New to the Beginner Investor course? Learn more about it HERE.
Welcome to Day 2 of Learning to Invest with The Budgetnista & Ellevest!
If you’re doing the full course, did you get a chance to complete yesterday’s lesson?
If not, review it here: Beginner Investor Course, Day 1, then come back!
If you’re just here for this lesson, keep reading!
Today’s Focus: Creating Your Investing Plan
Today, you’ll learn..
– What factors you’ll need to take into account when creating your investing plan
– Why these factors are so important
– Step-by-step, how to create your own investment plan with Ellevest
Remember, each day you’ll get a video and a written lesson walking you through the process. You’re not alone! 🙂
Watch the Day 2 video below, then move on to the lesson.
Let’s meet-up later in our Dream Catcher FB Group to discuss what we learned!
See you soon…
Are you ready to get started? Before you do, here’s something you should note…
Women retire with two-thirds the savings of men, live six to eight years longer and have higher medical costs.
Ridiculous, and slightly terrifying, right? That is why investing is so important for women.
Yesterday, we talked about what happens to your money when you don’t invest — nothing. We want our money to have the chance to grow!
I’m so excited to show you how having an investment plan can help you take action with confidence.
Here’s what you need to know:
You DON’T need to:
- Have a lot of money to get started
- Have your entire future figured out before you invest
- Panic, even if you’re starting small or starting later than you hoped
- Know how to make your investment plan real…yet. TOMMORROW we’ll show you exactly how to understand and use it.
You DO need to:
- Make a plan for your unique goals
- Get started!
For our lesson, we’re going to focus on the goals-based investing plan at Ellevest. If you’d like more information on Ellevest’s “Invest Now” “build wealth” plan creation, I’m including instructions below.
Let’s take a step-by-step look at creating an Ellevest investment plan
Here’s a quick RECAP of what we’ll cover today:
Dream Catchers who open a new Ellevest account in September will receive $25 towards your first funded goal at Ellevest. This offer is for new clients only – see official promotional details below*
Step One: Let’s get started!
Step Two: Now, let’s talk finances.
Step Three: What do you want to invest in?
Step Four: Great! What’s most important?
Step Five: Confirm or adjust your goals.
Step Six: Submit, and voila!
Getting Started: Welcome to Ellevest
Click here to go to Ellevest.
The here link not working? Copy & paste this to get started: https://thebudgetnistablog.com/ellevest
- First, you’ll create an account by entering your email address and a password (you’ll need 10 characters, one uppercase letter, and one number).
- Review and agree to the terms by clicking the box, and then click the “Create Profile” button.
Step One: Getting to know you: Let’s get started!
- Enter your name and zip code
- Then, we’ll ask for your age, gender and education level
- Next, we’ll ask for your current salary and a couple of other data points
Ellevest uses a gender-specific salary curve based upon your education level and industry in your retirement projections.
If you work on commission, or you’re a freelancer and not sure what your annual earnings will be, use last year’s income as that can be a fair estimate, and will help the algorithm create your retirement projections. If the projections feel off for you, you can always edit them.
Step Two: Let’s talk finances.
Here we are on step two!
This is where we ask you to estimate your outside account balances. This is an important step because this helps us know what you may have already saved or invested.
TIP: You don’t have to be exact to the penny here, but it’s helpful to provide an accurate estimate and include outside retirement accounts like your 401(k). Our investment plan will include recommendations for that too!
Step Three: Goals shopping – What do you want to invest in?
*If you just want to get started with a “build wealth” goal, you can click on the “Let’s Go” button above, and it will create a single investing portfolio for you that is focused on, you guessed it, building wealth. This process is a little different from the goals-based portfolio we’re sharing in the video. We’ll include some step-by-step instructions at the bottom of the post, in case you’d like to explore this option.
Ellevest is a goals-based platform, and each goal that you select here will receive its own personalized investment portfolio.
Not sure what goals to pick?
You can pick up to five goals but, if you’re just getting started, here are a couple of things to think about:
- If retirement savings are your focus, and you’re already putting the max in your work-sponsored plan, select Retirement On My Terms, and create an IRA.
- If you’re looking for a general wealth-building account, select Build Wealth.
Here’s a list of all the available goals:
Flexible and Shorter Term:
An Emergency Fund: a low/no risk portfolio, designed to help you save for immediate needs you might have, aka emergencies.
A Place to Call Home: a flexible, shorter-term goal, designed to help you with home ownership. Investors can withdraw funds at any point.
Kids Are Awesome: a flexible, shorter-term goal. This is for all the expenses of raising kids. Note: This is not a 529 plan for college savings. Ellevest currently doesn’t offer these, as they are managed by individual states.
Start My Own Business: a flexible, shorter-term goal created to help you become an entrepreneur. Investors can withdraw funds at any point.
Flexible — can be shorter or longer term:
Build Wealth: a flexible, shorter-term or longer-term goal to help you grow your nest egg. Investors can withdraw funds at any point.
A Once in a Lifetime Splurge: a flexible, shorter or longer-term goal like that trip around the world. Investors can withdraw funds at any point.
Retirement On My Terms: The big, long-term goal. Investors can only withdraw funds when they reach retirement age. These can be traditional IRAS, Roth or SEP IRA (a retirement account for self-employed folks).
Step Four: After you’ve selected your goals, it’s time to prioritize!
*If you clicked “Let’s Go” above to create a single, Build Wealth goal, you’ll skip this step – head to Step Five.
You can drag and drop your goals in order from most important to least important by clicking and dragging the circles.
Keep in mind, sometimes big plans can require some trade-offs. That’s the beauty of creating your plan!
You can see a path forward for all your identified goals, but you don’t have to attack all your goals at the same time.
A good rule of thumb is to make sure you’re on track with retirement first and foremost, then focus on other goals as they’re important to you today.
Then, as your investing habit becomes solid, you can revisit your plan and start working on additional goals.
Step Five: Confirm or adjust your goals.
*If you’re following the “Build Wealth” single goal path, check out INVEST NOW below for a description of how to customize your goals.
Let’s take a look at the goals you’ve selected. Ellevest shows you a number here, based on how much money they anticipate you’ll need for each of your goals.
DO NOT PANIC.
If the target feels too big (or too small), click the “edit” link beneath the amount on each goal and change the amount.
Remember to click save to update your goal.
This is your plan. You’re going to be able to play around with everything here once we get it created, so it doesn’t have to be perfect yet.
Once your goals look correct, you’re going to click “confirm goal targets” at the bottom of the screen, and then the Ellevest system will take over. * insert happy dance *
Step 6: Generate your portfolio.
You’ll see this screen while Ellevest is busy running hundreds of market simulations to create the best investment and savings recommendations for each of your unique goals.
Once your Investment Plan is complete, you’ll see it pop up on your screen!
“Wait, what??? Those numbers can’t be real!! I’m already working paycheck to paycheck. There’s no way I can afford to invest that amount of money each month toward my goals!!”
I know, I know…these numbers can be disheartening. But please remember that you are not alone in these outcomes. I have faced this same reality when I lost my job and my house, ultimately forcing me to move back home with my parents and start all over again. There was no way that I could invest what I didn’t have, right? But I made a resolve to start somewhere.
So, remember when I said DON’T PANIC? The goals that you set for yourself in this process reflect your ideal plan! It is an earmark for what you aspire to achieve. Think of it as a vision board where you clip magazine photos of your dream home, dream income or dream body. Even though those things may not be tangible today, it is a collection of goals that you selected to inspire you to get to where you want to be. Think of your Ellevest portfolio in the same way!!
Bottom line: If you’re not there today, grab a box of tissues, cry it out and then reassess what you need to do go get there. Take a screenshot of your initial results and post it on your fridge for inspiration. Then, make sure that you join us for Day 3 where we will discuss your portfolio outcomes and show you how you can adjust your goals so that the outcome is realistic to your financial situation today.
Once you complete this process, make a declaration that you will adjust your budget to reflect a contribution based on what you can afford right now. Even if that contribution is only $5 today, make a commitment to start investing in your future today!
Ok, now that you have your plan, keep it handy. Tomorrow (Day 3), we’ll show you how to understand your plan and how to begin to make it real.
INVEST NOW – For “Let’s Go” Clicking, Single Goal-Having Wealth Builders.
For those of you who have selected the “Let’s Go” single goal option, we’re able to skip the prioritization screen and jump straight into customizing your portfolio. We’re going to take you on a tour of your portfolio options tomorrow.
For now, we encourage you to click around on the page. The little grey circles with the letter i in them will give you more information about your options under each section.
Here’s your homework for today. Don’t worry, you’ve done most of it already.
- Head to Ellevest and complete your personalized Investment Plan Dream Catchers who open a new Ellevest account in September will receive $25 towards your first funded goal at Ellevest. This offer is for new clients only – see official promotional details below*
- Review your plan
- Check-in on your accountability partner. Has she done her plan?
- Keep your investment plan handy. Tomorrow we’ll review it together and show you know to take the plan off the paper and into your real life.
And that brings us to the end of today’s lesson. Woot woot! How do you feel? Ummm, you have a personalized Investment Plan? How awesome is that?!
Tomorrow, we’ll take a deep dive into the Investment Plan and explain it’s components. YES!
*Want to get some age-specific investing insight? Check out Sallie’s recommendations in Money.
PS – If you have questions about Ellevest’s investment portfolios or site features, you can always reach out to Ellevest’s concierge team – they’re happy to help: firstname.lastname@example.org.
Remember to reach out to your accountability partners to encourage each other through each daily task.
And don’t forget, me and your fellow DC’s want to check-in with you and your progress in our private FB Group, here: Dream Catchers : LIVE RICHER w/The Budgetnista
Make sure to use the hashtag #DCbeginnerInvestor when you post, so me and your fellow Dream Catcher Investors can find it.
Before you go, leave a comment below.
What did you take away from today’s lesson? What are your investing goals? We all wanna know!
Then, share what you’ve done on Day 2 with your tweeps…Yeees! I now have a personal, investment plan thanks to The Budgetnista and @Ellevest ! #DCbeginnerinvestor Click To Tweet
*The Ellevest The Budgetnista promotional offer is valid from September 1, 2018 to September 30, 2018 for the first 1,000 new clients of Ellevest who enter through this designated landing page. Clients who enroll and fund their non-retirement account will receive $25 added to their highest priority goal in their Ellevest account. Clients who enroll and fund their retirement account will receive a $25 Amazon gift card which can be redeemed by visiting www.amazon.com.
Please review Amazon.com Gift Card Terms and Conditions prior to redemption. Ellevest is not responsible for lost Amazon Gift Cards. Ellevest’s processing time for depositing $25 into a client’s Ellevest account or delivery of a $25 Amazon gift card may be up to 60 days.
© 2018 Ellevest, Inc., an SEC-registered investment adviser. All rights reserved. For information about Ellevest, and its financial advisory services, please visit the firm’s website (www.ellevest.com) or the SEC’s Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov). Tiffany Aliche, known as “The Budgetnista” is a paid solicitor of Ellevest. More information about the relationship between Ellevest and The Budgetnista can be found here: https://www.ellevest.com/thebudgetnista.
*Source Ellevest. To arrive at “about $100 a day”, we compared the wealth outcomes for a woman who begins investing at age 30 with one who began investing at age 40 after having saved in a bank for 10 years. Both women begin with an $85,000 salary at age 30 and all salaries were projected using a women-specific salary curve from Morningstar Investment Management LLC, a registered investment adviser and a subsidiary of Morningstar, Inc., which includes the impact of inflation. We assume savings of 20% of salary each year. The bank savings account assumes an average annual yield of 1% and a 17% tax rate on the interest earned, with no account fees. The investment account assumes an investment with Ellevest using a low-cost diversified portfolio of ETFs beginning at 91% equity and gradually becoming more conservative during the last 20 years, settling at 56% equity by the end of the 40-year horizon. These results are determined using a Monte Carlo simulation—a forward-looking, computer-based calculation in which we run portfolios and savings rates through hundreds of different economic scenarios to determine a range of possible outcomes. The results reflect a 70% likelihood of achieving the amounts shown or better, and include the impact of Ellevest fees, inflation, and taxes on interest, dividends, and realized capital gains. We divided the calculated cost of waiting 10 years to invest, $337,657, by 3,650 (the number of days in 10 years). The resulting cost per day is about $92.50.
The information provided should not be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice.
The information provided does not take into account the specific objectives, financial situation or particular needs of any specific person.
Diversification does not ensure a profit or protect against a loss in a declining market. There is no guarantee that any particular asset allocation or a mix of funds will meet your investment objectives or provide you with a given level of income.
Forecasts or projections of investment outcomes in investment plans are estimates only, based upon numerous assumptions about future capital markets returns and economic factors. As estimates, they are imprecise and hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.
The practice of investing a fixed dollar amount on a regular basis does not ensure a profit and does not protect against loss in declining markets. It involves continuous investing regardless of fluctuating price levels. Investors should consider their ability to continue investing through periods of fluctuating market conditions.
Investing entails risk including the possible loss of principal and there is no assurance that the investment will provide positive performance over any period of time.
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