In this episode we explore some of the roots of "it's your fault" thinking by mainly looking at income and expenses.

Spend less than you make is the golden rule of finance, but is that really all that's going on?

It's true that you can't save money unless you have some left over.

So what's the problem?

You have a lot of financial factors at play that you don't control and that make a significant impact on what you can and cannot do financially.

Why do the guru's and professionals disregard this? It doesn't sell products.

So we want to help.

(We do make several references to ramen noodles, which are delicious.)

The dilemma today is being in this place of working hard to save and control your expenses and not feeling that you're able to get ahead.

Most of us are bound in our income earning depending on the profession we choose and we have no control over the rising price of goods of the things we need for the basics of daily living.

A couple years ago if you got a 5% raise and inflation is 8% you got a 3% pay cut!

The dollar changes value over time. Things increase in price over time. Interest rates are high. the price of assets, like homes or stocks, have gone up dramatically.

These impact you and are economic factors you do not control.

What's Up With Money?! Book Club

Think and Grow Rich by Napoleon Hill

We are back for 2024!

Healthy and ready to tackle the new year!

We begin a 4-part series expanding on our first and most listened to episode: Episode IV - It's Not Your Fault, A New Financial Hope

(We began with IV in honor of Star Wars)

We thought we'd begin the year where our podcast began with a 4-part series diving deeper into the idea that it's not your fault. Our hope is that this helps with those New Year's Financial Goals!

Our goal is to relieve money anxiety, rather than heaping more and more anxiety on you by telling you that you suck - so fix it!

Nope!

We want you to get money right and realize that there are a lot of other things at play that are important for understanding money and relieving financial anxiety. You have to hold two things together with money - you are responsible and there are many things that you have no control over.

Most of us think about this paradigm and like to make the simple solution by putting a dot on the chart.

Student Loans = Individual Failure

Lack of Home Ownership = Individual Failure

Jeff Bezos = Individual Success

Trust Fund Kid = Community Success

But is this all there is to the dynamic that creates the financial dynamics we actually live in?

Nope!

What's Up With Money?! Book Club

A look back on a few we think you should read in the New Year:

And that's only some of the books we read this last year! Look back on our past episode for other What's Up With Money?! book recommendations.

Notes arriving soon!

Show notes soon to come!

What's up with debt?!

Never ever, under no circumstance, should you have debt.

Debt is the best and having it has made me wealthy.

What in the world are the guru's talking about?!

Sure! Both sides of the debt convo use the blanket term "debt," but they are not talking about the same thing at all.

One side talks about "uncollateralized debt" while the other is talking about "collateralized debt." Got it?

Collateral: The assets which are pledged as security for a loan.

Thanks to our friends at Investopedia for this helpful definition and our word of the week!

This episode is all about the "un" side of debt. Most of us experience this in the form of credit card debt and student loans. These are loans that are given to you with no collateral other than potentially your future income earning.

These often come with high interest, like 25% on a credit card, or high balance, like $100,000 for college. Either can be a recipe for drowning financially.

It is important to ask yourself, when listening to debt advice, to understand which type is being talked about. We will get into the other side of debt next time.

Penny For Your Thoughts

It is easy to judge the "un" debt, the credit card debt or high student loan balances of some, but for many this is the only way they could get access to money, to cover medical bills, help family in need, cover an emergency. Many financial things are outside of our control and non-judgmental understanding goes a lot further in finance than rigid rules meant to shame.

What's Up With Money?! Book Club

We have two articles for you this time around!

All The Personal Finance Books Are Wrong by Derek Thompson

Popular Personal Financial Advice versus the Professors by James J. Choi

As we have said, the old 3-Legged Stool of Retirement is stressed at best and broken at worst. Social Security, Pensions, and Savings methodology of retirement no longer works.

We need a new stool - a 6-Legged Stool!

Lesson 1 - You can buy different types of money. You must spend every dollar you get and buy more money with it.

Lesson 2 - The New 6-Legged Stool

Every type of money falls into the following paradigm:

401(k) in general is a market, taxed, and non-guaranteed.

The key to the new world of finance is having all 6 legs working together.

Lesson 3 - May be best to not retire.

Studies show there are side effects of retirement on mental health in terms of isolation, depression, and the early onset of Alzheimer's or Dementia.

What's Up With Money?! Book Club:

Adrift by Scott Galloway

The old 3-Legged Stool of Retirement: Pension, Social Security, and Savings

It used to be that retirement was simple and you just needed the old 3-Legged Stool to hold you up. In the 1970's and 1980's the Pension Leg got kicked out. Social Security has continued to decline and all the burden is now on the Savings Leg to provide you the income you need in order to cover your cost of living.

Today, we have a different story.

Everything is on you for saving enough money. Social Security average monthly check is about $1800. This is far from adequate income. Social Security is a very stressed leg and many point out the fund is running out of money.

All of this leads to retirees main concerns of having enough saved for retirement and outliving their money.

So how do you figure out what amount is safe to withdraw from your account and not run out of money?

Great question!

This led to a massive study that created the 4% rule - you can take out 4% of your money and statistically you should not run out of money. This can range depending on market conditions at the time you take money out.

What is important is understanding "The Safe Withdrawal Rate" (as we call it).

This is where your future income comes from so that you can stop working and enjoy your golden years.

Fun Fact! Beginning in 1984, a portion of Social Security benefits have been subject to Federal Income Tax.

For more fun - https://www.ssa.gov/history/

What's Up With Money?! Book Club

Adrift by Scott Galloway

In this episode we go back in time and chart out the history of retirement.

In order to understand retirement today, it's important to see the evolution of retirement, where it came from, how it developed, and where it's going.

Retirement is a relatively new phenomenon.

Farm gave way to factory. Factory gave way to corporations.

This changed how people worked, earned, and had income for life.

History of Retirement in 30 Year Chunks

1980: Pre-retirement era ends

1890 - 1920: Government supported forced retirement era abroad

1920 - 1950: Government supported retirement era in the U.S.

1950 - 1980: Optional retirement era

1980 - 2010: Expected/entitled retirement era

2010 - 2040: Death of retirement era

What's Up With Money?! Book Club:

Adrift by Scott Galloway

This is all about getting some info to equip you to be ready to have a great Life Insurance conversation with a Life Insurance agent!

Do not be afraid of Life Insurance.

Do not be afraid of Life Insurance agents.

Be equipped.

Good agents that really understand the value types of Life Insurance we are talking about structure stuff at their detriment - not yours!

Remember, the lower the death benefit the lower an agent gets paid.

The more cash - the better for you, not the insurance company or the agent you are working with.

Rules for term - cheaper is not always better and may be worse. From an advisor's perspective, cheap life insurance is a major red flag!

Questions To Ask Your Agent

Freebie Book Recommendation!

To Sell Is Human by Daniel H. Pink

To help you rethink sales, understand you're always selling, and help you out!

What's Up With Money?! Book Club:

Money. Wealth. Life Insurance. by Jake Thompson

We are back!!!

Part 2 of our 3 part series taking a deeper dive into Life Insurance.

This is in honor of September being, among other things, Life Insurance Awareness Month!

This episode is going to focus on some of these concepts you may have come across on social media using Whole Life Insurance for -

"Being Your Own Banker"

"Infinite Banking"

"Create Your Family Bank"

One of the keys to this type of thinking is taking off your "investing hat" and putting on your "banking hat." In doing so you can begin to disconnect the noun bank with the verb banking in order to understand why and how people use these, why they work, and why you should consider Whole Life Insurance.

These high commitment plans (like any financial tool) requires funding.

After depositing money into one of these contracts you operate it like you would your normal bank and savings accounts.

Money goes in and money goes out.

Where these are different is in what benefits you get from depositing money here. After several years of getting the bank going, you get several benefits that you do not find elsewhere in the banking and investment world.

This is the simple story, and when placed as a complimentary tool your financial life can get a boost from what you are currently doing.

These earn interest and dividends.

All the money grows tax free.

You can utilize your money at any time.

The insurance company pays you to have the policy.

You get the death benefit at the end.

What's Up With Money?! Book Club:

Money. Wealth. Life Insurance. by Jake Thompson