085: Paycheck to Prosperity: The G4 Cashflow Model for Lasting Financial Freedom with Stephen V. Soderstrom

Episode Transcript
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Speaker 1 (00:00):
I have a question for you.
Can you tell me exactly wherelast year's pay raise went?
If you're like most successfulprofessionals, that money
vanished without a trace.
Our guest today, author StevenSoderstrom, knows exactly why
this happens and, moreimportantly, how to stop it.
After watching countless highearners struggle with the same

(00:21):
paradox of I make good money,where does it all go?
Steven developed a radicallysimple system no budgeting apps,
no expense tracking, nospreadsheets that make your eyes
glaze over.
Just one powerful concept giveevery dollar you earn a specific
purpose before it ever hitsyour bank account.
This single shift created whathe calls the G4 cash flow model

(00:45):
and is the focus of his new book.
Hey, steven, how are you doing?

Speaker 2 (00:56):
I'm fantastic.
Thanks, Paul.

Speaker 1 (00:58):
I've been really looking forward to today's
interview.
I met you, I want to say, aboutone year ago today at a
conference, and since thenyou've started working with us
to publish your book, which iswhat we'll get into today.
I hired you to be my financialadvisor.

Speaker 2 (01:13):
Yes.

Speaker 1 (01:13):
I also want to introduce my brother, gabe
McManus, who was your book coach.
You've, in the past year, havehad a big impact on both Gabe
and me.
We've been really influenced byyour ideas, which we'll get
into in today's podcast, and soI thought it'd be fun to have
Gabe join along, just so that wecan recapture the magic of
everything that you shared withus as we approached writing and

(01:36):
publishing your book.

Speaker 3 (01:37):
Yeah, hey Steven, hey Paul, it's good to be with you
guys again and on the podcastthis will be fun.
Yeah, as.

Speaker 2 (01:42):
I've shared.
I'm excited to have Gabe here.
He was a great partner inwriting the book.
I really admired his point ofview, the questions that he had
there were real questions thatreal people had and so it was
super beneficial.
I think I was with him for areason and I really valued his
perspective as we worked throughthat process.
So, Gabe, I really appreciateyou being here and take the time

(02:02):
out to do so as well.

Speaker 1 (02:07):
I will say one more thing, and part of the reason
that I had Gabe work with you isthat when you and I first met,
steven, you had mentioned thatyou love personal finance books,
and I think Gabe has read like,or listened to, about 30
personal finance books in a year.
I thought, okay, these twopeople are going to geek out
over personal finance books.

Speaker 2 (02:20):
And.

Speaker 1 (02:20):
I was right, because typically the coaching sessions
that we do are an hour and Ithink you guys did two hours per
session minimum or somethingalong those lines.

Speaker 2 (02:29):
Yeah, we got in the weeds.
It was fun.
It was a great sparring sessionback and forth of what you read
and then what real lifeactually means for folks, how to
be able to blend those twospaces.
So it was really fun.
I really enjoyed theconversations.

Speaker 1 (02:45):
Yeah, I did too.
I think I'll just add this aswe get going is that?
One more twist is that Gabe hasalways or until he met you, has
always been, I would say astaunch DIYer, do-it-yourselfer,
where he's thought, okay,what's really the value of
financial advisor?
And just in those conversationsthat you had during the process
, his mindset completely changedto seeing the value of having a

(03:05):
financial advisor such asyourself.
With all that being said, I'mreally excited for today's
episode.
We're going to do the go alittle bit longer form than we
normally do today, because wereally want to capture as much
of the magic that you and Gabedid during the process of
writing the book so that ouraudience can benefit from that.
Does that sound good toeveryone?
Sounds great.

Speaker 2 (03:22):
Sounds great.
Thanks, Paul.

Speaker 1 (03:24):
First question this is a big question.
Tell us your story.
Who is Steven Sutterstrom?

Speaker 2 (03:33):
How'd you get started out and what led you to where
you are today?
How we had a chance to get intothis profession is pretty neat.
I went to school to become ateacher.
So I was at college.
My goal is to graduate with ateaching degree, and I'd always
love money, I'd love business,I'd love finance, but I got a
teaching degree because I alsowanted to be a teacher and if I
got a business degree I couldn'tbecome a teacher.
If I got a teaching degree Icould do that.
And so I actually graduated andI was in a long-term position at

(03:56):
a middle school here inMinnesota and during that time
my wife, kelly at the time,actually recorded a show for me
on Oprah.
So she knew I loved money, knewI loved business, and so while
I was at school she taped thisOprah episode and it was her
episode on money.
Right, somebody was there abook to talk about and it was
about money.

(04:16):
So I watched that show when Igot home and immediately just
went out and bought the book andread the book in a day.
And that was my epiphany wasI'm going to teach money.
I don't know who, I don't knowhow, I don't know what it's
going to look like, but I'mgoing to teach people money and
it was my favorite thing tolearn about.
It's still my favorite thing tolearn about today, to read
about.
If you looked at my, all myfeeds have finance information

(04:40):
on them articles that we read,podcasts that we listen to.
It's all based on finance, andso watching that show on Oprah
was a wonderful epiphany and awonderful moment that between my
wife, kelly and Oprah.
They completely changed my lifeand since then that's what I've
been able to do is actuallyteach money to people who really
need it.

Speaker 1 (04:57):
I'm glad that you said between your wife and then
Oprah.
I think that was a smartdecision.

Speaker 2 (05:01):
Yeah, I feel like that was a smart play as well,
but equally important.

Speaker 3 (05:05):
So, yes, it's been awesome.
That's one of those things inour early conversations really
came through is that you have ateacher's heart, and so when
you're sharing the ideas aboutmoney, it resonated so deeply
because that's your beginnings,that was the ability to teach
and to help somebody understandcomplicated ideas.
I think that's what got menodding my head long from the
start and realizing that therewas such value in the things you

(05:28):
were talking about.

Speaker 2 (05:29):
Thanks, gabe.
The hard part about what we do,or one of the most important
things that we do, is takecomplicated information,
complicated concepts, and justput it into a way that just
about anybody can understand.
And so no different than ateacher working with every
student that's there.
Not everybody's a straight Astudent.
Not every walks in is astraight A financial entity as
well, and so you've got to beable to take complex pieces so

(05:50):
that when they walk out of theoffice with you, when they walk
out of that visit, they go oh, Ifeel so much better that we
spent this time together, or Iget this.
That makes so much more senseto me than it ever did before.
And when you have those momentsthey walk away just like a
student walks away moreconfident, making better choices
, better decisions and thereforea better outcome.
But it's being able to takecomplex information, complex

(06:13):
strategies.
Put it in a simplistic form,teach it to them and they go, oh
yeah now I get it.

Speaker 1 (06:17):
That's what we do.
Can you take us back to maybejust your early days of starting
out?
I know that you covered this alittle bit in the book in terms
of you starting out, what youobserved and really why it was
that you had to come up with abetter system so that you could
better serve your clients, sothat you could get to the point
where you are today.

Speaker 2 (06:34):
What I really believe is that, deep down, we have,
pound for pound, the bestclients that are out there is
that the clients that we haveare meeting and reaching their
full potential of what'spossible within their life.
It doesn't mean that everyperson walks in, is making
hundreds and hundreds ormillions of dollars every year,
or that they have $50 million,which is what makes us a great

(06:56):
team.
What they're really coming inwith, and what they've been able
to do, is to reach theirmaximum capacity.
Now, it didn't start therethat's not where I started, but
that is what I believe ourclients have been able to do is
to become the best version ofthemselves possible, and that
takes time to do, but that's whothey are, which is why I
believe, then, we actually have,pound for pound, the best

(07:16):
clients in the world, and sothat really came from.
When I started as an advisor, Ithought my job would be you
would bring me your statements,you'd bring me your investments
and I'd tell you where youshould hold more international
or small cap or large cap andI'd show you charts and graphs
and rate of return and I'd talkto you about standard deviation
and beta and give you a wholebunch of words that, at the end

(07:38):
of the day, you'd walk out going.
I don't really know why we'redoing what we're doing or what
he said.
What did he actually say?
But, boy, look at how smart heis and what he really did and
what I found was a combinationof actually real problems that
people had that had nothing todo with rate of return, why they
should hold more internationalor large cap or small cap.

(07:58):
It didn't have anything to dowith what percentage was in
their 401k, but they actuallyhad way different problems in
their life and if we could solvethose problems, that would be a
huge lift to their life.
So one of the biggest problemsthat I saw was I make good money
, where does it all go?
That was one that if youvisited with enough families

(08:18):
across the board, people weregoing to walk in and go I make
good money, where does it go?
I just don't understand someversion of that.
I should be better off than Iam.
Why aren't I better off than Iam?
Things like that.
So there's a version of thatthey're going to walk in with,
and I remember this clientdistinctly and there were so
many points that hit me as I wasstarting out as a young advisor

(08:38):
One of those points.
The client walked in and theycame in, they were young
professionals and they said hey,we want to retire.
And I said great, and we puttogether a financial plan and I
said you need to save $10,000 ayear to reach your goals.
And they then said I don't have$10,000, right, that's 800
bucks a month.

(08:59):
I don't have $833 a month toset aside towards my goals.
And I go look, that's what themath says, that you need to save
, fast forward six months.
They walk back in and they gohey, steve, guess what?
I got a $10,000 pay raise andin my mind I went perfect, round
, hole, round, peg 10 grand.
It's going to go straight toretirement.
They're going to make thishappen.

Speaker 3 (09:14):
And I said excellent, we're going to put it into
retirement.

Speaker 2 (09:17):
You're going to do it .
And I thought perfect.
And what did they do?
They go.
We bought a boat, boat, perfect, good choice.
We bought a boat.
And then the next client we'regoing on this vacation.
We're doing this.
I quickly realized was that theyweren't going to be on track.
It didn't matter the rate ofreturn, it didn't matter how
much international, how much Itried to tinker with their

(09:37):
investments or whatever thatmight've been, it actually
didn't matter.
This client was not going toreach their goals.
Mattered, this client was notgoing to reach their goals.
And that really broke my heartand I knew that we had to fix
this.
At the same time, I was gettingpeople walking in, as I
mentioned, making $300,000,$400,000 going.
Where's all my money going?
We've got to fix this.

(10:00):
And then I watched clients atthe same time.
If they were older, they wouldhave a 401k or a 403b or a
retirement plan through work.
That retirement plan would havea lot of money in it.
Their personal checking accountwould have little money in it
in comparison.
And so what you realize wasthat if it was set up automatic,
if they didn't have to think,they just put this money in and
they've accumulated hundreds ofthousands of dollars in an
account that actually they putvery little thought into,
proportionately.
And then their checking account, where they had complete

(10:23):
thought over, they didn't havevery much money.
So these things were allhitting me as an advisor, seeing
so many families come into ouroffice.
And then what I found was ithappened to me was that when
Kelly and I were young and wewere starting off, we weren't
making very much money and wethought next year will be better
, we'll get a pay raise, we'llget a bonus, we'll get a tax
return, next year will be betterand next year would come those

(10:49):
things would happen, but weactually didn't feel any better.
And then the following year ithappened again and I thought,
okay, if this is what'shappening to me, who's in
finance, who's a nerd aboutmoney, who loves finance books?
Who's reading all of thisinformation?
If this is happening to me, Iknow what I will look like if we
don't fix this.
And look at how our income hasgrown over the past three years.
We don't actually feel betteroff.

(11:10):
That was a real problem, and sowe began changing the way that
we live, because we could watchpeople come in with their real
problems, their real challenges,and create solutions that were
actually just better for me.
I knew where I would go if Ididn't fix it.
I needed to fix something formy own family to be better off
than we were on track to become,and that's what we've done and

(11:31):
then we shared it with clients,not knowing that they would need
it.
But I just would say thingslike this is what Kelly and I
now do.
And they'd go oh.

Speaker 3 (11:39):
I'll try that.

Speaker 2 (11:40):
And then it began to work for them, and then the next
client, and the next client,and the next client, and over
years it became transformativeto where our clients are at
today.

Speaker 1 (11:48):
To me.
That's what was so relatable,because I think you shared some
version of that in when we firstmet and it just struck me, just
as that's me, and I can onlyimagine that's so many people.
And you just nailed it becauseI'm a big believer in habits and
behavior and it's I have abelief that I can make as much
money as I want to make, but atthe end of the day, if I'm just
spending more, inflating mylifestyle, then you end up in

(12:09):
the same place.
You might have bigger, fanciertoys, but are you really better
off?
Is your stress really down?
Have you really accumulatedenough?
I think that was the thing thatstruck me so uniquely, because
for most other people that I'veworked with, it's always about
my products better or I can dobetter for you here.
This is why, whereas you're,the way that you communicated
that to me was just.

(12:30):
That just makes inherent senseto me.

Speaker 3 (12:32):
And that's where, after Steve and I would have
these conversations, paul and Iwould talk and then have another
hour long conversation justdiscussing the ideas behind it.
That was really cool because asI moved from thinking, as you
said, that a lot of people thinksomebody is just going to
tinker with your investments anddo I need more international?
That's what I had imagined thatthe process would be, that I
really thought I could take careof this on my own, but because

(12:54):
this resonated on a deeper levelwith me about how I'm spending
my money, how I'm really settingmyself up for success and how
I'm spinning in a cycle of thesame problems year after year,
paul and I had greatconversations about it and it
became something that was fun totalk about because of the way
that you presented it in ourcalls.

Speaker 2 (13:11):
Yeah, I really appreciate you guys taking time
to do so and continue to havethose conversations.
It's just, there's so much morevalue and if we can solve
people's real problems.
Their real problems weren'twhat portfolio percentages
should they actually have?
Their real problems were how doI get a car for my kid?
How do I go on vacation?
How do I pay off my housefaster?
How do I put my kid throughembraces?

(13:32):
How do I pay for college?
How do I do these things?
These were the real problemsthat people have, and here I was
showing them charts and graphsabout information that really
wasn't that valuable and they'dwalk out of the visits.
I can only imagine they'd walkout going.
I still need this in my life,but I don't really know why.
And I still have all theseproblems over here.
None of them are actually beingfixed, and I felt like if we

(13:55):
could solve real problems inpeople's lives, the investment
stuff is actually easy.
That's just math.
Math is easy, life is hard, andso if we can get really good at
the life side, the math willall.
It will just take care ofitself, and that's what we've
been able to do.

Speaker 1 (14:09):
There was something else that really struck me early
on in working with you and I'mcurrently in my forties.
I have my own business, I'm anentrepreneur, I generally enjoy
what I do.
My mindset, my thought processat the time was I really need to
save because I'll probably workindefinitely not because I have
to but because I want to, and Iguess that was part of my

(14:31):
rationale for not doing a goodjob.
Saving and investing for thefuture was that was my mindset
at the time.
So you really helped me shiftthat mindset to that.
Even though maybe I'll workindefinitely because I enjoy it,
what I really should be lookingfor is that optionality,
whereas when I hit 60, that if Iwanted to retire, I could, if I
wanted to keep working, I could, but I really could have that

(14:53):
optionality.
But just the way that youexpressed it in the book was
really powerful.
Can you share more about that?

Speaker 2 (14:57):
Yeah for sure.
Thanks, Paul.
What I find with folks is acouple of things.
One is to keep in mind is thatI think we're a brand new person
every 10 years, so the personyou are today is not going to be
the person that you are goingto be in 10 years from now.
And think of it 10 years ago.
It's unlikely you were the exactsame person today of who you
were 10 years ago, and so one ofthe pieces that I've been super

(15:21):
fortunate to have a chance inand get and gather- as a young
advisor was visiting with peoplewho were in their 50s, 60s and
70s all the time, even when Iwas in my 20s and 30s, and what
I found was what I wouldconstantly hear and it didn't
even matter how much money theyhad the clients who had 500,000,
5 million, 15 million when theywere in that late 50s, early

(15:44):
sixties they all wanted to haverelatively three things, and it
was just these three things.
They wanted time to be able todo with whatever they wanted to
do with it.
They wanted health so that theycould do whatever they wanted
to with the time that they had.
They didn't want any financialstress.
They wanted financial freedom.
So time, health and financialfreedom were the three things,
and it didn't matter.
$500,000 worked it right,that's all that.

(16:07):
They saved $500,000.
They wanted that $15 million.
They wanted that as well.
So it was beginning to shapetowards this.
If that's what they wanted, whyisn't that what I would want?
Why isn't that what you wouldwant?
And I hear often people walkingin going I'm going to work
forever.
I'm going to work till 65, 70years old, 75.

(16:28):
I'm a workaholic.
I love what I do.
I have super passion for it.
I'm really excited about it.
I've also seen those same folkstell me that same message and
then get to 60 and go I'm tired,when can I be done?
Do I have to go till 65 or 70?
And so it's just preparing andthinking about is there a chance
that you might be somebodydifferent than you are today?

(16:49):
Is there a chance that youmight do?
And if there is that chance,shouldn't we plan to give you
that option?
And then what we find is thepeople who have that option, if
they do continue to work, theyactually enjoy it more because
they don't have to go.
That feeling of I'm going herebecause I'm forced, I'm going
here because of the paycheck.
The people who get to work.
They're no longer working forthe money, they're actually

(17:11):
working because they reallyenjoy it Big difference.

Speaker 1 (17:14):
You have this powerful analogy, comparing
financial problems to cancer,and that can seem dramatic, but
just the way that youarticulated it and the reason
that you do that, I think wasreally just really eye-opening.
Can you share what, at least interms of the book, what you
meant and what you mean byfinancial cancer?
Thanks for bringing that up andI appreciate the thought of.

Speaker 2 (17:32):
It does feel dramatic .
It feels dramatic to relatemoney to cancer and I completely
understand that.
But I also think it is is thatthe money problems that people
have they're usually inside,they're usually really deep down
and it's a challenge.
And so what happened in my lifewas there's a photo in my
office and I've got a wall ofphotos and there's nine

(17:53):
different photos.
They're all in the shape of asquare and in the bottom
left-hand corner of those arrayis a picture, a family photo,
and my dad is in that pictureand it's all of us together and
we're in.
It's around Christmas time andwe're all smiling in that photo.
Everything looks good on theoutside but in the inside.
We had no idea that at thattime my dad had cancer.

(18:15):
There was kidney cancer.
That was in there.

Speaker 3 (18:17):
We had no idea at what point did you see the
analogy to people's financiallives and when did you make that
connection and start talking toyour clients about it?

Speaker 2 (18:27):
I think there's so many people that once my dad
realized he had cancer and oncehe had those decisions to make
that's when it really hit,because he would come he would
feel like I don't feel anything,I feel fine.
Why do I have this cancer?
What if I do nothing?
If somebody came to you andsaid I have cancer and I'm going
to do nothing, you would thinkthat's crazy.

(18:49):
That is what are you talkingabout?
There's ways to fix that.
There's ways to get better.
What I feel is that same thinghappens to people every year in
their finances is that they knowI'm not as good as I could be.
They know, ah, maybe I've madea poor choice here.
I could have made a betterchoice there.
They know, man, why are we stillsolving this problem?
I got a pay raise, I got a$30,000 pay raise.

(19:11):
Where'd all that go?
And yet they choose to donothing about it.
That's a problem that seemssilly.
If my dad wouldn't have takensteps to resolve the cancer at
that time, that would have endednegatively, and no different.
If we don't take steps toimprove our financial lives, I
believe we'll die at our desks.
I believe there will be highpaying individuals making good
money, living in goodneighborhoods, driving nice cars

(19:33):
that essentially are just willdie at their desk.
They will have to work forever,and we don't have to.
It doesn't have to be that way.

Speaker 1 (19:40):
And that's hearing that and listening to you.
That's where I guess Iself-diagnosed a year ago, where
pay my bills felt that I hadgood income but the savings
wasn't there, the investmentsweren't there, and that's where
I defaulted back to.
I like working.
I don't need to save forretirement because I don't plan
to retirement.
My takeaway for myself was thatI think I have some form of

(20:02):
financial cancer and hopefully,if we solve for it early enough,
I'll be okay.

Speaker 3 (20:06):
When I used your system to put my numbers in, it
was shocking really to seespecifically what my fixed
expenses were, what I'm spendingjust on the day-to-day stuff
that comes up, and then when youput it against your income and
I thought this is unworkablereally.
That self-diagnosis really iseye-opening.
And then being able to makeadjustments to try to get back

(20:28):
on track and to move towardsfinancial health, that's a good
feeling.
I think we both experiencedthat after you talked to us
about it.

Speaker 2 (20:35):
And I really applaud you, but I also applaud every
individual who's open enough tohave that conversation.
Is that it's so easy just tokeep ignoring it and say, oh,
next year I'll do it myself orI'll get better next year?
And so I really applaudeverybody that is open enough to
say, hey, let's have aninternal look, let's have that

(20:55):
x-ray, let's have that workupdone to be able to do that's
really important and I applaudevery person who's had a chance
to do that.
Every one of our clients has.
Their lives are better for it.
But it is just taking somestock and who are you really?
And then, who do you want tobecome In health and in finance?
There may come a time whereyou're going to change by choice
or you're going to change byforce.

(21:16):
Either way you're going tochange.
Either way, this is going tohappen.
Changing today you have theopportunity to change by choice.
It happen.
Changing today you have theopportunity to change by choice.
It's so much better.
I didn't say it was easier, butit is better than having to
change by force later on becauseI don't have any money or I ran
out or something bad happened.
Either way, people will change.
It's just please, change today,get better today your life.

(21:38):
You can improve today.
We just have to take action init.

Speaker 1 (21:41):
I think along those lines.
To me this was a relatively newconcept, or at least a new
understanding for me.
You call it the high incometrap.
I think probably many peoplehave that, which is, I'll just
make more money and when I makemore money, then that'll solve
my problems.
Again, I'm a business owner,entrepreneur.
I have the capacity to earnmore money.
I don't need to scrimp and savenow because I'll make more
money in the future.
My problems will be taken careof.

(22:02):
Can you share more about whatthe high income trap is?

Speaker 2 (22:05):
The high income trap really came from watching
clients who, as they werebeginning to near retirement,
say this was the life theywanted to recreate.
And so what I mean by that isthey're going through their 20s,
30s, 40s and maybe even intotheir 50s and they're making
money, but what are they goingto make the most amount of money
?
They're making the most amountof money right at the end of

(22:25):
their career, in the last fiveyears of their life.
They're making the most amountof money.
And so what dollar amount dothey then want to recreate?
They, want to recreate thatlast five years of lifestyle.
But it seems silly, right?
Because all of the years beforethat they weren't saving, to
recreate that number.
They were saving at a muchlower dollar amount or a much
lower pace.

(22:45):
All of a sudden at the end, ofour life they go.
I want to recreate this incomeand it's very challenging for us
to do and, very simply, the waythat I think of this is that if
there's a couple that's outthere and they're making
$100,000 a year and they retiresocial security, whether it's
here or there this income socialsecurity might cover $70,000.
So they make a hundred.

(23:05):
Their social security is goingto cover 70.
They need investments to cover$30,000.
There's another household,they're making $400,000 a year,
social security is only going tocover $80,000 between those,
which now means a $400,000couple needs to recreate
$320,000 a year in savings andin income and in need.

(23:28):
Between incomes 100 to 400 isonly four times the difference,
but their savings need went from30 to 320,000 per year that
they were now responsible for.
So you have four times theincome but 10 times the savings
requirement for you to live thatlifestyle that you want to live
in those last five years.
It's a real problem.
If you're not thinking aboutthose pieces it can be a real

(23:50):
problem.
And if you don't have enoughmoney and you retire, that's a
problem.

Speaker 3 (23:53):
Do you have a lot of clients that come in at a
certain point and they just theyhaven't really conceptualized
that fully and that they've beencontributing to the 401k but
not realizing that they're noteven close to making up that gap
?

Speaker 2 (24:06):
Yes, and it's usually these are folks who believe I'm
doing well.
We just had a client walk in.
They're in their mid forties,they're in this 400,000, we've
got $1.5 million, we're gettingstock, we've got 401ks, they've
got good money coming in,they're making good income.
They've actually have over amillion dollars in savings and
they're thinking we're doing allright.

(24:27):
Once you actually extrapolatethese pieces out and put some
real data to it, it becomespretty clear oh man, maybe I'm
not doing as well as I thought Iwas doing and thank goodness
they are giving themselvesenough time to pivot, adjust,
make decisions.
So our job really, for highincome individuals, what we
believe is that they're smartpeople who can make smart

(24:47):
decisions, but they need smartinformation to be able to do and
it'll become very clear.
The answers will absolutelyshow themselves and they will
make, and have made, much betterchoices.
Their futures will be betterfor it.

Speaker 3 (24:59):
You had talked to me at one point about the analogy
to Michael Jordan choosing hiscoaches that when I was talking
about do it yourself, that I'mthinking I'm going to save a few
dollars by not paying afinancial advisor to manage my
money.
Could you share what you weretalking about with an athlete
the way that they think aboutthe coaching and the advice that
they get in their lives?

Speaker 2 (25:19):
I keep a couple of things in perspective there and
it's easy to say I can do thesethings on my own, but I think
it's also more successful to go.
Here are the coaches that arehelping me get there, even as we
know that as top pros inathletics, it's easy to look at
that these are the best in thecountry, best in the world, and
all of them have a coach all ofthem.
The likelihood that somebody ismaking it to the Olympics, that

(25:42):
somebody is winning a worldchampionship, that somebody is
making it to the Olympics, thatsomebody is winning a world
championship, that somebody isreaching their maximum potential
without a coach, is a verysmall percentage of people that
can actually do that.
And I hear all the time I don'twant to pay that person for
this.
And then I just think what doyou think the richest people in
the world pay for?
Their accountants and theirfinancial planners?

(26:02):
How many millions of dollars doyou think they're paying for
these individuals, theaccountants?

Speaker 3 (26:07):
alone are making a ton of money.

Speaker 2 (26:09):
Michael Jordan.
If you're thinking of these proathletes and their coaches that
are with them all the time,those are pretty high value
coaching positions to be had andyet they're creating the
greatest results.
That's what I mean by ourclients are the best of the best
.
They are reaching their maximumpotential.
That's what's most importantand that's what's possible
through coaching and leadershipis that you're going to reach

(26:30):
your maximum potential.

Speaker 1 (26:32):
This whole book is centered around what you
describe as the G4 cash flowmodel.
What is the G4 cash flow model?

Speaker 2 (26:41):
The goal with the G4 cash flow model is to solve.
What we have is the biggestproblem that clients are
actually walking in with, thebiggest feeling that they're
actually walking in with, andvery simply, that is I make good
money.
Where does it go?
And this dawned on me in acouple of ways when I was
starting out as an advisor.
I knew how much my dad wasmaking at 30 years old and I

(27:02):
knew how much he made at 60years old.
It was a pretty big gap andclients would walk in and they'd
say things like I'm making goodmoney, I don't know where it
goes, but next year will bebetter.
The next bonus, the next payraise, the next tax return, that
will be better.
We would ask the question whatdid you make three years ago,
what do you make today and whereis that difference?
If we could find the difference, could we achieve your goals?

(27:23):
The answer was, more often thannot, yes.
The best part was is that threeyears from now, you're going to
make more money again in thenext three years?
So if we could just find thatgap, what were you making three
years ago?
What do you make today?
If we could find that gap, whatwere you making three years ago
?
What do you make today?
If we could find that gap, wecould achieve your goals faster
and the best part was, threeyears from now, you were going

(27:46):
to make more money.
So what we built was this modelthat we could capture and find
every pay raise moving forward.
The way that we did this wassetting up a checking account
just where your deposits went to.
What we found was that thischecking account at a completely
separate financial institutionwas really crucial.
We deposit our clients' checks.
We actually deposit them intowhat we call a Prosper account
here at our practice here in G4.

(28:06):
It's their account, their nameon it, their money.
But at G4, we deposit thesefunds into a Prosper account
here at Ameriprise.
Then what we do is we recreatetheir paycheck down to them and
down to their own bank.
So whatever bank it is thatthey're using.
We then recreate that paycheckand figure out okay, you need to
live on X amount of dollarsevery single month.
You come up with that number,we don't come up with it.

(28:26):
You come up with that number,what it is that you need to live
on every single month, and wewill just send you that dollar
amount.
Really, nothing should changeat the most basic At home dollar
amount.
Really, nothing should changeat the most basic at home.
Nothing should change exceptfor when you get a pay raise,
when you get a third paycheck,three paycheck month, when you

(28:47):
get a tax return, when you get abonus.
Because if we do this correctlyand we keep sending you the
same dollar amount now, we'veinstantly captured that bonus,
pay raise and tax return andinvariably the clients come back
with the best question, whichis what do I do with all of my
money?
Not where did my money go, butnow it's what do I do with all
of my money?
And that has been the key tothis whole piece.

Speaker 1 (29:04):
How do you create that structure, that discipline?
This is how much money I getevery month and I determine the
number.
How do you help peopledetermine that number?

Speaker 2 (29:13):
There's just an exercise that we go through at
the beginning, and one of thepieces that I just asked clients
for is I'm not asking you to goback the last year, six months,
and average out every expenseand where did it all go, and I
don't need all of thatinformation, I just need a good
ballpark for us.
To start with is that I alwaysfeel like if you give us 10%
effort around filling in somedata, we're going to get 90% of

(29:34):
the results.

Speaker 1 (29:35):
I think I gave you 10% effort initially because I
spent about 15 minutes beforeour first call and said okay,
this is all I got.
This is perfect.

Speaker 2 (29:42):
That's all that it takes.
If you just give me 15 minutes,we're going to be 90% correct
and then we're going to feel itout.
After that, we're going to justtry things Like how does it
feel?
Because what I would find iswhether it's in the apps,
whether I put a spreadsheettogether right Again, here's who
I am.
I'm a spreadsheet person.
Could you imagine howenthusiastic Kelly would be when
I bring up a spreadsheet and Igo hey, honey, I want to talk

(30:04):
about this line item on aspreadsheet.
Could you imagine how that goes?
That's not a great.
That just doesn't work.
We have on the spreadsheet thatwe're only supposed to do this.
That's not real life.
So we needed to create a waythat we didn't have to think
that it could just be automatic,that we could capture these
funds instantly and create.
Really.
The secret sauce to this pieceis that there's just an

(30:25):
invisible wall, that.
What I hear from clients isthat and what I felt personally
is that there's this invisiblewall between the money that they
deposit, the paychecks thatthey deposit into this account
over here and then theirspending account over here.
There's this invisible wall andthey feel like, well, I can't
really go back and get thatmoney.
And we know, if we're reallytruthful with ourselves and I

(30:47):
said there's money in yourchecking account, at minimum
you're tempted to do somethingcool with it and spend it At
minimum we're tempted to do.
But if it never showed up inyour account, it wouldn't
actually even cross your mind,you wouldn't even spend it.
And so creating that invisiblewall where clients go, that's
not even my money.
I hear that, no, that's noteven my money.
In my Prosper account, it istheir money, it is their
future's money, it's buildingwealth for them at a faster rate

(31:09):
.
But they perceive it as it'snot even my money because it's
not at their bank at home.

Speaker 1 (31:14):
And I think the best analogy is that it has a similar
dynamic to the 401k.

Speaker 2 (31:19):
Yes, that's exactly.
It Is that this idea thatpeople could build a 401k by
just putting 10% of their moneyinto a 401k and have it build up
over hundreds of thousands ofdollars.
It's their money, their name ison it, they could access it at
any time they wanted, but theynever do, but it's their money.
And so that exact same idea Ifelt like when I built this.

(31:39):
It was why are we just fundinga 401k at 10%?
What if that idea could workwith 100% of our paycheck?
And so that's all we did was,instead of just using 10%, we
said let's build that idea with100 and go from there, and it
has been a huge game changersince.

Speaker 1 (31:55):
Can you drill down on what you call the CEO account?
And so I get that you'resending over a fixed amount
every month from the oneinstitution into, say, my
primary check account.
How do I make sure that laststhe full month?

Speaker 2 (32:08):
Yes.
So the first problem Kelly andI solved was hey, our income is
going up.
How do we capture the growth inincome?

Speaker 3 (32:15):
So that was our first step.

Speaker 2 (32:17):
Then the next problem that we found was still at home
.
Again, I am the spreadsheetperson.
This is who I am is thisindividual who watches all of
the accounts?
And my wife?
She is a normal person.
She's the one responsible forgetting everything for our
family.
She does it all.
She's wonderful.
I would joke that really I'mjust the bum of the relationship

(32:38):
.
I just show up to work, I gohome and I'm really just the bum
.
Kelly runs the whole household,but what we found one of the
challenges that we had on apersonal level was that Kelly
would go to the store.
She'd come home with three bagsand every single time we have
four kids, mind you She'd comehome with three bags and every

(33:01):
time I would ask her a questionhow much did you spend?
Every time I'd ask her how muchdid you spend?
So, if you're on, if you canrelate, that's every time.
And then I'd have a secondquestion Did we need that Every
single time?
It wasn't that I didn't loveKelly.
No, I love Kelly.
I know that she's gettingthings for our family, but what
it felt like to me was that,very simply, there was a slight
friction.
Every time she would walk inthe door, whether it was
intended or not.
It felt like I was judge, juryand executioner.

(33:24):
Every time she would walk inthe door, and it just wasn't a
fair way to run a family at all,and so we had this real problem
.
So we had to find a way tosolve it.
Now, as the planner that I am,and many are, they can tell you
what your property taxes are forthe whole year.
You can tell you what yourmortgage or your rent is for the
whole year.
You can tell you within acouple of bucks what your

(33:46):
utilities might be, what yourstreaming services cost For the
whole year, if you're CEO of abusiness, ceo of a company, ceo
of a family, for the whole year,what these are going to cost.
What you weren't sure of iswhat were you going to spend on
food, gas, groceries, dining,entertainment, clothes, hobbies,
what were the real things thatyou were going to spend in life?

(34:06):
So all that we did was notknowing exactly what we were
going to spend.
We just created a target and wecreated a second checking
account and we said we're goingto move money from checking
account one to checking accounttwo at our bank every single
week and that's what you get tospend, and you can spend it on
anything.
We created a CEO account thatis designed for spending.

(34:26):
It's supposed to be guilt-freeIf Kelly comes in with three
bags.
It's three bags.
That's what it is.
There's no conversationregarding it.
That's just what it is.

Speaker 3 (34:40):
We know that we're running the family, but it's an
account with money that's in itdesigned specifically to be
spent for our family's benefit.
Now, what happens if, beforethe following week, you run out
of the money in your CEO account?
Do you go on your credit cardsat that point?
What's the answer at that?

Speaker 2 (34:49):
Good question there, gabe.
So a couple of things that wefound valuable.
One is we found that movingmoney from the main account to
our CEO account every week wasactually one of the most
important steps to this is thatusually people get paid every
two weeks.
Right, maybe they get paidevery 15 days, and if you had to
go that entire time, there's achance that you might get run
out of money.
Things might get tight.

(35:11):
You might be then forced to putthings on a credit card, but we
found that actually, if we paidpeople every single week, is
that the client would actuallybe better off.
We were better off, and so Ithink of this very simply is
that what usually people getpaid on.
Friday.
So you get paid on Friday.
Who wins?
What do you do on Friday night?

Speaker 3 (35:27):
Saturday, Sunday.

Speaker 2 (35:28):
You're going to ball games, you're going to the
movies, you're going out.
You're spending all of themoney.
So it's easy to pay yourself onFriday.
You spend it all over theweekend.
By the time you get to the nextweekend, you're out of money.
If you could pay yourself everytwo weeks and you can pay it on
a Friday.
So we found that if you payyourself on a Tuesday, by the
time you get to the weekend youcould spend all of that money
guilt-free.
Whatever's left, spend it, havefun with it, don't worry about

(35:51):
it.
Now, if you get to Monday andyou don't have any money left,
you might have to eat leftovers.
So make sure you might need toeat the leftovers, but on
Tuesday you could pay it againevery week and it's the same
dollar amount.
So just like you know what yourproperty tax bill is for the
year, you know what yourmortgage or rent is for the year
.
We now know what your spendingis for the year.

(36:11):
It's X times 52.
And I don't necessarily need toknow what it's on or where it
goes.
And all the apps that trackwhere you spend all the money
those are all reactive apps.
This I can be proactive.
My wife and I can look at thechecking account.
We know exactly how much moneyis in there.
We don't have to think, wedon't have to talk about it.
We know exactly how much moneywe can spend.

(36:32):
There's really no need for usto do anything else.
We can communicate withouthaving to communicate.
So setting up a separatechecking account, paying
yourself on a Tuesday, having aset dollar amount and trying to
challenge each other to livewithin that piece, it'll change
the mindset that you have aroundspending money and how much you
can actually spend.

Speaker 1 (36:49):
I've been doing exactly that for six plus months
.
I haven't deviated it from atall.
I haven't quote unquote,cheated at all.
I've stayed completely withinthose boundaries.
That's for both my wife and me,and that goes towards just the
discretionary spending.
It goes towards food, grocerystore, any restaurants, amazon,
target, gas, things of thatnature.
In that six plus months, Ithink there's only been one or

(37:10):
two times where it's starting toget a little bit low.
For example, I didn't go to themovie that weekend because I
was getting low, so I'm notgoing to go to the movie, and
this has happened twice.
And the irony there, though, isthat's in the CEO account,
whereas in these other accounts,I see just starting to
accumulate massive amounts ofmoney.
But I'm disciplined based onthis one account, which is just

(37:32):
fascinating to me.
Also, I will add, I don't haveto track it.
I don't have a budget app.
I don't have to track what Ispend at here or there, because
it's all just this one account.
Look at that one account.
If there's money, I can spendit.
If there's not, I start scalingback, but it replenishes every
week.
We've adjusted, and we simplydon't spend that much money.

Speaker 2 (37:52):
Money I equate kind of money to like that tube of
toothpaste is that when you geta fresh tube of toothpaste and
you're putting it on yourtoothbrush, you got toothpaste
for days and you're putting iton there and you can put all
kinds on, but then you get tothe end of the toothpaste and
you're squeezing it to.
Your thumb hurts and you'repushing it so hard because
you're like by golly, I know Ican get another day out of this
thing, it's just challenging you.

(38:12):
So when money is in theaccounts, when we get pay raises
and bonuses, it's constantlyjust we're not paying as close
attention to it as maybe wecould should.
By not paying attention to it,we're losing out on really the
goals that are important forpeople, the goals that they
really want to achieve, whetherit's retirement or college, or
buying a car in cash or beingdebt-free, whatever it might be.

(38:33):
We're losing out on it, becausewe're just not paying attention
to the day-to-day pieces as wellas we could.
So I had to create a way that Ididn't need a spreadsheet to do
, so we could always knowexactly how much money we could
spend.
We could live the life that wewanted to.
So we haven't tried to changeyour lifestyle dramatically at
all, but what we've really juststopped was an increase as your
income went up your lifestyledid it.

Speaker 1 (38:55):
We captured the game.
If I didn't have the system, ifI wasn't grounded in the system
, I would do the natural humanthing.
Oh, I got a bunch of money inmy account.
I probably deserve to go toplaces and spend it and I know
that I can live off of it andI'm happy living off of it.
It's the accumulation in mysavings and investments is
skyrocketing where it's out ofsight, out of mind.

Speaker 2 (39:15):
It's taking the idea that over time your income will
go up, how fast it goes up, whenit goes up, whatever that looks
like.
But again, we challenge.
I knew what my dad made at 30.
I know what he makes at 60.
I know that there's a wide gapin there.
I understand inflation is athing, but it's still.
The pay raises are larger thanwhat the inflation is there,

(39:37):
larger than what the inflationis.
There's an opportunity for usto capture those dollars.
That's all that we've done.
I had an advisor, a friend ofours, that we were working with
and the client came in and theywere making $500,000 a year and
they had a million dollarsportfolio at that time and I
said what's the greatest waythat you're able to get them an
extra $100,000?
He came up with here's theinvestment idea that I would do
to get them $100,000.

(39:58):
My answer was can you help themjust save $100,000?
Could you help them find$100,000?
Or, when their income goes fromfive to six, could you find
that 100,000?
Because they can guarantee thatit just went up $100,000.
Their net worth just improved.
So we don't need a fancyinvestment piece to make it
happen.
If they can just make it happen, they can control the outcome.
It's so easy for us to go, oh,it's rate of return is why I'm

(40:20):
not being successful.
No, you can actually out-saverate of return, Then when you
combine, the two are fantastictogether.
But we've just got to get in onbeing able to build the assets
the way that we have and ourspending is.
Usually the largest culpritthat we have is just not paying
attention to day-to-day spending.

Speaker 1 (40:38):
We talked about the CEO salary.
There's some other savingsbuckets that are very specific.
These are part of that monthlyamount that you send over from
the one institution to the otherinstitution the other day.
I also have an automotiveaccount that you helped, that
you encouraged me to set up.
You're going to havemaintenance every so often At
some point, you're going to buya new car, et cetera.
So I've just beensystematically putting money in

(40:58):
there every month for thisfuture problem that I know I'm
going to encounter.
And the bill was like 1200bucks.
I'm like great, here you go,and it just came out of the
savings.
So it didn't come out of the CEOaccount because that's separate
.
It didn't go, it just came outof these other accounts that you
help people anticipate.
It's not an emergency fund.
The real question is, how doesthis differentiate from the idea

(41:21):
that some people have of anemergency fund, because it's
more planned spending that youknow you're going to have in the
future?

Speaker 2 (41:26):
No, that's exactly it , paul is.
What I would really try tothink of is what are the
problems that I know I'm goingto have Right now?
What problems do I know that Ineed to solve over the course of
the next one, three, five-yeartimeframe?
And if I needed to, what wouldI do today to solve that problem
?
For example, like travel, kellywould like to leave the state.
We live in Minnesota.
We'd love to leave the state,especially in the wintertime.

(41:48):
I'm a fan of leaving the state,especially in the wintertime,
so we know that's something thatwe want to do is to be able to
do that, and so we had to figureout a way to solve that problem
.
Instead of every year being athing that we had to get into,
what we did was we just set up aseparate savings account.
We literally we just nicknamedit travel.
Every month we moved money inthere.
This really came from theproblem of getting to that time

(42:11):
of the year, wanting to leaveand then going.
Where's the money for it.
And the real problem from thiswould come because I am who I am
again and Kelly is who she is.
I'm the nerd and she's normal.
She'd come to me and say, hey,here's this really cool vacation
.
Our friends are going on.
Can we go?
And what would I say?
No, immediately no, I wasn'tsaying no because I'm a bad guy.

(42:33):
I wasn't saying no because I'ma bad guy.
I wasn't saying no because Idon't love Kelly.
I was saying no because I'mtrying to preserve my family's
success, right, preserve thefunds that we have.
What if something were to occur?
Do we have money to take careof it?
What if something bad were tohappen?
And so what we began doing wasjust moving money into an
account just designed for aspecific goal Was that we took

(42:55):
money and we created a bill,moved it into a savings account,
nicknamed it travel.
And if money went into thataccount and it was in there, we
travel.
That was it.
Whether we were going on thetrip or not, we would put money
into a travel account.
And when she would say, let'sgo on this trip, I'd say, is
there money in the travelaccount?
She'd say yep.
I'd say book the tickets.
Piece of cake.
And then we did that for all theother problems that we had in

(43:15):
our life as well.
So, car you mentioned you hadsome car repairs.
We've got cars they needrepairing.
We've got cars, you might needa new one.
How would you organize thattoday if you needed to put money
into a car account just tosolve that problem?
Today we have kids activities,we have Christmas, we have gifts
.
I would hear people say thingslike I have a savings account,

(43:36):
but the money didn't have apurpose.
They didn't know why they hadit, they didn't know what it was
for, they didn't know what itcould solve and they didn't
definitely then didn't know ifit was enough by organizing the
money into accounts specific fora purpose, when that problem
arose solved.

Speaker 3 (43:51):
That was one of the eye-opening things that when we
were talking, you said Christmasbirthdays we act like we don't
know that these things arecoming up every year.
We just have to face it when weget to Christmas.
And I thought that's true, thatI could be putting aside money
throughout the year.
So when Christmas time comes, Isay I'm prepared, I have money
ready to go for this.

Speaker 2 (44:10):
Yeah, we know that credit card debt increases
during Christmas time.
We know that February,financially, is a depressing
month because there are,financially is when the credit
card bills are now showing upand they have to pay those.
We know that as a nation, wecan see that all the data points
to this thing.
Clients would come in and theygo oh Christmas.
You know how expensiveChristmas is and I would think

(44:31):
come on, we know it's coming,you know it's happening.
It's almost it's the same dateevery year.
Is that you're going?
We know that you're going tospend more money during this
timeframe.
Why are we surprised by this?
I really just try to figure outways to pre-solve problems and
if we could pre-solve them, theywere no longer a problem.
Christmas would just get solved, birthdays solved.

(44:52):
We know that if you own a home,or if you're right, we know
that you're going to need newthings.
It could be a new TV, a newcomputer, a new dishwasher, a
new air conditioning unit.
We know that's going to come up.
So if we plan for it today, putit in the budget, assume that
we had it and all of a suddenyour air conditioner goes out.
It's no longer a.
Where do I get the money.
It's oh, I have moneyspecifically in this account for

(45:13):
this specific problem.
Boom solved.
I've shared and you shared.
When I go and get new tires onthe car, I go in and get tires,
they go.
It's $1,500 for tires.
I literally just log into mybank, I transfer $1,500 for my
auto account into my spendingaccount and I use the debit card
and I walk out.
That's it.
I'm not wondering where am Igoing to get the money from?
I'm not worrying if it's on acredit card and I have to pay

(45:35):
for it later.
I've already solved the problemin advance.
And if we can pre-solve thoseproblems, people's lives are so
much better off and then they'renot going.
Oh, I spent this money and nowI need to withdraw money for my
savings account.
Oops, or oh, I know I need topull from here.
No, we've already planned foryou to do so.
There are very few surprisesthat we should actually have in

(45:56):
life.

Speaker 1 (45:57):
I think it also helps balance out.
Sometimes, I think there's asituation where, because 401k
contributions tend to beautomatic and someone might be
saving up hundreds of thousands,if not millions of dollars in a
401k, yet they're heavily indebt because they don't manage
their day-to-day.

Speaker 2 (46:13):
Solve these real problems like plan for them, and
we know that it's not the nextpay raise that's going to solve
it.
So if we can just organize themoney and give it specific
purposes, a plan and a purposefor every dollar that you're
going to generate, the way thatI think of this is what did you
make three years ago?
What are you making today?
Where is that gap?
And if we gave it a purpose,would the problems that you have

(46:33):
today still be problems?
If you're making $250,000 ayear as a family over the next
10 years, with pay raises, withbonuses, inflation, if you make
250 today over the next 10 years, you're gonna make what?
$3 million over the next 10years?
If we organize $3 millionreally well, could we achieve
the goals that you have andcould we do so in an easier

(46:55):
manner than you're doing itright now.
That's what we've been able todo Solve real problems and then
the rest of it's easy.

Speaker 1 (47:01):
You shared a lot about how a lot of what you've
come up with just is based onyour own life and you and your
wife Kelly and you just came upwith solutions for yourselves
and then you started sharingthese with clients.
I think the couples dynamic isreally interesting.
I think research shows, andprobably just our gut knows,
that one of the biggeststressors in marriages can be
money and just a couple spyingabout money.

(47:22):
Can you share any stories orjust what?
In terms of the people don'tcome to you for marriage
counseling, I imagine.
But what's some of the impactthat you're having on people as
a result of setting up thesesystems, which the first time
you do it it might sound like alittle bit complicated, but I
can tell you that once they'reset up, they're automated.

(47:42):
You don't even think about themfor the most part.
It's so simple to follow oncethey're set up.

Speaker 2 (47:47):
Relationships and money is such a hot topic and
such an opportunity fordiscontent or frustration among
individuals that the value ofhaving some conversations, the
value of having a third party.
In most families there is aperson who is the money person
that is a normal thing and thenthere's this other person in the

(48:09):
relationship who maybe runs thefamily, does other.
In my family, I was the moneyperson.
Kelly was responsible for thekids and the activities and all
of that.
Those were the roles.
Usually we see people wherethere's one couples where
there's one person who's themoney individual.
That can create some sort ofdisappointment, frustration
amongst each other, because onewants to save it all and the
other is just trying to managethe household.

(48:31):
Really well, by having theseconversations, in an unemotional
position with a third party,focus on the goals that you both
actually want to achievetogether.
You both agree on them for thefirst time.
In many cases they're now onthe same page of the same book,
reading at the same and allmoving in the same direction,
and now we know why something ishappening or why we can or

(48:54):
can't spend money, or when wecan spend the money, which is
also an important metric to beable to actually go.
No, you should go on thosetrips.
You should do these things.
You do have the capacity to do.
We don't need to save everypenny for this stuff, because
life is worth living.
It's having some sort of athird party to be able to come
in and go.
You are doing great, or we doneed to get better, and here's

(49:16):
why I don't have to raise afamily with you.
I don't have to see you up inthe morning, I don't have to see
you at Thanksgiving orChristmas or any of those
holidays.
By having that third party tobe able to provide some guidance
during those conversations hasbeen really valuable.
Yes, we've absolutely heard it.
This is not what I expected tobe a part of, but I've
absolutely heard.

(49:36):
You've saved our marriage.
Our relationship is betterbecause of you.
That's absolutely happened timeand time again.
That wasn't the goal of this,but that has been the outcome of
it.
It's far more continuity,solidarity, focus towards the
goals and understanding of whatit is that we're actually trying
to achieve, towards that, andthen people are, because they're

(49:59):
on the same page.
They're actually end up beingable, in a loving way, to hold
each other accountable towardsthe goals we have.
They know this was what wewanted to achieve.
Does that actually do that forus?
Yes or no?
And if it does, it becomes avery easy answer to say yes to
it, and so they can hold eachother accountable in a very
loving way as well.

Speaker 1 (50:13):
The first time that my wife and I we've been married
for over 20 years really talkedabout money was in one of our
meetings, which is just.
I think myself I didn't evertrack my money really.
My wife and I never reallyspoke about it.
It just at some level.
It seems absurd to me to lookback and do that, and the
amazing thing is that part ofwhat you do is you encourage me
to make sure that both of uswere on the meeting, even though

(50:34):
we're doing this through Zoomor.
Teams or whatever.
I'm like I can do it, my wife'slike you can go do it.
But you encouraged us to bothbe there and we were, and it was
funny because we weren't reallyapart and so just having the
conversation you helped us toalign it towards our goals.
We both bought into it.
There's just been very smoothsailing ever since.

Speaker 2 (50:52):
That's a great point, paul.
You know, what I find is thatbecause there's one person in
the relationship who's the moneyperson, that's the person who
thinks I'm going to go visit thefinancial advisor, I'm the one
who's going to do it, I don'tneed this other person.
And that just seems silly,because who lives the goals?
You both live the goals.
Just because I'm the moneyperson in my family doesn't mean
that Kelly's goals aren't anymore important.

(51:12):
They're like we all knowthey're more important than my
goals.
We know that's true, to haveher there.
I always think like one personmight deal with the money, but
you both live the goals.
And so having both parties comein is really important, because
we want to hear both sides, wewant to understand what's
important to both parties.
But then we also want people toknow why we're doing what we're
doing, so that both people cantake positive steps towards

(51:35):
achieving those goals.
And that's what happens.
So, yes, we hear it often inthat, oh, usually he just did it
and I go.
No, we want both of you to havea chance to come in.
Or she's the money person, shemakes the money, she'll come in.
No, we want both of you to comein.
If you have goals, we want tohear both sides of those and
we're going to help improve bothof your financial lives and

(51:57):
outlook.

Speaker 1 (51:57):
And it's amazing that she took to Japan.
Our nephew is getting marriedand she wanted to gift him
$1,000 and do all these things.
As you said, if the money's inthe account, great.
We have a gift account, we havea travel account.
It's like the money's alreadybeen pre-allocated.
Go for it.
Zero resistance, because I'mnot worried about savings

(52:18):
investments.
Everything is on track and, ifanything, we're
over-accumulating in all thesedifferent accounts, and so my
financial anxiety, as I call it,is essentially about a zero,
and that has never been the case.
It's always been how am I doingand what's going to happen and
how will that impact me?
And since we've been meeting,working together, the anxiety is
at literally a zero.

Speaker 2 (52:38):
Most of that anxiety comes from not knowing what.
If something bad happens, can Ihandle it?
Will it be okay if I have aslow quarter?
If their house needs a hugerepair?
If our car breaks down, can wehandle it?
So there's anxiety for thesethings that are unknown.
If you can just plan for thoseand have a way to answer those
questions oh, if the car breaksdown?

(52:58):
Oh, I've got money to solve it.
Okay, let's check.
If the AC goes out, I've gotmoney to solve it.
If you can organize the moneyin a way that it can really
solve most of the problems thatyou might come up with In most
years we know what thoseproblems are going to be you can
solve all of those ahead oftime.
It really diminishes thatstress level that you might be

(53:19):
having.

Speaker 1 (53:19):
I want to get into another practical application or
just, I think thing that weface.
I've been blessed this pastyear.
My income has been going upquite nicely and at the same
time I think you told me this isthat you actually want to have
these systems in place beforethe next raise, before all these
other things.
Otherwise you're just going todefault to normal behavior.
I'm very lucky that we met whenwe did.

(53:40):
When does someone deserve tospend more money or when should
they be spending more money?

Speaker 3 (53:49):
Steven from your book about the idea of the happiness
versus the stress buckets.
Could you put it in the contextof that about when we deserve
these things?

Speaker 2 (53:55):
The goal in the end is to elevate your lifestyle.
That's, in the end.
That's what we want for all ofour clients is to raise their
lifestyle, is to have luxuryitems, is to have jet skis, is
to have cool stuff, is to go ongreat trips, is to buy nice cars
.
That's the goal in the end.
But we need to differentiatebetween I deserve these things

(54:20):
and I've actually earned thesethings.
There's a very bigdifferentiation in that we do
want you to get there, butthere's a big difference between
deserved and earned, and a lotof that is just going to be in
the stress that's created fromgetting these things.
Gaben mentioned this happinessbucket idea and, very simply,
what that is in my mind.
We're all carrying on thisbucket.
This bucket can only be filledby two things, two things only.

(54:42):
It's either happiness or stress.
That is it.
There's only two things in ourbucket happiness and stress.
And the challenge here is thatstress will always fill our
bucket first, always, and thenhappiness will come in second.
As you're filling your bucket,you've got to be very careful of
what it is that you're puttingin your bucket.
But in fact, if we just canfind a way to remove stress, you

(55:05):
automatically have more roomfor happiness, to the point that
, as you said, my stress now myfinancial stress is zero.
You now have full opportunityto fill your bucket with
happiness, but as soon as stressshows up, happiness leaves.
And now I have the stress todeal with.
In our society today, we confusethings that I deserve and

(55:26):
things that I earn, and peoplego.
I've worked really hard, Ideserve happiness, so therefore
I deserve a luxury vehicle.
I know, because I did it right,I work really hard, I deserve
something nice.
And we, right, I work reallyhard, I deserve something nice,
and we go out and we buy itbecause we believe this will be
the thing that brings ushappiness.
This is what we're working for,this is what the world tells me

(55:47):
I should be getting.
Is this really nice vehicle,this really nice house, this
really nice boat?
Whatever it might be, becausethat's what's going to make me
happy.
But as soon as we get thosethings, countless studies will
show that happiness is futile.
It only lasts a little bitwhile we have those things and
then, inevitably, we're filledwith stress because now I've
spent money on it, which nowmeans I have to go to work,

(56:08):
which increases my stress level,to make the money to pay for
the thing that I thought wouldbring me happiness.
Now I have this thing that Ibought that now needs to get
repaired.
Now I've got to take it andit's got to get fixed.
And I've got to pay moreinsurance on it, and I've got to
.
I've also got to make sure Ifeel pressure to use it.
If I go and buy a boat, I'vegot to use this boat, right, I
want to make sure I use it andso I feel pressure that I have

(56:30):
to use it.
The stress of all of theseitems, just by adding in those
items, removes the fact that Ican actually fill my bucket with
happiness.
Kelly and I had this samethought process was that we were
working really hard.
We were in our late twenties,early thirties, by golly.
We deserved some luxuryvehicles.

(56:50):
We did it.
We each had matching luxuryvehicles.
They were awesome, they werevery nice, but there was a
problem associated with them.
It wasn't really aligned withthe long-term goals that we
actually had for our family wasto have these luxury vehicles,
and so in the moment it feltlike we deserve these things.
We worked really hard.
Look at what we've gotten to.
We deserve these vehicles, butat the same time, we were doing

(57:16):
so at the expense of our kids'college funding and our kids'
college education.
If we were to really lookforward in our lives 10 years
from now, what really was goingto bring us more happiness?
The fact that we used to havesome really nice luxury vehicles
that are now 10 years old, orthe fact that we could put our
kids through college and theycould walk out completely
debt-free?
Even though we felt like wereally wanted these things, it
was a poor choice that we madein getting those.

(57:38):
We actually had to turn around,had a conversation with Kelly
Fortunately Kelly is completelyunderstanding opened all of
these pieces.
We sold those vehicles, boughtvery mundane vehicles.
At that time I'm sure ourneighbors were wondering, oh no,
what happened over there attheir house.
But I can tell you today, aswe're going through it exactly
today, we've got a junior incollege.
He's going to be a senior incollege and a freshman in

(58:00):
college.
They are thrilled and we arealso thrilled with the decisions
that we've made by having achance to transition those
vehicles to actually then gotowards college education.
It felt like a tough decisionat the time, but now the
happiness is absolutely flownthrough by removing a stress
that would be how am I going tocover this large expense for

(58:21):
college?
It's now just solved and itleaves a whole lot more room for
happiness.

Speaker 3 (58:25):
How have you seen this applied in your clients'
lives that?
Is it a tough sell?
Or do they get it fundamentallyand then start to feel the
benefits of filling or removingthe stress from the bucket and
letting the happiness rise, eventhough they're not getting any
things initially?

Speaker 2 (58:42):
It comes in one of two ways.
One is maybe, if they're comingin younger, they've maybe seen
stress from other people andthey go.
I don't want that.
They've seen people and they go.
I don't want that They've seenit and they go.
I don't want to stress overthose items.
More often than not, though,people walk in already feeling
stressed from some of thedecisions that they've made and
they're going.
I just don't want this stress.
How do I get rid of this stress?

(59:03):
How can I build a better model,moving forward, not everybody
and I don't think very many haveever sold their vehicles and
then repurchased some mundanevehicles.
Those were steps that we did,but those are not conversations
that we go you should sell yourcar, you should sell no, none of
that.
What we're trying to do is justthink better in the years
moving forward than we thoughtmaybe in the last three.

(59:25):
Let's think better in the nextthree and so that we can look
back three years from now and bereally proud of what we've done
.
And so people, if they'reyounger, they walk in saying I
don't really want this stress toget added.
I see it's happened to myparents, my family, my aunts,
uncles.
I see the stress they're under.
I don't want it.
Let's build a better model.
Or more often than not they'rewalking in going I make really

(59:46):
good money, but I'm stillstressed out.
I'd really like to remove thatstress from my life.
And how do I do?
And then again in the end, ourgoal is that they can actually
do everything they want in life,that they can actually elevate
their lifestyle, that they canincrease their spending.
That's actually our goal isthat they can increase their
spending.
But the way that we do that, ascovered earlier save money, buy

(01:00:09):
assets, use those assets tothen pay for an increased
lifestyle, and that's what we'retrying to build.
That's what we're trying to do.
It's a sustainable method ofincreasing your lifestyle.
It'll never go backwards, itwon't create panic, it won't
create concern, but create asustainable model for an
increased level of lifestyle,and you should be able to do

(01:00:29):
that then forever.

Speaker 1 (01:00:30):
You use a term in your book move on to cooler
problems, Cooler problems.

Speaker 3 (01:00:34):
Yes.

Speaker 2 (01:00:35):
Yes, that's exactly.
It is that I believe thatsuccess, financial success, is
actually based on the problemsyou're solving.
I always think everybody has100 problems.
Everybody has 100.
Just which ones are you solving?
And you can't get to the nextset of problems until you've
adequately solved this set ofproblems.
But think of it is that theperson with $300,000, says the

(01:00:57):
$300,000 problems.
The person with $3 millionstill has problems.
They're just different ones.
The person with $30 millionstill has problems.
They're just different set ofproblems.
And the 300,000 person's going.
I would love the 3 million orthe $30 million problems, but
you have to solve this level ofproblem to get to this level.
And to get to this level, thegoal is to get to cooler

(01:01:21):
problems, get to solve betterproblems, and so if we're
solving the same problem everyyear, we're actually not
building ourselves a way to getto the next level of problem.
That's the goal Solve the nextlevel, Solve this problem so you
can solve the next level ofproblems.

Speaker 1 (01:01:36):
In the book.
You mentioned a three-yeartransformation.
What happens in three years?

Speaker 2 (01:01:40):
I love three years.
There's so many visits that wehave that in our team.
We do just a progress report, acheck-in, and it's been
astonishing to go hey, here'swhere you started with us,
here's where you're at today.
Did you think this could happen?
Whether the client sheepishlysay, oh yeah, I knew that would
occur.
It's amazing to see the resultsof what's possible over a

(01:02:01):
three-year timeframe.
We consistently reallyunderestimate how much our lives
can change over three years andour clients have seen incomes
grow.
Your income can grow, but socan your net worth significantly
.
That's what we try to build.
I just think of it in a smallchanges creating dramatic
results.
Think of somebody that you'dseen three years ago and if

(01:02:22):
today they physically havetransformed, they're now in
shape, they're ripped, they lookright, they look great, they're
all of those things, you noticeit and you bring it up
instantly and go oh, my goodness, how did you do it?
And they have a chance in threeyears.
They could be a completelydifferent person in three years.
The goal is, if they just had apersonal trainer and they went

(01:02:43):
there three times a week, theyate right, they took all these
steps, there's a hugeopportunity for them to change
their physical appearance inthree years.
It's no different than for themto be able to change their
financial life in three years.
And that's what we do.
You look back after three years.
I'm astonished.
They're astonished regardingthe results that they've been
able to achieve.

Speaker 1 (01:03:01):
I know.
I have to admit that I don'tknow if I fully buy into this
whole three-year thing, becauseI feel like in three months I've
essentially lived thetransformation.

Speaker 2 (01:03:10):
Thank you.
It has been awesome to watchyou.
It's awesome to watch clientswho do these things faster.
The speed of how fast it canhappen is really up to them.
It's up to what steps do theywant to take?
How much are they going to buyinto that process?
How much will they let me?
How much trust are they goingto give into this entire process

(01:03:35):
?
And the ones that do?
It really is amazing to be ableto see what they've done.
It's super exciting.
To be frank, it's actually whywe keep growing as a team and as
a business and as a firm isbecause now people are going oh
my gosh, you're somebody I don'teven recognize.
How did you do it?
And they go.
Oh, here you go.
And then they show up here andthey're getting ready to begin
their journey as well.
It's actually the reason ourbusiness has grown is because

(01:03:56):
the transformation that's reallyhappened in people's lives.
But yes, it doesn't take threeyears.
It's really just how fast willthey let us be a bigger part of
their life?

Speaker 1 (01:04:04):
When you were looking to write the book, so a year or
so ago, and you had saidsomething to the fact that we're
not looking to work witheverybody, we're looking to work
with.
I think it was 3%, the 3% thatwant these results.
To me, that was that stood out,because because everything that
you're describing here today,the results that you can, I
believe, fairly consistentlydeliver to people based on the

(01:04:27):
conversation that we've had, theonly prerequisite is that you
need to want it.
Part of the reason that wewanted to have excited to help
you publish your book, but alsopart of the reason that we
wanted to do this long forminterview with you today is just
to help inspire and motivatethose 3% that are like I want
this.
Who's a good fit?
Who's not a good fit?
What would you tell those 3%that are at this point in the

(01:04:49):
conversation with us and they'relike that makes a lot of sense.
How do I do this?

Speaker 2 (01:04:52):
That number really came from when I was a teacher
walking into a classroom, andback in middle school I knew
that when I walked in, not manykids actually cared about what I
was going to say.
I remember myself in middleschool, right.
I wasn't super stoked everysingle class I was walking into
to sit there and learn and be apart of it for that 50 minutes

(01:05:12):
or that hour to be there.
What I also saw throughteaching, though, was I saw C
students, d students, f studentswho really wanted to get better
, who really actively wanted toimprove, reach out and improve
and make huge strides.
I saw C students become Astudents.
I saw A minus students become Aplus students.

(01:05:33):
I saw so much progress in thekids who actually wanted to be a
part of my class.
That, to me, was that's who wewant to teach, is that mentality
of people who want to have achance and get better.
So I'm not there.
We're not here for just to havea chance and help you, ho-hum,

(01:05:53):
be a part of it.
We're not here to talk, just totalk.
We want to change your life,and you have to be actively
involved in changing your life.
We're one of the few places thatwill tell you I can't care more
about your success than you do.
You must care first about yoursuccess.
We will care right behind you,but you're going to care most

(01:06:14):
about how successful you'regoing to be and we're looking
for the people who care thatmuch to take action.
It's much less about who areyou walking in, it's who do you
want to become.
That mentality, that person, iswho we want to have a chance to
be a part of.
That covers all income ranges.
That can be somebody who'smaking $150,000 to $1.5 million.

(01:06:34):
The ones who are going.
I want to reach my fullpotential and I'm willing to
take steps to do.
That's who we want to have achance and be a part of their
lives, because we willdramatically change your life.
That's what I love to do.

Speaker 1 (01:06:46):
What are the next steps that someone should do,
either to get the book or tohave an opportunity to talk to
you and or your team?

Speaker 2 (01:06:55):
A couple of things.
First of all, I just believethat people have the potential
to reach their financial goalsand improve their lives.
I remember running spreadsheetsin my own life and being the no
person and trying to balancethe finances with my wife and
family and watching clients gothrough the same things.
It's taught me that theirpersonal life and these
strategies really work, not onlyfor my family, but for

(01:07:19):
thousands of other folks, andover 20 years we've seen it
change lives.
This is my favorite thing to do.
The easiest way to go aboutdoing this is going to
g4financialfreedomcom Request acopy of the book.
We'll have a chance, we'll getit right out to them and we'll
have an opportunity to beginchanging their life right then.
And there,g4financialfreedomcom, they can
begin having these conversationswith spouses, significant

(01:07:41):
others.
What are the goals that youreally want to have a chance to
achieve?
What really is important to you?
If you could make somethinghappen, what would you want your
life to look like three yearsfrom now?
And we begin.
We build it now.
Let's do it now.

Speaker 1 (01:07:55):
This has been fantastic.
I've really enjoyed theconversation.
I really feel that theconversation we've had today is
almost like the audio bookversion of the book.
This is what I was able to.
This is what you and Gabe, theconversations you had I was able
to listen in vicariously, so Ireally hope that the listener
really gets a sense of the kindof impact that the G4 cashflow

(01:08:16):
model, which is what your book'sall about, can have and, by
extension, what you and yourfirm are all about.
I'd love just to and finally,wrapping up and I'll give this
to either one of you, gabe, justas Stephen's book coach, and
just your own learningsthroughout this process Is there
any insights or any takeawaysor any thing that you'd like to
share before we wrap this up?
And then I'll ask Stephen youthe same question.

Speaker 3 (01:08:37):
Paul, after Stephen and I would have our
conversations and then you and Iwould talk and discuss these
ideas.
I found myself out on the golfcourse with friends and the
subject of money would come upand they'd talk about some of
the different problems they werehaving.
Maybe their wife was spendingand they were asking those same
questions how much do you spendand what's in the bag?

(01:08:59):
But I found myself bringing outthe ideas that, Stephen, that
you were sharing for your book,and realizing that they're
helpful not only in Paul's life,my life, my friends that I was
talking to on the golf course orjust coming into contact with.
I really love the idea, too, ofthe three-year transformation
because I think that, just frommy perspective, putting money in
a 401k and thinking maybe 10,20 years down the road this is

(01:09:21):
going to amount to something isnot as tangible and real as
thinking that what can I do thisyear?
That's going to make asignificant difference in my
life and I'm appreciative of theideas that you've shared with
me, that you've got out there inyour book and that are making a
difference.

Speaker 1 (01:09:37):
Thank you, Stephen.
Final thoughts before we go.

Speaker 2 (01:09:39):
I think the biggest piece to me is you can do this.
This is regular people makingtremendous strides to become the
best version of themselves theycan be.
Is that this isn't about what Idid yesterday or oh, I would
have, should have or couldn'thave done that.
This is just about how can I begreat today, moving forward and
it runs the income gamut fromclients in the hundreds of

(01:10:00):
thousands to millions of dollarsare walking in with these same
ideas of how can I get better,how can I reach my full
potential.
And it's possible, and yourlife can be changed in
significant ways.
And my goal for our clients andthose that we're fortunate to
work with, my goal for thosereading the book, is that they
get to look back 10 years fromnow and just be proud.

(01:10:22):
They get to be so proud of whatthey've done, the progress that
they've made, and theirconfidence in their future has
really increased.
That's my goal for them throughthis process is to really
change, improve, and that theylook back so proud of who they
are today.

Speaker 1 (01:10:38):
Fantastic.
Thank you so much for your timetoday.
I've really enjoyed theconversation.
Thanks Stephen, thanks Gabe,thank you, paul.
All right bye for now.

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