Brief Summary
Nisha Shaw is a former investment banker turned financial mentor who has helped millions rethink their relationship with money, break free from debt, and take the first steps toward building lasting wealth. She shares actionable money tips and strategies to help people of all income levels achieve financial freedom. Key points include:
- Establishing a peace of mind fund, paying off high-interest debt, building an emergency fund, and investing for the long-term are crucial steps to take control of your finances.
- Understanding your unique money mindset and relationship with money is important, as it shapes your financial behaviors and decisions.
- Passive income through investing, particularly in index funds, is one of the easiest ways to build wealth over time.
- Budgeting your time and being intentional with how you spend it can have a significant impact on your long-term financial and personal outcomes.
- Seeking support and advice from trusted sources, while also staying true to your own values and goals, is key when making important financial decisions.
My Mission to Spread Actionable Money Tips
Nisha's mission is to take complicated financial jargon and turn it into easy, practical, actionable money tips that anyone can understand and implement, regardless of their income level. She believes the principles of money management remain the same whether you earn $50,000 or $500,000.
Trauma and the Link to Money Attachment Styles
Our unique relationship with money is often shaped by our upbringing and past experiences, creating an "invisible backpack" that we carry with us. Understanding these money beliefs and mindsets is crucial to improving our financial behaviors and decisions.
The 4 Steps to Take Control of Your Finances
The four key steps are: 1) Build a peace of mind fund, 2) Pay off high-interest debt, 3) Build an emergency fund, and 4) Invest for the long-term, starting with index funds and target date retirement funds.
Paying Your Debts
Paying off high-interest debt, such as credit cards, should be a priority before investing. Nisha recommends ranking your debts from highest to lowest interest rate and focusing on the highest ones first.
The Emergency Financial Buffer We All Need
Having 3-6 months' worth of living expenses saved in an emergency fund provides crucial financial stability and peace of mind, even more so than earning a high income.
What to Do With Saved Money
Once you have your emergency fund in place, you should only be saving for specific goals like a house deposit or car purchase. Anything beyond that should be invested, as keeping large sums in a savings account will result in your money losing value to inflation.
Do These 3 Things Before Investing
Before investing, ensure you have completed the first three steps: peace of mind fund, paying off high-interest debt, and building an emergency fund. Investing before these foundations are in place can be risky.
Why You Should Save for Retirement
Saving alone is not enough for retirement due to rising costs of living and inflation. Investing, particularly in tax-advantaged retirement accounts, is crucial to build long-term wealth.
Spending Money for External Validation
Nisha cautions against spending money solely for external validation or status, as this can lead to lifestyle inflation and financial stress. It's important to align your spending with your personal values and goals.
What to Invest In
Nisha recommends investing in index funds and target date retirement funds as the easiest and most accessible way to build long-term wealth. She advises against speculative investments like cryptocurrency until your financial foundations are in place.
How to Get a Salary Raise
Asking for a raise or switching jobs are effective ways to increase your income. Nisha provides tips on how to build a strong case for a raise, including researching industry standards and highlighting your contributions.
What Is Opportunity Cost?
Opportunity cost refers to the potential benefits you miss out on when you choose one option over another. Understanding opportunity cost can help you make more informed financial decisions.
Should You Split Your Investments?
Nisha recommends diversifying your investments, with the majority in low-cost index funds and a smaller portion in more speculative assets like cryptocurrency, if desired. This helps manage risk and emotions when investing.
The Best Book to Learn About Finance
Nisha recommends "Think and Grow Rich" by Napoleon Hill and "The Richest Man in Babylon" as excellent books to improve your financial literacy and mindset.
Should I Buy or Lease a Car?
Nisha advises buying a used car that is 3-5 years old, as it will have already experienced the majority of its depreciation. Leasing can be an option for those who want a new car every few years and don't mind the higher ongoing costs.
The Role of Money in Relationships
Nisha recommends having separate "team" and "individual" accounts with your partner to maintain financial autonomy and avoid conflicts over money.
What Is Passive Income and How to Get It
Passive income refers to money earned without actively trading time for it. Investing in index funds is the easiest form of passive income, while other options like creating digital products or renting out property require more upfront work.
Making Millions With YouTube
Nisha shares how her YouTube channel, which started as a side project, has grown to over 2 million subscribers and become her full-time career, allowing her to have a greater impact than her previous corporate job.
Doing Your Finances With AI
AI tools like ChatGPT can provide helpful, personalized financial advice, but Nisha cautions that the emotional and behavioral aspects of money management should not be overlooked.
The Importance of Your Credit Score
Maintaining a good credit score is crucial, as it can significantly impact your ability to access credit and the terms on which you can borrow money. Nisha provides tips on improving and monitoring your credit score.
