Category: Anine Sus

The World Isn’t Green and Brown

“Your green is somebody else’s brown.”
—Larry Swedroe

For the May 2022 issue of the AAII Journal, editor Charles Rotblut and I interviewed Larry Swedroe about his book with Samuel C. Adams, “Your Essential Guide to Sustainable Investing.” You can read the interview here!

As you’ve probably gleaned from my other blog posts about sustainable investing, investors are hitting many roadblocks on their way to finding companies and funds that are not only labeled as sustainable, but are truly acting on that label. With that in mind, I asked Larry whether having regulations set for environmental, social and governance (ESG) and sustainable investment labels would help.

Part of his answer made me hopeful for the future of sustainable investing: “There are a lot of people who say, ‘I really want to help the planet and I’m worried about climate change, so I’m going to screen out energy companies.’ To me, this would be a bad decision. We want to support companies that are creating technologies that improve the planet. The industry that’s working to create a greener planet (as it produces the most green patents) is the one that everyone vilifies: energy.

“If you screen energy companies out, you raise their cost of capital, making it more difficult for them to invest. A better strategy would be to use a best-in-class kind of rating system. This could lead you to consider investing in the energy companies that are making the most progress toward a greener planet.”

Just as the world isn’t black and white, with much room for gray and nonbinary thinking, the world isn’t divided into green (virtuous and sustainable) and brown (vice and sin) either—there’s a lot of muddiness in between.

Something that Larry stressed throughout our interview was that the individual investor is the one who must decide what their sustainable investing strategy looks like: “I don’t think there’s a right answer. There’s one right answer for each person, depending upon how deeply they feel about these issues and how deep into the weeds they want to get.”

One benefit of sustainable investing for me was that it really narrowed down my choices. There are thousands of things I could invest in, but once I made sure what I was putting my money into was sustainable, had low fees and was helping more than hurting the earth, I ended up with under 10 exchange-traded funds (ETFs) that fit those specific criteria at the time.

I’m still finalizing what my investing strategy will be, while also looking for future investments. Investing sustainably was my entry point, and I hope it helps you too!

Bonus: Part of our interview with Larry Swedroe is also available in video form! You can see what I look like inches away from a nervous breakdown, something I only share with my closest friends! Enjoy 😉

I read this so you don’t have to! The Behavioral Investor by Daniel Crosby

“The moral of the story: get a lobotomy and get rich.”
—Daniel Crosby

Since I now have money invested in the market, it’s time to face my humanity. Behavioral finance studies how psychology affects investors, and in “The Behavioral Investor” psychologist and asset manager Daniel Crosby investigates the ways in which our brains interfere with our investing success.

AAII Journal editor Charles Rotblut interviewed Crosby in 2019 and made me much more interested in how investors “ought to drive out emotion at every turn.” Crosby covers sociology, how investing affects the brain, physiology; ego, conservatism, attention, emotion and how investors can overcome all four; and how behavioral investing is rules-based. Each chapter ends with a “What’s the big idea?” section that summarizes main concepts.

Every time I go to check my Schwab account just to take a quick peek at my investments, I hear Vanguard founder John Bogle’s voice in my head: “When you get those regular retirement plan statements … don’t open them. Don’t peek. And when you do peek … be sure you have a cardiologist standing by. Because you will be so amazed at how much money you’ve accumulated over 20 or 30 or 40 or 50 years that you won’t believe it. You’ll probably faint, or something worse, and there will be a doctor there to revive you.”

I saw this sentiment echoed in “The Behavioral Investor,” as I suspected it would be: “Greg Davies shows that if you check your account daily, you’ll experience a loss just over 41% of the time. Pretty scary when we consider that human nature makes losses feel about twice as bad as gains feel good! Look once every five years and you would have only experienced a loss about 12% of the time and those peeking every 12 years would never have seen a loss. Twelve years may seem like a long time, but it’s worth remembering that the investment lifetime for most individuals is likely in the range of around 40 to 60 years.”

I used to think this was a more complicated idea, but it simply means that if you don’t look at your account constantly, you’re less likely to see your account in the red. I’ve read enough AAII articles—specifically on behavioral finance—to know that my emotions aren’t going to change the direction of the market, so why even get them involved? Don’t my emotions have enough work to do already? I’ll save it all up for 20, 30 or 40 years and then let it all out when I see how much money I’ve made!

Crosby also provides a helpful lesson on diversification: “Left to our own devices, we create portfolios in our own image. Americans buy American stocks. Steel workers are overweight manufacturing, while financiers double down on bank stocks. The timid fail to allocate to equities and the overconfident hold large positions in single stocks. Like an old married couple, our holdings start to look just like us, and there is great danger in that similarity.” He also encourages investors to avoid mutual fund manager Peter Lynch’s famous strategy of “buying what you know” in order to combat the tendency to make our portfolios “overweight [in] what we know.” Instead, he counsels us to “put in place a plan that diversifies across geographies and asset classes, both familiar and foreign.”

To really drive this strategy home, Crosby says, “By buying a diversified basket of index funds that covers a variety of asset classes, know nothing investors (who often know a great deal) are likely to beat more than 90% of active managers and have time to focus on pursuits more meaningful than compounding wealth.” I like those chances, especially as a “know nothing” beginning investor! (OK, maybe I know like three things now.)

Though Crosby doesn’t say specifically how often I should be checking my Schwab account, I’ll probably limit it to once a week as I start and then build up to once a month. I still want to know how my investments are doing, even if it’s just to say:

If you’re just getting started in investing, I wouldn’t recommend for this book to be number one on your reading list. I’m glad I worked up to it after reading more books on the basics, because if it was the first investing book I picked up I wouldn’t have been able to apply the lessons as well as I can now.

Stay tuned as I grow my investing library and read more books so that you don’t have to!

Read more book reviews next!

Broke Millennial by Erin Lowry
Financial Feminist by Tori Dunlap
Nice Girls Don’t Get Rich by Lois Frankel

Shop my investing library at Bookshop.org!

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Hereditary Financial Habits: The Generational Wealth Gap

https://investingdiscoveries.blog/wp-content/uploads/2022/04/GenWealthAudio.mp3
You can listen to the audio of this post!

When I was first developing my ideas for this blog, I would talk to my best friend Ilana about her perspectives on money, investing and finance. One night, I asked her what she thought of the word “wealth.”

Many other millennials and young people likely feel the same about “wealth” remaining an idea. So, what gives?

My super light and fun research revealed a few compounding issues that affected many millennials in the beginning of their wealth-building years: 1) We have lived through two major recessions, and many young professionals were just starting their careers in 2007–2009; 2) student loan debt has increased exponentially as the cost of college tuition rose faster than the rate of inflation for decades, starting in 1980; and 3) wages have remained stagnant while inflation and cost of living have increased.

Economic Recession

In 2001, around the time when the millennials born in the early 1980s were in college, the economy entered a recession for a period of eight months from March to November. My only potent memories from this time were of 9/11 when I was in second grade. My baby boomer parents, in contrast, recall that “9/11 caused a sharp and shocking drop in the market, and the uncertainty of the time caused people to view what had been a fairly mild recession with more fear, causing more volatility.”

The dot-com bubble that burst in 2000 also contributed to this recession, and many people lost their jobs as unemployment climbed to 5.7% by the end of 2001.

Then there was the Great Recession that lasted from December 2007 to June 2009. This one I remember. I was at the tail end of middle school, and it was on everyone’s minds—yes, even 13-year-olds! My parents recently told me, “It did put a hurt into our 401(k) and stock values. It started with the burst bubble of the housing market, and then unregulated financial institutions, especially mortgages. We didn’t buy or sell a home, so we weren’t affected too much there. Beginning in 2009, stocks started to slowly come back and did well for the most part for 10 years.” My dad says it was “a wake-up call, and I tended to watch the market more closely for signs of volatility after that. I still do. Not that I can do that much about it!”

This recession greatly impacted not just the U.S., but the world. Many countries felt the shocks at different times. At the end of 2009, U.S. unemployment was at 9.9%.

According to an article from Trust & Will, in both of these instances of recession, people with the least amount of wealth—millennials—were the most affected.

Student Loan Debt

First, I want to say that I was extremely lucky in that I had very little student loan debt despite going to an out-of-state, private liberal arts school. My parents started 529 college savings plans for me and my brother in 2001, right around the time of that recession, and my dad recalls that they grew nicely over the years despite blips in the market. I’m so incredibly grateful for the planning that preceded me. It gave me a huge leg up and allowed me to simultaneously start paying off my debt and saving as soon as possible.

When I asked my parents about how much they paid for college, my mom remembered writing a check for $1,000 for a semester (!!!) and my dad said it was between $3,000–$4,000 per year for him. Nowadays, the average tuition for a year at an in-state public school is around $10,000; for out-of-state public school, around $23,000; and for private school it’s closer to $40,000.

Let me throw some more numbers at you from that same Trust & Will article: “In 1989, 40-year-old boomers had a median income of $70,000, median wealth of $112,000 and median debt of $60,000. In other words, income and wealth far exceeded debt. In contrast, millennials have more debt relative to their income and accumulated wealth. With a median debt of $128,000 and income of $73,000, millennials have a much harder time paying off debt and building wealth. In addition, you might notice that the median income for millennials is only $3,000 more than the median income for boomers back in 1989. Wages remain stagnant and are outpaced by inflation.”

It’s likely that most of the debt millennials are carrying is related to student loans. An article from Visual Capitalist investigating the rising cost of college tuition found that “Since 1980, college tuition and fees are up 1,200%, while the Consumer Price Index (CPI) for all items has risen by only 236%.” This staggering difference need not be quantified further: College is so damn expensive that we need the government to subsidize our education, but we need the education to qualify for a career to pay off the debt!

Thankfully, there is some good news. For the first time since 1980, the cost of college tuition is finally not rising faster than inflation.

Wage Stagnation

As I briefly mentioned in my book review of “Broke Millennial,” wages stayed roughly the same for 40 years compared to inflation, as supply likely overwhelmed demand in the job market.

When I looked into this further, I found a Fast Company article that noted, “While recent pay hikes are certainly a positive development that will benefit millions of workers, they are not close to making up for years of wage stagnation.” They also can’t outpace inflation over the last year, which has overtaken most of the raises people received in 2021.

In addition, the purchasing power of the average American hasn’t really changed in 40 years and everything around us has become more and more expensive, forcing many people to work multiple jobs just to pay rent and get food on the table. Some news outlets will give this a trendy name like “polywork,” as if it’s something new and exciting to report on instead of people being overworked and underpaid into eternity.

Conclusion

Though I won’t be able to solve all of these economic problems in this blog post alone, knowing that all of these factors are at work helps me to understand why millennials have struggled to bridge the generational wealth gap. Are there any other possibilities you think I missed? If you’re an older millennial, how have you combatted these external circumstances? If you’re a younger millennial with a lot of student loan debt, stick around because I’ll be looking into how you can invest even while you pay it off.

Opening High-Yield Savings Accounts

Last time I wrote about savings accounts, I asked my Instagram followers if they knew the interest rate on their savings accounts. I gave them four options: 1) Yes, but it sucks; 2) Yes, it’s actually making me money!; 3) No; and 4) I don’t have a savings account.

I got 15 responses: Three of my friends said they know their interest rate, but it sucks; six said they don’t know the interest rate; and six don’t have a savings account. I would say most of my followers fall between the ages of 20 and 40, and some of those without savings accounts are either younger than me or not working full-time yet.

However, no one selected, “Yes, it’s actually making me money!” This didn’t surprise me, but it motivated me to continue my research and finally open some high-yield savings accounts.

First, I revisited SmartyPig, which still offers a 0.70% annual percentage yield (APY), or interest rate, on my savings. This account will let me save up to $10,000 at this high interest rate, but once I have more than that the APY drops to 0.45%. I decided to call this my “grower not shower” savings account, where I’ll put money before investing it so that I can make the most of it before its intended purpose.

Signing up for a SmartyPig account was easy, it just required my name, address, Social Security number and creating some security questions. At some point I was asked if I had lived at my current address for more than two years. When I said no, I was asked to also enter my previous address. Once I read the disclaimers, I was able to manually connect my current bank savings account to make a transfer.

Then I wanted to look at some high-yield options that gave me more flexibility with my savings. LendingClub now offers a 0.65% APY, higher than it was when I last looked into it! The only restriction is that I must have at least $2,500 in the account. I’m calling this one my “movin’ on up” savings account where I’ll be putting funds to save up for buying a place in the future!

Opening an account with LendingClub was slightly different than SmartyPig. I was asked to create a security phrase, and I was able to connect my bank automatically using Plaid. From there, I could designate which account I wanted to connect and choose the amount I wanted to transfer. There were many disclosures to read, but most didn’t apply to the high-yield savings account I was opening and were instead about LendingClub’s other banking and card offers.

I decided to open two different high-yield savings accounts so that I can maximize the yields across both, and because I want to keep my savings goals separate as Bola Sokunbi explained in “Clever Girl Finance.” For now I’m keeping my regular savings account with my bank, designating it for emergency savings.

I’ll keep you updated on how my plan goes, and as it changes along the way!

Why I Care About Sustainable Investing

If I had to pinpoint the exact moment that I started caring about the earth we live on and had a language to discuss it with, it would be when I enrolled in Dickinson College. Known for its sustainability, Dickinson College became a carbon neutral institution in 2020 and is highly rated by the Princeton Review Green Honor Roll. While I was there from 2012 to 2016, I appreciated the water bottle refilling stations, the college farm that contributed to campus dining services and local restaurants and the Center for Sustainability Education that instilled in students the importance of taking conscious action to sustain the earth.

That’s how the fuse was lit.

Within the last year there were two pieces of work that solidified and further propelled my sustainability mindset: “No Planet B: A Teen Vogue Guide to the Climate Crisis” edited by Lucy Diavolo and Lorde’s album “Solar Power.” The Teen Vogue collection “No Planet B” includes articles from 2016 to 2020, many written by teen activists for climate change. It covers the basics of climate change, the fossil fuel industry, how recycling plastic won’t stop plastic from ruining the earth, intersectionality—that is, the acknowledgement that everyone has their own unique experiences of discrimination and oppression, considering gender, race, class, sexual orientation, physical ability, etc.—with climate activism and the global impact climate change is having on indigenous people. In one article from 2019, we hear from Amanda Cabrera, an eight-year-old at a climate change strike in New York City who says, “We need the planet but the planet doesn’t need us.” All of these young voices are the ones who will be most affected by climate change, and they understand just how dire it will get if nothing is done to slow it down.

Another young voice affected by climate change is Lorde. Ella Marija Lani Yelich-O’Connor, known professionally as Lorde, is 25 years old and released her latest album “Solar Power” in August 2021. It’s an album inspired by her time spent in nature when she cut out social media and most of the internet in 2018. On the album, Lorde balances the knowns with the unknowns. The song “Fallen Fruit” is her most explicit on climate change with lyrics like “It’s time for us to leave,” the fallen fruit of the title signifying what little is left after prior generations’ development and damage of the earth. On the final song of the album, “Oceanic Feeling,” she sings about lineage of place and connection with the earth and its elements. She starts off by thinking about her ancestors, her past; and then to her brother, her present; and finally, she thinks about a daughter in her future. But will there be a world for that daughter in the future?

I remember reading “No Planet B” at the lake while listening to Lorde’s album “Solar Power” over the summer, feeling all of my big feelings about the earth and all the harm we have done to it that cannot be undone. Layers and layers of things humans have built on this earth, roads that connect us but also cause pollution, buildings that the majority of people can’t afford to live in, factories that only care about efficiency and profit and are pumping toxic waste into our air, into our water, into our lives. It doesn’t just disappear, it piles up—everything we have done to the earth will overtake humanity in the end. Corporations are the biggest producers of waste and yet most of the climate anxiety and call for sustainability is placed on the individual.

What can an individual really do to improve the world? I can start with putting my money where my mouth is. That means I’m not investing in Tesla or Amazon, to start. Other big corporations—including asset managers BlackRock and Vanguard that have had a huge hand in environmental destruction—are also off the table. And I’m not interested in investing much in cryptocurrency either—according to Digiconomist on Twitter: “During 2021 Bitcoin consumed 134 TWh [terawatt-hours] in total, which is comparable to the electrical energy consumed by a country like Argentina. Related CO2 emissions were ~64 Mt [metric tons]; enough to negate the entire global net savings from deploying EVs [electric vehicles].”

What I can do is research my investments before I put my money into them. That socially responsible exchange-traded fund (ETF) I think I found? It’s an iShares ETF, and iShares is owned by BlackRock. And its top 10 holdings are full of big corporations. Oh, and it’s mostly invested in military-grade weapons and fossil fuels! Many investments are masquerading as sustainable for me to feel better about investing in them, and I’m not going to fall for that.

There are many layers of sustainability to look for in an investment, including whether the company itself is investing sustainably, can sustain its business, is using and creating sustainable products and, at the end of the day, can also offer sustainable investment returns.

Though it will be a more difficult route, I’m going to find stocks and funds that create better ways of living for our future like efficient solar energy, wind power, waste reduction, pollution control and green transportation. Even though I’ll be investing for the long term, I want to take action now so I can make a larger impact in the future. There’s only so much an individual can do in the fight for climate change, but if we all care just a little bit it will make a world of difference.

If you’ve been inspired to look for sustainable investments, let me know what led you to this point—be it a book, an article, a discussion with family/friends or a personal experience in nature.

Read these next!
The Great Index Fund Diversion
Finding Index ETFs That Aren’t (Entirely) Killing the Earth

The Carrie Finances: Building a Budget That Doesn’t Leave You Broke

OK Anine, it’s been six days. Are you going to keep thinking about that guy who called you corazón and then said he didn’t want to date anyone? No, you’re going to build yourself a budget because he wants to “get his life together” and you already have!

In Sex and the City, Carrie Bradshaw was notorious for relying on the men in her life for money and housing, to the point that it made me a bit sick to watch. She goes to Big when she needs money and she lets her ex-fiancé Aidan buy her apartment (which, unsurprisingly, doesn’t turn out well). When things backfire and she’s nearly homeless, she has no backup funds to bail herself out.

Ever since I was told at age 15 that to be a writer in any capacity I’d have to “get myself a rich boyfriend,” I’ve loathed the idea of relying on a man (or anyone) for anything. It also helped that I listened to Deap Vally’s song “Gonna Make My Own Money” hundreds of times!

Like investing, in dating past performance is not indicative of future returns. For now, I’ve given up on a future reduction in rent were I to move in with someone. (As Whoopi Goldberg said, “I don’t want somebody in my house!”) Instead, I’ve made a life for myself on my own terms.

This also means that I’m a one-income-stream household, and that me, myself and I have to cover the entire rent payment, utilities and other monthly expenses. I live in a one-bedroom apartment in Chicago, and I pay for electricity and internet, but I don’t have to pay for water or gas/heat. I’ve cut back on my monthly subscriptions, so those only cost about $13. My monthly fixed expenses are $1,188. So, what do I do with the rest of my monthly income to ensure my financial stability?

Remember when I read “Broke Millennial” and Erin Lowry introduced me to the percentage budget? It’s time for that budget to shine. First things first: Let’s spreadsheet it!

The percentage budget outlined in “Broke Millennial” designates 50% of monthly income for fixed expenses, 20% for savings or financial goals and 30% for wants or flexible spending. The first thing I wanted to see was the true percentage of my monthly fixed expenses. I was pleasantly surprised to see that it was under 50%. This gives me even more flexibility in this budget, especially if some months I want to save more than 20% of my income, or I need to spend a little more on dental costs—or fancy cheese!

I tried out this budget for the month of February this year and it worked out well for me, even when it came to paying off my credit card! I haven’t set a specific food budget yet, but for now I’m including it in my 30% for flexible spending and will determine it in future months. I’ll also be looking into some other budgeting methods, including trying out a budgeting app or two, so stay tuned for more of the Carrie Finances series!

Have you tried a budgeting method? Did it work, or did you have to create your own?

What Is the Purpose of a Savings Account?

In previous blog posts I described myself as a big saver, but I wasn’t much of one before I got my savings account. I opened my savings account back in 2016 after I graduated from college. I was working consistently and paying off my student loans, but my parents encouraged me to put money into my savings account because if I kept it in my checking account I was just going to spend it!

Savings accounts are basically your bank paying you to keep your money with it. I think of my savings account as a place to hold money before its intended use. The average savings account today has a 0.06% interest rate, meaning the money in your savings account will appreciate by that percentage over one year. It’s definitely not a place for my money to grow—I’m making $0.14 per month at most on my savings. Rather, it’s a place to accumulate money until it’s time for it to shine and fulfill one of my goals.

I learned from Bola Sokunbi in her book “Clever Girl Finance” that psychologically it’s better to separate savings for different goals into their own savings accounts to not only avoid confusion but to not feel that you’re being set back on your other goals when you need something for one specific goal. Right now I have money to be invested and my emergency savings in the same account, but they should really be in separate places so I can see my goals clearer. Thankfully they soon will be, but I also want to look into a high-yield savings account, which I learned about while dissecting Carrie Bradshaw’s financial situation.

First, it’s important to make sure that any bank you’re putting your money in is insured by the Federal Deposit Insurance Corp. (FDIC). This means that your money will be safe should the bank go under. You can check if a bank is FDIC insured here.

After some researching and reading reviews, I found a few candidates for my future high-yield savings account: Sallie Mae’s SmartyPig, Axos Bank, LendingClub and Discover. SmartyPig offers a 0.70% annual percentage yield (APY) or interest rate on my savings, but the caveat for this higher yield is that it only applies to amounts under $10,000. Once you have more than $10,000 in your SmartyPig account, the APY falls to 0.45%. Axos Bank can give you 0.61% per year up to $24,999, but after you hit $25,000 the APY is much lower at 0.25% and goes down to 0.15% on more than $100,000. LendingClub offers 0.60% APY for balances of $2,500 or more. Through AAII’s partnership with Discover, you can get 0.55% APY without any restrictions or minimums (this is higher than what you can get through Discover without being an AAII member). These are all high yields with good options—I would just have to decide which option fits each goal. Maybe I’ll end up having more than one high-yield savings account to maximize the interest rates for the amount of money I want to save.

On the topic of how much you should have in a savings account, I recall many years ago when someone told me that they couldn’t believe a person they knew had more than $100,000 in their savings account. I knew that having too much in a savings account was as bad as not having enough—the opportunity cost of not growing all of that money in investments outweighed having all of that money stowed away, and in a manner akin to stuffing cash under your mattress!

I will be revisiting this high-yield savings account research when I open one in the near future, so stick around for more of my investing discoveries!

How I Raised My Credit Score in 2021

When I first started my job at AAII back in 2017, I wanted to buy a new work wardrobe and my mom took us to Macy’s. She said, “If you get a Macy’s credit card, then you can get all of your clothes here and not have to pay for everything at once.” When I checked out with my new clothes, the cashier opened a Macy’s credit card for me. I had to talk on the phone to some guy who asked me for my Social Security number, my date of birth and my address, among other invasive questions. It felt a bit like an airport interrogation (one time when I had just turned 18, I left my government ID behind and had to tell someone the last names of my neighbors—I never forgot it again!), but after about 10 minutes I had my very first credit card.

I used my fancy new Macy’s credit card whenever I bought things from Macy’s, and then when I moved out on my own in 2018, I opened a credit card with Wayfair so that I could put all of my new furniture on the card and pay it off over time. Thankfully, I was able to pay off my store credit cards without incurring interest, and the Wayfair card allowed me to not pay interest for up to 24 months (the number of months varies depending on how much you spend). I paid everything in full within the year.

However, I’ve never had a proper credit card from a bank. I use my debit card for almost all of my purchases. Why? To be honest, credit cards—and credit in general—scare me!

First of all, what is credit? Credit gives you the ability to borrow money and pay it back later. But I like to see exactly where my money is going, and not be surprised by how much I’ve spent at the end of the month when it’s time to pay the bill. With my debit card, I see exactly what my purchases are and can budget accordingly. But with a credit card, my brain goes all theoretical and then I have to do math and that’s not a fun time! (I recently learned that I could pay off a credit card throughout the month if I want, instead of waiting until my statement arrives, which makes me feel infinitely better!)

Now, whenever I buy something online and a website offers Afterpay, Klarna, PayPal Pay in 4 or Sezzle, I choose it. Not only does this make my bank account happy, since I don’t have to spend all my money at once, it has also raised and maintained my credit score for the last year and a half! Most of these companies that allow you to pay later also don’t charge you interest if you pay within a certain period of time, meaning that you will still be spending the same amount of money whether you pay for it all when you buy it or stretch it out over four or more payments. Most of these pay-later options take your money automatically, but make sure that you pay these installments on time, or else you’ll get pounded with late fees!

I’ve gotten my credit score to a good place (700+), which helped me to be approved for my apartment and will further help me to be approved for an actual bank credit card.

I primarily use Credit Karma to check my credit score, but it also includes offers for credit cards and shows how likely I am to be approved for different cards. After doing some research, it looks like the “Discover it” credit card is a great option for me. There are no annual fees, I can use it at Woodman’s (and buy infinite amounts of cheese!) and I can get 5% cash back on groceries, restaurant meals and more. (AAII worked with Discover to get you some other sweet deals here.)

Signing up for a credit card was super easy, but if my credit score had been lower and I hadn’t done anything to raise it over the last year, it would have been harder to find a credit card that I could get approved for. I’ll keep you all updated on how my credit card journey continues—I’m still freaked out by the possibility and the power!

I read this so you don’t have to! Clever Girl Finance by Bola Sokunbi

I found “Clever Girl Finance” by Bola Sokunbi when searching for beginning investor books, and I hesitated before buying it. Though the world of finance is dominated by men, particularly white men, I wondered if financial literacy needed to be gendered at all. Sokunbi answered this question within the first few pages of the book, saying that “despite [women] earning more than ever before, we are paid significantly less for doing the same work as our male counterparts in nearly every single occupation and industry. On average, women earn about 20% less than men … On top of that, we are living longer than men by an average of 5–10 years, which means we actually need more money for our financial well-being in retirement than men will.”

This reminded me of a comment on a video by YouTuber Elena Taber covering investing for beginners:

While reading, I did find it easier to learn from someone with similar life experiences as me. I had a feeling that nothing was being left out that might apply to me specifically.

Sokunbi covers your money mindset, how to get your money organized, budgeting, debt and loans, investing, credit, protecting yourself, making more money and key financial actions. Each section has helpful “Take Action” checklists with activities you can do to understand your relationship to money based on how you grew up, what you want to accomplish with your money, tracking your spending, creating a budget, getting your student loans under control, outlining a retirement savings plan and more.

I was most drawn to the chapter on budgeting and saving, especially how much is recommended to have in emergency savings. Sokunbi mentions budgeting apps as a simple way to start, but cautions “it can detach you from closely monitoring your finances if you don’t make a conscious effort to do so.” She says that you should have “three to six months of your essential living expenses in emergency savings. This includes living expenses related to your housing, transportation, and food needs” and the range is dependent on if you’re partnered (three months) or single (six months).

Regarding where to keep your emergency savings, Sokunbi suggests that they should be “easily accessible and liquid so you can get to it when you need it without having to wait and without having to worry about how financial markets are performing. Therefore, it shouldn’t be tied up in investments like the stock market or in real estate. An interest-bearing savings account or a certificate of deposit are good places to keep this money.”

But what I really appreciated about this breakdown is how Sokunbi highlights the behavioral aspect of saving, “You also want to make sure that you are keeping your emergency savings separate from your other financial goals. Blending your savings goals together can get confusing, and in the event you have to use your savings, taking the money out of a comingled account can make you feel like you are setting yourself back with your other goals as well.”

Though I could take or leave the gendered jokes about handbags and shoes (Carrie Bradshaw would love this book), overall I found Sokunbi’s writing style extremely informative and easily accessible. The “Take Action” sections are the most valuable part of the book, and I’ll be returning to them throughout my investing discoveries.

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