So hey, guys, listen, we're all trying to get more productive. And the question is, how do you find a way to get an edge? I'm a big believer that if you're getting mentoring or you're in an environment that causes growth, a growth-based environment, that you're much more likely to grow and you're going to grow faster. And that's why I love growth day.
Growth day is an app that my friend Brendan Burchard has created. Then I'm a big fan of write this down growthday.com forward slash ed. So if you want to be more productive, by the way, he's asking me, I post videos in there every single Monday to get your day off to the right start. He's got about $5,000 and $10,000 worth of courses that are in there that come with the app also.
Some of the top influencers in the world are all posting content on a regular basis, like having the Avengers of personal development and business in one app. And I'm honored that he asked me to be a part of it as well and contribute on a weekly basis. And I do. So go over there and get signed up.
You're going to get a free tuition free voucher or go to an event with Brendan and myself and a bunch of other influencers as well. So you get a free event out of it also. So go to growthday.com forward slash ed. That's growthday.com forward slash ed.
That's the end of my show. So first and foremost, S stands for savings. You've got to have that emergency fund. And I say that as someone who needed mine, I was 25 and I was making a sandwich, cutting a piece of baguette, the bread knife slipped, hit my finger and I saw a piece of my hand fall into the counter, had to go to the ER and the bill was $16,000.
And even after insurance, I had really good insurance, I still owed $1,300, which was a lot of money for a young person. And so I always say, make sure you have three to six months of living expenses set aside in a high-yield savings account, because that is going to let your emergency fund essentially roughly keep up with inflation so that it's not being eaten away at, but you have your little nest egg in case something happens. Then we move on to tea, which stands for total debt. I am an area, so I'm very, very impatient.
And I like to do things fast and I like to do things very efficiently. So when it comes to total debt, I rank all of my debt from highest to lowest interest rate. You make the minimum payment across everything, but then any additional money you have for debt pay down, you're going to put towards the debt with the highest interest rate and then you'll pay it down in that order. This is just to let's you pay the least amount of interest and get your debt slashed in the fastest time frame possible.
Next up, our retirement. I am a little bit further from retirement than I'm sure Ed might be, but listen, I think we should all be thinking about it because I want to one day be able to kick back my feet and just chill. And I think many of us want that. And some of the easiest things we can do to take advantage of tax benefits is to contribute to our employer sponsored retirement accounts as well as our individual retirement accounts.
So at work, that's going to be something like a 401k, a 403b, 457 TSP. It's typically got some weirdo name that doesn't make any sense, but leverage that oftentimes employers will match your contribution. So you do get some free money. And then with an IRA or Roth IRA, that is your individual retirement account, but contribute to both of these because it is going to give you tax benefits and help you save and invest for the future.
And we move into I investing. The mistake that a lot of people make at step R is that they open these accounts, they put cash in and they're like, all right, I'm set. I'm good. I'm invested.
No, you are not. When it comes to investing, I always compare it to the grocery store. Would you ever have $50 in your pocket, go to the grocery store, do a whole lap around and then leave and then go home and open the fridge and be like, why don't I have any food? It's like, well, you didn't, you didn't buy anything.
That is how investing is too. You can't just open the account. You can't just put the cash in. You have to buy stuff.
And when it comes to buying stuff, I recommend target date retirement funds, potentially if you're younger, just ETFs that track broader indices. And if you are getting a headache with me saying some of these words, just consider finding a robo advisor. You take a quick quiz about your money goals, what you have, what you earn, how old you are, what type of family environment you want to have, where you want to live, everything about your personality and your money habits. And then they'll spit out a diversified portfolio that you can use.
So it takes all the guesswork out of that investing. And then we move into P, which is plan because you do not get to have a happily ever after or right off into the sunset without having a plan and backing into how to get there. And what I encourage people to do is actually calculate their FU number. This is a plan where you envision your perfect year, where you live.
What does your family look like? Are you working? You know, what kind of clothes do you wear? How many times do you go on vacation?
Do you have pets? What have you? And then you think about what that would cost for one calendar year. And then you take that number and divide it by zero point zero four because that zero point zero four represents a very conservative four percent investment return.
So once you have this bigger number that you'll get after you do that calculation, invested, earning you four percent, you will be able to essentially throw off enough in gains that you can fund your entire lifestyle while you just chill. I love strip. By the way, everybody, we're going to dive into some of the things you just said there. I want to say to some of you, some of this stuff already is a little bit more technical than you're used to.
We were going to get above it about 30,000 feet in a minute as well. And some of you are very young listening to this. I just want you to know how cogent advice was. I started planning for retirement.
This is no joke when I was 21 years old. I started thinking about it. I built an emergency fund. First thing I did three or six months set aside, I started to educate myself about money, which we're going to talk about a little bit later, just knowing basic things.
So we'll get above this stuff here in a minute. But before we go, I want to, I want to challenge you on one of the things in strip. I just want to hear your response. I'm not going to tell you that I have an opinion one way or the other.
But the notion of retirement plans, 401k IRA, that's a very commonly recommended piece of advice, yet more and more, I know you know this, but more and more, there's a contrarian viewpoint about that, which says that you're deferring those taxes probably into a higher tax bracket, that the theory is that, you know, what you're doing by putting money and forget the matching piece for a second, but if there was no matching, but you know, I'm putting money into a 401k. I'm deferring the taxes now while I'm earning them because theoretically, when I retire, I'll be in a lower tax bracket. But the truth of the matter is a lot of people believe taxes are probably going up not down. So am I deferring some of that money to more taxes?
And then the idea that I'll need less money in retirement than I do when I'm employed for most people, that's probably not true. So just wondering that one piece of all of it, I'm not seeing you've been asked this on any shows and I wanted to ask you, do you debate that in your own mind as well about the deferral issue where you may be sticking those, those, uh, those eggs aside for a smaller harvest someday because taxes could be higher. Yeah, definitely. And I think that's why a lot of folks are now, and I say folks, a lot of corporations are also offering things like a Roth 401k and more and more employees are taking advantage because essentially, you know, Ed knows this, but I hope everybody listening can learn this, traditional investment accounts typically that are for retirement allow you to have a tax benefit today and you pay taxes in the future.
And to Ed's point, you know, taxes could potentially be much, much higher. And we don't know that. However, the Roth variety is you typically do not get a tax benefit today. You pay taxes.
You contribute post tax dollars today, but that money is free and clear yours in the future. Um, it is why I am such a huge fan of the backdoor Roth IRA for folks who earn more than the typical income limit for contributions. I think the Roth variety makes a lot of sense. If that is your viewpoint, ultimately for me, I am encouraging people to just get started.
I don't want them to debate traditional versus Roth. I don't want them to like belabor the decision. Just pick one at the end of the day. Sure.
Will one option certainly be better for you than the other? Yes. But not contributing at all or waiting too long is going to be way worse than picking the wrong variety. You're right.
And it's a big thing. Everybody that's listening to this, like, and even you really young people listening, you got to get started. And I mean, even if it's $20 a month, you're like, I'm not going to get Starbucks four days a week. I'm just going to start to have habits.
I'm a wealthy man because I started the habits young of what a wealthy person did. I mean, probably when I was 21 that year, I may have actually only saved like 200 bucks, but all my friends saved nothing. And all of a sudden, I had a little mutual fund, a little bit of money in it and I'd emergency funds set aside. And I kind of got addicted to paying myself first and buying things, doing press other people like never or last.
And so there's some real fundamental things here that you talk about and we'll get into the FU number in a minute too. I want to talk about that. It's cool. But before we do that, real rich people, you say they're really not interested in impressing you with their money.
And I want you to discuss that just the mindset of rich people as opposed to the mindset of middle class or someone who ends up staying poor. A lot of it is habits and mindset. Do you save money? Do you pay yourself first?
Do you at least read a little bit or follow an influencer like you that has the topic of money? So it's just in the front of your mind, right? But what about that notion of impressing people versus accumulation of assets? Yeah.
I mean, I can use myself as a perfect example. When I first moved to New York, I was in my early 20s, graduated college, and I had this fancy job on Wall Street. So in theory, some people thought I was a rich person. I was not.
I guarantee you I was not that New York City rent was very expensive. And I was certainly going out on weekends. I was getting drinks with friends. I was going to dinner and the amount of money I spent on designer goods as a 22 year old was unbelievable.
Like I look back and I like choke on the number. And I bought things like a little winter beanie, which I had a little logo on it or red bottom shoes that by the way are so painful. I've I've won them once. They hurt so bad.
And a big part of that was wanting to belong, wanting to look the part, wanting to look rich and feel rich and prove to my friends that I had made it. When in reality, that was actually putting in a worse financial position than how I'd just been to your point, setting that money aside, investing it, building up some of those rich habits. And now at 30, you know, I've made quite a lot more money. I have a business that I own.
I'm doing very, very well for myself. And it's so funny that now I find myself spending less and less annually as a full just, you know, a dollar figure than I did back in the day on designer goods. And in fact, not only do I not oftentimes buy designer, sometimes I'll just buy the doob off of Amazon. And I had a friend ask me, like, why did you do that?
And I said, well, you, you and everybody knows exactly how much money I made last year. Forbes reported it. You know, I can afford those. Why should I pay extra when these look exactly the same?
And you couldn't tell anyway. And you thought I had the real thing. It's so true. By the way, you're a thousand percent right.
The wealthier I got, the less inclined I was to spend money to impress people. And it's actually one of the ways I go wealthy. And I don't mean this critically, by the way, because this is not completely true and I'm about to say so I'm couching this under generally speaking what I'm about to say everybody and no criticism. I have owned Ferraris.
I have owned Lamborghinis. I've owned Rolls Royces. I've owned stuff. Okay.
By and large now, I just want you all to know this because I'm a rich person. By and large, when I see somebody driving a Lambo, do you know what I actually think? When I see them, they are not wealthy. Because if they were, they more than likely wouldn't be.
When I see someone with that beanie and I have two of them that has an LV on it. Cause I thought it looked really cool with my beanie. And I remember when I wore the one the first time in the winter, I was playing golf and I really rich dude, a friend of mine, like a really rich dude goes, will you take that crap off your head, please? It's ridiculous.
And so in general, when I see someone sort of decked out and stuff, I actually think they're probably broken debt. What I think is I bet they make a lot of money and keep none. That's what I think. That's a general statement.
It's not always true. But if you all want to know what a very wealthy person typically thinks like, now I have spent a lot of money on my homes because I live in them and I like to have a nice place. I like to feel comfortable and safe and secure and look at beautiful things. So if you consider a home material thing, I have certainly spent money on it.
But I actually believe a home unlike most influencers, I think a home can still also be an investment long and appreciating asset, especially depending on the neighborhood. And say that, go ahead. Yeah. Yeah.
Yeah. So I think like there are things that we see as flashy, but there are different levels to this. So when you think about big toys, cars, motorcycles, boats, those are all depreciating assets. A car and a motorcycle or whatever, it loses 10% of a new car's value.
As soon as you pull it off the lot, just throw it out the window. OK. Within five years, most of these have halved in value. And I'm not talking about the ultra luxury supercar.
There's only 10 made a year. Those are truly collectors items. I can see those potentially appreciating, but just like your standard run of the mill, Ferrari or your standard. I know that's like so crazy to say your standard run of the Mambo, but like the base model will depreciate it'll have in value.
Whereas typically with real estate investments, sure, some are a little bit flashy. Maybe you have an indoor Zen garden, you've got a pool, you've got the basketball court, whatever, but like oftentimes real estate continues to appreciate in value. And on top of that, you know, once you get to your phase of life, there are opportunities to make investments when it comes to real estate, whether that be commercial, whether that be residential, but real estate truly isn't as that oftentimes appreciates there are going to be better investments than others. But it's not the same as buying a luxury car.
And I will say back to your point about that, you know, Louis Vuitton hat, like I will, I also recommend us consider what we are specifically buying from those luxury brands. You'll notice that the very, very wealthy still do like designer goods, but you'll find them wearing the ready to wear that is not logo heavy, that is found in the very back of the store that you need to make an appointment to try on. Whereas the folks who want to show that they have money are buying the items at the front of the store, heavy monogram logos, heavy, heavy branding, you are basically a walking billboard. And especially now in our line of work, I think about it, I'm like, no free press.
I, I get paid to promote brands. Why would I wear something with a brand's name on it if they weren't paying me? And if I truly didn't like it. And so I think there's, there's levels to this thought process.
You're allowed to want nice things, but like there's different types of things people are buying. You're right. You can still like nice things. And I have very wealthy friends who have Lamborghinis, but I'm just telling you in general when I see that.
And at this stage of my life, it just gets when you get silly, wealthy, you almost want to conceal it to some extent. It's actually, I was younger. I wanted to sort of prove I was wealthy even when I wasn't. And this is like accumulated more stuff.
I didn't feel the need almost embarrassed to do it. So it's just a mindset thing. Everybody's not a judgment of anybody, one way or the other. Today, we're going to talk about money.
So many of them emailing and DMing the show saying, which you please Ed discuss budgeting and finances a little bit more saving retirement and debt. Very concerned about it's very much on my heart before I get into some of the things on my cover. Let me just say, I'm not coming to you on some soapbox, some guru or expert on a high horse, you know, thinking I have everything figured out or that I'm perfect. I'm actually today coming to you.
You're listening to somebody who understands. I've had cars repossessed, unfortunately. I know what it's like to be behind on your credit cards and have them taken from you. I know what it's like to have a house for closed on.
I know what it's like to really consider bankruptcy. I've had my power turned off. I've had my mobile phone turned off before. This is not stuff I'm proud of.
I've had the water turned off. Man, you don't want that to happen. And most of that stuff was self inflicted for mistakes that I made. I've had horrible advice on podcasts from these gurus, social media, the different examples that are held out there about what wealth looks like and what being rich looks like and what the right things are to do financially.
So we're going to talk about some of those mistakes I've made and that I see being made in the world today and it pains me. Let me give you some statistics first. If you make $80,000 a year, do you know about how much money you have to have saved in order to retire just at the same standard of living? And when I say same standard living, I'm not talking about now you're tired, you get to take extravagant vacations or anything like that.
I mean, just to live the same as you live right now with your job. If you make $80,000 a year, how much money do you have to have saved? Well, the data tells us you need about $2 million saved after taxes. So what that means is like, well, I got money in my 401k.
You do understand you haven't paid your taxes yet when that money comes out of that 401k or that IRA. So after taxes, you need about $2 million saved. If you make $80,000 a year to provide the same standard of living, how do we know that? Well, at a $2 million amount of money, 4% interest on that would spend up about $80,000 a year.
You could live it about the same standard of living that you currently live at now. Are you on pace to do that? Because let me tell you what the average American the median American has saved in the median, $5,000. $5,000 is the median.
There's a difference between the median and the average. The median is the person in the middle. The average is when you take all of the affluent people, wealthy people and all the people that have nothing. The average savings is about $100,000 currently.
The median is $5,000. That's a problem because when you look at debt, the average American has $114,000 of consumer debt, 114,000. That doesn't count their home loan. That's college loans, car loans, credit card debt.
Average person carries about $10,000 on a credit card average interest rate about 15%. Can you see there's a problem? We are in a consumer culture. We're in a culture that tells us to spend, spend, spend to keep up with people.
We've also got a lot of influencers out there telling you to get rid of all of your money that you should just every dollar you get, you should get rid of it, spend it somehow or invest it and stay broke so you stay hungry. Let me say something to you about that first of all. That's terrible advice. This idea that the only way you can stay driven and hungry is to remain broke or to get rid of all of your money is insane.
If your motivation level is so low that you need to deplete all of your cash in order to stay hungry and motivated, you don't need to check your bank account. You need to check your actual inspiration level. That's insane. And so the other thing that's in our culture, they don't need to be some of the keys is that we're trying to keep up with the Joneses.
We're trying to impress people by buying really expensive things. Let me say something to you. I've been very fortunate. I've had, you know, like I said, I've been, you listen to somebody who's had their car repossessed, home foreclosed on, power turned off, water turned off.
None of those are things that I'm very proud of. OK, but I've also been blessed to become very wealthy. I've been blessed to, you know, I've driven every car you could possibly ever have. I've owned them all basically most all of them.
I've had six different jets, including a global express that I bought from Oracle. I own my own island, right? I've owned multiple oceanfront homes. My studio right now is in one of them.
I've owned some of the homes in the nicest neighborhoods in the world. I've had, you know, all the material things you could possibly want. And let me tell you something. They're really nice to have, but you can't enjoy them if you're broke.
Living in a really nice house that you can't afford that you're sweating the payment on all the time is no way to live and trying to keep up with people to impress people who don't care by buying stuff you don't need is insane and I see it happening. And so striving to impress people with material things, let me just say this to you up front, doesn't work. It doesn't impress them. And for the few that it does impress, those are the wrong types of people.
You want people to be impressed with the content of your character, with the way you live your life, the way you treat your family and other people. And if to get them to be impressed by you, you need a particular purse or a particular jacket or pair of shoes, those are people who's approval. You don't want anyway. Yet we seek it, don't wait to keep up with people.
We're in a consumer culture, which is why consumer debt is so high relative to savings. And so by the way, if you're a young person, let's just go, I don't care about retirement. That's 30, 40 years away. First off, it's going to happen faster than you think.
Let me ask you this. Do you want to be in control of your life? Do you want to be able to call the shots and not have the world dictate shots to you? Do you want to be able to help your parents or your siblings or your friends at any time you want to?
Do you want to be able to take advantage of opportunities when they come along to be able to write a check at any time you want to buy something on discount that's an asset as opposed to a liability? So at any age, you should be saving money. I figured this out by the time I was about 23, I'd made some money. And like I said, I had a house foreclose, a car repode, and I started to change the way I viewed things.
I found out most of these people I was impressing with these cars that I had, they weren't around once I didn't have them. They weren't impressed with me. They weren't impressed with the car. And the other thing about nice stuff, it's out of style in like two or three years.
Anyway, right? Like the truth is, even a nice house you have stylistically in 10 or 12 years, it's dated. It just is what I started to get addicted to was watching my savings account grow, watching my investments grow, watching my assets grow. I got more fired up every month, saving money, stacking paper than I did with what I was mine doing press people.
And then I'm going to give you the keys in a minute. I'm 52 years old. I'm worth hundreds of millions of dollars. I've made hundreds of millions of dollars.
And I've only bought two new cars in my entire life because buying a new car is one of the dumbest things you could do. You should be either leasing your cars or buying them used. Let someone else pay all that depreciation. You let that thing drive off the car lot.
Let them drive it for a year or two and then you buy that thing on a discount. It's still going to drop after you buy it, but not at the same rate as the dumbing you buys the new car. So let's go through a few things here that can help you. Number one, by the way, that's that I gave you earlier.
If you make $80,000 a year, you need $2 million. That's if you're retiring today. If you make $80,000 a year and you're retiring 30 years from now, if you factor in inflation, you'll need $5 million. So you have to start to ask yourself, are you on pace?
Are you doing the things that would get you wealthy? That's where I want to begin. The first thing you have to do when it comes to money is get some goals and some outcomes. And this is for everybody who makes minimum wage all the way up to those of you that are making six or seven and even eight figures.
You need to have financial outcomes, a financial focus. If you don't invest or save money when you're making very little, you will not invest or save money when you're making a lot. That's one of the great fallacies and lies about money is people are like, well, I'm on this limited amount of income. So once I make more, I'll save more.
That's not what I see happen. I see someone making $40,000 a year, living paycheck to paycheck. And then when they're making $70,000 now, instead of driving a Honda, maybe they got a Lexus instead of having a so, so apartment, they got a nice apartment. And then when they go from $70,000 to $100,000, then they upgrade from the Lexus to the Mercedes and they buy a house and they deplete their savings buying a house.
And then when they go from a hundred, if they do to $150,000, they get rid of that house, they get a more expensive house and then they got a second car and a second house and they never get around to really accumulating any savings. In other words, they upgrade their lifestyle as they make more money. Smart people don't change their lifestyle for a long, long time when they begin to make more money and they begin to build the habits and disciplines of a wealthy person when they're a broke person. I was saving money.
So here's how old I am. I was making minimum wage, working McKinley home for boys, working at an orphanage that I worked at. And I was making minimum wage, which back then was $8 an hour. And I was still finding a way to say $50 a month in a savings and a four savings because I wasn't going to Starbucks.
I didn't have cable TV. I eliminated basic things because I wanted to build it and I started to get excited. Well, I got $300. I've got $1,500 safe.
I've got $6,000 safe. As my friends were buying expensive cars, in fact, there's a great story I tell often that even when I started to make money, I wanted to buy Mercedes. I bought a fake one. I bought a kit car.
I bought a Chrysler LeBaron with a Mercedes body on it because I wanted to look like I was driving Mercedes, but I want to spend the money. That's a true story. By the way, I had a kit car with a Mercedes body on it because I was so addicted to saving and accumulating money. So first things first, let me give you some keys.
Number one is you need to decide what your outcomes are, what your goals are financially. Do you want to have financial freedom and independence? Right. That's one level of wealth or do you want to be like stone ass wealthy?
Those are two totally different things. And for a lot of people, the answer is I just like some financial piece and independence. I don't have to have Lamborghinis and jets and islands and all these other things, but I sure would like to live financially peacefully. I'd like to someday not have to work.
I'd like to pay off my house. I'd like to have a bunch of money saved. Whatever that is for you. I want some element.
I don't want debt. The scriptures tell us, Oh, no man, nothing. I'd like some financial piece in my life. And the truth is I think most people see the wealthy thing on Instagram all the time and think that's what they want.
But maybe it's not what you want. Maybe the truth is you just like more time. If you could save enough money to pay all your bills and have your house taken care of and some basic stuff, maybe you'd like to take more time off. And if you want to say money's not that big of a deal to me, I get that.
And the truth of the matter is that's how I started out. It was not that big of a deal to me, but I knew the lack of money and I knew that was a real big deal. I don't want to be broke. I don't want to be stressed.
I did not want to be in a position where I couldn't help my family if I needed to. And so my first goals were not to be super wealthy. They were to get financially independent. And the first step in doing that is you need to know your financial independence number, your fin number, your fin numbers, the amount of money you need saved so that living off the interest on that money, you no longer need to work anymore.
The next thing is this, you got to stop going into debt. You got to stop spending money to impress people. You got to stop it. You got to stop buying meals on credit.
Stay out of malls, frankly. I've been to a mall maybe five times in 15 years. You know what? Monitor and really be smart about your Amazon account.
Don't have people shipping you stuff. You don't need to your house. Take a look at all your subscriptions. Do you need all of them?
Do you need every single one of those subscriptions or could you eliminate some of those things if you're on a budget and start to put that money into savings? The next thing is to understand the distinction between three separate things. You need an emergency fund set up. An emergency fund is three to six months of your current expenses, accessible at any given time.
You need that money set aside. That's the case of a job loss, car breaks down. Somebody needs some help. Emergency, quite frankly, life's just going to happen.
So the first thing's first is you need three to six months of money set aside and emergency fund. You should start to make that your goal and your ambition and start chipping away at doing that. If you're someone making a lot of money right now, carve that amount out and put it to the side. The second thing that you need to do is you need to have savings.
Savings is just money that you're accumulating. Then in case you needed, it's there for a rainy day. You should have some savings. Anybody who tells you shouldn't is wrong.
They should have some measure of savings. And then the third thing is investing. That's money you're going to take that has some risk to it that you're going to try to get rates of return on. I'm not going to tell you where to put that money today, but I can tell you that you need an emergency fund, savings and that investments.
The only advice I'll give you on saving money because I'm licensed, I'm not. I can't recommend particular investments. What I will say to you is this, if you can't explain it to me, you shouldn't be putting your money in it. If you can't understand it and explain it back to me, it's not the place for you to be putting your money in.
And if you don't have a financial professional in your life, you can explain things to you in a basic way so that you can understand them. You have to ask yourself why they're confusing you. You have to ask yourself that. Right.
Sometimes people like to make things seem very sophisticated and complex so that you think you need them and that maybe potentially you make a bad decision. You ought to be able to explain to me why your money's in there and how it works and what it's doing and anybody can do it. Even somebody who doesn't want to know a lot about financial education doesn't matter. You should be able to do that.
Okay. So that's number one. The next thing is as soon as you can afford it, make sure you have a competent tax person and CPA in your life. If you're someone making a lot of money, you really need a good tax person in your life, a professional competent tax or CPA and you probably ought to be working with somebody who can help you with your money as well.
Make sure you have a financial game plan and direct it and make sure you're running a budget. Now in my budget recommendations, here's what I'm going to ask you to do. I'm going to ask you to take the first 30% of your money. If you can afford it, 30% of your money and give it to your tithing and to pay yourself first.
If you can't do 30%, if it's down to even 10%, carve something out that you're going to give away and carve something out because of the law of reciprocity and carve something out that you pay yourself first every month. Take it off the top. Don't pay yourself last because you're never going to get paid. If you make $3,000 a month, take $50 and pay yourself first.
And now you make $2950 a month. You say, yeah, that sounds good. You're a rich guy. Listen, I spend every single dollar every month.
I understand it. I've lived on minimum wage. And I'm telling you that even when I live on minimum wage, I found a way to pay myself first. You need to get in control of your life.
And the way you get in control of your life is you first control your spending. You control your budgeting. You control your financial discipline. You begin to make this a massive priority in your life that you're going to become somebody who is financially in control.
Because if you start the habits of being financially in control, eventually, you will be in control and you will call the shots in your life. So please budget and begin to save your money and don't invest in something you can't get clear on what you want. And if you're younger, start saving money. Now you'll build the habits of, well, trust me, I'm 52 years old.
I started doing this in my early twenties and I really believe that's why I'm wealthy. You see on social media that won't be rich someday that look rich right now. I have more friends in my life. Listen to me, those of you that are making a little bit of money that used to be rich than that currently are.
I've watched them go seasons of five or eight or ten years where they were balling. They were making real money. They were driving the nice car, the nice vacation. They bought this or that and then bam, things changed.
They got caught with their pants down financially. They had no money saved, no cash debt up to their eyeballs. You're not. And so I have more friends that used to be rich than currently are because they weren't in control of themselves.
They didn't have delayed gratification. They had no financial discipline, no budget, no game plan, no goals, no outcome. But now when it comes to your investments, let me just say this to you. There's lots of places to save money.
I can't recommend it. I know the cool thing right now and I made a lot of money in real estate. That's a great place. You know, start flipping houses.
That's one of the real things. That's great. And you should maybe that is what you should be doing. But you're one bad flip away from being broke too, which is why you still need cash saved.
How about having a plan in your life where if it goes bad, you're still okay. And I'm not talking about, I know you maybe you'll say, yeah, that's just a luxury I don't have. Of course you do. You can save some money.
There are ways to do it. And if you're not making enough money, they need to get a second job. Work a second job. I've had multiple jobs at any given time.
Many times when I was an entrepreneur, many times I'd go back and get a night job to support my entrepreneurial hustle. But being an entrepreneur is not easy. Being an entrepreneur is difficult. You want to put orders listening to this.
Maybe you're going behind. Maybe you need to get a job two days a week or stock and shelves at night. I stock shelves at a grocery store for two years while I was building my business because my business wasn't keeping my family afloat and I still had to save money. So some of you that are entrepreneurs.
Maybe it's getting a second job. Some of you have a full time job. Maybe it's starting a second business. Maybe you need a second income stream.
The truth is that in this day and age, with how crazy things cost and how out of control taxes are, you may need secondary income. So if you have a job, maybe it's starting a side hustle on the side or a second job. If you're an entrepreneur, maybe it's having a second job on the side that's part time to support your business. It's okay to work a lot.
It's okay to have financial discipline. It's okay to go through a season of your life where you sacrifice lots of things, including time in order to get wealthy. But the hardest thing that I see, the most heartbreaking thing are those people doing the grind, making the sacrifice, doing all the things to make money. And then they have no game plan, no financial discipline.
They watch all these idiots on Instagram or social media. Go, man, I got to have the car. I got to have the house. I got to have the nightclub.
I got to have the steak. Man, sometimes even me, when I show the things I have, I've got, you know, I'm lucky now. I'm in this video. I got a stupid expensive watch on, right?
I didn't start buying expensive watches or cars until I could write checks for them and not just write checks for them, not sweat the check where it didn't make a dent in my savings. You imagine saving up $200,000 and dropping $130,000 on a stupid watch. Now you got 70 grand. I didn't start writing checks for watches like that tied millions of dollars saved.
And sometimes I think that's a bad example. Because the truth of the matter is this watch is great. And you know what? I barely ever look at it.
I got a couple other ones. They're stupid. I've got a lot of nice cars. And you know what?
The minute you drive by somebody, they're not impressed anymore. And if I am impressing them, it's probably the wrong person. That's not to say part of getting wealthy is to have nice stuff. I get that.
I like nice stuff. I become accustomed to it. But I didn't start partaking in it until I had earned it. And I earned it with the work I did and all of the savings and investing I'd done.
And then if it's 1% of my money, OK, who cares? That's play money. But if it's 20, 30, 40% of your cash and you're spending it on stupid stuff like cars and clothes and stakes and wine, that's dumb. Right?
And trust me, I've had every car you could possibly almost think of. Lambos, Ferraris, Mercedes, Rolls Roy, whatever. I've had six jets. Like I said, the last jet I bought from Oracle, a global express jet, I've had all those things.
They're amazing. They're not amazing if you have debt on them. They're not. They're not amazing if you have to worry about paying for them.
They're not amazing if they're a major chunk of your cash. They're not. Remember that the average American has $100,000 in consumer debt and $5,000 of savings. The average American needs $2 million to retire and they got five grand.
Is that sad or what? And so we need to budget. We need to save money. Why is saving money matter, Ed?
It gives you control. And whether we like it or not in this lifetime, we need to be able to protect our families and protect ourselves and make decisions as an entrepreneur. One of the reasons you need to have financial discipline is that lack of financial discipline will cause you to make bad decisions as a business person. You'll make decisions based on money or pressure because you haven't saved money.
As a friend, let me say this to you, you just remember this, your lack of financial discipline as an entrepreneur will eventually affect your business. It'll eventually affect your business. What's the number one mistake I see entrepreneurs do? They don't pay their taxes.
They get behind on taxes. They say, wow, I made $30,000 last month. No, you didn't. You made $30,000 if you're a 1099, you're self-employed, you're 1099, real estate agent, insurance agent, business owner.
You made $30,000 last month before taxes. You're probably made more like 18,000, but you're living like you made 30. Those of you that are employees that have a job, it's your lack of discipline, saving money. It's your lack of having a game plan.
It's running up debt that you don't need. And again, I'm not trying to be insensitive to anybody who doesn't have, you know, a lot of income coming in. I've lived that way. I lived in a single parent.
I lived in a family where my mother stayed home and raised our family, most important job on the planet. And we had one income, which was my dad's. And I know what that can look like. I know when my dad, everyone time my dad lost his job and how absolutely destroyed our family wasn't worried about what was going to come when my dad was unemployed for a while.
And thank God my dad had an emergency fund and we had money to live off for those months where he was finding work. And so this stuff matters. It has ramifications. Begin to educate yourself.
Evaluate what you drive. If you're on a budget, you need to drive that car or could you get something less expensive, reduce the payment or actually cash something out and do something with that savings. Evaluate what you subscribe to your subscriptions, get serious and get focused. And stop caring what people think about what your stuff is.
I promise you, nobody cares. That matters. Nobody does. And I want to say this to you about real estate.
A lot of you ask me about real estate. I think that's a great place. I do not believe it's the only place though. And so begin to educate yourself about the different places you could put money.
But the most important thing is to begin to build the habits so that you become the long term financially independent and maybe stone as wealthy. And for those of you that are making money, please don't be one of these people that was rich just for a little while or successful just for a little while. That you had this tremendous blessing of making some money, maybe more than you've ever made for a little window of time and you blew it on stuff and you didn't save and accumulate and invest. Don't go into debt that you don't need to.
Some debt is good debt. We all know this debt on liabilities is terrible debt on cars, debt on clothes, debt on food, debt on stuff you don't need. That's terrible debt on assets. Everyone says, well, that's great.
Well, maybe, I mean, sometimes it's great. You still got to buy the right property at the right price. It's going to be something you can afford and handle, right? Just because it's debt on an asset doesn't make it good debt.
It just means it's definitely not stupid, right? I've had so many friends that were doing pretty well for a while. And now they're not. And they're not because their lack of savings created pressure in the bad times.
And when the bad times came because they were under pressure unnecessarily, they should have had money saved and invested. But because they didn't, they made bad decisions under pressure. And ultimately, those decisions were made because of financial pressure and that financial pressure ruined their businesses. Had they just saved money in the good times, they could have wrote out the bad times.
And so it's the same with you have a business or a family. You've got a plan for winter. Listen to me, winter comes in everyone's life. There's four seasons for a reason.
There's summer, spring, winter and fall. And that metaphorically is true in our lives. You're going to have a spring in your life, probably at some point where you've got some financial opportunities. It's going to be sunny out in the summer.
And then there's going to be a time where you start to have anxiety and things begin to change, the leaves of your life begin to change and you can feel it maybe not the way you want it to, which is fall. And ultimately, there's going to be a winter and all of our lives, there's a financial winter, there's a winter where we lose our job or our car breaks down or there's a disaster or a family need or our income and our business drops or we just have massive expenses and a short window of time that we have to make. So that winter is going to come. Please prepare for winter, whether you don't make a lot of money or you do make a lot of money.
I can tell you this, if you begin to develop the habits of budgeting and have an emergency fund and saving money and staying out of stupid debt, right, and investing after your savings, wherever you believe that that's appropriate. When you have those habits and you make good choices and you begin to live in some financial harmony and peace consistent with your values, that when winter comes, you can write it out. I've had probably four or five winters since my mid 20s and I've been able to ride them out and if I can be really candid with you, because I had saved a lot of cash, I was able to make a lot of money during other people's winters when they had to sell their house or their business or their asset. I could buy them at a discount because I had cash or I had investments.
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That's bull and branch B-O-L-L-A-N-D branch.com slash my let code my let to unlock 15% off exclusions apply. Very short intermission here, folks. I'm glad you're enjoying the show so far. Be sure to follow the Ed My Let show on Apple and Spotify links are in the show notes.
You'll never miss an episode that way. This week, we're going to talk a little bit about money and financial peace. Now I'm licensed, so I can't give you any real specific investment advice or anything like that, but I can talk to you a little bit today about just some basic principles that will give you more financial peace in your life and some insights into some of the things I see that are very commonly spread on social media by many influencers that I just don't necessarily agree with. And so one of the things that I've been very fortunate to do is to build a pretty significant net worth.
And I believe part of that net worth was built because of some basic principles that I've adhered to that I want to share with you. And so let's start from the very beginning. Number one, you have to decide that you want to save and accumulate money. And that's become a priority for you.
And I'm going to say some things that sound a little bit contrary to what you hear on social media all the time about. I hear people say, you should get rid of all your money, right? You should use that like crazy. You know, debt on appreciating assets you should always use.
And there's no reason to save cash. You should be investing all your money. That's just insane. Like some of that's true.
But this notion that I keep hearing on social media for people, it's like get rid of all your money and so that you stay hungry. Yeah, you might not be in starving if you do that. And so let's go all the way back for a few minutes about some basic things that I believe about financial security. I think this is something by the way you could share with your children all the way up to somebody who's, you know, 80, 90 years old listening today.
There's a few things. There's two types of people in life. There are savers and spenders. They're just are and you need to know right now which one are you and how do you know that?
You know that based on the amount of percentage of the money you make that you save. And I want to say something to you. If you can't save money when you're broke, when you're making very little, you will not save money when you're making more. That's a fallacy.
People say, well, once I make more money, then I'll save. If you can find a way to save any amount of money right now, build the habit, the pattern of being a saver. And I'm talking about when I was making minimum wage as a busboy at the whole enchilada restaurant. Yep.
That was my job. I was a busboy at the whole enchilada. The very next job I had basically after that, I worked in an orphanage for $5.60 an hour. That gives you an idea of how old I am because that was minimum wage then.
And in both of those careers, as a young person, at 17 and 18 years old, and then I got the job at the orphanage when I was 21 years old after college, I saved money. Now I saved $18 a month into a forced savings program when I worked at the whole enchilada. And I saved $20 a month when I was working at McKinley Home for Boys. But what happened was that was money that I never missed.
And it was forced savings and it created a behavioral pattern in me when I was poor and broke that I'm a saver. And so when I went without, I went without the starbucks of the world. I made my own coffee. I brought my own lunch to work.
These things like very insignificant things. But what I was doing was engraining in myself the ability and pattern of saving. So which are you right now? Are you a saver or are you a spender?
Because you're one or the other. I've never been addicted to what kind of shoes I had, what kind of jeans I was wearing, the shirt I had. I was much more addicted to accumulating wealth. I got off, if you will, on showing somebody my mutual fund or my bank account statement much more than I did on what kind of car I drove.
And I've always been that way. And I wasn't that way naturally. And I knew early on I learned that I needed to establish this pattern of which one was I. And so ask yourself this.
And by the way, you could making a lot of money right now when you're not saving or you could be making very little. It's an idea that you just begin this pattern of some sort of four savings. Have it taken right out of your account, have a draft out of your account. I don't care if it goes into a, I'm not going to tell you where it can go because I'm licensed or where it should go.
And for the purposes of today's message, there are qualified people you can see in your life that can tell you what to do with that money. But are you a saver or a spender? A really scary thing is when two spenders are married to one another. I hope in your, if you're married that one of you at least is a saver and that if one of you is a spender, the saver has influence.
But when two spenders are married, that is a formula for a lot of toxicity and a lot of stress. This idea that I keep hearing from so many people have get rid of all your cash, all your cash is insane. Right. Oh, keep you hungry.
You don't put pressure on you. Really? No, what to do is put stress on you. If you can't be hungry when you're saving cash, at what point does that end or to all your life?
Do you just keep spent? Think logically about that. So you're supposed to get rid of all your money to say hungry. Are you that unmotivated, that uninspired that you have to have no money or very little money to be hungry?
There's not other higher purposes and callings that can keep you hungry in your business life. It's so stupid, but I keep hearing it. So stop that nonsense. Of course, you should save money.
Now there's a difference between saving and investing. There's a percentage of now, once you start to make money, you should have savings, which is just cash. And then you should have investments and I'm not going to tell you where to invest your money. You'll make those decisions.
Those are two totally different things. But I can tell you right now, like to this day, and I'm not exaggerating this, I add up, like, what am I spending on my streaming services? What am I spending on Starbucks? What am I spending on DoorDash?
What am I spending on Amazon? You should audit all of these things. Like, do you read and by the way, if you're an addicted spender, shut out your Amazon account. Just shut it down.
But the amount of money people spend on frivolous things, silly things, like, like their door dashes or their Uber deliveries or these things that you could just go to the grocery store and save money or all your streaming services, plus you still have direct TV, plus you got cable service. These are, this may not seem like $8, $12, $20. This adds up to places you could save money. And again, it's that habit.
It's that feeling that I love saving as opposed to I love spending. This is so counterculture, what I'm saying right now, it's crazy to me that it is counterculture. But I've always felt like I have this huge advantage financially in my life, because like I'm into that, not the other stuff. And then once I had enough cash, then I became an investor and you can decide where you put that money for you.
It could be real estate. It could be the market. It could be CDs. It could be treasuries.
I have no idea. I'm not suggesting any of those things. It would be very clear. What I'm saying is that you should have savings and then investments in their two different things.
But I cannot begin to tell you how many times in my life that because I had some cash saved, I took advantage of different situations. But if you don't have cash, you can't or you don't have investments, you can't. Now, secondly, audit where you spend your money. Do you have a budget every single month?
You should have a budget. And the first thing in that budget, for me, is my tithing. If you're a person of faith, it's what you give to God's kingdom. It's the seed you plant.
And again, if you're broke, that may be $5 in the hat at church when it's passed. I don't know, but it's some seed you're planting. If you have a hundred pennies in a dollar, the first pennies go there, the second pennies, even if it's a small amount, go to savings. You pay yourself first.
We say it again. You pay yourself first. That's after you pay God if you believe in that. Okay.