Rachel Cruze, a financial expert and author, recently shared her insights with Bryce and Alec on the Equity Mates Investing Podcast. Cruze, who co-authored “Smart Money Smart Kids” with her father, Dave Ramsey, emphasised the importance of teaching children the value of hard work and how money comes from it. She also stressed the significance of setting long-term priorities, living within one’s means, and having a budget to avoid overspending.
Cruze advises against using debt to make purchases and recommends saving up and paying with cash instead. She also encourages people to differentiate between their needs and wants and to prioritise their spending accordingly. Cruze suggests having a line item in the budget for personal spending to enjoy life but to avoid overspending.
When it comes to investment strategies, Cruze recommends consistency and diversification in one’s investment portfolio. She advises against trying to time the market and instead recommends investing regularly and staying invested for the long term. Cruze thinks a reliable, informed investment professional to help you in your investing journey is essential but urges you to find someone who has “the heart of a teacher, not the heart of a salesman”.
Cruze recognises that many people are struggling in the current economy, and many families need to rethink their expenses. She advocates for reducing expenses, cutting back on luxury items, and starting a side hustle. Cruze suggests selling items around the house that you no longer have use for, tutoring online, teaching English to those wanting to learn in other countries, or using freelance websites to write and edit articles.
In the interview, Cruze emphasised the importance of teaching children that money comes from work. She recommends giving children chores and paying them for their work, emphasising that money is earned through service. Cruze also encourages parents to instil in their children a sense of service and purpose in their work to make it more meaningful.
In our conversation, Cruze remembers; “I think one of the basic things my parents did, which was so smart and it’s something we’re doing with our kids, is teaching them that money comes from work. Money doesn’t appear. It doesn’t just come from mom and dad with this magical card that we swipe or on our phones that we get to tap a button and just stuff appears.”
Cruze advises setting long-term priorities, such as saving for retirement, and automating your investments consistently in a diversified portfolio. She recommends allocating 15% of one’s income towards retirement savings and she also stresses the importance of living within one’s means, having a budget, and avoiding overspending.
The real reason is because it saves time! “My life is hectic… so sitting on an app, jumping money around kind of stresses me out. And so the idea of just parking money somewhere, knowing it’s going to grow on average 12% over the course of 70 years, that’s what feels good to me.”
The full interview with Rachel Cruze is available on the Equity Mates Investing Podcast.