The Importance Of Savings – Episode 291

This transcript was auto-generated and may contain errors.

[00:01] Welcome to the Prosperity Podcast. Prosperity Podcast listeners, today, we are taking a community thread, forum, feedback. I don’t know what you call it, but we’re going to read something that got 11,300 upvotes in just the last 24 days. And here it is. The title of this is, I Just Got Fired, The Importance of Savings. Now, Kim, are you ready to hear this? I would love to hear this. And it’s wonderful because you don’t know the body of this text, and I am eager to hear what you say. So, here I go. I’m going to read it. Hey, guys. I was literally fired less than an hour ago. And this subreddit is the first person I’m telling. I just want to point out how incredibly important savings are. I’m 24, and this was my first real job.

[00:59] I’m fortunate to have saved $5,000 in savings, enough for about four to five months’ expenses. And that isn’t even considering unemployment in my last check. This is a huge reason why I didn’t cry when I was fired, LOL. It didn’t even feel like my livelihood was gone. So what do you say, Kim? I want to just shout from the rooftops, hallelujah, great job. Isn’t that funny? You know, just the other day, I was talking to a young person, and I asked them if at their employer, they were talked to about maxing out their 401k, which, of course, yes, they were, which, of course, if they did that, meant that they would have no liquid savings. And I wanted to scream. That is such a disservice to our young people and to us, us middle third, I’m thinking I’m

[02:02] about a third of the way through people. How’s that for a new word, third? That works. So you said that this got upvoted and expanded. You want to elaborate on that a little bit? Yeah. So here’s what I did. And a part of my job as the co-host is I’m out there and I’m sifting through listener questions, feedback, but I’m also seeing what people are talking about. And this got 11,300 upvotes in the last 24 days. And I thought there’s a reason for that. And when you had an emotional feedback reaction, it was the same part I did when they said, this is a huge reason why I didn’t cry. And I thought, that’s so true. And so maybe what would be great is we’ve talked a lot about savings on the podcast

[02:59] and you’ve got inside of your books, a lot of teachings about savings. But I think it’s one thing to hear it. And then it’s another thing to attach the emotional piece to it and the actual understanding. Help our listeners maybe understand, when did you get the savings on an emotional level other than just the habit of it? That really is a great question. And it came to me probably about, I want to say, two years into starting the business. So here I am. I’m 24, I believe, when I started. I go from a salary job to an all-commissioned job. And my husband at the time was all-commissioned also. So it was definitely a scary time. But we had just enough money coming in that everything was kind of fine.

[03:51] And along the way, we saved because we knew how critical having a backup was going to be when you’re in an all-commissioned job. It really forces you to just look at things very differently. And so I had a really nice start. This practice, this financial services arena, if you will, is not an easy thing to get started. But thankfully, I had a really nice start. So for a couple of years, I was able to save a bit of money. And then I got into just a situation where things kind of shifted. I was trying to upgrade my market a little bit. I had marketing expenses that I needed to have money for. I also admittedly got sidetracked on something that I thought was going to work and didn’t end up working.

[04:33] And all of those things came to bear kind of at the same time. And I went through my — it was a money market account. I went through it like in a matter of two months. And it was like, whoa, holy cow, I’m so glad I had that. And yet at the same time, it was scary as I watched that thing go down, down, down, down, down, as I got through the couple of months and then got things restructured and back on the growth curve again. But you know what? It happened to us again in 2008 and 2009. And it was a lot bigger numbers. In other words, I so understand the statement, and I think I hijacked it from somebody, cash flow issues do not go away. They just get bigger zeros on them. So true. So when when you’re doing larger businesses,

[05:22] when you have bigger real estate deals, et cetera, et cetera, you know, the cash flow issues are still there. They just have a lot bigger zeros to the left of the decimal point. Right. Yeah. So when you were burning through the money market account, did you have like have sleepless nights and a lot of stress, you know, that feeling when you sit in bed and like you got that hot throw up in mouth and you’re like, oh, my gosh, and you like run through everything. Did you have that or was it greatly reduced because you had the savings? Well, it was greatly reduced because I had the savings until the savings started getting closer and closer to zero. And then it was no longer greatly reduced. Then those feelings were there.

[06:04] And interestingly enough, at the same time, I was so like back up from that time, a year or so, I had started our whole life insurance policies. So I was starting to use the whole life and the forced premium bill that requires one to save as a verb, which then creates savings as a noun. I was pretty new at that. And so I hadn’t shifted over my emergency idea of funding to life insurance yet. It was something that was there, but hadn’t really developed. And so because of that, I think I was even more scared. And then again, to switch the story to the 0809 side of things, we used our life insurance policy a ton to support both emergencies and opportunities in the 0809 period. And all of that came with emotion, for sure.

[07:06] Both escalated emotion of like, yes, we can take advantage of this opportunity and scared emotion of, oh, my gosh, we’re using our life insurance policy over and over and over here to make payroll as we’re going through 0809. So I think all of the above happened. Yeah. You know, when you think of a life insurance policy, one of the nice things about it is when we went through that great recession in 0809, a lot of time as a business owner or even if you’re self-employed, your income is greatly reduced. And so your financial ability to get additional loans or even just getting loans that banks aren’t offering can be limited. But if you have a life insurance policy, who do you have to go to? Do you have to get a credit check? No.

[07:58] Oh, do you have to go into some institution and say, hey, please, please, please, business is going to do better. Please help me out. Nope, none of that. So it’s in actuality, it’s this additional safety net. And so you had the life insurance safety net and your cash on hand safety net. Now, what caused the turnaround? Was it having the savings was able to help the turnaround? Or are we talking chicken or egg? How did all that work? Yeah, that’s a good question. And I believe without a shadow of a doubt that having the savings gives you the peace of mind, which is that emotional aspect to progress forward with your principles intact, with a total give first attitude intact. And believe me, it wasn’t easy.

[08:53] Tammy and I were just talking about this the other day, Tammy Brandon, my sister that runs the blueprint process and is a guest on this podcast occasionally, who Spencer, you know very well, we were talking about how my emotional state was maintained at a high level because I could get up every day in the early part of oh nine and help somebody. And when I helped somebody, then I felt better because I was able to do something, even though it didn’t. In fact, most cases didn’t relate to any monetary reward for me. My own emotional state was in a good space and rewarded properly because I was able to get up and help somebody again, because there were like a whole bunch of backup plans there because we had the life insurance to sustain the companies

[09:47] and our own personal expenses for a while. So because of that and because I was able to help people in a give first way, I was able to maintain my principles So it was a serious domino effect there in a good way that all was enabled and at this point now eight or nine totally because of the cash value of life insurance as our emergency opportunity fund, as our savings now as a noun that enabled us to do all of that during that time. You know, that’s just fantastic news. And so I I think the good summary of this episode is you had financial savings account. You had your life insurance savings account, but you had an emotional and a relationship and a mental savings account all built up. And it helped you get through those things.

[10:37] Yeah, that’s really well said. Well, for our listeners, one of the things that we would definitely encourage you to do is to reach out. If you are in a situation like this person that maybe you’ve in a job transition or you just have a life question, we’re here to answer those questions. And again, if you want to remain anonymous, we can take your question and answer it on the podcast and you can send those questions to hello at partnersforprosperity.com and you can give Kim as much or as little detail as needed. Obviously, the more detail, the better the answer that Kim can give. And we just want to thank you. Any final words before we sign off, Kim? Always grateful for the saving and then the principles

[11:28] and the seven principles of prosperity people can get access to on our website. And I really encourage people to think about their own principles as well. And that helps maintain our emotion at times that can become stressful. All right. Well, thank you, Kim. And thank you, listeners, for spending some time with us today. Thank you for listening to the Prosperity Podcast. To take control of your money and have it work for you. Visit us at partnersforprosperity.com. If you liked this episode, make sure you subscribe and leave a review.