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- [00:00]
Candy Valentino
Foreign this episode is brought to you by Progressive Insurance. Fiscally responsible financial geniuses, monetary magicians. These are things people say about drivers who switch their car insurance to Progressive and save hundreds because Progressive offers discounts for paying in full, owning a home and more. Plus you can count on their great customer service to help you when you need it. So so your dollar goes a long way. Visit progressive.com to see if you could save on car insurance, Progressive Casualty Insurance Company and affiliates. Potential savings will vary. Not available in all states or situations. Welcome to the Candy Valentino show, the podcast for founders, investors and entreprene where we have honest conversations about what it takes to grow your business, build more wealth and create financial freedom.
- [01:14]
Unknown Host
Hey guys, welcome back to another episode of the show. Thanks for tuning in with me today. And if you've been tuning in, you know that we are on part three of our series Master your Money. And if this is the first you're hearing about it, you're going to want to go back and listen to part one and part two of our four part series. And this is regardless if you are building a business as an entrepreneur, if you're managing your money and your family, if you want to build a successful rich life, we are going to be breaking this down every single week. We've got two more episodes and a bonus episode that is coming at the end of the series of all with you in mind. If you tuned in last week, you know that this episode is one of the most misunderstood principles about money. And today's the day. Let's jump into it. And I feel like this episode needs a theme song. I'm going to dial it up. Let me see if I see if you guys can you hear that.
- [02:23]
Candy Valentino
Little.
- [02:23]
Unknown Host
Notorious Big Mo Money Mo problems I thought was appropriate for this episode. Because the most misunderstood financial principle that doesn't exist is the thought that more money will solve money problems. But here's the truth. More income will not automatically make you wealthy. And I know it might sound crazy and you're saying candy, but it would be really nice to make some more money to have more money. And I promise you it will solve my problems. Well, the data says otherwise. And I get it. We've all been told that the secret to more wealth is to simply make more money. Side hustle, Work harder, Raise your rates, Increase your prices, Ask your boss for a raise, Charge more. But here's the problem. If your habits don't change, more income will become more fuel for more poor decisions. Let's say you're making $70,000 a year and you're overspending. Now imagine you start making double that, $140,000 a year. You would think, oh, I'm going to be set right? No. But here's what happens. The car gets upgraded, the house gets bigger, the vacations get nicer, the clothes become designer, and people still live paycheck to paycheck. They just look a little better doing it. That is not wealthy. That is the lifestyle creep. Because more money does not solve money problems. Habits do. I'm going to say it one more time. More money does not solve money problems. Your habits is what will. And here's the data to prove it. Almost 40% of Americans are earning $100,000 a year and still live paycheck to paycheck. And 65% of professional athletes go broke within five years of retiring. Whatever league that they're in. 75% of lottery winners that win millions lose it all within a few years. On the flip side, school teachers, warehouse workers, blue collar professionals who invest consistently, the most amount of millionaires. Why? Because they did not leak their wealth. They did not upgrade their lifestyle. They protected it. They directed it, they gave it a job, they invested it, and it multiplied. So let's get into some of the largest leaks that could be happening to your money. These are the invisible habits that could be draining the very thing that you're trying to build. I shared the first one. Lifestyle creep. The more you make, the more you spend. The raise goes to that bigger mortgage, a nicer car payment, first class, flat flights. You think, I've earned this. But really what you've earned is a bigger financial burden. Make sure that when you make more money, when you increase your revenue, when you raise your prices, you do not raise your lifestyle. It is a habit that so many rookies make. And I mean rookies, when they're first making money, they go and increase their lifestyle instead of taking that margin and investing it into their future so that at some point they don't have to trade time for money. And that's what the lifestyle is keeping you from. It's keeping you on the hamster wheel of always having to work to pay bills. And as if that's not the only leak, the second is the expense creep. This is the one you don't notice. Maybe it was a 999 subscription that turned into 14.99, or it was a program that you bought for your business that was 299 and now you're on some other 399 program with all the users. It's the not caring about the electric bill and turning it up in the summer when you leave the house because you're making a lot of not doing little things that you can do on your own because you read a book that you should just outsource everything in your life and all of those expenses creep in and before you know it you forget about half of them and now you have to go earn revenue and make more money in order to just keep up with all of the expenses that have creeped in. That's why doing the State of the Union and your personal audits are so important. So that you can always keep an eye on this and make sure that it doesn't get out of hand. That brings us to the third leak. Mindless spending. Woo. This is when treating yourself and self care becomes a habit instead of a reward. And this could be Amazon or Target. Anything that you are emotionally spending money on that's costing you more than you realize. I mean I know so many people who use Amazon as a therapist or a target as some emotional support system system. I mean when I want to actually think back in the late 90s, I dated a kid. This is no joke. True story. I don't think I've ever even talked about it. It's interesting, it just popped into my mind. But they, they were pretty poor and his mom went in for a minor gallbladder surgery, had her bowel duct cut, had to have emergency liver transplant surgery and ended up suing the doctor for the mistake that he made and ended up getting. I don't even know what the settlement was, but it was in the millions, which obviously was a significant amount of money for people who don't have any and especially back in the late 90s. But fast forward to mindless spending, emotional decisions. She blew through just about that entire settlement through shopping on QVC and hoarding. Like more money does not solve money problems. It's the habits and the behaviors of the person that is spending. So mindless spending can become a habit and not just a reward. So make sure you budget. I know that sounds super boring, but if you're going to treat yourself, you want to celebrate a win, which I fully support. Make sure that you are celebrating mindfully and that you are not mindlessly spending. And that brings us to leak number four, the debt drag. And guys, if you've heard me say it once, you've heard me say it 20 times. The number one greatest destroyer of your wealth is bad debt. We cannot out invest bad debt you cannot pay. 18, 20 or 20, 24% interest rates on credit cards or other types of debt. And then go open a Roth IRA and start investing or a SEP or a 401K. Because you can't out invest even in the best markets. You're not getting those typical rates of return as an average investor. So every dollar that is going to interest is a dollar that is not being built for your future. It's robbing you of your future. And a lot of people don't realize how much credit card and debt in general is costing you just to borrow that money. Your income is not what makes you rich. Your habits do. Whoo. I am fired up on this today. But we're going to keep going forward because I want to make sure that you master this. And I think this is an important one to touch on because 74% of people. 74%. So that means seven and a half of every 10 people that are listening to this went out and made a purchase that they knew was not smart, but they did it just to feel better in the moment. This is called dopamine debt. People are going into debt emotionally, spending because they're stressed or bored or overwhelmed. And so you reach for something to feel better. And oftentimes people know not to reach for drugs. So maybe they reach for alcohol, but maybe they're trying to not drink anymore. So now they're reaching for achievement or spending. And marketers know it. Large corporations know this. They know that you get a dopamine hit when you get an Amazon delivery or that new outfit that comes, but it creates long term regret. And look, this isn't about guilt. My goodness, we've all done it. This is about awareness, understanding. It is powerful because then you can track your spending by emotion and not just category. And really asking the question, like, am I buying this because I need it or because I want to feel something? Or because I do feel something, like, is this really solving a problem or is this actually adding to a problem? Sometimes the best budget strategy isn't a spreadsheet. It's therapy and a journal. It's making sure to express the emotions that we have and really paying attention in the moment. And sometimes it's not to escape a bad feeling. Sometimes you feel really good in the moment and you get caught up in it. I'll give you an example of this. I was actually in New York City doing some media. It was around Christmas time, I think. I was doing some stuff with the book and there was like a billboard in Times Square and a bunch of things we had going on, and family came in to just try to celebrate in the city and be there for Christmas. And we were walking. I walk into Louis, and I'm not even kind of into purses and designer stuff anymore. Like, I feel like when I first made money back in the day, that was important to me. And now none of that's really important to me anymore. And it hasn't been for quite some time. So I don't really spend on designer bags and things like that anymore. Like I said, I did that in my 20s and feel like I got it out of my system. Because when you don't have money, sometimes you just want to go buy things that you always wanted, and then you kind of get it out of your system, or you go on and build more significant wealth and realize that none of that stuff matters. But even so, those feelings and that dopamine sometimes can creep in. And I was walking into Louie because someone that was walking around with us wanted to go into that store. And so, of course, we all walked in and it was really cool because it was at Christmas time and there was this beautiful blazer. Like, it was so nice. And on the mannequin and, you know, they're getting you a glass of champagne and trying to show you all these things, and, you know, let's see if we have your size. They saw that I was eyeing up this jacket, and I almost did it. It was an insane amount of money for a blazer. Like, at the end of the day, that's what it was, was some really nice buttons. And I was like, you know what? Let me. Let me just give me a day, and if I really still want it, I will come back. Because I knew in that moment that if I would have bought that, it would have been great. In the minute it was Christmas, there were all of these vibes, but I knew I probably would have wore that once or twice, and then I would have saw it hanging in my closet and think, I cannot believe I paid that much money per wear on that item. So I didn't do it. I left. And everyone's like, I cannot believe you didn't buy that jacket. And it's not that I couldn't. It's just that I'm smarter with money. I don't get the dopamine hit and the emotion of buying things anymore. However, that was still very hard. So I've shared with you on the show before about the 24 hour rule. If you think you're going to get something, if you really want it, just give yourself 24 hours to pause, to leave that store, that salesperson, that emotional state. And then if it still makes sense 24 hours later, well, maybe it's a good purchase. At least you will have the emotional stability to not be buying in the moment and be able to think, is this a good buy? Do I need this? Or am I just trying to feel something?
- [13:56]
Candy Valentino
This episode brought to you by Progressive Insurance. Do you ever find yourself playing the budgeting game, shifting a little money here, a little there, hoping it all works out well, with the name your price tool from Progressive, you can get a better budgeter and potentially lower your insurance bill too. You tell Progressive what you want to pay for car insurance and they'll help find you options within your budget. Try it today@progressive.com Progressive Casualty Insurance Company and affiliates Price and coverage match limited by state law. Not available in all states.
- [14:31]
Unknown Host
This is the story breaking right now.
- [14:33]
Candy Valentino
Fox one is coming soon, which means soon you can be there live for all the biggest moments. She is gone. And witness history as it's made.
- [14:45]
Unknown Host
It's not about me.
- [14:46]
Candy Valentino
It's about what this human spaceflight program is about. It's our national goals. Get all of your favorite news, sports and entertainment with a side of I.
- [14:55]
Unknown Host
Think I may have peed a little.
- [14:56]
Candy Valentino
All in one app streaming live on August 21st. Fox One.
- [15:02]
Unknown Host
All right, so now that we know some of the most misunderstood financial principles and some of the leaks that may be happening, what do we do with it? Well, here is a three step fix for leaking money. Number one, run the audit personal audit on your personal finances and if you have a business, run the State of the Union. If you haven't been doing this monthly, do the last 90 days bank account, credit card statements and start to highlight anything. Now in the typical State of the Union meeting, in your personal audit, I talk about this differently. How to look at discretionary spending, what's necessity in this particular audit? I want you to take 20 minutes this week because if you listen to last week's episode, I told you 20 minutes a week, two hours a month. So take your 20 minutes this week and run the 90 day audit. But I want you to highlight your expenses differently. If you're like me, grab a yellow and a pink or a yellow and a blue highlighter and look for any purchases that maybe were emotional, unnecessary, unused. This is very eye opening and empowering. Don't judge it. Don't beat yourself up about it. Like my gosh, we all do it. I walked out of Louis back in December, but I can tell you I'm sure there's plenty of times that I didn't walk out of the store. This happens to all of us. So make sure that you're just identifying it. It's a very empowering exercise. And then once you identify what's emotional, what really wasn't even used, and what was completely unnecessary of a buy, I want you to take step two. Where can you redirect that money in the future? Can you invest it into your personal finances? Can you invest it into your business? Can you maximize maybe your ira? Or is there another rental property that you can be purchasing? Even a couple hundred dollars a month adds up to several thousand a year. And here's what most people fail. They think, oh, it's only $200 a month, Candy, that's $2,400 a year. Well, what can I really do with that? Okay, $2,400 a year invested at just 10% over 20 years is over $140,000. So people look at the, oh, it's $200 a month now, but it's what you're robbing from and your investments. That's how the small things, the small decisions end up compounding over time. So during those 20 minutes you're running this 90 day audit, you're highlighting anything that's emotional, unnecessary, or was unneeded, unused. Step two, you're going to see what can you cut. Are there at least three expenses that you can cut? And can you take those savings and automate it so that it immediately goes into either debt payoff, if that's what you've got, or, or investing, if you don't have any debt. And then step three is set a lifestyle cap. Don't become one of the rookies who continues to increase their level of lifestyle every single time they make more money, trapping themselves into constantly having to work to pay bills, decide what lifestyle you really need, and then make a decision and have discipline not to inflate beyond that, no matter how much you earn. This is how you trap wealth instead of letting it escape. And this is the antithesis of not being trapped, always working to pay bills. Set a lifestyle cap so that as you make more and more money over time, you continue to invest that money into your future. And if you take away anything from today, I want you to remember that earning more money does not necessarily lead to more wealth because if your habits don't change, more money becomes more fuel for more poor decisions. When you plug the holes, your income, no matter what level it is, really becomes a tool to help you build a future that you can count on. Wealth doesn't always come from more money. It comes from fewer leaks. Because it's not just what you make, it's what you keep. And it's what you do with it that counts. All right guys, thanks so much for tuning in and spending this time with me today. If you found value in today's episode, please share it with someone you care about and tune in next week for part four where we break down the five reasons most people never hit financial freedom. That's all for today's episode. We'll see you next time. Hey guys, thanks for tuning in to this episode and if there was anything something that you loved or you had a specific takeaway, share it and tag me at Candy Valentino. And if you haven't already, grab a copy of my latest book, the 9% Edge Life Changing Secrets to create more revenue for your business and more freedom for yourself. You can pick it up anywhere books are sold, Amazon, Barnes and Noble, or your local independent store. And once you do, head over to 9% edge.com and claim $1,500 in pre order bonuses, including a chance to join me on this very show. Thanks so much for tuning in and spending this time with me today guys. We'll see you next time.
- [20:19]
Candy Valentino
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