Todd Capital Millionaire Podcast Episode 65 pt 1: The community isn’t poor, the community just has poor spending habits

This week we released Episode 65 of the Millionaire Podcast with Real Talk Ron. The conversation was all over the place but the vision was centered on creating a new economic situation for our people by shifting our thinking and shifting our habits.

The biggest point Ron made on the show was about how he hates repeat customers.  Ron does credit repair and usually his customers are those who got ahead of themselves in the debt game.  A repeat customer is someone who got their credit right, got new cards and proceeded to rack up charges once again. We concluded that keeping credit right is a mindset and frugality and contentment helps you sustain the sub 30% account balances to keep your credit great.

Financial Independence

I was recently introduced to the world of financial independence through the bigger pockets money podcast.  Financial independence is when you are able to live of your investments, you are technically retired. For so long my mindset was make a lot of money and chill but FI is about taking a proactive and strategic approach to eliminating your responsibilities, its the same end result but its focused more on what you can control with what you have than a wish and a prayer that a financial blessing rains down on you.  FI lets you take your income, live well below it and put it in the right places. Everyone can do that.  Everyone can’t pick the newest hot stock or flip a ton of properties or create facebook. FI is massively more attainable than getting rich.

What is important about this is that you can achieve FI much faster than the typical retirement age.  This is because financial independence takes the current middle class model of retirement and flips it on its head. So not only is it more attainable, if done right you can get there quicker.

The current model of retirement basically wants you to make payments until you die. You get a home, you pay it off over thirty years. This requires that you are always making a payment and in order to make that payment you have to work a job.  This keeps you being  a good little employee slaving away to keep the boss rich. That mortgage debt is the new slave chain.

Most people are binary thinkers, they think that the opposite of mortgage debt is rent. Well, dummy, rent is a slave chain without the equity and tax benefits. The opposite of mortgage debt is not rent, the opposite is a paid off home.

I have said this multiple times but it shouldn’t take a family that earns 100k per year 30 years to pay off a 300k (right sized) home. Come on folks, the math doesn’t even add up. Why do you have to make 3m (assuming you don’t increase your income) to pay off 300k?

The problem is that we have normalized payments and we have normalized living life around those payments. FI is about eliminating your mortgage debt (aka your biggest expense) as fast as you can so you can then live life on YOUR terms.

Financial freedom the only hope

Financial freedom is not riches. Financial freedom is freedom from required monthly payments, freedom from a boss and freedom from work you hate that you do because of your payments.  Too many of us are aiming for stuff and not enough of us are aiming for freedom. We just want fancy chains as opposed to no chains. 

The most common way to achieve financial freedom is to create a life where you live off half your working income and then use the other half to eliminate debt.  It won’t be easy, fun, flashy or comfortable but the end result is a life other people wont see for 25 years, if ever.

Unfortunately, most people are aiming to live off of 80% of their income. You won’t get to freedom this way.  This is better than most but I still think they can do better.

We have to make a choice. We have a wealth gap, we don’t have a stuff gap, we don’t have a luxury car gap, we don’t have a  Hennessy gap. Stats show that we over consume on those areas compared to our peers. The wealth gap can’t close until we take our financial freedom serious. Every dollar should be a freedom ticket not a stuff ticket. 

Stash app stole my money

I have the stash app which is basically an automatic savings app.  This app steals my money once a week. I get an email saying the auto draft took the money and its gone. Well, that’s one way of looking at it. In reality I still have it I just have to go one app over to see the money.

This is how people see living off half their income or frugality.   Whenever I talk about frugality people say “well you gotta live life” but is paycheck to paycheck, refund to refund really living or are you just suffering in fancy overpriced clothing? So many of us see it as if we are losing something or giving up something. In reality we are gaining our life back. Jews, Asians, immigrants know that cash in the bank is better than a sneaker collection.  This is why they win. The Forbes measures net worth not net stuff.  You need some stale, old dead stock money you don’t need stale old dead stock sneakers.

So many of us have gone through college or law school or a grad program and had to sacrifice balling to buckle down and accomplish a goal. Financial freedom is just another 4=5 year chunk of buckling down.

If our 100k family used 50k of their income to pay off that home it would be paid off in 6 years. If they got a raise or picked up more income on the side it could happen a lot sooner. On the other side of that debt is a life filled of whatever the heck you want. Not only have you set yourself free but you have set your heirs free.

If you are interested in investing with our club on either the stock or real estate side we would be happy to welcome you into the partnership.  Email membership@capitaltodd.com today to join.

Be great, invest well,

Todd Millionaire

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