What Is Financial Literacy?

Vercie Lark • 2021-03-24

Watch on YouTube Listen on Spotify Listen on Apple Podcasts

Dylan Carnahan:I'm your host, Dylan Carnahan. That intro was provided by Get It Rogers. That was his song, Capstone. Get It Rogers recently released Banquet. You can find that music video out on YouTube. I'll have that link down in the show notes below this episode. More music is on the way from Get It Rogers. He says, never stop believing, and never stop striving for better. That leads us into the topic for today's episode, What Is Financial Literacy? In this episode, we're going to talk about personal finance, how investing and savings works as well as budgeting, and ultimately, you're going to learn how to secure your financial freedom. I couldn't think of a better person to talk on this subject than our guest today. He's the author of Make It Rain. He's an angel investor, former director at HP, a former chief information officer at Embark, a former executive at DST Services, and a mentor of mine, Vercie Lark. Vercie Lark.

Vercie Lark:That's all, sis.

Dylan Carnahan:So I guess to kind of start off here, this is going to be a little bit different than obviously the beginning of our conversation and the previous conversations we've had. But I know kind of a little bit about your personal background growing up in Dayton, Ohio, and kind of where you are today. But can you kind of talk about how your professional career began?

Vercie Lark:Yeah, pretty straightforward. I'll just start after high school. I graduated from Wright State University with an engineering degree. And after graduating, I had my first job working at a company called Monsanto Research Corporation as an engineer. I did that for about two years. At that time, I'm pretty simple with my disclosures because they're in my book as well. And I took my first job making about $26,000 an hour, my first real job, I call it. Before that, I had a $3 an hour job, $7 an hour job working at Monsanto as a laborer. And then when I graduated, I took a full time engineering position. Worked as an engineer for roughly two, two and a half years. And I was just curious about information technology. Obviously, as an engineer, you get a little bit of that, but you're not really immersed in it. And so I basically, you know, when you bug people enough, you go out there and you put yourself out there, somebody offered me an opportunity to move over into the IT department out of the engineering department. And so that really started my career in information technology. I was early on, worked there for roughly two and a half, three more years. And, you know, I would just say wasn't satisfied with where where where my life was going to go. It was a department of energy, which means you're working for the government on a contract. And there's nothing wrong with that. But it wasn't in the kind of the growth areas that I wanted to be in. So I put my work with recruiter, ended up working for Compact Computer Corporation back 1989, a long, long time ago. And so when I moved out of what was engineering into information technology and onto a real technology company, everything started to take off, worked there as a systems engineer for a while, moved into management roughly two and a half, three years later as a supervisor over what we call our network operations, and then moved on up the ranks, ended up Compact was acquired by Hewlett Packard roughly some 14 years later. When that acquisition occurred, I was pretty high up in the organization. I would have been what you call a director, a senior director in the organization. The next step would have been a vice president. And so when that happened, I got the opportunity to actually move out of traditional IT working behind the scenes to actually supporting a paying business. And so I was not doing internal supporting more. We actually started to build what we call HP managed services, which was an outsourcing company for companies that wanted to move their have HP run their desktop servers, all that kind of stuff, their infrastructure. And so that exposed me to basically technology, but technology in terms of supporting businesses and really opened my eyes and gave me an opportunity to interact with, start to interact with customers and start to think about business strategies, all those kind of things that I had no experience in. And so it was another really accelerator that actually helped very well. During my journey in Compaq and HP, there were lots of people that left Compaq. They were kind of like the proving ground. They go off to either start their own company or work in high positions at other companies. And one of those folks reached back when she was actually working in Kansas City at Sprint, next Sprint at the time, and asked me was I interested in coming on board to work with her. We had worked together doing everything around the Internet at HP. And it took me a while to kind of come to terms with leaving because I had a great career, a great kind of trajectory going there. Ultimately, Valerie Kershport, she asked me and I said, yeah, we'll do it. And so we moved to Kansas to work at Sprint and Sprint was going to spin off its wire line, which was called, spun off called Embark. And so that's what brought me to Kansas City. I was living in Houston at the time, moved from Dayton to Houston, Houston to here. And ultimately, the deal was pretty straightforward. She was going to be there for a little while and she was going to ride off in the sunset. And then when she did that, I took her role. Now, that's when I became the Chief Information Officer, what was Embark. And then as a career goes in the tech industry, there's lots of acquisitions, mergers, divestitures, etc. Embark was acquired by a company down in Louisiana. And when that happened, I stayed on for another roughly 18, 24 months. And actually, that was my first time of I decided, you know what, I've had enough of this corporate world, I'm going to go do something else. And so when I left Embark, CenturyLink, I guess, I had a couple of business, I had purchased a gas station back in my hometown the day that my brothers were running, and had a real estate investment business back in the day in places I knew, and then here in Kansas, a friend of mine worked with me, and we had an online t-shirt company where we're doing silk screening and kind of custom work for a lot of groups and organizations. So I had that going before I left what was Embark, and that was fine. And I said, you know what, I'm just going to take this and run these and kind of do my own thing. And then I got a call from a recruiter that actually helped me get my job at Compact. You know, this is two, three decades before, and he said he'd been following my career. He said he realized I was not working anymore. Was I interested in doing something else? And I said, no. But ultimately, he he he guilted me. He said, you know, as a professional courtesy, you know, I really like you to talk to this company down in Kansas City. And I said, OK, what's the name of the company? He said it was DST DST Systems, which is located down in Kansas City. And the only thing I knew about DST at that time is we had used them in the print in our telecommunications business for printing services. So anyway, I interviewed with the CEO and chief operating officer at DST and some others. And the and so that moved me into the financial services industry. I became the first CIO, chief information officer at DST Systems. And for me, the learning about the financial services industry was probably the most thing that compelled me the best. And then I actually met folks that I thought I could learn from. So I joined DST, worked there for until DST was acquired by a smaller company and actually a decent sized company now called SS&C. And I retired from there. Before retiring, I started to see the because I was working with the financial services industry and spending a lot of time with companies and the people that actually ran those businesses. I just felt there was a need for a better approach to, I'm going to use the word, teaching people about their money, investing, saving, finance, et cetera. And so I started working on the book. And so right after I left DST and retired there, I basically created this book and I've been spending my time with a lot of organizations, schools, nonprofits, adult groups, et cetera, trying to educate them on what it means to actually invest and build wealth and accumulate wealth so that they could have a better retirement when they get to the point that they're ready to do that. And so that's my career in a nutshell. A lot of twists and turns along the way, but, you know, certainly engineering to IT, IT to the financial services industry. And when I left DST, I was running a business that was roughly about a seven hundred and fifty, sixty million dollar business. So I moved completely over into running businesses and then I saw this need. And so I've been focused on that need since I left DST roughly three years ago.

Dylan Carnahan:Yeah, that's definitely quite the journey, you know, from especially from where you started to kind of the whole right there.

Vercie Lark:Pretty broad.

Dylan Carnahan:Yeah, there's a lot that goes into it. So can you kind of talk about just specifically what you you mentioned a little bit earlier? But what were some of the reasons you wrote Make It Rain?

Vercie Lark:Yeah, pretty straightforward. I grew up in a small, small area, low income area of Dayton, Ohio. And there were really three drivers that really were solidified. My work at DST, you know, when you're sitting in the financial services industry and you're seeing a lot of the discussions, you know, I go to conferences and everybody's talking about financial literacy and what they want to do to help bring people who aren't investing into the investment community. But I just simply thought about myself and said, you know, no one's ever reached out to me from the time I started working even now to say what can we do to help you build wealth and accumulate wealth and do better things with your money. So that was one I said, and I'm like, you know, I'm probably more of an exception. Somebody should have talked to me somewhere along my life given the amount of wealth that my wife and I had accumulated, but that didn't happen. So I knew there was a problem. And what I learned is unless you have a certain amount of money, it's not profitable for large organizations to actually provide financial services to you. And so I said, OK, there's got to be a better way. So that was one driver. And I said, how can I use my knowledge and my experiences to share those at a very low cost through a book and ultimately through engagements to help people really get better at that? The second one is having a conversation with my brother and unfortunately his wife had passed away and I simply asked him, I said, you know, what are you doing? What's your retirement look like? How long you got to go or whatever? And he said to me, you know, here's what I have. And I said, well, what's your salary? He's a bus driver. He was a bus driver at the time. And he told me, I said, well, you need about double what you have. And so I gave him the outline of Make It Rain, the little outline I had created. And he read it over the weekend, called me back and said, you know, why don't you tell me all this stuff a long time ago? And I just looked up and said, you know, I was learning by trial and error back then, too. Now I've kind of had this stuff in my mind. I kind of can help people. And so that was another driver. And then the last driver was in my role at DST and all the companies before, people would always ask me things about their career, about finance, about investing, things like that, because I did more than just work in a corporate environment. And I was always giving advice. And then one person simply asked me at my last job at DST said, and she was younger, she said, Mr. Lark, we ask you all these questions, you give us simple answers, we go do it, and it seems to work. We need a Finance 101 course. Why don't we create one? And so that was the third trigger. I said, there's more to this than what I was just thinking. And so that led me to write the book to really create something that would allow people to get the basic knowledge about personal finance, saving and investing, the traditional ways of doing that that are common and that most people use to build great amounts of wealth. And I said, you know, we're off about six months after I left DST. The book was published and I've been on a tour in the Midwest areas that I'm familiar with, really making contacts along the way to really get the book in the hands of people, whether they be young folks, middle-aged folks and older folks, so that they have hopefully have better outcomes because of that engagement before they get ready to retire that can help them secure their financial futures.

Dylan Carnahan:So to kind of, I guess, to reiterate kind of what you said at the end there. So what kind of person could benefit from financial literacy?

Vercie Lark:Yeah, everybody. And so I don't, I generally don't use the word financial literacy. And the reason I do that is because there's lots of companies been doing it for a long, long time, and the outcomes haven't changed for people that just simply don't have experience. There's also a lot of organizations, people with brand names out there, going through programs and creating programs for folks to teach them financial literacy. And they really focused on things like getting out of debt. How do I, how do I improve my credit score? All those things that are there, they're important, but they don't teach you how to invest your money. And so for me, it's pretty simple. My book is focused on wealth accumulation, the simple things you can do to start to build and accumulate wealth and secure your financial future. So that you have more wealth to pay the bills and hopefully retire well. So that was really the driver. I didn't feel like the industries were doing the right thing. And so I don't use the word financial literacy a lot. I typically say I want them to be able to invest. I want them to be able to live a better, more secure life. And hopefully when they decide to give some away, they can give more to the people in their communities and teach them to do the same on how they're spreading the wealth. And so I hope that they learn enough out of my book that they can share with their community, with their networks, and that we build a large and growing community of rainmakers. That's really my focus. So financial literacy is important. Understanding finance is good, but knowing how... It's like you. You can go and learn how... Go to a hitting cage and learn how to hit. But until you got the pitcher throwing that ball at you at 30, 80, 90 miles an hour, and it's curving or whatever, hitting on a pitching... Knowing how to hit versus actually knowing how to actually play baseball are two different things. So my intent is let's educate them enough so they understand, but then show them through the book simple steps that they can apply. You don't have to apply them all, but apply a few to actually start to build wealth within weeks, months, or years and see that progress and hopefully that excites them to continue to do more and more of that over time. That's my approach to it.

Dylan Carnahan:So I know one of the kind of things that you talk about in your book is budgeting. So can you kind of just simply answer what is a budget, first off?

Vercie Lark:Sure, so there's a saying that you hear, at least I heard a lot growing up, and that was, you know, put your money where your mouth is. And so what a budget really is, is a way to understand where your money is going and then make conscious decisions about where you want your money to go and then document that. I call it the roadmap. In my book, I call it, it's your roadmap to financial success and whatever you need to do. There's no different than if you wanted to, if I wanted to lose weight, right? I have a goal and then I had to figure out how I'm going to get there. And so here's the exercises or the diet changes or things I'm going to do to get there. A budget is simply that. It informs you of where you are and then you project out where you want to be. And with that, you make conscious decisions about where you want your money to go. So I think of a budget as nothing more than a roadmap. And if you follow that roadmap, the odds are higher that you're going to end up where you want to be versus not doing anything. So it's a way to identify issues, identify changes in behavior, and in behaviors, I mean, spending behaviors. And once you know those, you make some conscious changes. And ideally, when those changes occur, you see the things you want to unfold in your personal financial life. So it's pretty simple. It's an important thing to do, but it's not the ultimate thing you want to do. Your budget is just a means to an end to help you understand where you are and monitor your progress. And ideally, make the changes you need as you monitor your progress to achieve the goals you want financially, similar to losing weight, right? If I want to lose weight, I'm going to exercise twice a week or three times a week. I'm going to eat less sugar. I'm going to drink more fluids. If that's my plan, that's what I'm going to do. If I want to be an NFL football player, guess what? There are certain things I'm going to do. And that's just the way it is. And think of a budget as no different than basically your exercise plan, to really change your habits or improve your habits so that you get the outcomes you want.

Dylan Carnahan:So what are some things that you might include in that roadmap?

Vercie Lark:Sure, pretty straightforward. It starts with just understanding where you are. So basic budget in the book and in the things I communicate, there's really the major robbers of wealth are where are you spending money, I'll call it unconveniences. So understanding that, you know, especially in today's world where you can go buy Starbucks, you can go order everything you want online and have it delivered to your house. And when you're doing that, typically you spend more than you probably would when you're using cash. And so understanding what you're spending your money on is important. So your housing, your transportation, whether it's a car or a bus or whatever, your food, your clothes, insurance, if you have insurance, if you're paying for it for yourself. And then really the one that kills people are the miscellaneous things. Alcohol, restaurants, Uber Eats, those kind of things are the things that I call wealth robbers that really take away from people's ability to actually invest. And then obviously how much are you spending in your investing? So there's probably seven, those are seven major categories. I used to have, I think there are ten in my book. Once you understand those expenses, then you've got to understand your income. How much income are you generating today? And where are those sources? And if you're not making enough money to pay for those expenses and invest, then you've got to either reduce those expenses or find alternate sources of income. So early on when I was coming up, I started to invest in real estate because I was working for $26,000, $27,000 an hour. I knew I wanted to have more money at my discretion to invest. And so that was the reason I started to invest in real estate. So in the book I talk about get a side hustle. And today, again, with the internet, you can have lots of side hustles from blogging to editing to you know what, setting up a little store to really generate more income if indeed your expenses are exceeding your income level and your inability to invest. So get your expenses right. And then the last thing I do that I focus on is understanding where you want to be. And so with your goals, and I say set goals, I'll just set a budget and then set a goal. Say I want to reduce my expenses by X and then identify in there which expenses to curtail or reduce. I want to increase my income by Y. OK, well, I can increase my income by either investing over here or working more over here or those kinds of things. And so make those two decisions so that you get your financial life in order and then take some of that extra money and start investing. And as you do that, ideally, as your salary grows and your income grows and your expenses continue to reduce, you can invest more and more and more for whatever, whether it's school, retirement, taking a vacation, whatever it might be. But you've got more discretionary money to invest where you want it. So anyway, that's to me the most important thing. And so I use this term called SIP, S-I-P. It's really focused on three things. What do I need to save? How much do I need to invest? Then what do I want to use to pay my bills? So SIP, save, invest and pay your bills. And the idea is you get those in balance by really assessing your budget. And once you get those in balance, whatever balance means to you, then you're managing your financial future versus reacting and responding to your financial future.

Dylan Carnahan:Okay. So you kind of talk a little bit about wealth robbers and how that can kind of detract from your goals. But as far as just as someone who's just created a budget for the first time, what are some kind of pitfalls people fall into?

Vercie Lark:So first, what people try to do is, well, first thing they'll do, they'll do it once and then they'll never look at it again because they felt like it was too hard to do to really build that first budget. And what I tell people is pretty simple. The first one is always harder than the next one, right? Once you build your budget the first time, the next time you go into it a month later or three months later, you're just updating changes. And so once you've got it, it's easy to maintain. So the first thing is maintain your budget. The next thing, once you build it, maintain it. The next thing is don't think about the budget as an exercise. Think about it just like anything else. If I was going to drive from here to California, I'd have a roadmap.

Dylan Carnahan:I'd have a map.

Vercie Lark:I'd use Siri or Waze or somebody to say, how do I get from A to B? Think about your budget as that same thing. It's simply your map to get from A to B. And it's an exercise you do to make sure you're on track. So keep that in mind, Vercie, saying, oh, God, I've got to go to my budget. Then the next thing to do is make decisions. Once you look at the information, you will find areas for improvement, like I guarantee you. Take the action, and when you take that action, monitor it. And so that when you see those successes, it kind of fuels you to actually go back and revisit your budget. If you don't revisit it or take the actions, you'll lose focus or lose the energy or lose the excitement about doing it. And what I found is, once you see the money, and I'll use my son as an example, he and my daughter actually have gone through the exercise now that they're kind of coming out of college and are out of college for the first time. And both have found simple ways to actually improve, even with where they are in life, improve their spending and their habits. Both are starting to see their bank accounts rise, they're starting to see their investments rise, and they've kind of caught the fire, so to speak, about, man, this is not as hard as I think. Now, are they looking at their budget every week? No, you don't need to do that. Look at it whatever frequency makes sense for you every month, every quarter, whatever, because you don't want to really deviate from your plan too often, and then just get after it. So the pitfalls is not maintaining it, not really using it and taking the actions after you see what you need to do to improve your financial future, and then coming back and sticking to it. Taking action is probably the most important.

Dylan Carnahan:So what would you say to someone that is, you know, to really reel them in and, you know, that hasn't had a budget before? What kind of advice would you give?

Vercie Lark:Yeah, I'd say go buy my book, be candid. And so actually, I'm actually adding some things to my website. But basically create a simple budget. Don't create, you know, a 900 line budget to start out. You may never, most people never need that. Use those major categories similar to what I talked about that you can find in generally any place and just capture that for the first time. You know, capture your overall expenses. How much am I spending on housing? You don't need to say, I've got, you know, rent, utility. Just add it all up and say, okay, here's my bills. Here's what it is. How much am I spending on my car? Gas, insurance, tire, all that kind of stuff. And just put in one line item. So you have, so it's easy to maintain it, easy to track. As you get more and more things going on in your life, you can really flesh out more detail. But to start, keep it simple so that it's not an arduous exercise for you to do and maintain. And then the more you learn as you go through the cycle of doing it, then you'll say, then adding more detail makes sense for you because you'll say, you know what, I really go look at my, I need to look at my housing and see what else am I doing there? And then actually make some changes at a much lower level. But at the first few times, just start at the highest level and kind of work your expenses, work your income. You know, within about 30 minutes when I meet with people personally, we've got enough of their budget laid out to actually help them make decisions. And the decisions usually come from the same places for almost 90% of the people I meet. They're spending money on, in today's world, how much DoorDash are you getting? Well, you know, I order three times a week. Okay, how many times do you go to Starbucks? Well, you know, I go there twice a day. I mean, they all come down to generally be the same things that most Americans are doing. And so within about 30 minutes, because I know where they're going to be, I just kind of guide them to those places. You know, well, you know what, I have student debt. My college loan is this. I mean, some people in their 50s still have college loans, right? And so you generally, within about 30 minutes, you should have enough information to make those first decisions. And sometimes that means, in a lot of cases, there's a young lady that I met with, a friend of the family, met with her, and she now, she has a side job. She's working part-time. And with that part-time job, she's paying off her credit card. And she's been at it for about a year, and she's knocked down probably 50% of her credit card debt. An easy decision to make, and she's doing that. And that's all you need to do. And when you get to that point where you've knocked it down, you say, now I can take some of that money and invest it more for my future or save it for my future. Just keep it simple. That's probably the other thing. Keep it simple. Finance is not as complicated as all these large books that people read, Make It. You don't need to know everything. You just need to know a few things. And those few things are what I tried to distill in my book so that people can take every person of every walk of life and find something either in my book or on my website to help them make some decisions to improve their lives.

Dylan Carnahan:No, that's great advice. I kind of want to pivot here. You know, you brought up the SIP acronym here.

Vercie Lark:Yes.

Dylan Carnahan:To kind of focus on the savings portion. What makes savings so important?

Vercie Lark:Yeah. So savings, there's two things you want to worry about. And I'll give you a stat. Generally speaking, it's directionally correct. Somewhere between 90% of the people in the United States have less than $400 in their savings. And what that means is when they have a car breakdown or they have an emergency, if they have a home, or they have a medical bill come out of the blue, they can't pay for it. And so what they do is then move toward credit to pay for those things that they should be planning for, because guess what? These things happen to everybody's life. So SIPP is about first thing is making sure you build a little bit of a buffer in any stage of your life to deal with emergencies. Now, you're not going to ever build enough buffer to deal with all emergencies, but for those common things that you know are going to happen, you get a flat tire, right? You need to take a car in for maintenance, those kind of things.

Dylan Carnahan:The rainy day fund.

Vercie Lark:The rainy day fund, right? So that's first. Then the next thing you do is build on that and say, I'm going to actually accumulate some more savings so I have enough liquid capital available if I want to do something, take a vacation, pay for gifts, whatever it might be, right? So I recommend people to have somewhere between at minimum one to three months if you're young, and then you build that over time to basically three to six to 12 months if you can. But if you got one to three months generally, you can cover most emergencies and have a little mad money around to buy yourself something nice every now and then, and or buy something for someone else. With today's markets, having money in a savings account doesn't generate a lot of return. So just keep that basic. Then the next thing you really want to do is start to say, okay, how do I invest so I can accumulate wealth? And what I try to shift people from doing is, you know, a lot of people think, well, I'm just going to save, save, save, and I'm going to be good later on. The answer is you won't because you can never save enough money to build enough wealth to cover your needs in the future. And so save enough to cover your daily needs, your weekly needs, your monthly needs, maybe three months out, right? So again, you lose a job, you've got three months to cushion until you find another job, that kind of thing. And then focus on taking the other money you have and either reducing your expenses so you can start to invest more or earning more income so you can, so you can invest more so you can truly build wealth, whether it's wealth for college, wealth for your kids, wealth to buy a car, wealth to buy a house, or wealth to retire. Your goals are your goals, but make sure you're just putting more money toward investments that actually generate a much better return. And that's those, the S&E, I are the most important things. In my first generation of Make It Rain, I didn't talk much about debt. In the next edition, I will. But I didn't focus on that because ultimately I'm trying to get people to change the most important habits to start accumulating wealth. And then you say, okay, now I want to knock down my debt.

Dylan Carnahan:Okay, so I guess just to go right at it, just what's the basic difference between investing and savings? Sure.

Vercie Lark:Sure. Savings is investing is putting your money in things that accumulate more wealth at a much higher rate of return. When I say rate of return, so if you're in a savings account today, in most banks you're generating interest on that savings at less than 1%. So if you wanted to say, I want to have $1,000 that I've saved and you want that to double, it'll take you 70 years for that to double. So in 70 years, that $1,000 will be worth $2,000. Probably not a good investment. And so now you move over to investing, whether it's in stocks or things like mutual funds or index funds, and those things I outlined in my book, I won't go through them here. But when you invest in those kinds of products through a brokerage firm or through a retirement firm, a retirement plan, now you get somewhere between 6, 8, 12, and in some cases, even higher rates of return. So what that means is if you have $1,000, and I'll just make it simple, if you have $1,000 invested in an account that's generating an 8% return, that money, that $1,000 that you just put in there will double in about roughly six or seven years, nine years on the outset. And so think about the difference. $1,000 doubling over 70 years, $1,000 doubling over, say, nine years, eight times nine is 72. There's a rule in the book called Rule of 72. Now, if you have $10,000, I'll make it even better for you, in roughly 10 years, you'll have $20,000. Ten years after that, you'll have $40,000. Ten years after that, you'll have $80,000. So if you are just a very simple minded person and go, I want to have another $100,000, if I'm 20-some years old, by the time I get to be 40, you just make that simple investment in a product that gives you that 8% to 10% rate of return, and guess what you're going to be? You have to do no work, you have to do nothing else, and that's why I call it Make It Rain. You do nothing other than just let the rain fall because the interest accumulates on a compound basis as compared to your savings. So that's the big difference. And people, especially older generations, they think, they tell their kids, save, you got to be disciplined in that saving. And you do, but you don't really make it rain until you start investing money into things that give you a higher rate of return today. Now, interest rates may rise in the future, and if they do, they get to, say, a 5% or 6% or 7%, then you're going to get a much better return there and it's a much more secure return. And so then you can just rebalance your investments. I'm going to put a little bit more in savings and also keep some in the market. But right now, the best thing to do, the best return you can get is investing in things that are in the general market. That's my opinion. And I'm not an investment advisor. That's my opinion. Yeah.

Dylan Carnahan:Just to clarify. So we kind of talked about the differences between interest in investing in savings and kind of the benefits that investing has, but just kind of fundamentally, what can you invest in?

Vercie Lark:Sure. Sure. So for most people don't have time to go exploring and research stocks and bonds and commodities and Bitcoin and all that stuff that everybody's kind of going crazy about these days because they have more time at home because a lot of people work from home. They're probably doing more time looking at investment than they are doing their work, right? But most people don't have that kind of time and most people don't want to spend that time. And so what I typically tell people to do is invest in things that have been tried and true and there are things in the market today called index funds or mutual funds. An index fund, basically, I'll use one simple one. There's one called the S&P 500. And it's a fund that every brokerage firm and every retirement firm typically offers. And what that fund does, it allows you to invest in that fund. And when you do that, your money is spread across 508 of the largest companies in the United States. So instead of investing in Facebook only or Home Depot or Wal-Mart or whatever, you invest in there and your money is spread across, which diversifies your investment risk. And it will generate somewhere between, generally speaking, an 8% to 12% return depending on the year. It may go down to three in one year, but on average, you're going to get a good return. And so by doing that, you're simply going to double your money regularly, right, every 7, 8, 9, 10 years. And so I tell people to do that as a base because that gives them diversity. It also prevents them from having to even worry about trying to select stocks. And then there's people that manage the companies that go in and out of the S&P 500, and you don't have to do a thing. You just, that kind of thing. And so index funds or mutual funds are the best when you're just starting out, and you really don't understand how the markets work. When you want to move up a tier, then you can pick companies. And what I tell people, if you want to invest in a particular company's stock, pick a company that you know, right? How many of you guys use Starbucks? I'll say, well, you know, Starbucks is a pretty good company. How many of your parents go to Home Depot or Lowe's? Guess what? There's pretty good companies. How many people shop at Walmart? Companies you know are generally companies that are going to be around for a long period of time. I'm not talking about the new companies that everybody's crazy about, but the traditional companies, right? They're going to generate you a great return if you want to start there. So index funds, then to kind of, I call them stocks that have good cash flow, good balance sheets. And balance sheets means they're well-heeled. They have lots of money. They're not going to go out of business in the next 10 or 20 or 30 years, most likely. Invest in those. And if you want to get really speculative, then you can go take maybe one or two or three or four percent of your portfolio and say, you know what, I want to try to invest in Bitcoin. Or I want to try to invest in whatever that emerging thing is. But if you don't have that base built, and you take your thousand dollars and put it into, say, that Bitcoin, and Bitcoin drops from today $60,000 a coin to whatever. Again, guess what, you just lost your thousand dollars. That's not the right way to start investing. Build a foundation, build on that foundation. And when you have enough money in that foundation that you know, I can look out and say, in five years, I'm going to have $10,000 or $20,000 more than what I had. You can take a little bit and maybe kind of play around the edges. But I don't recommend, I never recommend anybody do that because you don't have to. You know, if you think about people like Warren Buffett and all the great investors, there was no such thing as Bitcoin and all this stuff around it. And they still don't, they still steer clear of that because they don't have to spend money on those things to make lots of money, to make it rain. Hopefully that answered your question a little bit there.

Dylan Carnahan:Yeah, no, it certainly did. I guess kind of you talk about, you know, making a good foundation, right? You talk about index funds and mutual funds. So where do people go to invest in something like that?

Vercie Lark:Yeah, so you typically do your retirement plan. So if you're working in a company and they have a retirement plan, they'll either have a 401k or something similar, where they actually allow you to invest for your retirement. Within that retirement plan, you get to pick the things you want to invest in. And generally they'll have mutual funds or index funds, like I just talked about. They'll have lots of them for you. You pick the one that suits you based on your degree of tolerance for things going up and down, right? So that's a place. If you don't have a retirement plan at your office or your work, then you would go up in a brokerage account at a company like a Schwab, Ameritrade, T. Rowe Price, Fidelity, some of the traditional, I always say the traditional Morgan Stanley of the world. You go out there and you just simply go online and open an account. And once you open that account, you basically take some of your paycheck that you get your income and basically have it funneled into that account through payroll deduction. And once you do that, you decide what you want that money to be invested in. And they'll have the same options. You're going to have more than you typically have in your retirement plan. And so then the other place you can do it is if you don't want to do it that way, you can open up another retirement account on your own called an IRA, an individual retirement account. So you can say for retirement and have the brokerage account. And so you can do both. You don't have to do one or the other. You can do all three if you want. The reason I say the company retirement plan first is generally when in a company's retirement plan, they're going to offer you money to invest for your retirement. And what that turns out, the term that's used is a company match. And so if you invest, say, six percent of your money through the income you get at work, the company will match in many cases four to six percent. So you basically are making money without actually even have to take the risk of investing, but then you also invest. And so you get even a higher rate of return. So the example would be if you use the S&P 500 fund, and you got a six percent or eight percent return every year, and then your company gives you an additional four to six percent, you're making 10 percent on your money, a portion of your money without having to do anything. That's a very, very, very, very good rate of return. That means your money, the money you invest, every time you invest it's going to double every seven years. So if you do that over 40 years, do the math, your company, your money will double exponentially by the time you get to be 40 years out or 20 years out or 30 years out. And so 401Ks or retirement plans at work start there. If you don't have one there, open up an IRA through either, you know, all those well-hilled companies, Fidelity, T. Rowe Prices, JP Morgan's, those kind of companies. American Century, if you're living in Kansas City, right? The Everett Jones is those kind of companies that are actually, that's great to use those companies because they're our home companies, right? They have all those things for you. And then you can also open up brokerage accounts with them as well and invest either in the stock market or in index funds or mutual funds. And again, in my book, if people read it, I describe what those things are from the highest risk things to the lowest risk, from mutual funds, index funds, all that kind of things. So they can get a little bit of primer there.

Dylan Carnahan:Well, that's kind of, this is certainly set a great foundation for someone to kind of figure out all those things. I kind of want to transition to kind of two more loosely based questions that people might just have. So first off, how much money do you need to retire and how do you determine that?

Vercie Lark:Sure, simple. So the financial people that you hear online will tell you you need seven to ten times that. And many people can't get there because they have not been investing over the course of their life. And so what I simply tell those folks is just start investing in whatever you end up with is better than what you're going to end up with if you don't invest. So no matter what people tell you, do that first. Ideally, you're going to have somewhere between five to ten times your pay. So if you're making $20,000 a year as a laborer, then you want to accumulate roughly $200,000 or $150,000 to $200,000 before you reach retirement, because that amount of money will generate the income you need to continue to live the lifestyle you live today. And then you add Social Security in there. So you've got enough to live on, again, to live the lifestyle you have today. If you want to live a better lifestyle, then you need to increase that. So think in the range of five to ten times your annual salary or your annual income, because some people have income not just from work. Just say, OK, if I want to really be equivalent to where I am today, that's what I need. If I'm making $50,000, make it very simple, right? Five times that is 250. Seven times that is 350. You know, ten times that is $500,000. That's what I need to actually plan to accumulate. And again, depending on where you are in life, you may not get to that level, but it would be better to have $50,000 or $100,000 more than nothing. And so the key is to start doing something different. What I also recommend as a percentage to make it easier for people if they don't think about this, is simply start investing somewhere between 6% and 15% of your income every paycheck. And if you do that, you're going to be in decent shape, especially if you're in your 20s, 30s or 40s. When you get to be in your 50s, if you're just starting, you may need to invest more than that. But if you're investing at that rate over the course of your life, by a percentage, as your salary grows, the amount of money you invest grows, the amount of return you're going to get grows. And so just thinking that simple rate, somewhere in the 6% to 15% from an investment perspective.

Dylan Carnahan:So the last thing I got for you pertaining to financial literacy and kind of what we've been talking about is, so say someone's listening to this and they go, wow, you know, that was a lot. And Vercie's talking about retirement and holy cow, I haven't thought of it. You know, how do I get there? What are some kind of ways that people can, you know, add supplemental income?

Vercie Lark:Sure, sure. Absolutely. I call them side hustles and there's lots. And so when I, so back up, what I also tell people is your education matters, but it doesn't need to be a college education. If you want to add supplemental income, maybe you can go and get some kind of side hustle. Painting, houses, lawn services. You know, if you're a plumber, do some side things with plumbing. If you know ACVAC, do this kind of thing, you'll get trained in those skills to do that. So those are traditional ways that people actually add income. I did it by basically investing in real estate and I had my family members maintaining those properties. So we all had side hustles, so to speak, right? Other ways in today's world is through the internet. You can be an Uber driver, you can be a DoorDash driver, you can be an Uber Eats kind of driver. There's things you can do that just take no real new skill that you can start immediately doing to add income. Or one of the things I put on the line on my site is, if you have a lot of stuff in your house and you always like to accumulate stuff, maybe you sell some of that. So open up a lot, you go into Facebook or whoever through the marketplaces and sell some of that stuff to generate additional income that you can actually invest. That's another way to do it. So using the online kind of world as a way to generate income is great. There are lots of jobs out there. If you like doing what you're doing, blogging, create a blog. And once you get enough followers, then advertise, get people to come in and advertise, and that generates income for you because now you're doing more than just having first, you got a lot of people on there, right? There's lots of ways to make money. And again, there's some articles on my website. If you go to versilark.com or get there through letsmakeitrain.com, you'll see some things there. And actually, I'm working on, I didn't tell you this, I'm working on a second edition of Make It Rain. And it's been expanded to include things like that. You know, here's some traditional side hustles, here's some new side hustles, here's some things you can do depending on your age to actually make some more money or generate more wealth over time. And also, I'm adding a section on debt and also one on identity theft because a lot of people are getting hit with identity theft these days. So yeah, there's lots of things you can do. I've done a lot. I had a scrap steel company, so recycling, taking steel, collecting steel, taking it and getting money for that. I've done all kinds of things in my life to generate additional income that some people may not think is cool. But you know, when I wasn't cool, I was really trying to generate more income to build more wealth. So I didn't really care what people thought about the things I was doing with regard to, you know, dumpster diving or whatever. Now, people don't have to do that, but there are many options, is my point, from doing just labor in neighborhoods for people you know, farmers, electricians, et cetera, especially if you have that skill, you can make extra money as much as you want. And if you don't have that skill, you can learn that skill within about six or 12 months and actually do that for someone else. So there was a lot of, hopefully that was a few things to give some insights to people. There are a lot more opportunities out there today. You can be a software developer online. If you have a development skill, you can be a blogger online. You can be an editor of people's books online. You can do all kinds of things because the internet has opened up so many opportunities. For anyone that has a phone or a tablet, you can make it rain. It's pretty simple.

Dylan Carnahan:Yeah. So speaking of make it rain, how could someone get a copy of your book?

Vercie Lark:Sure. Sure. Thanks for asking. I should have said that early on. So my book's available online only. It's only available in a couple of stores, but online on Amazon, Barnes & Noble. You can go to Walmart or any store out there that has an online store. Just type in make it rain, Vercie Lark, and you'll be able to buy it. There's an ebook available for I think still listed at $4.99, depending on which site you look at. Sometimes they're $3.99. The paperback books range from probably around $8 to $14, depending on whose site you're on. And then there's a hard copy out there. I think it's around $20 a copy. And so they're available for you to get there. If you're a nonprofit or charity and you want to buy books, say, for your group, rather than buying them online, they can contact me by going to my site and then filling out the contact page. And once they do that, I can buy those books in bulk and get them a much deeper discounted price than if they would buy them on their own. And so those are the two ways to get books in general. But it's out there. You just Google Vercie Lark and Make It Rain. You're going to find a website that has it. I mean, it's being sold all across the world right now, which is pretty cool. I've got some people in Australia that have purchased this, some people in the UK. So it's like, whoa, this is pretty darn cool.

Dylan Carnahan:Well, thank you, Vercie. I really appreciate you agreeing to sit down and have this discussion, as well as hearing your story. It was fascinating. And I know I learned a lot, and I hope our listeners did as well.

Vercie Lark:You bet. And thank you for this opportunity. I love to try to share the wealth, so to speak. And I typically don't just like to talk about the book and why I did it. So you gave me an opportunity to give some tips, and that's really what I'm all about. I'm not trying to make a bazillion dollars off the book. I'm trying to spread the wealth so that people can actually end up in a better place. So thank you for taking this opportunity and giving me this opportunity to share with you and the folks you're connected with.

Dylan Carnahan:Of course.

Vercie Lark:Let's make it rain.

Dylan Carnahan:That concludes our interview with Vercie Lark. I hope you guys enjoyed that. I know it was a rather intricate subject and we talked about a lot, you know, what to include in a budget and some pitfalls to avoid there, as well as the value of savings, how to accumulate wealth through investing, and when I'm sure everyone will love it, I'm sure you'll be able to get a lot of information about how to do that. Be sure to check out Vercie's book, Make It Rain. You can find it by going to versilark.com as well as looking on Amazon. Give Get It Rogers a listen as well and check out his new music video. In addition, feel free to subscribe to the podcast on your preferred platform. Follow us on social media for updates. I'm currently pursuing an interviewee and topic for the next episode. It's yet to come to fruition, but I can tell you if it does work out, you guys are going to be really excited for that episode. I'll catch you guys on the next episode. And as always, keep asking questions. Thanks for watching.