Retirement the Beast in the Basement - Episode 15
We all want to retire, you have more control over when you retire than you think. Daphne joins us to discuss your investment mix, the importance of life insurance, how owning a business can accelerate your path to financial freedom.
About Our Guest: Daphne Jones, Financial Educator, Bitcoiner, and Podcaster is helping GenX women design their version of Financial Independence. She believes that through investing and entrepreneurship, GenX women can grow their wealth. After more than 20 yrs of military service and working in corporate America. She decided it was time to empower women to transform their money stories by making complex topics relatable. Daphne guides women in making informed and effective decisions about their money.
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TRANSCRIPT:
[00:00:00] Naseema: Welcome Back, my Financially Intentional folks, I'm super honored to have Daphne Jones, join us. And Daphne is financial educator, big corner and podcaster, health, gen Z women design their version of financial independence. What is up to Daphne?
[00:00:19] Daphne: Hey, how you doing?
Great to be here.
[00:00:22] Naseema: I am doing incredibly well. My little sidekick in the background, ,
[00:00:28] Daphne: but she's well behaved, so
[00:00:30] Naseema: you'll do well. So far, so good. So far so good. But Dne, talk to me about your journey into just getting your finances in order. We wanna hear like the backstory.
[00:00:42] Daphne: Okay. The journey into financial wellness.
What started it is did the usual stuff like we were supposed to, you know, good girl, go to school. I did the military first, then I went to school met a cutie and got married. And so we started the. Back in those days, they called us puppies, black and upwardly mobile.
And so we were doing all the stuff, you know, buying the house, the, the foreign, you know, the foreign sports cars and stuff, and just, just having a pretty good time. And I became ill. I got sick and got real sick and it couldn't work. Couldn't work. And right about that time, he lost his job a little bit after.
and girl, there is nothing worse than when two six figure people of a certain hue lose their income. Both of them. It's like,
[00:01:41] Naseema: and it's like when it rains, it pours too. I mean, like both of y'all at the same time got hit. That's crazy, right? Cuz
[00:01:48] Daphne: you find out, what you find out is, is that you're swimming naked.
You didn't know it before, but you are. You're swimming naked and. . So because your paycheck is like a mulligan, it, it, it puts a sav on any bad decisions that, that you all made as a couple. It, it fixes it every, every two weeks, once a month, however you get paid and in looking and trying to keep things afloat.
you really start looking back and figuring out what did you do and what can we do different in the future when things get back on track? And so that, that started the journey and so fast forward I got into life insurance and first I just as a business, but the more I read about money and the more I read about life insurance, I was like, hey.
This is something people, you gotta understand why you need life insurance. It's not just a, a sort of have, it's a must. It's, it is gotta be right next to the wheel and everything else. It's, it's real important. It's real important that you do it. So, and that brought me here wanting to get the message out to as many people.
So they led to a podcast, grown women growing wealth development of a YouTube channel smart Money Chick tv, just to get their information. And particularly as I said, bing, gen X, there's some, there's some stuff we did really hard that wasn't really smart. So I want my fellow sisters to know we can still out time to make change.
And then those of us that are behind us, the millennials and especially the z u, use the great, the best wealth builder you have in. That's time. Cause you start with the plan. Yes. Yeah. Sky's the
[00:03:34] Naseema: limit. . Exactly. And the earlier the better. The best time to get started right. Was like 20 years ago. Exactly.
But the next best time is today. So I like that you're getting this information out there. And so I wanna know, like did your marriage survive that? Oh yes. That financial turmoil?
[00:03:54] Daphne: Yes. , but two stubborn former military folks. We were. We were going to make it work cuz we had promised from the beginning we were, we were gonna make it work.
And so we did, but it
[00:04:06] Naseema: wasn't easy. Yeah, I like that. Yeah. Yeah. But so many marriages and relationships don't survive, things like that. And so it's a great testament to who you guys are that you guys were able to come through. And you mentioned life insurance and you getting into life insurance and that kind of opening your eyes to what was possible financially.
Mm-hmm. and also just like as a tool of, as of life insurance being an essential tool. Can you share some of the things that you learned and lessons from life insurance and what you typically advise you? The average person, to start getting and educating themselves about life insurance.
[00:04:48] Daphne: Okay?
The first thing is to get independent life insurance. Often when you talk to individuals, they say, I have life insurance from work. That's often not enough. , it's great because usually it's either free or very cheap. So please take advantage of it just for cost reasons. But remember, that's not your life insurance.
It ends when the job ends. Get your own life insurance policy and. , you need life insurance. Cost, of course, money's finite, but get life insurance. Usually the best thing to do is start off with a term policy. It's easy it's easy, and it's less expensive starting off because you, you have to make it fit into the budget cuz there are things that you can do later on.
Mm. I want to get, get my thoughts straight cuz I, I don't wanna just start. . Let's say I'm talking to a 22 year old, just getting fresh outta school. Gen Z got your first real grownup job, okay? They hand you your packet at work, life insurance is in there. You sign up, you talk to your mom right quick. So you go on and you go for an extra 10 bucks a month or 10 bucks a pay period, and you, you bump it up to maybe three times your salary.
Okay? That's. But you still need to get an independent policy that you own. So depending on your budget. The easiest way, the cheapest way to get life insurance in place is through a term policy. Since you're under 30, it should be a 30 year level term policy. And what does that mean? That means that the price you're paying now for X amount of dollars of insurance is the price you, you'll pay for the whole life of the policy.
30 years worth. And being 22, you can get some crazy policies. You can get like a half a million dollars for less. $30 a month. Okay. And it's yours. So the advantages is one, you insured. I know you think you're not gonna die cuz you're 22. That happens. But insurance insurance helps your credit score cuz it's an asset.
insurance. People like to see it when you start going doing some other things. So it's there also when you reach a point in your life where you understand you need life insurance for multiple things. Usually it's a wedding, usually it's a marriage. Children or somebody you're close to an age dies and you figure out you do need life insurance.
The life insurance is there. You've got it at a great price because the longer you wait, the more expensive it. Also you can convert this insurance to permanent life insurance. So right, permanent life insurance, term life insurance. The reason it's so cheap, it's like you are renting life insurance. It's set for a Pacific time period.
The term you purchase it 10, 20, 30 years. Now at the end of that term, the life insurance goes. And in most cases you don't get the money back. But the thing is, is what I'm telling individuals, you don't let that life insurance go away. At some point during the life of the term, you convert it into permanent insurance, the price is going to go up.
But usually by this time when you convert, cuz remember you got 30 years, right? You convert 10, 15 years in the future, you're making more. You understand the value of that life insurance and you really understand the value and the fact that you're about to get a whole bunch of life insurance based on your health and age of the years prior.
So let's say you're 35 years old, you've developed high blood pressure, you picked up a few pounds, you are going to pay the same insurance rate that you would've paid if you had bought the same amount of insurance when you were. . So that's why I say get insurance and get it early, get a, get an inexpensive term policy for, like I said, at 22.
It can be less than $25 a month depending on how much you purchase. .
[00:09:13] Naseema: So I know a lot of people are like, well, I'm 22, I don't have any kids. The purpose of life insurance is supposed to be like, to replace my income. Mm-hmm. in case something is to happen to me. How do you sell it to people who are in that situation that don't think that it's something that they'll ever need?
[00:09:32] Daphne: That's when you start hearing things like be your own banker and you start showing them the tax advantages and the wealth building capabilities of life insurance. . Now with the term policies, they don't build a cash value, but permanent policies do. And those are the policies that can give you tax-free income and retirement.
They can be used to save money to say, start a business a few years in the future because the money grows. You can get guaranteed interest, you can have the interest tied to certain mutual funds. And the and in these type policies, you don't lose money. It follows the market, but when the market isn't performing well, the policy simply grows slower so you don't lose money.
So that's how I often talk to younger people about life insurance. Those who are just young, no kids not married and the fact that they can borrow money from themselves, I show them the, some of the, the financial growth potential of life insurance that, that it's worth getting. So,
[00:10:37] Naseema: I. I agree.
Everybody needs life insurance. And I think that there's an important, it's important to have a mix between whole you know, permanent life insurance and some term life insurance. Mm-hmm. . However, there's like this thing that I feel happens and like middle class communities or heavily in black communities.
When you. Be in, being in professional spaces where I feel like whole life insurance is kind of oversold. Mm-hmm. and term life insurance is kind of downplayed. So I kind of wanna talk about the fact that they both have a space, but oftentimes I think that people are sold into products that often .
Don't necessarily serve them in the moment for what they need. And also I think that a lot of times there's people in this space that aren't necessarily selling products that are beneficial, like whole life policies that are permanent insurance policies that are beneficial to that person. And they're often just beneficial to the people that are selling these policies.
No. So in order,
[00:11:43] Daphne: never.
[00:11:45] Naseema: Right. So I just want you to kind of clarify and delineate like, what, how do you actually know, like if these products are good for you or how do you actually know what the proper mix of insurances are so that you know that these products are optimal for you and what your financial goals are?
Well,
[00:12:05] Daphne: you have to decide what you need life insurance for. It could be great if you're actually talking to a life insurance professional. Who is, who has a fiduciary dead duty to you who's, who's more interested in what's happening with you, but you do need to come armed with your own information. So I think what has happened to life insurance is that folks have.
and the need to make it look like something extra and special, like some of the things I just talked about, cuz it is a great wealth building tool. We've gotten away from the basic thing that life insurance is supposed to do and life insurance is to provide a death benefit, a cash benefit to the folks you leave behind.
You know? I see you got your little girl there. In the event that she loses a. The surviving parent or the people that are going to be responsible for her need cash and they need cash with a given, a set amount of cash guaranteed to be, to be received within a given amount of time. That's what life insurance was for.
That, that's what it's for. That was the original design, and that's why the death benefit is is, is non-taxable and things of that nature that it grows tax free and all that good. . That's why it was, that's what it was designed to do. So when you're, when often these policies, cuz I know you're talking about the universal, the IOLs, where they're tied to they're tied to some type of financial products, usually mutual funds.
And the purpose of a life insurance premium is to cover. the administrative cost of a policy, which is usually pretty low. It's only a few bucks a month. And then the rest of it, the rest of the premium is to, is to pay for the death benefit. Right. Okay. So in those policies, they have an amount above those two things to, to put in that in that growth.
So often what has happened, these products are sold to people who, gee, for lack of a better word, can't afford them? There are folks out there who can, of course, that's why they're there, but they, they tend to be sold to working people who can't afford them, and they end up lapsing and they have no insurance at all.
And that's the worst thing. There's, there's nothing to me, worse than that, than watching a widow or a widower have to deal with the fact that they're, that they need, you need cash when you lose keeping, keeping it real. When you lose your man, you want your man. , but a check for six figures, six to seven figures helps.
I'd rather have honey, but since can I please have something that helps me take care of what honey used to do? And that's what life insurance is for. And so that's the, that's the sort of thing that, that needs to be discussed. You, you can put the money bags in front of someone, you know, $2,000 a month in retirement and things of this nature.
But usually when you're talking about income producing life insurance like that, you're talking about putting four figures away a month and many working people just don't have that. And you have to be honest about that upfront. And the thing is, term insurance simply doesn't pay as much as those other policies you're talking about.
So there there is, there is financial education involved and you need to get it from somewhere else other than the person that's selling the I. So that, that's one of the things I try to do on my.
[00:15:40] Naseema: Yes, and that's the whole thing. It's all about educating you instead of like, I think that what people try to do is say that, well, in lieu of investing in your retirement account, in lieu of investing in, you know, These other kind of investments, you should be investing in life insurance and life insurance, while it does have a cash value, shouldn't be looked at as a form of investing.
And I think that that's where people get confused and I often get that question. But it's all about educating people and knowing where you are and understanding that. Like you said, those products often come with a five figure a month price tag, and sometimes that is just not doable. And if you're not able to pay for those policies, they do lapse and you do lose your coverage.
And that's the worst thing that can happen to get into something you can't afford. And then when you actually needed to not have it, and that's why, you know, term is a viable option for that. But there are so many different products out there like for. I have term insurance and I then I have term to 80 insurance, and then I have some whole life or some permanent life a permanent life policy in addition to that.
But those, all those things compliment and supplement each other in a certain way, and it's at an afford, and it's what's affordable for me so that I know that those things don't lapse. So that when I do need. for what they're for. I have access to them. And I know you're all about financial empowerment for women, and it is about like utilizing all the tools that are available to you and having that right kind of investment mix and kind of saving mix.
But more important, like educating yourself on really what you need to be financially empowered. Can you talk to us about other products and things? People need to have to be financially empowered. I know you talk that I, and I specifically wanna talk about that investment mix that you often discuss.
[00:17:41] Daphne: We're either, we're employees. So the first place I tell folks to start, and I'm gonna catch some grief, I always do your company retirement plan. Okay. And this is why. Now again, there's there's sexier stuff out there. It's like the sexy life insurance policies, but the key to to, to building.
Is consistency and it's consistent and you can set it. I'm not gonna say set it and forget it, but you can set it. It's there, it's done. It's, it's coming out periodically, every two weeks. Once a month, you control the product that goes into, that can be some tax advantages, depending whether you want to be pre-tax or post-tax.
The government wants you to save that. There's usually some type of matching involved. It's just useful and it's easy. And for those of, and during that working life, there's u there's a marriage usually to deal with their kids. You got your other pa, you got a life to live. Let's, could we set something going on that we don't have to worry about that?
And, and that's going on now. The next thing you do have to put, the next part is a budgeting, is a budgeting. because you want to put your money as much as your money to work as possible. You've got fixed amounts where you're, you are, you're living off your funds where, where you live, utilities, food, vacations, things of that nature.
But you wanna keep debt to a minimum where you can put as much of your money to work as possible. So then the next step, after you take care of that 4 0 1. And maxing it is that you start looking for places to put money and the market is very useful, particularly if you look at things like dividend producing stocks, which I promote heavily.
REITs as an example also because of the amount of dividends that they do return cuz they're required by law to return so much of the. that, that they bring in. And next after that, you also start looking into some type of business and or cash flowing. Real estate. You can go in independently, you can go into syndications.
There are local, usually real groups where you can get started learning. It all doesn't have to come out of pocket cuz you paid some guru, you know, four or five figures to hang out and have them talk to you about it. again, because I often say there's a difference between saving for retirement, which is good, which is what you should, that should be a part of it, which is what your 4 0 1 is.
It's simply growing. It's, it's just growing pretty slowly and also investing for retirement because even as, as we are starting to see what the boomers as they retire, That amount that you're, that you're using to retire on, it still needs to have an active component. It can't just be you drawing down on those funds.
It has to have an actively growing component. So that's what I mean by investment mix.
[00:20:52] Naseema: You won't get any heat over here about starting with your , with your company sponsored retirement funds because I know that that's where a, the biggest chunk of my money is. And because it's so easy to automate, set it, forget it, pay really low fees, optimize my tax returns cause I do have a higher income.
Mm-hmm. . And so I love it. But I do also love the alternative. Places that she's hoping people to look at. And I think a lot of times people just don't understand that there's so many different ways to invest. Dividend investments are great. It's kind of just like owning real estate, right? You own mm-hmm.
a chunk of a company and then, you know, you get these returns every month and sometimes people just need it phrase in a certain way so that they understand how it works. And so I think you explained that beautifully.
[00:21:40] Daphne: Just wanted to, you mentioned fees about your four Oh.
Okay. Mm-hmm. . Now those fees, I know you think 1% isn't much or 0.5 isn't much. That stuff over years adds up.
[00:21:53] Naseema: Oh yeah. I don't have those kind of fees. ,
[00:21:55] Daphne: right. So often again, because you do have to take some responsibility. Yes, it's said it. Mm-hmm. , and it's easier, but you do have to take some respons. Particularly now with it's becoming much better and far more transparent, where you're usually gonna have some no fee options in the mix for your 401k.
Mm-hmm. , please look, please look, yes, read the perspectives.
[00:22:17] Naseema: Sometimes you don't even have to do that. You just literally have to set an appointment or call the customer service agent of the people that run your plan. Great. And say, listen, I just wanna kind of understand the fee structure.
Mm-hmm. behind what I'm paying. And if there are more affordable options, can we move my investments over to that account? , if you can even just like look at the investments that your company is offering and sort them by expense ratio or the fees, and then see what you're invested in and how it relates to the fees.
And there's, like you said, low or no cost options. Mm-hmm. in there. And like, oftentimes what people will do, because our, our employers will do because they wanna make sure that you. Invested from the start because they found that so many people would put money in the retirement account but not invested is that they'll drop you into a target date fund, which is not bad.
No. However, there might be better options. And so just having that conversation can save you five to six figures in your retirement. So that is something to. Very important. My, all my stuff is in low, really, really low fee index funds within my retirement account, and that just took a matter of like a couple of minutes of just looking at what my options are and switching my investments over.
Right? But that's because I'm familiar with looking at it. But if you're not, somebody is always gonna be there to help you.
[00:23:36] Daphne: Right? The one 800 number is. , it's pretty important because again, yes. If particularly if you're working for either a very large private firm or one of the because often we as, as, as as black women, we tend to, we tend to work for governmental entities.
Mm-hmm. State, local, federal government. And the larger those that have those plans, they have the 1-800-NUMBERS that can guide you. Yes. And, and set it up to what you want. Mm-hmm. . Mm-hmm. . And
[00:24:06] Naseema: you also are a Bitcoin expert. And I wanna talk about that because Bitcoin right now in this environment is something that people are like, what the heck happened?
Like, what is going on? Is this even a viable investment? Is this a scam? Like people need to understand like in these 20, 23 streets, what is going on with Bitcoin right now?
[00:24:29] Daphne: Okay, Bitcoin. Now, what separates Bitcoin from other cryptos is that Bitcoin is not centralized. No one is in control of Bitcoin.
Number two, Bitcoin, there's a set amount of Bitcoin that are going to be mined, which is the algorithm that produces the Bitcoin. There's only gonna be 21 million. 20. Yeah, 21 million of them. So unlike our dollar, you won't create more to, to make them cheaper. And what you saw happen with FTX and what you've seen happen with other cryptos is that these things were invented.
They were, you know, promoted, whether they be by stars or just word of mouth to get them, get them up to a certain price you bought and then they were dumped, and then you saw them go to. So I'm a Bitcoin cuz people will often ask, say, yeah, well, Daphne, you're in the crypto. No, no, not in the crypto. I'm in a Bitcoin.
Even to where I, I I purchased my Bitcoin, a dollar cost average, and I purchased my Bitcoin from an next change that only deals with. . You can go to my my channel Smart Money Check tv, and I've got a link there in my bio where you can go see those guys and they'll hold it for you or you can hold it yourself.
You're on custody. I won't try to give you a Bitcoin class here, but Bitcoin not crypto. . And again, because it's, it's decentralized you can control the Bitcoin by controlling your keys. There's a set amount of Bitcoin and the price is going back up. So, so you still think
[00:26:12] Naseema: it's a viable investment for people?
[00:26:13] Daphne: Yes. It's mm-hmm. . , I see the, the use of Bitcoin is expanding with the Lightning network and some other things. And so we're not too far off or you're going to be able to buy gas with Bitcoin. We're not that far off clothes. Go shopping regular with Bitcoin. Bitcoin is expanding in use, so. Am I saying that you need to replace the money you're putting in your 401k needs to go into Bitcoin?
No, that is not what I said, but having some Bitcoin for the future is not a problem. And, and I would because, well, what they're doing, they, they're printing dollars so fast on it's. , the, the way they're printing money right now and that, that's another discussion within itself too. That's a long class.
[00:27:02] Naseema: Well, yeah, and I love that you have financial education and resources on all your platforms.
And I'll have a link to your link tree where people can connect with you. But can you share, , can you share all of the resources that you have and ways that people can get in contact with you? Cuz you've been a wealth of knowledge and I know people wanna connect and learn more from you. Hey.
[00:27:23] Daphne: Instagram, one of my favorites.
I'm the Smart Money Chick on Instagram. I am keep you away from that webpage. It's still in the design stage. It's the smart money chick.com. But the best way to see my stuff is the, the Smart Money Chick on Instagram, smart Money Chick tv. On YouTube we're. You'll see my links there. For instance, if you're interested in buying some Bitcoin I've got access there.
You're interested in talking about life insurance. You've got links there where you can get some questions answered and even talk to some companies about getting your policy. And for those of you, my my millennials and my Gen Z's sisters who really don't want to talk to anybody. When you wanna buy something, you can buy life insurance just by the link.
Mm-hmm. . You can click answer some questions and voila, you have a policy. You
[00:28:16] Naseema: are also a fellow podcaster and I checked out your podcast. Yes. And you have some great shows on there. Thank you. About resources around mindset, around careers building your career and all of those things.
So if people wanna check out your podcast, where can they check it out?
[00:28:32] Daphne: It's grown women growing. And you can check us out anywhere you listen to podcast. We're on Spotify, we're on Apple Pandora Google. If there's some folks out there that still listening to Google on, on for podcasts or we're we're there too.
My awesome partner, Roberta Rava, she's . She's a former mortgage banker, now she's into sales coaching. The information she gives about housing and, and, and products about buying houses, it, it led to some great conversations. So, Oh, that's the other thing about building wealth. Just wanted to put that in there.
In your mix. Own where you live. Yes. Do not let anybody tell you not to own where you live, about that. You know, rent where you live and own and rent what you own. That's cool in an advanced state. But the building, the building blocks of wealth is. it is owning. It starts with owning where you live. It starts with owning where you live.
[00:29:31] Naseema: Yeah. So real estate, and I mean, . There are some things that we can debate about that, right? But one of the greatest wealth building tools is through real estate. It is. But understanding how to buy real estate in a way that it's gonna be beneficial to you. Cuz most people who own single family residents don't buy it as an investment.
And even though there is always gonna be a cost to where you live, there is a way to optimize that. And so I definitely agree that there are some built owning. Your house is one of the greatest ways to build wealth, and that's kind of the foundation of wealth building. So
[00:30:08] Daphne: particularly if you bought if you bought like about more than 15 years ago,
Right.
[00:30:14] Naseema: But we, we can't go back in time, but we can Well, it's, it's
[00:30:17] Daphne: a great way they, the appreciation. Mm-hmm. . Okay. Don't look at your house as a uh, as a piggy bank. Mm-hmm. , but. , it has some tax advantages. It, it's quite a bit, it's quite a bit to owning a house. So there's advantages to it. It, it's, it's foundational in wealth.
Cuz if you, if you look at any of the folks that you read about, . They've got they own, they own their house. They own their house. There's some other things they own, but they own their house. So
[00:30:50] Naseema: yes, so it is great tools and I know that you share those resources on all of your platforms. And so I wanted to thank you for joining us here on the podcast and dropping so many gyms in this short amount of time.
, but I, I think that you are a wealth of knowledge and you have access to your tools right there. People can readily access through your link tree. So make sure you check that out. It's gonna be linked in the show notes. Just a whole bunch of information there that you can use to learn and grow and build your wealth and be a smart money chick just like Dave.
There we go. So Dabney, thank you so much for joining me on Thank you. The podcast. Thanks for having me's. My pleasure.
[00:31:29] Daphne: Yeah. Hey, kiss the baby for me. Definitely.
[00:31:32] Naseema: I will. Thank God. Bye-bye. You're not here anymore, .
Hey there I’m Naseema
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