Grow Your Income
I'm going to start with the truth about money. This may be the most annoying slide I show you all day long because it's just so true. It's this. The bottom line. When it comes to money, you have to spend less than you make. You can cut your expenses. You can grow your income. The best approach is to do both. That's it, though, right? Like if you want a really dumb down personal finance, you have to spend less than you make. If you grow your income, it's easier. If you cut your expenses and you grow your income, you're unstoppable. So I want to talk about the concept of you, the money machine, financial planning, personal financial planning. He's actually personal. So when you think about that for a second, personal financial planning is personal. Whenever I see these things that air the financial service companies put out and they say things like $1,000,000 will be enough to retire, you're gonna need to 2.5 or three million. First of all, what that makes most people want to do is take ...
a gun and put it towards their head because I told you earlier that 47% of Americans had how much? $400. So you tell American that they need to have $3 million that is a pretty useless thing when the average American's got 400 bucks. So what I tell you is you have to drill down on the numbers and you have to personalize these numbers, so it's totally relative. It also depends on where you live. I've had people. I've seen people retire with $59 and go through all of it less in 10 years and have to go back to work. It's personal. It all depends on how you live. So, first of all, how do you make a personal you do this? I would start with what does it cost a month for you to live. If you stopped working tomorrow, how many months of expense did you have set aside? So if you spend $5000 a month and you have $50, then you've got 10 months of runway, right? Does this make sense? So a lot of it comes down to how many months of runway do you want? So how How much money do desire a month to be funny, actually secure. And what does this look like? Like I desire x years of income to feel financially free. So my experience again and I'm talking about No, I'm not talking about retirement. Sometimes talking about feeling free. My experience has been that when most people have two years of money set aside, they feel they feel free. And the reason is is that two years of runway allow you to quit a job you hate. Leave a relationship you don't want to be in start your life over fresh. Two years is a nice long runway. A year, quite frankly, is more than most people often get tohave. But I bring this up because I really think that when it comes to living rich, I talked about you go. You go out 30 years, but you zoom in on now and then I want you to take a look at how many years of income do you will take for you to feel really rich Now, the truth is, most Americans today actually don't desire to stop working. They just desire to reinvent and reengineer themselves, reinvent, reignite on something new, so to me what financial planning. These he's a change from. Is this whole concept of retirement to re engagement and rejuvenate and re invigorate our lives? Because the truth, the matter is it's almost doesnt make sense anymore to retire in your late fifties early sixties. If you're honestly gonna live to be 100 I want to show you how small amounts of money can change your entire life. So I want to use $500. I've been talking a lot about $ a day. $500 a month in extra income is a little over $ a day, right? So $5 a month incoming, 8%. We remember I showed you those funds and earlier lessons that, you know, I think you can earn eight or nine or 10% annually. Over time, I showed you how the stock market has averaged 10 11 12%. I showed you a boring, incredibly automated mutual fund from Vanguard that has averaged over 9% since it started in 1985. They're not guaranteed return, but I'm gonna use 8%. You make $5 at 8% and you don't need to use it and you put it in your step pirate. You're self employed retirement account where your solo for one K plan that I covered and you let that grow for 20 years. That's $296,000. So we talk about ketchup plans. $5 a month can help you catch up. That someone goes, Well, that's not a $1,000,000. Okay, I got it. 25 years, though it's almost 1/2 a 1,000,000. So my belief is, if you're sitting here in your fifties, 55 or 60 it's never too late. That's $500 extra a month. What if you had a way? 30 years, $750,000. So a lot of the economy and we live in today is what's called a entrepreneur economy, where we're all doing a side hustle. You know, the freelance world is we're moving to wear off. Eventually, most of us will be some form or another self employed and freelancing. A lot of these businesses can be started on the side. Small amounts of money make a big difference. I just want to go through $1000 quickly $1000 extra month in years. It's almost 600 grand at 8% in 25 years. It's $957,000 in 30 years. It's a 1,000,005. Oh, I want to go. Go big and get excited, right, cause some of you guys were just kicked butt entrepreneurs. So you at home, you're the kick butt entrepreneur or doing whatever it is you're doing $10,000 a month. 8% your in real estate. You can catch up all day long, and you have unlimited income. Right? So you're in commission urine commission business. Lots of realty agents. Follow me in 10 years. 20 years. Look at these numbers, by the way. You make an extra $10,000 a month and you save it. You literally could build in 20 years, a $6 million account. Now, you may not want to work 20 more years, so let's just cut this number in half. You could build three million, right? Could you have a 10 year plan and go? You know what? I'm gonna go crush it out there and I'm gonna fully fund one of these retirement accounts. I'm not gonna pay tax on this money and I'm a catch up. Yeah. Have you got clarity on this and purpose? Then you can get out of the It's too late for May. I'll never be able to do this thing a lot of times. That's what you need to see the tears forming in your eyes right now. At times, you need to just get like I could go do this. Um, there are 27 million small businesses in the U. S. They create 60 to 80% of all new jobs, many of you of your not self employed. You will be eventually. Small businesses represent small businesses, less than 100 employees representing 99% of all employers. 2/3 of American millionaires are self employed. Do you need to be self employed to be a millionaire? Know everything I've talked about today based on the automatic millionaire book. None of this was about having to be self employed. This was how do you build wealth on ordinary income with a job? If you're self employed and you make good money and you're smart with it, you can be rich faster. That's a simple fact. But anybody who tells you that's easy. Be self employed is lying to you because of your self employed on on skin entrepreneur. Here, I work a lot harder being entrepreneur than I ever could work being an employee. Let's start off with the dumb business. Poor business. I apologize. I'm not calling anybody here dumb. That does this. I'm just teaching you why. It looks tough. Okay, so this is what people do in the real world. The business makes money, and the beauty of being a business owner is your accountant says to you you can write off almost everything. So what you should do is we should You should spend the money. You take lots of tax deductions and I'm all for tax deductions. I am because I don't like to pay taxes. But if you do this really well, what will happen is that the end of the year your account will say, Well, I have great news for you. You owe no taxes because we ran all your expenses for the business legally and now you. So you made $300,000. Hey, we ran all the expenses for the business and you owe no taxes and you go man. That's great. Yeah, good job. What that means is you have no money at the end of the year. So what that really means is there's a technical term for this, and it's called Broke This system. Here's what is guaranteed. With this system, you will never have a retirement. You will have no assets when the economy turns down. You're really in trouble because you have no emergency cushion. Um, but the good news is you want to pay the tax. I am being a little facetious there, right? Because in the effort to not pay taxes, you can work 5 15 20 years and have absolutely nothing to show for it. Meanwhile, your friend you got a job in a company and you're like, Oh my God, he's got job friend you got Job has been using his 41 K plan, paid himself first for paid herself. First Max out his plan. She maxed out her plan. Now she's got 1/4 $1,000,000 or he's got 1/4 $1,000,000. They've had health care and they haven't had half the stress that you've had being self employed and they have real wealth, and you have. No, this system does not work. And I see entrepreneurs with a $1,000,000 in revenue and they have no money. So this is what smart business looks like. Business makes money. Owner pays themselves first. Let's hear that again, where they dio pays themselves first. Yeah, because if you're an owner, you still got to do that. So you use your retirement account, set fire a solo 41 K plan defined benefit plan. You go and get one of those set up, then you save some money and the owner buys real estate and the business rents the real estate back. And then, ideally, the business has a liquidity event or a sale, and you have wealth and financial security. So, in fact, I'm gonna skip right to this. Learn from my experience that said sure from day one. What did I tell my wife to do before she got literally She got a job of Corcoran? And what's the first thing I told her to? Dio, Honey, you need an LLC. What's now? I'll see Here, let me show you. So here's your business in a box, you need to have first full corporate structure. So I went online biz filing dot com Here's the name of your LLC now. She has a tax I D. Number. Now she has an LLC. Now, honey, you need to go down to the bank and hand you get yourself a bank account for your new company, and now you need a credit card for your new company. She's like, what? New company? I haven't started working yet. I'm like, this is how you start your business the correct way, By the way, you have to build it before it comes. And she's killing it now in real estate. So all this is set up. How am I gonna get a corporate credit card? I'm like you're gonna go online right now, and I trust me when you Google business credit cards and you put your information, you're gonna get a credit card. She's like how, like just do it. She does it. I can't believe they approved. Of course they did. They pulled your tax I d number, and they saw that you have credit like it's not that hard. Um, and I'm like, now when you like, and I said her life when you go out to with your clients. Make sure you use the business credit card. Um, so banking relationship call Go. Me with the bank. Have a business relationship. But, you know, this is I got business phone, website, email, etcetera. It takes very little to be in business today about people being business like you could be in business for nothing, right? Like I started my business with $500 on a kitchen table. I got to a $1,000,000 revenue with my business. I didn't even have business cards. It didn't happen overnight, but three years later, I had a $1,000,000 business and I didn't even have a business car. Had a website. Let's talk about the people that should be on your team. Corporate attorney. You know, in the old days, you need to corporate attorneys set up the also You really don't know you can do it online. But if you're gonna build a more established business, if it's a C Corp, you probably should hire an attorney escorts. Most people don't do s corpse. They're doing LLC's the account. It's really critical you need to count it and then immediately unlike Now you bookkeeper, the bookkeeper. I haven't even earned a commission yet. I haven't gone the office. We don't need a bookkeeper for I'm like, because in the next 30 days, you're going to start having expenses. And they admit when you make your first commissions, you're gonna need all of this tract bookkeepers or cheap today to, uh, you need often help because you can't do this yourself. You can run a business today with virtual assistants. Um, I have run a business many, many years with no staff staff, but virtual so these are two companies have used assist you dot com Get leverage dot com. Um, I use get leverage right now. These guys, when I have when I have overflow work, I sent it to get leverage. This is run by buddy of mine. Uh, sorry, Mizell. In fact, I think you might have taught a class here. He did, right. Let's doing. I pushed him to write that book and he we were talking. He's like I should talk to create a lot. They do a great job. So, um, again, you don't need to have a lot of money to be in business. You just need to have the desire to be in business. But you do need help. You can always do it yourself. Um, and that takes me to the fastest way to make more money in your business. There's usually three ways to make money in a business. Um one. Get more clients, get more customers to sell more. Sell more to those existing customers. Right? Three. Raise your prices. All three combined. It's like unstoppable. Those were the three. Find more clients, do more business with existing clients and raise your prices.