”A Bigger Life” with Adam Carroll

Adam Carroll – Host of build a bigger life podcast; curator of master of money.com and founder of the shred method:

• Personal Background – pathway leading to him doing what he does
  • His family appeared affluent or middle class, but money wasn’t really there.
  • His family was loving and considerate.
  • I used to use my credit card in college, and so I became part of the debt stats; 
  • He was an entrepreneur in college, hence borrowed loans from students to build this business.
  • He studied books about personal finance and started applying the principles, and he was able to pay off all my debts at age 26, except the mortgage.
  • This enabled me to save between 3,000-4,000 USD per month, and made me feel like a millionaire, something I started sharing with other people.
• Making this my career
  • I met a personal financial guide and mentor, who gave me a couple of books.
  • I became intrigued by the concept of passive income, and how to create it, especially as an educator, speaker, and creative.
  • I wanted to make money speaking, writing, and creating content; so I describe myself as a mediapreneur – meaning I like creating media in all its facets and then figure out how to turn around and sell it.
• The Shred Method
  • One of the big things the podcast is dedicated to is retiring debts, hence the need to know every new dynamic, principle, and practice to achieve that.
  • The Shred Method is a tactic for optimizing people’s income.
  • Most people don’t have an income problem, they have a liquidity problem; they make enough money to afford what they are doing, but they are not able to go beyond that to save because money is tied up in their lifestyles.
  • The Shred Method tries to help people manage their finances by helping to knock off the debts one by one, maximizing how much money you have remaining at the end of the month, and then figuring out what one should do with the money that is left over; i.e. what is the most efficient use of that money that is humanly possible?
  • Our goal is to create certainty around retirement, to guarantee the working class that they can retire comfortably and never worry about debts and sustainability.
  • We rephrase words differently, for instance, we call retirement choice-age, because we want people at retirement to have many choices and not limited by money in any way.
• The Shred concept:
  • I was a mortgage broker for a number of years; I started a company that I branded and packaged as the first socially responsible mortgage company in our State.
  • I witnessed the exploitation that was happening in the mortgage sector. This was underhanded and morally reprehensible.
  • I wanted to start a company that didn’t function that way; we would receive people who wanted to refinance their mortgage, and we would do the math and show them they could save between $50-$200 per month; but I would be left with this feeling that you have just paid $2000 or $4000 to refinance your mortgage, which essentially would send the client to the same square they were before.
  • I started digging deeper into this mortgage issue at the decision table, I realized that you pay interest for the first 36-40 months, and this is when most people would refinance before they got their hands on the mortgage game itself.
  • So Shred happens in the first 36-40 months of payment is where you can make the biggest difference in how much principal you can pay down on a mortgage
  • When you do that, you are paying in advance your mortgage; you are accelerating your decision table.
  • So we started realizing that one of our goals was to help people have more equity in their homes, reduce the amount of interest that they pay, and then figure out what to do with that extra equity and strategically deploy it in the right places to start building their own wealth.
• What do you think about *HELOCs?, a sort of establishing an emergency fund or capital?
  • A broad brush statement: Anyone who has equity at home, must have a HELOC as an emergency fund – in addition to money saved which is liquid and readily