← Success Story with Scott D. Clary
Success Story with Scott D. Clary
Lessons - The Hidden Systems That Keep You Poor While Others Get Rich | Jaspreet Singh - Financial Educator
00:14:25
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- [00:00]
A
This podcast is brought to you in part by Stash. Are you still putting off saving and investing? Because you'll get to it someday. Stash turns someday into today Stash isn't just an investing app. It's a registered investment advisor that combines automated investing with dependable financial strategies to help you reach your goals faster. They'll provide you with personalized advice on what to invest in based on your goals. Or if you just want to sit back and watch your money go to work, you can opt into their award winning expert managed portfolio that picks stocks for you. Stash has helped millions of Americans reach their financial goals and starts at just $3 per month. Don't let your savings sit around, make it work harder for you. Go to get.stash.comsuccessstory and see how you can receive $25 towards your first stock purchase and to view important disclosures. That's get.stash.comsuccess story paid non client endorsement, not representative of all clients and not a guarantee Investment advisory services offered by Stash Investments llc, an SEC registered investment advisor. Investing involves risks and investments may lose value. Offers subject to T's and C's A huge shout out to Federated Computer for supporting today's episode Let me explain why I love Federated Computer. Why? They are friends of Success Story. They are changing the way businesses buy software because we all need software to run our businesses. I don't care what kind of business you're building, but the best business software doesn't have to cost thousands of dollars each month. So Federated Computer replaces a lot of the software that you're using right now. Let me explain. The average typical Federated computer customer saves 75% or more on their software bill and gets great software, top notch customer service and support and a software solution that is uniquely installed for your business without any sort of surveillance or breaches of privacy. For example, if you use Google for email, Salesforce for CRM, Slack for team chat, link list, Monkey for customer acquisitions and Airtable for data management. With a team of 10, you'd save $9,000 per year on software costs. By switching to Federated Computer they replace all of those and what's wild is that the cost of Federated Computer doesn't grow as your team grows. You can use Federated Computer savings to grow your business rather than feed the woke Silicon Valley software companies. The Federated Computer team literally invented cloud software. They actually have the patents to prove it and they are taking a hammer to the ridiculously high prices of of business software that all entrepreneurs are suffering from Federated Computer. They've been a longtime supporter of success story. They're offering 30% off their already low prices when you use a coupon code freelance. So go to www.federated.computer to begin saving 75% or more on your monthly software costs. That's www.federated.computer. these folks are going to do you a big favor. Check them out in this lessons episode. Discover the core principles of building lasting wealth rather than chasing quick riches. Learn why the TRD FR work time return dollars dictates your financial success. Learn how automating a 751510 split between spending, investing and saving kickstarts wealth growth. Learn why understanding inflation's hidden transfer of wealth from non investors to investors is crucial for securing your financial future. So this is, I mean, let's talk about wealth building versus just making money or just trying to get rich. Because what you're, what you're describing is, is sort of like wealth building 101. So I think it's important just to highlight sort of that process that you went through and how you looked at assets and liabilities and investing. Describe what most people do versus what you were doing. But then also I think an interesting point is the way you did it. Is that the way people should do it if they want to build?
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Well, the way you should do it is what's right for you. Personal finance is called personal finance because it's personal. And at the end of the day, building wealth comes down to three things. TRD, time, return dollars. The one thing that we cannot control is time. But what we know is the longer your money has to grow, the more wealth you can build. But let me back up just one minute. The way you build wealth is by investing your money. It's not by saving your money and it's not by spending your money. It's by earning money, not spending that money and then investing it. And the two or three asset classes that have built the most wealth than anything else in America over the last century are building a business, buying stocks, buying real estate. Now, the majority of people should not build a business, but everybody in America should be a business owner. How do you do that? By investing in stocks or by investing in real estate. And so you have to be an investor if you want to build wealth. Now the question is, how do you invest your money and how do you become wealthy? That goes back to the trd. So when you invest your money, the more time your money has to grow, the wealthier you're going to become. But we can't go back in time and start investing five years ago. So that can't change. The best thing to do is to start sooner rather than later. Then there's r return. The better returns you can get on your money, the faster your money can grow, the faster you're going to build wealth. I mean, you can think of it in terms of how long is it going to take you to double your money. If it's going to take you 100 years to double your money, you're never going to become wealthy. But if you could do it in five years, well, now you can really start to see the power of compounding because now you can invest more money, double it, grow it, and just keep doubling it that way. And the final part is D dollars. The more dollars you invest, the wealthier you're going to become, which ultimately goes to. How do you invest more dollars? Well, you can either spend less money or you can earn more money. There's no other way around it. And in the beginning, spending less is the simplest thing to do. That's how I started. I spent no money that way. I had more money to invest, and so I spent as little money as possible. The problem with that is there's a limit to how much you can cut back on. There's a limit to how many pennies you can squeeze out of your budget, but there's no limit to how much you can earn. That does not mean you shouldn't try to cut back. You have to be able to spend less, because if you don't know how to spend less than what you make, you're never going to build wealth. But just don't get caught up into the game where all you do is spend less. That was what I originally focused on, was just how to cut expenses, cut expenses, cut expenses. And I cut back really hard, which was fine for me because my personality aligned with that. But I don't think the average person would want to do what I did. So if you can't spend less to, you know, whatever level you spend less, what you can, where you can, as extreme as you can, then you look for ways to earn more money. And now you're going to say, well, how do you do that? And again, it's going to be dependent on you because personal finance is personal. Maybe you work to ask your boss for a raise, maybe you get a second job, maybe look for a new job, maybe look for a career change, get a certificate online. If you spend $500 online, you can get a certificate to get Some sort of new job that might be able to pay you 70,000, 80,000, $110,000 a year, depending on what the job is. Maybe you go out to start a side business or a side hustle or maybe you start a whole business, but that's going to depend on what's right for you.
- [07:18]
A
Do you have, I mean, personal finance is personal. But when you look at a healthy, a healthy ratio, maybe for people to understand if they're just again, this, this. The audience for this is a wide range. Some of them have been investing for a long time and they get this game. Some of them are probably new to finance and they're trying to figure out they're in a 9-5-W2 and they're a little bit entrepreneurial, but they're also focused on finance. And they're not super financially literate, but they understand like they're, you know, some of friends do real estate and stocks and oh, they also want to start their own business. There's all these ideas that are sort of just like, you know, you know, ruminating in their head and they're trying to figure out what to do and there's so many different options. So what would be like in. From an entrepreneurial perspective? I would say don't leave your 9 to 5 and if you want to make a little bit more money, maybe start a side hustle or find a talent or a skill and you can go find ways to close clients. Like you said, you know, you work 9 to 5 or 9 to 7, then you take your 7 to 9 or 7 to 10 or your weekend and you do some freelancing work and you can start to see what entrepreneurship is like and that can make you a little bit more money. But so you have this bucket of money that's coming in from your work and your side hustle and your entrepreneurship or your whatever. What are good ratios that people should think about so they can put X amount of money towards their rent or their mortgage and X amount of money towards investing. Just some best practices based on an average risk tolerance of somebody from like 25 to 35.
- [08:53]
B
Yeah. A simple rule of thumb that I say is a 75, 1510 plan which says for every dollar that you earn from here on out, 75 cents is the maximum that you can spend, 15 cents is the minimum that you invest, 10 cents is the minimum that you save. Create three different bank accounts, one for your spending money, one for your investment money, and one for your savings money, and then automate this process, automate it. Most Banks are going to do this for free. If your bank is trying to charge you, find a new bank. And the reason why you want to automate it into different bank accounts is because you don't want to accidentally spend your investment money on a new tv. You don't want to accidentally spend your savings money on a car. Your savings money is there to protect you against an emergency. Your investment money is what's going to be used to invest in your real estate, your stocks, your the books that you want to learn or do, whatever your investments might be. And you're spending money is what you use to pay your mortgage or your rent, to pay for your car, to pay for your groceries, to pay for your vacations and everything in between. And the reason why I say it like this is because everybody is different. Some of you are going to say, I want a nicer car. Others are going to say, I'd rather live in a nicer place. Other people are going to say, screw all that. I can live in a small box. I'd rather travel. And that's fine. But as long as you're spending within your means and putting money aside to invest and save, then it's within your spending plan. And I would say this is a simple way to start.
- [10:17]
A
Hey everyone, Scott here. I just want to take a second and say thanks for listening to the podcast over the past couple of years. Obviously this wouldn't be possible without each and every one of you. I have a favor to ask, so I would love to get some more information about you and why you listen to the podcast and why you listen to the show and why you tune in every week. And I have put together a short survey and we are using this to help us sort of inform what type of content we want to create and the direction of the podcast going forward. This information is not shared with anyone else, so this is just for us internally and I put together a link so scottdclary.com survey where you can go and you can fill in some information so we can know what kind of content you love. Also, for the first 100 people that respond to the survey, you will be entered into a draw for a hundred dollars Amazon gift card. So we'll be giving out one of those to the first people that respond. It should not take more than two minutes of your time to fill out the whole survey. It's really not that long and it will help you shape the future of the podcast. So I really appreciate each and every one of you and thank you for listening. I just want to Take a second and thank Cornbread Hemp for supporting today's episode. Now Cornbread Hemp CBD gummies have been this really nice addition to my wellness toolkit. I don't use them every day, just when I want to unwind after those extra busy weeks, but they're perfect for those moments when you want to take the edge off and just find your balance. Really just shut off from work. And what makes them special is how Cornbread Hemp crafts them. They only use a flower of USDA organic hemp plants. That's the best part for the purest, most potent experience. No fillers, no artificial fluff, just clean full spectrum goodness and delicious watermelon, berry and peach flavor. I keep them in my nightstand for those moments when I just need a little extra help relaxing. And I love how transparent they are too. Every batch is third party lab tested so you know exactly what you're getting. And they put together a special offer for all Success Story podcast listeners. All listeners can save 30% off their first order. Just head to cornbreadhemp.com success and use code success at checkout. That's cornbreadhemp.com success code success for 30% off your first order of these amazing gummies. I have to take a second and thank Northwest Registered Agent for supporting today's episode. Now listen. I know a lot of entrepreneurs listen to this show. If you're an entrepreneur, if you're building a business, you have to listen if you want to get more when you're launching your next big idea, Northwest Registered Agent lets you establish your entire business identity in just 10 clicks and 10 minutes. For nearly 30 years, they've been the secret weapon for entrepreneurs who want to move fast while getting expert guidance. For just $39 plus state fees, they'll handle your formation, create a custom website and establish your local presence wherever your business takes you. As an entrepreneur myself, what I value most is their one stop business solution. You get everything from formation paperwork to custom domains to trademark registration all in one easy to use account. No more juggling all these multiple services or wasting time figuring out the legal stuff. So don't wait. Protect your privacy, build your brand and set up your business in just 10 clicks and 10 minutes. Visit northwest registered agent.com success and start building something amazing. Get more with Northwest registered agent@northwestregisteredagent.com success do we have in in the US in particular? Because I'm sure I know the answer to this. But you, you live in this space so you must have some some data or Some insight. Do we have a massive wealth building problem? Like if we just look at. Because I mean, I think I'm and definitely am super biased because I speak to entrepreneurs all day and I speak to successful people who have sold their businesses. So I have no, I have no understanding of the average individual and what people are going through because I'm just, it's, it's, I'm very fortunate. My little circle of friends here is, it's, it's fabulous, but it's not the reality. I don't think many people are financially literate. I don't think many people are investing. If I even look at. I'll give you a personal example. I look at my parents, like they don't invest in real estate and stocks the way they should. They have a money manager and a financial manager and that's fine, but they're not the strategies that the most successful people in my circle of friends are using. For example. So what's the state of wealth building in the U.S. right now?
- [14:41]
B
About 70 to 80% of Americans. And the reason why I give a range is because it depends on the study. But some 7 to 10 out of Americans are living paycheck to paycheck. That means they have no extra money to save, no extra money to invest. Half of Americans are not investing at all and have not invested at all. That means no savings, no investments, no stock market, no gold, no real estate, no nothing, no retirement, no 401k. So if you walk down the street, that means for 7 out of 10 people that you see, actually closer to 8 out of 10 people that you see. But we'll round it down. These are people that have next to nothing in their bank account. More than half of Americans do not have $1,000 to their name. And that's the average state of America. Now there's two reasons for this. There's the you problem and then there's the me problem. The me problem is I spent too much money, I don't know how to manage my money and I buy too many dumb things. That applies to everybody. But there's also the you problem, which is how the economic system is keeping a lot of people broke. And this is something that's out of our control. And what I mean by that is, if we take a look at the last five years, between 2019 and 2024, the average household income in America has grown by a little bit under 18%. But I'm going to round it up to 18%. So the median household income in America has grown by 18%, while the average inflation rate, reported inflation, was just over 23%. Over that same time period, housing prices have grown by a little bit over 50%. That's renting and buying. And at the same time, the s and P500 has grown by over 80%. So what does that mean? Over the last five years, the average American who works to get a salary has become poorer because your salaries have not kept up with inflation. That means you have to spend more of your money to buy groceries. You have to spend more of your money to pay for your rent or your mortgage. You have to spend more of your money to just survive. And you have less money to save and invest, if any. At the same time, the average investor has become disproportionately wealthier. The average rate of inflation over the last five years has been 23.1%, while at the same time, housing prices have gone up by 50%. Which means if you invest in real estate, chances are your rental income has grown, chances are your rental properties have grown, unless your own office buildings, which have really been hurt. But the stock market has also grown. The S&P 500 has grown by around 80%, which means investors got a windfall. The average person became poorer. Why? Because of something called inflation. And inflation didn't start in 2019 or 2020. Inflation has been happening for decades, but it just became a hot topic after 2020 because of how extreme it got over the period of five years. But this same thing has been happening decade after decade after decade. If you look at what the Federal Reserve bank says, the Federal Reserve bank is our central bank in the United States. And what they say is that they want 2% inflation. And what I'd like everybody to think about when they say that is, why 2%? I mean, how did they come up with that number? Why is it not 3%? Or why is it not 1%? Actually, why is it not 0% inflation? Because inflation means that you have to spend more money to buy groceries. You have to spend more money to buy things. And inflation is there to benefit the investor. Because when you see inflation, that means more dollars go into the hands of businesses, which means more dollars go into the hands of the investors who own those businesses. Inflation disproportionately benefits the investor while disproportionately hurting the average American who's not an investor. Because inflation means that consuming becomes more expensive at its core. I mean, inflation is when the value of the dollar goes down, causing the price of things to go up. So if just if you have to spend more money to buy things. Like you have to spend more money to buy groceries, to buy a flight, to buy a car. That means consumption gets more expensive, which means more dollars are going into the hands of businesses, which means again, investors who own those businesses benefit. And this is where now you have to understand that is happening. This economic shift is happening. It has happened in the past. It will continue to happen in the future. And as has happened since way before the pandemic, the reason why the Federal Reserve bank wants 2% inflation is because 2% inflation is known low enough that the average person doesn't notice it day to day. Now, during the pandemic era, we went way above that, which is why it was so extreme. And now people are starting to feel that pinch of inflation. But 2% inflation is low enough that the average person doesn't notice it day to day. But it's still happening. Which means that if you just prefer become a consumer and an employee and you are not an investor, you are a victim to this economic system. We're never taught this and this is where a lot of people get upset. But in order for you to win now, in order for you to beat this system, you then have to look at the me problem, which is stop spending so much money on dumb stuff that you can't afford. And that means you got to now cut back on your expenses. That way you have money to invest. You don't have to be a millionaire to capitalize on this, but you have to understand how to control your money to do it.
- [20:12]
A
Thanks for tuning in. If you found this valuable, don't forget to hit that subscribe button so you never miss an episode. And if you want to dive deeper into this conversation, check out the links in the description to watch the full episode. See you in the next one. A huge shout out to bamboohr for supporting today's episode. Let me share something I've learned from building multiple businesses. Your time has a dollar value and if you're spending hours on HR tasks, you're literally burning money. That's why I'm fired up about bamboohr. This isn't just another software tool. This is Strategic business optimization. Over 34,000 companies are already using them because it transforms those time consuming HR tasks into streamlined processes. Here's what makes it different. It's actually built for entrepreneurs like us. Simple to use, easy to implement, and it scales as you grow. No complicated onboarding, no HR degree required, just pure efficiency. Listen, if you want to operate like a true CEO, reclaim your time, do what I did check out the free demo@bamboohr.com freedemo see for yourself all that bamboohr can do and how truly affordable it can be too. That's bamboohr.com/free demo bamboohr.com free demo this isn't just about HR, it's about strategic Growth A huge shout out to bank on Yourself for supporting today's episode Entrepreneurs here's the retirement secret that Wall street doesn't want you to know. While you are pouring everything into growing your business, they want you gambling your Future in their 401k casino with no guarantees. As a business owner, you already take enough risks. Why gamble with your retirement too? It is time to discover the financial strategy smart entrepreneurs are using to protect their wealth. Bank on Yourself is the proven approach that gives business owners what they need most certainty, flexibility and control in their retirement. Unlike traditional retirement accounts, bank on Yourself gives you predictable, guaranteed growth that isn't at the mercy of market crashes, a liquid cash reserve you can tap anytime to seize new business opportunities or weather downturns. There's zero penalties or restrictions and tax free retirement income that shields your hard earned wealth from future tax hikes. For entrepreneurs who understand the value of financial leverage, here's the game changer. When you access your money, it continues growing as if you never touched it. This means your capital works twice as hard just like you do. You can get a free report that reveals how you can bank on yourself and enjoy tax free retirement income, guaranteed growth and control of your money. Just go to bankonyourself.com Scott and get your free report. That's bankonyourself. Com Scott bankonyourself. Com Scott.