Episode No. 74

Can You Build Wealth Without Risk? Dissecting Smart Investment Strategies with Kofi Thompson

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Episode No. 74

           Listen To The Podcast On

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Welcome to another impactful episode of the Share the Wealth Show! In today’s episode, we are delighted to introduce Kofi Thompson, who will be exploring the question: “Is Wealth Building Possible Without Risk?” We will delve deep into the world of smart investment strategies, dissecting the ways that enable individuals to build financial prosperity while minimizing potential hazards.

Kofi Thompson works with First generation wealth creators helping them accomplish their goals with more clarity and intentionality. As a comprehensive financial advisor. He helps his clients build, manage,protect, and transition wealth allowing them to follow a defined path to turn their dreams into realities.
Growing up Kofi was impacted by many financial traumas his parents faced while growing up in section 8 housing. In his early 20’s reality struck and after his father passed away from cancer he came to the conclusion that no one should pass off debt instead of wealth. After this and realizing much of financial pain people had was caused by misinformation and miseducation it became his mission to serve and heal the financial lives of other.
He believes the problems we face today can’t be solved with the same way of thinking that got us there so he uses his knowledge to take nuanced approaches to find solutions to many different types of financial problems. Outside of his business he is also a competitive powerlifter holding a Virginia state dead lifting record, a yogi, book nerd, cyclist, and podcaster Host of the Show Breaking the Glass Ceiling where he helps his audience grow spiritually, emotionally, physically, mentally, and emotionally.


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Key Quotes:
“I don’t believe in like overnight millionaires, things like that. A lot of the habits you establish truly dictate where you’re going to be down the road. .” – Kofi Thompson

“ There should be alignment as to what you’re doing and what you truly desire.” – Kofi Thompson

“When it comes to building wealth long-term, so much of it is just consistency in what you’re doing. Just doing something like, they often say success is doing the things that other people won’t do or doing the simple things consistently enough and for a long time..” – Kofi Thompson

Connect with Kofi!
You can find him on
Instagram: https://www.instagram.com/kofithecreator/
Facebook: https://www.facebook.com/kofi.thompson.27/
Linkedin: https://www.linkedin.com/in/kofi-thompson/

or visit his website https://www.zioncapital.us/

Free Financial Plan: https://us.planswell.com/discovery/adv-kofi

Let’s get connected!
You can find Nicole on
LinkedIn https://www.linkedin.com/in/nicole-pendergrass/
Instagram https://www.instagram.com/nvestornikki/?hl=en
Facebook https://www.facebook.com/nvestornikki
or Visit her website https://noirvestholdings.com


[00:00:00 – 00:00:36]

Kofi Thompson: Like a lot of the habits you establish truly dictate where you’re going to be down the road. So like early on, it’s kind of easy to fool yourself. Early on like, oh no, I’m doing the right things. I’m investing in these like, you know, these shiny objects, these things that look super cool. All this stuff looks nice. And you feel like you’re kind of making a little progress, but like if you’re not truly like being real for yourself, Nick, okay, like, am I really, you know, putting away for the future? Like, do I really like care about like legacy and what am I doing about that? I do, I really care about like, you know, making sure that, you know, I’m playing defense and I’m protecting my wealth. Like, what are you actually doing to implement those things?


[00:00:45 – 00:01:11]

Intro: Welcome to the Share the Wealth Show, where minority professionals can learn to escape the racial wealth gap and catapult themselves into abundance. Your host, Nicole Pendergrass, grew her net worth from being negative to multiple six figures. Join her on her investigative mission to expose secret strategies of the wealthy so we can all have the tools needed to build the life and legacy we were created to possess. Now it’s time for the show.


[00:01:12 – 00:02:18]

Nicole Pendergrass: Hey, hey, hey, wealthpreneurs. Welcome back to another episode of the share the wealth show. This is the show where we discuss strategies on how to build, grow, and protect minority wealth. And today we have with us Mr. Kofi Thompson. Guys, you just don’t know what you’re in for today. This gentleman is a powerhouse. He’s really affecting and changing lives. He’s had a childhood I feel like a lot of people could probably relate to. And to see him turn that around into the business that he owns now, he’s a financial advisor and the founder of Zion Capital Management, right? It’s capital management. Okay. And I just already know from the stories he’s told, I’ve heard him speak at conferences before and it’s just so impactful. And you know, his heart is in the right place. He really wants to affect lives through building wealth. So, Wolfie, he works, he used to work at First Gen. Do you still work at First Gen? Are you, you’re fully into your Zion


[00:02:19 – 00:02:23]

Kofi Thompson: Zion capital into Zion. I was at, um, Northwestern mutual, but fully in Zion.



[00:02:24 – 00:03:38]

Nicole Pendergrass: Okay. Now. Yeah. Okay. Perfect. Well, as a comprehensive financial advisor, he helps his clients build, manage and protect this is on does build invest grow. This looks like kind of the same, um, and transition well along to them, uh, allowing them to follow a defined path and turn their dream into their realities. Growing up, Kofi was impacted by many financial traumas that his parents faced while growing in section eight housing. And in his early twenties, reality struck. And after his father passed away from cancer and he came to the conclusion that no one should pass off debt instead of wealth. After this and realizing much financial pain that people had were caused by misinformation and miseducation, it became his mission to serve and heal the financial lives of others. I love that. So can you expound a little bit on, firstly, welcome. Thank you for joining us today. And can you expand a little bit on that earlier part of your story where you went through all those issues that got you to the point that you are today and what decisions, what was that first step you made to change your financial life?


[00:03:39 – 00:07:18]

Kofi Thompson: Yeah, absolutely. So growing up in my household, I really didn’t have many options. We really didn’t have any type of financial knowledge. There was no type of guidance. It was just one of those things that like my, I knew that we didn’t have money. We never really talked about it that much, but just because of the things we did, we never really like took like also vacations. I couldn’t remember going to like, the all you can eat restaurants. My mom would be bringing in plastic, plastic Ziploc bags. You know, putting stuff in there to take home. You know, all the handy down clothes, watering down the detergent. So like, we really lived in the sort of a scarcity kind of environment, always just kind of stretching, you know, every dollar we could. And this was just life. Like we, I didn’t really know any better. I just thought this was how things were. So you know, as I continued to get older, and you start to realize, like, a little bit more about your financial or socioeconomic status. You just like compare yourselves to like your peer groups, all the different things. And you’re just like, I, you know, started to realize like, wow, like, I know we don’t really have money. I feel like when you don’t grow up with a lot, you desire to have more, you know, in the future, like you desire to be able to like, I wanna be able to, you know, travel. I wanna be able to do these things. So at first just kind of start off as like, you know, I just wanna be able to experience life. I want to be able to actually, you know, do the things, take those vacations. You see the people on TV doing all this cool stuff and you’re like, man, like that looks awesome. As I, you know, got out of high school and gotten to my early twenties, reality actually really struck for me because when my parents enforced, she started getting sicker. My dad enforced she got diagnosed with esophageal cancer and my mother had mental problems and she needed help. And I really started to see the impact of like what not having your financial situation in the right place can really do. And it really like, we weren’t able to provide the proper healthcare to them. Like we weren’t able to get the best doctors. They really, you know, I saw them suffer immensely just because like we didn’t have the resources to truly provide for them. And that’s when it like really just kind of, I had a 360 change in my mindset. Cause before it was like, hey, like you wanna I want to become or gain financial freedom and financial stability to be able to live life. But then it was like, I wanna be able to help people out and make sure that like my, no one has to go through these things or experiences that my parents had to live through, like seeing them suffer. And I personally think that like, it’s one thing like being able to, live life in abundance, being able to provide for yourself, but just being able to take care of the basic necessities and like, you know, those things are so important. And like, I believe that, you know, one thing that kind of, I guess really struck for me was like, I wanna be in a position where anyone that I truly care about, like doesn’t have to worry about finances. Like I wanna be in a position where I can go to a, you know, country and pay for someone’s $40,000 surgery or, you know, just… you know, start a foundation or start a school about financial education, like those things, those actually have an impact on people in my community, really started, you know, strike for me. So yeah, that was really the, uh, experience that really turned my mindset into starting to pay more attention to my financial health, um, in my early twenties.


[00:07:19 – 00:10:21]

Nicole Pendergrass: Oh my God. And you know what? We have a lot in common with our stories. Um, growing up financially disadvantaged, but not really realizing it as a child. Cause at the time my parents did a really good job at still letting us live full lives, even though we couldn’t spend money on certain things, even though we went to pay less for shoes, even though like, you know, we never saw movies the same day that they went out, they came out like you had to wait six months to get to, get the go to the $2 movie theater that was down the road. Like I ain’t getting the hand, I mean, I was probably the only one who didn’t have hand-me-downs because I was the oldest and I’m the only girl. But all my brothers, you know, hand me downs and all that. And like when you grow up in a suburb, you have a house with a yard to some people that just like, oh, you’re rich because you have a house with the yard. But that wasn’t our story. You know, like I think I told the other day of someone I got so much trouble as a teenager for buying like a twenty-dollar shirt that was on sale with my employee discount at a store that I worked at. I got in so much trouble because twenty dollars was way too much money for a shirt. Right. Like it was. Yeah. So it was one of those kinds of things. So nowadays when my mom buys like a sweater, that’s $30, I look at her, I’m like, are you crazy? What is happening? Cause I still have those, still have those like internal limiting beliefs about like just those money habits that I fight against all the time. And I’m still unearthing because that’s a process. But also what I wanted to say is that, um, then our dad’s passing. So my dad passing was also the pivotal moment for me wanting to change my life and find another way to gain that financial freedom and that wealth and to retire my mom so she wouldn’t have to work two and three jobs and just make sure that we had money and not money just for money’s sake, but be able to live how we wanted. And it was mainly for me to retire my mom because while my dad was, on disability for a lot of years, she was working two to three jobs. And that was one of the things I was already looking for something to do. I wanted to do something that I loved because I heard so many times people going into careers and professions that they didn’t like. And I didn’t want that to be my future. So I didn’t know what that was until the year that my dad passed is when I got introduced to real estate. And from there, I saw that as my vehicle to retire my mom and to then…it turned into helping other people gain financial freedom through real estate as well, which is why we’re here today, right? So we both have that same kind of mission spurred by that same kind of tragedy in our lives, same backgrounds. So now I’m super excited because you get to affect more than one person at a time. Like having one-on-one conversations, which is necessary because everybody’s financial situation is different. But at least anybody listening, all the well-preneurs listening now, can get a lot of gems and insight from what you can share.


[00:10:22 – 00:12:02]

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[00:12:03 – 00:12:31]

Nicole Pendergrass: So I guess the first question really is then. What is something that you’ve seen over time with, you know, a lot of your clients? What’s like a common underlying theme with either doing something with their finances, maybe like not in an optimal manner or some other things that you’ve suggested repeatedly to clients to implement first, like as a good foundational piece?


[00:12:32 – 00:15:59]

Kofi Thompson: Hm, okay. I, one thing that I often see that I often like in the beginning of our relationship, because using beginning relationship, there’s a lot of, you know, changing of habits. There’s a lot of, you know, really a lot are a lot of like planning, you know, changing a lot of different strategies, things on those lines. Um, what I often see though, from people that I work with initially is oftentimes a misalignment of their goals and their actions. So, and this is really one of the most common things financially, and not for everyone. It’s just like, you know, I relate to fitness because I’m a huge, you know, I believe health is the first wealth, but like, it’s like you want the Instagram body, but then you’re sitting on the couch eating Doritos. And then you go like, it’s like, oh my God, I desire this, but then I’m doing this. And like, I, you know, I’m not gonna tell anyone like what actions they should or should not take, but there should be alignment as to what you’re doing and what you truly desire at the end of the day. And it’s like one of the most difficult things for a lot of people is like, and it’s really difficult because like finances are very like it’s long-term, right? You may not necessarily like, there’s like I don’t believe in get rich quick schemes. I don’t believe in like, you know, just kind of, you know overnight, you know, millionaires, things like that. Like a lot of the habits you establish truly dictate where you’re going to be down the road. So like early on, it’s kind of easy to fool yourself. Early on like, oh no, I’m doing the right things. I’m investing in these like, you know, these shiny objects, these things that look super cool. All this stuff looks nice. And you feel like you’re kind of making a little progress, but like if you’re not truly like being real for yourself, Nick, okay, like, am I really, you know, putting away for the future? Like, do I really like care about like legacy and what am I doing about that? I do, I really care about like, you know, making sure that, you know, I’m playing defense and I’m protecting my wealth. Like, what are you actually doing to implement those things? And if like, it’s really, it’s difficult again, you know, because we have to be real for ourselves. We have to be like really looking deep, you know, go through some introspection, sometimes have a hard conversation with ourselves, but really like actually making sure that those actions are aligned down the road are so important. Like if you’re going out every single weekend, taking vacations, getting a car that’s 30% of your income, all these different things, like you’re not on a track to build wealth. That’s the reality of it. And you choosing a higher income is not gonna help that because you’re just gonna continue to spend more and more of what you’re taking in. Like you gotta be building, you gotta be setting away sowing seeds for the future. And if you’re not doing that, you gotta give yourself a reality check and be like, hey, like either I don’t want this, which is perfectly fine. Maybe you don’t wanna build a wealth. Maybe you don’t want the legacy. That’s perfectly fine. But like really being truthful of yourself about, okay, let me pay attention to the actions that I’m taking or they align with the future goals that I have. And then the second part, second question that’s the hard or the second part to that question. What was that again?


[00:16:00 – 00:16:15]

Nicole Pendergrass: So I got, I don’t even remember what the second part was. The question I thought, when you said second part of the question, I was like, there was a second part to the question. I just wanted to ask questions very word, wordily.



[00:16:16 – 00:16:18]

Kofi Thompson: Foundational piece. Okay, foundational piece.


[00:16:19 – 00:16:20]

Nicole Pendergrass: Yes, yes, yes. See, you’re good, you’re good.


[00:16:21 – 00:16:56]

Kofi Thompson: Foundational piece from building wealth. So, when it comes to, you know, building wealth, like there’s, there’s a couple different aspects you want to have, like one is like, you wanna have, like before you like start going out there and playing like, you know, full offensive, you know, going out, investing in properties, doing all those things, like you wanna make sure you have like your defensive pieces in place. Like you shouldn’t be looking for a real estate deal if you don’t have an emergency fund. Like that’s, that’s the reality of it.


[00:16:57 – 00:18:03]

Nicole Pendergrass: Okay. I have to, I have to jump in because you just expose my whole world. I definitely did that. I had, I was scraping together that down payment for my first property. I had no emergency fund. I don’t even know how it came up with the down payment. I piece milled it together. So, um, I maybe am a little bit more risk, risk tolerant than what’s probably safe, you know, like reasonably safe and like what you should do. But okay. So now let’s go into what, how, what I, and I know what you’re going to say because you know, your financial advisor, you want people to protect the money, but I know there’s a difference between protecting and growing and you can’t, I don’t think you can be in growth phase. If you are so cautious about protecting the money, because in protecting you won’t grow it, right? A little bit of risk is involved. So how do you play off the trying to grow but not take as much risk? Like, what do you think about that?


[00:18:04 – 00:19:50]

Kofi Thompson: Yeah, great question. So it’s, I believe in like the power of the and, not the tyranny of the or. Okay, say it again, slow. I believe in the power of the and, not the tyranny of the or. So like, it’s not you have to do this or that. But you can do them both at the same time, but like make sure you’re being intentional. So for example, say I’m getting together with someone and they’re like starting from scratch. We’re completely starting from scratch. I’m gonna be like, hey, we’re gonna create this strategy for you. We’re gonna have some of your money going towards your emergency fund. We’re gonna have some of your money going towards your investments. We’re gonna have some of your money, you know, going towards, you know, this future goal that you have. We’re gonna have some money going towards, you know, protection insurance pieces, things like that. And so we’re like really creating this like, uh, strategy to say, Hey, how can we like chip away at all of these different goals at the same time? Cause don’t want to be like all offense or all defense. Like there’s no team that has won with like amazing offensive, you know, strategy, but no defense, no defense. And I’m not going to say like you could do it, but like you, like in building wealth, like I’m there outliers out there. There are absolutely outliers. There are people that have done it. Like, you know, doing like all offense, but like you really want to also reduce risk. And risks are also very apparent. And like, if you’re, I believe, like, don’t pay attention to the risks. Like don’t focus on that. Like, you don’t want to focus, oh my God, this bad thing’s going to happen. I’m like, you know, get in that negative mindset and you’re just focusing on. Um, but like, you don’t want to drive a hundred miles down the, the highway without a seatbelt. Like you got to be, you know, okay, you know.


[00:19:51 – 00:19:55]

Nicole Pendergrass: Okay. I got it. Aware of those risks. Note well taken.


[00:19:56 – 00:20:05]

Kofi Thompson: Yeah. And you may get, you may get to point B perfectly fine, but like, if you hit one speed bump, it’s over.


[00:20:06 – 00:21:25]

Nicole Pendergrass: Okay. Yes, so the whole…going down the highway, 100 miles an hour with no seatbelt on, I don’t quite hit 100, but sometimes I’m at 80. It’s like my cruise point. So I get, that’s actual, oh God, I hope no cops are listening to this, but you have to catch me in the action. Oh, okay, I’m putting way too much out there. Anyway, in life, I feel like I do that too. Like in my investments, like. I do, I am a little bit more risk tolerant. Like I said, what I still try to take calculated risks and not just jump off the deep end. So I will go 80 with the seatbelt. I’ll be shy of a hundred because I don’t want the car to flip kind of thing. You know, like just what I don’t want everything to kind of low up. So I think that is a great point. And it just depends on someone’s risk tolerance. In the spreading of the buckets to build all these different avenues at the same time and kind of like hedge your bets against total loss and like build as you’re growing, is there a standard percentage that your income should be in each of these buckets or does it really depend on the person? What’s like a safe standard?


[00:21:26 – 00:22:31]

Kofi Thompson: Yeah, there is a standard. So the most appropriate answer, it does depend on the individual person because there’s a lot of variation as to like, what someone overall financial freedom ages, what types of other goals they have, there’s a lot of variation. But if I were generally the percentage I usually tell people is a 20, 60, 20 approach. So, and this is like for the average person that they start saving in like their 20s, they want to retire by like their sixties. This is just like average. 60% of your money should be allocated towards your fixed expenses. Usually your house is taking up, your house shouldn’t really be more than like 30%. The other types of like necessary fixed expenses, 20% should be going towards the audience living their best life. You should also have money out there to, live life, travel, do all those things, and then 20% should be allocated towards the future.


[00:22:32 – 00:23:23]

Nicole Pendergrass: Now that’s definitely going to make me go back and look at my allocations, because I can’t say that I have sat and purposefully said, oh, this much money I’m going to put toward, you know, future endeavors, this much I’m going to use for today, this much I’m going to use for like living. I kind of just, it’s I’ll be completely transparent. It’s super haphazard. It’s like, oh, we want to go on a vacation. Okay, let’s just make a budget. But that budget is not based off of our income and like allocation of percentages. It’s kind of like, okay, well, we’ll pay for it and figure it out, right? And I think that is a problem with getting to the level where you’re not living paycheck to paycheck because you have discretionary income. Yeah, absolutely. And it’s easier to kind of play around with that.


[00:23:24 – 00:25:08]

Kofi Thompson: Yeah. And the, one of the reasons why it’s no very, like in order to continue to like level, continue to go in the right trajectory, it’s important to really be intentional about those allocations is because of Parkinson’s law. So you guys aren’t familiar with Parkinson’s law. Parkinson’s law is essentially that like anything that’s available is gonna be consumed. Like if we like go to like a restaurant and all you can eat place and we put a bunch of food on our plate, like it doesn’t matter like how hungry we were, like we’re gonna try to eat every single thing that’s on that plate. Oh my God. So, Parkinson’s is all, yeah, very, very true. Go, go finish, go ahead. Yeah, so like, you know, the reality is, is like, like what we gotta do is get a smaller plate. Like if we really wanna control our horses, get a smaller plate. So making that bucket smaller, because it’s just human nature. Like we, that’s what we do. It’s nothing like, it’s not as much about discipline. It’s just the fact that we are going to consume, you know, what’s available in that regard. So like we got to allocate specific amounts. So we know, all right, this is the amount of consumption I’m going to have here. Now I’m going to be, I’m going to separate portion sizes. Like I’m going to do smaller plates, you know, so on and so forth. Like you know, any business that’s operating, they’re saying, hey, like, this is the percentage that’s going towards marketing, this is the percentage that’s going towards, you know, employee benefits, this is the percentage that’s going towards research and development. Like they’re allocating these specific things because they know that, hey, like, we just have this big pool of money. It is just gonna get consumed at whatever is urgent in the time, in the time. In the time.


[00:25:09 – 00:27:32]

Nicole Pendergrass: Oh my God. Yeah, that’s ashamedly how I operate my finances sometimes. So I will say that this is well, so a couple things with the first thing is this is why I think the suggestion of automatically creating automations in your finances, like having a bank account or automatic payments or like a certain percentage or dollar amount going to a separate account that’s, you know, harder to access that maybe has, you know, a two, three, four day transfer time so that you can’t use it for a on the whim purchase, right? Or it’s a bank account that you don’t see all the time or doesn’t have a physical branch near you, you know, and transfer times take a long time. Because if you start siphoning money for specific things into that area, then it can build for a while undisturbed. And then you can use it, you can use that bucket for what it was intended for at that point. Yeah. And that’s exactly how I do my finances now, like with bill pay, not really with like saving and putting stuff into my future buckets and all those other things. So I need to reallocate my automatic distributions into these other accounts so that I can stay, you know, on path to having these kind of buckets, like as you suggested, because I really love that 2060-20 idea and all, you know, you can tweak it a little bit for what you need in your specific situation. But I think I’ll do that. But the one other thing I did want to say about Parkinson’s law for my ladies out there, that’s why no matter what size purse you have, it will always get filled and stuff to capacity. Oh yeah. I like, I went from having a big tote bag because my shoulder, I started getting shoulder pains to like a small cross body. The other day I was trying to get into the apartment building and I could not find my keys and I have a small cross body. It’s like a size of an envelope. I’m like, there’s nothing. Why is there so much stuff in this little purse? I can’t even find these big chunky keys because I have so much stuff in there. And I was just like, this is, I’m defeating the whole purpose. So yes, Parkinson’s is all is true. It’s a real thing. And thank you for highlighting that for us.


[00:27:33 – 00:27:34]

Kofi Thompson: Absolutely, absolutely.

[00:27:35 – 00:28:07]

Ad2: Are you enjoying this episode? Then stop what you’re doing right now. Head over to Apple podcasts and leave us a rating and review. It really helps our show get pushed to more people who are looking for the information that we’re sharing here. We have to share the wealth. If you listen to us on YouTube, make sure you like the episode that you’re listening to right now and subscribe to our channel, then share the channel with somebody else. There are people out there looking for the information you’re listening to right now. So make sure you share it with someone who you know needs it. Now back to the show.


[00:28:08 – 00:29:42]

Kofi Thompson: The system is really what leads to success. As you mentioned, having a set it and forget it mentality. You’ll find the biggest places where there’s an enormous amount of wealth, whether you look at houses, it could be 401Ks, it could be whole life insurance, it could be social security, all those different things are automatic. They’re just automatically being set up. They’re automatically being drawn. Once you purchase your house, you’re paying your mortgage every single month. These things are usually the biggest places where there’s just a massive amount of wealth and money because they’re set up and they’re a system of paying those things consistently. And when it comes to building wealth long-term, so much of it is just consistency in what you’re doing. Like just doing something like they often say like, you know, success is like doing the things that, you know, other people, you know, won’t do or doing like the simple things like, you know, consistently enough and for a long time. And if you just like, for example, you want to, you know, be real estate investor in five years, you know, set your fund up and then allocate a percentage of that, you know, four or 5%, you know, an amount that’s, you know, you know, reasonable, and then just set it and forget that. And then next thing you know, you’re going to look down, you know, five years and I’ll be like, wow, like I have enough to invest in my first property.


[00:29:43 – 00:32:56]

Nicole Pendergrass: Yes. I love that. That’s a great idea. It’s just like, it’s automating the systems that will help you build wealth. Because we are all human and no matter how much we try to, for most people, you know, stay on top of being consistent with certain things, sometimes where you can get decision-making, uh, like capacity or getting some decision out of your head and into an automation, better you are able to focus on the other things because I know, and I don’t know what the exact name or law of this is, but there is like a certain amount of decisions that we as humans can make in any given day. And so we start the day with certain amount that we can make in every decision that we have to make throughout the day kind of decreases our ability to make effective decisions you know, later on in the day. So that’s why, you know, like Steve’s jobs used to always wear black because that was one less decision that he had to make in the day. So automating those kinds of things. I actually tried that at one point in the winter. I bought just like a pack of black socks because I was like, I’m spending way too much time trying to find socks that match my outfit. Cause I’m trying to be cute with like little pattern socks and you know, match up things. And I was like, you know what? Let me just cut that out for a second. Let me just get the all black socks. And I did it. And honestly, like in that time, because getting ready in the morning, the socks was like the last thing that was like always making me late. Cause like I’d pick out a pair of socks and there’d be a hole in one, or I couldn’t find the other matching one and all this other stuff. I’m like, I can’t, I gotta cut this out. And that actually, I could feel the relief in the morning, like not having that decision, just grabbing the black socks and putting them on. I could feel it. So I think automating just even simple things like that in your life, can help with more complicated or making bigger decisions later on that will help move your financial, not that stocks are anything to do with your financial journey, but as a kind of example. But I think that that’s, yeah, I think automating is great. So besides like automating bank accounts, I know you can automate some like investments. What other investments have you seen clients who maybe want to build up a capital to invest in real estate. Like, cause I know you, you are not a real, you are a real estate proponent as well, right? Like your real estate advocate. Absolutely. Oh, okay. I’m a wealth advocate. So anything that has to do well, the advocates or anything. Okay. Perfect. Love that. Okay. So if like somebody was coming and they, like you said, you’re saving up, let’s say you’re, you’re putting a certain amount into a bucket to save eventually for your first real estate purchase. Besides just putting it in your savings account, because we know, at least I, and I think you would agree that’s kind of a losing battle with inflation and the rate of at least right now what you’re getting with savings. So where can you put capital to save it up? That would be, um, kind of like get you a little bit better return than savings, but still be safe and liquid. And I don’t know if that kind of product exists.


[00:32:57 – 00:35:13]

Kofi Thompson: Yeah, yeah, absolutely. So when it comes to building up the capital to be able to do something, one, I wanna absolutely disclose that, hey, if you’re going to start investing or looking at securities or various types of investments, you don’t wanna just go out there and just do it without any knowledge, without the guide of a professional. You don’t wanna just, cause you can…You know, make some sense. Definitely, definitely the reality there. So you want to be intentional, either, you know, learn the right things that you need to learn on your own or work with a professional that’s going to guide you in what you need to do. But it’s pretty easy. For example, like I always, you know, Toma kind of says, hey, like if you have a goal or something that you want to do, man, it’s like two, three years away. Great place to have that in is like, actually just like investing it in like a fixed income. You know, portfolio or like an index fund, you know, put that in something that’s going to, you know, be diversified heavily. So you’re minimizing your risk, putting it somewhere that’s, you know, in the market has various types of securities in there. And time horizon is like the biggest component of this because you want to make sure that you have the time, you know, two, three years at least to, you know, that money may fluctuate a bit. But if you have the time horizon on average and you’re in a diversified fund, you will have more than you would if you just had that in the savings account. You know what I mean? So it’s like, really it’s about like time or allocating your funds in an account based off your time horizon. But if you do that properly, like it’s something that like, when I dive deep with a client, like I’m understanding what their goals are and I’m doing this, you know, things for them. You do that properly, you can. It’s a much more efficient place than having your mind just sitting in the same account. Like frankly, like I would say that like, if you have a goal that’s less than two years, the savings account is a great place because it’s highly liquid. It’s safe. But if it’s more than two years, like you’re just, you know, losing my inflation.


[00:35:14 – 00:35:31]

Nicole Pendergrass: What about like, um, bonds or money market accounts or things like that, that, uh, are potentially at least from my understanding could be higher than a savings account. Is that right or is that mistaken?


[00:35:32 – 00:35:46]

Kofi Thompson: No, no, yeah. So money market funds are generally gonna be higher than the savings account. Bonds are gonna be as well too. So bonds that would fit into the category of like a fixed income index fund. Oh, okay, okay. Yeah, cause bond is fixed income security.





[00:35:47 – 00:36:03]

Nicole Pendergrass: Okay. And so what about your like emergency account? If you’re setting up your emergency account, should that just be in a savings account or can your emergency account potentially be growing as an investment, but a liquid investment that you could get to, if you need it to?


[00:36:04 – 00:38:57]

Kofi Thompson: Yeah, so the answer is like, it depends. And I know that’s not the answer that everyone wants to hear, but it all depends. Cause a lot of like, and I see finances like medicine or like, you know, health or diet, like there’s no one size shoe fits all approach. And I know that’s like what we really want. We want just like that. What do I need to do? Well, it depends on who you are, what your goals are, what your circumstances are. So that comes down to like just risk tolerance of the individual. And also like again, like looking out like what your capital needs are in the short term as well too. Like if someone is like has a very, very conservative. They’re super low risk. They don’t want to take any exorbitant risk. Money market accounts, things like that. Maybe even a CD, savings accounts, all those different pieces. Part of the financial is the emotional part. You don’t want to be losing sleep over your money being all stressed out. But if someone’s a little bit more risk tolerant, they have a high risk profile and they don’t have any other short-term capital needs. And they also have like liquidity in other places if they really need to access it. Yeah, you can be a little bit more aggressive. You can maybe put that emergency fund in like a fixed income portfolio, maybe like a balanced portfolio, maybe even, you know, get a little bit more risky than that. But like I would steer away from being too risky because the reality is that we can never predict life. And that’s why it’s so important to really, not take general advice, understand what you truly need from a financial standpoint because you can’t predict life. And as soon as you need that money for repairing your roof and your investment property, is the same time that the market goes down. You know, it’s like, you know, it’s just like, it can create a not great scenario. So like, you know, really understanding, okay, like what is, how much safe money do I need? You know, every company out there has reserves. They have that money in reserves for the liquidity for those events. And then once you have that, like, you know, typically I recommend like at least three to six months, if you’re just looking on the personal side and you’re like, you know working at an employer and getting a consistent income, at least three to six months, what do I need on the safe short-term side? And then anything you don’t need above that short-term side should ideally be invested, should ideally be getting better returns.


[00:38:58 – 00:39:10]

Nicole Pendergrass: Okay, guys, don’t kill me, but I’m gonna have to cut this episode short. This is too juicy and we need to do this in a part two. So stay tuned for the next episode that airs and you can hear the rest of our conversation.


[00:39:11 – 00:39:35]

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