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Hi everyone, this is Dan Thompson and welcome to another wise money tools video. We are talking about the 5 elements to wealth. And this time we're going to have a little bit of a crossover from our last video where we were talking about debt. In our last video, we were trying to determine good debt, bad debt, when to have debt, when to be using your money to build and grow. So this is kind of a crossover video. And I'm gonna talk a little bit more about what we had done in the previous video. But more specifically, we're gonna talk about paying off your home mortgage. Now, I'm gonna show you again, maybe some good debt, the power of compounding and time. So the question is, should you carry mortgage or should you pay off your house as fast as you can?

Now, I gotta say this because this is really important. Oftentimes, paying off a home is more of an emotional decision than a financial one. And I've never been one to try to talk someone out of paying off their mortgage, if they just feel like this is something they want to do. It's gonna give them all the peace of mind and safety and they sleep good at night. So that's great. And if that's you, awesome. However, in this video, we're gonna look at it purely financially, we're gonna take all the emotion out of it. And first of all, you got to realize one thing about home and especially home equity. Home Equity gets a 0% rate of return every day. We can month in forever and ever. Okay. Now, what do I mean by that? Well, we probably should describe what equity is. Equity is the amount of money you would literally put in your pocket if you sold your home.

It's the difference between what you owe and what you own. Okay, so if you have a home let's just say, it's worth or you could sell for $200,000. And you have a mortgage of $100,000. Well, basically you have $100,000 equity. It's the difference between your home's value or sales price and your loan balance. That 100k in equity, does not grow, does not get a rate of return and sits there idle everyday forever. But Dan, you say how can that be? My house is gonna be worth more in 10 years than it is today. And yes, that is true. However, think about this. If you have a home worth, let's say $200,000 today and in 10 years, it's gonna be worth $300,000. Now, it didn't matter if you owned your home by paying cash or if you had 100% mortgage. It really didn't. Your home went up value based on the market. Not how much money you put into it. So with or without a mortgage, your home went up from $200,000 to $300,000.

Now you certainly have to account for payments and interest and so forth. If you didn't own your home free and clear, but the equity in that home is always gonna get a 0% rate of return. So let's look at it this way. We're gonna take two couples, we're gonna call couple one, our accelerators because they're gonna go out and they're gonna accelerate their payments and pay that mortgage off as fast as they can. The other ones we're gonna call them mortgage yours, these guys are gonna keep their mortgage and they're gonna do other things with their money. So both start out with the same home, same down payment, same mortgage, same monthly payment. So each of them basically bought a $200,000 home, they put $40,000 down or 20% and they have $160,000 mortgage. Their payments are $1050 a month. Now, I'm not including property taxes and insurance. This is just pure principal and interest.

Now the accelerators, they heard the radio guy tell them that the paid off mortgage has replaced the BMW and so they want to pay off their mortgage as fast as they can. Now both couples have an extra thousand dollars a month for a total of $12,000 a year extra that they could put toward their mortgages. So the question is, would it be better to put that extra thousand dollars a month into the mortgage or somewhere else. So the accelerators by accelerating their payments, they're gonna pay off their home in 10 years and 3 months. So by adding that thousand dollars a month for the next 10 years. They're basically gonna pay their home off and own it free and clear in 123 months. Now once they pay that off they're really not gonna have any cash. They haven't saved, they don't have any other investments. They have all their equity in their home tied up in the sticks and stones.

Now at this point, they can finally start saving and investing because they've paid off their home. But they've missed out on 10 years, they're 10 years older, that means they have 10 fewer years to grow and compound their money. Now the other couple, the mortgagors, they decided to put their extra thousand dollars into a safe, accessible tax advantage location that averaged historically, about 7% in that same 10 years. Now, keep in mind that the Ramsey ites Davey says that after you get your house paid off, you can go buy mutual funds. And he says that they're gonna do 10 or 12%. But we're just gonna use 7% because no one's been able to figure What funds Dave buys? And we asked him all the time, Dave, please tell us which funds are you buying that are doing that. Anyway, at the end of 10 years, the mortgage yours are gonna have roughly $247,000 in their account.

Now, this is cash, they can access cash that they can use and turn into income at some point in the future as well. Now, how would the accelerators get their cash out of their house if they needed it? Well, there are two ways. They can either sell their house and take their money or they can get what's called a HELOC. A home equity line of credit. And as long as the bank's willing to lend the money, they could get some money out of their house because they put it all into the house. They don't have anywhere else to access capital, other than through a heat locker selling their home. How are they gonna generate income from there home, I guess they could Airbnb it on the weekends. But a home does not generate cash flow. Hopefully when or if they need to get some money, the bank will lend it to them. Or maybe the market will be at a really good time to sell and they'll be able to pull out some cash then.

Now remember, the mortgagors have the exact same home value, both homes went up at the same time at the same rate. So there was no difference in that. By the way, in year 10, they still have a balance of about $150,000 on their mortgage. And but they have $247,000 in cash. So the question is, could they pay off their mortgage now? Mortgage balance 150 they have $250,000 they could pay off their mortgage, couldn't they? And they would still have what $70,80,000 left over. But would that be a good idea? Would it be a good idea if they now took their money and paid off their mortgage. Well, our accelerators, as we've talked about have already paid off their mortgage. It's year 10. Again, they don't have any cash. It's all in their home. But now the accelerators can start saving $2000 a month, right? Because they don't have a mortgage and they had that extra $1000. So now they can start saving $2000 a month.

The mortgagors will keep on paying their thousand dollar mortgage and saving $1,000 in their side fund for the next 20 years. Okay, so it's been 30 years since they both moved into their houses. The mortgagors have finally paid off their home. All told over that 30 years, they paid $186,000 in interest. So for that home, they ended up paying $386,000 for their home. Oh, that sounds brutal, right? However, because they saved on the side and they compound in that fund. It has $2.4 million in cash. Now if we subtract the extra 186,000 they paid in interest, they still made over $2.2 million in cash. So can you see the power of compounding and time they use what I would call good debt into an asset a home that is appreciating. Now going back to our couple the accelerators, they were able to start saving $2,000 a month once they paid off their house. They use the same account that the mortgagors did.

But remember, they started 10 years later, because they were putting their extra money into their home. How did the last 20 years fair for them down the road? Well, their account grew to 1.4 million. That's not bad. The problem is they lost out on a million bucks by accelerating their house payments and paying off simple interest while they were missing out on compounding interest. And those 10 years made a huge difference. Now think about this, a million dollars at retirement can be a big difference in how you enjoy those retirement years. You can see how amazing really compounding is and why Einstein called it the eighth wonder of the world. You may have heard this little analogy before, but it's really incredible when you think of compounding. And that goes like this. I'm gonna give you two choices.

Okay, you can have $100,000 today right now, take it and run. Or you can have one penny today. And each day for the next 31 days. We're gonna double it. So in other words, you get a penny today. Tomorrow you get 2 pennies, then 4 pennies, 8 pennies, 16 pennies, 32 cents and so on. So which would you choose? 30 days of compounding or $100,000 today right now in your pocket. Well, you probably can't guess that this is a trick question and especially if you've heard it, because at day 31, a single penny would be worth over $10.7 million. And here's the schedule 1 to 2 to 4 to 8 to 16 to 32 to 64 to 128. And then it starts to get into some dollars we get here today 18 and now we've got $1,000 we finally broke the $1000 mark, then 2 then 5 then 10. By day 22 We have $20,000 by day 23 we have 41 then 83 and finally we get into where day 28 we break the million dollar mark. Day 29 2.6 million then to 5.3 million and finally day 31 $10.7 million.

Now that's compounding 31 periods. Now most people in their lifetime won't have 31 compounding periods of 100%. For instance, how long does it take for money to double at X%, you may have heard of the rule of 72. It's a formula that basically states that if you divide your rate of return into 72, that's how many years it takes to double your money. Now, it's not exactly accurate. But and especially as you get into higher rates of return, it even becomes less accurate. But it gives you a ballpark and it's easy to come close. So if I get 10% of my money and I divide that into 72, that basically says 7.2 years, I'm gonna double my money. Here's a table that's a tad more accurate, at 2%. And rule of 72 says 36 years, it actually takes 35. If we look at 12%, for instance, it says it's gonna take 6 years, it actually takes 6.12 and so on and so forth. Anyway, the idea is we want to find out how many times we can compound in our lifetime.

So it's not all that critical for this discussion if we're perfectly accurate. But what I want to point out is that over a working lifetime, we don't have many opportunities to get 100% compounding periods. Let's just say you start working at age 25, you basically have 40 years to grow your money unless you work past 65. But again, so let's use 10% average, which means we're gonna double our money about every 7 years. So if we divide 7 into 40, that means we're gonna have somewhere between 5 and 6 compounding periods in our lifetime. That's it. So even though it'd be nice to have 31 compounding periods and some very, very wealthy people might have a few of those. Then when we add in taxes, and costs and take away years of growth by losses. Well, I'm not trying to tell you all this to depress you. But what I want to point out is there are a couple of ways to put compounding in your favor.

One is the obvious one, start now start today. Don't let another day go by no matter how small the amount is to get compounding. The other way we can get compounding in our favor is to force accelerate the periods. Now if we go back and look at that 31 day compounding chart, but this time, let's assume that each day is 7 years, okay? If I already have $20,000 saved, I can force accelerate the process and I'm already at day 22. I find that lots of people have put money into mutual funds 401K's or other investments, and they also have some good income. We're They can start to save right away. If you can for start this concept with say $100,000. Now you're between days 24 and 25. Start with a million and bam, you're pushing day 28 already, where you get the idea. The more you can start with, the quicker you can bypass the compounding periods that seemed to be really slow grow for a while, I mean a penny to 2 pennies to 4 pennies to 8 pennies to 16 pennies.

I mean, you feel like you're getting nowhere right? Now, if you don't have the capacity, don't get discouraged. Just get started. You're gonna be surprised how much you can add to this over the years as your income grows. And then you can accelerate your compounding then I tell people all the time, you can't get back yesterday. So we've got to get started. Okay, I've got to wrap up this video because I don't want it to go too long. But we've got to touch on one other factor that goes hand in hand with compound, and it's not understood, and it's really not understood how devastating it can be to your compounding. So you've got to stay tuned for the next video or part two of compounding, if you will, because this is where we're gonna talk about that.

So make sure you subscribe. If you have any questions to him questions at wise money tools.com. Answer them just as quick as I can. If you want to spend a few minutes click on the time trade. We'll talk about your particular situation. In the meantime, we're talking about the 5 elements to wealth, and we're getting close to the fifth one and then we're gonna put this all together and wrap it all up in a nice package for you. So that's about it. Talk to you next time. Take care.

Hi everyone, Dan Thompson here and welcome to another wise money tools video or maybe podcast depend on how you keep in touch with us. Well, at the time of this video, it's early December 2019. And you may have a few more weeks to do something that you probably should seriously consider, and that is to convert your IRA or maybe even some of your 401k to a Roth. Okay, this is called a Roth conversion. Now, why would you want to convert any funds to a Roth? Well, a couple things. You may be in the lowest tax bracket of your lifetime. You know, I know most financial advisors kind of assume you're gonna barely be surviving during retirement, and thus you're gonna be in a lower income tax bracket. They think because you know, you probably paid off your home, you don't have any debt, no kids. And by the time you retire, you can live on a whole lot less. But seriously, who wants to do that? I mean, these are your golden years, have fun, spend some money. That's only possible though, if you've planned well and you've got money to spend, right? Well, I actually don't see many retirees going into a lower tax bracket. Again, if they've had any measure of success in their finances. I see a lot of them at least in the same tax bracket and some actually creeping into higher tax brackets. What's worse, if your tax bracket gets to a certain point, now your Social Security is gonna get taxed. And that can make for an even higher tax situation and really one of the most unfair taxes out there. You've paid all these years into social security. And then if you just happen to make a little too much your Social Security gets taxed. Anyway, once you convert to a Roth, basically what happens is you take a traditional IRA or a 401k, a lot of employers have a Roth conversion. And you convert it to the Roth, you're gonna pay tax on that money right now this year. But then what happens is you will never pay tax on any of the growth from this point going forward. It's a powerful concept. And you don't want to just ignore it or discount it, because it can be huge. You can convert all or a portion of your retirement plans to Ross and again, as I was saying, some employers even have a Roth option within their plans. Now, the downside to the conversion is obviously the taxes. They've got to be paid this year. And what you don't want to do is take that tax burden if you will, or the tax bite from the rock proceeds. So let me give you an example. Let's just say you have $100,000 that you want to convert, and you're in a 24% tax bracket. That means you're gonna have to pay $24,000 in taxes this year. But you want to be able to take this $24,000 from another account, a savings account, a money market, CD, that's renewing any low or non producing account would be better for you to take that money out of. You don't want to take it out of the Roth itself, because that takes that $24,000 and you give up the opportunity for that to grow and compound literally forever. And that can mean 10s if not hundreds of thousands of dollars depending on your age, and the years you have ahead that you can let it grow. So converting now would mean you got to get rid of the tax you got to pay the tax now. But then never paying tax on the growth from here on out. And again, that could be huge. So consider doing a Roth conversion, if you think you'll be making more money in the future. You have the cash to pay the taxes now out of pocket, and you have a decent place to invest the money that you think will do well over the years. Now, you don't have to convert at all. Maybe you've just got a few thousand bucks that you can put toward the taxes. Well, quick calculation, maybe you only convert 10 or 12 or 15 or $20,000, whatever that is, but it's worth thinking about doing that conversion. And again, you just got a couple weeks before that is before the years up, and then you gotta wait till next year. So what about contributing to a Roth. Well for 2020 so that's next year, if your modified adjusted gross income is higher than $139,000 if you're single. And by the way, that's $137,000 for 2019 Or if it's $206,000, married filing jointly next year or $203,000 this year, you can do a Roth. If it's higher than those numbers. You can even do a Roth. If you do happen to be in those income tax brackets, and you still want to have a Roth, you can do what's called a backdoor Roth. It's a little bit of a process requires a few steps, but it can be done. What you basically do is you make a non deductible contribution to a traditional IRA, then you convert it to a Roth down the road. Now, when you do a non deductible contribution to an IRA means you make too much you don't get the deduction that you can still put money in the IRA for the tax deferral. The problem again with an IRA, is it eventually that's gonna be tax coming out. So you put it into a traditional IRA then you convert it to a rough. All right. So all this is good. Well, it's a lot of work. And you can only contribute, you know, like $6,000 to a traditional IRA. And again, if you're in those higher income tax bracket, you may be looking to figure out a way to save more tax money than just on $6,000. Well, there's another way, and it's a Roth like account, but it's got substantially higher limits on it, in terms of how much you can put in. In fact, you can almost put in unlimited contributions by doing some various strategies. It can also be a much safer place to invest, because you can find places where you have zero loss potential, which can be huge. Particularly if your only choices are to go buy a mutual fund, or some other type of investment where you're just throwing money in and crossing your fingers. What's even better is you don't have the rules that go along with traditional retirement plans, such as waiting until you're 59 and a half to access the funds. Or you have to take a required minimum distribution when you hit seven and a half. So you kind of want to evaluate your situation. But it can be a good idea to do a conversion on your Roth over the next few weeks. Because you've got to do it before the end of the year. Going forward. If a Ross sounds like a good solution for you. You probably want to consider exploring how this Roth like account can produce even better results for you and have much more access to your funds. It's pretty easy, and quite a benefit for your family too. Alright, well that's it for this video, you probably have a question or two. Make sure you send them to questions at wise money tools.com. Don't forget to subscribe and if you want to talk about this You want to talk about how a Roth or a Roth like account might fit in your situation, click on the time trade link below. And we'll spend a few minutes together and see what might fit best. So evaluate your situation. If you can, it may be a good idea to do your Roth conversion the next few weeks before the end of the year going forward. If a Roth sounds like a good solution for you, you probably also want to consider exploring how this Roth like account can produce even better results for you and give you much more flexibility. It's pretty easy, and it's quite a benefit for your family too. Well, that's it for this video. Don't forget to subscribe so you don't miss the video. And if you have any questions shoot me the questions at wise money tools.com. I'm sure this video is sparked some questions and happy to answer them. If you want to spend a few minutes together talking about your particular situation. Click on that time trade blink below. Pick out a time we'll get together and talk for a few minutes. Well that's it. Until next week. Take care.

Everybody, this is Dan Thompson with wise money tools. Thanks for joining us on this video. So in the past couple videos, we've been talking about the five elements to wealth. And today we're gonna talk about one of the other elements. Remember our formula, y=a(1+r)x. And each one of these things has it's own little element. That's part of it a is our cash, pay yourself first. One is our capital and debt equation. How much money can we grow? How much money have we saved? Our is the growth that can either be a plus or minus, depending on the safety and risks that we take. An "x" is the leverage or exponential growth that we get by using leverage. So in this video, we're gonna talk about 1. Okay, we're debt and capital fight against each other. I think we'll all agree that debt can be a wealth killer. I mean, it takes money that you could be saving, growing and compounding, and you're sending your capital or your cash or your money to someone else. The problem is, if all we do is concentrate on our debt, and never pay yourself first. They there's a little battle there because you could be missing out on years and years of compounding, while you're trying to get yourself out of debt. Now Dave Ramsey, he's kind of the Guru of getting out of debt. And for the most part, I would agree with him, but I call his particular formula of getting out of debt, the beans and rice formula. Because he's all about literally sacrificing every single dollar towards getting out of debt and living just as frugal as you possibly can. And again, getting out of debt is a good thing, but done wisely and in order. So Dave kind of reminds me of talking to some of those older guys. You know, the guys kind of like the early 1900s great, great, grandpa types. They remember the day when they didn't have electricity. They ate gruel once a day, they had to walk through four feet of snow to school and it was uphill both ways. You know, it's just life is so easy right now and they try to compare what it used to be back then. Well, Dave kind of reminds me of the guy who wants you to live like that. No enjoyment, no entertainment, you put all that on hold you don't go to the movies. You don't do anything fun. You're just getting out of debt, debt, debt till you own your home free and clear. And it kind of reminds me of the movie, Oliver, you know, little kid holding up his bowl. And he says, Please, sir, can I have some more? Please, Dave, may we go to the movies? That's kind of what it feels like to me. I mean, He wants you to forget about life, forget about fun, and you just pound and pound and pound and take it out of debt look and I get it. There are a lot of people who live paycheck to paycheck. And they do it because they're paying so much debt. And debt can be a looming obstacle over a lot of families heads. So we do watch out of debt. The problem is you could also miss out on years of growth and compounding, if every extra dime goes to someone else. Now, I don't know the exact balance for your situation. But you've got to strike a balance. You got to get out of debt for sure. But you also need your money to grow and compound so that you can start to build toward your wealth. As a rule of thumb, if you're getting a return that's greater than your debt interest. Then maybe paying off your debt is probably not the best move and you can do other ways you can go about other ways to do that. As an example, if the interest on your loan or your debt is let's say 8%. And you can only get 1% at the bank, yikes. Well, it's probably best for you to pay off that debt. One misnomer is when someone tells you that you're making 8% on your money. If you pay off a loan that has an 8% interest rate, say I get what they're saying, but it's really not true. It's a lie. You're still in the hole 8% you're just not making that 8% on the other side. So you're paying out 8% and you're losing 8% from your cash flow, because it went out. So by paying off your debt, if you have an opportunity to start actually saving at 8% but you're not making a percent on your money, then you're on a treadmill. What I'm trying to say is this, if you can only make 1% on your money in the bank, and your debts 8% is probably best to pay off the debt. Because your growth or your savings isn't even keeping up with the cost of debt. But if What if you could save your money say at 9%? Or maybe even better over time? What then would it be better to save that money and begin growing and compounding sooner or to pay off the 8% debt, then we have to consider both good and bad debt. Yeah, there is such thing as good debt. And it might be defined as borrowing to buy an appreciating asset, such as a home. Bad debt can be defined as buying a depreciating asset, such as maybe some clothes or even a car. However, as much as David like you to pay cash for your cars, and other major purchases, he never considers opportunity costs. It may actually cost you more to pay cash than to finance a car. What you need to understand is how money works, how to take advantage of that knowledge and the benefits of when and how to use debt. The problem is with fanatic debt reducers mentality, they're gonna miss out on the one thing that we all run out of every single one of us. We start to lose it every day and that is time. We also live in a very low interest rate environment, and saving your money in the bank just isn't gonna do it anymore. On the other hand, oftentimes debt costs are so low, that it's not hard to supersede that cost of money with the compounding of your money. Now, you may have heard of two types of interest. Basically, there's simple interest and there's compounding interest. And understanding the difference can be huge and help you make good financial decisions as well. Simple interest is how most debt is structure. Okay. Suppose I make an investment of $1,000 had a simple interest rate of 5% With simple interest, I'm gonna get that 5% every year until I get my investment back. So let's just say it's gonna be a five year investment. So I get $50 each year for five years, or a total of $250. It might look something like this. Here's my thousand dollars, 1st year I get $50, 2nd year $50, 3rd year $50, 4th year $50, 5th year $50. Okay, now using that same 5% but now let's use compounding interest instead of simple and let's see how that turns out. In year one, I get fade paid 5% which is $50. But then in year two, because now my account value is $1050 I get paid 5% on my thousand of course, but I also get 5% on the 50 I made last year. So I'm getting paid 5% on 1050. So it looks like this year one $1050, years two $1102.50, year three $1157.63, year four $1215.51, year five $1276.28. If I compound at 5%, I have $276.28 earn interest 76 more dollars than if it was simple interest. Well, you may be thinking, well 27 bucks isn't that big of a deal, right? But as you get into larger sums of money, and more time, this can be huge. Now, since dead is typically simple interest calculation, and many investments are compounded oftentimes. It's better to keep productive money growing and compounding, while paying simple interest and using smart deaths. Now, is this always the case? Absolutely not. First of all, I'm not really a big fan of debt to begin with. So we got to control that but going back to Einstein's quote. He talks about interests and he says he who understands it earns it. He who does not pays it. The question is, can you do both? The one thing that's rarely discussed when it comes to making purchases for cash, and what I've mentioned with Dave is that he always misses out on what's called opportunity costs. Suppose I have to buy a car. Now both Dave and I would agree that buying the least expensive car would be the best. However, Dave has a no excuses no qualms no alternative way you go and you pay cash for that car. But what they misses is that even paying cash has a cost. See, I can either borrow money and pay interest, or I can pay cash and lose interest. If I take cash out of a productive asset or for go putting money in a productive asset. So that I can purchase a car my money loses the opportunity to grow and compound literally forever. Once it's in a car, I've got a depreciating asset that's guaranteed to be worth less every day that I drive it. If my cash can be used to help grow my money at a greater rate than the simple interest I may be paying, it might be better off to finance the car and let my money continue to grow and compound. I use this simple example. Suppose you can lend your money or invest your money at 10%. And let's suppose that the cost of financing will be 4% doesn't make any sense at all to take your money from an investment earning 10%. So you can avoid paying 4%. So in this case, to take my money from the investment. I give up the opportunity for that money to earn money, which again is opportunity cost forever. Okay, So hopefully you get the idea that can be a killer, no doubt. However, there might be ways to use smart debt capital used wisely can benefit you for a lifetime. That leads me to the next video where we're gonna talk about compounding and growing your wealth. You don't want to miss it. In the meantime, just think about this. Think about the debt you have the amount you're paying out, and is there any way you can curtail that? Is there a time in your life where it might be smarter to be growing your money, then paint all your income out to someone else? That's really the balancing question that we have to make. And it's not sometimes really easy to figure out, but we can figure that out together. Well, don't miss the next video. Make sure you subscribe. If you have any questions you have any questions at wise money tools.com. I'll answer them just as quick as I can feel free to make comments below as well. And if you ever want to talk about your particular situation, just click on the time trade link, and a few minutes together, that's about it till next time, these are the five key elements to wealth. We're gonna be on to the compounding and growing next. So, take care.

Hi everyone, Dan Thompson here, if you remember, we're talking about the five elements to wealth. Now remember the formula created by Einstein. He called it the eighth wonder of the world. It's compound interest, y=a(1+r)x. If you recall, why is our outcome? This is the answer, right? This is our goal. This is our wealth. Now the first element that we have to understand is "a" and "a" equals cash. Okay, we might call it cash, we might call it capital, we might call it funds or money or greenbacks or bones, or whatever else you want to call it. What it boils down to goes way back to the famous book that you should have all read. If you haven't, you need to read it. It's called The Richest Man in Babylon. It's a great book, easy read, very easy to comprehend too. In this book The very first principle to becoming rich. I kind of like to say wealthy, because for some right now the word rich has taken kind of a negative meaning so we'll probably say wealthy. But he always said the richest man anyway, stay away from politics right now. The first principle is drumroll, pay yourself first. That's it. One of the most basic principles in life is to put yourself in the front of the line. Look, you're the one putting in 40-50 hours a week working, you're the person who should get the first part of your paycheck. Way, way too many families live paycheck to paycheck, and they never have a dime left over at the end of the month to save or pay themselves. They pay their loans or credit cards, utilities. Everything else gets paid, but they don't pay themselves. So starting today, this minute, I don't care what your financial situation is, you need to start paying yourself first, how much? Well, depends on your situation, I would shoot for at least 10%. At kind of a minimum, maybe you can't do 10 right now. But get something so that you feel like you're accomplishing that goal of paying yourself. Eventually you want to get that up to about 20%. But here's a deal. Once you see how all this fits in, you're gonna want to try to figure out how you can pay yourself 100% and put it through the five elements to wealth before you start taking income. But anyway, you'll see how exciting this is as we go along. Although it's not gonna be possible. Maybe right now, the main thing is start with something today. You got to figure out how to get that started and then we'll figure out how you can do more. Now in his book, "Rich Dad Poor Dad" Robert Kiyosaki taught the Same principle, he said that his rich dad taught him to pay himself first. So in his book, he says pay yourself first. It's the power of self discipline. If you cannot get control of yourself, don't try to get rich. Wow! If you can't control yourself, don't try to get rich. It makes no sense to invest, make money, and then just blow it. It's the lack of self discipline that causes most lottery winners to grow broke. Soon after winning millions of dollars. It's the lack of self discipline that causes people who get a raise, to immediately go out and buy a new car, take a cruise. He says, of all the steps this step is probably the most difficult to master if it's not already part of your makeup. Now, I'd venture to say that personal self discipline is the number one delineating factor between the rich, the poor and the middle class. So that's pretty powerful. If that's the factor between the rich and the poor. Then let's get some discipline and put ourselves out in front of the line each and every payday. All right? And the power of cash and having it that cash flows amazing. So you work you get paid. If you pay yourself and save and invest first, then pay your bills. You're gonna be amazed at what can happen. And don't worry what to do with it just right now, right? We're simply wanting to take that action and start saving, paying herself first each and every payday as we go along. It's gonna make perfect sense where to save and invest it. But it all starts with us. Without this part of the equation, the cash equation, really nothing else matters. If you're not able or willing to pay yourself first and look out for you and your family. Put yourself at the front of the line, you're always gonna struggle to build your wealth. I don't care if you have debt up to your eyeballs. And Dave Ramsey tells you that suck it up and eat rice and beans three times a day, it's wrong. You have got to put yourself, you've got to put something in your pocket, you've got to get the compounding machine working for you. Okay, so that is element number one, cash, money, capital, whatever you want to call it. The only way this works is this if you have some cash to do something with and paying your self first is how we're gonna build that cash. If you are fortunate enough to already have cash to already have other investments that you can access? Well, you're just gonna be that much further ahead. As we go through this whole process. You're gonna be able to jump ahead a few time periods as we call them in our five elements, but I'm jumping ahead of myself. I really do get kind of excited about this I can't wait to share it all with you but we've got to go one step at a time. So that this becomes a way for you to understand and then ultimately become the captain of your own financial ship. So that's it for this video. That is element number one. Stay tuned for element number two. If you have any questions, shoot them to questions at wise money tools.com. Don't forget to subscribe. Can't wait to see again. Until next time, take care.

Well! Hi everyone, this is Dan Thompson with wise money tools. Welcome to this video. Today we're gonna talk about the most critical and least understood basic money principles. Now, listen closely here for just a second. Okay, I'm gonna be putting out these next five to six videos pretty quickly. As you know, I typically put one out about once a week. But this next five or six are gonna come a little bit quicker because I want these in your hands just as fast as I can get them done. Because they're the most important videos to your financial success. Okay? These are very important and I want you to miss a single one. So if you're not subscribed, click Subscribe now. Okay. Sorry, don't mean to be so dramatic, but I assume you tune in to my videos because you want to get something out of them. And I can promise you as we go through these next few videos, it's gonna hit you it like as gross as in despicable me, light bulb. Right. So the light bulb is gonna come on. And it's gonna be pretty exciting, and I can't wait to share this with you. So what we're gonna talk about, like I told you in our last video, we're gonna talk about the elements of financial success. And certainly you've heard of them before, but maybe not all packaged together. And if you want to seriously take your financial wealth to another level. You've got to know and implement what we're gonna call the five elements of financial success. And what I want to do is break down each element into a separate video or this one's gonna get too long. And I can't take the risk that you're gonna tune out. We're gonna try to keep them short, sweet to the point. So for each of these videos, take your time. Maybe watch them a couple of times, if necessary. You got it understand this so you can again, take control, grow your wealth. I'm also gonna put this video series if you will, into a mini course. And then I'm gonna put a free link to access this anytime, so that you can refer back to them without looking through my hundred plus videos searching forum. And of course, you can always share that link with your friends and family. This is stuff I wish I would have known and practice back in my 20s. This is the stuff I wish they would have taught me when I first became a financial advisor. So this course again, it's gonna be called the five elements to wealth. So watch for that link as we get going in these videos. Alright, so let's get after. Let me introduce you to this again, even though you've likely again, like I said, heard of these elements. They have to fit and balance with each other. And that's what's gonna make this film a little bit new. So we all know the world is made up of four elements, earth, air, water, fire, right? These four elements are believed to be the essential elements to life, take any one of those elements away. And the theory is life would cease to exist, and maybe even the world as we know it. Each element plays a specific role. And we needed to sustain our life. What just like these four elements are critical to our living and to our world. In the world of money investing and finance, there are five elements that have to be present, working together, him balance to build wealth, and here they are. The first one is income. This can be also called cash or in short, what we might call capital. Then there's debt. There's both smart debt and dumb debt. And we've got to figure out which is the best for you and how to get out of dumb debt. The next one is safety. This is the protection of your money that so many of us want when it comes to investing. But then there's growth. And for the most part, this is what we do. This is why we save and invest, because we want our money to grow. And finally, the fifth element is leverage. This can be used in many ways, most ways. What it does is it adds to your risk. But we're gonna talk about how there are ways or won't add to your risk. So again, this can be kind of fun. If we ignore or overemphasize one of these elements, we potentially eliminate our long term chances of a successful financial outcome. But here's what's interesting those, if you were to talk to several different money managers, financial planners, financial advisors, radio talk show host. You're gonna find that each one puts a major emphasis on one element over another. As an example, you'll find that your traditional or typical financial advisor uses the lure of growth. If you will, to encourage you to invest hoping that you're gonna build your wealth through risk and using them. They say you know, buy mutual funds, dollar cost, average, diversify, take risk, and that's what you need to grow your wealth. Then on the other extreme, you have the get out of debt guys. I often call these the Dave Ramsey, who are all about eating rice and beans and put every penny towards paying off your debt and your house and then pay cash for everything else the rest your life. Well, out of balance, what's happening is they're missing some critical elements of wealth. And just getting out of debt isn't going to build your wealth. Now I know after you're out of debt, Dave wants you to put your money into mutual funds. But now you add the risk element and you've lost time to the equation. And time is an important part of this equation. Well, we're gonna get to that as we go along, then the next group of advisors, if you will, these are the better do nothing than to lose. So they keep cash around, see these bank accounts, honey markets, they don't trust the stock market, they don't even buy, they may even buy gold and silver because the world's coming to an end, right? Basically, they don't trust anything but maybe their local bank and some little pieces of metal. Then you have the safe money guys who use investments like annuities to make sure that you never lose money and to have income during retirement. Then you got the life insurance guys who are all who also like safety, but they also want liquidity. They want to be able to take advantage of opportunities as they come along. And then finally have the risk takers and these are the leverage guys. These are the guys who build businesses and investments and they use leverage, or what we call other people's money, OPM, that formula to lever up their capital and build and grow their wealth faster. Well, on the surface, you could make an argument that each of them have some good points. So when we look at those five elements and how each one plays a role in the financial world, we've got to figure out how they balance together. Now depending on your status, your experience, your current wealth, your risk tolerance, you may lean more towards one particular flavor than another. That's why each of these different advisor types I'll stay in business. Because there are enough people who believe in their particular model again or flavor, and they jump in with them. Now, I have to admit over the years, I've been pretty much in all of these categories, depending on my age, my wealth, the economy at the time. When I first started out in 1986, I found myself in a world where you sold mutual funds diversified money, dollar cost average, you never asked any questions. This is just how you did it. You didn't ask questions like, does this really work? And is all this really necessary? Unfortunately, it took me about 13 years to realize that it's not a very good way to go. Unless you're pretty much okay, staying broke through your retirement years. I've also risked a lot of money, personal money, trading and investing. It sure is fun when it's going up. And that's so much on the way down. Well, that drove me to being a little more ultra conservative and simply protect your money, have it grow slowly, but over time, if you don't lose, what the theory is you're gonna turn out fairly well. Then you've got the leverage guy or what I can called the entrepreneur guy. And again, that's he's part of me as well. So I like to build things into grow things. And so we even started a building company several years ago, and now we develop and build homes. And it's been really good and it appears right now to be looking good for the next few years. But you have to be cautious at the same time and try to put away some profit elsewhere, as you go along and slow down, if you can kind of see what's happening before it gets too ugly. Well, the truth is balancing and understanding how all five elements work together is the only way to wealth predictably and as safely as possible so you can sleep at night, one of the very basic kids keys toward wealth, and it fits well within our element. And that is compounding. Einstein gave us one of the best quotes when It comes to money that's ever been said. He said, compounding interest is the eighth wonder of the world. Then he went on to say he that understands it earns it. He that doesn't pays it, he produced this simple formula of compounding interest. Well, simple, I guess is a relative term. Here's the formula, y=a(1+r)x

. This quote by Einstein is often quoted by financial advisors, which is fine. It's just words to many of them because they don't really understand. See, compounding is huge. And when we balance all the elements, if we look at the equation, and each one of those five elements, each one of them is a very important part. So why is the wealth we build? This is the end result. This is what we're after. This is the answer, so to speak. "a" Is the cash or the income. This is the first step, we've got to have some money. So we've got to learn to pay ourselves and put some cash in a place where we can start working with it. One is debt or being debt free. However, out of balance, this is gonna be really interesting when we get there, if we're putting too much emphasis on the debt side. Now, the "+" this could be a plus, or it could be a minus sign too, because this is the safety. This is protecting your money from losses. If we have a minus sign, we've got losses. So we want to keep that in the plus sign and make sure that we're in a situation where we have safety and protecting our money. Our is rate of return it's the growth this is where compounding comes in. And then finally "x", x is leverage and the potential for exponential growth if we use it properly. And if we don't use it properly if we use it like so many entrepreneurs and startups, it can get really kind of ugly fast. So here's the problem with financial advisors who talk about and emphasize just one or maybe two of the financial elements and leave the rest out and miss out on the total equation. As you know, from your math classes in school, if you take any part of this equation, or maybe turn a plus sign into a minus sign, the whole equation breaks down and it doesn't work. The only way the equation works is this, each part of the equation is there and managed properly. Now let me make a confession here. So I've been at this stuff, 33-34 years, some like that. I've seen just about everything out there that financial advisor sell. I've read tons of books and articles from many successful investors. They're certainly success stories in those books. And some call it Looks, I didn't call it diligence, some call it brains, whatever. They found a way to build their wealth. Some kept it. Some didn't. There are lots of businesses that have washed up and are, you know, literally down the drain. You know, 30% of new businesses fail in the first two years have been open 50% during the first five years, and a wow 66% during the first 10 years. So just because you're a business owner isn't a surefire way to wealth. What I found is that not everyone is cut out to be a Warren Buffett, Bezos OR gates, right. In fact, the vast majority of Americans simply work at a job, make a good living, have a career and hopefully have some sort of retirement at the end of that something they're left out of this, you know, dream of wealth because they don't have the time or possibly the talent or the ambition or the drive. You know, a lot of people don't want to put everything on the table and go open a business and work like crazy to make it successful. But what if in every walk of life, you could experience true wealth by combining these elements and keeping them in balance? What if it wasn't as hard as you thought? What if you didn't have to build a company or take a bunch of risk or get lucky and investments. But you could simply take advantage of the five elements, and wealth would almost grow by natural economic forces. Everyone plays a role in our economy. What I want to do is show you that no matter how you fit in there, you can be as wealthy and financially free as you can dream. I don't want to take away from you, those of you who want to be creative and be innovators, and you're driven to make the world better. That's what built America, then that's a huge part of all of this. As entrepreneurs build their businesses. They create cash flow. And they too can use the five elements if they take advantage of cash flow and setting up this side. Rather than putting it all back into their business and potentially losing that business. Again, just the statistics of what happens to businesses tells you probably ought to be protecting some of that future capital. So both the entrepreneur and hard worker can win once you know the five elements and how they work together. Okay, so now you know the five elements. Let's review really quickly the type of person that each element represents and the good and bad of each, we'll call the first one the cash club. They love to save money in an account. They do a great job of paying themselves first, but they don't grow. They don't leverage and we've got the debt free club. Now these guys get really committed. They're all in starting right now. And again, I call them the beans and rice guys. They'll sacrifice enjoyment now to live a debt free life later. They're really committed but never pay themselves first, because they're always paying someone else, a guy who they owe money to right? They miss out on both growth and leverage, which are integral to the whole equation working well. Then we've got the guarantee or the safe club. They love safety and guarantees and they're drawn to typically life products that give that guarantee and investment security. No other investment in the world focuses on security. As much as insurance companies do. They are really secure. And typically the trade off for that security is a little lower or slower growth. Then we've got the high growth of the home run club, they love to put to bed on the potential big win. And these guys are rolling the dice in the stock market or maybe crypto maybe other aggressive investments. They offer potentially high growth, but they lack the security and the leverage and it can become very risky. And then finally, we got the leverage guys. These are entrepreneurs they love to build their empire using leverage to accelerate their growth. Their priority is to use all available resources to grow that extreme focus of the business. And unfortunately, by doing that, it also brings on risk. Their confidence in themselves translates to them working for money, instead of money working for them. Okay, so that gives you a bird's eye view of each element. Which one right now fits you the most. Maybe it's a cross between one or two of them. You know, john Bogle, he's the founder of Vanguard. He's credited for saying, never bear too much or too little risk. Taking a balanced view of being neither too risky or new to conservative. So there you go. That's a great start. Probably a lot to take in. This is gonna be really excited. I can't wait to share more with you. So again, make sure you subscribe, be ready for the next video. It's most likely gonna be sooner than next week, so be on the lookout for it. If you have any questions, make sure you send your questions at wise money tools.com. I'll answer just as quick as I can. Again, subscribe. Here where to spend a few minutes talking about your situation, click on the time trade link below to schedule a time. Well, that's about it. Thanks for joining me. Now you understand the five elements to Wealth, I'll talk to you next time. Take care.

Hi everyone, this is Dan Thompson with wise money tools. Welcome to another video or podcast, however you listen to us. You know, if you look around there's a bunch of different financial advisors and they're kind of divided, if you will. You know, on one hand, you've got the advisors that are all about selling you. You know, mutual funds, maybe some stocks, nothing they sell has guarantees. And what they do is they rely on past history or past performance to kind of entice you into the investments are working with them. Now, these advisors use words like diversification and asset allocation and dollar cost averaging. And you know, it there's no surefire way that makes money. But they say to kind of make you feel all warm and fuzzy, as if you're actually avoiding risk and they quote, you know, past performance And averages, like their actual returns. So again, you kind of supposedly feel good about risking your money. Now this group is made up of what I call traditional financial planners and investment advisors. Then on the other hand, you've got advisors who are geared more towards what are referred to as safe money guys, these guys are, you know, safe money investments, little to no risk, sometimes tax advantaged and income oriented. You're gonna find bonds, annuities, life insurance, you know, with a main emphasis in this group of safety. And they use the safe money arguments that losing money has a greater impact on your wealth than rate of return. So for the last 35 years, been in the investment world. It's been interesting to hear both sides of this argument. And believe me, I've heard both sides, many, many, many times over. So in 1986 when I started with This big firm, it was all about investing and managing money. And after the dot com crash in the late 90s, early 2000, it was evident that these guys really didn't know what they were doing the amount of risk that people would take. And really didn't understand what they were invested in or why they were invested in it. Well, it just proved to be not a very long term oriented solution. So one of the ways I can kind of tell you if people know what they're doing. If I ask a few simple questions, like, Where's your money invested in right now? And they may say, Oh, it's in a mutual fund. And I say, do you know what fund it is? And they may or may not know the name of the fund. I say, do you know what they invest in? Usually, they have no idea. This is where you kind of get a blank look. And I asked him, Why did they pick that particular fund? And oftentimes, they say, Well, I looked at the history and had the best return and I say So how does that do when the market you know, has a downturn or some sort of a recession comes along? And again, they typically have no idea? Well, you get the idea. Most people are blindly or what I call speculating into these mutual funds. It's not really investing. It's nuts how little the average investor knows with what they as to what they have, and why they bought into it. So around 1996-97, I started looking around for a better way I needed to find a way that my clients could actually come in and come out ahead after these markets take, you know, some big hits. So I did a lot of work on the safe money side. But I realized that these guys didn't really have the complete answer either. They work mostly of fear telling you to run as fast as you can that it's just too dangerous to invest in the kind of the Wall Street way. They warn you of market crashes and recessions. All of what your true but again, it's based mostly on fear. So the risk guy says that if you're too safe, you're never gonna make money. And the safe guy says that if you're in a stock market, you're gonna lose money someday. So which side is right? And Why is it so confusing? Well, let me tell you what I found. Both sides are wrong. Okay. I'll tell you why. First, let me clarify this. Let's first kind of determine who's who, let's call the one side that wants you investing all your cash into the market all the time. We'll call those our risk advisors. They will call the other side who never want you to invest your money and they keep it safe. We're gonna call those guys the safe advisors. Well, let me tell you why the risk guys are right. Well, kind a right. I think it's important that you have the capacity to grow your money, but as safely and with as little risk as possible. However the way risk advisors want you to invest and how they invest your money, and the fees they charge, well, this is where it goes all wrong. The bottom line is, they really don't know how to invest. Right now the risk guys, man, they're all crowing like roosters, markets have been going up for several years. They look like they're just the greatest stock or mutual fund pickers in the world. Because again, the markets just up, up, up.Right. Well, who knows how much longer it's gonna last? It might have a little bit to do with what the elections turned out like next year. Well, when you see your statements right now, at least at this point, the risk guys might look like they are right. Conversely, the safe guys are telling you that the markets are volatile, and when they come crashing down. You're gonna lose a boatload of money and you should protect your money and buy safe investments while you can. Well, the bottom line is exactly the same as the risk advisors. And that is that the safe advisors really don't know how to invest and grow your money either. Neither side really knows how to invest. Oh, sure they know how to throw your money in investments, but they don't know how to invest. Let me tell you a true story. When I started way back in the day, like I said about 1986, I was on the risk side. I was, you know, excited to learn how to invest. I wanted to learn how to make money for myself, and also obviously show clients how to build their wealth do. Well, guess what? Believe it or not, brokerage firms don't teach you how to invest. Advisors don't ever take investment courses or classes. You know, what they get trained on. They get trained on how to communicate with people and how to sell the products, how to get assets under management, get them in the door, so to speak, how to convince people to move their money. To your brokerage firm, advisors are not trained on how to invest. And I was really discouraged. I mean, this is what I wanted to do. They taught us, you know, how to sell mutual funds and how to make sure people were, you know, diversified and all that good stuff, but they really didn't teach us how to invest. I never learned things like how to analyze an investment, what a cap rate is earnings, revenue, free cash flow. And you know, other methods that people use and investors use for evaluating an investment. So they just basically, you know, give your money to a mutual fund manager and hope they know what they're doing. Then when you jump to the other side, safe advisor side once again, it's more or less how to sell. And again, they don't know how to invest either. They're all trained to convince you that you don't ever want to be an investor. You want to protect your money. They neglect to talk to you about opportunities and sound investment practices that have proven to work for decades. And I'm sad to say that both sides are all about getting your money under their management. First and foremost. What I've been in search for so many years is how to grow your money safely and predictably. But neither side had a really good answer for this. The risk side accuses the safe side that all they want to do is earn a commission. And that's why they sell the products. And then the safe side says, Well, those guys over there just want to charge you a fee. Remember, a fee is nothing more than an annual commission, and they don't really manage your money. What they do is send your money off to another manager or a mutual fund, then they stack their fees on top of it. So you get the idea. Then you can take all the risk if you want on one side, or all the safety on the other side. And you know what, once again, in a sense they're both right. All right, Dan, how can they both be right? Well, it's simple, because neither side knows how to invest. And they don't understand money, and what I call the 5 elements to wealth. As a result, you as a client, they never feel comfortable with the risk you're taking or not taking. Neither sides really figured this out. Unless you think outside the box, get away from both sides for a while, you're doomed to fall into one of their boxes. For me, I like this hybrid approach. After the first 15 years of being on the risk side, seen the ups and downs in the markets, the illusion of averages, a fact that most advisors really don't know. I came to realize, well, you know what, this really doesn't work. Then being involved on the safe side. Now, although you might sleep well at night, you can miss out on some good opportunities and some years that you could grow your money. The fact that safe advisors don't know how to invest, they're gonna scare you with their stories so that you run from any kind of investment risk. So having been on both sides, listening to both sides of the story, realizing both have flaws. Again, I like this hybrid approach. It's a really simple philosophy isn't that hard to understand? It's really pretty simple. I was driving the other day. And I was listening to the radio and I listened to these two advisors who were discussing the market. And the market, by the way, it seems like about every other day, it's hitting an all time high. Anyway, what was asked if someone came into you into your office today, with $100,000, what would you advise them to do? And you kind of hear him both, you know, thinking about it and him and then they both agreed they would invest $100,000 right now. Because as advisors, they can't predict where the markets going. And I thought Wow, they'd even ask the right question. The right question is, should I be investing right now, this is the problem with risk advisors. It's always a good time to buy, never a good time to sell, sit back, take a break. Just ask your advisor right now, if you have a risk advisor, with this market at an all time high, ask him Is it a good time to sell. You're likely gonna hear some sort of clever motto or slogan as to why you shouldn't sell. Ask the safe guy if you should invest into this market. And obviously he's gonna say, no way. Look what happened to people in a way they lost 50% of your money. Why would you want to ever get involved with that kind of volatility? You see, it goes back to the point. Neither the risk guy nor the safe guy really knows or understands investing. And so they don't put into practice again, what I call the five elements, financial success, or the five elements to wealth. Sadly they were never taught these things. That's how we're gonna. And that's why, over the next few videos, we're gonna talk about these five elements that when balanced, have a very predictable and successful outcome. What if you could grow and compound your money with no investment risk? And could you use investment principles such as leverage to add horsepower to your growth? Sound kind of interesting hope sell, because that's what we're gonna talk about next. You don't want to miss it. Well, that's it for this video. As always, if you have any questions, shoot them to questions at wise money tools.com for sure. Make sure you subscribe because you don't want to miss these next videos. And if you ever want to talk in click on the time trade link below, set up a time where we can have a little discussion about your situation. That's about it. Until next time, take care.

Well! Hi everyone, this is Dan Thompson wise money tools. Glad you could join me on this wise money tools video. So I got a quick question for you. Are you capable of picking your own mutual funds? Now that might sound kind of silly, but I started as a financial advisor back in 1986. Yep, old guy, little gray here. Now, if you work for a big firm, what happens on a fairly regular basis is you get these guys coming into the office. They're called wholesalers. And it happens a few times a month. A wholesaler is basically the sales force of a mutual fund company. And what they do is they come in and they tout their mutual funds tell you how wonderful they are. They take you to lunch, give you a pin, a cup, some sort of trinket and off they go. It's kind of taken for granted if a wholesaler shows up that management wants you to sell their stuff. Now this can be a conflict of interest is certain extent because oftentimes a mutual fund company will either pay a fee or give a kickback to the brokerage firm to push their funds. Now, they do this and it's all legal. But what they do is they call it a due diligence reimbursement. See, the brokerage firm has to pay an employee of sorts to analyze the fund group. And so the fund group will pay them for that due diligence. Well, there were a few wholesalers that came in while I was in my first year, and their stories were amazing. I felt like I couldn't go wrong selling their funds. I remember one wholesaler coming in. I guess this was about 3 or 4 years after I'd been in the business is around 1990. And he had this big pitch for their China fund. And that in China was going crazy at the time and their fund was up 45% for the year. And he said to all of us, he said, Now this is just the beginning. China's here to stay. This is where you want to put your money. I know about 3 months later, he showed up to the office. And he was touting their blue chip large-cap fund. And I remember asking him, I said, Well, last time you're here, you're talking about the China fund. How's it doing? Well, luckily, I had never sold any of it, because he was a bit uneasy. And he sheepishly admitted that it was down 90% and they closed it, closed it and I just felt like I dodged a bullet. Had I simply follow the wholesalers push, my clients would have been toast. Sadly, way too many brokers in my office had sold their clients to China fund. So that brings me to the point of this video. What happens to these funds when they close? Where does the money go? See a mutual fund company won't keep their dogs very long. Because they don't want them on their books. There's a stat that indicates that there are over 32,000 mutual funds that have closed, okay? Now they may have closed due to lack of interest, they may have close to bad management, they may have close to performance, or they just didn't have enough sizzle to keep them exciting. As with the China fund, there was a lot of sizzle for the sell. But as soon as the sizzle was drowned out, most of the assets were lost and the fun closed. Now they don't have to put it on the books, but there's still a little bit of money in there. So what happens to that money? Well, what they do is they typically roll what's left of your assets into another fund. Then they send you this letter that says now you're the proud owner of their new high flyer fund, right? Well, there are lots of reasons and excuses to make you feel all warm and fuzzy and that they did the right thing. But the reality is what they did is buried their dogs. So suppose there are two funds. One has a 10% return each year for the last three years. The other one has like a 2% return and then a negative 5% the last year. And you own the one that lost money over the last three years, what the mutual fund company can do is closed that dog. Keep saying dog, I love dogs by the way, and they roll those funds into the good one and hide the horrible returns of the other one. Now, here's where it gets a bit deceiving. So again, they give you a nice letter, explain the move, and now you're the proud owner of this new fund. But remember, you own that horrible fund for 3 years previously, right? However, now your money is rolled into the new fund. And at the end of the year, you get a statement that shows the last 3 years return as if you'd been in that fund. Well guess what? Somehow all the bad returns are wiped out gone. Your statement shows you've done 10% for the last 3 years, even though your actual account value shows dramatically otherwise. Now, this happened about 32,000 times in the last number of years, maybe not all of them for horrible returns. But still the history is wiped clean. And you're now part of the history of the new fund that you're that they rolled you into, even though you did not experience that history. I guess I point this out, because what did the broker that sold you the fund, know that You didn't know? Oftentimes, not much more than you could have read for yourself. In other words, brokers are subject to being sold a bill of goods by these wholesalers, just like they then turn around and sell you a bill of goods. With the research you can do on mutual funds these days in about five minutes. There really is no good reason to pay And to buy a mutual fund from a broker. Did you know that at the end of 2014, there were over 79,000 mutual funds worldwide 79,000 just in the United States over 9600. Korea alone has 11,000. And India is pushing to over 10,000. Now, here's what's really interesting though, do you know how many stocks there are in the United States? Well, in 1996, the US stock market peaked with issues at 7322. At the end of 2018, we had just over 3600. So those numbers have been cut almost in half. And now think about this. There are over twice as many mutual funds in the United States as there are stocks in the United States. And that's the only thing that mutual funds can buy. Okay, so back to my point of this video. Do you really think a broker can pick a mutual fund better than you see brokers and financial advisors pretty much hone into one or two mutual fund families. Maybe they like him because of the wholesaler. Maybe the returns for a particular fund has been good for the last few years. Or maybe it's the payback that if the firm gets I don't know, what am I mean by payback? Remember, I was telling you about the cost kickback for due diligence costs that many firms receive will brokers and advisors get a few perks as well. I remember in my second year of fund company invited me on a due diligence trip. They flew me to Chicago, picked me up in a limo took me to the Nippon hotel. I think it's called in downtown Chicago where I look right at this huge billboard of Michael Jordan from my room. Then they took me to the finest restaurants. It was just top notch accommodations. And then we had like a two hour meeting. Where they talked about their funds, their fund managers and how they analyze stuff and all that. By the time I left, I was so impressed with the company. They had this great story nice people. And of course, they treated me very well. Well, I got back to my office A few days later, and I did some research. I liked everything about them, except one thing. They had horrible results compared to other funds in their competitive group. So how can I justify selling them? The promise so many brokers justify selling them because of these due diligence trips. I talked with a few other guys in the office and they basically said. Hey, these guys are going to take care of you. And how do you know that they aren't gonna do better in the future, and you're gonna be fine, just sell them? Well, I couldn't do it. I just couldn't sell fund, because somebody took me on a nice trip. Now this happens several times each year. The courting that goes on behind the scenes is incredible. Now, I think that's curtailed over the years somewhat. It used to be much more you know, aggressive. I mean, some of the trips I've been on to sway me to sell their stuff have been incredible. The problem is you as a consumer, you have no idea if the broker you work with is unbiased. Did their research or if it's a good story, but they are simply paying back the wholesaler for their weekly visits, and for the little trinkets they get. And you're never gonna know that which again, takes me back to my point. There's no reason in this world that with a bit of research, you have just as good a chance of picking a mutual fund, as well as any financial advisor out there. Not only that, you'll save the fees as well a fee that is completely unnecessary in today's world. Fees can literally eat up 30% or more of your total return, even if it's only 1% a year. I hear that all the time. Well, it's only 1% a year. But if you look at some of the calculations of how that works out over time, it can eat up as much as 30% of your total return just for picking a fund. What I think is a better question is this. Our mutual funds all what they're cracked up to be. I mean, by the time you look at the actual return, the fees, the taxes, the manager of philosophy. You may be able to do much better on your own. Using what we like to do, and that's the Warren Buffett style of investing, you could potentially dwarf the returns on an actively managed fund. And it's not that hard. It's certainly worth exploring. That's the purpose of these videos to make you, your best financial advisor. The first thing you got to do is build up your capital so you have capital to access when it's a good time to be buying. Having cash or capital markets, correct or even crash is really the secret to Warren Buffett's success. He says, be fearful when others are greedy and greedy when others are fearful. There's a little fear out there right now. And maybe for good reason. We've got a great economy right now, a pro business, White House company profits are up wages are up employment, the lowest and 50 years. So there's good reason to be optimistic. I'd simply say if you aren't invested right now, and you have the ability to save. It may be the best time to build your capital base and keep cash. Buffett is sitting on billions and cash, like 122 billion at the end of last June. He's not investing much right now. Might be a good signal for us as well. One of the best places to save and build capital is through our banking system. It's safe, it's tax advantaged, it's accessible and ready to be put to work when those opportunities arise. And that's how you can create wealth with Without taking a lot of risk, and certainly without rolling the dice and picking the right mutual fund. Okay, so that's about it for this video. As always, if you have any questions, shoot me to questions at wise money tools.com. I'll answer as quick as I can. Don't forget to subscribe. And if you want to have a strategy session, make sure you click on the time trade link below. Always love to hear your comments as well. So feel free to comment below. Be Your best financial advisor, you're gonna feel more in control, do better with your money and eliminate ends of thousands of dollars in fees during your working life. All right, that's it till next week. Take care.

Well! Hi everyone, and welcome to another wise money tools video. This is Dan Thompson. Glad you could be with me today. So today we're gonna talk about what happens if the cost of living goes up? Well, first off, we got to understand some of the reasons why the cost of living might go up. A few things can happen because of recession, it can be inflation, it can actually because of you know, a dynamic economy for instance housing can go up due to justice, you know, an economy that's roaring. But let's talk about the everyday costs such as food, gas, utilities and more of your minor purchases, if you will. So let's say you make $200,000 a year and your grocery bill goes up 10% or maybe it costs you $25 more to fill up your car. Well, that's probably not gonna be that big of a deal. You can swallow those extra costs pretty easily, you may go out to dinner a little less. And maybe cook at home a little more, but you're probably gonna survive. Now by the way, we talked about the butterfly effect in the last video. It's just the effect that one small little thing can have on a and create a devastating effect on the other end. The analogy is always a butterfly flaps its wings in Chicago, and a hurricane happens in Tokyo or something like that. Anyway, let's kind of look at the butterfly effect of one segment of the economy. Suppose we have an increased cost of goods, and the cost of living gets a little more expensive. As we progress. And we feel this cost of goods going up. We felt just a little bit more. Lots of people that were eating out a few times a week, maybe cut back a little bit. Eventually this is gonna have an impact on the restaurants. Right. Fewer people eating out cost of food rising for the restaurant owner, then he's got fewer patrons, they're likely gonna have to cut back on employment. So unemployment rises, then something has to give on the menu, maybe smaller portions or they have to raise the cost of each menu item. And on and on and on. You can kind of see how everything is affected by cost of living going up. And this is just a miniscule part of the total economy. Anyway, suppose we have a lower middle class family of for makes $45,000 a year. Well, currently they pay no federal income tax. They pay seven and a half percent into a Social Security tax, another seven and a half percent for Medicare tax. So their take home page week is probably about 735 $740 a week, or around $3,100 a month. Now let's just assume their rent or mortgage is in the norm, that's right now between 30 and 50% of your income. So let's just round it and say that it's $1,000 a month. That leaves them $2,100 for living or about $525 a week. Out of that they have to pay utilities, groceries, clothes, kids activities, some maintenance and repair, most likely a car payment. I mean, 525 bucks just doesn't stretch all that far. Now, suppose they've been paying $100 a week for groceries, and $50 a week for gas. Now, maybe another hundred dollars for utilities, which kind of get the idea. They're stressed every Penny's accounted for. If you watch my last video where we talked about the butterfly effect of taxing the wealthy and the corporations, and what a Medicare for all plan could be. If one were to get her way and she starts taxing the rich and the corporations. It's just a matter of time before the butterfly effect or the unintended consequences. Cause the cost of things like this family needs to go up. And as I said earlier, if a family's making $200,000 a year, and their grocery bill or their gas bill, or the utilities go up, like 10 or 15 or 20%, it's, you know, they don't love it, but it's not a big deal, they're gonna survive. However, our middle class family cost, if they go up 10%, it's gonna put a lot of pressure on their finances. I mean, they just might not be able to make it. And to add to that the possibility of getting their wages cut, or maybe even losing their job completely. See, this is a real problem for them. So here's the deal. If I were middle class right now, and I took just five minutes to think through this butterfly effect. I might conclude that the most important thing I can do is stay away from getting this free stuff. You want to give me free healthcare. But the offset is the economy suffers, and I may be out of a job. It's just not worth it. You know, I remember as a teenager, it was late 70s. And Jimmy Carter was in the presidency, and we got hit with inflation. Now, I grew up where we were in a very low. I want to say the middle class, but we were probably in the lower to poor class. Now my parents live paycheck to paycheck. My dad worked really hard but money was tight. When gas skyrocketed, and the inflation hit my family. We struggled. I remember sitting in the car when my mom went to get gas. There was no such thing as filling up the tank. She'd put in $3 or $4. I never saw my parents able to fill up the car. We never got to eat name brand stuff. And this was when off brands were terrible by the way. Nowadays, you can go to a store and get an off brand and it's probably just as good. It's probably even packaged by the same name brand companies. I remember one thing I love Lucky Charms, there's no way we could afford them. I need some kind of toasted oats and I had to eat it with powdered milk. Now that stuff's nasty turns your, the milk turns blue in your bowl. But I'd have to eat my cereal half the time with my eyes closed. Anyway, So my parents took the brunt of inflation in those car years, because they were the last ones down the line. Bad economies affect the rich for sure, but they devastate the poor. It's literally stupid to think that the rich are simply gonna pay for everything. It never has and never will work. What they do do is when the economy is going well. They invest and grow and wages go up and people go to work and even the poor are raised up. The standard of living goes up for everyone. The poor in the US live richer lives than the poor in most other countries. I hate that politicians have created this class envy in this class warfare. I'd rather inspire young people who are maybe living in poor lifestyles to make something of themselves. They don't have to aspire to be these crazy rich people, but how about just self sustaining and financially free? Okay, so who really gets hurt if the cost of living goes up, like we've said. If gas goes to $5 a gallon, will the rich be hurt? They might not like it the ticket and they're not gonna go broke. If a lower middle class family has to pay $5 for gas. Well, this could be a real dilemma for them and could certainly hurt them financially for sure. So last week, I traveled to California for some meetings. Now gas is nearly a dollar 50 a gallon more in California than it is where I live in Boise, Idaho area. So when would I pay about 40 bucks to fill up my car here? I was paying nearly $60 in California. And I thought, okay, that's aggravating, not sure how many of my friends that still live there can stand it. By the way, I grew up in California, it's changed a lot since I was there between gas and 100 other taxes, I'd be really ticked off. And I wonder my why my friends aren't trying to find a way out of there. Anyway, It's sad because so much of California is beautiful, but it's been driven into the ground in many areas by the same policies we're talking about it don't work. You want to spread the California way of higher taxes, homelessness, cost of living throughout you know, the whole state, you want that to go through our country. Well, if we implement some of these things that are being talked about, get ready, get your tent ready. It won't matter where you live. We're all gonna get it overdose of what's been going on in California for the last number of years. Anyway, again as I was saying, Who do you think is affected by that extra dollar 50 gas tax? You think Mark Zuckerberg of Facebook thinks about the gas tax, or that Sundar at, you know, the CEO of Google, with his $200 million a year salary. Do you think he worries about the gas tax? Of course not. The ones who are affected by the tax of the hard working poor and middle class. The employee who struggles to make ends meet, the gas tax is supposed to be used for roads, bridges, etc. But these people can't afford to drive any further than work in home. They're not even traveling around using those roads and bridges. Where you get the idea these taxes and cost of living increases don't bother the rich. Again, they may be frustrated and all that but it's the poor middle class are really affected, get the taxes imposed or often to penalize the rich. They want to make them pay for their success and their wealth. It every time being through a slow to economy, unemployment, the higher taxes the ones who fill up the most of the lower middle class wage earners. Okay. So what about a market correction or a crash? If we have a recession and the stock market drops 50%, the rich is certainly going to feel that pinch, no doubt. It might drive a few that were wealthy out of business and some of them back to the middle class, if you will. However, the middle class workers whose 401k gets cut in half. Well, that could change their financial future for the worse. If businesses closed, unemployment goes up, and once again, the rich might be able to survive. But the poor and the middle class take the brunt of the economic slump. Suppose a business has 250 employees and it closes. Maybe few of the rich guys get hurt, but maybe you can go broke. But worse than that there's 250 employees who no longer have jobs. And sadly, most of those people who don't have enough money saved, they won't even last 30 days. Now we've got 250 more people looking for work. Okay, so what about the cost of living going up? I remember back in the days of Obama, he was talking about his cap and trade plan. And these are his words. He said, with my plan of the cap and trade system, electricity rates would necessarily skyrocket, skyrocket that doesn't mean a small increase. That means double, triple, quadruple or even more than what your current rates are. Think about that. Once again. The rich will probably be okay paying higher electric bills, but who's gonna fill it the most? Yeah, the poor and the middle class. As you can see nearly every policy dreamed up by government to hurt, penalize or tax the rich will ultimately hurt and penalize the poor and the middle class. The best way for the middle class to keep moving up the economic scale is to keep them employed, teach them how to manage their money stay out of debt. So they're able to save and invest and finally build a cash account so that they can invest when markets do make corrections. It's essentially the Buffett style. If we let government control the outcomes of success by taxing and penalizing the wealthy. Trying to level the playing field or giving away free stuff will end up increasing the cost of living for everyone. But the unintended consequences are the butterfly effect would be the poor and middle class would be the losers. Cost of living is a big deal for most Americans. It won't help at all if the government gets involved, they just tend to make it worse. So next time you think about the cost of living or free stuff or the poor the middle class, or like getting free education or free health care, there's no free lunch, it's gonna trickle down. If you're going to tax the rich, the consequences will be born at the end of the row. You can take a snapshot of what can possibly happen by looking at Venezuela. Some say that's an extreme example. It might be, but the poor are more poor than ever there. Somehow we've got to teach these simple principles to our young people in high schools and certainly in college, because the way we're going is gonna be a disaster. Ah! alright, well that's it for this video. Any questions? Send the questions at wise money tools.com. Everyone have a strategy session, click on the time trade link below. Be sure to comment, love to hear your comments. Try to answer all of them. And don't forget to subscribe. Never miss a video. Until next week. Think about how you can increased your economic status and become financially free. All right. That's it. Take care.

Hey everyone, this is Dan Thompson. Welcome to another wise money tools video and podcast. Now in this video we're gonna talk about and take a look at the new proposed health care that Elizabeth Warren just came out of. But we're gonna try to look at it from the perspective of, you know, a hard working middle class American, if you will, who's, you know, trying to get to a point where they can retire someday. Let's just think about the millions of people who have a 401k out there or really any other retirement plan that's getting funded because of work. So the question is, how many 401k is could get creamed. If Elizabeth Warren's were to get her policy put into place? Well, let's look at the plan. And again at a very high level. Basically what she did, she announced her Medicare for all plan. It's a $52 trillion plan that has all the makings for a way to pretty much destroy to destroy your 401k. And let me explain what I mean by that. It's critical that you connect the dots and understand the chain of events that can be set off by one seven move. You've probably heard of the term the butterfly effect, right? Well, it's defined like this, it says, this is a phenomenon, whereby a minute localized change in a complex system can have very large effects elsewhere. And then the analogy is if a butterfly flaps it's wings in Chicago, a tornado occurs in Tokyo, right? So Warren is proposing has such a devastating butterfly effect that it literally could affect the world. Because the United States tends to lead the world anyway. Well let's look at the basics of the proposal and again, just kind of at face value. What she said was it's gonna be cost $52 trillion over 10 years. And she says it's gonna be paid for by taxing millionaires and billionaires and corporations. She says her plan will increase taxes on the middle class. And she says that they will even get some money back. She wants to increase the power of the IRS to collect more taxes. She wants 3% annual tax on wealth. She wants to increase payroll tax on businesses and corporations. Okay, so that's probably just the surface. Now if we unpack those things one at a time, maybe we can kind of deduce the oncoming butterfly effect. First off $52 trillion over 10 years, that's 5.2 trillion per year, and that's trillion with a T. Now for a better perspective, let's look at what a trillion dollars is in seconds. Okay. So thousand seconds is almost 17 minutes, it would take almost 12 days for a million seconds to elapse. It takes 31.7 years for a billion seconds to roll by. Now a billion is a lot of money. But a trillion dwarfed a billion a trillion is a thousand billion, which means a trillion seconds would amount to 31,709 years. Now we don't even have enough history to go back 31,000 years. If we take 52 trillion, and we divide it by the number of people united states, which is 372 million, not counting illegals. And by the way, illegals get their health care free. It turns out to be $139,784 per person, over 10 years or 13,900 per person every year. Now that's not every working person. That's not just adults, that's every single person is paying $13,900 every year. So a family of five, somehow, some way is gonna get paid is gonna have to come up with $69,000 per year. Now I guess the first question is. Are you in pain $69,000 if you're a family of five right now for your healthcare? Alright, but here's the deal. She says the middle class isn't gonna have to pay just the rich, the wealthy corporations are gonna have to pay. Now again, presuming this passes, let's see what might happen. So first off, no one in the middle class will have to pay the cost, which even her fellow Democrats say that's just not possible. That means somehow the wealthy are gonna get stuck with it. Now the middle class makes up for about 66% of our current population. So that means 34% of the population is gonna have to fund 100% of the cost for her plan. Again there's 372 million people, that means 66% of them, or 245 million aren't gonna have to pay. So that means 97 million are gonna have to come up with you ready? So we're gonna just divide that out over the 97 million. That means over the next 10 years, 97 million people are gonna have to pay $536,000 each. Okay. The question is, Are you one of the 97 million? See, the middle class income for this year was between $45,000 and 1,45,000. So a family making 1,45,000 gets to pick up a significant tax and pay for others health care. The reality is, it's just not practical. You can steal all the money from the wealthy and it won't make a dent in this kind of a cost. So What's the butterfly effect? How many wealthy people will let their money be stolen from them or have a government takeover where they literally have unlimited taxing power on him? What if she's wrong though? What if it's not just 52 trillion? What if it's 60 trillion or 80 trillion. One thing we know about the government is they always seem to be able to spend more than they estimate. We also know that what the government takes, they rarely ever reverse and give back to you. So what we're gonna see is probably families with a lot of money and corporations exit the country. Similar to what's happening in New York, people are leaving New York and heading to Florida like mad because of the taxes that New York keeps imposing upon them. You can only tax so much before those with the money say. Okay, that's it. I'm out of here. Now, you may have noticed in the last few years, we've had somewhat of a booming economy. It's the butterfly effect effect of tax cuts. When businesses and families have more money in their pockets that they can spend and save and invest. The economy grows as they grow their wealth. They may buy a bigger home, get another car, take vacations go out to eat, invest, whatever they want to do. The effect is tremendous on the economy. And that's why we have a 50 year record low for unemployment. That's why wages have been going up dramatically compared to previous administrations. The wealth tends to perpetuate more wealth, more wealthy families, more millionaires are added to the roles as there's really plenty of room for many many more. There's more innovation that occurs, more businesses invest in R&D, more businesses are created to fill needs and wants of others. Raising taxes has the opposite negative effect and the economy tends to shrink and even Possibly collapse under the weight of government regulation and taxes. The Medicare for all is nothing more than a recipe for disaster. There's no free lunch. It's got to be paid for by someone and somehow. Okay, I better stop there. This is just the cost and the butterfly effect it will have. Let's talk about just for a second unintended consequences. I've said this previously, but corporations do not pay taxes. Okay, yeah, they write the check. But the tax bill is passed on to every consumer of their goods and services. It's factored into the price, just like any other cost of doing business. Since I've talked about this before, I'm gonna be quick on this point. If a corporation gets hit with a higher tax, several butterfly effects occur. Number one, increased cost to the consumers. And this could and would eventually price the consumer out of the market. Number two, wages to employees have to be reduced to keep your prices the same. And number three, eventually cutting back on employees, which makes unemployment price. See taxes can't be raised in a vacuum. There's gonna be consequences. And in this case, they can be devastating ones. Now next, she says that the IRS will be tougher on collecting. Now, if this alone doesn't send shivers up and down your spine, I don't know what does. I mean, there is no piece of mail that you can get that when you open your mailbox you see Internal Revenue Service on the top of that envelope that puts you into a tailspin. If you've ever had to deal with the IRS, you know how unnerving that can be. So would you be in favor of increasing the force and the power of the IRS? Does this make you all warm and cozy? If so, watch out, you could be next. So then she wants to do a 3% annual tax on wealth. It's not robbery enough to steal from your paycheck. But can you imagine every year filling out a personal financial statement. And then sending the IRS an additional 3% of your wealth. And this isn't a one time event. It's every single year. Now that sounds like it's pretty motivating. Do want to build your wealth, right? All right. So I wonder if this woman is actually functioning with some mathematicians behind her. Now, if you're a millennial, or a Gen X, or whatever, but you're gonna get a job someday and try to support a family. Maybe you have some ideas and you want to be financially free someday. You would be nuts to vote for this, because in a few short years, you're gonna be the one holding the bag. And I can tell you right now, if this were to go into place, the number of offshore accounts and foreign corporations that would be created would be massive. Other countries would be wise to make laws right now to allow US citizens to open up corporations in their country with one simple easy document. Banks couldn't open doors fast enough and other countries trying to keep all the wealth that's gonna leave the United States. The Bahamas would be open 24/7 trying to keep up with the demand. The butterfly effect is that the very people that Warren put these taxes on eventually take their money and they leave the country. Now who's gonna pay? Okay, So finally, she said that she wants to increase the payroll tax on employers. See again, this is kind of not even thinking once again, where's the money gonna come from? What's the butterfly effect, lost jobs as employers will have to cut down on wages, unemployment is gonna go up, consumers will have to pay more for the goods and services. Now here's the culmination of the entire butterfly effect. The very people who she thinks she's helping are the same people that are gonna be hurt the most. Why? Because most likely their wages are gonna be the first ones to go to see the poor tend to have the jobs that are more expendable. And she's trying to theoretically help them. But in the sense she's gonna ultimately put more hurt and burden on them. They may have to share a job with someone else or go part time. Worse, they may just actually lose their job. The devastation will trickle down to the lowest paid the least educated, the poor to the middle class income earners. They're gonna feel this the most and they're gonna be the recipient, possibly the harshest economic circumstances that they've ever been in. Look, folks. You don't need a spreadsheet, a degree in economics. You don't have to have a Harvard education to walk through this in your mind, it's just common sense, at least to everyone who's not brain dead, and a politician seeking power and control over us. Just think about this for a second, think about where you work. If you're an employee, and your employer just got hit with an additional 15 to 30% additional tax, what might happen in your line of work? what might happen to your job? Do you think the employer has the capacity to simply take it out of his pocket? Or will it eventually affect the entire company? If you're an employer and the same situation occurred? What would you have to do? Is your business so filthy rich that you'd simply roll over and eat the tax? Or would it have to be passed on through employees reduction in wages or price increases. Most small to medium sized businesses run pretty lean. The first to go are gonna be the lowest paid and most expendable. So this thing has disaster written all over it. Just think about what this would do to our economy. I know it's nice to think about getting free stuff. But it just ain't ever gonna happen. It can't happen. There is no free lunch, someone pays and it will affect the poorest among us eventually. Everything from gas to groceries will be affected, and you and I will pay for it somehow, someway. There's no such thing as stealing from the rich without a butterfly effect. And in this case, a tsunami on the other end, wiping out a wonderful economy. So that was kind of fun. As it for this video. Probably got on my soapbox a little bit, but I want as many as within the sound of my voice to become a one percenter. I want you to be wealthy if you're not there already. I find it pretty exciting that there's a lot of people with means and wealth that tune in to our videos and I love having you here. I want to hear from you. There's plenty of room for more wealthy people in this country. I don't want you living paycheck to paycheck with debt hanging over your head. Even though politicians want us to hate the wealthy right now. It's the wealthy that can make changes in the world. And I'd love to see you be one of them. Well, as always, if you have any questions, shoot him to questions at wise money tools.com. Please I'd love to hear your comments. And don't forget to subscribe. If you ever want to have a strategy session, spend a few minutes with me and talks about your situation and how you can improve upon it. Click on the time trade link below. Other than that, glad to have you with me. Talk to you next week. Take care.

Well! Hi everyone, and welcome to another wise money tools video. I'm so glad you could join me today. How is it out in your world? You know, every morning, I should say I try every morning to do an elliptical workout. And I use a program called I fit it's really cool because do you run with a trainer in all parts of the world. I've been a run on the beach in Hawaii in the Cinque Terre in Italy, Iceland and on top of glaciers in Alaska. I mean, it's really kind of cool. You can just about run anywhere you like. But one thing happened the other day that was kind of interesting. We ran in Montenegro, and Montenegro is a really unique and beautiful place on the Adriatic Sea. One other thing that's really cool these trainers talk to you about that You know where you're at, kind of how it, you know, became in the employment and as really talked about all kinds of things that you can learn historically about these areas. What I learned is that Montenegro's on the Adriatic, and it's surrounded by Bosnia, and countries like that. Croatia, I think borders it as well. But just declared its independence in 2006. I thought that was kind of interesting. But ever running along the coastline, I could see the view and I could see a cruise ship over there. And then the trainer started talking about once they declared their independence. How many countries came in and wanted to be part of their growth? The United States being one of them. And I started thinking about Wow, look at what you know, has happened. Montenegro since 2006, and I started thinking about what happens in a free market. When money comes in to the economy, and people are chasing their dreams, entrepreneurs come in, I think you know, just about that cruise ship. I want to go too far into the cruise ship, but just to build a cruise ship. Give me thousands of employees that must take. Not to mention all the materials and the parts and the furniture, the mattresses, the carpet, the walls, the paint. I mean, just the the millions of details that go into a cruise ship. And all the companies that are part of that, companies that forged metal companies that make furniture companies that produce food. I mean the hundreds and hundreds of companies just to keep a cruise ship going. But then I got to think of what's that cruise ship arrives in Montenegro for instance. What happens at that point? And what kind ofinfrastructure needs to be in place to support all those tourists coming in from the cruise ship? Well, first we got the port itself. I mean, somebody had to build the port, the docks, we've got employees that work there. And that's just to kind of keep the dock in good shape so that cruise ships can come and have a place to tie down. They want you to leave the port, you've got roads and infrastructure and all the things that have to be in place to handle the tourism. And then you've got cars that need to be there in some fashion. They could be rental cars, taxis, even Uber drivers potentially. And then some of the things that tourists like to do, you might have motorcycles, or scooters or golf carts, all those kinds of things. So just transportation alone is a huge thing buses, tour buses, right? So then you go to all right now all these tourists come over here some maybe stain, some may come by cruise ships, some may fly-in. And now we got to have some hotels, motels, places for people to stay Air B&B ease. I mean think about all the the infrastructure and economics that come with just housing people for a night. And then all the food you need restaurants, need grocery stores have a food that has to come from farmers and manufacturers and produce places. I mean, it just gets mind boggling to think about all the different things that are so intricately involved just in tourism. Then you got people who want to live there. So we've got a whole housing market there. Now think about what goes into a house, the lumber, the roof, the plumbing, the fixtures, and all the different manufactures is that how are involved in just building one house. And then like I was saying now we've got roads and we've got landscape and we got trees and we got sprinkler systems and I mean the list goes on and on and on. And this is just you know, thinking on the surface and again just kind of taken care of tourists. And then I started looking around and I saw there were other boat docks and so we've got a whole nother economic, you know, potential for people who buy their own boats, fishermen, and then all that goes into fishing boat. And then fishermen who bring in fish, and then the fishing factories. Oh my gosh, it just starts to explode. And then you got to, I got to think about all the people there who might have just been kind of hampered and never really had opportunities. And now that through their independence, entrepreneurial, entrepreneurial ship opens up. And maybe they want to be the guy who has a his own restaurant or a clothing shop or a jewelry store or whatever might be the attraction there. And the economic center involved with that, you know, guy who maybe wants to go out and get a car and drive Uber or maybe just drive a taxi, maybe he wants to buy a fleet of scooters and rent out scooters every day. The employees that have to run these things. Just got you know, again very very intricate as far as what you can think of that has to go in to economy and we think about a hotel. All the staff that goes there, who owns the hotel, where do they get the money? Who's gonna to build the hotel? Right. Now all the infrastructure for that? I mean, it's just it's crazy how important a capitalist society is where the economy can grow and sustain itself by, you know, entrepreneurs taking a risk building something trying to do a little better for themselves. And they might be able to under an economy that's socialist. That is government run that has a regime that tells you what you can and you can't do I just I mean, I sat there and I was running on this thing for, you know, 25-30 minutes. And and my mind just kept going deeper and deeper into this one little area of the world that declared it's independence. And how the other countries wanted to come in and bring money and how this place is probably now just exploding. And all the people who are benefiting from it. Certainly many of the locals, probably a lot of people moving in. I mean, they got It's pretty exciting. And I think we've got to keep that in mind, especially in this political environment that we're hearing that we're. You know, we're talking about changing this whole system, the system that has basically taken a country from 1776 and built the greatest country that has ever existed in Earth's history. And it's done it through freedom, and through the opportunities of taking advantage of entrepreneurial ship, and taking risk and building businesses. None of this was done because of a government. It was done because a government let things go free. And I shouldn't even say let because it's the people who ran this government. And we're seeing that slowly shift to where the government thinks it now is supposed to control the people. And it's really frustrating to me because I don't want to see this country have to suffer. What other countries have already been suffering? And if we can just learn from them in the past history and realize that freedom is really the most important thing we can keep in this country. And you know, we hear arguments about healthcare and specifically employment, those kinds of things. What we're gonna to do with, you know, the elderly and all that, and I know there's some problems out there, I'm not painting this perfect picture. But healthcare has yet to run in a free environment. It's always had some sort of government control over it, which is why it's so inefficient. If we could just let that thing loose. Take two or three or four or five years who knows how long but it would finally find a balance and become a very effective, efficient and affordable way to manage our healthcare. You just think about everything the government's involved then. And it's that's where our problems are. If we can keep government out, that's where the American spirit and ingenuity, innovation, the imagination, that's where we really excel. And I'm seeing that just in these other countries who are finally experiencing their own independence in their own freedom. So that was all I wanted to say today. I just think it's I hope any of you guys out there who have this entrepreneurial spirit who are, you know, wanting to make your own way. I just want to give you encouragement, that is a very worthwhile endeavor. It isn't easy. Entrepreneurs tend to work harder and longer hours with this hopeful benefit in the end, and many of them get it and hope you do too. But that is what has built America. And I hope we keep doing that. Well. Don't forget to subscribe to our Channel. Love having you here. Please send me any questions at questions at wise money tools.com. Any comments, any ideas on things you'd like to hear about and talk about would be, you know, always welcome. We're glad you're with us. Thanks for joining me. I'll talk to you next week.