The large bulge bracket banks are continuously looking for a way to shed some of those traditional payroll costs, and you see this across a lot of sectors. If you look at the actual W2 forms that the IRS has received over the last ~10 years for the traditional nine-to-five job W2 forms that they get compared to the 1099 tax forms that they get from freelancer or contractor workers or independent workers, those the amount of W2 forms had just stagnated absolutely flat for the last 10 years, while the 1099 forms have just gone exponentially higher. So, in every industry, every sector, whatever you work in, or whatever you want to work in, there are opportunities to kind of shift into that freelancing independent kind of idea.

Robert Leonard  05:02

When you first transitioned to a financial career, what were you surprised to learn?

Joseph Hogue  05:07

Well, really, I was surprised to learn how much you can actually make. This was back in 2012-2013 when vlogging on YouTube still wasn’t a thing, as they say. If you asked my mom, she would have said, “Get a real job!” and, “Those kinds of things don’t pay the bills.” You can.

Obviously, there were many more before me that were doing that kind of thing. Still, to this day, so upwards of eight years later, it still surprises me every month when I close out that month profit and loss statement, how much you can actually make in this and how fast that income grows. Last year I grew my income, my monthly income by 70%. On average, the year before that, it was about 40-50%. The year before that, it was about 35%. What traditional job can actually increase your income every year at that rate? It’s just unheard of! Especially these last 10 years, when wages have been so stagnant, maybe you’re lucky if you get 2-4% raises every year. But by creating your own online assets, your own online business, you can actually do that. You can actually double your income every year.

Robert Leonard  06:16

We haven’t had anyone on the show yet to talk about credit scores, so I’d like to spend some time talking about this topic. I think it’s a very important topic to learn, understand, and even master, especially for millennial investors. You can be a fantastic investor, whether it be in stocks or even real estate, but if you don’t have good credit, it can just make your financial goals so much harder to achieve. So first, what exactly is a credit score? And second, why is it so important?

Joseph Hogue  06:47

Your credit score is primarily based on your credit report. Anytime you file for a credit card or apply for a loan, or even when you’re renting a house or some other thing. Those all go on your credit report. There are actually three credit reports, depending on where a creditor, somebody who loans you money, is going to report on. There are generally three credit reports: Equifax, TransUnion, and Experian. They’re generally about the same. Most creditors report to all three, and anyone extending your credit will pull up what’s called FICO.

Normally, there are a few different places that generate your credit score, but FICO is by far the most popularly used. Basically, FICO just uses everything in your credit history on that credit report to generate a score from 350 to 850. But really, the extremes there are very rare. It’s pretty rare to see someone with more than an 820 credit score, or less than maybe 450. This is just kind of a quick measurement of your creditworthiness. A lot of banks won’t lend to people with less than a 680 credit score. A lot of your federal loan guarantees have minimum credit scores that you need to qualify for.

I think what a lot of people don’t understand or don’t realize is that your credit score is going to be used in a lot of other things as well. Insurance companies for auto and home can actually use your credit score to determine your insurance rate or your premium. It’s called a credit score-based insurance modeling. This is something where they found, through data and through algorithms, that they tend to lose more money on lower credit score insurance. What they do is they can legally build in a premium and extra premium for these people that have lower credit scores. So bad credit can actually mean you’re paying more for your insurance.

Obviously, it’s also used a lot of times when you’re filling out a job application. If you’re going to work in finance, or banking, or a lot of these other industries or sectors, they can actually pull your credit report, look at it, and use that in determining whether you get the job or not. A lot of times, when you fill out a rental application, as well, the landlord might actually pull your credit report and look at that. It could keep you from getting a roof over your head.

Robert Leonard  09:03

Yeah, I actually have experience with three of those different things that you mentioned. For my rental properties, I always pull credit on all of our tenants. To your point, I’m the landlord, I’m on the other side of that, doing exactly what you just said.

I also spent three years working at a bank during college. When I was at that job, they did pull your credit before you started. They even pulled and checked our credit frequently throughout the time that we were there just to make sure that we were keeping up with it. Because if you can’t keep your financial health in order, then they had concerns about you giving guidance or helping or working with money. So, that was definitely an aspect of it.

And then to the insurance rates. You’re absolutely right, and what’s interesting about it is it’s not a protected class. You can technically discriminate against credit scores because it’s not a protected class. The insurance companies do take advantage of that and make money where they can and protect themselves where they damn.

Joseph Hogue  10:01

It’s so important to protect your credit score, to build your credit score to actually develop it. Use credit wisely. I think that’s something that we so often miss when we see some of this advice, to just completely neglect or avoid credit or avoid debt. Sometimes, debt is unavoidable. Student loans are a huge part of millennials’ finance. I actually loved seeing that crushing student debt podcast with Travis Hornsby you did a few weeks ago. Excellent podcast. And it’s so true. You need to be not only using debt smartly but understanding really how it affects your life.

Robert Leonard  10:37

How did you find out about credit scores? How did you learn about this topic? It’s not something that’s taught in everyday schools, at least not here in the United States. So, how did you stumble upon this topic and learn about how important it is and then the intricacies of it?

Joseph Hogue  10:51

A lot of it was the hard way. I got out of the Marine Corps and actually started investing in real estate, as well, while I was in college. I started doing very well. I would buy dilapidated houses, fix them up, refinance them, and then rent them out as I was paying off that mortgage. Of course, as you know, in the real estate business, your ability to refinance or your ability to cash out of a property is absolutely critical. This was in 2002. I was doing well. Everyone was doing well in real estate. But then 2008 comes along, and I got absolutely destroyed. It just got over my head with trying to finish my MBA degree and working full-time. The rentals got behind on a lot of the mortgage payments and just destroyed my credit. So, not only did I lose a lot of real estates, but the business also destroyed my credit. I found myself in a place where I couldn’t get a loan for a stick of gum. So I had to learn about what that credit score really was, what how it affected my life outside of even just being able to refinance those properties.

Robert Leonard  11:54

So, I know with credit scores, six main factors really impact How someone’s score is calculated. Talk to us a bit about what those six factors are.

Joseph Hogue  12:06

Alright. So, the biggest credit score factors. One is your payment history. What sucks here is that a lot of these factors, especially this one, are pretty much out of your control. Your history of payments, anyway. This is going to be on your credit report. You’re going to have a history of up to about even 10 years of the late payments, the on-time payments for a lot of your credit cards if you filed for bankruptcy, or got any judgments or liens against you. A lot of that is going to go on there and that’s going to be your payment history. So, while you can’t necessarily change the past and what has happened in the past, you can, of course, know that this is affecting your credit score, and try to be better with your credit in the future. Even if you’ve got bad credit, one of the best things you can do is try to get maybe a secured card, some kind of credit where you can actually make those payments. Build good credit history to kind of balance out some of the bad marks that you’ve got on there in the past.

Another one that’s out of the control of a lot of people, especially millennials, is going to be that length of credit history. This is just basically how long you’ve had credit accounts open. Understand that all of this really goes to establishing a history for you. It’s some kind of a trust factor that you’re going to be paying off new loans. Creditors need this kind of scoring in this kind of reporting, to understand what rates to offer you and to see how risky you are as a borrower. So, your credit history length is something you can’t really affect. 

Another one is credit utilization. This is actually one that you can affect. This is just how much do you have borrowed versus your max limit. So for credit cards, for each individual credit card, as well as for all your debt in total, how much do you have outstanding that you owe versus the maximum amount that you can borrow? What they want to look at is: Is this someone that’s overextended already? Is this someone that owes $20,000 on a $20,000 line of credit across their credit cards, and they’re just kind of scrambling to find the money? That’s obviously a warning sign for any new creditors. Is this someone that’s got maybe $5,000 worth of debt on cards, but has a $15,000 balance on them? That’s still not great, but it’s not necessarily somebody that’s the scrambling to find ways to ways to pay stuff.

The credit mixes are also important. Whether you have non-revolving debt, which is something with a fixed payoff date, and fixed payments, like your mortgage, your student loans, and things like that.

For revolving debt, which is your credit card, a lot of lines of credit will fall under that where your payments might vary from month to month, and there’s really no payoff date for these lines of credit. You can keep borrowing on your credit card. And so obviously, if you’ve got a lot of that revolving type of debt, then it’s just another risk factor. I’ll say for creditors, you can get yourself deeper and deeper in debt with these revolving credit lines, whereas with some of those non-revolving ones, you’ve got a fixed payoff. You’ve got a monthly payment that you know how much it’s going to be

Robert Leonard  15:12

Yeah, I remember when I was first getting started with building my credit, the credit age is probably the thing that bugged me the most because, as you said, there’s just nothing you can really do about it, you just kind of have to wait. You can be doing everything right, but that’s just one of those things that just kind of takes time to build. It’s the same with payment history. I mean, that’s in your control, because you can make the payments on-time every month, but in terms of total on-time payments, that can only go up so fast. It can only go up monthly. So it can be something that takes time to build, and you just need to start early, start right, and build it the right way.

Joseph Hogue  15:47

Yeah, and it’s too bad that even just one default or a 60-day late payment can just wipe out a lot of great payment history, and now you’re stuck with just trying to build that credit history back up so creditors will overlook that credit history or that one negative point.

Robert Leonard  16:07

Yeah, that’s interesting, isn’t it? How you can have 7,590 payments of on-time in a row and then one late payment erases all of that. One late payment puts you in a bad spot.

Joseph Hogue  16:21

I saw some research a couple of years ago that showed a kind of an on-average of how much a loan default would hurt your credit score, and actually drives credit scores down depending on where the credit score started from. If you’ve been so good at building your credit history and building that score and you just get one defaulter, a 30-day late payment hits even harder than some of these lower credit scores. The higher they are, the farther they’ve got to fall. Just one default could hit a credit score that’s in the high 700, like 780~150 points or more, will knock you all the way down into that subprime credit group.

Robert Leonard  17:02

Yeah, I remember reading the exact same thing. It kind of surprised me when I read that. I was surprised to hear that not everyone’s scores are impacted equally from a late payment. Rather, if you had been doing better in the past, making one small mistake actually hurts you more than if you had been kind of treading water all along. I always thought that was really interesting.

When it comes to these different factors that impact someone’s credit score, are they all equally weighted? Or are certain things more important than others?

Joseph Hogue  17:30

They’re weighted differently. This is an interesting thing because you can actually see what’s more important to FICO and the credit scoring system, and what you can maybe adjust a little bit on your own. Payment history is 35% of your FICO score. This is why it is so important to protect your payment history, to always make those on-time payments. Your credit utilization is actually 30% of your score. Again, this is the total revolving credit that you’re currently using as opposed to your credit limits. This looks at what your available credit is. It’s kind of a snapshot of your credit risk there. Your credit history length, so the length of time that you’ve had credit, is 15% of your FICO. Credit mix, something that we really didn’t talk a lot about, but this shows how diverse your portfolio of credit accounts is, whether you’ve got car loans, credit accounts, student loans, mortgages, another kind of credit debt out there, is 10% of your score. Another one is the new credit. The number of credit accounts you’ve opened up recently, whether you’ve got a lot of applications out there, which are called hard inquiries, can weigh on your score because obviously, if you get a lot of applications out there, then it just looks like you’re scrambling for debt. New credit’s actually 10% of your FICO score, as well.

So some things impact your score that you can control, as this new credit. If you know that you’re going to be applying for a loan for a car, for a house, or for some other kind of large credit within the next six months or a year, hold back on applying for any new loans. You wouldn’t want to send in that credit card application form. You don’t want to do something that’s going to put these new inquiries on your credit and affects that part of your score.

Robert Leonard  19:16

If someone listening to the show today doesn’t have the best credit right now, but they really want to get on a better path and improve that, how can they do that?

Joseph Hogue  19:24

Wow! Yeah, again, it’s so important to protect your credit history, your score. But there are ways to improve your score. As we said, a lot of it is fixing that payment history. What you can do is you can figure out ways to get things on your credit report that maybe aren’t there yet. A lot of creditors might not be reporting to all three bureaus, or they might not be reporting to any of the bureaus. One of the best things you can do if you’re renting a house is talking to your landlord, and get those rental payments put on your credit report. There are actually a lot of online services out there that work with landlords to do this. It’s going to get those rental payments that you make every single month on your credit reports. That’s going to start building that good credit history.

Also, work on some of these factors that really affect your credit the most, like credit utilization. If you can’t pay down all of your debt, then at least try to focus on that total revolving debt on those credit cards. This makes sense from a saving money perspective, as well as from a budgeting perspective. Usually, those credit cards are going to be your highest-rate debt, so you want to get those paid off first. That type of debt, revolving credit, is really what’s going to affect your score the most. As much as you can pay that down, do so. It’s always good to have less than 30% credit utilization. Basically, what that means is only less than 30% of your total limit on your cards. So if you’ve got $10,000 limit across all your credit cards, then owe less than $3,000 across all of them, or individually, as well.

Robert Leonard  21:03

What about those services that you probably hear from late-night commercials about? Or even sometimes on the radio that say they can fix your credit rapidly, or that they can remove old payment history, bad payment history, problems like that. Does that really work?

Joseph Hogue  21:18

There is some truth to what they’re doing. Some of them actually contact the credit bureaus. But you can do this on your own. This is absolutely something you can do on your own. It’s easy to do, and quickly. All the credit bureaus have an online form. We used to have to mail in the dispute form. All three credit bureaus, Equifax, TransUnion, and Experian, have online dispute resolution or online dispute forms. What you do is go on there, and if there’s something on your credit report that shouldn’t be there, so it’s saying that maybe you missed a payment, or maybe there’s a credit account on there that actually isn’t yours, then you can go on there and tell them to take that off. Tell them that it’s incorrect to count.

The credit bureaus actually, by law, have to resolve this. They actually have to contact the creditors, and the creditors have 30 days to respond to these disputes, whether it’s a legitimate credit or debt or not. If they don’t respond, then that gets taken off your credit report. This is a good way to get mistakes off your credit report.

Sometimes, what a lot of these companies or these services will do is they’ll try to get some of these other credit marks off of your credit report as well. If you’ve, if you missed a couple of payments on that store credit card that you had five years ago, it’s still on your credit report. You’ve closed the store account, but it was legitimately yours and you legitimately missed those payments. Sometimes they’ll try to get those knocked off as well. They’ll dispute those. That’s not exactly legal. There’s still kind of a gray area there. A lot of times the store isn’t going to care whether what’s on your credit now or not anyway. You’ve closed the account so they take no time to respond, and it gets wiped off of your credit. So that is going to going to increase your score.

But again, this is something you can do completely on your own. Those late-night infomercials that you’re seeing and the credit service companies a just going to charge you an arm and a leg for something that frankly takes less than 10 minutes on each of these credit bureau sites to do.

Of course, this is all different from that negotiation that you’ll also hear about.  Now, that is something completely different. That is a servicer or a company that is offering to negotiate your debt down, offering to work as a middle person between you and the debtor or the creditors to pay less than what you owe. A lot of times they’re going to tell you to just stop paying your debts and your bills for about a year or two while they have that negotiating power to negotiate these loans and these debts lower. Of course, that is going to absolutely destroy your credit at that time. That is really something that you want to avoid at all costs. Oftentimes, this is just as bad as bankruptcy because you if you do go for so long not paying those debts and really driving your credit score lower than. It’s not worth it. And often, these debt negotiation companies, they’re going to charge you almost as much as they’re going to end up saving you on the amount of debt that you didn’t have to pay. So say they get 25-30% wiped off of your debt, and you don’t have to pay that, but their fees are gonna end up being 10-20%. So you’re really not saving nearly as much as you might expect.

Robert Leonard  23:39

I’m glad you made that distinction because I think the line can be blurry sometimes between credit repair and debt forgiveness, specifically when it comes to those questions or those programs that sometimes are being offered.

So what tools or resources do you recommend someone use to track their credit score, credit history, and just their overall credit report?

Joseph Hogue  24:49

Actually, by law, you’re allowed to see your credit report once a year from each of the bureaus. What I like to do instead of just going online and getting all three credit reports once, what you can do is stagger that. If you get three credit reports and you’ve got a year to see each one, then every four months, go look at one of your credit reports. Go to the credit bureau’s website, and fill out the information to get your free credit report. Not only is that going to keep you updated on what’s on your credit report, and make you savvier as far as where your credit is at, but it’s also a great way to monitor your credit report to make sure that someone’s not stealing your credit or your identity and racking up different credits on there. So, that’s one thing. Stagger checking your free credit reports.

Another idea is just about any credit card is going to have a free FICO score service. They are going to actually pay your credit report or your FICO score, maybe once a month, maybe every couple of months, then you’re going to be able to see that for free. When you actually get your free credit report from the bureaus, you don’t see your score. It’s very important to be able to see your score as well as the credit reports. Actually, all three credit bureaus offer a monitoring service where you can instantly see your report and your scores all the time, but these are upwards of $15-$30 a month. But you can really do this all free and very quickly if you just kind of plan it out.

Robert Leonard  26:19

I personally just like to use Credit Karma. It’s maybe not the most accurate in terms of the score always, but the history is usually pretty good, and it’s free. So that’s a resource that I personally like to use.

Joseph Hogue  26:30

There you go. Yeah, I’ve used Credit Karma in the past, but haven’t used in a while because I do have a couple of credit cards that just show me my score. But yeah, you’re right. If you’re using a credit card service to see your score and see your credit score falling quickly, then you’re obviously you’re going to want to know what’s happening there. So a free service like Credit Karma is great.

Robert Leonard  26:50

We’ve had a great conversation so far throughout this episode about credit reports and credit scores. Now, I want to transition to talk about stock investing. With the rise in popularity of financial independence and retiring early, I’ve noticed that a lot of popular YouTubers and personal finance influencers on social media recommend the dividend investing strategies even for millennials. Historically, dividend investing had mostly been utilized by older investors closer to retirement, and millennials, or just young investors in general, were focusing more on high growth strategies. Where do you seem to stand on this? Do you think dividend investing is a good strategy for millennial investors?

Joseph Hogue  27:33

I do. I think even younger investors can have a good portion of their portfolio in dividends. It’s actually been proven through research by Ned Davis that companies that regularly and consistently increase their dividend actually outperform other stocks over the long-term. We’re talking outperforming other stocks that don’t pay a dividend, outperforming dividend stocks that don’t increase their dividend, and so forth. It’s just something in that dividend model that really a lot of times helps companies, but it can’t be taken as a cure-all either. 

You’re right that younger investors need some growth stocks, as well. They need some growth in their portfolio. Typically, the reason why you see a dividend company or a company paying dividends is that it’s returning that cash flow to investors. It’s kind of running out of those reinvestment opportunities. You get a lot of those high-growth companies that make a better return on those growth opportunities, opening more stores, doing more research and development, and just that general growth, that it’s worth more to investors to just keep the cash flow in the company. It’s still a very powerful thing for an investor.

Another warning sign, or risk, I would say to dividend investors is just chasing that dividend. I see so many people ask me questions about this fund or that fund that pays a 15-20% dividend, or this stock that pays an 8-10% dividend. They’re just chasing that dividend yield without really looking at how that company is paying that dividend, or how that fund is paying the dividend. The risk in it could be cut, or really whether the stock price is going. For some of these closed-end funds, what you see is the fund manager is using so much leverage to get that 15% and 20% dividend, that if anything goes wrong in the economy, or around the stocks that are holding, then the stock price just crashes. So you may be collecting that 15% dividend, but you’re losing 15% or 20% on the stock price. Eventually, you’re going to have to sell the stock and you’re gonna have to take a huge loss.

Robert Leonard  29:36

With all of that said, where should a brand new investor get started? Maybe a retirement account? ETFs? Individual stocks? What do you believe is best?

Joseph Hogue  29:46

Well, first, if you’ve got a 401-K with a company match, that should be your number one priority. Invest at least enough each month or each quarter to fully max out that company match. That is free money. That is the best return you’ll ever make. If you’re investing $100 in your 401-K, and your company is matching even half of that, that’s like a 50% return, and no investment will ever get you a high return like that. So max out your company’s 401-K match.

After that, your priority should be those retirement accounts, so your IRA, your rough IRA. You can only do about the max of $6,600 a year right now, but you get some great tax savings, whether it’s an immediate tax benefit or a tax benefit when you withdraw the money in retirement. So, that should be your second priority, maxing those out, taking advantage of those tax benefits as far as the investing itself.

I’d also like to recommend what’s called a core-satellite strategy. This is basically, to the core of your portfolio, so 60-70% of your money, you put in just a small collection of funds. This is broad funds, like maybe an S&P 500 fund that really covers the entire large-cap stock market. Maybe it’s going to be a real estate fund like the Vanguard (VNQ), which owns real estate companies, pays a great dividend, and tracks commercial real estate. It could be some bond funds, like the Vanguard Long-Term Bond (BLV) fund. What this is going to do is this is going to give you broad exposure to those different asset classes, like stocks, bonds, and real estate. But it’s also going to give you kind of a stress-free part of your portfolio. You’re going 60-70% of your money in these big diversified funds. It’s something you really don’t have to worry about. You put your money in these. These are already diversified across the different asset classes and across the different sectors of the economy.

And then, you know, if you do you want to invest in individual stocks, maybe you take that other 30% or 25% and invest in just a handful, maybe no more than 10 individual stocks that you really like. This is not only going to make much less time that you have to devote to analyzing those stocks, but you’re going to be limited to only the best that you really believe in. You don’t need to go find 15 or 20 stocks to fill your portfolio.

Robert Leonard  32:01

So you do think that people should run a bit of a concentrated portfolio?

Joseph Hogue  32:06

Well, not necessarily because I think that 60% or 70% that you’re going to have in funds is going to diversify across the entire stock market sectors. If you’ve got, within that 60% or 70%, maybe 60% or half of that in stock funds, you’re already diversifying across every sector and most of the industries. With these 10 funds, understand that these are only maybe 3-5%, at the most, of your entire investable wealth. So even if you’ve got 30% in these 10, that’s still only a third of your total assets.

For example, in your core part of your portfolio, if you’re holding a sector fund, like if you’ve got 20% of your wealth in The Technology Select Sector SPDR (XLK) there and then you’ve got 5 to 10 of your stock picks all in tech, then sure, you’re going to be concentrated, and you’re going to want to watch that because any market weakness, or especially any kind of weakness within the tech sector is going to hit you hard.

What I do, a lot of times is, within these 10 stocks, I’ll look into different sectors. I might look at financials, pick the best stocks out of there, and tech, and pick the best stocks out there. I still try to be a little diversified within those 10 picks as well. But even if you have three or four of those stocks, within a certain sector, even within an industry that you really like, then it’s still a relatively small part of your portfolio if you’ve got that 60 or 70%, in those diversified funds.

Robert Leonard  33:36

We talked earlier about your previous stock pick, the Starbucks of China, but what is another stock that you’re particularly interested in right now? Maybe it’s not one that you’d allocate 100% of your portfolio to, but it’s just one that’s maybe on your radar. Just another one that you like; and why do you like that pick?

Joseph Hogue  33:53

It’s actually not a stock, but I’m going to cheat. I’m going to pick two. One is that Vanguard Real Estate ETF (VNQ). It’s a collection of real estate investment trusts. I think this is an excellent fund for investors to get real estate exposure. Maybe they don’t have the money to go directly into real estate investing, but they want that exposure for a great cash flow asset. That’s going to help them diversify a little bit away from stocks. I really like the VNQ or really any real estate fund.

Another fund is the Alerian Master Limited Partnership (AMLP) Fund. This is a collection of master limited partnerships, which are all companies that own energy pipelines, storage, and processing facilities. What I love about this one is you get the benefits of an MLP, which are basically very high cash flow, as well as a little bit more diversification, away from some of your other traditional energy stocks. But you don’t get the negatives of an LP, which is a K-1 tax form. So, if you’re investing directly in an AMLP company, then you’re going to get a special tax form each year. It’s not really difficult, but it’s something that a lot of investors try to avoid because it’s another tax form you have to file. But with this an AMLP fund, then you don’t get that. It’s treated just like any other fund. I think it says something like a 9% dividend yield right now. Obviously, energy has not done very well over the past three years, but it is something that owns some great assets. I believe it has at least another 10 or 20 years before we really see the end of energy independence.

Robert Leonard  35:30

Given your experience investing in just a variety of different ways, including stocks, real estate, and inside hustles, if someone listening to the show today has a few thousand dollars, say anywhere from maybe $1,000 to $3,000, that they’re looking to invest, what do you think is the best way for them to invest this money? Is stock investing really the best way to go? Or might it be better for them to go long-term? or to invest in starting a side hustle?

Joseph Hogue  35:57

Excellent question. This is something I kind of struggle with on the channel a lot because investing videos are very popular. Everybody wants to know, the next big stock or the next dividend stock. But as much as I love talking about investing, you will never get rich from investments. Sure, you might find that Tesla or the next big thing every once in a while, but in the grand scheme of things, it’s not going to make you rich. You need to create those other income sources.

So, if you do have that $1,000-$3,000 to invest, I would say start off by investing in yourself. Take some online courses, or learn something, a new skill or a hobby that you can take up and monetize that into a side hustle. The beauty of this is it’s not going to cost $1,000. You can take a lot of online courses for $10 to $20, and turn those into a side hustle through a blog or a YouTube channel for basically nothing. I started my YouTube channel on about $600 worth of equipment, but you can start it with just the phone in your pocket. If you want to get started with some real momentum, maybe it’s going to cost you $500 for courses to learn the hobby or the skill, and then to turn that into a legitimate business. It’s very inexpensive to start an online business today. With the rest of that, sure I would go into stocks and really just start that investment portfolio.

Robert Leonard  37:23

What is your number one piece of money advice for a millennial listening to the show today?

Joseph Hogue  37:30

Stop thinking about money. It’s obviously counterintuitive, but I would say find something that you enjoy doing and you could see yourself doing for four decades, and then figure out a way to make money doing it. We talked earlier about the financial independence retire early (FIRE) movement, and it’s really, so what? You get early retirement, then what? At best, you become some kind of sunburnt alcoholic. Okay? We all need a purpose in our lives. You need to find that and find a way to make money doing that, and then the money becomes secondary. Retirement becomes secondary. I don’t know what I would do if I wasn’t creating these YouTube videos and interacting with the community on Let’s Talk Money. So, I still save money for saving in my retirement accounts because of those great tax savings, and I put money away, but I don’t know that I’ll ever need it because I don’t know that I’ll ever fully retire.

Robert Leonard  38:29

To further your point, and I think I know the answer to this, but I’m assuming you didn’t start your YouTube channel to make millions or even to make money off of it, right? You probably started it as a passion project, and then, as you said, you took your own advice and eventually learned how to monetize it.

Joseph Hogue  38:45

Absolutely, absolutely. Yeah, as for the blogs, a big part of it was to make money to be able to start that online business and really transition away from that traditional nine-to-five. But it did come from that area of passion and that hobby to be able to talk about personal finance. Those are so important because oftentimes, you’re not going to make thousands of dollars a month starting out. You’re going to make maybe a few hundred at most, but you’re going to enjoy doing it. You’re going to become the expert, and gradually, you’re going to build that online income stream up.

Robert Leonard  39:16

And even if it is just a couple of hundred dollars, or even $1,000 a month, that’s one of the types of businesses that I’m super passionate about. I’m a huge stock investor. I love real estate. And I’m even entrepreneurial. If I could have the opportunity to build a billion-dollar company would I do it? Probably.

But I think what’s overlooked in today’s world is those $500 to $1,000 or even a couple of thousand dollars a month businesses or side hustles that you can build. I think it’s missed so frequently because those billion-dollar unicorn startups are glorified all over the news and social media, so people don’t think of these smaller businesses or side hustles as a success. Whereas if you really look at the numbers and you look at how that side hustle income can really impact your life, it can be life-changing. Even with a small dollar amount, like we just talked about, even if it’s not billions. And so, I really like that point. I really try to drive that home a lot through this podcast, and I’ve heard a lot of guests talk about that and say the same thing. You’re absolutely right.

Joseph Hogue  40:15

The tech billionaires and the huge companies are glorified. People forget that. There are over 18 million millionaires in the US, okay? The millionaire next door isn’t the founder of Uber. He’s the with this online business that’s making even just $1,000 or a few thousand dollars a month, but he’s grown that, and the value of that company is in the millions. The beauty of a lot of these is you can create these online businesses in 5-10 hours at the most every week. You can open up an Amazon FBA store, start exporting your products from China through Alibaba or FBA, and it takes 5 or 10 hours a month or a week to run these things and grow them into a million-dollar business.

Robert Leonard  41:03

What I also really like about this is that it allows you to approach life from a perspective of trying to win, rather than trying to not lose. When you’re trying to win, you’re able to try different things, take a little bit more risk, and just work on more projects that have a higher upside than you are if you’re just always trying to not lose, maintain your career, and not lose your job. Being able to do that has a profound effect on the wealth you’re able to generate.

Joseph Hogue  41:32

Absolutely. I love that. Trying to win, not trying to lose. It just speaks to that scarcity mindset. There are so many people who have that limited resources and limited time and what’s so limited when you can shift that mindset into what’s possible and what you can actually build and what you can actually do.

Robert Leonard  41:50

It really, really does. Joseph, thanks so much for your time. I’ve really enjoyed our conversation. I think we talked about a lot of important financial money investing topics that I think the audience is going to really enjoy. Where can our audience go to learn more about you?

Joseph Hogue  42:06

Well, I’ve actually got the three blogs, on covering personal finance, investing, and making money online. But, really, right now, it is all about the YouTube channel, Let’s Talk Money. We’ve grown the community to over 152,000 people that are really creating the financial future you deserve. I’d love to see everybody there. I love the face-to-face interaction that we get on YouTube.

Robert Leonard  42:28

Joseph and I have talked about a lot of different resources; some stocks and some books all throughout this conversation. I’ll be sure to put links to all of those different things in the show notes so that you guys can go check those out after the episode. I’ll also put links to Joseph’s YouTube channel, his blogs, and all those other resources in the show notes so you can connect with him there as well.

Joseph, thanks so much! I really appreciate it.

Joseph Hogue  42:49

Absolutely! Thanks, Robert. I had a good time.

Robert Leonard  42:51

All right, guys. That’s all I had for this week’s episode of Millennial Investing. I’ll see you again next week!

Outro  42:57

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