041: How to Become So Money with Farnoosh Torabi

So_Money_Podcast_FarnooshFarnoosh Torabi, host of the So Money podcast, is the author of three books, When She Makes More: 10 Rules For Breadwinning Women, Psyche Yourself Rich, and You’re So Money.

Farnoosh is a frequent financial contributor to Yahoo!, The Today Show, ABC and several top women’s magazines including Glamour, Marie Claire, and Redbook.

Farnoosh was a keynote speaker at #FinCon14.

So let’s dig in. Let’s meet today’s Master of Money.

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I hope you enjoyed that. A big thank you to Farnoosh for giving us the gold today.

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The Money Mindset Shift

A couple of years ago, Farnoosh was talking to financial expert and author Barbara Stanny and Barbara said, “There is no limit as to how much money you can make.” It became an eye-opening mindset shift for Farnoosh. Like most people, she had reached a place in her life where she was making a good salary and was comfortable. She was alright with sticking with the status quo until talking to Stanny, who said that whenever women are making more, the world becomes a better place. Fundamentally, Barbara wanted to make more money to make a difference in her community, the lives of her friends and families, and the world as a whole. If your money is going back into society, then not only is it changing your lives but the lives of others as well.

From Fraud to Role Model

At the age of 23, Farnoosh was a financial journalist and was writing about things like saving and staying out of debt. But truth be told, she wasn’t the best model for those things. She had debt and student loans and was living paycheck to paycheck. She felt like a fraud. She had grown up in a house where money was openly talked about and that openness and assistance from her parents really helped negate any fear that Farnoosh might have had about money. She felt like it was her responsibility to get her money in order.

She was working with Jim Cramer at the time, and with his help, she managed to get a book deal to pay off most of her student loans.

The Liberation of a Budget

Back in 2005 when Farnoosh was starting to get her money in order, she used Mint to help her out, as well as an Excel spreadsheet. She kept track of her food, metro card, and rent that way.

Her dad always used spreadsheets, so she grew up seeing them and loved using them. The numbers don’t lie and it was nice to have that framework. Having a budget wasn’t limiting to her; it was liberating. It was a way to see the numbers and make adjustments to things she didn’t need or really want.

She was investing in a 401k, a Roth IRA and a 401k through her job, and once she became self-employed she set up a SEP IRA.

The Empowerment of Debt-Free Living

Getting rid of her debt made Farnoosh feel like an adult for the first time. She felt empowered and as though she could do anything. Debt really does weigh you down and make you feel like there are hurdles in your path.

Stumped By Tax Codes

Accounting is the area of personal finance that Farnoosh thinks her brain is not hard-wired to understand. Tax codes stump her and she doesn’t have an interest in it. She understands the basics, but she doesn’t feel like she knows enough to share advice. She prefers to just recommend a CPA.

She used trial and error to find a CPA. She has hired and fired them. In the beginning, she hired someone based on word of mouth and ended up not having a good relationship with the person. She wants to work with someone who is above the books. She creates folders in Dropbox of everything that her CPA needs and that makes her taxes so much more efficient.

Saving for Goals that May Change

Farnoosh chose the New York state plan as her 529 plan based on the historical returns and what they heard from other parents using the plan. It’s a savings plan and their kids can attend school wherever they want. With the New York state plan, they provide a tax deduction for your contribution.

Farnoosh believes that saving for goals is always a good idea because even if you save for 5 years and then your goals completely change, you still have a ton of money and options.

Avoiding the Feeling of Success

Farnoosh is extremely grateful and proud to be where she is now. She never thought she would reach this point. Being able to work with people like Jim Cramer and Jean Chatzky has shown her that success is possible, but also how much hard work has to be put in to make it happen.

Gary Vaynerchuk once told Farnoosh, “the minute you feel successful, it’s over.” So she is constantly looking for new ways to learn and grow so that she doesn’t reach that comfortable place.

Show Notes

Time Stamp:

  • 02:14 – Farnoosh’s goal of making more money to influence society
  • 09:45 – Feeling like a fraud led to financial success
  • 15:39 – How Excel spreadsheets started Farnoosh on the path to financial liberty
  • 19:35 – Feeling like an adult for the very first time
  • 20:40 – Hiring and firing CPA’s
  • 25:45 – Having a ton of money and options is better than no money at all
  • 33:25 – Working really hard to never feel comfortable

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This show is part of the FinCon Podcast Network and was produced by Steve Stewart.

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About Philip Taylor, CPA

Philip Taylor, aka "PT", is a CPA, blogger, podcaster, husband, and father of three. PT is also the founder and CEO of the personal finance industry conference and trade show, FinCon.

He created Part-Time Money® back in 2007 to share his advice on money, hold himself accountable (while paying off over $75k in debt), and to meet others passionate about moving toward financial independence.

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