Hey everyone, Dan Thompson here with another wise money tools video. You know, last week I talked about the Golden Goose and how important that was to start saving your eggs. And we alluded to the fact how important it is that those eggs have time. Time to mature, to hatch to become other geese and then build even more eggs from there. So one thing that we all need, and we all run out of, and that is time, right? Well, our geese need some time. They need the again the time to hatch them to produce more eggs and then to hatch those eggs and on and on and on. However, if we don't give ourselves enough time, then we end up scrambling trying to make up for last time. I see this regularly, I get desperate calls from someone that might be 5 or even 10 years away from retirement. And guess what? They haven't even started preparing and now they're in panic scramble mode.


So there's two things regarding time that can devastate our future plans. You've heard the phrases, adding fuel to the fire or to make matters worse, so it's bad enough not to be saving. But to make matters worse, or to add fuel to the fire is to add or to take away losses. In other words, to add fuel to the fire is we save money, but then we lose it for a minute here. Let's talk about starting today right now. This can have a huge impact on your future. If you are saving right now, then saving and doing the right things with your money so you don't lose it. It's critical. I don't care if you've delayed or made some bad choices, and you're 30 or 50 Or maybe you're already in your 60s. You really just can't delay another day. And those that have saved losses are the other factor in people not being able to reach their goals. It's bad enough again that we lose money, but it has a greater impact if we lose time.


Time is a limited component of life. We can't lose time, and losing money is losing time. Sadly, I hate to admit it, but I've lost money in my lifetime. You know, when I first started, I follow the traditional financial planner path and for many years, that's how I thought things had to be. I also have lost money in things like the.com bust, that lost money in 2008. I've also made some other financial moves, it didn't turn out so well. So I'm guessing many of you are in that same boat. Most of us did that because we didn't think there was a any other way to build wealth that in order to get the reward, we had to take risk. And Wall Street's always preaching risk and reward. But that's not true. There's some very sound investments that you can eliminate the risk and still have the reward. What we want to do is take some income, or some return of our golden eggs. And we want to take some money off the table protect that and put a pile over here and let those eggs produce more geese and produce more eggs.


What's more is this. What if you didn't have to take any risk at all? What if there was a safe way to grow and compound often times faster than the typical risky investments that you hope are gonna pay off? So we're gonna talk about that as we go along, but again, in this video I want to talk about how important time is. So the other day I was talking to this 32 year old guy, what I did is I showed him the basic concept of time. And it even took me back as to the power of time. And specifically starting today with more, no more delays. So here's the scenario. He was making some pretty good money. But he wasn't saving anything to speak of. So we figured that if he just saved one golden egg that he was producing each year, that would be worth about $10,000. Okay, so watch this. We went back, we took the historical returns of this particular strategy of leveraging and using the balanced 5 elements to wealth strategy, and we plugged it in.


Now, if he began right now, at age 32. And at age 65, he started to take income based on repeating the exact history in that timeframe. He would be able to take out about $200,000 a year, tax free. Now I know sounds crazy, I get it, that's much more. In fact, it's double what he's making right now. And most people are told by their financial advisors that they're gonna have to live on less, even 50% less than what they make today. But again, that's because of financial advisors assume you're pretty much gonna be broke or dead broke, and you have to live off the 4% rule. Anyway, using this income based on historical facts, it turned out to be pretty nice. What I want to impress upon you is this. He started talking about as we went along, you start talking about that he wanted to pay off some debt first. Because the guy on the radio told him that was the most important thing he could ever do.


And he also wanted to save on I can't remember what it was but he needed to buy something and he wanted to save up there or save for the next year to buy it. Well, basically what he was trying to do is say, hey, Dan, this is all great, but I need to delay saving those eggs for just one more year. And then I can get started, you know, pretty heavy. And I don't know if either one of us thought one year would make that much of a difference. So what I did is I backed up the calculator, and I showed him this. It was the cost to delay one year. If he starts at age 33, instead of at age 32. And instead of saving that golden egg this year, he spent it. So his income at age 65 went from $200,000 a year, down to $165,000 a year. That's a difference of $35,000 a year. Now let's just assume you live 25 years into retirement. That turns out to be an $800,000 difference.


So 1 year delay so that he could pay something off or save up for something that he could buy, ultimately cost him $800,000 potential and potential income. But watch this. What if he delayed 5 years like so many people do in this world? You see a lot of people are listening to Dave Ramsey, which I believe he's like the debt elimination King. But so many times people are delaying the savings in the compounding. Because they feel like they need to take all their money to pay off debt. For some reason, Dave thinks that by paying off debt, it's gonna make you wealthy. Well, the real problem is, you're never gonna get to real wealth if you miss out on 2, 4, 10, 15 years of growing your golden eggs. So if this guy delayed 5 years, let's just assume that he's got just a ton of debt and needs to pay that off first. So his income would go from $200,000 down to $99,000, almost $100,000 a year difference, just so that he can say and yell that he's debt free.


Now, don't get me wrong, debts a killer, we need to get out of debt be better if you just never went into debt. But missing out on compound in yours can sometimes be much more devastating than having a little debt over your head. All right, well, in that same 25 years, if he was down, or if he had reduced his income almost $100,000 in his 25 year retirement span, at $2.5 million dollars less income. So that's what's wrong with our current financial education system today. Honestly I as much as I want this guy out of debt, he would be better off carrying debt for another little while. So that he could save some of his golden eggs, rather than give them all to the banker. Now again, don't get me wrong debts a killer, but not because of the interest repay. It's because of the last eggs that we lose. And we don't give those eggs time to produce those golden eggs are a big deal. So the first rule should be again, don't go into debt.


If you have to get some bigger tickets such as a home and maybe a very, very, very, very cheap car. Then do it after you've been able to save your at least your 10% of your income. At least get to the point where you're saving that one egg from day 1. Man if a young kids coming out of college and they get their first job, the very, very, very first thing they You should do is pay themselves first. Get used to taking that first 10% and paying yourself, then if you need to use a little bit of debt to build buy your house, maybe a very, like I say, very inexpensive car. At least you're putting away your golden age, giving up those years of compounding. So that you can put all your income toward debt is much more costly than the debt itself. You with me? Let me give you one more quick example. Paying off your home, man that can be a very satisfying event. And I don't ever want to tell somebody they shouldn't pay off their home.


Sometimes that's just a really emotional thing. But it's a big ticket purchase and over the years. If you carry a mortgage, it can get very expensive, so to speak. However, let's go back to the video I did a few weeks ago where we look that an example of someone who had an extra thousand dollars a month. And they were told the best investment they could make is to pay off their mortgage, get out of debt, and jump and shout. They heard that paid off mortgage has replaced the BMW and thought that was the way to wealth to be debt free. So they have a choice, they can start saving some eggs right now. That would then produce another goose and then that goose would produce more eggs and that those eggs would produce more goose and on and on. And we would just have this huge linear family tree of the power of compounding. Or they can take that money and pay off a 4% mortgage.


So it would take them about 10 years to pay off the mortgage. If they added that thousand dollars a month. And better yet, they're told that they're gonna save over 300,000 in interest. So essentially, they're gonna delay compounding for 10 years and put that thousand dollars toward their mortgage each month. Now let's just say this couples 35 years old today, in 10 years what they will do is they will save their current house payment of 1500 dollars and the extra thousand dollars that they're using to pay off their house right now. So in 10 years, they're gonna now begin to start saving, they're gonna save $20500 a month with the hope that it's gonna catch up fast. And what the guru's never calculate is that those missed 10 years of compounding and last time is huge. So our first couple is gonna pay off their house as quickly as possible and save $300,000 in interest that they would have paid.


Then they're gonna take $2500 a month or $30,000 year starting at age 45, until retirement at age 65. Well, here's the result, using our simple and easy strategy using historical numbers, not that they can't be repeated, but they are historical. Their income at age 65 would be $146,000 a year. Not bad, pretty decent retirement, I'd say right. It's a little more than they're making right now. So their lifestyle wouldn't have to change at all, really. Now in the typical Wall Street world, that incomes is probably gonna be about half that much. Now, our other couple, they also would like to start saving but instead of putting it into their house. They're gonna keep their 1500 dollar house payment each month for the next 30 years. But they're gonna take the additional thousand dollars a month or $12,000 a year that they could put turn towards paying off their house. They're gonna put it into the acceleration strategy.


So what's their income at age 65 projected to be? Drumroll. $232,000 a year tax free over $90,000 a year more by having those extra 10 years of compounding. Now, again, this is historical. I can't really say that's gonna happen in the future, there's a pretty good statistical chance it'll come close over a 25 year retirement, that's $2.25 million in additional income. Because they compounded 10 years longer, even though they only save $12,000 a year that add massively outperformed saving $30,000 a year 10 years later. So the couple who delayed compounding for 10 years while they did pay off their mortgage, they found it to be a very costly alternative. Now to be completely fair, the couple that paid their mortgage, what they do they paid $300,000 more in interest to the bank, because they carried that mortgage for the full term. So my question is, would you trade $300,000 for an additional 2.25 million.


Now, even though the interest is already accounted for in the net result. Let's just take $300,000 off at 2.25 million, and we still are $1.9 million ahead. So that my friends is the power of compounding and time. Okay, so that's it for this week. If you have any questions, make sure you send me the questions at wise money tools.com. Don't forget to subscribe. You don't want to miss the video. And if you want to take a few minutes and see how these strategies how the acceleration and the leverage strategy might work in your situation, click on the time trade link below. We'll spend a few minutes together and see if it's a good fit for you. Other than that, thanks for joining me. Talk to you next week. Take care.