5 Pillars of Financial Success

Hey there. Good morning. Welcome to my little weekly Show, Tuesdays at 9:00 o' clock Pacific Time, 1:00 o' clock New York Time. Today we're going to be diving deep into the five pillars of financial success. And the reason I chose this topic for today is a lot of people think that the answer to becoming wealthy is making more money. That is probably one of the furthest things from the truth and I'll explain why in just a moment. If you don't understand the five pillars, chances are that you will never really have accumulated wealth, that you can retire comfortably and live the lifestyle that you really want to live. I know it's a big bold statement and you'll understand why in just a few moments. I'm going to be sharing with you why making more money is not the answer. Learning the thinking required to master the game, master the game in here of wealth. And we're going to be talking about the avalanche method versus the snowball method to debt reduction. So if that sounds like a fun 30 minute packed session, you are right. So let's have a little bit of fun. Let me know who you are, where you're from and I'm going to be looking here on my screen to see who's responding to me. As always, if you like what I'm doing, hit the share button and let's get the word out to many more people on you know, what we're doing here every Tuesday. All right, so lots of people watching right now. So the five pillars of financial success if we you have just joined me. All right. For some reason my Internet speed is a little bit slow today, but here we go. Great. We got hey Diana and Anna and let's see, I got to put my 57 year old glasses on Michelle and Cosi from Toronto. Hey. Nikki Z. Serenity from Colorado. Awesome, awesome, awesome. All right, so let's get rock and roll. We're just past the 9 o' clock hour. For those of you joining me, let's talk a little bit about money. First and foremost, there is a lot of misunderstanding about money. Money is like your phone, like your glasses, like a little book. It's a tool. And the laws of earning money is pretty simple actually. It's determining your product knowledge, skill or service or idea and exchanging it with somebody else for that green paper with ink on it in the United States. But you don't even need green paper with think on anymore. You can just transfer stuff electronically on your phone or iPad or computer. So money is a concept. Money is a means of exchange and you deserve to make as much of it as possible. You just need to figure out the knowledge, the skill, the product or service that you have that you can exchange with somebody else. Money has nothing to do with your self worth except you're never going to earn more money unless you augment your self worth. So we're not going to get into that side of it today. Let me just share with you some stuff that you need to understand. Five pillars of financial success Repair, recover and debt. So if you, like many people, including me, got whacked financially in the 2009 time frame where real estate, stocks, you know, I'm sorry, well, real estate plummeted. Where stocks plummeted, where a lot of people lost a lot of money in the markets. Well, guess what, the last, you know, eight years, the market's taken off like a rocket ship almost everywhere around the world. And so most people should have recovered by now. But. But one of the things you've got to understand is if somehow your credit got screwed back then, you need to repair your credit so that you can have proper borrowing power. And that means you need to recover. And most people have never thought of their financials in a perspective of what do I need to do to repair and recover from any of the downsides of whatever may have happened to you? So that's the first thing you've got to take care of if that is you. The other thing you have to understand when you're dealing with success and financial success is there's good debt and bad debt. So let me give you an example. Let's say you could borrow money for 3 or 4 or 5% and you can invest that money and you can make 10, 12, 15, 20%. That's considered good debt. Let's say you could buy real estate and properly leverage it, not overly leverage it. You are on the upswing of a real estate market. That means that your money can actually work for you and increase in the proportion of the amount of real estate that you buy versus the amount that you used to put a down payment on the real estate. You have to understand how to use debt to make money when the time is right. And that is a function of knowledge and skills. Not hoping, not praying, not wishing. These are raw, hard skills that you can learn. So you've got to understand how to repair, recover and you've got to understand how to use debt effectively. But you also must understand a little bit of the psychology of getting out of debt if you have debt. So here is something for you to think of. I'm just going to take a look here to see how many of you are online and communicating. Hey there, Susan and Jordan and Robin. Nice to have you on. And great, great, great, great, great. Okay, so let me share with you. I mentioned to you before that I'm going to talk about the avalanche and the snowball method of financial debt and getting rid of debt. So here is what some people say is the best thing to do. It's called the avalanche method. And what happens with the avalanche method is you list all of the debt that you have from highest to lowest interest rate. Okay. Or from the highest amount to the lowest amount, and then you start to make a minimum payment on each of those debts. Okay. And so you might make, you know, a $50 payment on the top one, $10 payment on the next one, another 10 or 50 or 100 or $1,000 payment on the next one, and a little bit on every one of the debts. Now, from simply a brain perspective, right. Guess what we do here at Neurogen, we focus on how does the brain process this? So when you have a lot of debt and you pay a little bit on each one, a lot of people, and this may be you, it may not be you, because I'm going to show you in a moment the snowball method, which seems to work really well for a lot of people from a neurological perspective. But when you have a lot of debt and you see a little bit of payment going to each one, for some people, it just feels like an avalanche of debt is still there. And so, purely from a brain perspective, for some people, this avalanche method of getting out of debt causes a lot of stress. And when there's a lot of stress in the brain, the fear center activates. Actually, when the fear center activates, that is one of the precursors of stress, you actually shut down your left prefrontal cortex, which is the genius part of your brain that can help you figure out how to make more money to pay off your debt. So the avalanche method can create a lot of e, prolonged neurological stress, which causes you to, what, lose your motivation. Instead of the avalanche method, here is a snowball method for you to consider. And that is when you take all of your debts and you list them from the smallest amount to the. To the highest amount, and you pay off, put all the money that you can afford to pay every single week or month towards paying off that debt, you get a bigger dopamine release because you're actually knocking off some of the debt in bigger chunks and in their entirety at first. And so when you do that and you're releasing dopamine in the brain and you feel good, you actually activate the left prefrontal cortex of your brain, which then says, well, how can I do this faster? So you're getting a lot of very, very active dopamine releases, which causes you to want to pay off the debt faster. So here's a question for you, just so I know. Do you prefer the snowball method or do you prefer the avalanche method? Which one do you prefer? So I'm going to try and teach you some stuff. Then we're going to get into a couple more of the five pillars. That was the first pillar. Only repair, recovery, and debt. Understanding it and getting rid of it. So who likes the snowball? Who likes the avalanche? Let's see who we've got over here. And by the way, if you like this, do me a favor, hit the share button and hit the like button as well, because I can. I can see when you hit the like button. All right, so, Jordan, snowball for you, Michael. Snowball. I see we got a lot of snowballers out here, right? Snowball method. Yeah. So most people never create a list of their debt because they're afraid of it. And you can't be afraid of it. You have. You have to work on it diligently in a small, methodical, organized fashion and dig yourself out of whatever snowfall you've got. Okay, lots of snowballers here. Okay. Okay. Okay. So first pillar done. Let's talk about the second pillar here. And that is earning, earning, earning, earning, earning. In our Winning the game of money program, I get a chance to see tens of thousands of people who are looking to win the game of money. And I can't tell you how many people. I would say over 90% of the people that are in these programs, maybe over 80%, do not know the difference between the activities to make money and the activities to get ready to make money. All right, so let's have a little bit of fun. Are you willing to have a little bit of fun with me? The more you participate, the more you'll learn. By the way, that's just the way the brain works. And so can you write down one money making activity? Okay, one money making activity. Let's take a look at what you write down. What is a money making activity? If you want to make money today, what's a money making activity? All right, and it doesn't matter if you have a job or you have a business or you don't have a job or a business. What's one money making activity? Let's have a little bit of fun. So let me see your responses. So, Dave, Dave, it's not fair. You know the answers. All right, so Justin's bank robbery. Yes, Justin, that is a money making activity. And it'll probably put you in jail when you get caught, right? So Susie says pick up the phone and talk to a prospect. Bingo. Susie. Selling something you don't need. And this is going so fast. This is awesome. Signing a listing agreement. Okay. Knocking on doors to get clients. Come on, keep them coming, keep it coming. Selling your painting. Personal development is not a money making activity. Giving English lessons to somebody is going to pay you for them is. So sales calls. Lead generation is a process to make money. Once you have the prospect and then you're on the phone with them or they're on your landing page and making some decisions. That's making money. Higher paying clients. Well, selling illegal drugs, Che or chi. Yeah, you can do that. Okay, so I think you're starting to get the picture. Many of you, if you're reading the, you know, the list over here. So there are things that make you money. So for example, I could take my glasses if I wanted to make money and I can go see who in the complex where my office is needs these glasses and I could sell it to them. I could take some face cream that I have here and see if I could sell this. If I want to be in the selling business, I could take furniture that I have at home that I don't need or art and put it in the newspaper. Okay. And try to sell that through the newspaper. So here's the thing that I want you to understand. Getting ready, like taking pictures of the furniture, putting an ad in the paper, those are precursors to making money. But what most people don't know is what are the money making activities that I need to do, whether it's every day, every week, or every month. So if you have a job, then obviously you're trading your time for a paycheck. But what if you want to make more? If you want to make more, you might think, well, I'm going to take some courses and that's a good start. But that's not going to make you more unless you're able to exchange the knowledge or the skill that you've upgraded for more money. And so what I want you to do, if you really want to make more money is think about what are your money making activities, Right? So what if somebody says, well, I want to make more money, I'M going to invest in real estate. But what if the market goes down? The act, by the way, is something that will make you money. If you know what you're doing and you have enough time in the real estate market, the stock market, you can make money. You have to differentiate what it takes to prepare to make money. Upgrading your knowledge, upgrading your skills, taking photos, getting a website ready. All of the preparation is a part of making money. But the actual act of making money, very, very, very specific. And so you have to understand, if you're an employee and you want to make more money, what specifically and precisely are the activities that will help you make more money? So let me share a little story with you. On Sunday, I was walking with my son, hiking with my son Noah, and we go hiking almost every Sunday. And he works in the construction industry. I asked him, I said, sweetheart, do you want to make an extra three to four thousand dollars this year? He goes, sure, Pops, I'd love to make three or four thousand dollars this year. He said, what do you want me to do? Like, what do I need to do? I said, one very, very simple thing. He goes, sure, Pops, what is it? I said, go to your boss tomorrow morning on Monday and let him know that you would like a $2 an hour raise if he feels you have earned it because you've worked with him for the last six months. Now, Noah right now is 21 years old. He's making $18 an hour. And he went on Monday morning and took one money making activity. And within less than 10 seconds, his boss says, sure, Noah, you're worth it. Now, you may be thinking, how did I come up with, you know, three or $4,000 a year? Well, if you take 50 hours a week, which he works at two extra dollars per hour, that's 100 extra dollars per week times 40 weeks is $4,000. One simple request gave him a $4,000 raise. Now I said to him, now if you really want to become wealthy, sweetheart, I said, I want you to take that two extra dollars, but I don't want you to spend it. What I want you to do is commit that extra hundred dollars a week to your investment account. I said, now that one simple act can be worth hundreds of thousands of dollars for you. When you take that four extra thousand dollars a year, invest it with me in some of our investments, and let's say you just get 10%, you can take that $4,000 and over the next 20, 30, 40 years, that will be worth hundreds of thousands of dollars to you because of the compounding interest on the money and the money making money when you leave it in there. That is the power of one small money making activity. It might be small to you, but guess what? How many of you would like right now to have an extra 2 or $300,000 in your retirement account because of a smart decision you could have made when you were 22 by taking 10% of what you earned or 5% of what you earned? All right, so how is that for just a simple little idea on a money making activity that my 21 year old son just took that you, if you just took some time to think and you asked him, what could I do today, not next week or a month from now, today, to increase my income by 2%, 3%, 5%, but an extra $50, $100, $1,000 and then do that activity? Does that make sense? By the way, teach this to your children. Get them to watch this. Okay, let's go next to the third pillar of financial success. Okay, third pillar of finance. By the way, for all of you in our Winning the Game of money program that are also watching this today, the five pills of financial success. The entire video training is available in your program. So make sure you get to the level that that's on and go through that training. There's over 100 hours, as you know, of training in our programs. And the five pillars is one of them where I teach you the best stuff. All right, so number three, managing the money you have. So let's talk about managing money. And it doesn't make a difference if you are a business owner, if you're an employee or you're a student, it really makes no difference once you earn money. Managing money is a skill. And so maybe I can share with you what my wife and I do and what I've been doing for 35 years is we have a budget of how much money we have coming in from our business, our investments, salaries, etc. And then we have a budget for all the things that we spend money on every single day, week, month, quarter and year, including the government. And so when you have a budget for your TV and cable and phone and food and groceries and restaurants and trips and everything, if you itemize and you go on Google and just get a household budget and you get one for business as well, when you know how much money is coming in and how much it's costing you to live, you start to see a pattern of spending and of income coming in. And so something I learned many years ago is spend less than you earn and then invest the difference. And if you aren't earning enough, you have to get diligent at cutting your lifestyle cost down just long enough to make more money, pay off your debt, and live below your means temporarily. Well, you never want to live above your means. You want to live, you know, slightly below your means and invest the rest. But if you don't have a method to manage your money, then you're not going to have any mental or emotional control to make the smart decisions that you want. So you can use a tool, for example, like mint, mint.com that can help you with your managing money skills. And the very act of looking at your patterns allows you the ability to change the pattern. And the same thing is true in your business if you don't have, you know, budgets versus actuals. I don't need budgets versus actuals anymore at this stage of my life. But every single week, my wife and I go through our financials. Every week we go through business financials, personal financials with my team here at the office. We go through our financials here. But budget actual, budget actual. Here's what's coming in. Here's what we're spending so that we could be in awareness, that we could be proactive and get ahead of the curve instead of being behind the eight ball. And so how many of you are managing your finances, managing your investments, managing the money coming in, managing your expenses? If you don't manage your expenses, the reason I said making more money is is not the answer to wealth. I have seen people blow through millions of dollars because they didn't understand this pillar and the next two. So let me see your feedback. By the way, if you're liking this, hit the share button. Show me some love here. All right, hit the share button. So managing is number two. And then the next pillar is investing. And so I learned many, many years ago, there's a couple really good books. There's a book called the Wealthy Barber. There's another book called the Richest man in Babylon. And there's one other book, I don't remember that one, around investing. So how do you start to invest? The easiest, best way that I know how, based on something that I teach called the habit is more important than the intensity at first or the amount at first. The habit is more important than the intensity or the habit at first. Let me explain. If you're not used to investing on a regular basis, what you want to do is take either a dollar amount, whether it's every day, depending on how you get paid, or every week or every month and you develop the habit of taking a little bit off the top right away. There are apps that you can get that every time you spend money on your credit card, it'll take the change and invest it for you. Change, just change. But you can also take $20 or $50 a week or a month and put it into some investments where you can get into the habit of getting money to work for you. And if you invest, just like in the S and P in the United States, the Standard and Poor's index over 10, 20, 30, 40 years, those have been proven to work really, really well, just as a simple strategy. But when you start to think of taking some of the hard earned money that you make make and investing it, whether it's in real estate, whether it's in stocks, bonds, golds, I personally stay away from, for example, cryptocurrency, which is very, very volatile as most of you know. If you're going to invest, understand the difference between gambling and investing, understand the difference between hope and prayer and emotional emotions and logic. I do not invest based on what I hope is going to go up. I do not invest based on this hunch that I get. I invest based on logic and fundamental principles of whether I'm investing in real estate or a business or the stock market. I have a very, very set rules of what I invest in and what I don't. And so do you have A, an investment strategy? B, do you have rules of how you're going to make decisions on what to invest in or not, based on logic versus emotion? Because if you don't, this pillar will wipe you dry and clean you out so fast some, you know, you won't know what hit you. So the third pillar, fourth pillar, excuse me, is investing. And so if you don't understand how to invest or how to choose an investor for you, whether it's a stockbroker, whether it's a financial planner, whether it's a real estate guide, a person who can, you know, help you invest in real estate, you owe it to yourself to be on the sidelines long enough to upgrade your knowledge and skills so you don't make beginner, amateur, silly mistakes because they're very, very costly. And so there are ways to mitigate your risk. And this is going to take me to the fifth pillar, and that is understanding how to protect. Whether it's your money in the stock market, whether it's your real estate holdings, whether it's your business, whether it's any assets that you have, how do you protect those assets from either being sued for you being sued and then somebody taking those. How do you protect your downside in case the market goes down? Do you understand the mechanisms that you could put in place? For example, if you bought $1,000 worth of Apple stock today, you get about one share. But if you decide to buy one share of Apple stock today, do you know how to protect yourself if the market goes wild down so that you only lose $50 or $100, 5 to 10%. See, if you don't know that, you could put a stop loss order on that stock, then it might go down by 20, 30%. If you don't understand that one little technique. So what am I sharing with you? What I'm sharing with you is the five pillars of financial success. Repair, recover debt, earn, manage, invest, protect. It's all about having processes, systems and rules coupled with knowledge and skills and expertise. Processes, systems and rules and knowledge, skills and expertise. And the reason I wanted to bring this to your attention is, you know, part of my goal is to help people live amazing lives. And money allows us to do some things, whether it's to give to charities, to take more time off, to travel the world, to enjoy some of the finer things in life. But nobody ever taught this stuff to me when I was a kid. I'm teaching this to my children, I'm teaching this to my students in Neuro gym. And I wanted to just help you understand this is the landscape of what you're dealing with. And ignorance is not your friend. Ignorance just means not knowing. And if you don't know, you can't act. But if you do know, you could be smarter, you could earn more, manage, invest, protect your wealth and then you could take some of that financial stress off of you so that you can enjoy life more. All right, so I'm right on the money if I've earned a little bit of your favor. Share this with other people. There's nothing else to do. I've got no offers for you other than an offer of some high five and some love and some really good thoughts for you to make the next week an amazing week. You may want to watch us again. Share this with your children, your spouse, significant other, and dive a little bit deeper. Raise your level of awareness, raise your level of knowledge and skills and guess what? You can win the game of money with the five pillars of financial success and you can learn how to master financial goal achievement also. Alright, it takes a little bit of time, but we know how to. So have an awesome day. Please share this with others. And God bless you. Thank you so much. Bye bye. We'll see you next Tuesday, Sa.