Hi Logan, thanks for joining us on My Money Counts. Would you mind telling us a little bit about who you are?
Hi, Pamela! First, let me say thank you for allowing me to be a part of this blog series of interviews. I am a regular reader of your content, and I believe that it provides incredibly helpful advice to those who read it.
To say just a short snippet about myself–I am currently a senior undergraduate student studying economics and finance in wonderful North Carolina! I am pursuing the CFP (Certified Financial Professional) designation and planning to become a fully-fledged financial advisor soon after I graduate. In the meantime, I love helping people maximize their finances, which often starts with the littlest of steps. That is how The Wise Money Manager got started!
What exactly led you to start The Wise Money Manager?
That is actually a really interesting question. Last year, I became part of a statistics team at our school that performed a scientific study dealing with individual financial literacy and capability. In this study, we asked students five simple personal finance questions concerning topics that they would have to deal with once they graduated–things like mortgages, simple interest, stock market risk-reward, and credit–and we believed that all students would score above 70% correct when we averaged the results together.
Unfortunately, we were incredibly wrong. Most students only got 1-3 questions correct, and we found that our average “correct” score could be as low as 35%. In other words, our students are horribly under prepared to handle the world when they graduate. This posed a considerable problem given the amount of debt that many of them are taking on just to come to college!
As a result, I decided to start TWMM to help everyone, students and adults alike, gain the financial literacy that they would need to conquer their own personal finances. But here’s the reality: most people that I meet just aren’t all that interested in finances. As a result, I wanted to create content that would be new and engaging in order to help with this problem.
We believe that “wisdom” is the ability to live life well, so we believe that a “Wise Money Manager” will be capable of managing their finances well!
What would be three steps that you would share with people looking to improve their personal finance lifestyle?
First, I would say that the single most important step is to start by creating a family budget if you haven’t already. This is as simple as setting up an Excel spreadsheet and adding up what you are spending versus what you are making. Alternatively, you could use an app like YNAB (You Need a Budget) to make this process faster. If you are in the negative each month, you will need to look at ways to decrease your expenses and/or increase your income.
Once you do that, the next step is to begin paying off any debt, particularly credit card debt, that you may have outstanding. Many people that I have met usually want to invest before they pay off debt, because they believe that the investment income will help them pay off their debts faster. However, this couldn’t be further from the truth. This is because investment income is 1) uncertain and 2) almost never greater than the interest that you pay on your debt. So, start by knocking out the high-interest debt and then work your way down to lower-interest debt. Then, you can begin investing.
The third step is to begin building up some savings and planning towards goals. We recommend the general six-month safety barrier for savings–having six months of your current salary stored away in case of an emergency. We also hope that people save towards things that are important to them. Often, we find that more happiness comes from spending money on trips and things that allow you to spend time with others who you love rather than just purchasing more stuff that clutters your life and adds chaos.
You speak a good deal about investing on your website. Just out of curiosity, can you tell us about your most successful investment so far?
I would be glad to! In December of 2015, I had been watching the gold and silver market for about two years. Gold was about $1080 per ounce and silver was about $14 per ounce at the time. Mining companies just couldn’t afford to churn the stuff out at that level. Many small mining companies were going out of business left and right.
As a result, I knew that a supply shock was coming soon, so I needed to invest in a company that had enough cash to outlast the market downturn and be profitable when it flipped. At the time, that company was First Majestic Silver. I purchased many shares at an average price of $3.43, and I ended up hitting it big. I sold about two-thirds of my shares in March of ’16 @ ~6/share and got my original investment out. Then, I sold the rest of my shares when First Majestic Silver was at $16/share around July. It was a huge blessing!
Logan, thank you for joining us today and thank you for sharing your perspectives!Be sure to visit Logan’s blog site The Wise Money Manager.
Categories: Guest Posts