Young Scrappy Money Podcast Ep. 039: Building Your Investment Portfolio (and Your YouTube Empire!) with Joseph Hogue

Joseph Hogue, CFA, is an online investing expert and the founder of the Let’s Talk Money! YouTube channel. In this episode, he shares some of his favorite tips for new investors, including how to pick stocks without losing your marbles. He also shares his journey from corporate employee to online business owner and YouTube star, including how to make money from online thought leadership.

Resources from this episode: 

• Young & Scrappy, home to Michelle’s work as a financial advisor and financial coach.
• Let’s Talk Money!, Joseph’s YouTube channel.
• Joseph’s blogs: My Work From Home Money and My Stock Market Basics.
• Morningstar, Joseph’s go-to site for investing research.

Full transcript:

INTRO [00:00:00] Hello. And welcome to the Young Scrappy Money podcast. I’m your host, Michelle Waymire. And each week, I’ll be bringing you tips and tricks to help you take control of your finances as well as interviews with people who made big financial changes in their own lives. So join us. And we’ll help you get your financial s**t together. 

MICHELLE: Hello, everybody. And welcome, welcome to another episode of the Young Scrappy Money podcast. I’m excited to be here with Joseph Hogue. Our speaker today is talking about investing, about getting away from the corporate grind, getting into some awesome online businesses, side hustles. So I’m excited because this is a little bit of almost like a double feature within the same episode. I’m teaching you some of the more practical side of investments, but then also getting into some interesting side hustle ideas and some potentially lucrative moneymaking opportunities. 

So just to give you a little bit of background on Joseph before we get started, he’s actually a graduate of the Iowa State University, born and raised in Iowa. He served in the Marine Corps, worked in corporate finance and real estate before starting his career in investment analysis. He has been all over the news on Bloomberg, CNBC.

He has worked in venture capital. When it comes to the more traditional investment work, he’s pretty much done it all. He’s even got the MBA and the chartered financial analyst, or CFA, designation. But— plot twist— he left the corporate world to build his online businesses. So welcome, Joseph. I’m excited to hear all about that transition today as well as some investing tips.

JOSEPH: Thanks, Michelle. I’m excited to be here. And, yeah, a dual— you know, a dual show here. Because we definitely have that corporate side or that investing side and the side hustle side. So I’m excited.

MICHELLE: Yeah, same. So I want to start with the corporate side. And we’ll kind of treat this as like a chronological journey through your life. Tell us more about your background. How did you first get into finance?

JOSEPH: Oh my. How long and strange a trip it’s been. So I— you know, I got out of college and followed the same path that everybody goes down, the path that you’re supposed to go down. Right? I got a job in corporate finance. Always loved investments and had an internship with commercial real estate analysis when I was in college, so I went into that— corporate accounting, investment analysis, equity analysis. 

And, you know, I enjoyed the work. But I hated my job, if you can understand how that is I guess. I enjoyed analyzing stocks, equity investments, and being in that industry. But the job was just so rote, so routine. 

I felt like I had no control over any of it— over my salary or over the direction of my career. And so, yeah, I was— I think, like a lot of people, I was miserable. And I felt trapped for, well, what was nine or 10 hours a day.

MICHELLE: Yeah. Gosh. Those like 10-hour days over a long period of time, if all you’re doing is— even if you like the number crunching and the spreadsheets and all of the work, yeah, gosh, it’s a hard industry to be in, especially as a recent graduate.

JOSEPH: It’s definitely— yeah, yeah. You get out of college. And you are pretty much just chained to an Excel spreadsheet for the entire time. And so when you’re not making coffee runs for the seniors, then you’re staring at a computer screen for nine hours a day.

MICHELLE: Wow. That’s such a hard pass for me. As somebody who is constitutionally incapable of wearing a suit and like shaking hands with people and being a hardcore professional, that sounds like my personal hell. I’m glad you got out.

JOSEPH: Excellent. So, yeah, you know, I worked that for many years and started seeing other people making money online through freelancing, through websites, through their own side hustles and whatnot. And so I really— I spent the time. I devoted the time to research it and really found out that nobody makes money freelancing or with their own websites or blogging, as it were— not at first at least. 

So I made a plan to kind of gradually shift from that corporate world into my own online business. And how that came about was, you know, I started with freelancing at first. So I was a freelance equity analyst. A lot of the banks would hire me to do stock analysis and consulting and that kind of thing. 

MICHELLE: Awesome. 

JOSEPH: And so while I was doing that, then I was able to gradually build up my own online assets, my— the websites and the different books and products and stuff like that. And then so gradually, once those started making money, then I was able to come off of the freelancing clients and work and now just pretty much dedicate myself solely to my own online business, which feels great to have that control and knowing that, you know, it’s— you actually own some asset that’s continuously producing income, some of it passive, some of it active. And, yeah, it’s just a great feeling to have.

[00:05:12] MICHELLE: That’s awesome. So I want to start with some of the more traditional stuff before we get into your YouTube fame. So let’s pretend that the person who’s listening doesn’t have a background of investments. 

I want to make sure that we’re all on the same page as we’re digging in. So if you would give us your spin on an investment 101— so what is investing? And why should somebody care?

JOSEPH: Sure. You know, and all my work as an equity analyst, all my work with private wealth management and venture cap, I still firmly believe that investing can be easy. And really, it can come down to just a few points. Right? One is just getting started. 

And that might not seem like some grand, you know, grand font of wisdom. But it is— just getting started, even with debt. I know there’s a lot of people that say pay off all your debt first. Concentrate completely on debt. 

But if you can just put even $50 a month to an investment account, to some stocks and other asset classes like we’ll talk about, you’re creating that habit of putting something away. Because, you know, in our society, kind of a consumerism society, the tragedy is that a lot of us will never be completely debt-free. You’re gonna be spinning on that hamster wheel for the rest of your life, paying off debt, getting emergency expenses and having to put on more debt, or, you know, buying that big house, trying to keep up with the Joneses. 

And you may never be completely debt-free. But, God willing, what all of us will be is old someday and needing to rely on those investments and that retirement plan. So, yeah, just get started, even if it’s just $50 a month. You know, $50 over 30 years, $50 a month can grow to over $200,000 over like 30, 35 years. So it’s definitely not something you want to put off. But that’s only if you start early.

MICHELLE: Oh, I love that point that we’ll probably all have debt at some point, but hopefully we’ll also all be old at some point. That’s— I’ve never heard it phrased that way. And I think that’s— that’s a great way of looking at it.

JOSEPH: Sure. And it just builds a habit, even if it’s just $50 a month. So if you’re ever completely debt-free, that’s great. You’ve got that habit of saving. You’ve got that habit of putting some money away into your investments. If not, then you’ve always got that nest egg to fall back on. 

And you can keep on— you can continue to pay down that debt. But you’ve also got a backup plan. And that’s really— it’s comforting. It’s a big stress reliever for a lot of people that, you know, sure, while they might be paying down their debt, they’ve got zero. They’ve got zeros in their bank account or in their investments, their retirement plan. 

After that, I’d say probably just set up an emergency fund. Probably the biggest mistake I see new investors, even older investors, get into is they put all their money towards paying off debt or investing. And an emergency comes around. And they— you know, $2,000, $3,000, they have to fix the car. 

And what happens is they have to bring money out of the investments. They have to sell some of their stocks. And it’s just so discouraging, so disheartening, to have to sell your investments, no matter what time it is, even if it’s— so whether it’s a right time or the wrong time, as they say, to sell stocks, you see your investment account go nowhere months on end when you have to withdraw that money. 

And it’s just so discouraging that a lot of people just never get back in. They just give up. You know, what’s the point if their portfolio really isn’t going anywhere? So set up that emergency exp— fund of, you know, $1,000, $2,000 even. And that’s gonna cover the majority of those emergency expenses— those car repairs, those medical bills, things that you’re gonna run into.

MICHELLE: Yeah. That’s a great point as well. So your specialty is equity analysis. Can you define that for us and talk a little bit about what that process looks like?

JOSEPH: Sure. Well, equity analysis, equities are just another name for stocks, right? So equity analysis is really kind of a bottom-up stock picking idea where you’re looking at each stock. Of course, in the old days with my job, I used to do cash flow analysis on spreadsheets, all kinds of really complicated analysis. 

But honestly, for 90% of the people out there, it’s not that difficult. Investing can be easy. And you can really, you know, pick your own investments with all of maybe an hour a week. I know a lot of people, they spend so much time going back to CNBC or their favorite website and reading articles upon articles about how to pick stocks. 

[00:09:56] And the truth is they’re kind of either—  they’re trained to do that. Because honestly investing has become more of an entertainment industry than it ever was. And nobody really knows quite when that happened, when it became something for, you know, to make you money to something to entertain you. 

But, you know, sometime in the ’90s when everybody was making money in internet stocks, and CNBC came around and everything, it just became something where, you know, you’re supposed to just watch the market daily. You’re supposed to consume all the content that’s put out by these TV shows and these internet channels and just, you know, feel like you have to chase those stocks, when the reality is you really don’t have to. You know, you pick maybe three or five ETFs, which are exchange-traded funds, which are basically just big groups of stocks that all held together, kind of like the old traditional mutual funds. 

But they’re much cheaper. And they trade just like stocks. You buy them on any stock investing platform. So you buy three to five of those that are gonna cover things like, you know, dividend stocks. Or it’s gonna cover maybe a whole sector of the economy in stocks. 

Or you can also get bonds, bond funds. They give you exposure to all those fixed income investments that are basically like debt investments. You can also get funds that are exposure to real estate. So maybe you don’t have enough money to buy a huge portfolio of rental properties. 

But you just buy this one fund. It gives you, you know, stocks of lots of real estate companies. And it’s gonna give you that cash flow plus exposure into that asset class. 

So you got these three to five funds. And that’s the majority of your money. You know, maybe you put 60% or 70% of your money in these funds. And with the rest, 30%, maybe you pick individual stocks. 

And it just makes— it’s called the core satellite approach. And it just makes investing so much easier. And it’s so much less complicated. You’re only picking maybe 10 stocks, 10 companies, that you really enjoy, that you really love. And you really think they have a good upside and a long-term future. 

And the rest of your money, it’s in these funds that are safe. They’re stable. And they’re gonna give you those nice market returns.

MICHELLE: I think this is a nice approach for people who want to do a little bit of both. I’m a little bit of a— mmm, we can say a blasphemous CFA charterholder. Because I do not pick any stocks for clients. I don’t pick any stocks for my own portfolio. 

That’s just not my cup of tea. And so, for me, not— having it be something that I don’t really do day in and day out, I always see it as being more risky. And in a lot of ways, it is, right? 

JOSEPH: Sure, sure.

MICHELLE: A single company has risk that can be diversified away. But most of us don’t necessarily have the time or funds or energy to— it’s estimated— what? Between 30 and 40 stocks you need to hold in order to diversify away company-specific risk?

JOSEPH: Mm-hmm. 

MICHELLE: Most people don’t wanna pick 30 companies. But I love this approach. Because it’s kind of the best of both worlds. If you really are interested in stock picking, if this is something you wanna dabble in, at least this way you have this solid chunk of your portfolio in a handful of ETFs, something that’s gonna be pretty cheap, pretty diversified. And then you can kind of play with the rest of the money. That is a great approach.

JOSEPH: Sure. Yeah. I mean, stock investing, it is so much more than just turning on the TV for 30 minutes and hearing some guy scream into the microphone, you know, buy, buy, buy a certain stock. It is so much more than that. And I think— as part of that entertainment industry that is investing, I think people have become, you know, brainwashed to the idea that, yeah, they can pick a stock every day. 

And that’s how they’re gonna get rich by next year basically. They see these runaway stocks, like Tesla right now. And, you know, everybody seems to invest— be investing in them. And, of course, you get that fear of missing out, that FOMO, that they just put all their money in and really don’t know what they’re investing in.

MICHELLE: Yeah. I have seen some bad things happen with that strategy. Let me tell you what. So I like that you mentioned the core satellite approach. When it comes to picking the, you know, let’s say five or 10 individual companies that you find as sort of the part of your portfolio that’s individual stocks, what are some tips for actually selecting those companies?

JOSEPH: Sure. Well, there’s— and actually, there’s really just a few measures that I like to go by on stocks. You know, one of my favorite of all time is the operating margin. Right? And this isn’t necessarily one that’s talked about quite as much as some of the other metrics. But I think it’s probably pretty much, bar none, the best for finding great companies. 

And the operating margin is just if you go into a company’s income statement— and that’s one of the three financial statements that a company is gonna release every quarter and then every year. Then, on that statement, they’re gonna show the sales up at the top. They’re gonna show, you know, how much they paid out to suppliers. 

[00:15:07] And then they’ll have all their operating expenses. And basically, those are just, you know, expenses that they had to pay to run the company. So you’ve got staffing, marketing, things like that. 

And then under that, you’re gonna have their operating income. And that’s the money that the company made after, you know, just paying all the expenses there, after the expenses, after paying the suppliers. But it’s gonna be before things like their interest that they had to pay or taxes. 

So and then, of course, under that is their net, their earnings per share or their earnings, right? Which everybody focuses on that bottom-line number. Well, if you just look— the thing is with that bottom-line number is that it includes that leverage, the effect of leverage, the effect of taxes, a lot of different things that aren’t necessarily, you know, management’s effectiveness at running, or efficiency at running, this company. 

So what I like to do is take that operating income, the money left over after paying those operating expenses, divide by the sales. OK, so divide by the total amount of sales that they had. And that’s your operating margin, basically a percentage that shows really how effective manageable—  management was at turning those sales into profits. 

So and this is a great measure for comparing against, you know, not only the company’s history— so is this profitability measure— is that going up or going down?— but also against other companies in the same industry. And that’s something— another thing that a lot of investors don’t understand is when you’re comparing stocks, when you’re picking stocks, you really have to compare them with other companies within the same industry, preferably within the same industry, but definitely within the same sector. Right? 

Comparing a company like Apple, which is consumer technology, consumer discretionary, wherever you want to put it, with maybe a bank like Bank of America, and you’re comparing a lot of these measures, and they just tell you nothing. Because there’s such different business models between Apple, between banks, Bank of America, between a utility company. So you really need to be comparing apples to apples, as they say, right? 

You compare Apple to another consumer tech company. You compare a bank, so Bank of America, against Citigroup and so forth. And that’s gonna really show you how to find the best of breed in each industry. OK? So we’ve got the operating margin.

We’ve got, you know, just some other basic stuff, like sales growth. You know, is the company growing their sales each year by a faster rate than their competitors? So a lot of this is just— it’s really just kind of giving you a relative idea of how well the company is doing compared to— compared to its peers. 

And it’s so important to find those best-of-breed companies, right? Because honestly, you know, stock prices are what they are. They include everything that we know about a company. 

The only thing that I think a lot of times that stock prices don’t reflect is kind of that premium a lot of times on that best-of-breed company. So if you find the best managed companies, they’re gonna tend to continue to be the best managed companies. And they’re gonna continue to get that premium, continue to make higher sales, take market share, and really do better as an investment.

MICHELLE: I want to highlight a couple of things that you just said that I think are really important. So one, I love your emphasis on apples to apples comparisons. But to me, that indicates that you kind of need to know like what industry you want to buy in, even before considering any singular company. Do you have thoughts on how one would decide on an industry first?

JOSEPH: Sure, sure. And, you know, as much as— as much time as I spent as an equity analyst and researching individual stocks, I do like to start with that top-down approach. So you’re looking at, OK, what sectors or what universal forces are really gonna be driving the economy, the global economy, over the next 10 years? So right now, you’re looking at things like, you know, like streaming, streaming TV, or things like a 5G technology, which is gonna open up a breadth of products in, you know, the internet of things and all kinds of things like that. 

You’ve got the automation, the change to automation, as far as, you know, electric vehicles and self-driving vehicles, things like that. You know, these large forces, these universal forces, are going to impact sectors that, you know, are just gonna be— it’s gonna be undeniable, right? So you start from that position. 

OK, what are these— what are these large, universal forces? What are the sectors that are gonna be affected by them? And then you can go into the sectors, into the industries. And it’s just so much easier when you’re trying, when you narrow it down from that top level, to be able to focus on a specific industry.

[00:19:57] For example, the automation of self-driving, right? It’s obviously very much  gonna affect the transportation industry. If you consider upwards of 35%, 40% of the operating costs for a trucking company is from the labor, from those truck driving hours, if you— you know, if you slowly start to shift to a self-driving model, then that’s gonna free up a lot of operating income for those companies, things like that. 

And so you see that, you know, now when you’re picking stocks in an industry that is gonna be affected by these these large, universal forces, you don’t necessarily even need to pick the very, very best company in that industry. Right? Because these big, universal forces are gonna be driving a growth, driving profits, in that entire industry. So even if you pick— even if you end up picking the company that becomes the third best or the second best, it’s still gonna have that, you know, that extra push from that larger force. So the investment’s gonna do well.

MICHELLE: Yeah. So kind of figuring out the forces, deciding what industries that impacts, and then looking for the best in class within that industry is sort of the like in a nutshell key takeaway there.

JOSEPH: Definitely, definitely. So you’ve got— for large forces, you’ve got things like the aging population has been one that’s been developing. I’m actually looking at also the effect of millennials and that huge portion of the population that is now actually coming into their best earning years. 

So how is that gonna affect some of these industries and the sectors? Obviously, again, you’ve got the automation. You’ve got the 5G that’s going to affect so much over the next five, 10, even 20 years.

MICHELLE: Yeah. So getting a little bit more tactical here, I wanna go back to some of the ratios you mentioned. And I think it’s important to point out right out the gate that if the thought of opening up an income statement from a company is the most boring thing on the planet to you, stock picking is probably not your jam. Right? 

JOSEPH: Sure.

MICHELLE: Like if you don’t wanna dig into any actual numbers, maybe don’t pick stocks. 

JOSEPH: Definitely.

MICHELLE: So that’s my like, you know, a little bit biased caveat here. Just be careful. But let’s say you do decide that this is something that you want to do. 

And you are interested in digging into the numbers and really like getting to the meat of the analysis to make an informed decision. What tools or resources— or maybe it’s just a spreadsheet? How do you recommend people actually look at and kind of crunch those numbers?

JOSEPH: Sure. And that’s a great point too. There is nothing wrong with just basically just what they call indexing. Right? Buying some funds that give you those market returns and not having to worry about it. Right? You don’t— I mean, I enjoy stock picking.

A lot of people enjoy investing, enjoy stock picking. But it’s almost a little like you’re trying to do your own appendectomy. Right? You wouldn’t ask your, you know, doctor to pick your stocks for you. 

So why you as a— you know, let’s say a blogger, or let’s say an engineer, why are you trying to pick stocks? So unless you enjoy it, unless you really enjoy having that control and managing your own money, then, sure, you know, robo-advisors are a great option. Just having those funds are another great option. 

As far as the tools that I use, I use just a simple spreadsheet that I’ve actually created for, you know, the YouTube channel, where it gives you a lot of these ratios and stuff and compares it to the sector averages, something that I put together. You can use just any kind of Excel spreadsheet really to list out these fundamental measures. 

Another good one is the payout ratio for dividend stocks. A lot of investors love investing in dividend stocks. But they really don’t know some of the unique measures, or some of the measures, that they need to follow. 

And really the payout ratio is just how much of those earnings are committed to paying that dividend that a stock has every month. And again, you know, if something— so if a company’s paying out 65% of their earnings to the dividend, then how much growth— how much room does that leave for them to reinvest in the business and to grow the business? So very important that you’re watching that within a company. 

MICHELLE: Yeah. 

JOSEPH: But as far as other tools, you know, Morningstar actually is a really great website. You know, whether you have the premium version for the data or not, they’ll give you a lot of the financial statements kind of laid right out there for you. They’ll do a lot of the ratios, though, you know, sometimes they’re adjusted. Sometimes they’re not. 

So it’s maybe not comparable a lot of times to what you’ll see on maybe Yahoo Finance or some of the investing sites. But, yeah, investing does not have to be difficult. You know, there’s all of maybe about five ratios that I use consistently for every stock and then, of course, you know, looking at a company’s catalyst for growth, looking at what is in the news about it.

[00:25:08] MICHELLE: Just as a reminder to everybody who’s listening, we mentioned a couple of resources here, Morningstar and Joseph’s videos. I’ll always be sure to link out to those in the show notes. So if you go to youngandscrappy.com/blog, you can always find all of our podcast episodes there. And we’ll make sure to get you links to everything so that you’re not like frantically googling stuff. We’ve totally got you. 

MID-ROLL ADVERTISEMENT Hey, friends. Michelle here. And I’ve got a little present for you. It’s called Unf**k Your Finances. And it’s a PDF guide filled with some of my favorite tips for paying down debt, controlling your spending, planning for goals, and more. Go to youngandscrappy.com/tips to download your free copy today. 

MICHELLE: So let’s say somebody has gone through this process. And they’ve decided on their stocks. And they’ve bought them. 

What about making changes over time? So how do you recommend people change their portfolios in response to new information or updates? What you should— what should you be tracking over time?

JOSEPH: Sure. Well, I think one of the most important things to watch in your portfolio is just how much you have in those big asset classes. And this is so important. I probably should have led with this. 

But you’ve got your asset classes like stocks, bonds, and real estate. Right? Those three asset classes that are just a grouping of investments that reacts differently to the economy. Right? So stocks do well when the economy is growing, when interest rates are maybe, you know, flat or even increasing a little bit. 

Bonds do well when interest rates are decreasing and when the economy isn’t doing so well. And then real estate’s kind of an in-between. Because it’s a real asset. And you get that cash flow from it. 

So, you know, most people, you need to start with some idea of how much you want in each of these. Right? Younger investors, you’re gonna have more in stocks. Because you have longer to invest, and you can kind of tolerate those ups and downs in the stock market. Right? 

You can have, you know, upwards of, I usually say, 60% to 70% in stocks and then maybe 10% to 15% in bonds. That’s gonna give you— that’s a lot of your— just a lot of your stress reliever, right, in bonds? It’s just kind of to smooth out the stock market ups and downs, but also give you some opportunities. Right? 

If stocks take a nosedive, then those bonds are really kind of a cash investment almost that you can draw from to buy in stocks at a lower price. And then real estate’s just another way to smooth that all out. So maybe 60%, 65% in stocks, 15% in bonds, and the rest in real estate. And, again, you can get those bonds and real estate exposure just right from those exchange-traded funds with one simple fund or maybe a couple of funds. 

So but then as you age— and this is something that you don’t need to watch every day, every month, or even every year. Every five years, every 10 years, you look back on your portfolio. And those percentages are gonna have changed, OK? 

After 10 years of a bull market, stocks have just soared past bonds. So if you started with maybe 60% of your money in stocks, right now, you know, after 10 years, it could be upwards of 70% or 75%. It’s just that that portion of your portfolio has grown so much faster. 

So what you wanna do is you wanna go in there, and you wanna look at rebalancing that. So maybe— and not always necessarily selling your stocks, but just putting new money into your bonds, putting all your new money into your bonds so you kind of get that percentage back up to that 15% or 20% or wherever you are. As you age, then that tolerance for risk— OK, so you’re young. You’ve got 20, 30, 40 years that you can invest. 

You’re really not worried about one or two stock market crashes. Or you shouldn’t be anyway. Well, you get to your 50s. And you are certainly gonna be a little bit more worried that your investments are gonna be there to be able to pay for your kid’s college education or gonna be there when you need it to retire. 

So you gradually— over those years, over those decades, you gradually shift from, you know, maybe maybe 65% or 70% in stocks down to 50% in stocks. Maybe add another 5% into your bonds. And your real estate is right there, you know, 20%, 25%, 30%. 

So it’s really a very long, generational process of kind of rebalancing. And, again, this isn’t something that you need to worry about from year to year even. Just, you know, keep a good idea of what your target percentage is right around that age group. And, you know, as you age, gradually shift your portfolio into a little less risk and a little bit more cash flow and stability.

[00:29:56] MICHELLE: Yeah. So before we move on to talking about your YouTube channel because I’m sure people now are curious, um, I always have to ask this when it comes to investing. What are your favorite tips of what not to do? What are things to avoid?

JOSEPH: What not to do? You know, I am a diehard value investor. So I just— you know, I die a little bit inside every time I see a video about some just fabulously high-growth stock. 

And I will alienate half of your audience, I’m sure, by saying Tesla, you know. And it just scares me. Tesla shares right now as we record this have gone from, I think, something like, you know, maybe $300 a share just like four or five months ago to $900 a share today. 

And certainly Tesla is a leader in its space. It is the future of cars. But there is just no— I mean, there is just no godly reason why Tesla should be worth $900 a share after being worth— you know, supposedly the market takes all the information it has and values a company. 

So there’s just no way that a company should be able to go from $300 a share as a fair value to $900 within the space of three or four months. But grow— you know, chasing those growth stocks, thinking that those 20% daily gains, which it’s gone 20% yesterday— and it’s up about 17%, 20% today. Thinking those are gonna keep on going, you know, so investing at that peak and then wondering why they lose money.

MICHELLE: Aw, man, truth. I’m— you’re preaching the good word right now to me, but I agree with you for sure.

JOSEPH: That— I think a lot of people, you know, unfortunately either don’t know really the importance of having that diversification across asset classes or, again, just kind of neglect it. Because they’re chasing stocks. They’re chasing those returns. 

But so many people have 90% or even 100% of their money in stocks. And especially right now after 10 years of a bull market, stocks are expensive. On any measure, stocks are expensive. And it’s nice to think that the good times are gonna last forever. But they will not. They never do. 

So you need some money in bonds. You need some money in real estate. And you are gonna— you’re gonna thank me. You’re gonna thank me when that next recession comes, and you’re not losing sleep over whether your money’s gonna be there.

MICHELLE: Awesome. So let’s turn our attention to your YouTube channel. Because right now this is like the primary platform that you use to dispense your money wisdom. Is that right?

JOSEPH: It is. It is. You know, I started my— I started the blogs, the websites, in 2014 and, you know, loved being able to grow that online business. But since 2017, starting the YouTube channel, it has grown just exponentially. 

And I love it. I love the face-to-face connection you get with people. So it’s really where I’m spending most of the time at right now.

MICHELLE: Yeah. So what first got you into YouTube?

JOSEPH: Well, you know, I actually started the channel many years ago just as a way to host little video summaries of the blog posts. So I would record a video summary, host it, have it on YouTube, and then just kind of embed it into the blog. And really got nowhere until, you know, late 2017, noticed a huge spike in traffic to the blogs from YouTube. 

And what had happened is another YouTuber had actually mentioned or referenced one of the blog posts. And it was just sending a ton of traffic. So I started thinking, maybe there is something to this YouTube thing. 

So I actually got serious about my channel, started making, you know, a video a week just for YouTube, then two, and now three videos a week on the channel. And, yeah, it is more than doubled my monthly income since then from the ads, but also from just being able to reference affiliates and sponsors and talk about my own products. And, again, it’s just— coming from an equity analyst background, I was never able to write really with my personality. Right? 

We’re not supposed to. It’s all supposed to be fact and not fiction, not opinion, in your reports. So it was always very difficult connecting with people on a personal level through the blogs. 

But on the channel, you know, through those videos, I can connect much more on a personal level. Much more branding, you know, is open there. So I just love the community feeling that you get really from YouTube.

MICHELLE: Yeah. And I feel like especially too investing and money in general is such a stressful and overwhelming topic for people that having the personal element and having somebody who is knowledgeable and approachable— and you can kind of— I mean, it’s not exactly face to face. But it’s certainly much more approachable than reading a blog post. I can imagine that’s a really good medium for this type of information.

[00:35:04] JOSEPH: It is. It is. And really for almost anything. I don’t know that I can think of a topic that would be better— you know, better written out as a blog post than shared visually and personally through video. And that’s really the direction that the world is going in. 

So, you know, to all the bloggers, to all the— not necessarily the podcasters, that’s still a pretty good medium. And that’s still growing. But definitely to all the bloggers, it’s the shift is to video. And 5G is only going to amplify that shift.

MICHELLE: Yeah. Can I— can I ask you a couple of like more technical or in-depth questions about your YouTube channel?

JOSEPH: Sure, absolutely. And I love talking about just that sense, that idea, of an online business and creating that income stream. As much as I love investing, and I love talking about investing, those market returns of, you know, 7% to 9%, they are not gonna make you rich like a lot of people think they are. You really do need to be creating your own income source, creating and, you know, nurturing your own business and your own income.

MICHELLE: Yeah. So you mentioned a couple of things. So like you mentioned ads and affiliates. I’m wondering if you can break down like all the various ways that somebody can make money via YouTube.

JOSEPH: Sure, sure. Well, for a lot of people, it’s all about the ads. Right? And those are just the advertisements that YouTube shows before your videos, during your videos, pretty much anywhere it can jam an ad in there. But surprisingly, that is actually a smaller percentage of your total income. 

If you’re really using YouTube to its potential— and or kind of benefit— we benefit from the fact that ad rates in personal finance and investing and making money are higher. If you’ve got a channel, let’s say, on cars, you’re getting much, much less for your ads. So you really do need to explore some of these other income opportunities, some of these other income sources. 

So of course for bloggers and for anyone online, really some of the best income source is gonna be your own products— your own products, your own services, things where you don’t have to split that sale with an affiliate or with a sponsor, that kind of thing. So, you know, one of the things I’ve always loved through the blogs and now through YouTube is just self-publishing. Right? 

You’re creating that content. You’re writing out long blog posts or videos. You’re creating that content. Why not repurpose it into a self-published book? 

It is so easy just to put— you know, to revise, repurpose some content into a book, publish it on Amazon. And now you’ve got a nearly passive income source. Right? Once you get ranked on Amazon, and if you can drive just some organic sales from your YouTube channel or from your blog to Amazon to keep your book ranked, then that is almost completely passive and much more passive than a lot of the other online income sources you’re gonna use.

MICHELLE: So then the idea there is that the video, when people watch, you can tell them, hey, if you want more, go check out our book. And that’s kind of the hook from YouTube. Is that correct? 

JOSEPH: Yep. Yep. That’s— kind of, yeah, the YouTube model for making money is referencing something within the video, whether it be a sponsor, an affiliate, or your own product. Then you— and you reference, and you mention that you’ll leave a link in the video description below the video or in the first comment, something like that. And then, yeah, they go through. 

They click through that link. And if they buy something from an affiliate, then you get a commission. Or, you know, if it’s your own product, then you get that sale.

MICHELLE: Yeah. That’s so neat. So some other pushback or feedback that I get about starting a YouTube channel is that people are afraid to record videos. They’re afraid to see themselves on camera. They’re afraid to edit it. Do you have any tips for making that process go more smoothly?

JOSEPH: I do. I do. Number one tip, just get over it. Get over it and do a video. And just like the “get started investing” one, that might not seem like a huge font of wisdom. 

But so I’ve got a YouTube course, where I have students that take the course and start their YouTube channel. And, God help them, probably half of them never start— never actually start their channel. They never actually get the videos up. 

Because they shoot hours upon hours of video. They get their phone out or their camera. They spend on an expensive camera or something. They shoot hours of video. And they don’t like any of it. 

You know, they think, oh, this doesn’t look like, you know, what Casey Neistat’s videos look like or, you know— who’s the— ? The PewDiePie, they don’t look like PewDiePie’s videos. Well, of course they’re not going to. You know? 

[00:39:55] But if you look at anybody’s first videos on their channel, they’re always horrible. Right? So what you need to do, you just need to get some ideas for video ideas. And we’ll go over that next. Get some video ideas. 

Jot out a few notes on what you want to talk about for that video. Maybe a five- to a 10-minute video is what you want to aim for to start off with. And just get your phone out and record that video. Record it. Don’t even— don’t even worry about editing it at first, you know. 

Just record the video. Put it up on YouTube. And get it up there no matter how bad. OK? That’s gonna get you in the habit of getting videos out there and, you know, putting yourself out there on YouTube. 

And it’s gonna be a little scary at first. Because you’re gonna make mistakes. You’re gonna have ums and uhs. But you need to get over that initial fear of having the perfect video. Because you’ll never have the perfect video. 

So and then after that, it’s all just about incremental change. Right? It’s all about, you know, learning how to shoot videos, how to record videos, making your videos just a little bit better every single time. You know, there’s a lot of people that talk about a 1% change, right? You make each video 1% better than the last. 

And at the end of the year, after every single year, you’ll look back on the videos you did at the beginning of that year. And you’ll see the change. It’ll be amazing. Even after two or three years of making videos, I still see the change each year in the production quality and in the quality of my videos. So, yeah, just getting started. 

Another thing is getting video ideas. And a lot of people, they struggle with this. They spend hours trying to shoot a video. And then nobody watches it— completely frustrating. 

But if you go to— so pick— you know, you’ve picked your topic, your niche, so to speak, what you wanna talk about. Go to five, you know, five or six video channels that are similar to yours, YouTubers that are talking about the same thing that you’re talking about. And just see what their most popular videos are. 

You know, you can go to their videos tab. Sort it by most popular. And then just jot down in a spreadsheet, you know, their top 10 videos. And what you’re gonna see is— if you do this over five or six channels, you’re gonna see commonalities. You’re gonna see common titles and themes come up. 

And, you know, it’s just— it just so happens that within every topic, within every niche, there are just some video ideas or topics or keywords that are gonna be popular across all the channels. So those are your video ideas. Those are the videos that you know are gonna be popular. You can spend some time making them. And people are actually gonna be interested in watching.

MICHELLE: Yeah. That’s neat. Because I feel like people have this sense of, I guess, like a fear of reinventing the wheel, that like a topic has been discussed too much. Or somebody else has already made a video on this thing, so I can’t possibly make a video on the same topic, which is silliness. 

Because if you know that there are topics people are looking for consistently, they’re— people want that information. And the way that somebody else delivers that information is not always gonna be the same way that you deliver that information. You just might not have found your audience yet.

JOSEPH: Definitely. And, you know— and that brings us to probably one of the most important tips in anything is overcoming that what they call imposter syndrome. Right? Those nagging little voices in your head that say, who the hell am I to be talking about this? I’m not the expert, right? I am not the— you know, the expert with— that knows more than anyone else. 

And the fact is that, you know, if we stopped talking— if only the single most important expert was the only one able to talk about a subject, or if we stopped talking about things because it had already been said, there’d be no internet. You know, there— we would’ve stopped talking about stuff after the Gutenberg press was invented. Right? Because we’ve already had all this knowledge. 

And people are, you know, already talking about all these things. There is very little new in the world today. OK? So just understand that, yeah, you know, you might be talking about the same thing. But your personality, your experience, the story behind your life is really how that’s different. It’s really, you know, your value to the world.

MICHELLE: Yes. So my key takeaway from this whole episode is just get out there and do the d**n thing. Like if it’s investing, if it’s starting your YouTube channel, like just get out there and try it.

JOSEPH: Just do it. Can we— can we get Nike to sponsor this or what? Because, yeah, just do it. Just get to it.

MICHELLE: Nike, if you would go ahead and write us a check for this episode, um, you’re welcome. Just do it, you guys. This is— this is the plan. I love it. So any like last key thoughts or things that people should know about investing, about starting a YouTube channel, about anything that we’ve talked about today?

JOSEPH: Sure. Well, I think— you know, I think, not to beat a dead horse, but get to it. Right? Get started, but to also approach your financial life from both sides of the equation. Right? We talked about investing. And a lot of people, they spend hours thinking about budgeting, saving money, investing their money. And that’s great. 

[00:45:08] But you gotta think about it from the income side as well. Right? So be smart with your money— saving, investing it. But also think about ways that you can, you know, create more income. Because that’s really where the world is going at. 

If you look at— and maybe an aside, I guess, if you look at the 1099 forms collected and then the traditional W-2s collected by the IRS over the last decade, the number of W-2 forms have just flatlined. They are not collecting any more W-2s than they were collecting like 10 years ago. Right? But that 1099, so the freelancers and independent workers, contractor workers, those are just booming exponentially. 

And that’s the direction of our economy today, right? In 10 more years, it’s kind of— it may be very difficult to get that traditional nine-to-five job and be able to rely on that traditional nine-to-five salary. You need to be— you know, you need to be finding these side hustles, finding these business ideas, where you can create that income and really create that income insurance.

MICHELLE: Yes. Joseph, thank you so much for letting me pick your brain today. You mentioned a lot of good resources. And like I said, I’m definitely gonna make sure to link out to those in the resources part of every podcast episode, youngandscrappy.com/blog. But where can people find you online?

JOSEPH: Sure. Well, I’ve got the three websites, the three blogs, that I still post regularly. And those are great for, you know, that content that you can read, come back to, use as a reference. So those are— you know, mystockmarketbasics.com is really where I talk about investing, my career as an equity analyst, and what I’ve learned. myworkfromhomemoney.com, which is where I talk about my experience growing my online business and developing those income sources. 

But of course, again, I just love that face-to-face relationship I can build on YouTube. And I’d love to see everybody there. And join the community. Join the Bow-Tie Nation, as it were. And, you know, if you go, you’ll figure out what that reference is to.

MICHELLE: Awesome. Thank you so much again for your time. It was a delight to have you. Listeners, thank you for listening. It was a delight to have you too. And I wish everybody an abundant day.

END CREDITS I hope you enjoyed this episode of the Young Scrappy Money podcast. If you want to read about my work as a financial advisor and financial coach, you can do so at www.youngandscrappy.com. That’s www.youngandscrappy.com. Thanks again for listening.

Made with love by Jesse in Atlanta. [SMOOCHING SOUND]