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- [00:04]
Brian Buffini
Welcome to It's a Good Life with Brian Buffini, founder of America's largest business coaching company. Here's a short classic cut from one of our all time favorite episodes.
- [00:17]
Brian Preston
Well, the top of the morning to you and welcome to it's a Good Life. Today we have a very special guest on one of your favorite topics. We're going to talk about money. We brought in a gentleman by the name of Brian Preston. Brian's the host of the Money Guy show and is the author of the New York Times bestseller Millionaire Mission which we'll be diving into today. And what I really love about Brian, just like the working by referral system, he's developed a nine step system to building wealth called the financial order of operations. So Brian is a recovering cpa, I'm a recovering accountant. So we are going to nerd out here today and you guys get to listen in and really looking forward to talking a little money and a little systems here. Brian Preston, welcome to the show. Thanks for making time for us, Brian.
- [01:01]
Thanks so much for having me on. And I think you just nailed it. I think the public is so hungry for this information because it's the chicken or the egg, they're often wondering, hey, is your system great because you sold a lot of it or is it great because it actually created fruits from the system? I always like to tell everybody on the intro, this system, I know it because it worked for me, it's worked for my, my clients. And it's definitely the chicken came before the egg and the system does create fruit.
- [01:30]
You know, there's an awful lot of people with books out, right? I mean, I don't know what the number was last year. How many billions of books are out there. And there's a lot of people, they're on the Apprentice on Tuesday and they're writing their autobiography on Friday. And so the fact that you've been there, done that, brought people through it. And the dynamic that I love is a system. A system means that it's a set of disciplines, a set of routines, things you can set on automatic that can actually take you somewhere that you can't take yourself. And I'm really looking forward to diving in that. I also love the role that mentors and influencers and other people play in our lives. I came across in a lot of your work this Mr. Morrow. I'd love you to kind of give us a little insight in Mr. Morrow. And what did Mr. Morrow teach you?
- [02:10]
Well, it's one of those things. I grew up in a household where my parents Great parents, lots of love, even very disciplined parents. Meaning my parents didn't waste money, but they just didn't know how to make their money actually work for them. And I dealt with some scarcity with my father losing his job and all kind of other things. And nobody ever told me how money worked. But I can never forget my junior year of high school. And by the way, Mr. Morrow, just to set the table for everybody, Vietnam veteran, you know, served his time in the army, and then he's now helping us. He's also helping with the wrestling team at our high school. And I'm not so sure that he came in to inspire more than he came in to share his regrets of what he wish he'd have known if he was sitting in a high school class back when I was there 16, 17 years of age. And Mr. Morrow came into class, he goes, guys, I'm so jealous of every one of you, because every one of you right now, if you'll start investing or starting putting $100 a month to work, you'll be a millionaire by the time you retire. And here I am, not coming for money, and I'm working the local fast food. I worked at Hardee's at the time, at the drive through, and I was like, dude, I don't make that much money, but I think could save $100 a month. And what really Mr. Morrow was talking about was compounding growth once I realized, and that's really. Millionaire Mission was written because when I graduated from college, got into public accounting, everybody, when they find out that you're a public accountant or cpa, they think you're brilliant with money. But yeah, I was good with balance sheets, income statements, and that type of stuff, because I'd been taught that, but I didn't know what to do with. With my money. Nobody, you know, the margin once you live on less than you make. So I was like, I want to write a book that will actually help the future. Brian's, or the people who come out who want to actually already have this mindset of discipline. What do you do with that next dollar so you don't get sidetracked for two or three years, or somebody sells you some junk that actually derails you. That was the goal.
- [04:16]
And so that is the truth. And the truth is, you know, I grew up the son of a house painter. You grew up with a dad who lost his job in Southern Georgia. And, you know, being a millionaire is. Is a state of mind. It's requires some disciplines, and if you have a system, you Cut through the crap and you stay on track. It also keeps you off the distraction road. You know, one of the things we have right now, high inflation, Expenses go up, people are tight. What are the trends we see right now more people gambling at a rate of 2 to 1 than ever before.
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Online sports gambling especially huge.
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And they made it easy, right? And it's like, why? Because I don't feel like that a hundred bucks is going to do anything for me. But if I put a hundred bucks on, you know, Sloppy Joe on the fifth in the Preakness, maybe I got a chance. So we see the online gambling, we see the actual casinos, we see gambling up a ton, we see investing down a ton, and the overall sense of hopelessness, that, hey, you know, 22% inflation since 2019, my hundred bucks is now worth 78. And we'll get down the path, you know, that assets are ultimately the greatest hedge against it all. But maybe we could address for a second just that sense of hopelessness. Like, what's 100 bucks going to do for me? What's 200 bucks going to do for me? It's kind of like the person who's overweight and one more piece of pizza is not going to hurt me. Let's talk about that piece of pizza, that 100 bucks and what the difference actually is.
- [05:35]
Well, here's something I always remind young people is that I always talk about the three ingredients to wealth. Because you of course have discipline, which is living on less than you make. If you do that, you create margin, which is, does yield the money, which the money is an important part. But the third is the most valuable and important ingredient, and that's time. And people in their 20s are literally billionaires when it comes to how many seconds and minutes they have of time. I'll tell you as a person in their 50s now, I'm jealous of everybody in their 20s and even 30s because you just have so much opportunity that somebody has just not opened the curtain to let you see how valuable that component of time is in your life. And by the way, that hundred dollars is more valuable than you realize. Every dollar for a 20 year old has the potential to become $88 at retirement. Do you see what time can do for you? It gives you literally exponential multiplication of what every dollar can become. So I would don't get caught up in a dollar is not going to do much because when I look at my clients, you know, we have a $1.4 billion wealth management firm, people are shocked when they realize that their total account Values at retirement, typically 90 plus percent is the growth, not the contribution. It's the money growing upon itself. I look back on my own life, I don't, I can't tell you which of the original investments is now this huge nest egg. But I think those small little decisions all added upon each other and really lead to this money. You look back and go, how in the heck did it get to this level? And it's all those small decisions.
- [07:20]
Well, I knew I had to interview you. There's a quote I've been quoting for 30 years, on stage, 34 years. And I saw it in your book and I went, oh, this guy might be the real deal here. Our friend Albert Einstein, compound interest is the eighth wonder of the world. He who understands it, earns it, and he who doesn't pays it. Here's what would be great. If you're up for it, I'd love to kind of go over the nine principles.
- [07:42]
I'll grip and rip and give you all nine really quick. And by the way, yeah, great. Cash, by the way, is the resource. I know it's unsexy and people don't like having cash, but this is going to be your margin that protects you from the chaos of life. And cash is so important because it keeps you from making desperate decisions. So it's so important that it's two steps in my system and let me start with step one, which is highest deductible covered. When I say highest deductible covered, we're talking about your auto insurance, your car insurance. I mean your homeowner's insurance, your renter's insurance, your medical insurance. Figure out what the highest one is. Cover that first because that's going to keep you from the desperate decisions of an accident or something that derails you, cause bankruptcy or some other problem. Step two, get that free money from your employer. If you work for a company and they're offering you 50 to 100% guaranteed rate of return by just putting a dollar into the 401k. Do it. Step three is the high interest debt. You got to conquer that. If you're paying 25%, that's 2.5, 2.5 times what you're hoping you make out of your S&P 500 investment. You've got to pay it off. High interest debt can be credit cards, it can be personal loans, it can even be car loans, even student loan debt. Unfortunately, in this crazy world we're in now, then back to cash. Step four is now let's go beyond highest deductible and actually do three to six months of cash reserves. Step five, let's take advantage of any accounts that the government's going to restrict who can put it in and how much you can put it in meaning it's the tax favored and that's where your Roth IRAs, your health savings accounts. There's a reason the government's restricting all that tax free growth opportunity is that they want you to take advantage of but they don't want you to get too much of it. So you better start young. And often to really take advantage of that. Step 6 We often tell people look, I know it's aspirational in the beginning. Step six is max out those retirement accounts. That leads to step seven, what do you do? Hyper accumulation. What do you do once you're saving 25% or beyond? This is when we talk about not just tax favored savings and investments but how are you actually going to use this money. Step eight, this is when it gets really exciting. The boring title on this is prepaid future expenses. The fund title is Abundance goals is because this is when you're finally going now help the kids with college. This is when you can let your lifestyle kick it up a notch because you're not faking it anymore. You actually can afford if you want to have nicer lifestyle decisions like a car, a nicer car, nicer house or whatever that is. And then step nine, let's finally pay off the low interest debt. And I have all kind of rules on this. I get frustrated when I see 33 year olds try to pay off a 2 and a half or 3% mortgage. Don't get in a hurry paying off those low interest debts because you haven't made wealth yet. And that's a big mistake I see is people are squandering that that valuable resource of time.
- [10:28]
Right?
- [10:32]
Brian Buffini
Well, we hope you enjoyed this. Quick cut. Head to the show notes to listen to the full episode. If you'd like to elevate your business to achieve your goals, talk to one of our experts on a free business consultation. Visit it's a goodlife.com BC to schedule yours today.