How the Wealthy Retire Early With Limited Time and Savings

What if you're 55 or 60 and you're behind where you want to be financially? Now, somebody tells you the answer is simple, right? Just save more money, obviously, right? Or give it another 30 years. But there's just one problem is that you don't have 30 more years. Or maybe you're already saving everything that you reasonably can. Now, at that point, you have 2 constraints. You have time and you have new capital. But what if there's a 3rd option, a 3rd lever that most people never even measure? The productivity of wealth that you already own. Today, I want to show you how to identify whether your existing equity is working hard enough And how to determine how much additional velocity you actually need to close the gap. So let's go. All right, so let's talk about what happens if you're behind. So first of all, behind on what? So you have some goal that you need to achieve to reach the number that you need. But number one, is that number even the number that you need? You see, most financial advisors are going to say, well, you could sell off about 4% of your assets per year. And if you sell off about 4% of your assets per year, then, you know, cross your fingers. Hopefully, you don't run out of money before you die. But what if we have a recession? What if you're forced to sell at the worst possible time? So number one, I'd test that assumption. What if I had a higher return on my portfolio and I could actually extract more money and I don't need as much capital as I thought I did? So number one, I'd think about testing that number. And do I really need as much as I think I need? Now, assuming I already know that the number that I need is the number I need and by the timeframe I need it, then I have Really 3 options that are available to me. So number one, it's the amount of capital that I have. So maybe you're already putting all the money that you have disposable in. Then number 2 is the rate of return or the rate of speed that I'm traveling to that number. And then ultimately, I have the timeframe that I need to get there. Like, do you really have to hit it at 62? What if you hit it at 65? What if you hit it at 67? And so those are the 3 levers, the amount of capital I have, the rate of growth or the speed that I'm traveling, and the timeframe that I need to reach my goal. Now, we can get into Any 3 of those levers, and there's ways to get all of them to accelerate. But let's just talk about the second one. I need to increase the rate of return I have. Now, most people think they're stuck. Most people never even thought about increasing the rate of return because their financial advisor or their fund manager at their work or their pension just says, well, you get whatever the market gives us, you get 7%. But treasurers, family offices, they think differently. They think, how could I use what I have now and use it differently to affect that? So a couple things that we can do. Number one, you have more than you think you have. You see, a lot of people have money sitting in these different investments. So for example, I have a house, or I have rental property, and there's equity in them. And I have money in the stock market. And that's capital sitting in the stock market. And maybe I have a little bit of Bitcoin, and I have money sitting in Bitcoin. But all of that is capital, it's equity there. But am I maximizing the equity? Could I turn up the speed at which that, that equity moves? So for example, I have the home, it's a million-dollar home. The U.S. median real estate's going up at 5% a year. The 5% per year number is based off of the value of the home, not the equity in the home. So that million-dollar home is going to go up at 5% a year, whether I have $100,000, $200,000, $300,000, $400,000, or $500,000 of equity in that home. It doesn't matter. Same with my stock account or my Bitcoin account, etc. Bitcoin is going to go up at 30% a year, whether I have the Bitcoin full equity or I have debt against that. So what we can do is we can think, okay, what are the total amount of assets that I own? And if I average that, what is my compound annual growth rate or the speed that I'm traveling to my goal? But what is the actual equity that I have across my portfolio? And if I just take the equity, not the asset level, but the equity level, what is my return on my equity? And then the question is, how could I increase the speed of that equity? So for example, back to the home, if I have $200,000, $300,000, $400,000 of equity there, the home is going up at 5%, the home value, but the equity may be doing nothing. So if I have $400,000 equity there, I could potentially move some of that equity into another asset that could start compounding faster. So maybe some of that $400,000 Goes into another asset like the NASDAQ that's going up about 17% a year, or goes into another piece of real estate that's providing cash flow and giving me tax depreciation and going up as well. I could go on, we can go on for all the different ways we could do this, but you start to understand the concept where most people think about the total amount of assets I have and they average the returns and they take that return as that's just the constraints that I have without realizing that that's a lever, that's a number that I can adjust like a dial. And I adjust it not by chasing riskier things. I don't sit all day on Reddit looking for the next crypto pump and dump or the next meme stock to happen. I don't need to chase some risky options trading strategy or something or chase stocks like SpaceX and I chase all the way up and it went down 50%. I don't have to do that. I can just utilize the assets that I already have. And so if you're feeling behind on achieving your goals, take a look at what you already have and think about what if I put them into a different structure and what would that do to increase my rate? Okay. So now if you're sitting here thinking like, well, I don't actually know what my return, my existing equity needs to produce. to get me to even where I want to go? Well, that's exactly the problem number one, because you can't calibrate something that you haven't even measured. So I'm going to put a QR code on the screen right now that you can scan, and my team can help you look at where you are today, what you're trying to get to, and where that actual gap is. So go ahead and scan that code right now, and let's talk about the part that people usually get wrong when they discover that they're behind and there's a way to turn it back up. Okay, so now we understand that the rate of growth or the rate of acceleration or the rate at the speed that I'm traveling to my goal I can change it like a lever. So the question then becomes, well, how much should I change it? How hard should I push? Well, let me give you an example before I tell you this. So first of all, imagine that I am driving in my car and I have an appointment and Google Maps or Waze tells me that I'm going to get to my appointment late. Maybe I'm going to be 5 minutes late or 10 minutes late. Now I have 2 choices. Choice number one, I can speed. I can go faster. I could risk getting a speeding ticket or getting in a car accident, or I could just call my appointment and say, I'll be 5 or 10 minutes late. It depends on how hard I need to make it to that timeframe. Now, if it's just a friend that I'm meeting for lunch, hey, grab an appetizer. I'll be there in 5 or 10 minutes. If I'm going there for an emergency, then I'm going to speed. And our wealth is the same way. So most people think when it comes to building wealth that I don't know how much I need. My goal is just to make more. How much more? As much as I can. That's not the answer. And your brain can't work on solving that answer. It's like saying, I know I need to get to this appointment. Well, when do you need to get there? I don't know. As fast as I can. So, you're going to drive 200 miles an hour to get there? No, of course not. And that's how it is with our wealth. We don't need to push for maximum growth. We don't need to push for maximum speed. We just need to get to our goal that we need by the time that we need to get there. So, when we think about utilizing our equity, when we think about activating what I call lazy or dormant capital, and I put it into other assets, how much of it should I activate? Should I take all of my home equity out? And put it into something. But, but, but you're already asking, but, but, but what about all the risks? What about if I can't afford the payment or the market drops or whatever, right? So by doing that, you're increasing the risk a little bit, like speeding in your car. So the question is, how much do I want to speed? Most of you, I mean, I'm in California, we drive kind of fast on the freeway. As long as I don't go more than about 10 miles over the speed limit on the freeway, I'm probably not going to get pulled over. 10 miles an hour, I feel pretty good with. Pretty low risk. If I get over 15 miles an hour over, I might get pulled over on the freeway. 20, they're definitely going to pull me over, right? But maybe they won't see me. How much risk am I willing to take? And so the same is with our wealth. If I pulled 10% of my equity out, the risk is pretty low. And would it help me get to my goal? Then maybe that's fine. Or maybe I'm really behind and I really have to get that goal and I need to pull more out. And so the question is a calibration question, but you can't calibrate something that you don't know the constraints around. What's the number? What's the timeframe? How urgent is it that I hit that? What do I have available to me to utilize and access? And then how much of it Should I calibrate? How much work am I willing to put in? How much risk am I willing to take in order to achieve that goal? All right, now hopefully that makes sense for you. And let's say that you actually do this, and now you find trapped equity, and you do improve the efficiency, and you start closing that retirement gap. Well, eventually that just creates the next question, which is now how do I turn all these different assets, accounts, income sources, liquidity, and debt into one system that actually runs without me having to constantly make decisions all the time? Because having good investments is not the same thing as having a wealth system that operates on its own. And that's exactly what I break down in my Wealth Operating System video. I'm gonna put the link to the video right here. Go ahead and click on it and I'll see you over there.