ABC's of Money with Alan Akina - Lesson 9: How to Have the Millionaire Mindset

Anyway, welcome, welcome to another edition of the ABCs of Money. Today is lesson number 9. Love this lesson. I think you're going to enjoy it as well. It's called the Millionaire Mindset. The Millionaire Mindset. And really, kids and adults, this is where it's going to start. Right? It's going to start right here for us in our minds, just like we talked about the other day. Right? The importance of a dream board, visualization, being able to put it out there. This is the key to being successful right here, right between your, your, your 2 ears, kids. That's, that's all you need. All right, let's dive in. Lesson number 9, how to have the millionaire mindset. So I want to first start out with What is a millionaire? So a millionaire is someone that is worth a million dollars. They have a net worth of a million dollars. So let me take you through that exercise on how to get there. And so we're going to go through some numbers and I'm going to talk to you about how we get there and how you can calculate this for yourself and for your, you know, your parents can See how they can track their net worth, 'cause this is gonna be a key indicator, what I'm gonna share with you. So a millionaire, write this down, is someone that is worth, has a net worth of $1 million. So how do we do that? How do we calculate that? So we're gonna do a net worth calculation, very simple. So we're gonna take assets. Assets are things that you can own that are of value that make you money, right? We bring money into our pocket. How much? Houses, or what is houses? Real estate, right? So real estate would be one. You like my house here? Kind of cute. The second asset is stocks or paper assets. So there's real estate assets, there's paper assets, which are stocks, okay? And then the third major asset category is businesses or owning a business, okay? So these are the 3: real estate, Paper and business. Now, when you do a net worth calculation, you start to work with banks. The banks will include like your car, anything that you own that has value, maybe money that you have in your checking or savings accounts. Today I just got 4. Okay, so we're going to talk about your assets and I'm going to assume, let's say, let's say we bought a house. Let's say your house is $350,000. Okay. Your stocks is, let's say it's worth $25,000. Your business, you got a pretty good business that is now worth about $100,000. And your auto, your car. And I say, let's say the car is worth $10,000. That's the asset column. Now we're going to draw a line down the middle and we're going to create another section called liabilities. Remember what a liability is? It's basically a debt. It's when you owe someone some money for something that you bought. So because we have the house, most of us would have got a mortgage to, to buy the house. Okay. So when we look at the mortgage, okay, today the mortgage is— because, because I'm on a 101 Financial, I'm paying it down really quick. So today my mortgage is only $150,000. Ask your parents that know me. We help people pay off their houses really quick, a lot of them. On your stocks, there's really no liabilities unless you're trading with other options. So there's nothing here, nothing that you owe for your stocks. You just bought that outright. Your business, let's say you took out a business loan to get started and you, you, you bought some equipment, right? You bought a truck or some equipment for your construction company or whatever it is. And your loan is at $50,000. So you owe the bank $50,000 for starting your business. And let's say your car loan was at $5,000. Okay. So you paid it, paid it halfway off. Now, what we're going to do to get your net worth is we're going to take assets minus the liabilities will give you your net worth. Okay. Okay, so if we add this up, $350,000 plus $25,000, that's $375,000, $475,000, $485,000 right here. So $485,000 in assets. Okay, $485,000 in assets. Now we're going to look at liabilities. Okay, so we're going to add up all these liabilities, $150,000, Plus zero plus $50,000, so that's $200,000 plus— so it's $205,000. Okay. So now you take the assets minus your liabilities, which will give you your net worth of— what is that— $280,000. So what this means in this example is you are now in what we call a Positive equity. Okay, so you have a positive net worth. So the assets that you own are valued more than the money that you owe, the liabilities that you have on these assets. Now, there's sometimes that you can be in, you know, a negative situation where the liabilities are higher than the assets. That's not where we want to go. We always want to have our assets increasing. Right, our assets going up in value, houses going up, stocks going up, business increasing. Okay, your car is not going to really go up in value. That one always goes down. But the liabilities, we want to pay this down. So this grows, liabilities go down. Now your, your net worth goes up. Okay, so to become a millionaire, you need to have a net worth of $1 million or more. And that is how you calculate net worth. Okay. Now, I want to talk about mindset. So number two, what is a mindset? Okay, there's two things that I have for mindset. You see here on the board, there's a fixed and there are there is a growth mindset. Okay, what is the fixed mindset? A fixed mindset. Are those people that in their mind believe that they can't improve and it is what it is. Whatever your skills are, whatever your knowledge level is, that's what it is. And they don't feel like they can fix it or increase anything in their skills or their knowledge. They're just fixed at it. Okay. That's one mindset to have. And a growth mindset are those people that believe that they can improve. That believe they can get smarter and gain more knowledge. And they also look forward to challenges.

Hoorah!

They like to take on challenges and solve those problems. So if you think about mindset, it's really a collection of thoughts. It's a collection of, of pictures and the way we visualize things in our mind. And the great thing about this is that you can control your own mind, kids. You can control those things. You can try to work on that, right? And the goal is to start to work towards having a growth mindset. Why? Because millionaires, almost all millionaires have a growth mindset, if not all. And they are willing to take on challenges. They're trying to learn and improve their skills every single day. Very, very successful people like you hear of the greatest investor in paper assets or stocks our world has ever seen. His name is Warren Buffett. Incredible, incredible. I love learning from him. Now, Warren Buffett says he reads about 4 to 6 hours a day, newspapers and books, and just reads and reads and reads to grow his knowledge and his understanding of things. And, and I'm not saying you have to read 4 to 6 hours a day, but that's what the greatest does. So it's a good indicator and he has a growth mindset. Where are you today? If you— and some of you might be under 6th grade or 7th grade, this might not relate to you. But for those kids, those of you that are in high school and for all of you adults, what mindset do you have? A fixed mindset or a growth mindset? If you have a fixed mindset, I'm here to tell you, you can change. You can change and you can, you can grow out of that stage. Okay? And if you do, I highly encourage you to start to transition out of the fixed mindset and get into the growth mindset. Okay? So number 3 is what does a millionaire look like? So I've compiled a list from one of my favorite books. It's called The Millionaire Next Door. Love this book. I read it as, as a recent— I was, I think I was in college still, and it really helped to set the foundation for some of my beliefs because, you know, what I thought a millionaire was wasn't really what it was. Right. You see flash on TV like millionaires. They have all these nice cars, beautiful house, suits up, you know, Rolex watches, like they're just blinged out. Those are fake millionaires. You know, like there's fake news, there's fake millionaires. They look like they are a millionaire. They look like they're successful, but they have zero net worth. They spend all of that money trying to look good and not trying to accumulate assets. So when I read that book, it totally changed. Like, okay, millionaires are just normal people. They're just regular, average, ordinary people. You don't need the fancy stuff. The key thing is you work on assets, you work on building your assets, then the assets will give you money to go buy those fun things later on. Just don't do it too early. So I'm going to go through a list. 7 characteristics of a millionaire. Number 1, about 2/3 of them own a business. Number 2, 97% Of homeowners, of millionaires are homeowners. Okay, 97% own home. Number three, they live below their means. So let me put that in simpler terms: they spend less than they make each month. Number four, their spouses. or their wives, husbands are also planners and budgeters. So what does that mean? It really helps if you marry someone that is on the same page with you financially. Okay, that's, that's down the road for you kids. Okay, so their spouses are planners and budgeters. Number 5, only 17% of millionaires or their spouses ever attended a private elementary or private high school. It's kind of interesting. So it doesn't necessarily mean you're going to be successful if you go to a private school or if you don't go to private school. Number 6, 2/3 of the millionaires work between 45 and 55 hours a week. So the average person will work 40 hours a week at their job. Millionaires will work 45 to 55 hours. Me, I'm working more than that. And number 7, okay, millionaires on average invest nearly 20% of their income. Remember I talked about that in the 3 S's of money? Start with 10, but you want to get to 20 to 25%. Millionaires invest about 20% of their income, their take-home pay. Those are 7 characteristics of a millionaire. Now I want to go on to number 4, which is 10 millionaire mindset ideas. Number 1, write this down. You cannot save your way To being a millionaire. Okay, so what that means is you can't make money and put it in your savings account to become a millionaire. Millionaires don't do that. They grow their money. They invest their money into assets. A savings account is not an asset. Remember we talked about that early on in the three the three income sources and the the three S's of money? That's going to be a holding place. Your savings account, the money comes in. It's going to be a holding place so you can direct it. Into some of these three, one of these three assets, or all all three of these assets. Okay, so you cannot save your way to a millionaire status. Number two, this is a quote. Quote: Big hat, no cattle. So this is from my friends in Texas. Okay, I like I like this. Okay, so I'm gonna write this down. So you know what this means, kids? In Texas and in cowboy land, right? You have the big fancy hat, but you own no cattle. Cattle is assets. So they they they look fancy. They look like they're rich because they dress nice. They have this bling bling bling big hat, but they own nothing. They have no assets. Number three, this is. This is my favorite one that I teach people all the time. Buy assets, not stuff. Buy assets, not stuff. Okay, good. That's going to stick in your brain. You remember Uncle Alan for that. All right. Number 4, millionaires make building wealth a priority. Okay. So they make building wealth a priority. That's on the top of their list. Okay. Number 5, money doesn't sleep. It loves those with a great work ethic. Number 6. So here's what Bill Gates said, quote, if you are born Poor, it's not your mistake. But if you die poor, it is your mistake. And so remember that saying, folks, kids, no matter where you're at today, it doesn't matter where you start. It matters where you finish. And that comes from the great Bill Gates. Number 7, get a millionaire mentor and study them. Number eight, make your investments work for you. Make your investments or assets work for you, right? So again, we're going to buy real estate. We're going to get it to work for us. It's going to be renting every month. That house is not going anywhere. It's going to rent, rent, rent. Stocks, we're going to buy great companies that are going to continue to grow and innovate and do their thing. And we're going to grow with it and we're going to work our business. We're going to work as hard as we can in our business to be successful. Okay, so you get your assets, your investments working for you. Number 9, think big. Think big. Here's my suggestion. Shoot for multimillionaire status, not millionaire status. And number ten, decide now that you will do it. Put it in your mind that no matter what it takes, you are going to do it. You're going to achieve your goal, whatever it is—to be a millionaire or multimillionaire or whatever you want to do. But you got to decide now. Decide. Put it in your mind that you're not going to let obstacles stop you. You're not going to let let challenges distract you. But you're going to stay focused. And that, that is key because the one thing I can promise you, this, kids and families, adults, is that as soon as we, we end this Facebook Live broadcast, when you walk out your door, you go out and do things, there's going to be challenges. There is nothing we can do about those challenges, those roadblocks, or those obstacles except Find a way to go over it, go around it. And if you can't go over that obstacle or around it, then we're going to go right through it. We're going to go right through that obstacle and not let any obstacle stop you. That is crucial, okay? In anything you do in your pursuit to becoming a millionaire or your pursuit to do whatever it is you want to do in life. Okay, so, so don't let obstacles stop you. Those are the 10 characteristics. Okay, so your financial project is going to be twofold. Okay, so there's going to be 2 things. Number one, I want you to write down at least one millionaire trait that you currently have. So out of all these that we listed, okay, what is one of those traits that you already have? So write that down on a sheet of paper. And we're going to use that to build on. We're going to use that to build momentum. If you already have one, great. We're going to build that to get another trait and another trait. We don't expect you to have all of these, or maybe you might not even have one. But what's one that you want to work on? Okay, so write down one trait you already have. If you don't have that trait, write down the one that you want to start to work on. I don't suggest working on all 10 or all 7 of these characteristics. Choose one. One, start with one. Okay, that's your first project. Second project is I want you to contact a millionaire. Try to find a millionaire. You might not know them, but ask your circle of influence, your family, your connections, your network. Hey, Uncle, Dad, Mom, do you know anybody that's a millionaire that I could reach out to? I can send an email or a text or Maybe I can message them on, on social media. Try to find a millionaire. And here's what I want you to do. Ask them for their number one tip on becoming a millionaire like them. Get a real live tip from someone. Okay, so those are your 2 projects and those are going to be kind of fun. It'll challenge you. You got to dig deep. And, you know, everybody can find someone that knows someone that's You know, going to be a millionaire, reach out to them and ask them that. Okay. With that being said, are there any questions? We can take some questions now here at the end.

Is Uncle a millionaire?

Yes, I am very blessed to be a multimillionaire and very humbled to be that. Thank you. Good question.

Ginger asks, from the lesson on stocks, do you recommend using a third-party Like Motley Fool to recommend stocks?

Those— there's some great third-party services. Motley Fool is like a service that evaluates stocks and they write up reports, and those are good to look at. And, you know, I think that would be helpful. But I think if you start out small and just pick great companies that you know, you could probably do as well as these stock pickers. All right. You know, if you guys all know great companies, Apple and Microsoft and Disney, and there's a bunch of great companies out there. So just go with stuff that you like, that you are familiar with, do some research, and you'll find great companies.

Carmen asks if there's a limit, if there's an age limit to buy a real estate asset.

No, there's not, there's not really an age limit on buying a house or anything, you know, just there's gonna be issues of money and credit that come into play. But that hasn't stopped people either from, from doing it. And I've had my kids as little as 6 years old investing with me in some of my flips. Now they did it with me, they put, you know, a few hundred dollars in, but that was a great way to start. But yeah.

Nolan says, what kind of assets can you invest in as a younger person?

What kind of assets that you can invest in? Probably no one. Real estate would be a little harder because it does take money and credit to buy knowledge. The easiest one would be stocks, I would say. So you remember I recommended like Stockpile, and there's other companies out there like Robinhood, and you can use, you know, use as little as $5 to buy Disney stock. You know, Disney is just over $100. Apple, Apple stock is around $260 or $270 a stock or one share. You could buy $5 worth of that. So that's probably the easiest way to get started in an asset. And then the second easiest would be to start your own business. You start your own online business. So

Tanya says, can I own 2 businesses as a kid?

Of course, Tanya, go for it. Start one and then start another one. Get get those businesses going. I gave you the the plan just to formulate a one-page business plan. Definitely start it. All right, kids. Thank you for joining. I am going to jump on my Instagram, but please be safe, be healthy, listen to your parents, do your homeschool, and then also do your financial projects. I'll see you on Tuesday. Okay. God bless you. Take care. Aloha.