Maybe I can start out lower and eventually go higher and earn my way as I go and get more efficient as I go. And I believe that was possible.
So I created what is called the forced accelerated savings and investment technique. And that changed my life. I ask people in the Breakthrough, when I ask them, I say, ‘How many want to be financially independent?
Everybody puts their hand up. And then I ask them how many are, and there’s a little higher percentage than the general populace there that are there.
But I’m amazed how many people will be embarrassed by the idea that they’re 30, 40, 50, some of them are 60 and they can’t seem to get ahead. And I said, ‘All right, well, let’s make a decision now in this course that we’re going to change that.’ And I started giving them tips on it.
There are 10 things that I’d like to share with you that if you, if you don’t know these, then you’re absolutely committed to not being financially independent. I guarantee you. If you don’t know these 10 things, you don’t, these are the absolute bare essentials of being financially independent.
So you might want to write these down as I’m saying them, I explain this in the Breakthrough Experience. Number 1 is; what are your total assets?
You know, go through and look at every asset you have, and if you were to convert it into actual cash conservatively, what would that asset be? You gotta be really truthful about what that is. Ground yourself.
A lot of people are afraid to even know that, because it’s embarrassing and they don’t want to look at it and it’s painful and so they don’t want to look at those things, but you need to know what your assets are.
The second thing is you need to know what your liabilities are, if there is any.
Now, if there’s no liabilities left and you’re older and you may not have liabilities, but if you’re young, you probably have some liabilities, mortgages, car payments, things of this nature, but what are your liabilities?
Third is what’s the net worth? Your assets minus your liabilities. And you need to know what that is so you know where you’re starting, because if you don’t know where you’re starting, you don’t know where you’re going and you don’t know how you’re going to get there, it ain’t going to happen. It’s just, it’s a, it’s a mirage.
It’s a miracle if you expect. But once you know what your net worth is, the next thing is how much do you actually want to live on passively per year? That’s a very important decision.
I remember getting asked that when I was 28 years old and I was, and I thought, ‘Well, I want at least a six digit figure. I want at least a hundred thousand dollars a year.
‘ And at that time when I was 27, 8 years old, I thought that was, you know, at least passively, that was decent. And then I realized now that that’s not much, but at the time it seems adequate, but I wrote that down a hundred thousand dollars.
And I said, okay, the next question, now that I know what I want to live on passively, and that was then not now, I then asked, okay, what is the average interest rate I can earn on my investments? What can I get as an average yield with my knowledge? You know, if I put it into money market, I might get 2%.
If I put it into stocks, I might get 6%. If I put it in mid cap stocks or larger, smaller cap stocks, I might get 7, 8, 9%. If I putt it in real estate, I might get 6%. If I could leverage it with renters, I might get a 9% or 10%.
What is it that I think I can get?
And be conservative in with all of the knowledge you have in all the investments you have, what would be an average yield you would get? You need to know what that is so you can run projections. The next thing is what is the inflation rate in your country? Because you need to know you’re going to be going up against inflation. And that’s the printing of money.
If you have currency, that’s going to dilute the value of the dollar, and unless you have real estate or other items, that’s going to be diluting some value of the dollar value of what you have, the value of a stock or so you need to know what that is. And then once you know what that is, you need to know is how much a total net worth you need factoring in that inflation rate and that interest earning rate, to give you that a hundred thousand dollars or whatever that amount is. So let’s say you wanted to live on a hundred thousand, you had a 6% interest rate you could earn, a 5% inflation rate, and now you’ve got, okay, I need $1.666 million, earning 6% to get me a hundred thousand.
And then I have a 5% inflation rate on that, which is $83,333 and 33 cents.
So I add that up and it comes out $1.75 million earning 6% allows me to get this kind of objective. So now I know I need $1.75 million today to live a hundred thousand dollars, but wait a minute, my net worth maybe a hundred thousand dollars. So I’m now short 1.
65 million. So I got to have a $1.65 million somehow by tomorrow. Hmm. How do I do that?
Can I sell my body? Can I can I rob a bank? People start coming up all kind of way wild things to do.
No, you’re going to have to come up with a strategy, because if you don’t have a strategy you have a fantasy and a fantasy leads to a nightmare when it comes to economics. So what are you going to do?
Are you going to earn that all in one day? Are you going to earn half of that in two days, you’re going to earn a quarter of that in four days, you can earn a 10th of that in 10 days, you’re going to learn 100th of that a hundred days? How long is it going to take you to get to that amount? And the longer you go, the more you gotta factor inflation in. So let’s say you want to give yourself 15 years or 14 and a half years to get to that amount.
But by then, you’ve got to have the cost of living that’s going to double. So now you need $3.5 million in 15 years to give you the $200,000 equivalent of the time with inflation. So now you go, okay, I need to save $20,000 a month average through the next 180 months and I’m there. But I’m saving $200 a month.
Mmm, I’m short. So I got to come up with a strategy to get me there, which is the next thing that’s important.
And then I found that when I first looked at that strategy, when I was 28 years old, I was overwhelmed and I was just literally having a headache and a jaw tightness.
Cause I thought, ‘Man, do I really believe I can do this? I don’t know, this is overwhelming.
‘ And then I thought I’m going to have to go and earn more income. I got to save more income to get this goal, but I’m only able to do 200 right now. I need 20,000 a month average. Maybe I can start out lower and eventually go higher and earn my way as I go and get more efficient as I go. And I believe that was possible.
So I created what is called the forced accelerated savings and investment technique, and that changed my life, because I went 200 to 300 to 500 to 750 to a thousand to eventually 1,100, 1210, 1343, 1464, 2000, 4000, 8000, 16000, 32000, 64000. It just kept going up.
And then I realized I was accelerating what I was able to save as I was becoming more proficient in business, more dedicated and more effective in my management of money and more investment savvy. And I made it, I actually achieved that. And I, but I didn’t do it by a straight line.
I did it by going under it at first and then going above it at the end. And I put that strategy together. And with those 10 steps, you know, your assets, your liabilities, your net worth, how much do you want to live on, what’s your interest rate you can earn, what’s the inflation rate, what exactly is the amount you need total, what’s the shortfall, what’s the strategy and how do you accelerate that strategy?
Those 10 things, without those 10 items, you probably not going to be financially independent.
You gotta be able to know the answers to those and have a strategy; where you’re starting, where you’re going, how you’re going to get there.
If you want to get to financial independence. Thank you for joining me for this presentation today. If you found value out of the presentation, please go below and please share your comments. We certainly appreciate that feedback and be sure to subscribe and hit the notification icons. That way I can bring more content to you and share more to help you maximize your life.