About the Episode:
People talk about the importance of creating a budget and cutting out non-essential spending as being the first move towards financial freedom or even just getting ahead, but the problem is, that isn’t really the best first choice. Today I will talk about some smart ways to invest in your future and what it can look like.
Listen to the podcast here:
Watch the episode here:
- The feeling of wanting to get ahead Financially
- Instead of lowering spending… Make more income to cover.
- Look at your savings rate.
- Look over your investments
- Aligning financial goals with our life goals
- Designing life around fulfillment
Hey, what’s shakin’, Hey, I’m Rick Jordan. And today we’re going all in. We’re going to talk about today. It’s a myth, right? People think that in order to get ahead in life, in order to get rich, a lot of times you have to pull back and you have to save on some things. I’m going to give you some ways that I’ve taken and have actually been proven by a lot of different things. I even saw an article on CNBC the other day, and it actually made me start to think about this too, because whenever somebody starts to have financial difficulties, or if they’re, they’re like, Man, I really want to get ahead this year, you know, maybe they’re doing fine financially, but they’re like, I really want to get ahead this year, you start to see things like analyzing your spending.
And while that isn’t necessarily bad, a lot of times it can go overboard to where you get things like, oh, you know, I’m going to cut out all Starbucks, I’m just going to make coffee at home, you know, I’m not going to splurge on anything right now. It’s a temporary sacrifice. And I want you to be aware of these things. Because if anybody ever gives you that kind of advice, they are moving into a position of scarcity or trying to move you into this thought process, this mindset of scarcity, rather than abundance. So I’m going to give you some ways today to actually get ahead, okay, to actually start going towards some things. Now, the first one that I want to talk about, and I started, I just learned this one probably just a few years ago, you know, there’s a difference because years and years ago, I never really cared about, at one point, I transitioned from the scarcity mindset into something to where it was just an abundance mindset to where I started realizing like, you know, what, if there are certain things that I want, what if I just went out and made more money to get the things that I want?
What if I actually increased my income, rather than started pulling back on a lot of these other things? Now, I’m not talking about going through an inventory of things you’re actually not using or things you really don’t need. I just did that with streaming services, you know, and I know that that’s another one. It’s like, you know, some people cut out Starbucks, other people will cut out streaming services, I did it because I actually took a look at what I was watching. You know, because now, I mean, back in the days of cord-cutting, it was always trying to substitute cable with low-cost streaming simply, I can survive with Netflix, but even that was like, I want to know cable, which is price gouging in and of itself.
But still, that’s beside the point. I went through and I cut, the biggest thing I did was with Disney plus, I had this bundle, right with Disney plus Hulu and ESPN, I started looking at it like nobody within my family, whatever, watch Hulu, whatever, watch ESPN on, like cool. If I’m not doing this to save, it’s just literally not being used. Therefore I don’t need to spend the money. There’s no use in doing that. It wasn’t that I was pulling back to save money because I was struggling.
It’s just like it’s not being used. So why do we keep this around? But when you cross into that, you know what, I’m just going to pull back on everything because I think that this is gonna be a tough year, or I really want to get ahead this year. So I’m gonna sacrifice, that sacrifice is very scary because when you start to use that word that I’m going to sacrifice, the other word that starts with S starts to creep in. And that’s scarcity. I don’t want to see you move into a mindset of scarcity in your life. Because if you’re looking at the expenses, that way, you sure will start to look at the income that way, because you will start to find out that you’re like, Oh, I’m never going to make more, or this is my cap, or I don’t think that I can produce much more whether you’re an entrepreneur, a business owner, or an intrapreneur, or just somebody who works for somebody else, you’re always going to look at that as more of a finite number, rather than advancing yourself exponentially.
With your income level, though, here’s how to get ahead. The first way to do this and to actually get rich is to look at your savings rate, okay, or no, what I mean by savings rate is actually your investment rates, you know, you can put money aside and everybody needs to have an emergency fund and all that I’m not going to give me the percentage that you should have, because I’m not that guy. But what I’m telling you is before you start to cut things before you start to eliminate, start to focus on what you’re actually investing or what you’re actually saving. Because maybe it’s like 4%.
That’s it right right now, as you look back, but you know what the difference of one percentage point going from like 4% to 5% over a period of 10 years is 1000s If not 10s or hundreds of 1000s of dollars if it’s in the right investments, the difference of that 1% now going from 4% to 5% on the investment rate of your savings rate, how much cash you are taking to put into something, some kind of investment that one percentage point can make 1000s of dollars, hundreds of 1000 10s of dollars worth of difference. So the first thing to do is not to cut back on things, the first thing to do is look at how much more you can put away. That’s the place that you want to start. Or say I need to achieve this in a couple of years.
So if I do this quick math, and I can bump it up maybe two percentage points, it’s gonna work. Amazingly, that’s the first place to start. Then number two, the second thing is to actually create a conscious spending plan. Okay, now, this has nothing to do with cutting back on things. You take a look and design, what type of lifestyle you want, what types of things you absolutely want to do, you know, because here’s the thing, right? I know, this is a big thing, people will say, You know what, I’m just not going to eat out as much, because it costs a lot of money. That’s scarcity, everybody, that is scarcity.
But if you tie it to maybe a goal that you’re having and saying, You know what, I’m taking a look at this, I’m eating out like five times a week, however, but if I cooked at home more, I could actually control the amount of sodium that I’m in taking, I can control my calories better because I have some fitness goals for myself. So this actually lines up and you know what, now it can become more of a fixed cost, which is an important part of a conscious spending plan is identifying your fixed costs and giving yourself a budget. So, therefore, you’re not actually pulling back on eating out, you’re actually designing a life around a lot of different factors that will bring you fulfillment in a conscious spending plan.
That’s what I’m talking about right here. Now, that would include your fixed costs, it would include your savings like we were talking about your investments, and then also some guilt-free spending in this part is beautiful, I want you to have this in there. Meaning like no matter what, it doesn’t matter, I’m going to spend this money because these are things that I like to do, maybe it is going to the whiskey lounge every Friday night because it’s something you enjoy doing that sounds like something I would enjoy doing. I don’t know, maybe I’m gonna start it now after I just thought about it right now. But it’s guilt-free spending. In order to stay out of a scarcity mindset, you have to build into your life your lifestyle, this guilt-free spending. Now it’s okay to put a limit on that because you don’t want to go overboard, of course.
But whatever you decide, whatever you choose to do for yourself, to just have the lifestyle you want, it has to be guilt-free, because you’re building what you want. And you’re allocating portions of what you’re already doing. It’s actually a way to almost celebrate your success. And be grateful for what you have every single week of the year. Because you’re like this guilt-free. And the reason I can enjoy this guilt-free is that I’m doing what I’m supposed to be doing over here. I’m not sacrificing. I’m designing the life I want. I’m going after the income level that I want. This is super quick hitting today. But this is the scarcity mindset as you continue through this year.
This is going to be a tough year economically. I mean, you see the news about you know, they’ve been looming this recession over our heads for months now and saying that it’s possible we’re gonna go into a deep recession. We haven’t seen anything yet and all these things. As long as you have an income and you go through these steps, people are trying to scare you into scarcity right now. That’s not the approach because you can take this approach with what you have right now throughout the course of this year, and actually have an amazing, fulfilling, and happy year because everything you’re doing is building for the lifestyle you want right now and for the lifestyle that you want in your future. So in your finances this year and the type of lifestyle you want. I’m excited for you because after following these quick steps, you’ll be able to,
Go ALL IN.