Living a Rich Life
So we're going to talk now about living a rich life and so this is a lot of stuff that they're kind of like the grab bag things we want to talk about but we don't know how to structure the question like hey, my husband is a big overspend er so what should I do or what would I want to do with my money etcetera? Should I buy a house etcetera? But first there's something I know like so many people have been wanting to talk about, which is hey, this automation system sounds great but I earned an irregular income I'm in sales or I am a freelancer who gets paid I have four clients one month and then no clients for the next three months so how do I use this thing? Is this actually work so it can be very frustrating too t to see this system like this and say, well, this doesn't work because my money doesn't work like that it doesn't flow every month but actually you can do something similar this is how you do it imagine that you want to give you let's say you want to feed a plant right? And a ...
normal like water in this case is money so in this normal situation the water would be flowing regularly every day or every month it would give you a certain amount well, if you're a freelancer, you have it's huge amounts of water coming in one day and then no amount of water coming in forties what do you do one thing you could do is actually just create a little bucket and the water comes in up here and it's steadily streams it out to the plant sometimes the water goes up sometimes the water goes down but it's always going out steadily to the plant does that make sense okay so how do we do that with our money what we want to do is have this be the money that's paying us right so it's going to be steady and in the rest of our system can work the same way so all we have to do is focus on this part up here this is where your client pays you a lot one month and they don't pay you for four months etcetera so what we do what we do and it takes about six months to perfect this but it's not hard you figure out what the minimum you need to live on it's the minimum right the bare bones and uh and that can be no just basically cutting out a lot of discretionary expenses basically if you got laid off er you have no clients what would you do that's what you want to figure out so I'm going to make the math really easy here let's say that you need to live on a thousand dollars a month if that's the case next time you get paid, I want you to be able to work towards building up six months of emergency funds. Okay, so next time you get a four thousand dollar check, what do you do? You're going to take three thousand of those dollars and put it into an emergency savings account. Now, let's, say the month after that, you get paid nothing. You're going to take a thousand dollars out of that emergency account and then the next time you get paid, you gonna replenish it? You see what we're doing here is we're creating a little bucket up here. We're filling it up as much as possible before we start trickling it out to the rest of our system. Okay, so I like six months because, you know, at six months like, you might not get paid for two or three months, but six months, you should probably will be able to find some clients, right? So if I need a thousand dollars a month going to do whatever it takes to philip, six months worth of emergency water or emergency expenses, then after I have that six months filled up in the bucket, if I get let's, say, I have six thousand dollars in there and I get a five thousand dollar check. Who knows what to do with that money is going to flow it's just gonna flow right to the system five percent here five percent their guilt free spending maybe put an extra bit into my investment counter savings all that stuff that I describe in detail in the book that's how you can take an irregular income and almost regularizing is that is that a word? But we just well we just did it we just created a word we're going to regularize our income and normalize it bye bye actually creating this little bucket system that's goingto pause things for us for a while if things get tough and when we have extra money we just put it right in that bucket okay let's pause here because that's a lot to take in and that's applicable to thousands of people watching this if you are a creative entrepreneur I know you've struggled with money because it's like it can seem daunting where like I I just didn't get paid for the last four months I have huge cash flow problems. This system I just mentioned changes the cash flow equation for you because you spend a couple of months two, three, four, five months building up that emergency fund and then you just trickle it out like you're watering a plant slowly and steadily so I want to take time for questions before we go into the living a rich life part and I'll tackle those if you know whether you're a writer photographer, you might be just doing it on the side let's hear what those questions and barriers are? Yeah, that sort of trickle funds separate from your checking account. Where you going to be pulling things? Because before I was at my current position, I had an irregular income and I found that I would like want to have this fun and I would just always pull from it in the same way that you would pull from your savings if your savings in it like here in the same place. Yeah. That's a great question. I would keep it separate because I want to be paying myself regularly so I would have another kid could be a savings account here or it could be a variety of different accounts which I believe I describe, but I want to basically be paying myself a regular amount per month. That way everything can be stabilized. Okay, my goal is to essentially replicate a normal nine to five income as much as possible, but you still get the best part of working on your own, which is I get to have a flexible schedule. If I work harder and I served my clients better, I can actually make a dramatic amount. Mohr you get all the benefits and you also get the benefits of stability of your system okay, other questions in house then we'll go to the web and other questions any other hesitations because now if you're earning an irregular amount of money you now know how to be able to take this and turn it into a automated system let's hear from the web all right, so first of all I want to say from heather hummel thank you for addressing the unpredictable income earners among us I think a large portion of our audience so a question from hitch says hitch hitch oh man hit little pickup going on in here, okay? Hitch says, isn't that the same thing as savings? So what is the difference? And similarly, irena says emergency fund what is that savings account in a bank? So how do you distinguish that? Yeah, I mean, you could think of it like that and that's fine, the difference is you're also going to have another emergency fund account later that's going to be over here you're gonna have your sub savings account etcetera and I describe the difference in detail I'm trying teo keep the level of detail, we go into the correct level cause otherwise you get really gets overwhelming, but what is the difference? The difference is most people they think of their savings, they don't think of their savings account in the right way at all a savings account is money you need over the next roughly you don't need it tomorrow you need over the next five years roughly. All right, so if you're gonna put a down payment on a house or you're gonna go on vacation you don't want to subject that money to the sort of changes in the stock market. You just want to know that it's going to be there you don't use a savings account in general to pull money in pull money in out in, out in that's not the way you think about it, but because you have an irregular income, you have to make a slight modification so you could think of it it's a savings account, but the point is to enable the rest of this system a savings account is really for short term goals, ok and short in mid term goals. But if you are a freelancer or creative entrepreneur earning irregular income, you have to make a slight modification to your system so semantically you could think of it as a savings account or not, that doesn't really matter to me. The point is, why are we doing this and it's so that we can stabilize and normalize our income? Okay, what else? Canadian creative is wondering what about irregular income with debt we path debt first or do we build up that savings first go back to the ladder of investing I talk about that there's there's an additional wrinkle I didn't present here, but I like to create a savings account savings while I'm paying off debt if possible so you know you could take a fifty fifty approach, etcetera. Again, I cover that in chapter one of my book and you can even find chapter one for free on my site at I will teach you to be rich dot com slash book, so just go grab the pdf for free and also remember you can get a bunch of other bonuses that I will teach you to be rich dot com slash creative live, but you'll find out how do I think about paying off student loan debt, credit card debt while also building up savings and there's some very specific ways to think about that. Anything else? Yeah, this is a great question from brenda do you recommend a separate business and personal accounts? And to keep this six month emergency fund amount in your business account? Yeah, that's a great question, you know it's easy for me to say, yeah, but when we're all starting out, we don't do that wait, we all just open up the same account and figure it out later, I'll let some random account that I don't have yet figure this out later. Over time, you definitely want to open up two separate accounts. I wish I could recommend a good business count, but unfortunately all suck. I get this literally I get this question twenty times a week and people want to know and I won't even recommend the account I use because I don't even feel that it's that great. So I'm not even going to subject you guys to it it's not good, they don't even treat me right so I'm still looking for a great business account I'm like, listen, I want to be your customer for twenty years I'm going to run a lot of transactions through you what do you got from nobody's? Got anything good? So best I can say is look around I wish I could help you more with that personal accounts those were the best ones but you should have separate business and personal and the day I find the right business account is the day I will tell everybody on my site and my newsletter what it is. Okay, great. Um last question let's. Go ahead and take this from clare of ray, who was wondering if you pay taxes on your income quarterly? Does that effect when you can invest it in a roth ira uh that's a good question? No, it doesn't and you can know you can invest in any time in that year on you, khun contribute to depending on the time you invest this year for the past year. So that should not have anything to do with it. All right, all right. Move on, let's. Move on. Okay. So session for living a rich life. Now what have we gone over today? We've talked about the importance of psychology. We talked about savings in a totally different way of thinking about saving instead of cutting back on everything we built on what we learned in psychology to talk about cutting back on just two things. That's it and not worrying about all the other things. Then we talked about automation. We went into that an exhaustive detail. If you want mohr off course by this course to re watch it, you can check out the book as well. But now we want to talk about something broader, right? Living a rich life. What does that mean? And I think, uh, james, really the gentleman who came on via skype sort of help hammer that home, right? Living a rich life confident, moving upwards, knowing that I have options spending extravagantly on stuff I love and best of all, not worried. Knowing that he was in control, I believe we had a question from someone who said, you know, how did you get yourself through those dark times when you didn't even know that you could? You would be able to pay off debt? Um, and and one thing that we find is that light at the end of the tunnel is incredibly powerful, right? So it's, so interesting the way everything fits together. I said earlier that a lot of people who are in debt don't even know how much debt therein. So if you don't even know how much debt you're in, how can you find that light at the end of the tunnel? Where is what if you say like, oh my god, maybe I'm in five thousand dollars a day, maybe it's twenty I have no idea, but wouldn't it be better to say? Okay, I figured out how much debt I'm in I got I went online to an online calculator, I plugged in all the numbers, it told me exactly what to pay off when and now I know that in two thousand sixteen in january of two thousand sixteen, I'm gonna be debt free, yeah, that's kind of a long time to be in debt, ok, but at least I know. Okay, so by the way I'm gonna give you a recommendation for a calculator I really like on then we're gonna get onto the rich life stuff what's the cost dot com and look for the snowball calculator there I really like that I'm not associated with these guys but I sent him a lot of traffic and I would love to strike a deal with them one day they're great or calculators really simple you plug in all your debt and it'll tell you exactly what to pay off very simple you will know exactly what month and what year your debt will be paid off that's incredibly psychologically powerful so we have re capt we already talked about what we've done today let's kind of keep moving on for me you know, for a lot of people revere living a rich life can be this it could be traveling going where you want and when you go there doing the things you want um it can be this it could be you know, living this rich life what else defines living a rich life to us let's talk about it talk to it we'll talk to the web but let's talk in studio everyone I want one answer from everyone let's just start right here um stress alleviation okay, good no more stress okay, good done freedom, freedom what does that mean um freedom to be with my kids are with my husband or where I want to be that makes me feel good as opposed being stuck stuck very good stagnant is a word that I hear a lot I feel stagnant stuck okay good sarah yeah really mobile I think is a good one knowing that you can continue to sort of build on the things that you're doing already nice good just spending as much time with my family and doing uh just whatever I want with my kids and not having to uh check the balance of my account before I do it interesting I like that so being able to do what you want but not having to worry about can I afford to do this? Okay very good alright um spontaneity okay also being able to be generous with people and not feel guilty about it like can I afford this? Give me an example if you were if you had all the money in the world and you were to be spontaneous tomorrow what would you do good in new zealand? Awesome. Okay, I like that. I like that you just have that and then I would buy a cabana and invite my parents and beautiful, you know, have a vacation let's just let's go around. Wait well, I'm just we have to hold off on the way you specifically yeah, you uh living a rich life for me means um being able to spend time with family here um and being able to travel but really with that it's the experiences of meeting people and also enabling change in the world for other people very good bus um this is a hard is strangely a hard question like it's you would think would be easy but it is kind of hard I think along lines of what's been said already of not having to worry you know, not having to check your balance before you buy it you know a book in the bookstore and being able to just try something new like you know I want to try sailing I'd love to go sailing at some point greater now want to do that do that cathy I would say leading a successful like by my standards not necessarily making more money than everybody else not necessarily having you know, grand things and nicer cars but being able to say that I love what I do and enjoy the time I was spending doing it good I like that a lot um living a rich life for me is creating um without abandoned and without having to worry about what the end goal was just creating for the sake of creating um and also freedom of time and spending that time with people I love it's really important to me like that before we go to the web all share what? I thought I think living a rich life is to me I always wanted to be able to help my parents with their finances because like I said, you know, we grew up pretty middle class one income bringing in for the family and it was a pretty large family um I wanted to be able to travel wherever I wanted to go now like I said, you know, recently I decided on thursday I wanted to visit an old college buddy chicago friday I was on the plane, I stayed with him all week it was great it was like I don't have to think about that I just knew it could happen I didn't even worry about the money that was great couple more things for me flexibility so like one of my greatest joys is like hanging out my brother in the middle of the day like they want to see a movie it's one thirty p m on a wednesday let's do it we can do that and finally because I am a cognitive miser and I just don't want to have all these things in my head thinking about it um like can I afford a taxi? Can I afford a large size? Whatever yes I'll have to think about those little things anymore frees me up to think about the big things in life you know, how can I teach this class to change people's lives how can I help show you students of mine like james like the folks we're going to see in the next couple days and you know if people take this material and they actually apply it they negotiate they earn more they get in their client's heads they automate their money that's a game changer like we saw with james let's see what the people in the web have to say there's an amazing response on it is a challenging question uh sally mcbride says orale mcbride says to work out of interest and desire and not necessity fate says a rich life is the ability to support those close to you and help others grow I like that mato says time and place freedom travel eat be do what I want when I want do what I want when I want it's a huge day okay great couple more uh affects three living up to their names as pets and horses that's not a good that's not a good example I accept that but what else we have silent d who says a rich life is when people around you cherish your presence wherever you go nice night laurel enjoy not having to work every day of the week beautiful so what commonalities among these things a lot of discussion about freedom, a lot of discussion about control like doing the things I want to do not being judged by others demands right, but doing what I want to do creating meaning in the world um the reason I started off talking about money today there's a very specific reason honestly people are going to love tomorrow even more than today because we're going to get really in depth on how to grow your business how do you know? Just knock your client's socks off had to step away from being a commodity photographer or writer or whatever to actually being the world's best perhaps charging three four five x what your competition charges but actually your clients will love to pay you for right in my case uh some of my courses are a hundred times what my competition charges and do you know what my students love to pay it? Because they know that they're getting the world's best material that's been tested. So how do you do that? We're gonna cover all that but I started with money specifically today because there's so much emotional baggage around it and uh there's so many invisible scripts that we don't want to tackle. I mean, look how difficult it was for us to even talk about what a rich life is. We have these weird, vague things in our head butt if I asked you specifically it's tough and if I say what are you doing today so that one year from now you could do that I find it really tough I'm gonna give you one example about my own life and then we're going to go into some discussion here for me, one of the things about living a rich life was to take an international vacation be pretty much off the grid I want to do three weeks um last year I couldn't do it my business was not set up to support me leaving so if I left my things wouldn't go well with my business my staffing it wasn't all right so I said all right, well this is a rich life part for me and I want to spend you know, the next few months building systems so that I can leave and be off the grid and things will still work and so earlier this year actually did I went to vietnam, thailand and cambodia and I told my friends I said guys, I have a new phrase this year I said when I make it I'm bringing everybody with me and my phrase this year is my villa is your villa so I felt like just come join me in whatever city you want have a room enjoy and we'll just hang out and people did they flew in we like went around it was awesome, I was not on the grid, I checked my email pretty much like once a week and I told my team that and when I came back it was great so my business had grown it had grown more than enough to pay for all my travel, etcetera I was not doing anything and everyone knew what needed to be done now for many people it's the holy grail, right passive income, etcetera, etcetera we'll talk about that tomorrow, but uh all of this stuff the point of that is we may not be able to live a rich life today like a truly rich life maybe that means that maybe that means going on vacation like that for one month a year or two months here, but one year from now, what systems are you goingto have in place so that you could do either that or part of that that's why we're talking about this today so let's keep going on and actually dig into some of these things um we've talked about spending consciously we've talked about saving for the things that matter investing yourself and money and relationships so we're going to kind of broadly go on this and then we're gonna tap into what what people on the web are saying in here and we're gonna dig into that um I want to talk about conscious spending right now very quickly sort of lightning round I'm gonna ask a couple questions and we'll just go back in what is one thing that after today you want to spend consciously on and in the next one month you're going to find a way to do exactly that what's one thing travel give me a ballpark number whatever um wow does it have to be realistic yeah yeah it does because you're not gonna spend a billion dollars a month um I would say probably starting now one hundred dollars a month hundreds a month on travel yeah wonderful all right what else that could be a twelve hundred dollar vacation once a year right one hundred bucks great. I love that wardrobe yeah, not a ton but I think I buy a new clothes like once or twice a year so maybe like fifty bucks fifty bucks a month great. Who else who's got something bigger than five hundred because I honestly think that if you do this stuff what look we talked about negotiating cable that's eighty four hundred bucks a year so I want you to think bigger than that fifty bucks a month is great and I know you could do that easily but I want to talk about something bigger five hundred one thousand five thousand is that okay? Ebert says I'm buying a home exercise program and I don't know if he means like big jim stuff yeah good I love that okay give me more give me bigger taffy um I'll take the challenge of five hundred dollars a month support I love eating out really fabulous restaurants. I really appreciate well made food with friends, so yeah, I love that. Okay, great. What else? Five involved, but I'd like to invest in logo design, web design, hiring somebody to do that for me. Very good creating creating online presence. Excellent. Excellent. Terrific. So we'll keep hearing these as we go through, but the point here is that guilt free spending it is possible we talked about how to cut some stuff of stuff we don't really care about, right? We talked and we become more conscious. We did that exercise with the pdf which is also in this course if you missed it way talked about being conscious and being comfortable, guilt free spending on the things we love fact spending extravagantly. All right, notice that it's very interesting that no one can immediately come up with something they would spend five hundred bucks for a thousand dollars a month. I find that very fascinating. Do you? I think it's interesting on dh. They're starting to come in now. There's always that yeah, there's a lag, but I find it interesting that we tend to think so small and tomorrow we'll cover how to easily make three four, five thousand dollars easy and for most of the creative entrepreneurs watching, they could do far more it's hard it's not gonna be easy but it's doable I know this because I have thousands of people who graduated from I earn one course earning far more than one k so, uh I find it interesting that people haven't thought that big because we're still stuck in the rut of thinking down here well, I don't know I'm spending forty five dollars a month on this hair care product I don't know get your systems right? And if you still value that that's going to be trivial, you'll be able to save or burned more etcetera. So as we capstone today as we wrap it up, I realized that the automation and stuff and all that so that's great, but we're also challenging ourselves to think differently and to behave differently. All right? We're gonna think bigger than forty five dollars a month, okay, uh, let's we talked about, um, saving for the things that matter. Um we all know that we're going to have certain things happen to us five years from now, ten years from now twenty one we got the diaper example, which is thank you for saying that it's a true example and, you know, I learned that I don't have kids, but I learned that from talking to people who do, they're like, oh my god, these diapers are so ridiculous we all know they're going to be certain things happening in our lives. We can create sub savings accounts, I'll show you again how to do that don't believe you'll be the exception to the rule you're probably going to buy house you're probably gonna buy a car you're probably gonna have kids, etcetera. So how do we do this? We know we can use a systematic approach sub savings you could do this with my system using the account that I recommended or you could do it with your own stuff. You could even keep it in xl. I really don't care but it's psychologically very different to have specific savings accounts to say I'm saving for a down payment I'm saving for a vacation I'm saving for whatever I'm saving to get married even though I'm not engaged. Yeah weird maybe I think it's weird that people overspend on their wedding without it planning for it when they know they're going to get married so you could do all of these things and the beautiful part remember, at the beginning of today I said random people have no idea how to plan for their vacation or anything, but I will teach you the rich readers know exactly how to redirect money from one place to another cia we've kind of gotten there now the tactics of you setting up your account and all that it's not hard if you need a little bit more guidance you can check it on the book but now you know hey I'm gonna put away one percent two percent whatever and and I value it it's guilt free and I love spending money on a vacation or on travel or whatever it may be that's why we do the savings accounts okay investing in yourself I actually don't have to talk much about it to the people watching here but I want to spend a second honest because we tend to underinvesting ourselves I know that as someone who creates material for people I also know that it's someone I spent over fifty thousand dollars this year and last year each each year investing in myself so courses I food l a once a month for fifteen months from new york to attend a class because this guy who I attended was incredible I read his book changed my life applied to his course had to get my references checked and I was like this is amazing also joined all kinds of other courses by books take people out to coffee talk about that tomorrow and the next day but why you should take people out to coffee and what to say when you do that let's take a couple of examples here books course is coaching networking and work projects now I want to ask over the last six months how did you invest in yourself I want to hear people specifically tell me how did you invest in yourself and how much who's got one yeah constantly I'm not sure how much it wasn't have to look at that probably a couple of thousand dollars in bodywork like acupuncture massage therapy, a coaching networking and taking people out to dinner and lunch and coffee like excellent ok, good what else if you didn't invest yourself, by the way that's okay, raise your hand and say that to glad justin's courses like this here whether whether it was online educational to twelve programs or um uh just investing in my business network by going out and meeting with different business groups in the community just trying to gather as much information as I can from potential clients terrific investing yourself doesn't have to spend a ton of money it doesn't cost a bunch of money either. You came here some of you lived in seattle, you're still investing your time and your attention. We know by the way that if you in general, if you tend to investigate money, you'll probably be more likely to fall through but that's a very broad generality and you don't need to invest a bunch when I was a college student, I used to take people out for coffee all the time ceos you know what ceos never let college students pay because we don't any money we're poor plus, my money was locked up in the market as I told that police officer so but I actually would take him out they never let me pay it wasn't about the money any way would have been a five dollar coffee they paid attention to me because I was young I was ambitious, I sent them a good email we can all do the same thing what we got from the web how have people invested in themselves? We've got a ton, we've got sb, I'd ggo who spent seven hundred dollars, in gym at prep course is great we have a civil drafter who says tuition for bachelor's degree and also setting up a business anybody say I have not invested? They haven't said it yet, but we didn't weigh have specifically how much they have a right so our internet people who here has not invested in yourself in the last six months anybody here was making less money, it was actually less successful, I would take people out a lot and it's funny that now that I actually make more and more able to do that, that I've become sort of complacent and don't do it yeah, super interesting that happens all the time but that's very fascinating you realize that I think that it's natural right, like business is going is going well, we don't need to take people out and what we realize, though, is that to really build that long term value, take it to the next level and also you realise and we'll talk about networking tomorrow the day after because a lot of people think it's sleazy, slimy scam e but we learned that actually you can add tons of value even if you're just a college like I was I was trying to add value to their lives. So talk to you about that who has not invested what they say we're getting numbers or we're getting people pirate cat says I have absolutely not invested in myself in the past six months yeah, mike okay, ebert says nothing that's paid nothing that paid that's okay, I'm not guilting anybody for not buying courses that'll be oddly self serving, but but but it's, not just about money, writes about time it's about going places that are actually investing in yourself attending a talk reading a book from the library doesn't matter, but the truth is that you'll find it's kind of like, you know, you always see really fit people at the gym what's up with that, you know, because they're fit, but they're still at the gym now that's a very loose and somewhat terrible analogy, but the point is you see the best the best people I know are constantly investing in themselves they're buying programs. Okay, one thing. They are taking people out to coffee for free. They're reading books. They're reading articles, the top people or some of the biggest investors in themselves of all.