Although we are observing social distancing physically, now is as good a time as any for us to reinforce our bonds with loved ones and to reconcile small (and large) differences. It’s important for us to acknowledge each other’s fear and anxiety in these uncertain and emotionally turbulent times and let each other know that we are here for each other.
As a part of my series about “Investing During The Pandemic”, I had the pleasure of interviewing Rahkim Sabree.
Rahkim is a TEDx speaker, 2x author, and cofounder of the non-profit An Extended Hand, Inc., an organization that focuses on ending homelessness. Check out his book “Financially Irresponsible” available on Amazon. Follow Rahkim on Instagram/Twitter @RahkimSabree
Thank you for doing this with us! Before we dig in, our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the finance industry?
Sure! I actually kind of fell into it by accident. I had just relocated from another state and I needed a job pretty quickly so I took the first thing I could find which was work as a cashier in a supermarket. I hated it. One night a close friend of mine called me and asked if I’d ever considered working in banking. I said why not and applied to a local office for a large national bank. The rest is history.
Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?
There have been so many instances over the years. I think a blanket experience from my customer facing days was that things aren’t always what they seem. I’ve done wire transactions for amounts so large I needed several levels of approvals for individuals dressed in very worn and tattered clothing. I’ve rebated overdraft fees for individuals with the newest, nicest cars on the lot. The lesson for me overwhelmingly in these instances (and everything in between) is that there is a difference between looking wealthy, and being wealthy. The goal is to be wealthy.
Are you working on any exciting new projects now? How do you think that will help people?
Haha, most people that know me know i’m always up to something! I’ve had a busy last year and I seem to always be in competition with my previous accomplishments. I’m going to keep some of those projects under wraps for now. Currently I’m heavily promoting my latest book “Financially Irresponsible” and I can tell you I’ve been getting a lot of positive feedback around not only the content, but the delivery and how it’s already helping to change people’s lives. The book has a focus on financial empowerment; a topic I think many financial educators don’t spend enough time on.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
There are many people who I’ve encountered that have helped me on my journey, so I don’t think it’s fair to pick just one. I absolutely must shout out my grandfather for instilling in me a limitless belief system, and my parents for always encouraging me to keep going. I’ve encountered so many people who are creative and talented but simply don’t believe in their ability to make their dreams a reality. It’s my hope that through the lens of my victories, others can see themselves in me and adopt that limitless mindset.
Let’s shift a bit to what is happening today in the broader world. Many people have become anxious from the dramatic jolts of the news cycle. The fears related to the coronavirus pandemic have understandably heightened a sense of uncertainty and loneliness. From your experience, what are a few ideas that we can use to effectively offer support to our families and loved ones who are feeling anxious? Can you explain?
This is a great question. I believe it’s important to draw parallels between how the news cycle affects consumer behavior and world economics. My advice is to control the inputs and outputs. Like you said, it’s a very emotional and anxiety ridden time yet many of us have our heads down in our phones, tablets, computers, and televisions constantly consuming content. Sometimes it’s necessary to disconnect and take inventory of what matters like your health and well being, your family, and the small things that make life worth living. Although we are observing social distancing physically, now is as good a time as any for us to reinforce our bonds with loved ones and to reconcile small (and large) differences. It’s important for us to acknowledge each other’s fear and anxiety in these uncertain and emotionally turbulent times and let each other know that we are here for each other.
Ok. Thanks for all that. Let’s now jump to the main core of our interview. As you know the stock market and the economy in general have become extremely volatile and uncertain. Many people “dollar cost average” and put aside a monthly sum into a long term savings plan for retirement, college, or a home purchase. If a loved one or a client came to you and said, “I have been saving and investing $500 every month in an S&P 500 index fund. Over the next few months until the dust settles, should I be doing something else with my money?”, what would you say to them?
My loved ones and clients know that I’m a financial coach which is different from a licensed investment advisor and so I can’t tell them exactly what to invest in, or do with their investment. However what I can do is discuss with them their mindset, approach, and reasoning for getting started in investing. In general, the idea of dollar cost averaging into an index fund is a basic and effective approach to investing in the stock market. It’s a practice I continue to execute on personally whether times are good or bad. Many times when people approach me for financial counsel they are looking for me to either affirm or convince them out of their strategy. However personal finance is just that- personal. So reminding them of why they got started on that particular path and weighing the pro’s and con’s of their circumstances will help them come to conclusions about the way forward. As my grandfather used to say, “the answer lies in the riddle”.
Eventually the economy will recover and rebound. Certain sectors, like travel and hospitality might be hurting for a while. But other sectors, like technology and healthcare, might do very well. If someone wanted to prepare today to take advantage of the future recovery, what would you suggest they do?
Research. Understanding that markets cycle through periods of highs and lows is a good starting point. Although past performance is not a guaranteed indicator of future results, many people do benchmark and base decisions around investing on historic data combined with current market trends. For example, historically a retailer like Macy’s may have done well and so you might see some rock bottom “prices” for the stock currently. However current market trends will show you that the historic retailer may be in trouble and possibly approaching bankruptcy. Understanding the company’s financial past while also understanding the market as it exists currently is key. In instances where a company doesn’t have a financial past per se, someone should still research what they are bringing to market and assess how that thing is going to impact the sector. Some general rules of thumb I follow are; Don’t invest money I can’t afford to lose, invest in what I know, and play the long game. I don’t invest in stocks I don’t intend on keeping for a while.
Are there sectors that provide exciting and lucrative investment opportunities today, specifically because of the volatility and uncertainty?
I’m invested largely in tech. I’m sure there are opportunities however that I may be missing out on for lack of knowledge.
Are there alternative investments that you think more people should look more deeply at?
I’m a huge lover of real estate and attracted to the investment opportunities that real estate provides. I know some people are either stock market OR real estate, and others are both stock market AND real estate. It really just depends on you. Diversification in investments apply to more than just the basket of stocks you buy into. I own real estate, I own stocks, and I even own some crypto currency. With digital currency becoming more and more likely a reality, all the skeptics around cryptos might want to circle back and take a look into its potential as well (not investment advice).
If a person in their thirties and forties came to you today and said that they have $10,000 that they want to put away today for a long term investment what would you advise them to do with it?
I would ask them some general questions around income, investing experience, investment vehicles they may have or currently use, and what that long term goal was (retirement, buy a car, buy a house, etc). Based on the answers they provide me I might recommend they look at opening a Roth IRA if they are eligible, or I might tell them to keep it liquid if they were looking to buy a house. The guidance would really depend on their individual situation and aspirations. I would then tap my network of realtors, investors, financial advisors, and CPA’s to get them connected to someone within the discipline most appealing to their desired end result. I think this response is important because if I’m coaching someone financially, I want them to know that I care about them as a person and that I’m not just looking to score on a sale. If I can’t advise them how they want or need to be advised I want to connect them with a professional who can. In doing this, I’m building a rapport that says Rahkim is reliable, Rahkim is honest, Rahkim is transparent, Rahkim cares. I can almost guarantee that the individual will come back to me to be coached again in the future.
Ok, thank you! Here is a more general finance question. You are a “finance insider”. If you had to advise your adult child about 5 non intuitive essentials for smart investing what would you say? Can you please give a story or an example for each?
- Pay yourself first. Before you can begin to invest you need to establish a discipline and a baseline for investing. The practice of paying yourself first involves taking a portion of your income and allocating it for your long term savings and investing plan BEFORE you spend any money on bills, luxuries, or otherwise. Many people mistakenly try to save after they have finished spending. Having a budget can help a lot with this as you will know exactly how much money you are bringing in and where it is going in case you need to trim some fat on spending.
- Investing in education. The difference between a gambler and an investor is education. Investing in education may look different for different people and can be cheap or expensive. There are many free resources available for education on virtually every type of investment strategy/ opportunity out there. There are also paid groups, courses, books, etc. that you can use to take your knowledge to the next level.
- Invest in yourself. When it comes to investing outside of the stock market you might need materials/supplies/expertise/resources that you don’t currently have. Maybe you want to start or buy a business. Maybe you want to produce an income generating asset like a book. These things require not only upfront investments, but also recurring investments of time and capital. Embracing the concept of investing in yourself (understanding potential risks and rewards first) will get your finished product to market faster and better while minimizing rework, can result in guidance from someone whose experience can save you on time and mistakes, or can simply get you into a room that you otherwise wouldn’t have had access to. Sometimes the intangible returns on investments far outweigh what you can count in your bank account.
- Know your market. This is taking your investment in education a bit further and can be applied to any form of investing previously mentioned. You want to understand the supply and demand of the potential investment and how you can capitalize on either people’s willingness to buy or sell that item. Whether that be stocks, real estate, cryptocurrency, or even a book you publish, understanding how much someone believes in, doesn’t believe in, wants, doesn’t want, can afford, or can’t afford that object will be important to how, when, and why you invest in it.
- Invest in your health. Seems super intuitive however once you get that investment bug, you may become so gung ho about investing that you forget to sleep, you don’t eat right, you don’t exercise, because you’re totally locked in. Besides the emotional strain investments can sometimes have resulting in increases in anxiety and even depression in the cases of investments gone wrong, you absolutely have to stop, breath, and take care of you. All of the investment success in the world won’t matter if you aren’t around or healthy enough to take advantage of it.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
My grandfather used to tell me “advice is free, experience you pay for”. I’ve learned over the years that I can either learn from the experiences of others or I can pay for my own experiences through the bumps and bruises of figuring it. Furthermore, I’ve learned that while I can certainly volunteer advice within different disciplines I’m well versed, my experiences should have a price point, because if I don’t assign value to it, who will?
You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. :-)
I think in many ways I already have. Financial empowerment is the movement that means the most to me. It’s one thing (an important thing) to learn about financial literacy and how money works. It’s something completely different to teach people how to feel about their personal relationship with money and to believe not only that they can attain wealth, but that they deserve to do so.
Thank you for the interview. We wish you only continued success!