September 15, 2024 • 25 mins
Have debt under control should be paid off soon. What to do next start building wealth and getting money to work for you is a great goal to have.
Article Link: no links
Please support the show by subscribing, can cancel at any time. Thanks for the support.
- Subscription page: https://www.buzzsprout.com/961804/support
- Contact: ReduceDebtIncreaseWealth@Gmail.com
- Wanting Budget Spreadsheet Place Spreadsheet as Subject
- https://Happygiraffe.org/live
- https://www.shopfinancial.com/lantianbaiyu/
All other inquires place topic into Subject.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Charles McDonald (00:03):
Chuck, hello, I'm your host. Mr. Chuck, a
retired accountant turned truckdriver, I reduced my debt in a
relatively short period of time.
Debt reduction to achievefinancial freedom takes
commitment, confidence,determination. Debt paid off
now. What have debt undercontrol? Should be paid off
(00:24):
soon. What to do next? Startbuilding wealth and getting
money to work for you is a greatgoal to have. I'm going to be
talking about what you do asyour debt is coming down. It's
not quite all paid off yet, butyou're making great progress. So
what are you should be doing inorder to be ready once all your
(00:50):
debts paid off? And what are yougoing to do with all that cash
once you have no debt? Let'sassume your goal is to pay off
all your debt, your mortgage,your car payments, all your
credit cards, personal loans,everything. And it might be two
or three years, but maybe you'vebeen working on it for two, two
(01:12):
and a half three years, andyou're getting close to having
your debt paid off. Maybe you'reabout 90% done, and what should
you be doing at this point? Atthis point, it should be
increasing your emergency fundthat minimum of 1000 and the
maximum of 3000 was to get youstarted down the right road, on
(01:35):
the right path, now that you gotyour credit cards paid off,
maybe a car loan paid off, youneed to start increasing your
emergency fund. Your goal foryour emergency fund should be a
minimum of three months worth ofyour expenses go into your
budget. Add up. What are yourwhat's your housing, what's your
(01:58):
transportation, what's yourfood, your clothing, it
insurance. How much is that?
Yes, you need three times that.
Minimum. A good number to haveis six times that, six months.
In case you lose your job orrecession hits, you get laid
off, whatever the case. Maybeyou're in an accident, you can't
(02:18):
go to work and you don't havesick leave, or you don't get
paid unless you're work. There'sa lot of people out there like
that. So you need to startbuilding up your emergency fund
first. Now, once you have aminimum of six or 7000 in there,
that's your that's going to beyour minimum, you need to move
your emergency fund from yourlocal bank to a high yield
(02:43):
savings, or a high yield moneymarket. It used to be a high
yield savings, but it's changedover the last year or so. Now
it's a money market. It worksjust like a savings, but they
call the money markets a littledifferent. If you want to know
about that, then you need tolook it up and find out what the
(03:05):
difference is. But you should begetting somewhere 5% plus as of
like time I record this on yoursavings, or which would we're
going to be calling youremergency fund? That way it will
build up a little bit faster.
You got your money working foryou, 5% is better than, you
(03:29):
know, 1/10 of 1% at your localbank. I don't really have a
whole lot in my emergency fundat this time, around 10,000 and
I'm getting $35 a month. I thinkit's about five and a quarter
percent, something like that.
So, you know, $30 a monthversus, you know, 30 cents a
quarter makes a big difference.
(03:52):
So once you get that done, andyou're still going through the
process of paying off your debt.
Now your minimum balance foryour emergency fund might be
5000 or 7000 or even 10,000 sothen you build it up to 15,000
and you use the differencebetween your minimum and your
(04:14):
maximum of 5000 and you applythat to your debt. Now, as you
pay off debt, the gonna bebuilding up your emergency fund
a much faster. So if you're say,You got two or three credit
cards paid off, and you havefive, and you're starting to see
the speed up increase yourminimum from 1000 to 1100 and
(04:37):
then the next time you do itfrom 1100 to 1200 that way
you're slowly building it up,and you're not gonna miss the
money. It's not gonna reallyhurt you that much. So when you
increase your minimum 100 or 200or $500 your. Maximum gets
(04:57):
increased by the same amount. Soyou keep building up. Instead of
the 3000 it might be 3200 or3500 depending on how much you
increased your minimum. I hopethat makes sense. And as you pay
off all your credit cards, youcan increase it a little bit
(05:19):
again, maybe 100 or $200 you payoff a car loan, you do it again.
Youpay off your second car loan,
you increase it again. Now maybeyour minimum is 3000 so now your
maximum is gonna be five to 6000over time. It's gonna be a slow
process, but it's gonna speed upas you pay off your debt, the
(05:43):
amount of money be able to putinto your emergency fund to
apply to your next debt, thatprocess is gone. To speed up the
last debt you have, the fasterthat's gonna go. It also helps
if you get a pay raise at work,or if you change job and get a
(06:05):
big pay increase. That's what Idid. I changed jobs and got a
healthy pay increase, and thatreally helped my progress along.
So as you're doing this, by thetime you make that last payment
on your mortgage, your firstmortgage, and you're 100% debt
free, you should have somewherebetween three to six months
(06:30):
worth of money in your emergencyfund. Three to six months worth
of your expenses in youremergency fund, and you can, if
you want to be more comfortable,you can build that up maybe to
nine months or even a year. Themore you have, the better off
(06:52):
you're going to be, the longeryou can weather a downturn in
the economy, a layoff oraccident or whatever the case.
So it's up to you. Once you getcomfortable with the amount of
money you have in your emergencyfund, you continue building up
past that point, just like youdid with your debt. And now
(07:15):
we're going to look for ways toinvest your money. I always
invested in mutual funds,because mutual funds invest in
maybe an industry segment, orwhatever the different things in
the stock market, and they buymultiple different companies, so
(07:35):
the mutual fund is more diversethan buying one stock in one
particular company. Now, if youare buying stock where you work,
the company you work for, got tobe careful that that's not you
know, 90% of your retirementbecause you're not diversified.
(07:55):
What would happen if yourcompany has a downturn in the
value of the stock drop, youlose all your money in your
retirement account. You need todiversify your everything you
do, meaning you need to have alittle bit money spread all over
the place in the stock market,so if one segment drops, you're
(08:18):
not going to be hurt all thatbad. And also, if the market has
a big drop, don't selleverything, because you end up
selling it for a loss. But atime you re you think it's time
to get back in. You're going tobe too late, you're going to
miss it, and you're going to buyit at a high. So you're going to
(08:39):
sell low and buy high, andthat's not what you want to do.
You want to buy low and sellhigh. So a big drop in the
market, then that's the time youshould be looking to buy.
Whatever it is you want to buy.
I recommend you get a financialadvisor who understands how all
(09:01):
this stuff works, they generallyneed a minimum of, say, 10,000
or 50,000 so check around, andI'm not talking about stock
brokers. Stock brokers make acommission on what you buy and
sell, and they're going to betrading more things more often
(09:26):
in order to make a commission.
Stock brokers are not financialadvisors. Financial Advisors set
you charge you a maybe quarterlyfee based on a percent of a
quarterly fee. That's apercentage of how much you have
invested with them. So if youhave 50,000 invested with them,
(09:49):
and their fee is like 2% you pay2% a quarter. As the goes up,
they make more if it goes down.
Out and they make less. That'sreferred to as a fiduciary.
They're looking out for the bestinterest of you and not
themselves. A stock broker islooking out interest of
(10:12):
themselves. I need to make morecommissions, so I need to do
more trade. So I buy and sellstuff that I don't necessarily
think this guy should be doingbut I do it anyway, because I
need to make money. A fiduciaryfinancial advisor does not do
that, and they work with thelarger ones work with, like swab
(10:36):
or whoever, fidelity, Vanguard,all the different brokers or
agencies, whoever they are, theyhave, you know, agreements with
them so you don't pay the fees.
You pay their one time fee, andit's not too bad if you're
concerned about paying the lawfees, tell your financial
advisors you want to invest inmutual funds that don't have
(10:59):
high fees to minimize it, orwhatever your particular
strategy is that you want to do.
If you want to have aconservative investment and not
have the risk of losing theprinciple, the principles, the
amount of money that you'reputting in, then you have a
(11:20):
conservative investment. Ifyou're young and you want a lot
of growth, because you got 30years, then you be a more
aggressive investments that willgrow over time, and if it drops,
you got time to recover. Themain point here is you're
getting your money to work foryou. You hear people on
(11:44):
advertising and on the radiowhere they say they saved $2
million well, I can bet you theydid not save $2 million they
saved money that grew into $2million they might have saved
500,000 and over 40 years, grewinto $2 million they put in $100
(12:08):
a month, and then $200 a month,and they did that for 40 years.
So their initial investment mayonly be 500 but their total if
they would sell everything thatthey would be worth over 2
million assuming they got themarket price for everything.
It's also very important tocontinue to do your tracking and
(12:34):
continue to do your monthlybudgets. That's how you keep
track of everything. That's howyou keep your personal finances
under control. You may feel thatI got all my debt paid off. I
don't need to do that. Well, ifyou don't do that, you're gonna
go back to exactly where youwere before you may start using
(12:58):
credit cards too much and getbehind. You might spend all your
emergency fund because you werecareless. Maybe use emergency
fund to buy yourself a brand newcar, and I'm going to repay that
back. I can pay that backbecause my don't have a car
payment, but you never getaround to doing it. Keep
(13:19):
everything that you did whileyou're reducing your debt, you
deep doing the same thing. Youdon't stop doing that ever your
goal in building wealth, ifthat's what your next goal would
be to do and building wealth,you can only do it if you have
(13:41):
more income or what the value ofwhatever you buy goes up. That's
why people invest in the stockmarket, because over period of
time, they go up in value over30 or 40 years. If you don't
want to wait that long, well,how much wealth are you trying
(14:03):
to build? And you want, like, amillion or 2 million. Or what's
your goals? You want 3 millionfor retirement, or you want 50
million? Well, if you the moreyou want, the more aggressive
you got to be. You have to getin to some type of business that
is profitable, that you canstart from the ground up. And if
(14:27):
you watch the shark tanks, forinstance, most all those people
are making the investments,started some type of business at
the right time, build it up, andthen sold it for a fortune.
That's how they made theirmoney, and they why they're
looking for new business toinvest in, because they know the
(14:48):
value of that. They know thatthere's going to be some small
businesses to fail, and somethat do really well, and they're
looking for the opportunity forthe ones. It will do fairly
well. That's why they want apercent of the ownership, so
that the value of that businessgoes up. The value of their
(15:10):
investments go up. Same thingwith in the stock market. Same
thing when you buy real estatefor rental purposes, if you buy
in a single family home and yourent it out, you're technically
you, even though you'repersonally responsible for the
(15:30):
mortgage. If you keep it rentedout for 12 months out of the
year, for multiple years, therenters are paying the mortgage
for you, they're paying the realestate taxes, and they should be
paying enough rent to cover themaintenance. Now, there's going
to be time to time where youhave to cover it and then recoup
(15:53):
it later, but the value of thatproperty is going up, hopefully.
So if after you own it for 10 or15 years, is worth more than
what you paid for it. So notonly did you make money from the
rentals, you got to make moneyfrom the sale and the con stock
(16:14):
is the same way. If you investin stock to pay a lot of
dividends or bonds that payinterest. You're going to make
money from the dividends andinterest, and you're going to
make money from the sale,hopefully, of that particular
item, that's what you're tryingto do. Buy low, sell high on
(16:36):
everything that you do. Itdoesn't have to be real estate,
anything that you think is goingto go up in value may be a good
investment. Every investmentshas risk, the more risk, the
more chance that is not going towork out for you. That's why you
put the majority of moneysomewhere that is less risky,
(17:01):
such as stock market, maybe youcan have a semi aggressive
investment strategy. So part ofyour capital is going to be, you
know, saved where you're notgoing to lose it, and part of
it's going to be more risky,where you could lose it, but it
all depends on how much time youhave before the end of your
(17:26):
life, let's say, or before youretire, that you want to start
using that money. Thisinvestments is money that you're
going to put somewhere and notuse. You don't do it for two
weeks or six days or six monthsor a year. We're talking long
term, five to 15 year timeperiod. The longer you do it,
(17:51):
the more you can make, the moreyou put in, the longer you put
in more money, the more you'regonna make. It's as simple as
that. The strategy here is tomake your money work for you.
I'll be back in one moment withmy final thoughts are the
(18:11):
articles I refer to in myepisodes. Have a link in my show
notes if you're interested inchecking out the software that I
personally use to get my datacontrol. It's in my show notes,
under shop financial. You needto copy and paste the link, and
it'll take you to the website.
Any questions, you can justcontact me through that
(18:34):
particular website if you valuethis podcast and I'd like to
make a contribution. I had acontribution link in my show
notes. Also get whatever youfeel is appropriate for the
information I am providing. Ithank everyone for listening to
my podcast as you're paying yourdebt down. Let's review here, as
(18:56):
you're paying your debt down,you should be slowly increasing
the minimum in your emergencyfund. Once you get all your debt
paid off, your minimum in youremergency fund needs to be at
least three to six months worthof your expenses. The more you
(19:17):
have, the more comfortableyou're gonna be once you get to
the point where your minimumemergency fund, let's say 6000
you would then find yourself ahigh yield investment, such as a
high yield savings or high yieldmoney market that's gonna pay
you somewhere around 5% five anda quarter, five and a half
(19:40):
percent, maybe lower, maybemore, but somewhere around that
range, so that you can makestart making your money work for
you. I say 5000 because a lot ofthese places have a minimum of
1000 or 2500 so 5000 would be.
Safe, and you move it from yourlocal bank into that high yield
(20:05):
account, which generally areonline banks. I've done it for
years. I've had no problems. Soinstead of only getting a few
cents every quarter, you can geta few dollars every month. 5000
should be some around 15 to $16a month in interest. So that's
(20:27):
money you don't really have towork for it. Your money is
working for you. That's thestart of getting your money to
work for you, as your debt isslowly decreasing over time,
that will speed up. So youramount of money you're putting
into your emergency fund orsavings account will increase
(20:49):
faster. That's why you want tostart increasing the minimum
balance so that you have maybe2000 and then maybe one month
and then maybe two months worthof expenses. And slowly build
that up as you're paying yourdebt down. Once you get your
(21:10):
debt all paid off, then you needthe first thing you should do is
build your emergency fund up toa minimum of six months worth
expenses. And it can be morethan that. And then you keep
doing you keep doing this, justlike you're doing paying down
your debt, but now you have thatminimum emergency fund. You keep
(21:32):
building it up until you have5000 more, and then you find a
place to invest that money. AndI'm not talking about stock
brokers. I'm talking aboutmutual funds, safe investments,
and not CDs at your bank,because it's not going to pay
much you want to get some moneystarted in the stock market,
(21:57):
especially if you don't have anyretirement accounts at work, and
if you have a retirement countof work, maybe whoever invests
there might allow you to set upa non retirement account and put
some investments in, and you canfollow the guideline of your
(22:17):
retirement account. Got thingsthat you invest in there and
doing well to put in nonretirement money. I advise that
once you have 10,000 or more nonretirement money to invest, you
should find yourself a financialadvisor that will help you do
(22:40):
all this, he should take asurvey with you and find out
what your risk limits are andwhat you want to do, and your
goals and all them things, sothat he can make the appropriate
investment based on your comfortlevel. They don't get paid by
every time they buy and selllike a stock broker would a
(23:03):
stock broker. If you put moneywith a stock broker, he's going
to want you to buy and sell on aregular basis, because that's
how he makes a commission. Youmay lose a bunch of money. You
may make a little bit of money,but over the long term, it's not
good for you. You don't want todo that. You want to put money
into the stock market as a longterm investment, five years or
(23:26):
longer, 20 years, 30 years, 40years. The longer, the better.
The sooner you start this, themore you're gonna have when
retirement time comes. Once youget that set up and get
comfortable with that. And maybeyou build it up till you have
100,000 200,000 of money youactually put in there. You keep,
(23:49):
maybe didn't you reduce theamount you're putting in, and
you start saving up. And youlook for other ways to make
investments, such as buying realestate, rental property, or
maybe a business of some type,or whatever your long term goals
are. Maybe your goal is to haveyour own business. You can start
(24:10):
looking at doing those type ofthings, or you're gonna earn
more money. The goal here is youwant your money working for you,
so that you don't have to workas hard, work smart, not hard,
and the more money you haveworking for you, the more income
is going to generate, the morewealth you're going to end up
(24:34):
having over time. So it alldepends on your goals and how
fast you want to do it. It'sjust not a fast process. It
might be faster if you'reinvesting 5 million at a time
versus 5000 Yes, but it's a lotmore risky. You could lose more,
so you need to have more. Soit's all up to you and what you
(24:57):
want to do, but the goal here isbuy low. So sell high. Have your
money working for you, and asyou're paying down the debt,
you're in the process of gettingthat ball rolling in your
direction, and you'd be glad youdid so you.
Chuck, hello, I'm your host. Mr. Chuck, a
retired accountant turned truckdriver, I reduced my debt in a
relatively short period of time.
Debt reduction to achievefinancial freedom takes
commitment, confidence,determination. Debt paid off
now. What have debt undercontrol? Should be paid off
(00:24):
soon. What to do next? Startbuilding wealth and getting
money to work for you is a greatgoal to have. I'm going to be
talking about what you do asyour debt is coming down. It's
not quite all paid off yet, butyou're making great progress. So
what are you should be doing inorder to be ready once all your
(00:50):
debts paid off? And what are yougoing to do with all that cash
once you have no debt? Let'sassume your goal is to pay off
all your debt, your mortgage,your car payments, all your
credit cards, personal loans,everything. And it might be two
or three years, but maybe you'vebeen working on it for two, two
(01:12):
and a half three years, andyou're getting close to having
your debt paid off. Maybe you'reabout 90% done, and what should
you be doing at this point? Atthis point, it should be
increasing your emergency fundthat minimum of 1000 and the
maximum of 3000 was to get youstarted down the right road, on
(01:35):
the right path, now that you gotyour credit cards paid off,
maybe a car loan paid off, youneed to start increasing your
emergency fund. Your goal foryour emergency fund should be a
minimum of three months worth ofyour expenses go into your
budget. Add up. What are yourwhat's your housing, what's your
(01:58):
transportation, what's yourfood, your clothing, it
insurance. How much is that?
Yes, you need three times that.
Minimum. A good number to haveis six times that, six months.
In case you lose your job orrecession hits, you get laid
off, whatever the case. Maybeyou're in an accident, you can't
(02:18):
go to work and you don't havesick leave, or you don't get
paid unless you're work. There'sa lot of people out there like
that. So you need to startbuilding up your emergency fund
first. Now, once you have aminimum of six or 7000 in there,
that's your that's going to beyour minimum, you need to move
your emergency fund from yourlocal bank to a high yield
(02:43):
savings, or a high yield moneymarket. It used to be a high
yield savings, but it's changedover the last year or so. Now
it's a money market. It worksjust like a savings, but they
call the money markets a littledifferent. If you want to know
about that, then you need tolook it up and find out what the
(03:05):
difference is. But you should begetting somewhere 5% plus as of
like time I record this on yoursavings, or which would we're
going to be calling youremergency fund? That way it will
build up a little bit faster.
You got your money working foryou, 5% is better than, you
(03:29):
know, 1/10 of 1% at your localbank. I don't really have a
whole lot in my emergency fundat this time, around 10,000 and
I'm getting $35 a month. I thinkit's about five and a quarter
percent, something like that.
So, you know, $30 a monthversus, you know, 30 cents a
quarter makes a big difference.
(03:52):
So once you get that done, andyou're still going through the
process of paying off your debt.
Now your minimum balance foryour emergency fund might be
5000 or 7000 or even 10,000 sothen you build it up to 15,000
and you use the differencebetween your minimum and your
(04:14):
maximum of 5000 and you applythat to your debt. Now, as you
pay off debt, the gonna bebuilding up your emergency fund
a much faster. So if you're say,You got two or three credit
cards paid off, and you havefive, and you're starting to see
the speed up increase yourminimum from 1000 to 1100 and
(04:37):
then the next time you do itfrom 1100 to 1200 that way
you're slowly building it up,and you're not gonna miss the
money. It's not gonna reallyhurt you that much. So when you
increase your minimum 100 or 200or $500 your. Maximum gets
(04:57):
increased by the same amount. Soyou keep building up. Instead of
the 3000 it might be 3200 or3500 depending on how much you
increased your minimum. I hopethat makes sense. And as you pay
off all your credit cards, youcan increase it a little bit
(05:19):
again, maybe 100 or $200 you payoff a car loan, you do it again.
Youpay off your second car loan,
you increase it again. Now maybeyour minimum is 3000 so now your
maximum is gonna be five to 6000over time. It's gonna be a slow
process, but it's gonna speed upas you pay off your debt, the
(05:43):
amount of money be able to putinto your emergency fund to
apply to your next debt, thatprocess is gone. To speed up the
last debt you have, the fasterthat's gonna go. It also helps
if you get a pay raise at work,or if you change job and get a
(06:05):
big pay increase. That's what Idid. I changed jobs and got a
healthy pay increase, and thatreally helped my progress along.
So as you're doing this, by thetime you make that last payment
on your mortgage, your firstmortgage, and you're 100% debt
free, you should have somewherebetween three to six months
(06:30):
worth of money in your emergencyfund. Three to six months worth
of your expenses in youremergency fund, and you can, if
you want to be more comfortable,you can build that up maybe to
nine months or even a year. Themore you have, the better off
(06:52):
you're going to be, the longeryou can weather a downturn in
the economy, a layoff oraccident or whatever the case.
So it's up to you. Once you getcomfortable with the amount of
money you have in your emergencyfund, you continue building up
past that point, just like youdid with your debt. And now
(07:15):
we're going to look for ways toinvest your money. I always
invested in mutual funds,because mutual funds invest in
maybe an industry segment, orwhatever the different things in
the stock market, and they buymultiple different companies, so
(07:35):
the mutual fund is more diversethan buying one stock in one
particular company. Now, if youare buying stock where you work,
the company you work for, got tobe careful that that's not you
know, 90% of your retirementbecause you're not diversified.
(07:55):
What would happen if yourcompany has a downturn in the
value of the stock drop, youlose all your money in your
retirement account. You need todiversify your everything you
do, meaning you need to have alittle bit money spread all over
the place in the stock market,so if one segment drops, you're
(08:18):
not going to be hurt all thatbad. And also, if the market has
a big drop, don't selleverything, because you end up
selling it for a loss. But atime you re you think it's time
to get back in. You're going tobe too late, you're going to
miss it, and you're going to buyit at a high. So you're going to
(08:39):
sell low and buy high, andthat's not what you want to do.
You want to buy low and sellhigh. So a big drop in the
market, then that's the time youshould be looking to buy.
Whatever it is you want to buy.
I recommend you get a financialadvisor who understands how all
(09:01):
this stuff works, they generallyneed a minimum of, say, 10,000
or 50,000 so check around, andI'm not talking about stock
brokers. Stock brokers make acommission on what you buy and
sell, and they're going to betrading more things more often
(09:26):
in order to make a commission.
Stock brokers are not financialadvisors. Financial Advisors set
you charge you a maybe quarterlyfee based on a percent of a
quarterly fee. That's apercentage of how much you have
invested with them. So if youhave 50,000 invested with them,
(09:49):
and their fee is like 2% you pay2% a quarter. As the goes up,
they make more if it goes down.
Out and they make less. That'sreferred to as a fiduciary.
They're looking out for the bestinterest of you and not
themselves. A stock broker islooking out interest of
(10:12):
themselves. I need to make morecommissions, so I need to do
more trade. So I buy and sellstuff that I don't necessarily
think this guy should be doingbut I do it anyway, because I
need to make money. A fiduciaryfinancial advisor does not do
that, and they work with thelarger ones work with, like swab
(10:36):
or whoever, fidelity, Vanguard,all the different brokers or
agencies, whoever they are, theyhave, you know, agreements with
them so you don't pay the fees.
You pay their one time fee, andit's not too bad if you're
concerned about paying the lawfees, tell your financial
advisors you want to invest inmutual funds that don't have
(10:59):
high fees to minimize it, orwhatever your particular
strategy is that you want to do.
If you want to have aconservative investment and not
have the risk of losing theprinciple, the principles, the
amount of money that you'reputting in, then you have a
(11:20):
conservative investment. Ifyou're young and you want a lot
of growth, because you got 30years, then you be a more
aggressive investments that willgrow over time, and if it drops,
you got time to recover. Themain point here is you're
getting your money to work foryou. You hear people on
(11:44):
advertising and on the radiowhere they say they saved $2
million well, I can bet you theydid not save $2 million they
saved money that grew into $2million they might have saved
500,000 and over 40 years, grewinto $2 million they put in $100
(12:08):
a month, and then $200 a month,and they did that for 40 years.
So their initial investment mayonly be 500 but their total if
they would sell everything thatthey would be worth over 2
million assuming they got themarket price for everything.
It's also very important tocontinue to do your tracking and
(12:34):
continue to do your monthlybudgets. That's how you keep
track of everything. That's howyou keep your personal finances
under control. You may feel thatI got all my debt paid off. I
don't need to do that. Well, ifyou don't do that, you're gonna
go back to exactly where youwere before you may start using
(12:58):
credit cards too much and getbehind. You might spend all your
emergency fund because you werecareless. Maybe use emergency
fund to buy yourself a brand newcar, and I'm going to repay that
back. I can pay that backbecause my don't have a car
payment, but you never getaround to doing it. Keep
(13:19):
everything that you did whileyou're reducing your debt, you
deep doing the same thing. Youdon't stop doing that ever your
goal in building wealth, ifthat's what your next goal would
be to do and building wealth,you can only do it if you have
(13:41):
more income or what the value ofwhatever you buy goes up. That's
why people invest in the stockmarket, because over period of
time, they go up in value over30 or 40 years. If you don't
want to wait that long, well,how much wealth are you trying
(14:03):
to build? And you want, like, amillion or 2 million. Or what's
your goals? You want 3 millionfor retirement, or you want 50
million? Well, if you the moreyou want, the more aggressive
you got to be. You have to getin to some type of business that
is profitable, that you canstart from the ground up. And if
(14:27):
you watch the shark tanks, forinstance, most all those people
are making the investments,started some type of business at
the right time, build it up, andthen sold it for a fortune.
That's how they made theirmoney, and they why they're
looking for new business toinvest in, because they know the
(14:48):
value of that. They know thatthere's going to be some small
businesses to fail, and somethat do really well, and they're
looking for the opportunity forthe ones. It will do fairly
well. That's why they want apercent of the ownership, so
that the value of that businessgoes up. The value of their
(15:10):
investments go up. Same thingwith in the stock market. Same
thing when you buy real estatefor rental purposes, if you buy
in a single family home and yourent it out, you're technically
you, even though you'repersonally responsible for the
(15:30):
mortgage. If you keep it rentedout for 12 months out of the
year, for multiple years, therenters are paying the mortgage
for you, they're paying the realestate taxes, and they should be
paying enough rent to cover themaintenance. Now, there's going
to be time to time where youhave to cover it and then recoup
(15:53):
it later, but the value of thatproperty is going up, hopefully.
So if after you own it for 10 or15 years, is worth more than
what you paid for it. So notonly did you make money from the
rentals, you got to make moneyfrom the sale and the con stock
(16:14):
is the same way. If you investin stock to pay a lot of
dividends or bonds that payinterest. You're going to make
money from the dividends andinterest, and you're going to
make money from the sale,hopefully, of that particular
item, that's what you're tryingto do. Buy low, sell high on
(16:36):
everything that you do. Itdoesn't have to be real estate,
anything that you think is goingto go up in value may be a good
investment. Every investmentshas risk, the more risk, the
more chance that is not going towork out for you. That's why you
put the majority of moneysomewhere that is less risky,
(17:01):
such as stock market, maybe youcan have a semi aggressive
investment strategy. So part ofyour capital is going to be, you
know, saved where you're notgoing to lose it, and part of
it's going to be more risky,where you could lose it, but it
all depends on how much time youhave before the end of your
(17:26):
life, let's say, or before youretire, that you want to start
using that money. Thisinvestments is money that you're
going to put somewhere and notuse. You don't do it for two
weeks or six days or six monthsor a year. We're talking long
term, five to 15 year timeperiod. The longer you do it,
(17:51):
the more you can make, the moreyou put in, the longer you put
in more money, the more you'regonna make. It's as simple as
that. The strategy here is tomake your money work for you.
I'll be back in one moment withmy final thoughts are the
(18:11):
articles I refer to in myepisodes. Have a link in my show
notes if you're interested inchecking out the software that I
personally use to get my datacontrol. It's in my show notes,
under shop financial. You needto copy and paste the link, and
it'll take you to the website.
Any questions, you can justcontact me through that
(18:34):
particular website if you valuethis podcast and I'd like to
make a contribution. I had acontribution link in my show
notes. Also get whatever youfeel is appropriate for the
information I am providing. Ithank everyone for listening to
my podcast as you're paying yourdebt down. Let's review here, as
(18:56):
you're paying your debt down,you should be slowly increasing
the minimum in your emergencyfund. Once you get all your debt
paid off, your minimum in youremergency fund needs to be at
least three to six months worthof your expenses. The more you
(19:17):
have, the more comfortableyou're gonna be once you get to
the point where your minimumemergency fund, let's say 6000
you would then find yourself ahigh yield investment, such as a
high yield savings or high yieldmoney market that's gonna pay
you somewhere around 5% five anda quarter, five and a half
(19:40):
percent, maybe lower, maybemore, but somewhere around that
range, so that you can makestart making your money work for
you. I say 5000 because a lot ofthese places have a minimum of
1000 or 2500 so 5000 would be.
Safe, and you move it from yourlocal bank into that high yield
(20:05):
account, which generally areonline banks. I've done it for
years. I've had no problems. Soinstead of only getting a few
cents every quarter, you can geta few dollars every month. 5000
should be some around 15 to $16a month in interest. So that's
(20:27):
money you don't really have towork for it. Your money is
working for you. That's thestart of getting your money to
work for you, as your debt isslowly decreasing over time,
that will speed up. So youramount of money you're putting
into your emergency fund orsavings account will increase
(20:49):
faster. That's why you want tostart increasing the minimum
balance so that you have maybe2000 and then maybe one month
and then maybe two months worthof expenses. And slowly build
that up as you're paying yourdebt down. Once you get your
(21:10):
debt all paid off, then you needthe first thing you should do is
build your emergency fund up toa minimum of six months worth
expenses. And it can be morethan that. And then you keep
doing you keep doing this, justlike you're doing paying down
your debt, but now you have thatminimum emergency fund. You keep
(21:32):
building it up until you have5000 more, and then you find a
place to invest that money. AndI'm not talking about stock
brokers. I'm talking aboutmutual funds, safe investments,
and not CDs at your bank,because it's not going to pay
much you want to get some moneystarted in the stock market,
(21:57):
especially if you don't have anyretirement accounts at work, and
if you have a retirement countof work, maybe whoever invests
there might allow you to set upa non retirement account and put
some investments in, and you canfollow the guideline of your
(22:17):
retirement account. Got thingsthat you invest in there and
doing well to put in nonretirement money. I advise that
once you have 10,000 or more nonretirement money to invest, you
should find yourself a financialadvisor that will help you do
(22:40):
all this, he should take asurvey with you and find out
what your risk limits are andwhat you want to do, and your
goals and all them things, sothat he can make the appropriate
investment based on your comfortlevel. They don't get paid by
every time they buy and selllike a stock broker would a
(23:03):
stock broker. If you put moneywith a stock broker, he's going
to want you to buy and sell on aregular basis, because that's
how he makes a commission. Youmay lose a bunch of money. You
may make a little bit of money,but over the long term, it's not
good for you. You don't want todo that. You want to put money
into the stock market as a longterm investment, five years or
(23:26):
longer, 20 years, 30 years, 40years. The longer, the better.
The sooner you start this, themore you're gonna have when
retirement time comes. Once youget that set up and get
comfortable with that. And maybeyou build it up till you have
100,000 200,000 of money youactually put in there. You keep,
(23:49):
maybe didn't you reduce theamount you're putting in, and
you start saving up. And youlook for other ways to make
investments, such as buying realestate, rental property, or
maybe a business of some type,or whatever your long term goals
are. Maybe your goal is to haveyour own business. You can start
(24:10):
looking at doing those type ofthings, or you're gonna earn
more money. The goal here is youwant your money working for you,
so that you don't have to workas hard, work smart, not hard,
and the more money you haveworking for you, the more income
is going to generate, the morewealth you're going to end up
(24:34):
having over time. So it alldepends on your goals and how
fast you want to do it. It'sjust not a fast process. It
might be faster if you'reinvesting 5 million at a time
versus 5000 Yes, but it's a lotmore risky. You could lose more,
so you need to have more. Soit's all up to you and what you
(24:57):
want to do, but the goal here isbuy low. So sell high. Have your
money working for you, and asyou're paying down the debt,
you're in the process of gettingthat ball rolling in your
direction, and you'd be glad youdid so you.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations.
The Clay Travis and Buck Sexton Show
The Clay Travis and Buck Sexton Show. Clay Travis and Buck Sexton tackle the biggest stories in news, politics and current events with intelligence and humor. From the border crisis, to the madness of cancel culture and far-left missteps, Clay and Buck guide listeners through the latest headlines and hot topics with fun and entertaining conversations and opinions.