that I've kind of been navigating this year is just making room for more nuance that things are rarely as simple as they appear, but that we can always come back to, okay, this is the context I exist within now. How can I focus on adjusting my individual approach to adapt to it? 

Henah: Ah, in my signature words from the Rich Girl Roundup theme song, love it. Love it. Christie, Sebastian, and Kate, thank you so much for being game to join us today. This was so much fun, and I really loved the chance to spotlight you all on the Money with Katie team. 

Katie: Yes, same. 

Sebastian: Had a great time. 

Kate: We're all thrilled to be here. 

Katie: I love it. This team of rock stars and like I said, our talented audio engineer Nick, who was not able to join us today, but does make our weekly show happen. So please listen to or watch the episodes on YouTube if you don't already. 

Welcome back to Rich Girl Roundup. We will take listener questions every month on Instagram, so follow @MoneywithKatie on Instagram if you're not already. And as my standard disclaimer, I am not a licensed financial professional. This is not financial advice; this is just “What would Katie do in your shoes?” Paid non-client of Betterment. Views may not be representative. See more reviews at the App Store and Google Play Store. Learn more about this relationship betterment.com/moneywithkatie. This segment is brought to you by Betterment, the online investing platform that gives you the tools, inspiration, and support that will help you become a better investor. 

This week's question is from Taylor. “Dear Katie: Many moons ago I took some bro advice. I know, I know, I shouldn't have, but it was bro advice from my literal brother, who to be fair, is pretty good at money. So it is what it is. Anyways, he was very into the stock market and bro podcasts with little nuggets about things that could affect it. So I bought a handful of individual stocks per his recommendation. Fast forward: I am a rich girl doing rich girl things and have accepted I will never be an individual stock girl. I'd really like to transfer everything over to a robo-advisor that will manage it for me. However, with the current state of the market, my stocks have seen better days. Does it make sense to try to wait it out till they're performing better, or should I just bite the bullet and transfer it over. My cumulative return since I funded the account is 8.51%. So I haven't lost money, but it has taken a pretty considerable dip since earlier in the year before the market started turning. So it certainly feels like a loss to cash it out at this point.”

I loved this question for our “best mic drops of 2022” slash “truths to bring into 2023” episode, because to me it highlights such a beautiful evolution that many of us experience in our financial lives. Who amongst us hasn't dabbled in individual stock picking? Though I will say, Taylor: You said you don't think you're good at this, but if your portfolio is still up 8.51% after the last 12 months we've had, you actually might be better at it than you think. Now, I wouldn't recommend trying to extend your streak of Ws because it's very hard to keep winning forever, but I commend your growth and your courage to get some skin in the game.

So let's talk about the pros and cons of liquidating positions when they're quote unquote “down.” I use air quotes here because when we're talking about individual stocks, holding longer doesn't necessarily mean we are going to see them regain their former highs. For example, Cisco stock peaked around $77 during the dotcom bubble in 2000, and it has never been that high again. Today it trades for about $44. The point is, as investors, we tend to anchor to the price we pay as the real value and view anything above it as a good return and anything below it as a low. In reality, the fair market value or the fundamental value of that security may be nowhere close to what we paid. Someone who wanted to hold onto their Cisco stock after the dotcom bubble burst until it regained its pre-crash high, instead of diversifying into, I don't know, the S&P 500, would've missed out on one hell of a bull run and still would not have reached their former all-time high to this day, 20 years later.

All that to say, the fact that you've actually gained 8% on your individual stock investments, to me—and this is not financial advice, but rather a consideration for your decision—is a bit of a like “take the money and run” moment. The con that you don't know if they'll reach their former highs if you sell now is certainly a possible scenario. But the pro is that by cashing out now and transferring to a robo-advisor, you'll get to buy all the broad-based low-cost index funds at a price that's relatively lower than you would've paid this time last year. Now, like we said, that doesn't necessarily mean it's a fair price, and some people still insist that the S&P 500, for example, is still overvalued. But as far as rebalancing opportunities go, big downturns tend to be good times to secure new, more fairly priced positions in major indices.

Keep in mind, too, if you purchased these individual stocks less than a year ago, that is, fewer than 12 full months ago, you'll pay short-term capital gains taxes on your returns when you sell them, which is for all intents and purposes your marginal tax rate. And if you've held these stocks for longer than a year, you'll pay long-term capital gains taxes on your returns—likely 15%, unless you earn more than the mid-$400,000 range after accounting for the investment income. So just some tax specifications to be aware of.

All right, y'all, I am officially signing off on The Money with Katie Show for 2022, so I will see you next week, same time, same place, but in a different year in 2023. So thank you for spending 2022 with us. Our show is a production of Morning Brew and is produced by Henah Velez and me, Katie Gatti Tassin, with our audio engineering and sound design from the talented Nick Torres. Devin Emory is our chief content officer, and additional fact checking comes from the lovely Kate Brandt.