Hi everyone, Dan Thompson here. Thanks for joining us on another wise money tools video. You know, I've used this analogy of the golden goose over the years and in the next video or two kind of want to lay out how this might be one of the most important money concepts you'll ever learn. I know that sounds Whoo. But really it's true. You know what's fascinating to me about money and investing is it's really not as complicated as we make it. What's happened basically is you know, financial advisors Wall Street the suppose the Guru's make it seem so complicated, that they want you to kind of feel like you have to have their assistance. Well, worse than that is they don't really care if you know anything about money because they're happy to make You feel like you're incapable of understanding. And this way you're gonna turn your money over to them to manage.


Well, then after years, you know, maybe some good years and bad years, some ups and downs, some winners some losers, the all the management fees and taxes, in that you're, you know, your destination, the journey is over. It's time for retirement. And then well, what happened, I thought I was gonna have a bunch more money than this, or I thought I was gonna get a lot more income. And I didn't think I was gonna have to take so much risk, whatever that case may be for you. Well, I hate to be the bearer of bad news. But if you take this approach with your money, you're gonna be like most of the world and you're either gonna be or you're going to die broke. All right, broke. That's not a very fun word. Most people are gonna be broke because they just don't have enough money or the gonna be broke because the income that's generated off the money that they have is keeping them near the poverty level. Did you know that the average 401k at the end of 2018, was about $103,000.


Now, the good news is that's up 8%. Because as you've probably noticed, these markets have been on a tear for the last few years. But obviously, that's not gonna last forever. We've got way too many people thinking that this is normal. And what is normal is that we typically have some sort of a setback or recession, you know, least once in a 10 year period of time. Well, that average for everyone who has a 401k has kind of been inflated, if you will, or a little bit. It's been a little bit out of control. Now, so that's for the average 401k. That's everybody, right? However, just between the ages of 60 and 69. If we look at both IRAs and 401ks, the average account value is hovering right around $200,000. You can see by this graph, now folks, listen to me. $200,000 just isn't gonna do it, quite honestly, 300 to 5000 or even $700,000 isn't really gonna give you the income and the lifestyle that you may be dreaming of having someday. So many advisors talk about this elusive million dollar mark. And if you have a million dollars, you're gonna be just fine in retirement.


Well, you know what, a million dollars just ain't what a million dollars used to be. In fact, if we use the Wall Street's 4% rule, which basically says, don't spend more than 4% of your nest egg each year, or you could run out of money before you run out of life. Now, this has been tested and backed tested through what are called Monte Carlo simulations, and just said, if you want to have a surety that your money is gonna at least last as long as you do, don't take more than 4% out in income. So what's 4% of a million dollars, that's about $40,000 a year. Not too bad, but not really anything to be too excited about. And this is kind of the Wall Street. This is financial advisors who are supposed to make you rich beyond your wildest dreams. So you can basically be broke because the income you take from your pile of money is gonna be a lot less than you thought it would be in your golden years. And it turns out the golden years, maybe aren't so golden.


Who wants to be pinching pennies instead of spinning freely and enjoying your life? And you wake up one day and you wonder, wow! How's this retirement thing supposed to be? Once you understand the golden goose strategy, your eyes might be opened that Yet, you'll be able to take a uniquely different path from the rest of the world or what I call the sheeple and have a real opportunity to crush this retirement thing. The first object lesson is to understand who or what is the golden goose. Simply put the golden goose is a money machine and a capital creator. If you work and you bring home a paycheck, well, you're a good example of a golden goose. By your efforts, you just created golden eggs or what we like to call money, income, greenbacks, dinero, right. So let's break down an entire year's income into golden eggs. To make this real easy. Let's just assume that 100% of your income is gonna produce 10 golden eggs for the year.


So if you make $100,000 a year, basically each golden egg is worth about $10,000. If you make $200,000 a year, you're still only gonna produce 10 eggs. But now each egg is gonna be worth more and so on. What we have to do is turn as many of these eggs into other gooses. I know the plural is geese, but we want more goose's. So here you are. You're working at your job day in and day out week in and week out 52 weeks later in the year, and you look back and you say has the goose I produced 10 golden eggs. The question is, where are those eggs now? Well, if you're like a typical family, your eggs are gonna be given and spent so to speak in this similar fashion. 2 to 3 eggs went to pay Uncle Sam and taxes. 3 to 4 eggs went toward loans, credit cards and interest. Yep. The average family spends 34% on debt and interest, ouch. And then they wonder why their nest eggs at retirement are so low. But 34 cents of every dollar goes to pay someone else. Then 2 or 3 eggs went towards your lifestyle, you know you had to eat.


So you had to buy some food utilities, maybe some vacations or whatever. This is the money kind of we call it the lifestyle because it is what it takes to maintain your lifestyle. Well, that's about it. There goes all the eggs. Now you may have more eggs in one area and less than another. But what typically happens is that all the eggs are spent or eaten up or given to others. All that work and effort and you don't have any eggs that could potentially produce more geese. You see, geese that can ultimately produce more eggs, that produce more geese, that produce more eggs. That's the magic of compounding, the more eggs being produced, the greater your wealth, the more age you can keep, the greater your wealth, the more eggs that you have, the greater your income. So the one thing you have going for you is that you're still alive and kicking, and you're still the golden goose. And you can do it all over again next year.


What happens is somewhere along the way, this family is gonna have to start to figure out how to save some money. But how are they gonna do that the eggs are all spoken for. Well, this is where a lot of gurus will tell you the change your lifestyle. You got to cut back, start to save, put some money in a 401k or other retirement plan. And hopefully save at least a half an egg, or what some gurus recommend is to dramatically cut back on everything. Put more eggs into debt, hoping that when the debts paid off, you'll finally be able to save some more eggs. However, you're up against a real problem when it comes to using all your eggs to pay off debt. And that's time every year that passes where all your eggs are given to the bank or a credit card company is lost opportunity. See if I can keep a golden egg today, I can get that egg hatched and that goose will then produce more golden eggs. And those eggs then produce more goose's that will also produce more eggs. This is the Einstein method of compounding that we've been talking about for many, many videos now.


The more age you get to keep that become geese, which then produce more eggs. Well, pretty soon your wealth is literally unstoppable. However, giving up just 1 year of all your eggs can have a massive impact on your future wealth. Compounding, as we've said, needs time, the more time and ot the more eggs you can commit to compounding, the more magical the formula becomes. And again, so many gurus would have you miss out on this eighth wonder of the world of compounding, by not spinning your eggs wisely and putting it all towards debt, if you will. So for on that as we go along, is kind of rahner wrap this up, let's make it very simple. You're gonna produce 10 eggs this year. How many of those golden eggs will you be able to keep? And then how many of those can you turn in to other golden geese that will then make more golden eggs and so on? Oh, and here's the best part. If you can simply save the golden eggs, and you find the right strategy, you won't really have to do a whole lot.


The geese and the eggs will multiply and grow and you can simply sit back and watch it all happen. You know as part of our 5 elements to wealth. The first rule was to save to pay yourself first, at least one aid. What is 1 egg represent about 10% of your income, then you can build from there. But you can't delay you need to start today. That's the next element to the equation. That's the next element to make this golden goose strategy work. I'll tell you why a little bit more in the next video. I know a little bit of a teaser. But hopefully that will get you to come back because it's gonna be a good one. I want you to be anxious, I want you to be excited to get this thing started and not miss out another day of compounding.


Well, that's about it. As always, if you have any questions, shoot them to questions at wise money tools.com. I'll answer them just as quick as I can. Don't be afraid to leave a comment. You can have a little discussion there as well. And don't forget to subscribe. You don't want to miss these videos. And if you want to have a strategy session where we can talk about your situation. Just click on the time trade link below and set up a time with us. That's about it. Till next week. Take care.