Ep. 123 – Secrets To Building Your Wealth
Rob: Well, welcome to our Becoming Your Best podcast listeners. Excited and thrilled that you be able to join us today and I love these because even though we can’t see each other, imagine ourselves sitting across each other and having a conversation.
This morning, it’s a beautiful day as I’m looking out the window in Utah – it’s a little bit cloudy but just a beautiful day. Springs in the air, lot of exciting things happening so wherever you’re out in the world ,I hope you’re having a great day and that this podcast might be able to add to your day just a little bit. This podcast will be focused on some secrets to help you build wealth and this is actually a key part of Becoming Your Best because financially, if a person is strapped for finances and they’re barely able to get by, it’s really difficult to focus on other areas of your life – you know; personal, your relationships.
We’d say that you know money’s not where happiness lies but there certainly is a threshold where if you blow that threshold, then it can become a much more difficult and stressful part of your life. So, first of all, think about how you view money. How do you view money? Because my personal opinion is that money is a magnifier and it’ll simply magnify who we already are. You know some people say you know, “Once I have money I’ll do all these things!” Well, what I found in my experience is that that’s not the case if they’re not already doing them when they don’t have the money. So, what is your intent and purpose? If you were to have $50 million right now what would you do with that? And a lot of us say, “Well, we’d give away!” Well, are you currently doing that right now? So, how do you use money because how you use it now will be a reflection of how you use it when you have more of it. So, what is your motivation with money and part of the reason for this podcast and helping you develop ideas on how to build your wealth, is to put you in a position to where you you’re able to focus on you and your family relationships and then turn around and help others in the process . I read an interesting study that was done about a year ago and whether this exact number not, it’s in the ball park in the spirit is pretty close here and they found that on average, once a family reaches an income of around $70,000 dollars in the year, that at that point they have their basic needs met and the level of happiness doesn’t go up dramatically anymore from that point based upon the money. In other words, the source of happiness comes from other places outside the money. When you’re below that $70,000 threshold, then money still is a big deal. I mean, there’s a high level of stress to come into your life if you don’t have the ability to make a car payment are you not able to meet a student loan payment or all of these other things and so, I think what I’m saying here is that there’s a threshold that when a person crosses that threshold, the finances are not the number one priority anymore. You have your basic needs met. if you’re not meeting your basic needs, there’s a high level of stress that can come into your life and into your relationships.
So, the first intent is, how do you meet those basic needs? And then the second part of this is, then how do you achieve your financial dreams where ever you are today. That basic level that we’re talking about, can be all consuming of your time and attention if you blow it and it allows you have a freedom of time and energy once you’re above it. So how do you not only hit that line but then surpass it? I’m going to share with you just a few tips that not only help me but I know have helped thousands of other people if you have the time and discipline to do them.
The first one is not going to be a surprise. If you’ve heard or listened to us on this podcast say this over and over. That is to read often. Now there’s a lot of books out there. There’s millions of books go look at Amazon is see how many books are written on Amazon and available for sale. There are millions of them so it’s not just reading because if you learn incorrect knowledge that just accelerates the failure rate. So you want to learn from those who are teaching correct knowledge. Let me give you an example of a book that you need to read if you haven’t read this book, I’m saying that is better boldly as I can – you need to read this book as it applies to your finances and that is The Richest Man in Babylon. It’s a simple, quick book and it’ll teach you some basic fundamental principles on how to manage your money and what sets apart those who achieve their financial dreams and why certain people haven’t. Anyone can do it who has the right knowledge and the discipline to do so. Now why this particular item first of read often? Why would I share this? What we’ve found is that successful leaders are readers and this is mind boggling but 43% of college graduates will never read another book the rest of their life. I used to not believe that, I use to say “No, way!” But in our seminars, I’ll ask, you know, “How many people have read a book in the last year? How many people have read a book since you graduated?” And that statistic is actually very close. 80% of homes in the United States did not invest in a single book last year, and this is one of the habits the sets apart highly successful leaders from everyone else is they feed the mind. You know, when we get hungry we eat. The brain is no different. When we read, when we engage in activities like that, whether it’s an audio book or the physical act of reading, something engages the brain. We have a coaching client, incredible friend Danny Brassell, that can talk about this until and he’ll just expand your mind. Go look up Danny Brassell – you’ll find him out there. He’s written a book that talks about reading and the impact can have in your life and families. And this is one of the habits that will set you apart from everyone else. Elon Musk reads on average one to two books a day. There is a reason that Elon is Elon. So that’s number one. And if you haven’t read Richest Man in Babylon, that book specifically – I’m inviting you to go read in the next two weeks two weeks and apply some of the principles that you learn in that book into your life.
The second is to tithe 10% of your income. It doesn’t matter where you give that. The point is to develop the habit now of giving back, so whether you give to a church, a charity a cause that helps others; there’s something that comes when you give back to others and that’s why I said early on, money is simply a magnifier. If a person is greedy now and they’re always saying I’ll give once I have but they’re not giving even a little bit now, nothing really changes, If a person is able to give, even if it’s a small amount , money magnifies the ability to do that. So if you develop the habit now giving 10% of your income to someone or a cause or charity or church, you’ve already developed the habit and you’re putting someone else ahead of yourself and money doesn’t become the central focus – meaning it’s not all about you. You know there’s a great script or whether you believe the Bible or not, I love this scripture in Malachi. There’s this promise and said “Bring ye all the tithes into the storehouse and prove me now herewith sayeth the lord of hosts. If I will not open you the windows of heaven and pour you out a blessing that there shall not be room enough to receive it.” I’ve been living this principle for more than thirty years and can tell you there’s a huge power when you donate 10% of your income to either church or charity or cause that helps other people. Try it and see for yourself and whether you believe it or not, take the Lord up on this promise prove him. Give and see what happens when you do.
Number three is just like you’re going to take 10% and give to someone else, a church, a charity or cause, now when you have income that comes in, set aside ten percent for yourself. We’re going call this a vault or a gelt. What you want to start do is growing this vault or gelt. You’re not going to use this. This is untouchable, unless you’re in the most dire straights or in an emergency – you do not get into your vault or your gelt. Don’t touch it! 66% of millennials don’t have more than one month of savings if hard times were to hit. So, imagine the impact with that statistic if we were to have a serious financial setback in our country and it’s not a matter of if it’s a matter of when because if you look at the cycles, there will be periods of high economic growth as well as recession that are very predictable. You don’t always get in this high growth mode that we’ve been in now for quite a few years, so how are you preparing for that? Well, this is one of the habits you can read about in The Richest Man in Babylon. Pay yourself 10% first. Now, why will this work? Maybe you’ve heard this adage that says that “our expenses will rise to meet our income.” That is exactly right. You take 10% out and you find a way to still make it work. And now you start building your gelt, your vault. You know there’s this book called The millionaire next door and most people are playing this game of keeping up with the Jones’ and even when they appear to have all this money, if hard times were hit they are leveraged so highly in a mortgage and car payments and Country Club payments, that they would be hit just as hard as anyone else who doesn’t have savings. Because they haven’t built this gelt or this vault that we’re talking about. If you develop this habit, especially early on, it will put you in an incredibly good financial position especially in your 30, 40’s and 50’s down the road. So I would invite you to commit, if you’re not already doing it, to pay yourself 10% or more and then watch what happens how you will still be able to meet your obligations. This is a discipline of an effort. So really what I asked you to do is take 20% off the top. 10% to tithe to someone else, an organization, or charity and paying yourself 10% or more to build your vault or your gelt and watch as it starts to increase, there’s a feeling that comes into you. Imagine looking your account and it just continues to grow every month and pretty soon that becomes exponential and starts to compound and that The Richest Man in Babylon talks about feeding your children and then watching your children have children and grow and that’s what happens is you start to grow your vault and your gelt, those are your initial financial children and then they’re going to go out and grow interest and they start to have children and that’s how suddenly it starts become exponential overtime. So that’s the third one.
Number four is to invest in yourself. You know if you ever heard of famous Dave’s BBQ, I’ll never forget when I had the chance to talk with him he said, “You know my secret to success is?” His comment was that he had been investing in himself since he was 20 years old. That he considers himself and his brain, the most important asset that he has. That’s fascinating that he would say that. And since meeting him and hearing him say that, I’ve noticed that pattern over and over in some of the most successful people- is they invest in themselves. Look at Michael Jordan. He couldn’t have done what he did alone. He had an offense of coach, a dribbling coach, he invested in someone who could help him take the blinders off and see what he couldn’t see. And so think about this. This is a small ask of you. I would ask you to consider investing at least 3% of your income back into yourself. And that may not really give you more than just the amount that you need to buy some books or invest in some books. If you’re doing pretty well right now, then that gives you the ability to attend a conference or invest in a coach. So it really depends on where you’re at, but being disciplined about setting aside 3% of your income to invest back into yourself. Let me just give you an example of this probably 10 years ago while I was a fighter pilot in the airforce and we were doing okay, but we weren’t that far over the 70,000 mark. We were getting by but you could say we were pretty tight. I invested in a money management course from a friend named Gary. At that time in my life I didn’t have any idea what to do with money when it came in. If they came in and say, well I don’t know I guess I just put in the savings account. I didn’t know how to trade it, I didn’t know how to invest it in, I didn’t know anything about a vault. I just didn’t know how to take care of money. And you know I know there’s a lot of good financial managers out there but there’s also a lot of horror stories about investing with someone that has no idea how to handle money even though they’re a financial manager. And so I said, you know what, I don’t like this feeling I want to go out and take control of my money. Someone told me about this friend Gary and I said, “Sounds like a great course, I’ll try it!” I’d already started living this principle of investing in myself. This added up. Remember I didn’t have a lot of money to do this. It took some discipline, some savings and over the course of about a year and a half I invested seventeen thousand dollars and it was probably nearly equivalent to as much time as I put into my MBA at Colorado state over the course of a year and a half. There were a lot of hours and effort and now there is a total transformation. If I would have had the knowledge that I currently have when I was twenty years old, I can only imagine you know where we would be financially. That’s the point – is the earlier the you can start on this the better and I mean investing in yourself to get the right knowledge. When money comes in now no matter where it comes from, I have a very specific plan. There’s a vault side of it. There’s a less aggressive area where I handle my money and there’s a fairly aggressive investing and trading and some options and things like that. I have very specific rules, very specific plan and it has been amazing to see what’s happened to that growth over the course of just a few years. That’s small invest in myself and I see small because $17,000 at the time felt like a lot (and it is a lot), it has returned a huge amount compared to what was invested. So that begs the question, in my life what would have happened had I not invested myself in that conference and said there’s no way I can do that. Well I would be in the same situation I was in 10-12 years ago.
So, number 1, think about how you’re going to invest in yourself this year. How many conferences will you attend? There’s some that have a much lower price entry point than others. There should be at least one conference on your calendar, if not, here’s a bold statement – you’re selling yourself short. How are you going to develop your mind this year? You know if you have kids at home work something out with your husband or with your spouse, whoever staying with the children. Find a way to go together if you can. If not one person can stay the children – you can still find a way to do it if you have the desire and the discipline to do so. So the question is, what conferences will you attend this year? How are you going to invest that money? It only takes one idea to catapult you to be successful and where are you going to get that idea. So that’s the fourth one is to invest in yourself. You start investing in books, in courses, in conferences, in a coach; depending on where you’re at.
The fifth is the snowball your debt. This is one of the things that’s killing us in the United States and really throughout the world, but particularly in the United States and that is consumer debt. People are so strapped with credit card debt, their strapped with financial debt that came from college and there’s just so much debt and it’s weighing people down. It puts them in a position where it’s very difficult to swim out of even as a nation. I mean look at the debt that our nation is taken upon us right now and imagine if that was applied to an individual. Well how do you get out from underneath that pile because as soon as you can become debt free ,you go back and talk about your gelt in your vault, man now you can really start to accelerate the growth in your vault and building that gelt for your long term sustainability. So what’s a way to do this? Now they’re different thoughts on this. But I like this one that I’m going to share with you because it’s simple anyone can do this and that is if you have multiple credit cards, take the credit card that has the lowest amount that you’re owing on it. Meet the minimum payment on the other credit cards and focus all of your time and energy on that lowest total payment until it’s paid off. Once you pay out that credit card, cut it up. It’s gone from that point forward. And now take all the money that you were putting towards that credit card and put it towards the next lowest credit card. And repeat the process until you’re down to one credit card. Now some would say, “Cut up all your credit cards, don’t ever use them.” I would for my personal preference have one credit card. There are times where cash just simply doesn’t work in certain scenarios. Others will say cut up all your credit cards. So you can do what is best for you. If you don’t have the discipline to control spending with a credit card, then I would opt towards the side that says “Cut ‘em all up!” If you have the budget and the discipline with one credit card, and my feeling is it’s good to have one credit card for certain scenarios. That’s how you snowball your debt though. Visualise in your mind a snowball starting at the top of the mountain and rolling down the mountain. It gets bigger and bigger and bigger. And that’s exactly what happens. So, you start with that lowest amount on your credit card, then your next credit card, then your next credit card, you’re taking all that money then putting towards those credit cards and the snowball’s getting bigger and bigger; so you’re paying them off quicker and quicker. Now what happens once they’re paid off? You take that same amount you’ve been putting towards all the credit card payments, now you can put it towards your mortgage or if you have student debt, put it toward your student debt or your next lowest loan. Get that one paid off. And then you get to the point where your mortgage is paid off and everything that you’ve been using to pay off that debt now goes towards your vault. And imagine the snowball and the acceleration of your growth as you work towards achieving your financial dreams when you take that approach. Now that requires a level of discipline that a lot of people may not be willing to commit to. This is for those serious about success and if you’re listening to this podcast, I know you’re serious about your success. So you can do this! I have total confidence that you can do this and just imagine this: How would it feel to be totally debt free? To wake up in the morning and not owe a single penny to anyone! And not only that but to know that you have enough money in your account to cover you and your family if things got difficult and that you wouldn’t have to be subject anyone and no one to become coming to your door collecting a debt. It is possible and I know you can do it.
And the last one that I wanted to share with you on this podcast is: If you haven’t achieved your financial dreams already, make a budget until you get there. Yes – it’s a pain, it takes work; there’s no doubt about it! It’s what will allow you to get that 10% for tithing, to pay yourself 10% first, to invest 3% back into yourself. You do all that through a budget. And if you don’t your expenditures are automatically going to rise to meet your income -no matter what you make. It’s not going to change when you make a $1,000,000! Expenditures can easily rise to meet a $1,000,000 income, no problem. So right now in being disciplined about that – develop a budget. How are you going to donate 10%? How are you going to pay yourself 10%, at least? How are you going to begin to snowball your debt? Figure out the plan and then you’re planning to succeed.
So those are simple tips that anyone can do, if they have the desire and the discipline. The first one just to summarize:
- Read often; at least a book a month. Be disciplined about this and start with The Richest Man in Babylon if you haven’t read that. Great, great book on how to take care of your finances.
- Tithe 10% of your income. Find a way to give back towards a cause, a charity, a church and test this. See how it works for you.
- Pay yourself 10% or more. This becomes an absolute line in the sand, untouchable money that goes into building your vault and developing a gelt that will sustain you through anything that may come your way.
- Invest in yourself at a minimum 3% of your income. Start out with something small if you need to: books, courses that you can get online and start to expand as you’re able to. There should be at least one conference on your calendar for this year that will help you be better in some form or capacity. And then as it expands out that 3% becomes a bigger number – Invest in a coach, an executive coach, a personal coach- someone they can help keep you on track and accelerate that growth.
- Snowball your debt. Start with that lowest credit card and work your way up until all debt is paid off.
- Make a budget until you’re there.
So, I hope this is been helpful for you. You know this is borderline epidemic in our society. When 66% of millennials don’t have enough money in their savings account to cover just one month – this is a huge deal! And in the spirit of Becoming Your Best, it’s so much easier to have a great relationship with a spouse with your children when you’re not financially burdened down and always wondering how you’re going to make that next payment. And these are a few tips that I know can have an impact in your life in helping you get to the point where you’re achieving your financial dreams. Now, specifically, if you’re looking for a conference to attend you’ve heard us talk about the breakthrough leadership conference. There’s one in April, there’s one in October – if you want to put yourself on the fast track, this is not a pitch fest because this is not one of those conferences you tend and you feel like you’re getting all these programs tossed at you to invest in or to buy to opt into. This is two days of content focused on you, your team and your relationships; helping you truly become your best and the financial aspect is a very critical aspect to you becoming what you would consider successful in your life. So that you have the time and the freedom to do some of these other things that I’m sure that you want to do. So I hope this is been helpful to you. Wishing you a fabulous day, wherever you are in the world and always remember that one person can make a difference!