Let's Talk Investing with Angela Matthews | Ep. 21

• Angela started investing about 10 years ago when she realized she needed 'boo-boo money' - money that allows you to not work. She was making $48,000 as a recruiter and realized it wasn't enough after paying student loans and living expenses.

I need money. How does everybody else have money and I don't have money? And I mean, like, boo-boo money where you don't have to go to work.

• Angela Googled 'how do you become rich' and found two paths: entrepreneurship and stock market investing. She tried both, starting with repurposing jewelry. For investing, she read books that confused her, then decided to learn by doing.

I decided to learn, to learn on the go, like learn by trial and error... I realized that I'm a smart person. And I think we're all pretty smart.

• Her first stock was Apple. When it dropped 30%, she recognized it as a buying opportunity rather than a reason to sell.

• Tiffany identifies Angela as a contrarian investor. Angela explains that the answer is never 'all or nothing' - never liquidate everything. She shares the story of liquidating some investments (not Apple) to spend time with her dying father, which she doesn't regret.

The answer is never all or nothing. Right. It's never like I'm done investing or I need this money and you're going to cut everything out and liquidate.

• Angela's strategy changes based on market conditions. When the market is down, she buys total market funds. When the market is high, she focuses on individual companies that outperform their peers.

When the market isn't doing as well, this is a really great opportunity to buy a fund of the entire market... However, when the market's going a little higher, I fall back on buying the total market fund or buying a fund as a whole. I focus on individual companies.

• Tiffany clarifies that a mutual fund is like a basket of different individual company stocks - 'a bag of jelly beans' as Angela describes it.

• Angela discusses building wealth that spans generations. She shares that her daughter under 2 already has a brokerage account and owns companies. She defines transgenerational wealth as caring for both those above you (parents) and below you (children).

Imagine if you were 10 years old and your parents told you something like, hey, your college is already paid for. So is your wedding. And so is the college of your firstborn. Could you imagine the confidence you'll have?

• Angela managed her mother's 401k after she left her corporate job, demonstrating the pillar concept of supporting both parents and children.

• Tiffany and Angela discuss Opportunity Zones as a way to defer capital gains taxes while investing in underserved communities. Angela emphasizes that capital gains are a good problem to have - it means your investments are performing well.

Capital gains, it's a good problem to have. I love that you said, I love capital gains because that means you're doing something right.

• Angela notes that the US rewards capitalists and incentivizes investing, even when mistakes are made along the way.

• Angela employs the 80/20 rule: 80% of gains come from 20% of companies. She accepts that 8 out of 10 investments may not work out, as long as she finds her 'two' companies that make ridiculous amounts of money.

It doesn't go right all the time, but I don't need it to go right all the time. So I employ the 80-20 rule where 80% of my gains is really made from 20% of the companies that I invest in.

• She uses a 6-month analysis comparing company performance to the S&P 500. Underperforming companies get cut using a visualization technique where she imagines the company pleading not to be removed.