S2 E23 - I don’t know anyone that became a millionaire by saving | Broke to Woke

I love that you're still here with us, listening and even potentially watching out there on YouTube. Thrilled for this episode. One of the most frequently asked questions we get is what to save versus what to invest? Is saving overrated and how much should you save? Brittany, myself will be answering that question in this episode.

We're saving, we're investing. How much? What percentages? You asked me just a moment ago and I figured, hey, let's talk about it.

This is the most frequently asked question. What should I save?

Yeah. Should I invest? You're right, this is a heavy one. This is the one that people ask all the time, every time. And we can discuss and kind of talk through it right now.

Yeah.

So Brit, what's your answer?

We are not professional advisors that you are paying. In exchange for this knowledge, we're gonna give you our best advice based on our experience and based on what we have seen work in people's lives. You can't sue us for this. Just saying now, alright, my best advice for people with zero financial education.

Zero. So you haven't spent any time educating yourself for some reason on financial.

They want to get into it. And normally a mistake people make is they throw.

Go into debt or they throw all their money into trying to do an asset, but they don't know what they're doing. And then they lose it and then they go into this cycle of I can't make it and all the negative thoughts and then they just stay in their job forever that they hate and they go into debt even more and it's this miserable cycle.

Yes.

So for those with zero financial education, I say save six months worth of your monthly expenses, keep it in a savings account and anything above that you can start investing with. Now why do I do that? In case COVID 19 comes out and steals your job. You have six months to recalculate. You're not completely broke down to zero. Now, if you have kids, I say one year's worth of savings.

Okay?

Now that's a lot for people. It doesn't matter. You have no financial education. And between you and your spouse, if you lost your jobs and you have kids and, and you have a whole year's worth of savings. Oh my gosh. You have plenty of time to recalculate your whole lives and figure this out.

Initially, people might say, well, those numbers are staggering. And we're not going to specifically go through all the ways that you can save money. Again, we mentioned this numerous times. Literally Google it. Like how to save money. You'll get all the Tiny, tiny little tips and tricks of things that you can just, boop, move aside, peel off, be everything from coupons, just don't have Netflix. And take that money and put into a savings account. Now, as Brittany mentioned, you're absolutely correct. Zero financial direction. That's a very, very smart way to go. And please start the financial education. Yeah, you're listening to Broke to Woke. You are reading some books, you are getting some of that knowledge. Once you've done that, you can start investing a lot more than you save. Because for me and I pretty positive I mentioned this in the last season, I don't have a rainy day fund. I don't have an emergency fund. I don't have anything. And I haven't had that for a long time. Meaning I don't save money. I don't have money where I'm like, okay, and that's just sitting there doing nothing.

But you know how to make it. Make money. Every dollar you have could be making.

You money, could be doing something right. Everything from home equity line of credits to credit cards to whole life insurance policies where you can loan against the cash balance. What I've done, at one point you're.

Saying some really risky stuff that we are not telling you to do. Unless you have financial education, you know what the heck you're doing.

Burn it up. Because what I did is I took every savings, every dollar, and put it right into Bitcoin. So when you have savings or money that was saving for taxes or money that was saving for literally anything, I would just take it and put it into an asset. Right. Something that I believe was an asset and it was.

This is when you were brand new.

No, I still had four years of education under my belt.

So you knew to do that later.

Yeah, exactly.

Man. That's ultimate leverage.

It is. It's ultimate leverage. But I mean, could you do that and take a lot of your savings and buy Apple stock with it or BP or Walmart or Costco or Johnson Johnson or Procter and Gamble or Pfizer? The answer is yes, you can. Those companies, in my personal opinion, will not be at zero in the next 10 years. They're going to appreciate that you already pay a dividend, Right? You're getting somewhere between 2 to 3% interest on your money just to have it there. Plus the capital appreciation of your money. Quick tidbit for those who are listening. If you take $100,000. Let's not even say that much, you take $10,000 and you invest it into a company like Apple, right? Apple let's say hypothetically, grows 100% over the course of four years. Okay. That $10,000 that you invest into Apple over the course of four years doubles. Right now. You have 20. What was really, really interesting is Apple does pay a dividend of approximately 2%. So over that four year period, your money has now doubled, your savings have doubled to 10,002. 20,000. Are you getting Britney 2% interest on the 10,000 or are you getting your 2% interest on the 20,000? Which is amazing. That's such a cool concept because now you're getting more return on even more money. And you started with that $10,000 earnings.

Sounds a little better than a CD.

It's a lot better than a CD. Yeah, a lot better.

Why do people invest in CDs at all?

Because they just don't have the knowledge and they don't have the confidence. They don't have the education.

But it's the S word.

Yeah. What's the S word?

Safe.

Yeah, it's a four letter word, starts with S. That's very dangerous.

I've got another weird thing that I've seen people do. So my thing again, for no financial education, it's six months of savings. If you're married, it's a year. What I have seen people do is they actually have like 12 years worth of savings just chilling there, doing nothing. Or two years or three years. If you have more than a year. Start investing it, guys. Start finding a way to put it into things. I've really met a couple that had eight years worth of savings just chilling there. And they refused to invest it because they could lose it all. And I was like, it doesn't matter.

You got eight years. Take six of them.

Smartest, most educated people I've ever met, formally educated people I've ever met and refused out of fear. And it's like, you really don't think you could figure it out in a year? In a year.

Yeah.

But we don't want our savings account to go down. I'm like, what are you gonna use it for?

Right?

It's just, what are you gonna use? So people do crazy things.

How do you break people out of that kind of fear, Brittany? How do you do it?

I like to play worst case scenario.

Okay.

I do this with myself a lot. When I catch myself in fear and I start to get paralyzed or I make weird decisions. Well, first of all, we've got a core value in the company that says we do not make decisions out of fear. No, we never make decisions out of fear. That's really easy in real estate because there's a lot of fear for myself, I like to play out absolute worst case scenario. Say I've got six months worth of savings. Brittany, you've lost everything. You don't know anyone. You're in the middle of nowhere. You have only your clothes on your body, no credit cards, You've gone bankrupt or whatever, and everybody that you love hates you. What do you do?

I love this exercise.

I've got six months of savings. I have six months worth of time to rebuild my entire life. And I know what I've been able to accomplish in a matter of focused weeks. What if I had nothing else to do but figure it out?

Yeah. That's all you had. Like, you don't have a job, you don't have to go anywhere. You can sit on your couch and think you have four hours a day.

You know how much crap I could read if I didn't have all those other stressors? Because all my bills can be paid because I have six months worth of savings.

Yep.

Now, if you have a year, you and your spouse can, you know, your kids are still taken care of, everybody's eating. You're eating through your savings. But who cares? It's okay. You bought yourself that way.

That's your worst case scenario already.

You are so very low likelihood that that worst case scenario will ever happen. So you just kind of pull yourself out again, go, Ariel, and say, that's a crazy thought. I bought myself time and I believe in myself. You talked a lot about confidence. I have the confidence in knowing I will figure it out. And that's enough for me. So then it's like, all right, well, you can do this.

Yeah, sure. Of course.

Yeah.

I love that. That's a great one for me. I do very, very similar things, like going down the worst case scenario path and figuring that out. Also putting people, if I can, either physically or visually, in a scenario that they can impact and going, why aren't you helping this situation become better? You have the money to do it. You have the time to do it. You have the ability to do it.

Give me an example.

Yeah. So let's work with one of my coaching students. I had a coaching student who was like, jeremy, here's a particular initiative that I would love to help out with and fund. That initiative is children that are born without a limb or multiple limbs, and so they have to have a prosthetic. Well, we all know that children grow. So as children grow, the prosthetics have to grow. With them and they change. And that's a lot of money for a potential family. And so there's donors, grants, sponsorships, there's all kinds of things, but that money has to come from somewhere.

Exactly.

So he's like, jeremy, dude, I would love to be able to donate a million dollars to someone in that situation, right? Or to that organization, to that charity. And I'm like, bro, you have $4 million. Like you can, you can do that right now. He's like, well, I know I could. I was like, yeah, you can. Like, that's amazing goal, but you're not thinking big enough. Most people have a dream that their dream is something they can do now. They can do it now. You mentioned a few episodes ago, I want to travel the world, but I don't have enough money. I can't travel the world. Why not? I don't have enough money. How much do you have? $900,000.

I'm not a millionaire. Yeah, because I'm not a millionaire. I can't do that.

Yeah, like, dude, you can travel and live with Airbnbs and, or hotels and, or hostels and Southwest flights.

Thousands of dollars a month, two, three thousand, plenty of food, everything. Now, do you have to travel that way? You don't have to, but you can if that's what you really wanted to do if you want to travel and get out there. Long story short, put those people in a scenario where they can start seeing it and like you said, mapping it out, getting really, really specific. And that goes back to all the things we just been talking about the entire season two is creating those mental, micro magical moments, showing them you can achieve this, showing them the map, going bigger picture, going all the way into that 20 year scope, working backwards, all those things will absolutely work for someone in that scenario. And as we are understanding, we have these savings and we have these investments, helping them really, really see with clarity and matching together something that they get really, really excited about for me is easy and simple and amazing.

So what's your quick answer when somebody comes to you and says, Jeremy, what do I need to save and what should I invest? I'm just starting out.

Yep, just starting out. That's my answer is, unfortunately, it depends on a lot of factors. So let me get some of those factors and let me figure out where you're at and figure out what they want to invest in and how much money they have and their goals and their timeline and their dreams. Because for me, I personally think that what saving, I don't know anyone who has Become a millionaire through saving. I'll repeat that again. I don't know anyone personally. I'm not saying it doesn't exist. I'm just saying I know a lot of millionaires, multimillionaires, deca millionaires, few billionaires. None of them don't sit through saving. They all have to invest in something. So for me and the way I view the world, I got asked this question on one of the beaches that you own.

Two months ago by someone said, what's your.

I'm trying to think of the exact term that he used. But long story short, what's your zero? Meaning how far are you willing to lose right now if you needed to, if you had to? Where's your baseline? Where do you stop? I was like, dude, zero. I'll lose it all again right now. I'm not afraid.

Nobody can take that experience or education away from you. Yeah, that's the beautiful thing.

Yeah. It's like, I'll lose it all right now. Like, my baseline is zero, dude. Like, I'm not worried about it.

Yeah, but now you're a husband. Is it still zero?

It's still zero.

Is it still zero?

It is still zero. Yeah, it's still zero. Because we. And we're gonna talk about this very soon. There are ways to avoid a wipeout. So once you realize, like, yeah, it is zero, but is that actually gonna happen? The likelihood would require death. That's it.

And what do you have in place in case you do die?

Yeah, so much insurance stuff. So many things.

Yeah. We're not idiots.

Yeah.

And now that's, like, my best advice. I like to quote Michael Scott. Yeah.

The genius Michael Scott.

Don't be an idiot.

Yeah, pretty much. Pretty much. So to really, really, really specifically and directly answer that question, again, it would require a lot of time. But if someone's like, gun to your head or you get all the free M and Ms. For the world, you can eat peanut M and Ms. For the rest of your life and never gain weight. If you answer this question in 10 seconds or less, I invest 95% of everything that you make and save 5%. That's what I would say. And the 5% would be like, the most mediocre, tiny, itty bitty little piece where it's just. Just in case I need to fix a flat tire immediately. I don't have a credit card available for some reason. That's your 5%.

Otherwise, we're so blessed to be American and have so much access and there's people listening from all over the world. And it's incredible the kind of systems that have been created. But I want to tell you again, if it's ever been done so somewhere, it can be done where you are. You know, if there aren't credit cards available where you are, then how can you help make credit cards available? How can you take microloans if you don't have banking? How can there's. There's so many cool ways in which you can apply what we're talking about, even if it isn't made yet. So I don't want anybody listening to this to have limiting thinking. One of my favorite things Sir Richard Branson taught me.

I know exactly where you're going with this. I thought the exact same thing at the exact same time. You brought up. Our brain waves are linked right now. It's an amazing thing.

I said at first, may the record show.

Yeah, may the record show. Bring it. Go ahead. This is perfect.

He said, if you ever want to become a millionaire in a year or less, he said, take any successful American company and take it overseas. Do it overseas. Because I'm doing cell phones in Saudi Arabia. You think that's going to work? Cell phones work in Haiti. Cell phones work all over Africa. Cell phones work in. For the people who live in Antarctica. Cell phones work because it's a, you know, really great idea. And if there's a really great idea that you love and. Or you're hearing something we're talking about that you're maybe jealous, isn't accessible for you, that is an opportunity for you to go start that in your own backyard.

Yeah. And just as a reminder, folks, we talked about two episodes ago, the fastest way to become a multimillionaire. Brittany just gave you another one in this episode.

Genius.

And taking that knowledge, taking that ability is an investment. So when you're talking about invest 95%, save 5. Again, as you mentioned, if you live in that area of the world where that might not be readily accessible, that investment can be into human skill sets, human knowledge. Going through and talking to someone, talking to a developer, talking to someone who has a very precise skill set that can build something on a software system or can build something on a decentralized ledger, right? That has the ability to create this thing, that you can use this thing to then propel you from wherever you are using that, either money or the sales, negotiation, influence, abilities to say, hey, will you work with me? Right? You can give away equity into a company that hasn't even been established yet to have someone help come alongside of you to build something.

Absolutely.

There's so much that you can do.

So much. And you don't even have to do it internationally. I'm going to tell you guys a secret that I haven't told anybody.

Oh, boy, another one. Another amazing secret.

I was. I am known for being a very progressive and like innovative genius developer. How does she come up with these profound ideas In Nashville? I've got like stalkers and like all these people. Can I please take you to coffee now? I do have some really good original ideas, but a lot of times I'll just go to super progressive cities. I'll just take a little lap up to LA and look at what they're doing.

Yep.

Huh. Why is Miami doing this? And Nashville's not sure. Or why is Miami doing this in Augusta, Georgia hasn't done it yet. Why is Nashville doing this? So looking at the future, that's why they're called progressed. How can I take the future to the past and look like a genius? What if you had future knowledge of the stock market? You could take it back to the past. What do you think would happen?

Totally.

Oh, my gosh.

Yes.

So you can do that. Guys, just take ideas that are working, not in a like, you know, horrible way, but apply ideas of the future to where you live and you can make it really big. Jeremy just gave some really big wisdom on how you can learn in a safe environment, grow in a safe environment by bringing the people who are doing it to your town, to your city, to whatever you're trying, wherever you're trying to apply it. And you can ask them those questions. Yeah, that's the whole point of experience is just knowing what questions to ask.

Yeah. Well, I'll give someone a hundred thousand million dollar business idea right now. And me and a certain guy named Jeremy Locked talked about this. But in the British Virgin Islands, they don't have anything similar to Uber Eats or grubhub, which is like a food delivery system. Right. A food delivery app in certain countries, like the British Virgin Islands, think it'll work? Well, it works. And so many other developers.

Everybody loves it.

Yeah, everyone loves it from my phone. I can just order it. Do people have cell phones here? Yeah, they do. Oh, wow. So they have the ability to order a phone. You know, they could order their food from their phone. That food gets delivered to their location where they're at. And Jeremy had another idea, like about using boats, like using yachts. Rent them out, like a B, B and B. Right. So boat bed and breakfast. Right. Instead of an airbnb That's a good idea. So just the tiniest things, we're like, okay, cool. Boom. Now, a lot of people come up that idea, and then they get stuck. They're like, oh, I don't know how to do that.

I'm sorry. I'm stuck on boat B and B. I need to go buy the domain right now. This is so.

Well, this episode hasn't been.

I would rent so many more boats if this was a thing. Why am I not. All right, we're going to take a pause. We need a break.

Well, on that note, there's an episode coming up that we will talk about avoiding the wipeout, because we kind of touched on it this episode. I mean, what would happen? What do we need to do? There are, I think, tactical things that people can do to avoid that in case something awful happens and what to.

Do in the event you do wipe out, because have you ever wiped out before?

It's the only reason you've worked with me.

Yes, it is. And I may have tasted that before in my lifetime. There's some real practical ways to pull yourself back up off the ground and go 10x. We're going to talk about that in the very next episode. Stay tuned.

I know you liked that episode and you're all excited now about trading the stock market. Well, guess what? I can teach you totally for free, because I happen to be the best in the world at teaching people the stock market. Go to broketowoke.com and you'll notice on that website there are direct links to my education, to our platforms and tools and resources that Brittany and I have compiled together for your use. I'll see you there.