Karen is a Master Financial Coach, Public Speaker, Entrepreneur, and Author who has coached people with a variety of money issues: from just $500 in debt to $800,000 in debt. She has coached folks with up to 86 credit cards and taught them how to pay down and pay off those credit cards in record time.
Karen’s mission is to inspire others to rid themselves of debt and build wealth. She encourages others to break the shackles of debt and gives valuable insight into building wealth so they can experience financial freedom!
Karen Ford’s #1 Amazon Best Selling Book “Money Matters” is a discovery for many.
This book is not only motivational, but practical.
She is an avid real estate investor, who enjoys buying, selling, and flipping properties. She has even bought properties for as little as $10 and turned a few dollars into thousands!
In “Money Matters” she provides keys to demolishing debt, shares how to budget correctly, and gives principles in wealth building.
Karen: 00:00 Awesome, thank you. Well, I got to tell you what this, what you, what you do and what you have going on. I mean, I'm just so excited to have you on and talk all things financial freedom and I just can't wait to hear your perspective on, on these sorts of topics that I've jotted down for us to talk about today.
Michaela: 00:25 Oh, thank you so much. I really appreciate it. And back. I'm excited. Can you, can you tell the listeners a little bit about what you do and how you got into how you got into it?
Karen: 00:39 Well, absolutely. I'm more than happy to several years ago I became a registered nurse. And long story short, I have had people tell me my entire life that I'm good with money, I'm good with numbers. I never really saw it to be honest with you because I took it as something natural. You know, so anyway, long story short, several years ago I had a friend of mine tell me, Karen, you should actually get some more you know, training. And the area of financial coaching because you're really good at it. And so I did and I actually fell in love with it to the degree that I am no longer a nurse and wow, that's if, yeah, that's, so that's, it's huge for me because I love helping people, but I look at it like this Michaela, I look at it like this and people get healthy physically and now as a master financial coach, I help people get healthy financially. So I'm still helping people feeling my calling, whatever you want to call it. But I have such a passion for the area of finances under control and so many people are out of control when it comes to money, when it comes to making purchases, getting out of debt, building wealth. And so many times people don't know where to begin. And that's where I really come in and help them take control.
Michaela: 02:13 Well, I'll tell you what, as a, as a psychotherapist then the number one topic for couples that come into my office is finances. It actually logged out at a bit. They, they actually, they actually state it over communication and you know, any other kind of thing. People think that, you know, couples are always coming in because there's an affair or something. But the reality is it's, it's more got to do about money. It's usually got to do about money.
Karen: 02:43 That is correct. And you know, the number one cause of divorce in the USA today is not lack of communication, although that can play a part. It's not anything else. The number one cause of divorce today in the USA is money fights, I believe. And what I see. Yep. Oh man. I'll tell you what, if people learn to, you know, opposite to track, just to be quite honest with you, you already know that. I'm not telling you anything that you don't already know. But if they'll learn, you know what, if I'm a spender, then that means my mate is probably a saver. Or if I'm a saver, majority of the time they're going to be a spender. Very rarely do I find where both of them are savers. Now I have found couples where they're both spenders and that can really be another issue to deal with.
Karen: 03:35 But by and far, if people will learn how to communicate with their mate in the area of finances and, and you know, have somebody like you come in the picture and help them see eye to eye in that area and how, you know, it's not something that we have to fight about. It's what we learn. How are we going to work with each other in the rearing of children, area of our jobs, in the area of finances. And if we can learn to communicate and work with each other in the area of money, it will actually be so beneficial, not only to, to us, but our mate. I mean, you think about it, it's gotta be really frustrating to be in a marriage where one is a saver, one is a spender, just not enjoyable at all.
Michaela: 04:28 You know, I, it's interesting that you say that because I was reflecting on my own marriage and the funny thing is my husband and I are actually both savers. That being said is awesome that she said, we are very different financially in that I am the kind of person that balances my checkbook to the penny. I handle the finances at our, at our business and he's kind of like the throw another hundred bucks in there and call it good kinda guy. So it works because we have this same belief on the ways that our money should be saved or spent. And then one of us is able to kind of deal with the nitty gritty of paying the bills and do all that. And I love that. I love that control part of it. And then he's able to kind of just like, Oh good, you, you know, this amount goes into my account and I can not have to think about it and don't have to worry about the rest of it. So it actually works out well for us, but, but I do really feel like we're an anomaly.
Karen: 05:30 Oh, you absolutely are. You are. Absolutely. That is absolutely correct. You know, and you just said something really powerful there. You know, both of you still work differently. You're saving goes, you take it clear down to the penny. He's just like, athero another hundred bucks to it. We're good. You know? So we need to learn that as well. And we can discover things about ourselves. Probably don't argue with your house. That's terrible. It needs to go to the penny and probably doesn't argue with you and say, well that's just terrible. Then we just have to deal with each other. How we opt, you know, in marriages, mint, each person has a different personality. Each person, many times has been raised diff. Go from child to adulthood. We have different thoughts, we have different concepts about areas and so different really. But if we can learn to communicate with our mate and, and really embrace the difference, to be honest with you, we fell in love with them
Karen: 06:29 We were willing to marry them. So we need to embrace, there are differences. So that's what's attracted [inaudible] that they're just, to be honest with you, we'd, I think I would end up, you know, not, not doing so well with my mate was exactly like me. Someone say, I heard someone say one time, if your mate is exactly like you than someone in that marriage doesn't need to be there because someone doesn't need to be there because it's opposites attract and think about the differences. That's what you embrace and it's okay. We just have to learn how are we going to communicate, how are we going to deal with each other in this area of money, a saver braces. Because here's how I look at it. Us as spender needs a saver in their life so that they don't have to eat dog food in their golden here. Right? A spender ne their life. So they actually have a life. Because if you save every nickel, every diamond, you never get to spend [inaudible]. You're not living the best life possibly that you can live. You need to be able to your labor.
Michaela: 07:50 Well, I just love what you, I just loved what you said about about having that freedom to when you're with a spender to enjoy life and having the comfort of when you're with the saber to, you know, have your retirement years be comfortable. And I think my husband and I, we were both raised similar, similarly, very, very, very broke. I actually wrote a memoir about my, my upbringing and which was in a 27 foot fifth wheel with no electricity and no running water and hit and his wasn't too far off of that. So I feel like what's interesting is that we both align in that way of, you know, not, not wanting to take on debt, not understanding the importance of credit, but not wanting to take on debt wanting to enjoy and live life for the now, but also saving for the future. So it's a really good balance. Like we, we definitely have our beef and a lot of other areas, but this seems to be the one thing that we've nailed.
Karen: 08:49 That is awesome. I am fantastic.
Michaela: 08:53 So, so America is just notorious for debt. How do you feel about the debt in America and how Americans have, have gotten to the situations that they're in with regards to maybe spending outside of their means or loans or credit cards? What do you think about that?
Karen: 09:12 To be honest with you. You know, debt, you know, I've heard a little bit of truth in that, but in my opinion, no debt is good you. And so it's kind of like a, the old adage I owe, I owe, so off to work, I go, how about going to work because you enjoy your job and you're able to save and invest. I think that over the past 50 to 60 years you know, debt has really gotten a lot of grandparents, many of them or our great grandparents, depending on how old we are, a debt was not a common theme among them. They didn't buy it if they didn't have. And so over the years we have been duped and convinced that debt is normal and that you have to have debt to buy things. The true state, some people will say, well, you know, if I buy, you know, online or rent a car or buy anything on Amazon or websites or art.
Karen: 10:19 And that's not necessarily true because many of those web websites, Amazon renting a car, you couldn't do that with a debit card, which means you have the money in the bank. What happens though is people are convinced that they have to have credit cards, they have to have debt to, to make it in life. And that is just not true. Certainly you may do without some things for a period or you may have to delay that purchase if you choose not to go into debt to buy it. But isn't it much better to pay for something, know that you own it and now you're not going to get a bill in the mail. You know, I can use my husband and I's as an example. We've taken some phenomenal trips over the past several years. We've been to Jamaica a few times. We've been to the Dominican Republic.
Karen: 11:15 And one great thing about those vacations is that it's paid for before we ever, we don't, you know, the foods or let's try to get all inclusive. The hotels paid for the flights that we need to take as spending money. Many people that have taken vacations to Disney world or where have you, they charge everything. They charge the hotel, they charge the airfare, they charge the food. And to me that is not an enjoyable vacation because now it takes them the entire year for the vacation they just took to help them relax. To me that is not a relaxing vacation that come with credit card debt to pay for a vacation that was meant to help you relax. So you know, and sometimes I've heard people say, well you'll always have a car payment, not. So if you choose to have an always have a car payment that that's your decision.
Karen: 12:17 But actually you don't have to always have a car payment. You can pay off your car and instead of trading that car, start putting that monthly payment that you no longer have for that car, whether it's $300 $500, whatever it was, and put it in a marked car and pretend like you still have that car payment and pay yourself every week as if you still have that. And then once you get a good war, chest there, trade off your car, trade it in and pay cash for the next car. But I always advise people, you don't have to buy a brand new car. A brand new car will lose 60% of its value within the first three years. Buy a one year old car or a two year old car and let somebody else take that depreciation. Yes, you're still going to have a great warranty. And yet I was on it, but you're not going to take that depreciation in that car, you know, as if it were brand new. So I hope I didn't overextend myself on your inserted that question.
Michaela: 13:28 But no, not at all. And I don't have a car payment and hate car payments and we've used some similar thing, but at this point you know, car payments and etc. Payments are now tripling our, our mortgage payment because we've put it towards that. So it's yeah. So I embrace that idea as well. That, you know, you don't have to go into debt. I also bought a used car. I use new car that had still had a 60,000 mile warranty when I got it and it only had 11,000 miles on it. But you know, it's take, yeah. So I'm a big fan of, I think debt gets people into trouble because you're always living in arrears. You know, you're, you're, you're never able to to start saving and, and enjoy because you're always catching up.
Karen: 14:21 You're always playing catch up. That's so very true. You know something else when it comes to debt, you know, so many times people are fighting or, or, or having an area of stress in their life because of debt. To get rid of stress is to get rid of debt. Your stress level will drastically diminish. When you don't have debt, you're going to work not because you, because you want to, I mean, who wants to get up, have a morning and go to work because they have to because they have bills to pay. They have student loans to pay various things. When you don't have debt, you still have your utility bills of course, and you still have to buy food and put gas in your car. But when you don't have debt hanging over your head, life is so much more enjoyable, so much more enjoyable. And there's peace of mind with it.
Michaela: 15:16 I was going to say it's, it's comfort. It's really comfortable knowing that if something were to happen in the way of an illness or an injury or something like that, you know, that you can still function, you can still survive, you can take time off to do what you need to do or something like that. You know, one of the things I was thinking about as you were talking about debt is I see a lot of couples where, where we live that by these fixer uppers, you know, they have this great idea that they can get something on the cheap and, and, and make something of it. Now, I know that you have actually purchased a home, and correct me if I'm wrong for $10. Oh yeah. And flipped it. But I don't think that's often what I think often people buy these cheap, cheap fixer uppers and just get themselves into a a really stressful debt, full situation. What do you think about that?
Karen: 16:09 I think that if you have money in the bank to bond without going into debt, then I say, okay, but just note when the debt to fix it up now. Now you're really what would happen if you or your mate lost, lost your job? How stressful is that going to be? W that house once it's done is on the market for six months before itself, so you have to weigh these types of options. I am an avid real estate investor. I enjoy it, I love it, but I also know the risks, so dirt cheap and then knowing, okay, this is what I'm going to do to this house to sell it, to flip it. Or when I go in the house I notice things and I decide, am I going to flip this or am I going to sell it to make a little bit of a profit and let somebody else flip it.
Karen: 17:07 So you have to weigh those pros and cons. If you're buying a house cheap and you think that you can make, you know, 10,000 just selling it outright out of it or cleaning it up a little bit to sell it out, right? Let somebody else slip it, then, okay, you've made a profit, but if you're going to flip it, then you have to note everything that has to be done and know what your cost is going to be before you decide you're going to do that. So you have to weigh all of that. And, and again, I always, I might not get fired from your job, but what if he got laid off? What if, you know, God forbid you got sick and had to miss work and you know, whatever the case may be, you have to look at that and think to do this.
Karen: 17:55 What if you have to look at the, what if I, I'm thinking about somebody that I know that recently said to me their company offers a 401k and the company matches, I don't know, 5% up to a certain amount a year or something like that. And they were just talking about their finances and dah, dah, dah. And I says, you know, why aren't you investing in the four 401k like, why aren't you putting, you know, 100 bucks, 25 bucks, something into the forward. I started investing in 401k when I was working for a company at 18 years old and I didn't even think about it. It just came out of my paycheck. And then when I left over a period of time I had to transfer 401ks to company, to company, whatever. But then when I finally pulled it out and saw what it was sitting in an IRA, I mean, it was like, wow.
Karen: 18:48 Without even realizing it, I had done such an incredible forced savings. And the person that I was speaking with is, you know, I live paycheck to paycheck to paycheck. I could barely pay my bills. I don't have money to put in my 401k and I just thought, but it's free money. They match for free. That's free money, you know? Right. What do you think about people who say that I live paycheck to paycheck, I can't save or people that don't invest in 401k. What do you think about company 401ks? Do you think they're worth it? What are your thoughts? Oh absolutely. 401K's especially if the company is going to match because just like you said, that's free money. If they say, listen, if you put 3% in, you know, we'll match you 3% or whatever it is, whatever it is they're going to match you with is free money and most of the time you are not going to miss that money coming out of your paycheck before you get paid.
Karen: 19:47 Usually it's such a small amount to begin with. You're not going to miss it. And you know, if you have to start with 2% and then in another month go up 3% and then a go up another month and go up to 4% if you need to do it. And 1% or 2% increments do that because whatever they're going to match you with this free money. So I absolutely positively agree dark, don't you know, don't pass, go start now. Even if you start with 1% until you are comfortable with popping it up a little bit more, but definitely invest to what their match is going to be. Now as far as living paycheck to paycheck, I would have to sit down with that person and see exactly what they're spending because I have coached many, many people that tell me that they're living paycheck to paycheck. And when I start digging into their front, not digging, that's not the best term.
Karen: 20:47 I start asking questions and I take notice and I find out what your house payment, what is your car payment, how much you know, and I start digging for the information. And many times I will notice areas where they adjustment and they will no longer live paycheck to paycheck. Let me give you an example. I coached a couple of one time, lovely husband and wife and they had a three year old daughter and so I asked the series of questions, we found out what their credit car payment, all of that, and then we got down to groceries and I said, how much do you spend on food every month? And they both had a deer and a headlight moment and said, we don't know. I said, okay, that's no problem. Let me just start asking you some questions so we can so we can find out.
Karen: 21:41 I said do you all restaurant? Yes. How often do you go? Once a week. I said, okay. How much does that cost you? Once a week to go to the restaurant. So I jot that down. Do you all Brown bag your lunch to work or do you eat in the cafeteria at work? Oh, we eat in the cafeteria at work. How often do you eat in the cafeteria at work? Every day. How many days a week do you work? Five. Okay. How much does it cost you to eat in that cafeteria each day? So we jot that down. And then I said, how often do you go to the grocery store? Every two or three days to get what they need. Okay. How much do you spend every two or three days when you go to the grocery store? And they told me, long story short, each month they were spending on food $1,500 a month for a family of three.
Karen: 22:38 And one of them is only three. Wow. So they both had a deer in the headlight moment. Again, they were shocked and I said, do you want to make an adjustment? Because I thought, I can't make you make an adjustment. I know what you should do but and lets you decide. If it's their decision, that means they're going to do it. So I said, do you want to make an adjustment? And they both wholeheartedly said yes. I said, okay, you tell me what you're willing to do. So they decided instead of going out to eat in the restaurant once a week, they would go once a month instead of eating in the cafeteria every day at work, they decided they would eat in the cafeteria every Friday, and instead of going to the grocery store every two or three days, they would do meal planning and they would go to the grocery store. Once a week. They cut their grocery bill and restaurant bill, their food bill for the month from $1,500 a month down to $600 a month. Wow. Now that was an additional $900 a month they could put towards debt or put towards wealth building. But that was such a win situation. I coached a young man one time and he didn't have a lot of deaths, but he wasn't really sure where all his money was going.
Karen: 24:06 And I just said, do you like coffee? And he said yes. And I said, do you ever get a specialty coffee or anything? And he said yes. And I said you know, you drive through the specialty coffee place. And he said, yes, sir. Dude that he said every day on my way to work. And I said, okay, how much does that cost you every day? And he told me, long story short, he was spending $350 every month on his specialty coffee on his way to work. So he decided he was going to change that. But see none of that because it many times it's not the big, you know, it's not the house payment they go in your means, but typically it's not the big things that get us. It's the little foxes that spoil the vine ups here. It's the 10 bucks there. It's the $2 here. Many times we have to take notice where is this money going? And sometimes it's those little things that really add up.
Michaela: 25:09 When I, when, when I was pregnant I was working full time as a marketing director actually at the time and I was going to school for my masters in psychology and my husband and I made a decision that I would stay home once my son was born. And so, you know, I think a month or so before, or it might've been a couple months before I, I left and focused on my schooling and finish that up and it was going to be a big financial adjustment for us. But it was at the time that e-card was coming out and our home had been purchased at the height of the market. And so I went down to the bank and talk to them about a refinance and we were, you know, eligible for that. So I refinanced the house, we saved 3% on the interest, 3%.
Michaela: 26:04 That was the difference. And then I started doing the Railey's E cart, which was our grocery store e-card cart, where I could see what I was putting into my proverbial cart and, and stay within our spending and say, Oh, you know what, we have extra this month, so I'll do this or I'll, you know, take that out or put this in or clip the coupons. They let you clip the coupons online. Just that minor change was hundreds of dollars a month that you have to put out. And that was, you know, one of the way it was important to both of us that I have that time with him. That, you know, he was raised by us and not being spent on daycare, but but it was a big adjustment having to, you know, incomes two large incomes down to one. But I was amazed at how well we were able to kind of pinch and pull and do little things here and there, like you said, not, not doing the coffees every day and things like that to make up that difference and make it feasible and manageable.
Karen: 27:08 That's right. You know, just can really add up.
Michaela: 27:13 So one of the things so, so for people who are right now underwater with debt that are living paycheck to paycheck, your recommendation is to start looking at these little things, these little ways that they can kind of trim and tweak. Yeah,
Karen: 27:27 Absolutely. Yeah. You'll be amazed if you don't take notice how much coffee you drank or you know, the little stop at convenience stores, cost convenience costs because convenience stores are there to be convenient to you. But there's a horrific markup on those items and those convenience stores. So absolutely look at the little things that you're spending money on. Absolutely.
Michaela: 27:59 What do you think about Dave Ramsey's style of like putting your paycheck in a, in an envelope that you know is for, for, for food and an envelope for this and an envelope for that and then only spending with cash. What do you think about that?
Karen: 28:11 I think that there's a place for that. Otherwise you're gonna, I mean, look for everything. Your, your wallet or your purse is going to be loaded down with envelopes, certainly for food. And I'll tell you why on that. I don't know about you, but I, when I had gone to the grocery store with a debit card in hand and I start down the aisle, I'll make a mental note of how much I'm spending. But by the time I get to the third row, that's kind of thrown out the window. I'm no longer keeping track of it. And so then I don't discover how much I've spent until they've rang all and told tab the entire time. And I'll just come within a few dollars of them bringing it up. So taking note of how much you're spending on cause a great idea. I don't know that it's actually necessary for every category, the entertainment, utilities or anything like that, but certainly I think it's a great idea. Excuse me. Great concept for when you're spending money on food and going to the grocery store. Absolutely.
Michaela: 29:18 My sister in law told me just just this past week that she went through their subscriptions, you know, like subscription boxes and Netflix and different things like that. And, and she saved $3,600 a year in subscriptions over the, over, you know, time that she'd signed up for that we're renewing that she did.
Karen: 29:37 Wow. Oh, my notes. Oh my gosh, that's unreal.
Michaela: 29:44 We were on a group thread and I'm like, well, I only have Amazon and I get BarkBox and which saves me a lot on toys for the dogs and whatever. I know how much I'm spending every month on that and this and this. And then she goes, well, what about this and what about that? And I'm like, Oh yeah, I do have Apple music. And I do. I realized like, Oh my gosh, I have a ton of subscriptions that I didn't even think about. Like, you know, the obvious ones, but my vitamins come monthly, which those aren't going away. I, you know, I eat, I consume them. But there were a lot of ones that I didn't even know,
Karen: 30:16 Think about it. Isn't that amazing? That is amazing
Michaela: 30:21 I always laugh and I, and this might be the hippie in me, but I'm not a Costco person. I don't, I do not shop at Costco at all. And I always laugh at when people tell me how much their quotes saving by buying these things in bulk. And I think, but how much are you wasting by buying these things in bulk? I mean, how much Manet's do you really need for a family of four, you know, or that's right. I mean, how do you feel about Costco in the big box stores
Karen: 30:49 That if you have a large family, you have to weigh that? To be honest, go to a Costco or Sam's because it's just the two of us. And so, I mean, the children are grown, so you know, it wouldn't pay for us to buy, you know, a five gallon a mustard bottle. Right. So, right, exactly. So I mean, how, how quickly are we going to eat that? You know so you have to look at that too. If you have a large family. Certainly, you know, going to Costco or Sam's club or something like that can really be beneficial depending on how much you know you're spending at a regular grocery store. But if it's, if it's just the couple of you, it might not be a weekly thing that you, that you go to Costco or Sam's, maybe you might do that before and your home or where you're going to have lots of family or a family reunion or a picnic, what have you. But to me it's unnecessary only or you don't have a lot of social, you know social what is the word I'm looking for here? Events that are coming up, which would require you to buy in bulk.
PART II
Michaela: 00:00 One of the things I was thinking about as you were talking, I was kind of reflecting on our own style. My, my husband and I are foodies. We like to, we like to cook. We cook every night cause we live rural. So there's not really much in the way of, of that anyway. But we do enjoy going out to eat. We do enjoy cooking gourmet, we enjoy that sort of thing. And, and one of the things that I've realized is that we, we are fortunate enough because of the way that we've managed our finances to have a lot of financial freedom almost to the point where I think like, man, maybe we should be more mindful of, of what we spend on eating after dark.
Karen: 00:40 [Inaudible]
Michaela: 00:40 Brings us a lot of happiness. What do you think is the easiest way for people to build wealth?
Karen: 00:48 The easiest way to, well, there's a variety of ways to build wealth. And I enjoy all of them. But one way we've already touched base on is starting even with small amounts of money being taken out of your paycheck for our 401k or Roth IRA, especially if your company offers a match because little things will add up. So that's one method. A second method is you can, you can check into real estate investing. That doesn't mean that you're going to go buy a half a million dollar home and think you're going to flip it in an area where the houses sell for 300,000. You know, buying real estate, you can start small, but certainly do your due diligence, location, location, location plays a huge part. And having some knowledge don't just step out and try to wing it. Real estate is not something that you want to wing.
Karen: 01:50 You still need to do your due diligence. Listen to podcasts like this, be an avid reader. Study up a little bit, check the real estate market in your area and, and step out and find out another area is the stock market. Now here again, we don't just want to, you know, wing it and gas or anything like that, but you can start with small. You don't have to invest hundreds of thousands of dollars. You know, there are many brokerage for firms that will let you start small. The company, you know, I've had many people say, well, what about penny stocks? And I say, listen, unless you know, without a shadow of a debt that this penny stock is really going to be a winner. There are thousands of penny stocks out there. And so it's just really a guessing game. It's kinda like spinning the roulette wheel or buying lottery tickets to be honest with you.
Karen: 02:48 It's a guessing game. So do your due diligence and check the history of the company. You know, if they're a company that has been in business for 30 years and their stock keeps going up, it's not, and check the, see what their profit ratio is, you know, start small, start with safe companies. Again, do your due diligence. Don't go into buying a bunch of penny stocks, which, you know, you know nothing about. We still have a responsibility of learning and being aware of these companies before we invest our money in them. But I enjoy all of those, but of course I do some, I do my research and you can Google, you can go online, you can talk to people. I'm always talking to people that know more than me because I only know what I know, but I want to know what they know. So, and that's how we learn is by not thinking that we're all that in the bag of chips, so to speak. We need to check with other people and learn from them as well. So all of those areas are great ways to learn about investing and checking it out.
Michaela: 04:10 One of the things that I found to be a great tool when I was younger and, and like I said, I, I've, I feel fortunate that my upbringing you know, created a monster in the way of saving and things like that. But one of the things that I found worked really well for me when I was working was that I would have an, and I was a younger person, I would have the portion that I knew that I needed to live off went into my checking account. But then I had, and this was when direct, you know, direct deposit existed and so you could have two different accounts that you sent your money to and then I would send a different portion of my paycheck that wasn't critical to live on. I knew I didn't need it. Even, even if it was a small amount to another savings account that I did not have debit card access to and, and so it was kind of one of those things where, Hey, if I have something come up in a month where my car breaks down and I need to go tap into that ICANN, or if I need to buy groceries or I want to get a gift for something that I didn't, you know, calculate into, I can go get that money if I need to.
Michaela: 05:19 But I've got to physically go into the bank to do so. And, and that seemed to really help me. What do you think about savings accounts? I mean they don't generate that much interest, but if they're used maybe in that way where it's, you know, it's still mentally accessible. Cause I know some people have a hard time with the 401ks and the stocks cause they can't get to it if they need to. What do you think about that?
Karen: 05:41 I think definitely you need to have a savings account because if an emergency were to arise, let's say your, your furnace goes out, you have to replace your furnace or repair your furnace or to have access to that cash. So absolutely savings accounts are there. They're just not going to make you a lot of money. That's just the way it is right now. But you still need to have a savings account because emergencies arise. You know, I can remember the old adage, grandma said, save for a rainy day. Why'd she say that? Because she knew someday it's gonna rain and chances are unexpected events really are expected. You know, if you drive a car at some point you're going to have to replace those tires. You're going to have to replace that battery. You know, there are things that are a loner, you know, there are going to pop up your hot water 10 14 years old and now you're going to have to replace that hot water tank. Just a ride around the corner. You know, if you have a furnace that's 2022 years old and you're going to have to replace that furnace, so things are going to pop up. So we really, really unexpected events are expected and unless you want to have a really stressful situation on your hands, it's good to have a savings account so you have quick access to that cash so that when something does happen unexpected, you have access to that money to take care of it.
Michaela: 07:13 I like that. I like that a lot. And it's worked for me over the years because if I don't see it, I don't spend it. Absolutely. Then I'm like, Oh, maybe I don't really need that thing. And you know yeah, I can talk myself out of a lot, but we also have a 1968 house that we've fully remodeled. So I can, I can really, you know, attest to the unexpected expected done the furnace, haven't done the water heater yet, but literally everything else down to the copper piping. You know, this is a funny thing and I'm sure you've not heard this on a podcast yet, but I just thought it would be a fun topic. A lot of these television shows on Netflix and a lot of movies they demonstrate like an Armageddon situation where, you know, the world basically is ended and money is null and void and people have to barter and they have to use their skills and, and that sort of thing. And you know, there's doomsday preppers and all these things. What do you think about this idea that someday perhaps our financial system collapses? Well,
Karen: 08:30 Question right there. You know, if there's additional order or additional food items in your home or silver or silver as I think 17 or $18 an ounce, there's certainly nothing wrong with that. And you know, you can turn the silver if you need the but you know, to T if you that trouble having some of those items as a prepper in your home, in the event that maybe, you know, the grid goes off, the electric is gone or, or what have you, it's okay. But I do think that sometimes people can really go overboard with that. Right now our economy seems to be doing fairly well and peripherally. That will stay the course but certainly to have some items operation, there's nothing wrong with that, but be watchful that you're not so consumed and so fearful that you're just, you know, constantly in that fear mode.
Karen: 09:42 Many times, whatever it is, however we are, is what we're going to attract. I don't know if you've ever like minds attract each other. So if you're in fear than other people are going to be in fear and then you're just going to feed off people in that fear. So certainly, okay to have some preps, things in your home, but just and certainly there's nothing wrong with having other means to barter with whether it be what w you know, there's certainly nothing wrong with that, but just don't go overboard with it.
Michaela: 10:13 Do you think it's important that people keep cash on their, on in their PR, like on their person, like at their home, not have everything in the banks?
Karen: 10:21 I certainly think that's a great idea. You can have a small, you can purchase a small safe for your home in a, in a hiding place. You could put it somewhere where not everybody knows where it is. Maybe just you and your mate or you and just one other person. Certainly having cash because let's just say for instance, if something drastic happens and the banks, nobody's getting in the banks well, to be able to buy things, you're so certainly having some cash on hand in a safe in your home so that your able to go spend some money to go to the grocery store or whatever it is that you need. But certainly having some cash on hand in your home is certainly a good idea. Yes.
Michaela: 11:04 And we have that where I am here in California, we actually had that exact scenario where the power grid was shut down for a long time and therefore the banks were not accessible. How do you feel about tipping? This is a big thing. This is a big topic that comes up often because you know, I know there are people that are employed in the food service industry that rely on those wages because maybe the company they work for doesn't pay a good solid minimum wage or you know, a good solid wage has their base wage. But tipping seems to have become expected and not for great service. And so that can add a lot to a bill when it's an automatic 18% or if you feel expected to tip 20% and nowadays all the electronic readers, when you scan your card, that screen pops up and says, how tip would you like to leave? And a lot of times they don't even give you the number or the opportunity to write it in. It just says, you know, one, two, or $3 or 15, 18 or 20%. How do you feel about that?
Karen: 12:03 I don't like forced tipping. I certainly understand you know, men and food service where, you know, wait, people are not being paid what's do them. I, I certainly, I appreciate good service and I like to tip really well for good service. Now, if the person maybe didn't do very well with serving us, I will still tip I tip large for good service, you know, and I'll even tip 20%, 25% if, if it's good service because I want to show my appreciation to them. I really do. Now, you know, sometimes I'll go and to a restaurant and pick up takeout order. And pretty much what they did was they prepare the food, they put the food in the bag, right? So I don't necessarily tip that because that's takeout. I'm not being waited on. Right? They prepared the food, which I paid, that I paid. They're not at a table, they're not waiting on me hand and foot. And I don't know if anybody listening to this, I don't necessarily tip for take out when I went to the restaurant to pick it up. Now if it's delivered to my home, I'll, I'll tip because that person had to drive and bring it to me and they did it in a really record time. I'll tip that person. But if I'm going to the restaurant and I'm picking up my, my food, I'm not necessarily going to tip that.
Michaela: 13:47 Well. I've noticed this in the drive through coffee shops. If you pay with card, the screen pops up and says, would you like to tip $1 $2 or $3 for your service today? And I thought, I think about that. And I'm like, well, I ordered a coffee. They made me a coffee. I drove to them to pick up the coffee I should have to tip for. Right, right. Well, and you did it out of [inaudible]
Karen: 14:16 Venus to go through the drive through. When you go into that coffee there, they're not asking you for a tip. Right. So,
Michaela: 14:23 No, no way does it. Oh, it does. Yeah, it does. It says that on it, it says one do that, and then that's a two step process to say no. So I just ended up always selecting $1 and then I thought, Oh my God, I just paid almost $7 for this. Which seems ridiculous, you know?
Karen: 14:43 Right, right. Yeah. Because your PA, you're already paying for the product. He's somebody to prepare the and hand it to me. You know, if I'm standing in a drive through, you know, if I go into the restaurant or coffee shop and I'm, and I'm sitting, you know, I'm sitting down in there waiting on me, that's a different story. They're kind of over there taking my order. They're making it and then they're bringing it to me. That's different. Yeah, that's different. And then, you know, sometimes you know, of course I'll tip them because very, you know, from, from, you know, they vary from therapist SaaS therapists, it can be drastically different. So I will tip them according to your job, you know what I mean? And so, yeah, and that'll vary,
Michaela: 15:36 I think. And I think what's interesting about that is if they're self-employed massage therapist versus working for a company, you know what I mean? I, I mean, I wonder how that is, or hairstylists, you know, I mean, because if they're their own business, then do they need a tip? Cause they're asking the wage they want. Right. I don't know. That's a, that's kind of interesting. I mean, as a, as a psychotherapist, I certainly don't accept, I couldn't, it, it's illegal to accept a tip.
Karen: 16:08 Right. And in some of those, like there's some kind of hidden message with internet depending on what what service they're providing. So for you, a psychotherapist, it's almost like they're saying, we'll make sure you, you give me something good next time, or something like that, say something good to me. Right. Don't tell me something I don't want to hear, so to speak. It's kind of a subliminal message, I would think. Right.
Michaela: 16:34 Illegal for, at least in California it's illegal. But yeah, because it would be, that's exactly right. You did good this time with what you said or didn't say. Yeah.
Karen: 16:43 Right, right. Wow.
Michaela: 16:47 Yeah. Well, there's just so much, so much on the topic of financial freedom fi, you know, wealth and America debt in America. I love our conversation today. How can people get in touch with you? How can they learn more about what you do?
Karen: 17:02 Certainly. Well, they can go to my website, which is Karen ford.org and all of my books are on Amazon as well.
Michaela: 17:11 That's fantastic. And I will put that in the show notes. I just really loved having you on today, sharing your insights to, you know, building wealth and financial freedom.
Karen: 17:20 Oh, thank you so much. I certainly appreciate it
Michaela: 17:23 Thanks Karen. Take care.
PART II
Michaela: 00:00 One of the things I was thinking about as you were talking, I was kind of reflecting on our own style. My, my husband and I are foodies. We like to, we like to cook. We cook every night cause we live rural. So there's not really much in the way of, of that anyway. But we do enjoy going out to eat. We do enjoy cooking gourmet, we enjoy that sort of thing. And, and one of the things that I've realized is that we, we are fortunate enough because of the way that we've managed our finances to have a lot of financial freedom almost to the point where I think like, man, maybe we should be more mindful of, of what we spend on eating after dark.
Karen: 00:40 [Inaudible]
Michaela: 00:40 Brings us a lot of happiness. What do you think is the easiest way for people to build wealth?
Karen: 00:48 The easiest way to, well, there's a variety of ways to build wealth. And I enjoy all of them. But one way we've already touched base on is starting even with small amounts of money being taken out of your paycheck for our 401k or Roth IRA, especially if your company offers a match because little things will add up. So that's one method. A second method is you can, you can check into real estate investing. That doesn't mean that you're going to go buy a half a million dollar home and think you're going to flip it in an area where the houses sell for 300,000. You know, buying real estate, you can start small, but certainly do your due diligence, location, location, location plays a huge part. And having some knowledge don't just step out and try to wing it. Real estate is not something that you want to wing.
Karen: 01:50 You still need to do your due diligence. Listen to podcasts like this, be an avid reader. Study up a little bit, check the real estate market in your area and, and step out and find out another area is the stock market. Now here again, we don't just want to, you know, wing it and gas or anything like that, but you can start with small. You don't have to invest hundreds of thousands of dollars. You know, there are many brokerage for firms that will let you start small. The company, you know, I've had many people say, well, what about penny stocks? And I say, listen, unless you know, without a shadow of a debt that this penny stock is really going to be a winner. There are thousands of penny stocks out there. And so it's just really a guessing game. It's kinda like spinning the roulette wheel or buying lottery tickets to be honest with you.
Karen: 02:48 It's a guessing game. So do your due diligence and check the history of the company. You know, if they're a company that has been in business for 30 years and their stock keeps going up, it's not, and check the, see what their profit ratio is, you know, start small, start with safe companies. Again, do your due diligence. Don't go into buying a bunch of penny stocks, which, you know, you know nothing about. We still have a responsibility of learning and being aware of these companies before we invest our money in them. But I enjoy all of those, but of course I do some, I do my research and you can Google, you can go online, you can talk to people. I'm always talking to people that know more than me because I only know what I know, but I want to know what they know. So, and that's how we learn is by not thinking that we're all that in the bag of chips, so to speak. We need to check with other people and learn from them as well. So all of those areas are great ways to learn about investing and checking it out.
Michaela: 04:10 One of the things that I found to be a great tool when I was younger and, and like I said, I, I've, I feel fortunate that my upbringing you know, created a monster in the way of saving and things like that. But one of the things that I found worked really well for me when I was working was that I would have an, and I was a younger person, I would have the portion that I knew that I needed to live off went into my checking account. But then I had, and this was when direct, you know, direct deposit existed and so you could have two different accounts that you sent your money to and then I would send a different portion of my paycheck that wasn't critical to live on. I knew I didn't need it. Even, even if it was a small amount to another savings account that I did not have debit card access to and, and so it was kind of one of those things where, Hey, if I have something come up in a month where my car breaks down and I need to go tap into that ICANN, or if I need to buy groceries or I want to get a gift for something that I didn't, you know, calculate into, I can go get that money if I need to.
Michaela: 05:19 But I've got to physically go into the bank to do so. And, and that seemed to really help me. What do you think about savings accounts? I mean they don't generate that much interest, but if they're used maybe in that way where it's, you know, it's still mentally accessible. Cause I know some people have a hard time with the 401ks and the stocks cause they can't get to it if they need to. What do you think about that?
Karen: 05:41 I think definitely you need to have a savings account because if an emergency were to arise, let's say your, your furnace goes out, you have to replace your furnace or repair your furnace or to have access to that cash. So absolutely savings accounts are there. They're just not going to make you a lot of money. That's just the way it is right now. But you still need to have a savings account because emergencies arise. You know, I can remember the old adage, grandma said, save for a rainy day. Why'd she say that? Because she knew someday it's gonna rain and chances are unexpected events really are expected. You know, if you drive a car at some point you're going to have to replace those tires. You're going to have to replace that battery. You know, there are things that are a loner, you know, there are going to pop up your hot water 10 14 years old and now you're going to have to replace that hot water tank. Just a ride around the corner. You know, if you have a furnace that's 2022 years old and you're going to have to replace that furnace, so things are going to pop up. So we really, really unexpected events are expected and unless you want to have a really stressful situation on your hands, it's good to have a savings account so you have quick access to that cash so that when something does happen unexpected, you have access to that money to take care of it.
Michaela: 07:13 I like that. I like that a lot. And it's worked for me over the years because if I don't see it, I don't spend it. Absolutely. Then I'm like, Oh, maybe I don't really need that thing. And you know yeah, I can talk myself out of a lot, but we also have a 1968 house that we've fully remodeled. So I can, I can really, you know, attest to the unexpected expected done the furnace, haven't done the water heater yet, but literally everything else down to the copper piping. You know, this is a funny thing and I'm sure you've not heard this on a podcast yet, but I just thought it would be a fun topic. A lot of these television shows on Netflix and a lot of movies they demonstrate like an Armageddon situation where, you know, the world basically is ended and money is null and void and people have to barter and they have to use their skills and, and that sort of thing. And you know, there's doomsday preppers and all these things. What do you think about this idea that someday perhaps our financial system collapses? Well,
Karen: 08:30 Question right there. You know, if there's additional order or additional food items in your home or silver or silver as I think 17 or $18 an ounce, there's certainly nothing wrong with that. And you know, you can turn the silver if you need the but you know, to T if you that trouble having some of those items as a prepper in your home, in the event that maybe, you know, the grid goes off, the electric is gone or, or what have you, it's okay. But I do think that sometimes people can really go overboard with that. Right now our economy seems to be doing fairly well and peripherally. That will stay the course but certainly to have some items operation, there's nothing wrong with that, but be watchful that you're not so consumed and so fearful that you're just, you know, constantly in that fear mode.
Karen: 09:42 Many times, whatever it is, however we are, is what we're going to attract. I don't know if you've ever like minds attract each other. So if you're in fear than other people are going to be in fear and then you're just going to feed off people in that fear. So certainly, okay to have some preps, things in your home, but just and certainly there's nothing wrong with having other means to barter with whether it be what w you know, there's certainly nothing wrong with that, but just don't go overboard with it.
Michaela: 10:13 Do you think it's important that people keep cash on their, on in their PR, like on their person, like at their home, not have everything in the banks?
Karen: 10:21 I certainly think that's a great idea. You can have a small, you can purchase a small safe for your home in a, in a hiding place. You could put it somewhere where not everybody knows where it is. Maybe just you and your mate or you and just one other person. Certainly having cash because let's just say for instance, if something drastic happens and the banks, nobody's getting in the banks well, to be able to buy things, you're so certainly having some cash on hand in a safe in your home so that your able to go spend some money to go to the grocery store or whatever it is that you need. But certainly having some cash on hand in your home is certainly a good idea. Yes.
Michaela: 11:04 And we have that where I am here in California, we actually had that exact scenario where the power grid was shut down for a long time and therefore the banks were not accessible. How do you feel about tipping? This is a big thing. This is a big topic that comes up often because you know, I know there are people that are employed in the food service industry that rely on those wages because maybe the company they work for doesn't pay a good solid minimum wage or you know, a good solid wage has their base wage. But tipping seems to have become expected and not for great service. And so that can add a lot to a bill when it's an automatic 18% or if you feel expected to tip 20% and nowadays all the electronic readers, when you scan your card, that screen pops up and says, how tip would you like to leave? And a lot of times they don't even give you the number or the opportunity to write it in. It just says, you know, one, two, or $3 or 15, 18 or 20%. How do you feel about that?
Karen: 12:03 I don't like forced tipping. I certainly understand you know, men and food service where, you know, wait, people are not being paid what's do them. I, I certainly, I appreciate good service and I like to tip really well for good service. Now, if the person maybe didn't do very well with serving us, I will still tip I tip large for good service, you know, and I'll even tip 20%, 25% if, if it's good service because I want to show my appreciation to them. I really do. Now, you know, sometimes I'll go and to a restaurant and pick up takeout order. And pretty much what they did was they prepare the food, they put the food in the bag, right? So I don't necessarily tip that because that's takeout. I'm not being waited on. Right? They prepared the food, which I paid, that I paid. They're not at a table, they're not waiting on me hand and foot. And I don't know if anybody listening to this, I don't necessarily tip for take out when I went to the restaurant to pick it up. Now if it's delivered to my home, I'll, I'll tip because that person had to drive and bring it to me and they did it in a really record time. I'll tip that person. But if I'm going to the restaurant and I'm picking up my, my food, I'm not necessarily going to tip that.
Michaela: 13:47 Well. I've noticed this in the drive through coffee shops. If you pay with card, the screen pops up and says, would you like to tip $1 $2 or $3 for your service today? And I thought, I think about that. And I'm like, well, I ordered a coffee. They made me a coffee. I drove to them to pick up the coffee I should have to tip for. Right, right. Well, and you did it out of [inaudible]
Karen: 14:16 Venus to go through the drive through. When you go into that coffee there, they're not asking you for a tip. Right. So,
Michaela: 14:23 No, no way does it. Oh, it does. Yeah, it does. It says that on it, it says one do that, and then that's a two step process to say no. So I just ended up always selecting $1 and then I thought, Oh my God, I just paid almost $7 for this. Which seems ridiculous, you know?
Karen: 14:43 Right, right. Yeah. Because your PA, you're already paying for the product. He's somebody to prepare the and hand it to me. You know, if I'm standing in a drive through, you know, if I go into the restaurant or coffee shop and I'm, and I'm sitting, you know, I'm sitting down in there waiting on me, that's a different story. They're kind of over there taking my order. They're making it and then they're bringing it to me. That's different. Yeah, that's different. And then, you know, sometimes you know, of course I'll tip them because very, you know, from, from, you know, they vary from therapist SaaS therapists, it can be drastically different. So I will tip them according to your job, you know what I mean? And so, yeah, and that'll vary,
Michaela: 15:36 I think. And I think what's interesting about that is if they're self-employed massage therapist versus working for a company, you know what I mean? I, I mean, I wonder how that is, or hairstylists, you know, I mean, because if they're their own business, then do they need a tip? Cause they're asking the wage they want. Right. I don't know. That's a, that's kind of interesting. I mean, as a, as a psychotherapist, I certainly don't accept, I couldn't, it, it's illegal to accept a tip.
Karen: 16:08 Right. And in some of those, like there's some kind of hidden message with internet depending on what what service they're providing. So for you, a psychotherapist, it's almost like they're saying, we'll make sure you, you give me something good next time, or something like that, say something good to me. Right. Don't tell me something I don't want to hear, so to speak. It's kind of a subliminal message, I would think. Right.
Michaela: 16:34 Illegal for, at least in California it's illegal. But yeah, because it would be, that's exactly right. You did good this time with what you said or didn't say. Yeah.
Karen: 16:43 Right, right. Wow.
Michaela: 16:47 Yeah. Well, there's just so much, so much on the topic of financial freedom fi, you know, wealth and America debt in America. I love our conversation today. How can people get in touch with you? How can they learn more about what you do?
Karen: 17:02 Certainly. Well, they can go to my website, which is Karen ford.org and all of my books are on Amazon as well.
Michaela: 17:11 That's fantastic. And I will put that in the show notes. I just really loved having you on today, sharing your insights to, you know, building wealth and financial freedom.
Karen: 17:20 Oh, thank you so much. I certainly appreciate it