Debt-Free Millionaire

Choose a Career - (W2:D2) Debt-Free Millionaire Podcast

Real Life: Now that you have picked the income streams you want, let’s go over this again, because you may want to change your mind. The first and best questions to ask before choosing a college, career, or job are these: Who are you, really? What is it that you want to do for the next 30-40 years? What will pay you what you want to make? Where are these jobs located?
Conflicting Statistics: Experts say that, according to the U.S. Department of Labor, people change their job at an average of three to seven times in their lifetime. But, they also have these very interesting statistics, as well: 
Older generation was looking for:Increased pay – good paying job for a family;
Career Stepping Stone – They wanted to find ladders to success, and were willing to work;
Benefits – Wanted health insurance and retirement; 
Solid Business to Employ Them – They wanted to have a stable job for 25 years, and then retire.   
Millennials want these things, but if it’s a risk and unstable, that is okay, at a younger age:Feel like they belong – Emotion and belonging; 
A Movement - They want to make change;
Influence/Popularity – They want to be known by their peers and complete strangers;
Studies – A job based around their interests;
Feel good – They want to enjoy their work hours;
Make money – They want to make more money to buy new things, to advance their status.
BONUS: Your Spouse's Income:
Real Life: Along your path, you may gain a spouse or partner - which can be great! You can’t always assume you will get married, or sadly, that you will stay married. The sad truth is that you don’t always control this. As it has been said in the past, “it takes two to tango.” It’s not all your decision, but is based on your partner’s, as well.
When you do get married, it is an incredibly happy occasion, where you join two lives. There are many positive things that come with it. One benefit, is that you get to spend more time with someone you love and are best friends with. Another, is that you can join two incomes. You may even add children. 
The great thing about the financial aspect  is, though you can add two incomes  together (2+2=4), for an increase, your expenses don’t increase  the same percentage. When you get married, it’s more like joining two households, and paying less (2+2=3). Does that math make sense? Think of it more like this: when you get married, you add your expenses (food, shelter, needs, wants) to their expenses (food, shelter, needs, wants), and you pay for one rent/mortgage, almost double the food, utilities are one - plus a little more, needs are decreased, and wants are decided on by both of you. For most, your date money decreases, because you aren’t trying to impress as much, but instead, sustain. So you don’t have to be as fancy -  pizza and a movie will do just fine for a date.
Spousal income is great, because it comes with little strings attached. In society today, some married couples keep their income separate, but financially it makes more sense to add them together and pay expenses out of one account. Some married couples have their own accounts on the side for spending money not monitored by the other spouse and this is okay also.  If you choose to have one account, you simply add them together as you become one. It is no longer “my money” and “your money,” it’s “our money.” This is how the law sees it, and this is how to see it if you want your finances to be easier to monitor.. No longer can you say, I can do with my money how I see fit, it’s more of talking together as a married couple and finding the best way to move forward with how you manage your money. 
 

The Four Legs of Your Income Stool -(W2:D1) Debt Free Millionaire Podcast

Real Life: Let’s talk about the most important word in financial literacy: Income. It is the money coming to you for services you give, or items you sell. In other words, if you work a full-time career, part-time job, own a small business, or invest, you have income. And if you have them all together, you have four streams of income. 
Like a raging river, it is fed by hundreds of small streams that, together, make up a raging river. So, are your financial streams making you a raging success?
The Four-Legged Stool
In business, it is essential that you map out, and focus on, your different revenue streams into your company. Much like your personal income, you must figure out how many streams (legs) of income you have, and see how you can increase each, or add more, since you have limited amounts of time. 
Just like a stool you sit on, a four-legged stool is strong. Take away a leg, and it becomes wobbly;  take away any more, and it is near impossible to sit on. If you take away one of your legs of income, you still have three others to support you - you always want something to fall back on, if you lose your job.
How do you want to live your life? Would you like to have multiple streams of income, or one solid stream? I’ll give you a second to think that over…

BONUS EPISODE: Success in Flipping Houses - Debt Free Millionaire Personal Finance Course

Flipping Houses: A Gateway to Real Estate Investment Success
The allure of real estate investment has long captivated the imaginations of aspiring entrepreneurs and investors alike. Among the myriad strategies available, house flipping stands out as a particularly appealing entry point for many. This process, which involves purchasing properties, renovating them, and selling them at a profit, can indeed be a path to success for those looking to start investing in real estate. Here’s how flipping houses can turn into a lucrative venture and what potential investors need to know to make it a triumph.
Understanding the Market
The foundation of a successful house flipping strategy lies in a deep understanding of the real estate market. Successful flippers are adept at identifying undervalued properties in neighborhoods with high growth potential. They keep a pulse on market trends, including which home features are in demand and the average time properties spend on the market. Knowledge is power, and in the context of house flipping, it translates to the ability to make informed purchasing decisions that are likely to result in significant returns.
Renovation and Value Addition
At the heart of flipping is the concept of adding value through renovations. The most successful flippers are those who can see beyond a property's current state and envision what it could become. However, the key is to balance the cost of renovations with the potential increase in property value. This requires a keen eye for design, a thorough understanding of renovation costs, and an ability to manage contractors efficiently. By focusing on renovations that offer the highest return on investment, such as kitchen and bathroom updates, flippers can significantly increase a property's market value.
Financial Acumen
Flipping houses is as much about finance as it is about real estate. Successful flippers excel in budgeting, forecasting, and financial planning. They understand how to secure financing for their projects, manage cash flow during renovations, and price their properties for sale to maximize profits. Additionally, they are skilled at navigating the tax implications of flipping properties and optimizing their investment structure to minimize liabilities.
Time Management and Efficiency
The adage "time is money" is particularly true in the context of house flipping. The longer a property takes to renovate and sell, the lower the return on investment, due to holding costs such as mortgage payments, utilities, and property taxes. Successful flippers are masters of efficiency, streamlining the renovation process to reduce the time between purchase and sale. This often involves having a reliable team of contractors and suppliers and the ability to manage multiple projects simultaneously without compromising quality.
Risk Mitigation
While flipping houses can be profitable, it also comes with its share of risks, including unexpected renovation costs, changes in market conditions, and extended selling periods. Successful flippers mitigate these risks by conducting thorough due diligence before purchasing properties, setting aside contingency funds for unforeseen expenses, and adopting a flexible approach to selling, which may include renting out properties if the market takes a downturn.
The Path to Success
For those looking to start investing in real estate, flipping houses can indeed be a path to success. It offers the potential for significant profits, provides a hands-on learning experience in real estate investment, and can be an exhilarating entrepreneurial endeavor. However, success in flipping requires more than just capital; it demands market knowledge, renovation savvy, financial acumen, efficiency, and risk management skills. For those willing to invest the time and effort to develop these competencies, flipping houses can be not just a successful investment strategy, but a rewarding career in real estate.
 

Let's Plan for Your Retirement - (W1:D5) Debt Free Millionaire Personal Finance Course

Real Life: Do you want to work your entire life, or stop working – or lessen the amount of normal work – when you get to a certain age? This is retirement. When would you like to retire? Is it a year, or an amount of money? There are pros and cons to either choice, but there are some important things to think about when considering when you want to retire. By knowing what your requirements are to retire, you can find out what you need to do to get there.. We call this reverse engineering: start from your goal and think backwards on how to reach it.
Money to Retire On – Do you have enough money to survive on for the rest of your life? If you stopped working at age 60, and then lived for another 30 years, would you have enough money? Do you have a plan? 
There are special savings accounts you can deposit into, that you can’t touch until a certain age (in 2021, it was 59 ½ years old). These include: IRAs, 401(k), 403(b), or other alternative retirement accounts. Are you secure  financially, and will that money last you until you die? Here are some important statistics to know, about people who retire:
According to Schwab Retirement, in 2021, the average American needs $1.9 million saved or invested, at the time of retirement;
Only 58% of Americans are actively saving towards retirement;
48% of Americans have less than $10,000 saved in retirement;
50% of older Americans, nearing retirement, think they will live off Social Security;
Only 36% of Americans know how much money they need to retire;
30% of women, and 15% of men, have no retirement whatsoever;
Average debt per household is $31,000 at the time of retirement, while average income is $55,200;
The average American dies at 77 ½ years, but the potential is that you may live longer.
Remember that cost of living is not your only concern when deciding when to retire, it is also the debt you are paying. If you still have a high amount of debt, you will need more money. If you remove your debt, you need much less. With debt, you could need $3,000 to $4,000 a month, depending on the amount of debt. With no debt (and a paid for house), you could do well with $2,000 - $3,000 a month.
As you get closer to retirement, most people want to play it safe in their investments, but you may not need to. If you do play it safe, you would need a higher amount saved. If you play it smart, you may only need half of  that, and it will continue to grow. But again, the main question is, do you have enough to survive the rest of your life? Here is how you figure this out.
This is the amount you should have in your investment, growing by these ages (according to Synchrony Bank):
Americans in their 30s: 1–2 times their annual salary
Americans in their 40s: 3–4 times their annual salary
Americans in their 50s: 6–7 times their annual salary
Americans in their 60s: 8–10 times their annual salary
Think of it this way: how much do you want, or need, to spend each year, once you have retired? $50,000 a year? Then you need to figure out how many years you may survive past retirement. If you retire at 50, you could live 50 years - ‘til you are 100. 50 x $50,000 = $2,500,000. At the same time, if it is invested, whatever amount you have will continue to grow over the years, so you will need maybe ¾ of that amount, at $1.9 million in your retirement account. The government may also pay you $1,514 a month from social security, to help pay your monthly expenses. Can you survive on that, if you don’t have a retirement account? Someone without debt, who has a paid for house, could.
Social Security
Social security is what the government pays to the older generation, to take care of their needs. The problem is that it was supposed to take your money while you were working, and save it for you when you were older. Then it became, “take from the young and give to the old.” Now it’s, “put the money in the general fund and pay for Social Security by borrowing from general government revenue.” The question is, will it still be there when you retire? Should you rely on it? If it’s there, it’s more money for you; if not, then you have a backup plan, through your retirement account.
Things to Consider in Planning Retirement: Here is what you will need to do to plan for retirement: 
Are your kids out of the house? You may not want to retire until they are living completely on their own.
What will you do afterwards? What do you want to do when you aren’t working anymore? Do you have the money to achieve these dreams? Do you want to travel, or stay home? You may want to have an idea and/or plan.
Look forward to the longest vacation you'll ever have? If you think retirement is a long vacation, most Americans work after retirement either because they don’t have the money they need, or they are bored sitting around at home. According to US News, if you retire at 65, you have a 76% chance of living 10 more years, 38% chance of living 20 more years, and 5% chance of living another 30 years.
Building relationships with those you can trust. Being alone, not having a purpose, impacts your health in retirement and can lead to early death. University of Berkeley found that, when you have a partner that makes you happy, you have a 13% lower chance of dying sooner. 
If you are within 3-5 years of retirement, you may need to start planning your tax strategy before your retirement. 
Remember that Social Security, if it is still around, doesn’t start until age 66(if you were born from 1943 to 1954). The full retirement age increases gradually, if you were born from 1955 to 1960, until it reaches 67. For anyone born 1960 or later, retirement benefits are payable at age 67. So, do you have enough money to retire early?
Will you stay home, travel the world, or end up in a nursing home or assisted living facility? For these questions, when you get closer, you may want to think of an End of Life insurance policy, to pay for your expenses.
Compound Interest: In the last chapter, you learned about interest being paid on your Savings Account; you are also paid on your Retirement Accounts. The amount of interest depends on where you invest your retirement funds. It is not deposited into a bank, but instead, an Investment Broker will buy investments on your behalf , and give you all the interest acquired, when the value of what they bought goes up. You can invest in investment funds that are established by another group, business or government bonds, gold, cryptocurrency, and much more. When the investments you bought into go up, your retirement account value increases as well. 
Now, compound interest plays a very large role, when your retirement sits over a very long time, acquiring interest every year; then, what you deposited, plus the amount you earned in interest grows together for additional interest. For example, if I put in $1,000, and it grew in interest by 10% (or an additional $100), I would have $1,100 in my account by the end of year one. Year two, I now have $1,100, depositing an additional $2,000, and it increases another 10% (an additional $310). Now I have $3,410. So, I have earned an additional $410, that I didn’t have in my account before. By year three, I would have an additional $851, in addition to what I deposited directly. This is the great power of interest. By year ten, you have an additional $10,000, above what you deposited, and by 30 years, you are literally earning $100,000+ a year on your retirement.
If you start depositing into your 401(k) or 403(b) ($20,500, as of 2022), or IRA ($6,000, as of 2022) the maximum amount possible, you will have nearly $2M by 50 years old. Then you can retire on your own schedule.

Savings is King, But You Don't Need a Bank - (W1:D4) Debt Free Millionaire Personal Finance Course

Real Life: Consider this: what would happen if you lost your job and you had no money to pay your bills? What would you do to keep your house or apartment? What would you do to put food on the table? Well, if you had savings in the bank, you wouldn’t have to worry. Savings is an amount of money you have stored away for a later time. Normally, you would keep your savings in a separate bank account, called a Savings Account. You can spend your savings on anything you want, but when you spend it, it is no longer available for a time of need. 
Most people think of their savings as an emergency fund. You want to build your savings, over time, to equal  about 3-6 times your monthly expenses; so, if you spend $3,000 a month, you would want to save $9,000, just in case you lose your job, become disabled, or something drastic happens, because you would still need to pay your bills. This is what a savings account is really for. 
History: The first banks are reported to have been started in Mesopotamia, where the people would store grains, precious metals, and even weapons, for a time. More recently, savings banks and savings accounts were established in England, in 1799, and postal savings accounts started in 1861. In the United States, the first savings bank was established on December 13, 1816, as Provident Institution for Savings, in the town of Boston. After the Great Depression (1929-1933), the U.S. Government wanted to reestablish faith in the banking system, and so established the Federal Deposit Insurance Corp. (FDIC) which, in 1934, insured bank accounts up to $5,000. Banking institutions began to flourish, with the emphasis made by the government to save money, and people began saving more and more. Banks began to compete to store this money and first introduced the savings account interest rate - a payment you receive  to your account every month, for saving your money in the bank. Beginning at 3% in 1957, it increased to 5% interest by 1986. They offered new customers incentives, like free toasters and wall clocks, to entice them to open a Savings Account in their bank. Banks would use money deposited into savings accounts, to loan to other customers at a higher interest rate, to make money for the bank. 
Lately, as the government began allowing banks to borrow money at a low interest rate from the Federal Reserve, and other larger corporate banks, the interest rate in a savings account went from 5% down to around 0.2%, as of 2021. This has caused less people to decide to save in these traditional banks, and instead invest their money (which we will talk about in further chapters). In the past, you would have to visit the local bank to deposit or withdraw your money.  Only recently has the internet made electronic transfers and direct deposits available to their clients. Now, with smartphones, money can be transferred in mere seconds, and without the use of a traditional bank.
 
Vocabulary: Allow me to now introduce some of the words I just mentioned in the history.
Bank – These are businesses that are established to store, loan, exchange, and issue money, as transactions for those depositing or borrowing money.
Deposit – If you have money that you want to keep safe, yet available you would place it in a bank account..
Savings Account – an account that you establish with a bank to store your money and gain interest, while the bank has it. You also give the bank permission to loan this money to someone in need of money.
Withdrawal – When you want your money back, you remove a portion or all of it from your account.
Federal Deposit Insurance Corp. (FDIC) – The U.S. Government’s insurance policy guarantees that these bank accounts will have money if something happens to the economy, up to a certain amount ($250,000 in 2021).
Savings Interest Rate – If you deposit money into a Savings Account, the value will increase at a set amount, each month. This is based on the rate the Fed (definition below) is lending money to banks. 
Depositors – Those who deposit money in the bank.
Borrowers – Those who borrow money from the bank.
Lenders - Banks that give money, in the form of a loan.
Federal Reserve Bank (Fed) – This is a central banking system in the U.S. It is both private – it was started with private banks – and government regulated, with rulings from many boards and government officials.
Clarification: The flow of money in banks is rather easy to understand. When you deposit money into your bank account, the bank gives you a little extra money (in the form of interest), depending on how much you deposit, in exchange for your permission to allow them to lend that money to someone who needs to borrow money. They then offer that money to a borrower, and get paid back more than they are giving you to borrow that money. The more people that deposit money, the more money the bank has to loan, or pay back customers that deposited their money in the bank; so, at any time, if you wanted your money back, they would take from the money given to them by another depositor, and give it back to you, in cash. In the past, banks were only able to lend the amount of money that has been deposited by a customer.
In the last 20 years, the U.S. Government has allowed the Federal Reserve (Fed), which is a group of the largest banks and the U.S. Government, to lend money at very low interest rates (so the banks wouldn’t need to borrow from you, but instead, the Fed). And if the Fed is giving out this money for 1%, then the banks wouldn’t offer you 5% anymore for depositing; instead, they would offer you less than 1%, which is why the interest you earn from a savings account is so small. The Fed is allowing banks to borrow at less than 1%.

Are You Spending Too Much? - (W1:D3) Debt Free Millionaire Personal Finance Course

Real Life: Do you know where your money is going every month? Have you ever tracked what you spend? These are all called Expenses. Expenses are anything you spend money on, and they add up quickly! Here are just a few expenses the average American pays each month, listed in priorities of living:
Needs (Necessity Expenses):  
Food
Toiletries and Household Items
Mortgage/Rent
Utilities: Electric, Gas, Water, etc.
Insurance: Auto, Health, Home
Property Tax
Medical Expenses
Gasoline
Transportation
Child support/care
Savings
Wants
Personal Loans
Car Loans
Student Loans
Clothing, etc.
Dining Out
Junk Food, Coffee, Alcohol 
Entertainment, Toys
Gym Membership
Travel Expenses 
TV Services
Personal Grooming
Home Décor
Activity – How much do I spend? Now that you have a good list, go through your bank and credit card statements and write down how much you spend on theses items each month. If you don’t have this, ask your parents what they spend. Would you like to increase, or decrease, your expenses in each category?
How could you lower these expenses? Where are you overspending? Are you willing to spend less?
________________________________________________________________________________________
FIXED VS. VARIABLE EXPENSES: (Also W1:D3)
Now that you have a list of expenses (the money you spend), you may want to understand the difference between those that are Fixed or Variable Expenses?
Fixed Cost (Expense): Is a cost that does not change month to month. It does not increase or decrease because of something you do or buy. This can be for goods or services you purchase. There is less that you can do to reduce these types of payments each month. These include: mortgages, cell phone, internet, and insurance.
Variable Cost (Expense): Is a cost that goes up or down, depending on choices you make and desires you have. These may increase and decrease month to month, depending on how much you spend. For most of these, you get to decide how much you will spend.
Though some bills are a fixed amount every week/month/year, and others vary day to day, this does not mean that one is more important than the other. Instead, you need to make a list of your priorities. Those that are less of a priority, you should think about eliminating. As you will find, when looking through your expenses, you have more Variable Costs than Fixed, because most of these expenses increase as we want them more, and are willing to spend more on them. The United States is a consumer nation, meaning we spend what we want to spend on most items. There is nothing wrong with this, but also know that while some people are spending more on these items, some wiser individuals are finding ways of spending less. They are realizing that they don’t need as much as everyone else. The old saying is, “Keeping up with the Jones',” which means that you have to spend more to look like your neighbor, because they look so happy or rich. The truth is, most people who spend more to look good are majorly in debt.
Fixed Cost (Expense):  
Mortgage/Rent(Need)
Utilities: Cell or Internet (Need)
Property Tax (Need)
Insurance: Car, Health, Home, Rental, Life, Medical (Need)
Transportation: Public (Need)
Child Support or Alimony (Need)
Childcare (Need)
TV Streaming (Want)
Car Loans (Want)
Student Loans (Want)
Variable Cost (Expense):
Food (Need)
Toiletries and Household (Need)
Utilities: Electric, Gas, Water/Sewer Bill (Need)
Medical Bills (Need)
Transportation: Gasoline (Need)
Home or Car Repairs (Need)
Loans/Credit Cards  (Want)
Clothing, Jewelry, etc. (Want)
Eating Out/Junk Food (Want)
Alcohol, Coffee Cigarettes (Want)
Entertainment: TV, Movies (Want)
Memberships: Gyms (Want)
Professional Services (Want)
Games and Toys (Want)
Self-Care and Grooming (Want)

Making BIG money vs small money? - W1:D2 of the Debt Free Millionaire Personal Finance Course

GOALS: INCOME – HIGH OR LOW? (W1:D2)
Game View: In the game, you set your goals. This about this: what would make you feel like a winner? This is to track your sheet and analyze later. Will your goal be to make a high, medium, or low income, when you are older? Perhaps yearly income of $1 million? Place a dollar amount or just state high or low income.
Personal Game View: What is your goal, annually? Tell us if it is High or Low, and give us an amount.
Real Life: The best way to understand finances is to understand where you want to be, not just where you are today. You want to know what will get you where you want to be, from where you are right now. Do you want to make a little, or a lot of money? Will money solve your issues? To make a lot of money, what do you have to do to increase your income? We will go into each of these more in upcoming chapters, but until then, here is a brief overview with three basic ways to make money.
Full-Time Job (Job/Career): Consider: Full-time employment takes a significant part of your day with opportunities for promotion.Statistics: Only 69.8% of Americans work for someone else full-time.Who’s In Charge: In a full-time job, you are working for someone else.Time Commitment: Normally, working hours are 9:00 a.m. to 5:00 p.m. - outside of that timeframe, the hours are yours.Paychecks: You receive a steady paycheck, on a consistent basis, called “Pay Day”.How to Lose this Position: If you do not perform your tasks, to a level of your employer’s satisfaction, you may be fired. If your company is doing poorly, you may be laid off and go without work.
Part-Time Job (also be known as a “Side Gig”): Consider: Employment that takes fewer hours per week than full-time, commonly less than 30 hours per week.Statistics: 43% of Americans have a side gig as their sole employment, or in addition to their full-time job.Who’s In charge: In a part-time job, you are working for someone else.Time Commitment: You work when you can and/or your employer needs you, and less than 30 hours per week.Paychecks and Pay Days: You receive a steady paycheck, on a consistent basis, when you work.How to Lose this Position: These jobs are not usually  secure, and you are normally the first to be fired or laid off. Such as if you make significant mistakes or they decide they don’t need your help anymore.
Small Business Owner:Consider: Privately or solely owned, partnerships, or corporations, use fewer employees than larger corporations and have less revenue.Statistics: In the United States, 44% of GDP (revenue) is from small businesses (in 1998 it was 48%), and 99.9% of businesses are small businesses. 20% of small businesses fail in their first year, and 50% within their first 5 years.Who’s In charge: If you own it, you are in charge; if you use others’ money to fund it, you may lose control.Time Commitment: You set your own times and work as much as you want, though not working consistently may cause your business to fail. Often, you are still working after normal business hours.Paychecks and Pay Days: This may not provide you with a consistent paycheck. You make money after your business makes money, and pays all expenses and employees, first. You are the last to be paid. How to Lose this Position: You are not fired by your employer, but instead your clients (those who pay you, or use your services). 
Investment:Definition: You buy something (stocks, real estate, metals, cryptocurrency, etc.) and it increases or decreases in value, depending on  how others see the value of that commodity. If people want it, the value goes up; if they do not want it, the value goes down. This is also known as Supply and Demand.Statistics: According to Newsweek, in 2021, 52% of Americans have money in a 401(k) or 403(b) plan; 37% have an individual retirement account (IRA); 22% have a pension (retirement provided by your employer); 14% buy individual stocks; 65.1% own a house, and 15% own precious metals. 25% of Americans have no retirement savings for when they are older.Who’s In charge: The market is in full control over the value of these investments.Time Commitment: These work when you do not. Little commitment is needed after purchase. Except for keeping rentals, which take maintenance, paying taxes, etc.Paychecks and Pay Days: You normally receive revenue when you sell your commodity.How to Lose this Position: You can’t lose this investment unless you sell it, or your investment loses all value. Typically, the longer you hold the investment, the more its value increases. 

Income, Debt, and Expenses - Debt Free Millionaire Personal Finance Course (Week 1 - Day 1)

Simplified Explanation: 
Do you know the most basic terms in finance: Income, Debt, and Expense? These are the three most fundamental terms in the financial dictionary, and are essential to learn in order to be successful. We will teach you more about each of these, but let’s give you the basics before we go further:
Income means the amount of money you receive in a given amount of time, through work or investments;Debt means how much you owe another person or institution(s);Expense means how much you spend in a given amount of time;
So, what comes in (income), what you owe (debt), and what goes out (expense).
Part #1 – Normal Life: Allow me to simplify your potential financial situation in the future. Think of your ideal financial life. Which of these scenarios would you prefer? Choose and highlight the one you want:
Low income, no debt, few expenses;Get our book to find out more...