John Hope Bryant (20:32)
On this habit is 20% of your income. So there's two ways to make money. Make more or spend less. So when you start creating a budget, you start and you start listing out. First of all, you need a net worth statement. Even if you don't think you own a lot. When you start listing out what you own, you'll be absolutely surprised and generally pleasantly so. And then you can. You'll start realizing, even if you don't have a lot of assets, you'll start realizing things that you own that you should get rid of that you should sell, which will create a source of revenue for you. Things that are in storage start with on your phone and subscriptions. That is a form of it's not an asset per se, but it is an obligation and expense side of your balance sheet. There's getting two ways to make money. Make more, spend less. Think about all the subscriptions you have that you forgot about and the companies love you forgetting about them and they auto renew every month or every year and you don't think about it. How many years and how many months have you been paying for stuff that you don't use. Go in there and cancel those, those subscriptions that you're not using. That will save you a ton of money. And 10 ones equal 10. So this little money ends up being a lot. List out every asset, everything that you own. I mean shoes, I mean, cassette tapes, I mean books. I mean, you know, everything that you own. Go through your storage, go through your house, List it all out. Decide what you want to keep, decide what you want to sell, decide what you want to restore, decide what you want to focus on. That's an, you know, you want to create an asset and net worth statement, then create an expense and revenue statement and, and create a living, an expense budget, at least expense budget where you're spending and where and I think you'll be shocked at how much you're spending and where you're spending it. And that will, that's the first way of making more money is not spending money on stupid stuff. So a budget is where your money sleeps at night. An emergency fund. About 40% of this country doesn't have $400 for an unplanned event. That's shocking. It should be shocking to you. And Operation Hope has partnered with Delta Airlines. I'm going to have the CEO of Delta Airlines, Ed Bastian, on my podcast here soon. I think he's one of the most extraordinary CEOs. He's a good, dear friend of mine and a partner of Operation Hope, one of the most extraordinary CEOs in the world. And Time just made him Time magazine just made him one of the top 100, I think business leaders with the category he's under recently. And I absolutely endorse that. We partner with Delta Airlines with Ed Bastian support to teach financial literacy to all 100,000 Delta employees. And they all get a $1,000 emergency savings account if they go through the financial literacy course offered through either Operation Hope or Fidelity Investments. And it's been transformational for their lives. That said, and Truist bank, another one of our partners, also does that. And we're in 800 of the 2000 Truist branches. And that has been transformational for Truist and their customers and their employees. But I'm not talking about a $thousand dollars or $750, which is the case of of Delta or Truist. I'm talking about $440 of Americans. At least 40% of Americans don't have $400 for an unplanned event. In some cases, the number is as high as 65%, depending on whether you're Calculating credit card access. I mean, you're just looking at like pure cash in your hands. The numbers in excess, I believe above 40%, but no less than 40% of Americans have this current crisis. So you need to, it'll, it'll creep. Enormous peace of mind if you just solve for this, like you create a little emergency fund because something's going to go wrong, Johnny's going to get sick, you in, you know, some, you know, crap will happen, you'll lose your job, whatever. You don't want to be thrown into an emergency situation. And you know, you're down on your rent or you're down for your car note or whatever, or you can't pay for a medical bill or whatever it is because you, you haven't, you know, planned in the good times, for the bad times. I want you to sleep peacefully so life won't knock you out. All right? Life insurance, this is number three, right? So number one was budgeting. Two was emergency fund. Three, life insurance. I want you to protect your, your legacy even in your absence. I want you to have a legacy and I want you to, to floss like you have generational wealth. You do this through a life insurance policy. I don't care whether it's a term or whole life policy. Stop thinking about these fancy policies that you've heard of that the wealthy use. I'm talking about something basic for you. If you're a young person watching this podcast, a basic life insurance policy just might cost you as little as five or $10 a month. If you're young and in good health for a 25, $50,000, $100,000 policy might cost you literally a few dollars a month. No more than 25 to $50 a month. And if you want a $100 a month policy, a term life insurance policy, you might be able to get a $100,000, in some cases a million dollar life insurance policy. As a young person. As you get older, the premiums get larger because they think you might die on them at any moment in time. So you should get the policy as young as you can for as long as you can. If you can get a whole life policy which has a savings component to it, great. If you're not, if not, it's much cheaper. Get a term policy. I have had term life policies. I have term life policies amongst other policies right now. When you die, and you will die, I don't know how long you're going to live, but I dang sure know you're going to die. We all are. Going to die. Now you get to direct where that money goes, right? And who gets it. And I'm gonna get to that to wheels next. But hold on a minute. I don't want to see GoFundMe campaigns for people who are passing away. I'm tired of that. I mean we should. GoFundMe campaigns was meant to do something purposeful, purposeful, meaningful, intentional, aspirational. Now it's turned into professional begging. We've made this normal like going to a check, cash or payday loan, lender, rental, owned store, title lender, liquor store, pawn shop. Oh, GoFundMe campaign because Joe died, Joanne passed away. We should be planning for this. There should be a proper like burial policy. And when I see celebrities with GoFundMe campaigns because they had a medical issue or somebody died, I'm particularly mortified because weren't they just flossing around and a lease Rolls Royce or something just a few months ago? Like we need to knock all this stuff off again. Let's time to make boring sexy. Let's get the basics in place. If you have a major employer, if you're sorry, you have a job with a major company, there's a good chance, there's a good chance that there is a life. A death policy in place is part of your insurance policy at your employer. So if your employer provides health insurance, there's a very good chance that buried in that health insurance policy is a death policy for up to $25,000. I know it because I offer that at Operation Hope to my employees. I know it because there was an employee that passed away that we that did. They were struggling with with burial costs and did not know until we told them that that the health policy provided $25,000 worth of death benefits and that changed their whole life and allowed them to bury their loved ones in dignity. So again, boring as a new sexy. Read the dang on health policy. Health insurance policy that you already have, right? And you might find magic in that policy in the form of what I just told you. Death benefits. Please put in notes when you see something. Some comments when you see post me on social media after watching this listening this podcast, you see a social media clip of this somewhere. Please put in the comments whether you confirmed that your health policy has death benefits attached to it. Number four, wills and estate planning. This is a love letter to your family's future, right? That's the way I want you to look at it. This is a love letter. You're saying, I love you. I'm leaving you But I'm, but I'm, but I'm showing you I love you. I'm directing resources to your to tell you who, what and where. I want my resources, my hard earned resources to flow to and why and when and in what order. My mother was gangster. Juanita Smith, she had a will, she passed away a couple years ago, got rest her soul, she's been promoted. Juanita Smith, when she passed away, in her will she had put a gangster clause in there that said anybody, essentially anybody who. And I was a trustee, I'm the trustee for the will. And I could feel the energy of some members of my family like rising up, questioning what, you know, what my mother put in her own will. But anyway, the will essentially said anybody who challenges this will will be denied any benefits of it. And everybody just, just went, wrote, just went stone quiet. I love that. And you don't need a fancy will. You can. My mother did an audio message will when she was in great health. But even that's not enforceable by law. It's a cool thing to do and if somebody wants to do it, it's, you know, it's a, it's something great for your loved ones to see that after you passed away and what your intentions were. Particularly if you want to pick the those who receive benefits from it. Because people might explain who gets what and why, but you shouldn't do it. If you're digging at somebody though, I ain't giving you nothing. No, don't do that. But my mother also had a physical wheel anyway. You can pull a wheel down from the Internet, right? A simple will. You can do a one page will. You know, it doesn't be this complicated thing, but let's start there because Prince did not have a will. And the entertainer Prince did not have a will. I believe he's a Aretha Franklin did not have a will. They didn't think they were going to ever die. Nobody says, oh, I'm gonna die. You know, I'm gonna do that now I'm dying next week. People think they're gonna live forever. I think I'm going to live for a long time. I think I'm in great health. I think I'm in better health when I was 25, but I still have a will because death is not scheduled, right? You don't know how long you're going to live. You dang should know you're going to die. At least you should. What's the mystery? And Prince had no direction or no control of who got his resources and People I believe that he did not want to have control, ended up with control because they were the next of kin. He did not have children and so on and so forth. And owner a wife, Aretha Franklin, you know, similarly unfortunate. My friend Quincy Jones had a will and had an orderly estate, as best I can tell. So. And then beyond a will, you can do estate planning. I have, I advocate for trusts. You can do a revocable trust, that's one you can change. An irrevocable trust is one you cannot change. And you need to be very careful before you do an irrevocable trust. A friend of mine did one of those. An irrevocable trust. And it really put members of his family in a bind 25 years later when situations had changed and he had sort of forgotten about it and he had passed away and then on his deathbed tried to change the irrevocable trust. And the attorney said, I'm sorry, it could not be trust changed. That's why it's called irrevocable. So words matter. So you're gonna do a trust. Might wanna start with something that has some flexibility. Yeah. Anyway, so number, number, I was gonna get into a whole thing. My opinion about why would you do an irrevocable trust when you can do a revocable one. But you know, people have their reasons. Number five, credit score and debt discipline. 700 plus credit score is a new status symbol. People, you've heard me say it a million times over. Like you meet somebody attractive. Oh, cool. What's your name? That's. Yeah, beautiful. What's your credit score? Because if you get serious with this person, it's going to be a business partner for life. And you need to make sure you're sharing values and they're not just sharing your credit card. Right. Little financial literacy lesson. The person who makes it has a right to spend it. The person who makes it can also save it. You can have somebody who doesn't make it but who manages the money. And then you can have somebody who manages the money who doesn't spend the money or. Or spends the money and manages the money or spends the money or manages the money and doesn't spend the money. But what you cannot just have is somebody who spends the money. That's a disaster relationship. So I think credit scores. 7 credit score is a new set, new status symbol. And we should have everybody around you should have to aspire to a 700 plus credit score. Number six, owning a home. This is a forced savings account in pride of place. It's also the easiest way to build wealth. In America, 44%, on average of African Americans own a home, compared to 75% of our white counterparts. White folks are not doing it because they have nothing else to do. They're doing it because tax policy in this country is essentially designed around home ownership. And home ownership is the easiest single way that build wealth. And you got to live somewhere. Why would you want to why would you want to rent when you get home? I don't get it. And worse, we're flossing again, trying to rent something uptown with something we don't with money we don't have to spend money we don't have to impress somebody we don't know about and to and to brag about things that don't matter in people in places where they really don't want you in an environment that is not sustainable and will not last. You know, you're literally just raising a window and throwing money out. And I'm a landlord and I'm encouraging not to do it for the rest of your life. I'm encouraging to it's like working at McDonald's or Walmart. You know, you can work there your whole life if you want to make it a career. But for most people that's in it and split it, get there, stay there for a few years and then let there be a stepping stone and go do something else. Rent until you can own homeownership is a brilliant way to combine a place to live with a with a way to build wealth. You make money during the day, you build wealth in your sleep.
