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- [00:00]
Navy Recruiter
You say you'll never join the Navy, never climb Mount Fuji on a port visit, or break the sound barrier. Joining the Navy sounds crazy. Saying never actually is. Learn why@navy.com America's Navy forged by the Sea.
- [00:22]
Podcast Host (Michael Rosenbom)
Welcome to the Candy Valentino show, the podcast for founders, investors and entrepreneurs where we have honest conversations about what it takes to grow your business, build more wealth, and create financial freedom.
- [00:48]
Candy Valentino
Hey guys, welcome back to another episode of the show. Thanks for tuning in with me today for our part four in our Master the Money series. And if you haven't listened to the first three, I encourage you to pause this, go back, find part one and listen to them in order. They are quick, 15, 20 minutes max for each one. You can listen to all four of these in under an hour because I know you're busy. So I try to give you everything you need, nothing you don't, and get straight to the point. So listen to those first three and then come back to part four because this one's not for the faint of heart. If you have ever been wondering where your money went, why are you working so hard and don't have as much to show for it as you like? And you want to break the science cycle, we are going to dive into it because most people don't get to where they want to be financially. Not because they're lazy or that they don't work hard for it. It's because they don't know the rules of the game. And if you don't know the rules of the game, how are you ever going to win? So we're going to break down a few steps of what keeps people from achieving the financial wealth that they want. And I'm going to do it in a very practical, tactical, no fluff, no BS way. So let's dive. All right, so first things first. Number one, most people do not get financial freedom because they don't have a financial target. Seems obvious, right? But most people do not have a plan. They have a paycheck or they get an owner's draw from their company, but they don't actually know what they're working toward. They just work. They just either take a profit distribution, get the paycheck, take an owner's draw. And it's like I shared in one of our prior episodes, it's like getting in a car and driving without the destination. We need to know what where we are and we need to know where we're going and anything aside from those two things. If we don't start there, we're going to have chaos. So if you ever feel like your life and your finances are chaotic, it's because we don't have structure. Structure is not boring. Structure is actually going to give you what you want, which is success. Without it, you will waste time, energy, and fuel, just like you were in a car, not knowing where you are, not knowing where you're going, driving all around, doing all of this activity, yet feeling very lost. So the very first thing we need to do is set our financial target, and I call this our freedom number. Now, you could have a financial target for this year, this quarter, this month, but we also need to know, what is that freedom number for your life? What are you working towards? How much money do you actually need? So at some point, you don't have to keep trading time for it. Let's say, for example, you want $250,000 a year in passive income. Now, passive income on social media means something very different. And is it alluded to in a very different way than what's actually real? Real passive income truly comes from something like portfolio income, where you're getting dividends, or real estate property, where you're getting rent, but you're not actively investing. Most times what people fail to recognize and share with you is that passive income only comes after all the work is done. It is not building a course, it is not having some laundromat. There's a lot of things that you have to do first in order to have passive income. Most people don't tell you, oh, yeah, you want to have a big exit on a company, it's going to take you 10 to 20 to 25 years to do that. And then, great, you have lots of passive income. So passive income, we need to understand how much money do we need? Are we going to adjust our lifestyle and what does that look like? So that we know exactly how much money we have to have invested in either a portfolio or real estate, property or a potential business exit. And we need to understand those numbers and also exactly what diversification, where is the money going to come from? And then also have a contingency plan if the market changes or the real estate market shifts or you don't have the tenant or the business industry shifts and you don't get the exit that you're anticipating. So let's use $250,000 a year just as a random number. Now, what will you need to have invested in order to get that number? Say it's 65. Now, here's what I don't know. I always love to give you guys, context, you have to have context to whatever somebody is saying because everybody is in a different financial situation. You may be 55 listening to this and you have $0 saved for retirement. Right now. You may be 35 and have a million dollars saved at retirement. Everybody is coming from a different place. But what we can do is just say if somebody wants $250,000 a year in retirement, passively, you will on average need to have a couple to a few million dollars invested on average rates of return. I'm going to give you specifics. Let's say you have $2 million invested. Whether that investment is at is in real estate, whether that's in dividends and stocks, bonds, ETFs, mutual funds. If you're collecting better than average returns of, say, 12%, you may only need $2 million in order to collect $250,000 a year. But let's say the market doesn't do as well. Let's say real estate doesn't grow. Let's say that you're investing in real estate in an area that doesn't have average appreciation of the property and of rents annually, and maybe you're only collecting 6%. Well, now you need double the amount. Now you need over $4 million invested in order to collect the same amount of money. And depending on how many years working years you have left, whether you're starting from zero or you already have a million saved is going to determine how much you need to save between now and then. But here's what a lot of people don't do. They never figure out that number. They never establish a freedom number and then reverse engineer how to get this. And guys, I'm telling you, I've worked with entrepreneurs doing millions and millions of dollars in revenue only to find out they only have a couple hundred thousand dollars invested. And thinking that they're going to exit their company in five years or seven years or 10 years, but yet they don't actually have a strategy to do that. They don't understand who their buyer would be or how much that acquisition would actually bring back to them. And they certainly don't know how much they should be every single year in order to make work optional. And the only way you ever make work optional is to structure it in the beginning so that you know what that freedom number is. You know what you need to have invested in order to get how much passive income. And then you start to look at, let's take the next step. You look at how many years that you're going to be working and say, how much money do I need to make so that I can invest how much money in order to get to that number? And obviously that's just hoping that everything goes well. We also need a contingency plan in case something shifts. But if you are an entrepreneur and you're banking on having a big acquisition or merge with some company or a big exit, I'm telling you right now, the statistics don't support it. So you need to do more than just have all your eggs in one basket. And 85% of all businesses will never be acquired. Not because they weren't great businesses or they didn't have wonderful founders or they weren't doing good, but because they didn't have the structure in the beginning to set that company up to be acquired. So 85% of all entrepreneurs need to have a contingency plan, which means you need to build as much profit as you can inside of your business to pull that profit out and invest that either in portfolio income, passive income, like real estate, or a combination of the two so that you can start to stack that cash into investments so that even if you do get an acquisition 5, 10, 15, 25 years down the road of your company, that it's not something that you absolutely have to have because you didn't put all of your eggs in one basket. And you looked at this from a very diversified portfolio plan in order to maximize your chances of success. That's what we're trying to do. And I know that this can sound overwhelming, but that's okay. It's supposed to. It shows you that something needs to change. If you feel overwhelmed by this information, great. You're in the right place because we want to make sure that you get that real number, if nothing else. If you listen to nothing else from me ever, ever again, please figure out this number so that we can reverse engineer your financial freedom. And we make it a plan, not just a hope, a wish or a dream. This is the story breaking right now.
- [09:45]
Fox One Announcer
Fox one is coming soon, which means soon you can be there live for all the biggest moments.
- [09:52]
Podcast Host (Michael Rosenbom)
She is gone.
- [09:54]
Fox One Announcer
And witness history as it's made.
- [09:56]
Candy Valentino
It's not about me.
- [09:57]
Podcast Host (Michael Rosenbom)
It's about what this human spaceflight program is about.
- [10:01]
Candy Valentino
It's our national goals.
- [10:02]
Fox One Announcer
Get all of your favorite news, sports and entertainment with a side of.
- [10:06]
Candy Valentino
I think I'm happy to.
- [10:08]
Fox One Announcer
All in One app streaming live on August 21st. Fox One.
- [10:14]
Navy Recruiter
You say you'll never join the Navy, that you'd never track storms brewing in the Atlantic and skydiving could Never be part of your commute. You'd never climb Mount Fuji on a port visit or fly so fast you break the sound barrier. Joining the Navy sounds crazy. Saying never actually is. Start your journey@navy.com, america's Navy forged by the sea.
- [10:44]
Candy Valentino
All right, number two, don't make money emotional, make it logical. Guys. Money is math. But for most people, they treat it like therapy. Spending when they're stressed, swiping when they're sad, or avoiding it because they feel shame. This is not just about budgeting, it's about behavior. If you want to win the money game, you have to have some rules in place place. And that means no emotion, money rolls, no major financial decisions. When you're angry, when you're tired, when you're stressed, when you're emotional, always waiting 24 hours before making any non essential purchases. And make sure that you journal when you're spending. Like not just the actual transactions on your P and L or on your bank account, but take a look. Like I said in I Believe it Was episode part two of this series is take a look and see when are you spending money? When you look at that bank statement, look and say, was that a really stressful time? Should you have reached for your journal and not your credit card so that you developed discipline instead of chasing dopamine? If you want to master your money, you have to make money decisions logical and not emotional. And the only way you can do that is by developing systems so that you don't rely on your willpower. Because as we know, feelings can be fleeting. We want to make sure that you don't chase that emotional high of spending, of buying something new, of sharing it on social media, all the things that people do, because that is not how you win. We don't rise to the level of our goals and our dreams. We fall to the level of our systems. Most people try to white knuckle their finances, but it doesn't work. We don't need more motivation if that's the only thing you need at any event that you went to, any person that you talk to, any coach or consultant that you had any online social media following that you listen to or binge, all of that would work, but it doesn't. Discipline automating these decisions so that we don't fail when we get emotional or we need that dopamine hit. And the only way that you can do that is to develop guardrails, build a wealth system. And how do you do that? Three quick A's. The first day auto pay Those bills. Make sure that everything in your life is set up on auto pay so that you don't fail to miss the payment or if you're trying to pay down debt because 35% of your credit score is based on payment history. So if you go 30 days delinquent, 60 days delinquent, all of those really negatively affect your credit score. So you always want to set up autopay. Number two is auto transfer. This is the important one. For some reason, most people I meet do auto pay, but very few people that I meet do an auto transfer, which means that whatever that investing amount that they have, whether you're currently at 10% and you're trying to get to 15 or you're at 20 and you're trying to get to 25% of your income into investing or saving it. If you're looking to perhaps buy real estate and maybe you're just putting it in a high yield savings account temporarily, whatever that is. Most people do not set up an auto transfer, meaning that the second that paycheck comes in, or the second that your owner's draw happens, or that your paycheck from your company comes in, that you are auto transferring whatever that amount is into your investment counts. That is how you set it. And forget it, most people do auto pay. Very few people do auto transfer. And if you're one of them, I encourage you, by the time you're done listening to this in order to set that up, it will be massively valuable to you. Because if you wait till the end of the year, and I know a lot of entrepreneurs that do this, they wait to the end of the year to maximize their solo 401k or their SEP or whatever it is that they have, but not realizing that every single month you weren't invested, so those 11 months prior you could have been transferring that money in and getting all of the gains. Remember in the episode I just dropped, we talked about how much it costs you by not seeing staying invested if you just miss a couple of the best days in the market. So number two is auto transfer and number three, the third, A stands for account. This is a guilt free spending account with a hard cap. A hard cap meaning that you set an amount that you know this is not going to go towards your future, this is not going to go towards investments, and you're probably going to regret some spending this at some point. And if you ask your Future Self in 5 Years what they thought of this account, they would say, I wish you would have invested that and not spent it but if you keep a certain account or a certain amount of guilt free spending for the month, that has a hard cap and you never go over it. That is how you win. Structure and discipline will beat motivation every day of the week and twice on Tuesday. All right, this brings us to our final one. Raise your hand if this sounds familiar. You listen to something like this and then you start saving. You listen to something like this and you sit down and you review. You do a personal audit, you start cutting your spending and then next week you blow it or you start to get serious. And so you start investing. But then you get nervous when the market dips and you pull all your money out. Well, that you are not alone. But if you want to win the game, you have to stop starting over, have consistency. I'll tell you, all of my friends, people that are closest to me, one of the things that we all have in common is we are consistent. We do not pull money out when the market starts to dip. We buy down as much as possible. We don't just cut spending once and then overspend the next week. We make it a habit. Because when you make better decisions, it will create better habits that create a better reality. And guys, once you taste that, you will commit. Once you realize that it pulls the chaos out of your life and that you're able to do more, you're able to have freedom. You're able to decide how to spend your time, how to spend your days. And then you won't want to go back to the other behavior. But it's going to take commitment, consistency and a change in behavior. Consistency is what creates wealth, not complexity. And if you want to change the future of your family, your life, financially forever, you need to stop starting over and be consistent. Consistency creates wealth. Build that rule book, auto invest every month, no matter what. Don't upgrade your lifestyle every single time you make more money. Stick with a structured plan and don't change it even when it's boring. Start doing the things that most people won't do. And I promise you, you can have things that most people can't. And if you do some of the hard things now, I promise life will get easier. All right guys, if you need someone to walk with you through this journey, head over to candyvalentino.com check out our fractional CFO services for business owners and our programs for personal finance. Thanks again and tuning in with me today. We'll see you next time for our bonus session of this four part series, Master your money. Hey guys, thanks for tuning in. To this episode and if there was something that you loved or you had a specific takeaway, share it and tag me at the end. 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 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.
- [19:12]
Podcast Host (Michael Rosenbom)
I am Michael Rosenbom. I am Tom Welling. Welcome to Talk Ville where it's fun to talk about Smallville. We're going to be talking to sometimes guest stars. Are you liking the direction Lois is going in?
- [19:23]
Candy Valentino
Yeah, cuz I'm getting more screen time.
- [19:24]
Podcast Host (Michael Rosenbom)
It's good. But mostly it's just me and Tom remembering. I think we all feel like there was a team missing here. You got me Tom. Let's revisit it. Let's look at it. See what we remember. See what we remember. I had never been around anything like that before.
- [19:35]
Navy Recruiter
I mean it was so fun.
- [19:37]
Podcast Host (Michael Rosenbom)
Talk Ville. Talk Bill. I just had a flashback. Follow and listen on your favorite platform. Let's get into it.