MONEY MOVES & MINDSET

The Spaces convened on MLK Day for episode 2 of “Money Moves in Mindset,” led by Kenny (KP), a licensed securities professional, with co-host Jay and resident banking professional Jah. Building on the prior “financial house” theme, the discussion focused on using tax season to accelerate savings, prioritizing IRAs (Traditional vs. Roth), and understanding self-employed options (SEP and SIMPLE). Kenny emphasized mindset, discipline, and the Rule of 72 to “buy back time,” steering listeners from low-yield savings toward diversified mutual funds and structured plans. The panel contrasted 401(k)s with IRAs (control, portability, loans, and penalties), urged capturing employer matches, and highlighted budgeting frameworks (50/30/20), emergency funds, and living within means. Q&A covered starting late in one’s 30s–40s, high-earner constraints and alternatives (annuities, managed portfolios), children’s accounts (custodial and 529), and advisor compensation models, stressing that many advisors are paid by providers and offer pro bono guidance upfront. The session closed with concrete actions for tax refunds, reexamining insurance, automating contributions, and community follow-up in Discord.

Money Moves in Mindset — Episode 2 (MLK Day Special)

Session context and setup

• The community gathered on MLK Day for Episode 2 of the Money Moves in Mindset series. The hosts encouraged reshares and participation while awaiting panelists with some minor technical hiccups and a short musical interlude.
• Episode 1 focused on “building the Financial House.” Episode 2 centered on tax-season strategy, disciplined saving/investing, and practical tools (IRAs, mutual funds, college and custodial accounts), with live Q&A.
• Community touchpoints: Parley Syndicate Discord was offered for deeper, private follow-ups; ongoing series programming and resources (Patreon, merch, weekly shows) were highlighted.

Core theme: Turning tax season into wealth season

• Kenny (KP) framed tax season as a rare, broad access point to capital for many households. Rather than spending refunds on depreciating items, he urged channeling funds into savings and investment vehicles that build the “financial house.”
• Emphasis on access and information: leverage tax refunds to establish retirement accounts, diversify across vehicles, and start compounding early.

Foundational mindset and challenge (carryover from Episode 1)

• Procrastination: Treat January as the start of a “book” culminating in December—actively inventory assets and liabilities, do housekeeping, and sit with credible, accredited professionals to craft a plan.
• Insurance as the foundation: Ensure adequate coverage to withstand catastrophic events; insurance complements investing by protecting the plan.
• Social Security uncertainty: With eligibility age drifting and long-term viability questioned, individuals should build their own retirement streams; IRAs and disciplined investing can function as personal “social security.”

IRAs and retirement accounts: Structures, differences, and use cases

• Traditional IRA: Contributions may be tax-deductible, reducing current taxable income; withdrawals in retirement are taxed as ordinary income.
• Roth IRA: Contributions use after-tax dollars; qualified withdrawals in retirement are tax-free. Offers flexibility to withdraw contributed principal (not earnings) without penalty; earnings withdrawn early can trigger taxes and penalties.
• SEP IRA (for self-employed): Simplified Employee Pension for those funding their own retirement; can also be offered to employees.
• SIMPLE IRA (for small businesses): Savings Incentive Match Plan for Employees; allows employee salary deferrals plus required employer matching or non-elective contributions.
• 401(k) vs IRA distinctions:
  • 401(k): Employer-sponsored; often includes matching. Typically allows loans repaid to self without tax penalty (subject to plan rules).
  • IRA: Individually controlled; early withdrawals can be penalized and taxed depending on type and circumstances.
• Portability and control: Employer benefits are governed and adjusted by the company, often via board decisions. Kenny urged building independent retirement legs (IRAs, outside portfolios) so benefits remain with you if you change jobs.

Beating time: Compounding, Rule of 72, and discipline

• Kenny’s framework:
  • Rule of 72: 72 divided by an investment’s annual return ≈ years to double. At 3% (typical savings account rates), money doubles ~every 24 years; at 10% (historical average of many equity mutual funds), ~every 7.2 years. He cited long-term mutual fund averages over 10% since the 1920s and noted some managers target 3–4 year doubling via disciplined portfolio selection.
  • Objective: “Buy back time” by raising returns through suitable vehicles and consistent contributions, potentially shortening working years from ~40 to closer to 16–20 depending on discipline and compounding.

Mutual funds and diversified growth portfolios

• Kenny’s explanation:
  • Mutual funds: Professionally managed portfolios of stocks and bonds, frequently drawing from large, resilient companies (e.g., S&P 500 constituents). Managers analyze balance sheets, research viability, and allocate to achieve long-term growth.
  • Role alongside IRAs: Use funds to diversify beyond a single vehicle; build a plan that divert portions to IRA(s), mutual funds, and children’s education/legacy accounts.
• Jay asked: What besides IRAs should people use their tax refunds for? Kenny recommended mutual funds as a core diversifier and explained how employers often use portfolios of mutual funds within benefit plans.

Children’s education and custodial planning

• Kenny recommended starting early:
  • 529 college savings plans.
  • Custodial accounts for minors (e.g., UGMA/UTMA-style accounts) to begin compounding while children are young.
• Jay reflected on his 7-year-old son and the 10-year horizon to college, committing to early contributions and asking about investing directly with fund companies versus via employer plans.
• Advisor guidance: Kenny advised consulting a reputable financial advisor (FA) who can provide complimentary planning, is compensated by the institutions rather than large fees from the client, and customizes solutions. He urged discipline and diversification tailored by a formal Financial Needs Analysis (FNA).

Live Q&A and individual perspectives

• Steph (participant):

  • Confirmed she’s a hardworking mother in the 9-to-5 middle class seeking ways to save and retire.
  • Kenny noted her employer hadn’t informed her about IRAs, emphasizing the gap and the importance of independent education and planning outside employer control.

• Ray (audience):

  • Asked if he should raise a 401(k) contribution set at 3% of pay every two weeks.
  • Kenny: Increase if feasible without compromising essential resources; employer match is effectively free money.
  • Jay: Pressed a stronger stance—if the company matches 3%, aim for at least 6% total contribution to capture full match and build momentum.

• Jah (resident banking professional): Guidance for those starting “late” (30s–40s)

  • Start with foundations: 50/30/20 budgeting (needs/wants/savings), document expenses, and understand income-to-expense ratios.
  • Shift toward long-term growth: In the 20s you may take more risk; in the 30s–40s, pursue growth with appropriate risk controls and clear retirement focus.
  • Maximize employer matches on 401(k)s.
  • Roth IRAs: Highlighted tax-free growth/withdrawals at retirement; useful for many investors (especially those currently in lower brackets expecting higher income later). Encourage eliminating the myth that average earners “can’t indulge.”
  • Build emergency fund and live within means.

• Dr. Hawkins (guest): High-earner considerations and product selection

  • Asked about options for those whose income or employer plan participation may complicate Roth IRA eligibility.
  • Jah: Emphasized the broad benefits of Roth IRAs for both high and low earners, focusing on tax-free growth and certain flexibilities (e.g., first-time home purchase allowance up to $10,000), but noted control varies by provider and emphasized understanding terms.
  • Kenny: Proposed annuities and tailored managed portfolios for high-income investors focusing on income security, tax-sensitive planning, and lifetime payout constructs. He emphasized using illustrations to visualize outcomes and portfolio construction aligned to desired outcomes (income now vs income later), with downside buffers.

• Nikki Kai (participant): Preparing children now that parents are improving their financial foundations

  • Kenny: Establish minor accounts from birth, 529 plans, and complementary “historical” savings vehicles; run parallel strategies to parents but scaled to kids’ timelines—children benefit from longer compounding. Revisited Rule of 72.
  • Spending discipline: Example opportunity costs—from daily discretionary expenses to “$8 Starbucks” studies—illustrated how consistent small savings can compound meaningfully. He cited that $200/month at 9% over 35 years can approach $1 million, urging reduction in miscellaneous spending in favor of saving/investing.
  • Community model: Each-one-teach-one—parents make their FA their kids’ FA; share fundamentals across the community.

DIY investing vs professional advice

• Tara and others asked where to start if they want to invest on their own.
  • Kenny: Due to suitability and risk of mistakes, he discouraged purely DIY for beginners; recommended sitting with an accredited FA for pro bono education and a formal FNA before acting. The FA’s licensure obligates them to educate and advise.
  • Cost concern: Kenny explained fee structures—advisors are commonly compensated via small surcharges/fees paid by investment companies rather than large upfront client fees; clients keep the bulk of returns. He used a “10 cents on the dollar” illustrative example to show how small costs can be worthwhile given long-term growth.
  • Dr. Hawkins highlighted youth fear of advisor costs; Kenny reiterated that the advice session can be complimentary, that fees are typically modest and offset by appropriate portfolio performance, and that the goal is to grow clients’ wealth over time.

Community resources and next steps

• Private follow-up: Kenny invited more detailed questions in the Parley Syndicate Discord for personalized discussion.
• Series continuity: The team promoted upcoming shows (“Welcome to the DOC House,” “Pop Up Paper Wells”) and the broader Parley Syndicate ecosystem (site, Patreon, merch, weekly lineup).
• Closing: Gratitude to KP (Kenny), Jah, and the panel; community call to “share the space,” build legacy, and bring friends into the conversation.

Key takeaways and action items

• Use tax refunds strategically:
  • Fund IRAs (Traditional or Roth per eligibility and tax strategy).
  • Add to diversified mutual fund portfolios aimed at long-term growth.
  • Start or contribute to 529 and custodial accounts for children.
• Complete a Financial Needs Analysis:
  • Document assets, liabilities, income, and expenses; identify savings capacity and risk tolerance.
  • Reassess insurance coverage (foundation of the plan).
• Maximize employer benefits:
  • Contribute at least to the full 401(k) employer match; increase if feasible without jeopardizing essentials.
• Build compounding habits:
  • Apply Rule of 72 to understand doubling time; improve returns by selecting suitable investment vehicles.
  • Reduce miscellaneous spending; redirect consistent amounts to investments (e.g., $200/month at 9% over decades compounds substantially).
• Seek professional guidance:
  • Engage an accredited financial advisor for pro bono education and planning; ensure transparency on fees and suitability.
  • High earners: Consider annuities and managed portfolios for income security and tax efficiency.
• Community learning:
  • Share fundamentals with younger family members; make the advisor relationship multi-generational.
  • Participate in the Parley Syndicate Discord for deeper, personalized Q&A.

Participants and roles (as referenced in the session)

• Kenny (KP): Securities-licensed lead presenter; emphasized IRAs, mutual funds, Rule of 72, annuities, FNA, and advisor engagement.
• Jay: Moderator/host; prompted questions about using tax refunds beyond IRAs, investing routes, and encouraged maximizing employer match.
• Jah: Resident banking professional; offered foundational budgeting (50/30/20), emergency funds, Roth IRA benefits, and long-term growth guidance for those starting in their 30s–40s.
• Steph: Working mother; highlighted employer information gaps on IRAs and the need for independent planning.
• Dr. Hawkins: Asked about products for high earners with Roth IRA eligibility constraints; received guidance on annuities/managed portfolios and advisor selection.
• Nikki Kai: Raised questions on preparing children financially; led to discussion on 529s, custodial accounts, compounding, and disciplined saving.
• Ray: Asked about raising 401(k) contributions from 3%; encouraged to capture full match.
• Community shout-outs: Maria, Dustin, Bree, Tara, Hot Shot, and the Parley Syndicate collective.