Who is responsible for creating your life? What can freedom really look like? My guest today believes that everyone has the responsibility and the opportunity to design their own lives, and that money is a tool to build our dreams.
Brooke Tomasetti is a personal finance coach and educator at Money Life Mentor. She’s Director of Financial Education and Community at Carbon Collective, the first climate-focused online investment advisor.
"f you set aside time in your week to reflect on what's important to you, what experiences bring you joy? What kind of life do you want to live? And then you intentionally work to create more of that in your life. Starting on the day to day, chances are, you're going to end up leading a happy and fulfilling life."
"I started to learn about Carbon Collective's portfolios that are low fee, 100% divested from fossil fuels and invested in companies building climate solutions. And I was really excited because all of us, we spend 40 plus hours a week working so that we can invest our money to one day comfortably retire and build generational wealth. But most of our retirement funds are not actually funding the kind of world that we actually want to retire into and leave to our grandchildren."
Brooke Tomasetti is a personal finance coach and educator. She is the owner of Money Life Mentor and the Director of Financial Education and Community at Carbon Collective, a sustainable investing platform that provides low-fee, diversified portfolios built for solving climate change.
Brooke is passionate about the fact that anyone can pursue their wildest dreams by mastering personal finance. She applied financial wellness habits and simple investing strategies to go from in debt with $15,000 of student loans to a six figure net worth in less than four years. Brooke also bought and self managed a three unit property, and has shared her story on several personal finance and house hacking podcasts such as Wrestling With Real Estate (WWRE), House Hacking Success, and The Clever Girls Know Podcast. She also presented a TEDx Talk titled “Money As a Tool For Creating the Life of Your Dreams.”
Working remotely over the last six years has made it possible for her to travel the world while building a business and career that she loves. Her personal experiences and helping friends and family with their finances inspired her to launch Money Life Mentor, where she helps individuals make the most of their income every month and reach financial freedom while living a life they love now. Brooke’s favorite part about working at Carbon Collective and with financial coaching clients is enabling others to gain confidence in their finances and hit their goals, propelling them towards the life they want to live.
In 2015, Brooke spent one month at an off the grid international community in Ibiza, Spain. She was inspired by off the grid living and practiced permaculture techniques, sustainable building and construction, and alternative energy generation. When she’s not living out of a suitcase while exploring new cities and countries, Brooke enjoys hiking and anything that involves getting outside in nature.
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Hi, and welcome back to Stocks for Beginners. I'm Phil Muscatello. Who's responsible for creating your life. What can freedom really look like? My guest today believes that everyone has the responsibility and the opportunity to design their own lives and that money is a tool to build our dreams. Hello, Brooke.
Hi, Phil. So nice to be here.
Nice to meet you as well. Brooke Tomasetti is a personal finance coach and educator at Money Life Mentor, and she's also a director of financial education and community at Carbon Collective. The first climate focused online investment advisor. So let's start by talking about your travels because you're a nomad aren't you, you have no fixed abode.
2 (1m 20s):
That is correct. And probably one of my top five things to talk about outside of personal finance. So I'm glad that you asked, I started working 100% remotely about seven years ago. So I've been doing the remote thing for a little while now. And I will say at first I was hesitant to work outside of my personal office space, but I started little by little. So I started by working from a coffee shop one or two days a week. Then it progressed into exploring a new city in the US for a couple of weeks at a time while working. And then I did a three-month stint of working remotely from central America with my co-worker.
2 (2m 2s):
And we would work during the week and on the weekends, we'd explore, you know, hike, volcanoes, go visit some Mayan ruins. And after that, I was hooked on the quote unquote digital nomad life. And yeah, I've spent months at a time exploring new countries and cities while working full time.
3 (2m 22s):
And that's been working with Money Life Mentor. Is that the case?
2 (2m 25s):
Yeah, so I started money life mentor about a year and a half ago. I've been obviously a personal finance nerd since I was 16, but my professional background and what I actually went to college for here in the states was in marketing.
3 (2m 43s):
So you started out at 16 as a financial money nerd. Was that unusual amongst your group of friends?
2 (2m 49s):
Absolutely. There was certainly nobody talking about finances. You know, when I was, let's say junior senior in high school and certainly not my teachers, right. There was no personal finance class or anything like that. Unfortunately, I think I would have loved that, but I did end up taking some business classes and it definitely got me thinking about my own personal finances and how to manage that. And after I got my first job working at the library at 15, it really started to jog a lot of questions and curiosity around what do people do with money and what's the best use case for it.
3 (3m 31s):
And so this was obviously a natural evolution into starting Money life mentor then.
2 (3m 35s):
Yeah, absolutely. So after years of really teaching myself about investing, because even in college, at least where I went, we didn't have personal finance courses, we got economics and everything else, but no personal finance. So I just continued to read about investing, listen to podcasts like this, and just kind of through my own practices and things that I tested myself, just learn through trial and error. And that led to most of my friends and family coming to me when they had a personal finance question. And I found that I really enjoyed helping people understand and apply their income.
3 (4m 12s):
I think there might be a problem with studying economics because while you do learn a little bit more about finance it's seen to be as this great monolithic financial world that has very little to do with you on a personal level.
2 (4m 25s):
Yeah. It's almost like you learn all of these macro factors and principles and things, but there's such a gap between understanding that and then applying that on the micro micro level to your own finances.
3 (4m 39s):
So you were able to pay $15,000 of student loan debt in 18 months while you were earning under $45,000 per year before taxes. How is that even possible? What did you live on? What did you eat?
2 (4m 53s):
Yeah, I'll break it down into simple terms, but I'd like to point out that this was not easy. I think those of us who choose to, or, you know, have the privilege of even going to college, we graduate and we're on this sort of high of the, world's my oyster. I can do whatever I set my mind to. And then boom, you graduate. And you've got student loans and you're living either, you know, your parents' basement or with a couple of roommates in maybe a not so great apartment and working at a job that surprise is nowhere near your dream job. So it's kind of this like slap of reality, right? And people react to that in a lot of different ways.
2 (5m 36s):
Thankfully, I took all of this in that first year out of college and don't get me wrong. I was happy and grateful to be able to support myself on my own. That was really my one goal after graduating. But I realized that if I can gain control over the income I do have coming in, then I can free myself from this debt that is holding me back, right. Because I had a few student loans that $15,000 and I had a monthly payment and it was really impacting what I was able to do month over month, both from a spending perspective. But you know, also obviously investing in saving for my future, you know, short term and term.
2 (6m 17s):
And the first thing I did was I made a copy of a Google sheet, budget template online from somewhere. I don't even remember where I got it from. I probably just Googled like easy budget spreadsheet and I input my average monthly expenses and my monthly income. And I listed out all of the information about the three different loans that I had. And from doing this, I found that I had some wiggle room in my budget to pay well over the minimums on my student loans, as long as I kept my spending in check. And I made sure to add the additional payment to the loan that had the highest interest rate, anyone who's paid off debt can understand how high interest rates can really impact you.
2 (6m 59s):
So knocking that one out was my biggest goal, getting that done first. And I tracked my expenses and budget every month. And I decrease my expenses as much as I could. Thankfully I was already living in an apartment that was within my means, but in a decent part of the city with a roommate and I was driving the same car I had in high school. So my base expenses were already low. And, you know, if I had anything left over at the end of the month, I put that towards my loans. And you know, it sounds simple, but it's certainly not an easy thing to do
3 (7m 34s):
For many people. Their finances just, it feels out of control for people. How can people get their finances under control and Uncomplicate them.
2 (7m 44s):
Yeah. Right. It does feel extremely complicated when you start to dig into it. And like, I always say personal finance is simple, but it's not easy. Meaning the principles behind what to do with your money are simple. They're basic math, right? However, it's our emotions that often get in the way of us mastering our financial lives. So this is where simple systems that help remove the emotional and mental parts of working on your finances are key. And the first thing that I would do is create a calendar event for yourself that is 20 or 25 minutes long and recurs once a week for me, I find that doing that on Sunday, evenings works for me, but you know, to each their own, and in that calendar invite, I would update the description that you can type in, right in the financial goals that you're working towards and include any links you might want to reference such as your budget spreadsheet.
2 (8m 48s):
And you will use those 20 minutes every week to review your finances and take action towards those goals.
3 (8m 55s):
You believe that it's important to also understand what's important to yourself. Why is that? And how does that play into budgeting?
2 (9m 4s):
Yes. I love that you asked that question because I have my clients do self-awareness journal prompts. And at first people are like, what is the connection here to this with my finances? Why do I have to do this? And to that, I say, it is almost impossible to put together goals and a game plan for your life without knowing what kind of life you desire. You can do it, you can set the goals and tackle a plan, but when you achieve those things that you think you want, and you are kind of the top of the mountain, looking around will that have led you to a fulfilling life defined by your own definition of success and happiness.
2 (9m 50s):
It's really hard to say, right? But if you set aside time in your week to reflect on what's important to you, what experiences bring you joy? What kind of life do you want to live? And then you intentionally work to create more of that in your life. Starting on the day to day, chances are, you're going to end up leading a happy and fulfilling life.
3 (10m 17s):
You've got a lot of experience talking with people about finances and pulling that all together. What are some of the common misconceptions and the mindsets that you've seen people coming to you with that you can talk about?
2 (10m 32s):
Yeah, absolutely. I can kind of start with some of the common questions that drive people to start to dig into these kinds of things.
3 (10m 41s):
Yeah. That's a good place to start. Yeah.
2 (10m 43s):
Yes. So I find that maybe the top three or four things that I hear, number one is I get a lot of, I've worked hard the last five to 10 years of my professional life. Why don't I have more to show for it? That's a really common one. I find that usually happens when people start to do things like, you know, look at their 401k and maybe they're comparing with their peers and things like that. And they're like, Hmm, I have not been putting a lot of money aside, but you know, I earned six figures a year. Like, where's the disconnect here. I also get, how should I prioritize my different saving and investing goals?
2 (11m 24s):
It's a really common one because a lot of people, right, they have these goals of purchasing a house maybe in the next three years. And then short-term, they want to take a trip in the next 12 months. And then they've got this goal of retirement, which feels very pie in the sky, decades away. So kind of prioritizing those different things. And then a really big one that I hear is I am so overwhelmed by the amount of information out there, and I don't know where to turn. So that usually leads to how can I educate myself on investing and building wealth for financial freedom?
3 (11m 58s):
I think we're getting in a pivot point at the moment, aren't we, whereas maybe 10, 20 years ago, financial advice was seen to be something where you go and see a professional. You go and see an older man in a certain tie. Who's going to tell you exactly what you should be doing, but we're turning around now where the world is becoming interested in it. And more people like yourself providing a service to people and letting them know how it actually can be quite simple and uncomplicated.
2 (12m 25s):
Yeah. That's such a great point. And it's really nice to see more diversity in the financial education and investing space because you know, when you see someone who looks more like yourself, who maybe you can relate to on a more personal level versus, you know, some 65 year old, white haired, man, who's telling you how to invest your money is just different. It's going to resonate much differently. Right? So, you know, my friend who is also my client, she told me one time, I don't want my financial advice from some 65 year old white haired man. Like I want my advice from you. So it's very interesting. I think it's a good thing.
2 (13m 5s):
Of course, there's such thing as bad financial advice that you might pick up on Tik TOK or Instagram
3 (13m 11s):
WhatsApp for the rocket emojis.
2 (13m 13s):
Yes, yes. To the moon. So, you know, definitely taking everything that you see on social with a grain of salt. But I do think it's nice to see a lot of people getting interested in investing through just all these different channels.
3 (13m 28s):
Some people do have a mindset that's going to hold them back. It's not just about being overwhelmed or being too complicated, but there is actually a mindset I know of people who might have an idea that they don't deserve the wealth or that some have people around the wealthy because they've inherited the money or I've gotten lucky. Do you ever have to psychoanalyze people to a certain extent?
2 (13m 49s):
Absolutely. And really as an educator and a mentor, right. Versus somebody who is an investment advisor, who's saying, put your money here. I find I I'm able to connect on a more deeper level. So I do get into a lot of the mindset things and something that I find helpful because we all have that, right. We all have some sort of mindset that can hold us back. And I absolutely empathize with a lot of the emotions and mindsets that people have around money. Something that we can ignore is that a lot of people feel shame around their money.
2 (14m 31s):
That's kind of what you were getting at, whether it's, they have a lack of it. And they're realizing that, or maybe they've made some bad decisions in the past that led to debt, or maybe they were born into money and they have some, some shame around that, right? That's absolutely valid as well. And a lot of people also feel ashamed that they don't understand investing in personal finance. This emotion is something that I want to relieve everyone of, because regardless of how you got into debt or how you ended up at age 39 with no life savings, shame is an unproductive mindset, right? When people tell me that they feel ashamed or embarrassed about their finances, I let them unload all the emotions around that.
2 (15m 13s):
I encourage them to write down what their history with money is and what they learned, or maybe did not learn about money from their parents or guardians or teachers and how that impacted their lives. Right? Because some people see their parents going one way and they go the opposite way or they follow in their footsteps. It's very interesting. So I think just gaining that awareness, I like to write these things down, but just reflecting on that and being aware of that can be so powerful when it comes to actually rewriting those stories that we all end up in adulthood with. Right.
2 (15m 54s):
And I also recommend putting all your numbers into a spreadsheet because when you can see all the numbers, the expenses, the income, the debt, seeing it all laid out, often give someone a sense of control and power over their situation.
3 (16m 7s):
Are you ever telling people the truth about what it means about taking control of their lives and their financial lives? That there's no one else that's going to do it for them.
2 (16m 16s):
Yeah. It's a really good question. I find that as we kind of go down the path of doing the journal prompts to figure out what their vision is for their life. Like I do this thing called ideal life journaling. And I have them write about their ideal day. Like from when you get up to, when you go to bed, what is the ideal day for you? What's your living situation? Like who are you spending the most time with things like that, to help them get clear on that. Right? And then we take that, we translate that into some financial goals, short-term goals, long-term goals. And then we dive into the numbers. And usually by the time that we're looking at the numbers and I'm giving them action items, like at least every month for them to complete before we meet next.
2 (17m 2s):
And especially when you're meeting with someone month over month for that accountability piece, which I think is missing in a lot of really, when you try to accomplish anything in life, having the accountability can be so useful. But I do find that at least at that point, people come to that conclusion on their own. They understand, okay, this is what I want. Here's where I am. Right. The kind of gain that recognition of there's a gap between what my life looks like now, which is based on all the decisions that I've made the last, you know, 20, 30 years of my life. And then here's where I want to be here is like my dream vision. And it kind of clicks for people when they have that vision.
2 (17m 44s):
They're like, nobody's going to create this for me. I need to design that. So it's much less explicit people often come to that conclusion when they start to dig into these things.
3 (17m 56s):
And of course a big part of building wealth is investment. And you're interested in building wealth, but also making a better world. Tell us about carbon collective and what led you towards carbon collective?
2 (18m 8s):
Yes. So about five years ago, I went through the process of analyzing the products I was using on a daily basis. And I started to switch them out for healthier and more sustainable alternatives. It became sort of a fun obsession for me. And at that time I was also deepening my learning around investing. And I got curious and started to research what options were out there for someone who is environmentally conscious. And most of the answers I found at the time were typically along the lines of, well it's difficult and the fees are way higher, but you know, you could invest in one of these ESG funds, which, oh, by the way, most of them invest in fossil fuel companies anyways.
2 (18m 58s):
And so you might as well invest in low cost index funds as you normally would as a long-term investor. And then maybe one day donate to environmental causes. And that's a really terrible answer, right? Not ideal. So fast forward, about five years. And when I stumbled upon carbon collective, somebody who was a past client of mine, when I worked at a marketing agency, started working at carbon collective and reached back out to me. We had kept in touch and I started to learn about their portfolios that are low fee, 100% divested from fossil fuels and invested in companies, building climate solutions. And I was really excited because all of us, we spend 40 plus hours a week working so that we can invest our money to one day comfortably retire and build generational wealth.
2 (19m 51s):
But most of our retirement funds are not actually funding the kind of world that we actually want to retire into and leave to our grandchildren.
3 (20m 0s):
Tell us about the research and the process of carbon collective for ascertaining, which of the best investments to go into for that future that you that's so important for you?
2 (20m 11s):
Yeah, absolutely. This question really relates to carbon collectives theory of change and kind of simplify it. The goal with carbon collectives portfolios and investment products is to number one, divest from fossil fuel companies. Number two, invest in companies that are building climate solutions and to use our voice and our shareholder votes to move faster on climate and hold companies accountable for that. So that's like the short summary and up until probably eight months ago, I didn't really understand what divest from fossil fuels meant. Right. Obviously we think, okay, it's the opposite of invest, right.
2 (20m 52s):
But to kind of simplify it, it means that you remove your investments out of the fossil fuel industry. And the idea there is that when there is less money invested in fossil fuel companies, the shares of these companies decrease, making it more expensive for them to raise capital and expand operations. So that's really the whole goal around divestment. And then we also need to invest in the companies that are building climate change solutions. So from solar to electric vehicles to building efficiency companies so that those companies can grow fast.
3 (21m 29s):
So carbon collective is a robo advisor. I just wanted to break it down into a couple of sections here. So there's what is a robo advising firm and how does it work and how are they making the investments or how has carbon collective making the investments is advi ETFs or directly into companies themselves. So yeah. Tell us a bit more about the mechanics of at all.
2 (21m 50s):
Yeah, absolutely. I'll start with defining what a robo advisor is because I feel like it's a term that's become more and more popular, right? With the Wealthfront and Betterment and all kinds of companies now, but a robo-advisor is an online investment platform that helps you set up investment goals like retirement, and then automatically manages your investment portfolios to help you meet those goals.
3 (22m 16s):
And so that said, especially to avoid that 65 year old guy with the white hair.
2 (22m 22s):
Exactly, exactly. And that's a really great point. So because a robo-advisor relies on software rather than people say, somebody who's actively choosing which stocks you're investing in robo-advisors are also generally much more cost-effective. So they cost a lot less than traditional advisors. So for example, a traditional human advisor might charge 1% of total assets that you have invested versus a robo-advisor like carbon collective, for example, who charges the management fee of 0.2, 5%. And I'm sure you know, this Phil, but like extremely important for any investor because that percentage over the course of one's lifetime can be hundreds of thousands of dollars.
3 (23m 7s):
Yep. Cost compound as do gains. It's just the term itself. I think it's a real problem that robot adviser, if you have no idea about how they work, it sort of sounds like there's some algorithm that's magically moving your money around for me, it's a little bit of an unfriendly term, but it's, it's not that at all. Isn't
2 (23m 25s):
Yeah, yeah, exactly. It's nice. When you understand what goes into the decisions behind the robo-advisor.
3 (23m 34s):
Yeah, that's right. It's all about the decisions. Okay. So in carbon collective then deploys the money that you're investing. How has it done that? Is it like I said, through ATF, so directly into companies.
2 (23m 45s):
Yes. So right now we have our own portfolios and they're technically actively managed right in that our team is putting hours and hours into researching based on our theory of change, which we just covered. If you go on the website, you can see kind of exactly the filters that are used, so how we are including, or excluding various companies from the portfolios. And then we have a few different portfolios that anyone, any individual can go on and select which one they want to invest in. It's as simple as that. So they're not ETFs their portfolios.
3 (24m 23s):
Okay. Can you describe the portfolios? What are the different kinds of portfolio constructions?
2 (24m 27s):
Yeah, absolutely. So this would probably be a better question for our
3 (24m 32s):
2 (24m 33s):
3 (24m 34s):
Yeah. Just give us an overview.
2 (24m 37s):
Yeah, sure. So we have kind of the core portfolio, which is kind of a, it's a mix. So there's some bonds in there, some stocks, and it goes a little bit outside of the climate only portfolio, which is really just the companies that are in our like list of climate solution companies, which is right on the website. And you can actually see like how we weight the different companies. So you can see like what percentage Tesla, for example makes up of that portfolio. So it's kind of like giving investors who have a higher tolerance for risk, a way to invest in just the climate tech slash climate solution companies.
3 (25m 22s):
So a new user coming to carbon collective, what's the process like what do they first see on the website and when you want to get started?
2 (25m 30s):
Yeah. So on the homepage, if you were to go to carbon, collective.co, right now, there is a form. All you need to do is it walks you through, you should be able to complete it in like 20 minutes. If you wanted to set up an account, there's a lot of different options, right? So I think where people get stuck is understanding what kind of investment account they should open, right? Whether it's an IRA or a non-retirement account, or maybe they have an old 401k that they want to roll over, but if they have questions, they can easily set up a 15 minute call with our co-founder, who can help them select which account they need. It's a fairly simple process.
2 (26m 10s):
And it's nice because there is a human touch. So if you do get stuck, cause investing can be complicated and climate change is complicated. So we like to just be there for our members
3 (26m 21s):
Advice, the human face.
2 (26m 22s):
Yes. I love that.
3 (26m 25s):
I'll give that one to you for free.
2 (26m 27s):
3 (26m 29s):
So if people want to go in depth into sustainable investing, do you have any resources available?
2 (26m 34s):
Yes, absolutely. On the carbon collective.co site, we have the ultimate guide to sustainable investing and it is a huge resource. It's a book-length guide. You can just click through the different six chapters and read, and it covers really everything from why investing is a solution to climate change all the way to ranking the different ESG funds that are most popular and like what percentage they're invested in fossil fuels versus climate solution companies, all the stats all the way to investing basics.
3 (27m 13s):
Okay. So, well you've given us the web address. Is that the best way for listeners to get in touch with carbon collective and find out more?
2 (27m 20s):
Yeah, absolutely. I would say Instagram really any social channel, Instagram is a great place to connect. I spend a lot of time on there. So carbon dot collective is our handle, or if they want to reach out to me personally, that works too. I'm at money life mentor.
3 (27m 36s):
Fantastic. Brooke Thomas city. Thank you very much for joining us today.
2 (27m 39s):
Thank you so much for having me.
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