You’re ready to start investing

Daniel Sharkey from Mariner tackles the age-old question, “Are you ready to start investing?” and provides guidance for those looking to build long-term wealth, regardless of where they are in their career. In this episode, Dan demystifies the investing process, dispelling common myths and emphasizing why time is your greatest asset.

Learn the essential “pre-flight” checklist you need to tackle—including managing high-interest debt and building a liquidity buffer—before you invest your first dollar. Discover practical strategies for navigating your employer’s 401(k) plan, utilizing target date funds to simplify asset allocation and applying an “envelope system” to your budgeting to ensure you’re paying yourself first. Dan also explores the crucial distinction between strategic investing and speculative gambling, offering guidance on how to stay disciplined, avoid market-induced panic and lean on an advisor to help turn your financial goals into a concrete, long-term plan.

Transcript

Daniel Sharkey: You think you might be ready to start investing? Well, I’m here to tell you that you are. Let’s get to work.

Okay, everybody. Another solo episode of Your Life simplified. My name is Dan Sharkey, senior wealth advisor here at Mariner. And we’re here to talk about something very exciting. And I think probably one of the most underreported and under viewed things in the world today for people who are younger in their career or even younger in general.

Are you ready to start investing? It is a key question that everyone struggles with. When’s the right time? How do I get started? What to do? In this episode, we’re going to walk through exactly what those choices are, how you can get started and what you should do to take your place and invest in your future.

And that’s one thing that I want to constantly come back to during this episode, is that we are investing in ourselves. You are paying yourself first, and we’re going to show you exactly how. First, we want to dispel a couple of notions that I don’t think are appropriate, and that I want you to get that trash out of your head as soon as possible.

Investing is not just for wealthy people. Savings is a protection mechanism. It helps you grow. It helps you balance your assets financially.

It helps you ensure solvency for the future, and it provides you with a foundation that you can build upon for the rest of your life. Time is wildly important. You know, there’s an old saying that the best time to start investing was yesterday, but the second-best time is today. One theme we’ll continuously come back to is that time is on your side, but you have to get started right away.

Compounding is one of the most incredible things in the world. And we’re going to show you exactly how to do that.

So, we want to get the foundation right, but we want to do it fast. Every month you say, I’m going to get ready to invest. And every month that you don’t take that step out of fear, out of ignorance, out of thinking that there is a better time to get started.

Those are all things that we want to change our mindset around, so that we can get started as fast as possible. Obviously, doing this for the first time if you’re a novice can be very, very overwhelming. We don’t want to walk into something that we are unprepared for, and that’s why this show—that’s why Mariner exists, positively impacting the lives of many. We are here to help you understand what steps you can actually take.

So, what do we do first before we take this hugely important step? We know investing is critical. We know it’s how you’re going to build long-term wealth. But there are some things, the pre-flight checklist that you have to go through to get some things cleared out of the way.

First, there are some types of good debt: homeownership, student loans where applicable. But with any type of high-interest debt I would suggest you clear that away first before any dollar is invested. Any credit card for sure, that money should be paid down. Because if you’re trying to invest in the longer term and paying at a 22% interest rate or 29% interest rate, there’s no return on Earth that will be able to overcome that. So, first: get rid of all your debt.

Number two: making sure that you have enough reserves set aside in the event that something were to happen to you. That could be something as serious as a medical illness, that could be losing your job. That can mean being forced to relocate. But if you’re a single person, six months of an emergency fund set aside or a liquidity buffer, and that should be enough to give you an ability to withstand any potholes that you may hit in life before you turn to investing.

Okay, so we’ve got our ducks in a row. Where do I start? How do I start? Well, let’s start with the low-hanging fruit. Most often, if you have a full-time job, you are likely to have access to a 401(k). We hope that you’ve been taking advantage of that and using that to begin your investing process.

You really want to understand what your investment options are, and this is why Mariner exists and why you should talk to an advisor as quickly as you can to help orient yourself as to what your choices actually are. But looking through your employer plan is the first place that I would start. It can come directly from your paycheck.

You would have a suite of investment options available to you, and obviously we can’t describe what a proper portfolio looks like for every listener who might be hearing this for the first time but making sure you’re examining what those options are. There’s also a great tool if you’re just unfamiliar about how to do that yourself.

Obviously, talking to an advisor would be a hugely important part, but there’s also a target date fund that would be available to you. So, a target date fund is kind of a one stop shop, easy button for getting your assets allocated the proper way. So, make sure that you explore your employer plan first to maximize the benefit it gets you.

There are also some significant tax benefits along the way that you will benefit from if you’re doing a pre-tax contribution.

Okay, so let’s say you’ve done all that. You have some more discretionary income. You have excess capital that you want to invest. So, what do I actually do? Who do I talk to? How do I get started?

These are all questions that are wildly important, but you have to begin to take the first step before you start factoring in what ultimately goes into your portfolio. So, making sure that you understand the difference between a stock and bond. Understand how those different investment vehicles actually work.

Understanding what an ETF is or what are the individual products that you have. All of these questions that you have that you are naturally going to be faced with are some things that are wildly important. You also want to determine when I should get started. You’ve heard me say a couple of times that the best time was yesterday, and the second-best time is today.

What I often tell children of clients, or those who are investing for the first time, is that the goal should be getting as much money as possible, as quickly as possible. And to do that, you just have to get started to take the first possible step.

So how do you determine how much to put in? How much to save? And that really ties back to what your financial plan is. So, figuring out what your income is every month, figuring out what your expenses are and thinking about what above and beyond that that I can put into a long-term investment account. Advisors are here to help you with what stocks you should pick. How much of the risk assets that you should ultimately have. And then being able to figure out what the cadence is for you feeding your account.

For those that are starting for the first time, I would suggest setting a monthly dollar amount and feeding your asset allocation every single month. You want to become as frictionless as possible.

If you could do this through an automatic sweep of your checking account or some other type of mechanism that you don’t need to be personally involved in. Similar to the 401(k), which I already mentioned. That’s a wonderful start to be able to really get the ball rolling. The amount that you find needs to fit in the context of your financial plan, but that’s really not the most important part.

You have to begin to exercise those muscles, get used to feeding this account over and over and over again and ensure that you’re staying committed to the long-term plan that you have set up for yourself. You’ve heard me say the word ‘plan’ a couple of times today. And that’s really, really important.

If you do this much like you’re attacking a workout at the gym where you’re changing your workout every two to three weeks, this is not going to work. You have to set some ground rules. You have to set a foundational element to your plan, and you have to ensure that you have a commitment to ultimately seeing it through.

And that is why when you talk with an advisor, they can help put those foundational pieces in place to begin to grow that wealth over time. There are a whole suite of potential products and options that you can use a lot of jargon that could really get in the way. 401(k), IRA, Roth IRA, brokerage account. There are all these different words that people ultimately get confused about.

What I would encourage you to start first with—is not worrying about the individual product, but identifying what structurally you can do and how much you can ultimately put in. The consistency to investing, the discipline that you show, will be a far greater determinant of your success than worrying about the perfect solution all of the time.

And all we want to do is begin to build that snowball. Begin to drive your accountability to paying yourself first. A little trick that I learned a long time ago, and it’s typically applied to budgeting, but it has a lot of corollaries to what I’m talking about today. And that is what I call the envelope system.

Imagine you got paid in cash, and you were sitting at your dining room table, and all your expenses had to get into an envelope, so you had no money left in your hand when that exercise was complete. That is very similar to what we’re talking about today. Making sure that your investment portfolio envelope was filled first before other things that are done, before other non-essential expenses are paid, before trips are booked.

All of those things need to be accounted for. But you must ensure that you stay committed to your plan before you undertake any discretionary expenses in your overall life, and an advisor can help you figure that out.

So, what mistakes do people make when they get started? This is a very common question, and one that we want to try to help you avoid: stopping and starting.

There are always going to be life events that potentially get in the way, but you need to identify a significant commitment to seeing this process through. Making sure that you actually have a plan.

This is not the forum to talk about everyone’s individual attributes that they would need but find yourself someone to speak with that could be through your 401(k) plan. That could be through some virtual channels, but having a human like an advisor is a really great way to start, even if it’s just to get you on the right path about how to set up your life financially.

You should really identify what these assets are for. And do not be swayed by what’s on the news. A great quip I’ve heard for a long time is that markets in the short term are voting machines, meaning that they reflect the anxiety of the of the broader investor base.

Over long term, they’re weighing machines, meaning that they’re going to take in the information that is truly driving profitability of the underlying companies you’re investing in, and that’s what will be the end result. Do not get panicked. Do not sell out of fear and stay committed to your plan all the time.

Do not confuse—this is probably the biggest one that I can tell you—do not confuse gambling with investing. I’m going to say that again for those in the cheap seats, do not confuse gambling with investing. Meme stocks, Polymarket. All of these other short-term fixes, highly leveraged ETFs, all things that people may see on Reddit and other forums.

That’s not investing. That is not investing. You need to have a clear, structured plan, ideally one that’s written down and ideally one that has been vetted and viewed with the advisor that you are ultimately working with. For those that confuse what the difference is between gambling and speculation versus investing. There’s a lot of carnage that is left behind for those that think those are synonymous words, and they’re not.

So, what do we do now? You don’t need to know everything to get started. You just need to have a basic understanding of what your numbers look like, what you know that you can commit to and then know who to call to be able to put a plan in place.

Going back to the gym analogy, the best strategy that you will have in your portfolio is one that is consistent, that is constant and that is reliable. The ability for you to stick with the overall plan, over time. The markets broadly—and I’m going to use that term broadly because it encompasses a lot of different things, have survived wars, recessions, pandemics, general political chaos, headline risk, all the different horrible things that happen in the world.

And we’re still here and markets are still at all-time highs. That’s not a prediction. It’s not to tell you that’s always going to be the case, but have faith in the underlying ingenuity of these amazing companies that you can invest in. And I think that will serve you really, longer term.

If you don’t know how to get started, you don’t know how to much contribute. You don’t really even know who to call. That’s why Mariner is here. To positively impact the lives of many. That’s the best place to get started. And that’s exactly where we can help. If you’ve got it figured out already, great. We’re happy to give you a checkup or have you go it on your own. But make sure that you’re talking to someone along the way, and we’re always here to help.

We’ll see you next time.

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