Joel Dickson: Paying down debt is saving.
Mikey Caloca: I'm getting older.
Mikey Caloca: Is it too late for me to start?
Joel Dickson: You have to be very careful not to what I call play someone else's game.
Ally Salus: Here's the thing. Starting to invest can feel like everyone else already knows the rules. And you're just trying to make sense of it all. Welcome back to In My Finance Era. I'm Ally. This is a podcast where we take the real life money questions you've been asking and help you turn them into clear, actionable next steps.
Ally Salus: Today we're breaking down investing how to start what actually matters and how to make sense of all the information coming your way. I'm joined by creator Mikey Caloca and Head of Global Advice Methodology at Vanguard, Joel Dixon. Appreciate you both being here.
Mikey Caloca: Thank you. Thank you.
Joel Dickson: Great being here.
Ally Salus: Mikey,
Ally Salus: you connect with more and more people every day talking about your financial investing journey. You're super passionate about it.
Ally Salus: Why did you become passionate about it? And tell us a little bit about how you got started.
Mikey Caloca: I think just like everybody else, I was petrified when I first started. I mean, I think I started investing when I was like 16, maybe I bought like one stock out of just thinking that, you know, I use this product.
Mikey Caloca: I should probably invest in it. I think I ended up selling it the minute it went down like $0.02.
Mikey Caloca: So I think just like everybody else, I was very scared. But it's it's just something that I've always known that is there. I know it's good for me, so I should I should be doing it.
Mikey Caloca: So that's kind of like how I began it.
Mikey Caloca: And then it's just kind of taken off today.
Ally Salus: Yeah. And you are not alone. I think a lot of people are concerned on how to get started, what it all means, which is why we are so glad we have you here. Joel. Today, investing guru on podcasts, media, webcasts, everything. You are the perfect person to talk about this.
Ally Salus: Thank you so much for for being here today.
Joel Dickson: Well it's great being here Ally. You know, really appreciate it actually, Mikey, your story
Joel Dickson: about getting started.
Joel Dickson: It's so common. You know, the way I ended up getting started years ago was I got the gift of a share of a gold related company.
Mikey Caloca: Shoot!
Mikey Caloca: And now you're doing great.
Joel Dickson: Well, except that was back
Joel Dickson: when gold was the meme stock, for the late 1970s. Oh, it's so,
Joel Dickson: you know, it's like,
Joel Dickson: “What are the mistakes you make along the way? What do you wish you would have known at the time?”
Mikey Caloca: Yeah.
Joel Dickson: But the benefit of doing that, young is that you have all of your future investing to kind of,
Joel Dickson: make it up, if you will.
Mikey Caloca: That time. Yup!
Ally Salus: Totally. And, Joel, you wrote “The Principles for Investing Success”. We need to start there. And we actually found in a recent Vanguard survey that a majority of 18 to 34 year olds don't see themselves as investors. 64% say they don't have enough money, 69% say they don't know enough, 59% don't know where to begin, and 72% are afraid of losses.
Ally Salus: Tell us everything. What are the principles for investing success?
Joel Dickson: My…That added up to more than
Joel Dickson: 100%. So we've got we've got a lot of work to do.
Joel Dickson: I guess
Joel Dickson: what I would say is, I think the most important thing is what we call goals. Know what you're saving for and why. What's the purpose that you have for that, for that savings in the investing and then beyond that, it's like, you know, we talk about things like balance.
Joel Dickson: What does the diversification or your mix of investments look like to be able to help attain your goals over time? Worrying about costs along the way is kind of that third pillar. And costs mean not just the cost of the investment, but things like taxes, other things that get in the way of you being able to spend the money in the way that you most think about.
Joel Dickson: And then finally, we talk about discipline. And discipline just basically means, “hey, stick to your plan.” Unless something has happened that changes, you know, this is our life event or you know, something overall in terms of your goals, and approach, stick to your plan.
Joel Dickson: They're going to be bumps along the way. But having that plan, having that goal in mind can just make it a lot easier to figure out what to do, or more importantly, sometimes what not to do.
Ally Salus: Yeah. And Mikey, you talked about kind of your plan and how it's changed when you first started feeling unsure. Does any of that resonate with you and like how have you changed your plan over time?
Mikey Caloca: Well, kind of like what he said. Kind of like the whole like the bumps in the road. I kind of think of it like waves in an ocean.
Mikey Caloca: There's a phrase that I've learned as I'm adulting now, a dollar cost averaging, which is just buying regardless of what the heck is happening in my life. So like discipline, just like consistency for me, every time that I get paid, I know this is coming out. I know that I'm investing no questions asked. If I don't do it, I feel wrong.
Mikey Caloca: So that's kind of like what for me is kind of kept me going in my whole like journey is just before I was scared. I'm still scared.
Mikey Caloca: Yeah, I'm just doing it every single time that I get paid.
Ally Salus: Mikey, you mentioned dollar cost averaging. Joel, can you tell us what that is? And maybe even a couple steps back? Can you talk to us a little bit about the differences in the basics between the stocks, bonds, asset classes? What does this all mean?
Joel Dickson: Sure. So dollar cost averaging is actually a quite powerful way to just have regular investments. You know get it in get it save get it invested. You know, putting the same amount in every month or every couple of weeks. You know, Mikey we're talking about it is when you got paid, you know, just making sure having that regular, automating that kind of piece is just so important because, you know, you may not do it if you don't automate it.
Joel Dickson: And, you know, inertia is a very powerful force. And so use inertia for good. You know, have you have the regular investment. When we talk about though, the types of investments and so forth, generally we start thinking about things like, you'll often hear about stocks, bonds, cash and what are each of those in some ways. You know, cash you think about it is, you know, what might be held in a bank or in, in something where I can kind of demand it back very quickly.
Joel Dickson: You know, I have, like, full liquidity to get that money back.
Joel Dickson: A bond is you're lending somebody money, much like if you have a mortgage or a student loan or something, you've been lent money and you're paying back interest and some amount of principal over time. A bond is just where you are lending somebody else money.
Joel Dickson: And so they're paying you interest, over some period of time. And then a stock or equity is a is a share of ownership in a company. So after everyone else gets paid, if there are profits left in that company, then you as an owner get to enjoy that. Each of those cash bond stocks have different levels of risk if you will.
Joel Dickson: Right. You know so stock is hey look if there's money left over that's great. But if there isn't profit you're not getting anything. As an owner.
Joel Dickson: So you know, you kind of expect, although certainly not guaranteed, that you might get a bit of a higher return because you're taking on more risk than, say, a bond or than cash.
Joel Dickson: And so you think about this in terms of what we would call risk return characteristics. You know, the more risk that you take, in kind of these asset groups, and types, the more you would expect to, earn over time without a guarantee because you also comes with it more what we would call volatility. Yeah.
Joel Dickson: Might be up 10%. It might be down 10% whereas cash probably isn't moving as much. Yeah. So when we talk about investments overall diversifying you're kind of getting exposure to each of those, groups of assets in ways that make sense for your goals, for your time horizon and so forth.
Ally Salus: Such a helpful breakdown. Thank you for that.
Ally Salus: Let's dig in a little bit further on. We talked a little bit about the principles of investing success. What about getting started? So if someone has $100 a month to invest, what should they do? What should they think about and where should they start?
Joel Dickson: So if they have $100 of money to invest, I actually think they've already started.
Ally Salus: That’s awesome.
Joel Dickson: because in many ways, the best way to meet your goals over time in the most important thing is not the investment returns that you get on the dollars, but how many dollars you put to work to generate investment returns.
Joel Dickson: It's that saving piece of it. I'll give you a quick stat. And this is, you know, kind of as we talk about a lot of times, if you're thinking about saving regularly and you have a goal that is, let's say ten years from now.
Joel Dickson: In kind of a just a regular, balanced, normal type of investment, approach that balance that you have at the end of ten years to fund whatever it is.
Joel Dickson: Yeah. Or some great trip or maybe it's paying off some student loans or whatever it might be.
Joel Dickson: So that relative importance of saving, yeah, is just tremendous and huge, especially if it's in the context of, a shorter investment horizon.
Joel Dickson: 80% of that final balance will have come not from the investment returns, but from the contributions or the savings that you made along the way.
Ally Salus: Wow.
Joel Dickson: So, you know, if it's $10,000 at the end of the ten years, most likely $8,000, give or take was from the contributions you made yourself, and $2,000 was from the actual returns on that investment.
Joel Dickson: Mikey, you made the point about, you know, just dollar cost average and discipline and doing it. And that's that is the best way to get started. And then to to, make those investments work over time.
Ally Salus: Yeah.
Ally Salus: Yeah. And we've talked a lot about people. I love the point that you made about one $100 like you already are doing it. I ran a marathon a couple of years ago, and before that, everyone was like, talking to me. Runner friends who just getting started. They're like, I can only run a mile. How are you running a marathon?
Ally Salus: I'll never be a real runner. And I'm like, starting, going on a two minute run. You're a runner, you're in the game. It's the same, example that you gave. You're in it. Like if you're thinking about it, if you're feeling it, if you're getting started, if you're imagining your journey, you're in it.
Mikey Caloca: Even, even creating content. Same thing.
Mikey Caloca: I mean, even like people look at me now and I'm not some gigantic creator, but I, you know, I've reached a platform where people will look at me and say,
Mikey Caloca: “How the heck did you do that?” Yeah, it's funny because right now if you ask somebody, do you want to be a content creator? Do you want to start investing?
Mikey Caloca: “Oh, it's too late. I could have done it three years ago. Yeah, and I would have been a way better position.” That was the same answer when I started making content. I could have started investing years ago or making content years ago. So it's like it's the same thing. It's just it's never too late. You just got to start ten bucks, 50 bucks, 100 bucks.
Mikey Caloca: It doesn't really matter. You just got to start.
Ally Salus: Yeah. We've talked about the principles. We've talked about what to do when you're getting started. What about when there's a ton of conflicting information? We see information on finances and investing coming from everywhere. How do we kind of pass through it all? How do we make sense of it all, and what should we be thinking about?
Joel Dickson: Actually, I want to get Mikey's take on this first, which is, yeah, there is so much out there. Yeah. Go on. You should invest this way. You should use this strategy. You should take this approach. This is the way to investment riches and so forth.
Joel Dickson: How did you kind of go about and sorting through all of that.
Mikey Caloca: I think for me it's it's seeing learning online obviously. Like being mindful, being like wanting to be educated, being curious, but also just like dipping my toes in the water.
Joel Dickson: Yeah. And that's what I would love to highlight, because I think so much of the noise that's out there in the system, is really somebody is trying to sell something.
Joel Dickson: Yeah. You know, they'll talk about their great investment success. They won't let you know what didn't work.
Joel Dickson: Yeah. So you're hearing a very one side,
Ally Salus: You’re getting the highlights.
Joel Dickson: You're getting the highlights. Yes. Getting the highlights.
Joel Dickson: Like I will tell you exactly which of my stocks did really well.
Joel Dickson: I'm not going to tell you the, a couple of dozen
Joel Dickson: that didn’t.
Joel Dickson: Yeah. You know,
Joel Dickson: And so you have to be very careful not to what I call play someone else's game. And they're kind of like long term what we would say good investing, you know, approaches and principles, a diversified portfolio of stocks, bonds and cash that matches your, you know, ability and willingness to take risk and your, you know, time horizon that you have, for, for your goals and, and, you know, focusing not so much on the individual yellow lottery ticket.
Joel Dickson: I often call it a lot of what people talk about are, in effect, some version of a lottery ticket.
Ally Salus: Yeah.
Joel Dickson: Hey, you know, if you do this, look at this. That might happen.
Joel Dickson: Steady, consistent investment strategy applied over time. It may be boring. Yeah, but boring in this case is, often more success
Mikey Caloca: I think it's unique to, like, I think people need to understand that you said something a second ago.
Mikey Caloca: People need to understand that it's not. You cannot follow somebody else's footsteps and expect the exact same return.
Ally Salus: Absolutely.
Mikey Caloca: Because if you're investing in
Mikey Caloca: what somebody is telling you to invest in, you're investing later than they did. Yeah. So they're going to see a different return than you did. Yeah. So same thing with like my portfolio. I might invest in something that you guys might hate but I believe in it.
Mikey Caloca: And I'm going to put double down on it. So I think everyone is just unique. And I think that goes for a lot of things. And just life in general is just we can't really copy each other because it's not always going to be the same result.
Ally Salus: When you talk about this kind of personalization, everyone having kind of their own state that they're in and where they want to go and their different goals and journey that they're on in making it really your own.
Ally Salus: You are a gig worker now, so to say. So you are pulling in income from different places. How does that affect your investing journey, your plan? And when you started to pull income in from different spots, did you have to reevaluate your investment strategy?
Mikey Caloca: Well, pulling in income from different spots is very like, I'm actually still getting used to this as I speak.
Mikey Caloca: I think I'm just now still learning, like to see income coming in from different places when it lands in my bank, like what I do with it. I still think that my answer still remains true. I need to be investing. If I'm not, I'm doing something wrong.
Mikey Caloca: Like I said, I'm still learning. I'm gone from a W-2 job to making one income to now making like 5 or 6 or 7 different streams of income.
Mikey Caloca: So now I'm learning like, “oh my gosh, when this money comes in, how much do I invest?” And I, I'm actually personally speaking to a financial advisor to figure out like “how what do I diversify? What do I do?”
Mikey Caloca: I might have to you a little bit and I'll figure this out. But yeah, it's
Mikey Caloca: it's something that I'm learning.
Mikey Caloca: I'm not afraid to share that I'm still learning, but it's it's a work in progress.
Ally Salus: Yeah. And that personalization piece, something else that comes with that is the differences that people are able to take on when it comes to risk. We actually saw in a recent survey that about 27% of 18 to 34 year old say they are unwilling to take any financial risk.
Ally Salus: Joel, can you unpack a little bit on that risk piece and what it means for a new investor and what they should be thinking about and how they can make it personal to their journey?
Joel Dickson: So I'll start with if you're unafraid to take any financial risk, you're actually taking financial risk. And what I mean by that is, let's say, “Okay, I don't want any variability in the investments that I see.”
Joel Dickson: Well, most likely then you're not going to probably keep up with inflation over time on the underlying investments. So you're actually taking a different form of risk, which is that the $100 that you were going to invest today you could otherwise consume, you know, buy goods or go on a trip, whatever. If you don't get a return that's above inflation, that $100 today actually buys less
Joel Dickson: in the future than it does now. And so if you're like, oh, I'm going to invest. But I'm not going to take any financial risk. Yeah. You really run the risk of not being able to meet your goals in the same way that maybe you could today.
Joel Dickson: So I'd start there.
Joel Dickson: The other thing is, I think in many ways the most important, organ, if you will, in the body to deal with investing is not the brain.
Joel Dickson: It's the stomach. And so, you know, when you think about risk, can you sleep at night? Are you worried about your future and so forth? If you know you're finding that, “why, boy, the market is down. Yeah, whatever x percent.” And it's like why? “I'm not sure I'm going to be able to meet my goals” and so forth.
Joel Dickson: It's like, well, then maybe that's an indication that you maybe need to take a little bit less risk. All else equal. But remember, I mean, stick to the discipline part of that investing success that we talked about earlier, which is like, has your goals changed, has your strategy changed, has how much you're investing on a regular basis changed?
Joel Dickson: If nothing has changed in your financial plan or your goals or your outlook, your time horizon, you probably don't need to change in the kind of wake of the noise that might be right in the moment.
Ally Salus: you mentioned a little bit about that balance and making sure you're having fun in our recent survey that we ran, we found 31% of 18 to 34 year olds see investing as a form of entertainment, excitement, fun, or playing a game.
Ally Salus: So there is fun in this after all.
Joel Dickson: There can be. Just don't confuse investment with, you know, being able to meet your bills and your goals and objectives. Don't put the rent money at risk.
Ally Salus: Yeah, definitely not.
Mikey Caloca: Yeah I feel like we're seeing this like literally everywhere now. Like we everywhere we look I feel like it's sports gambling because now the legalization of it kind of in different states. But now we're also seeing the prediction markets too. It's kind of everywhere. And then what's really crazy is that people are using their bill money to pay for it, which is really like that part is insane to me.
Joel Dickson: It's such a fine line or balance. You know we talk about balance and, you know, how do you think about, you know, what can often be, you know, what we're often told about how to be a successful investor and, you know, regular diligence saving and, you know, put it in a kind of diversified portfolio where you don't have anything really to brag about or to hide that maybe has done poorly.
Mikey Caloca: You know, it's funny really quick. Yeah. You're saying this and I, I'm almost seeing, like, two perspectives because I feel like for some people it's the understanding. Part too.
Joel Dickson: Yeah.
Mikey Caloca: Because right now you just said diversified portfolio.
Joel Dickson: And what does that mean?
Mikey Caloca: What is it just like for some people that seems like French.
Mikey Caloca: But then to some people betting on sports or like gambling to them makes more sense because it's comprehensible for them.
Joel Dickson: Yeah.
Mikey Caloca: So I think it it also comes down to what we started with is just like becoming more curious and wanting to learn more about it because of like, again, it makes you happy.
Joel Dickson: Absolutely. Yeah. The be curious piece, you'll learn kind of what you feel you need to know and understand, is is in many ways a great, a great approach.
Joel Dickson: It is very much that, you know, sometimes some of these things can just sound like from people like me
Joel Dickson: about eating your vegetables. Yeah. I, you know, it's just sort of like,
Joel Dickson: you know, kind of just be diligent. Do it all the time. Regular. Eat the vegetable. Fact of the matter is, if you're not going to have some sort of fun or understand how this meets your goals for the long term,
Mikey Caloca: Yeah, exactly.
Joel Dickson: you're not going to do it.
Mikey Caloca: Yeah. You got to have a cheesesteak with the vegetables.
Joel Dickson: Yeah. Yeah. Cheat days are fine.
Joel Dickson: Yeah, I'm big on cheat days.
Mikey Caloca: Yeah.
Joel Dickson: You know, and and, you know, if that's going to be what allows you to, to be successful. Exactly. In terms of your goals,
Mikey Caloca: It's balance.
Joel Dickson: Have that have that cheat day.
Mikey Caloca: Yeah. It's balance 100%.
Joel Dickson: Have that have that cheat day. But don't put the rent money at risk.
Mikey Caloca: 100%.
Ally Salus: We've covered a ton of information. We've got a few minutes left. Mikey, any final questions that you want to ask Joel?
Mikey Caloca: I do, I would love to ask you one question. Yeah,
Mikey Caloca: Obviously I have a very wide range of an audience, but I do have a pretty large audience, is a bit older, 30s, 40s, 50s that they think it's,
Joel Dickson: That’s young by the way just saying.
Mikey Caloca: Well, woah woah woah, wait. I knew this was going to happen, bruh, but 30s because they always tell me
Mikey Caloca: I'm getting older.
Mikey Caloca: Is it too late for me to start? Because like, obviously you hear 18 that the sooner you sell, the better, right? But 30s, 40s. Is it too late for that person to start? Is there something else they could be doing, should be doing, or is investing still the best move?
Joel Dickson: It is never too late to start. And oftentimes we, we, we hear that in different ways, which is a sort of like, “Oh, I haven't gotten started.
Joel Dickson: And so now I have to do something different” where it's like, “Well, I just am where I am. Yeah. I'm not going to
Joel Dickson: start now. I've got this lifestyle that I want.”
Joel Dickson: Or the people will be like, “Tell me something that's going to get me a really high return
Joel Dickson: in a short period of time so that I could make up
Joel Dickson: for it,”
Mikey Caloca: Which difficult.
Joel Dickson: Which is extraordinarily difficult.
Joel Dickson: The other thing I again, I providing a little bit perspective on this in many ways, I think people have started in ways that they don't think they have started.
Joel Dickson: Paying down debt is saving.
Mikey Caloca: Oh, yeah.
Joel Dickson: Right?!
Mikey Caloca: Yeah.
Joel Dickson: And so, you know, if you're talking about saving for your future,
Joel Dickson: Paying down that debt, which people might be doing, saying, “Oh, I don't have a lot of assets, but I've paid or I'm working on paying down a lot of debt.”
Mikey Caloca: Yeah.
Joel Dickson: That can be a huge financial overhang on people's futures.
Mikey Caloca: Oh, 100%.
Joel Dickson: And so just getting started in
Joel Dickson: any way that that
Joel Dickson: trades off kind of what you're doing today with your needs, your wants, your desires of your future self.
Joel Dickson: And in many ways, I think about it is, you know, take a look in the mirror in the morning. Imagine yourself 20, 30, 40 years older. It's like, what do I want to do now? To set myself up a little bit better in the future and that may mean a little bit more savings now.
Mikey Caloca: Right?! What you just said.
Mikey Caloca: Yeah, I think about this a lot, actually.
Mikey Caloca: I'm not joking. Like, every time that I get paid or I do something, I think of, like myself, 30 years from now and I'm like, am I, like, upset that I'm doing this or am I actually smiling? Or the fact that I'm doing this? So like either putting money in the stock market or like buying something at the grocery store that I probably shouldn't just because I'm hungry.
Mikey Caloca: Like, am I looking back at myself, being like, Mikey, what are you doing? Or am I like, you know what, Mikey? Good job. So like that little future we talked about this actually the other day. But just like the future version of yourself, just
Mikey Caloca: like looking
Mikey Caloca: back and being like,
Mikey Caloca: “Good stuff, man.”
Ally Salus: Such great points. Thank you both so much for being here.
Ally Salus: Such phenomenal information for our audience. Really great things we can take away. Appreciate your time today and all your expertise.
Mikey Caloca: Thank you so much.
Joel Dickson: Thank you.
Ally Salus: Investing can feel complex at first, but hopefully today helped clarify where to begin and how to make sense of the information you're seeing. If you have questions or want to share with so that you can connect with us on social media, send us a message there.
Ally Salus: You can also visit inmyfinanceera.com for additional resources to help you take your next best step. Thanks so much for listening.
