How to Make Investing Simple with Kevin Matthews II | BiggerPockets Money Podcast 131

TL;DR

New investors can simplify investing by starting with small amounts through fractional shares, practicing with paper trading, and choosing investments that match their risk tolerance and style. Kevin Matthews II emphasizes patience, consistency, research, and a long-term perspective rather than expecting quick returns. Read on for his practical lessons on budgeting, stock picking, increasing income, and teaching children about investing.

Transcript

welcome to the BiggerPockets money podcast show number 131 where we interview Kevin Matthews the second from building bread comm and hear his story of financial success starting in sixth grade hello hello hello my name is Mindy Jensen and with me as always is my gleaming beaming co-host Scott touch oh you were just a shining example of how to reall... Read More

Key Insights

• Kevin Matthews II began his financial journey in sixth grade, learning to budget for video games, which set the foundation for his financial planning skills.
• Consistency and patience are crucial for successful investing, as emphasized by Kevin, especially in volatile markets.
• Kevin advocates for starting investing early, even with small amounts, using fractional shares to build wealth over time.
• Paper trading is a valuable tool for new investors to simulate the stock market experience without financial risk, helping them understand market dynamics.
• Kevin highlights the importance of understanding one's risk tolerance and investment style to make informed decisions.
• Job-hopping every couple of years can significantly increase income, as shown by Kevin's career strategy, aligning with studies suggesting higher earnings with frequent job changes.
• Teaching children about investing through practical simulations can prepare them for real-world financial management and foster a long-term investment mindset.
• Kevin's approach to financial advising includes making investment knowledge accessible and simple, countering the misconception that investing is inherently complex.

Questions & Answers

Q: How can new investors start investing, according to Kevin Matthews II?

Kevin recommends starting with small amounts through fractional shares, which provide access to stocks that may otherwise seem too expensive. He also suggests paper trading so beginners can observe market movements and practice without risking money.

Q: What is the biggest investing mistake beginners make?

Kevin identifies a lack of patience as the biggest mistake. New investors may expect quick returns and become discouraged by volatility, so he stresses consistent investing and a long-term perspective.

Q: What sparked Kevin Matthews II’s interest in financial planning?

Kevin began budgeting in sixth grade after his parents stopped buying his video games. He tracked his allowance, lunch money, release dates, and sales tax in a school planner so he would know exactly when he could afford each game.

Q: How did Kevin budget for video games in sixth grade?

Kevin received a $10 allowance every two weeks and $5 each school day for lunch. He calculated that saving $2 per day for five days would produce $10 per week, then used his planner to account for school breaks and Oklahoma’s 7.79% sales tax.

Q: Does Kevin Matthews II recommend picking individual stocks?

Kevin is not against stock picking when it is based on knowledge, research, and an understanding of the investment. His own strategy primarily uses index funds while allocating a portion to individual stocks.

Q: Why are risk tolerance and investment style important?

Kevin emphasizes understanding both before making investment decisions. Knowing how much volatility a person can tolerate and what approach suits them helps them choose investments more deliberately.

Q: How does job-hopping relate to financial success in Kevin’s view?

Kevin presents changing jobs every couple of years as a way to increase income. Higher earnings can strengthen a person’s overall path toward financial success.

Q: How can children learn about investing through paper trading?

Paper trading lets children simulate choosing investments and following their results without risking money. Watching gains, losses, and volatility unfold in real time makes market behavior more tangible than simply reviewing a stock’s past performance.

Summary & Key Takeaways

• Kevin Matthews II's financial journey began in sixth grade when his parents encouraged him to budget for video games, which later evolved into a career in financial planning. He emphasizes the importance of patience and consistency in investing.

• Kevin shares innovative investment strategies, including fractional shares and paper trading, to help new investors start small and build wealth. He also stresses the significance of understanding one's investment style.

• Job-hopping is highlighted as a strategy to increase income, and teaching children about investing through simulations is recommended. Kevin aims to simplify investment education, making it accessible to more people.