Prosperity Ladder: Categories of Wealth – Episode 503

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[00:01] Welcome to the Prosperity Podcast. Prosperity thinkers, welcome to the podcast. Today, we’re gonna be speaking about the categories of wealth, and there’s an actual prosperity ladder to follow. And Kim, you guys have taken the time to create this. So this is something that not only our listeners can hear, but they’re gonna get to see it with an infographic. So let’s walk through that, the ladder and those steps, and then we’ll go into the other pieces. It sounds great. Well, you know, I had help with that ladder when our very first book came out, which is Busting the Financial Planning Lies. So we should make sure that a link to that is in the show notes also. And I’m so excited to be able to reinvigorate

[00:51] that book with sharing this ladder, as you said, definitely as an infographic and some very talented artists with the ability to display what the ladder does and shows, and now our conversation added to it, I think is a really impactful view of personal finance over the course of one’s life. So it’s a infographic, it’s a conversation that can be valuable, especially if you have adult children that are just starting to earn money or even not adult children that are starting to earn money. And it’s interesting when we look at where the bulk of America is on the ladder, where the bulk of our clients are on the ladder. So those would be some of the fun things we get to talk about. Yeah, absolutely.

[01:47] Let’s start with that. So where people are in America versus where your clients are. Yeah. Where do you see the gap between this two? I’ll verbally explain the ladder. It’s easier if you actually look at it, but the ladder has four rungs on it. It’s just poverty, because basically everybody starts out there. Poverty just means that you don’t have any money so you can’t do anything. I mean, it’s a state that technically a young adult is in before they take their first steps to become an adult, which is basically working. And so I’ll just quickly say the four steps of the ladder are poverty, subsistence, comfort, and prosperity. And then the steps to get in between, those are the rungs of the ladders,

[02:41] the technical way to say it. The steps to get in between are working, saving, and owning. And you and I had chatted a couple podcasts ago back around some of the other ways to look at wealth and capital and that kind of thing. And back to my commentary, and the way to get out of poverty is to work, period. Unless you’re one of the rare families that does have a trust fund, and that’s clearly not our audience nor the bulk of America. So we’ll start with that and then just acknowledging that the way to get to subsistence is to have enough income that’s coming in to pay all of your bills. And that’s basically subsistence. Like one wrong move and you slide back to poverty. And we saw that happen to a lot of people.

[03:32] And there’s statistics out there that America’s savings account, like liquid money, I’m not talking investments, is $5,300. Well, somebody that spends $1,000 a month, which is very low number, just living obviously five months in and they’re back to poverty because they have no more capability. And so again, work is the job that gets you from poverty to subsistence. Then what gets you from subsistence or comfort is saving. And that’s where I think the big disconnect is because everybody wants to go first to investments. All of America is in this space between subsistence and comfort, not all, but let’s call it 80% of America. And I really believe that our clients are between comfort and prosperity.

[04:24] So what comfort is defined as is everything’s okay as long as everything’s okay. And you probably do have an emergency fund and you are okay as long as everything’s okay. But there is a action that keeping, and then there’s also a monetary game and it’s owning things. So that’s the lay of the land. And I think our clientele are thankfully in the comfort space. Many of them are in the prosperity space, but not a lot. And of course in America, the bulk of the people are between subsistence and comfort. Absolutely. So you’ve had the ability and opportunity to see where most of America is. And I would assume that when new people come into your ecosystem, they may have already adopted some of those thoughts,

[05:22] but you’re helping them move along. So let’s talk about maybe as the person’s climbing the ladder, the tools that will help them to gain more savings or whatever that may be. Absolutely. Well, so starting with that space. So when you’re between subsistence and comfort, that act is saving and it is horribly boring. And yet it’s so, so important to build liquidity and savings that you can control. And way too many people want to go straight into 401k plans or retirement plans or investments that could potentially lose their money. And while I am all for those types of things, it’s the order of operations that matters. And so as many of our listeners know, we have a brand new service that is actually been

[06:08] a couple of years in practice that is now available. And it is a part of our membership that we are offering and it’s called Currents and it will help with savings. So if anybody feels like that’s the space that they really need some guidance in, some accountability, a structure, a change in the order of their operations, then please reach out to me, hello, at prosperitythinkers.com and we’ll get that savings act automated. So did I answer your question? I think there was a second part. Yeah, so I immediately thought of the Currents app as far as the tool that’s helping with that. The other tool that you use once we call having some liquid is the life insurance plan. So talk a little bit more about that.

[06:59] I know we do that in the podcasts often, but I wanna establish those tools so that, as we have that construction mindset climbing the ladder in a way. I love it. Well, it’s a great analogy and you could also use the word product, products are things that you buy and you technically buy a savings account. And yes, we do have a smart account and it’s combined with an app and an account at a bank that really facilitates the savings behavior that I am now identifying as people’s emergency fund. And then the next step is the whole life insurance for those that are ready to take that, which is the opportunity fund and can still build liquidity, still create additional dollars. And for years and years and years,

[07:45] I’ve called the whole life cash value, the emergency slash opportunity fund. But I’m starting to differentiate that because opportunity funds are something that as you work towards prosperity, you want to have more and more. Opportunity funds are what enable us to take advantage of good investments when they come along, many of which are lump sum oriented, not monthly oriented. And because our lives operate monthly, we have to have a way to transition from that monthly savings as a verb into some type of lump sum, which could then be parlayed up to an investment, whether it’s to real estate deal or some private placement that requires 100K down or whatever the situation is, the really, really good investments

[08:32] are usually more lump sum in their orientation. But there’s an additional tool that I think is really important and that’s mindset. And we’ve talked about that quite a bit on the podcast too, but it is just something that we have to be working on every single day. And really, whenever we think we have arrived, it’s evidence that there is something wrong with our mentality because we want to be in growth mode. We want to be continually improving things. And that mindset is what gets people into prosperity. And prosperity could be defined on the ladder as having sufficient cashflow for the rest of your life. Now, notice I didn’t use the net worth number. So many people measure prosperity by some kind of arbitrary net worth number.

[09:22] And there’s tons of information out there about, well, when you’re this old, you should have this much net worth. But net worth does not put food on the table. It does not provide experiences. It does not help pay the bills. It’s cashflow that does. And so we really want to look at prosperity as having a cashflow that comes in that’s greater than your expenses. And it is completely irrelevant what age you are when that occurs. Absolutely. So to get to that stronger prosperity thinking to graduate from comfort beyond, we have the own piece. So let’s talk about own. And then I want to share a story from a recent conversation that may be helpful. Awesome. Well, owning or controlling is where prosperity lives.

[10:15] And so you could own real estate. You could own investments. You could own a business. You could own your time. You certainly can own your mindset. So there’s aspects of ownership that just your basic W-2 person can grasp. And as they progress and they’re seeking to get from that comfort space to that prosperity space, it’s typically ownership that’s gonna make the difference. So go after the easy part first, which is the mindset. You could argue that it’s not easy, but it’s certainly available to everybody. That’s the best news. Prosperous mindsets are available to everybody. And then seek the ownership of a business, the ownership of real estate, the ownership of something that you can control.

[11:06] And this is an area too back to the investment space that a lot of people invest in things they cannot control. And so I would view that differently than an investment that you can control, where you can control the outcome, you can control pieces and parts of it, and you can actually have an impact on whether it does well or not. Yeah, so true. Okay, so this might sound crazy, actually most things I do. So that’s fine. You said prosperous mindsets are something available to all of us, especially now. And immediately what you said put a phrase in my head, which was, they’re not only available, but they’re on sale right now. And what I mean is, for people that are watching the news and that are listening to the volatility,

[12:00] they’re at a huge disadvantage. The people that are choosing to have the prosperous mindset right now are seeing more opportunity than ever before. So that prosperous mindset is on sale for those who take action. Yeah, that’s really well said. And it’s so gratifying to know that we can make that choice. And we can make it any day of the week, any hour of the day. So if you felt like, oh, this morning I didn’t do a very good job of owning a prosperous mindset, well, awesome, fix it right now. It’s something that’s immediately available to you. Our thought can shift that quickly. Now, it might need a little impetus. Maybe if you’re jumping jacks, pet with a dog, outside for a run at noon or some sunshine or whatever it is.

[12:54] Nevertheless, our thought can shift that quickly. And that’s so gratifying to know. Absolutely. So take that phrase, what you just said, and I’m gonna couple that with a conversation I had a few days ago with a friend. He’s a business broker. So he buys and sells very large businesses. And so he’s, we’ll call it near the top of the business category because he gets to see so many transactions. And what he said was, I’m seeing a lot of businesses go through bankruptcy right now. But what was amazing, he goes, this is one of our biggest opportunities ever because we can now acquire these businesses for very little capital and tighten it up. And there’s a lot of government benefits to it right now for doing that.

[13:51] And so that’s someone because he has created prosperity in his mind because he has gone through the steps and has capital and he saved, he sees the opportunity, whereas other people are struggling right now. Yeah, that’s cool. And it is amazing how what could be a great investment for one person is a horrible investment for another. And what could be an unbelievably scary step for one person is a completely logical step for another. And so this is where knowing yourself is so, so important because in fact, to quote Peter D. Amanda is certainly one of the people that I enjoy following. If you are starting a business or buying a business just for the money, it’s probably not gonna turn out very well.

[14:46] There needs to be passion involved. There needs to be enjoyment. And I’m sure that this gentleman sees all kinds as it relates to that. And I would say that potentially a lot of the reasons for the bankruptcy is not that the business wasn’t good. In fact, that’s why he’s able to sell it. That’s why it’s on sale. It’s an opportunity for the right person. But the mindset of the individual, the joy and there’s circumstances sometimes accident or death or whatever that cause it to go haywire. But the commitment to serving the people that are a part of the business, all of those have to play a role or the business is not gonna succeed. Absolutely. It’s fascinating we can have these conversations

[15:33] around the principles of this. And then we’ll get others that say, well, how can you back this up? Are people really flocking to be more prosperous in their thinking? Are they really doing that? And some of the data that I have, and this is just the data from the podcast which is our listenership is up 17% month over month. Interesting. And so we’re for some reason, a magnet to people that are saying, okay, enough is enough. I want more of this prosperity of my life. And I think we’re going to see more and more of that as time goes on. It’s so wonderful that it’s a choice. It’s available to anybody of any age. I’m so honored to be able to provide that. And it’s so cool that we’ve used that word

[16:28] for over 30 years and rebranded to use it for another 30 years and how we can truly help. There are a lot of courses out there that are just about mindset and those are available and valuable. But I love how we’re able to connect the mindset piece with the practical products to buy. The implementable strategies to use. The tools that go with putting your boots on the ground and actually making it happen. Yeah, so, so, so good. So what we’ll do is this. We’ll put a link to the infographic reference to the original book. And then the last, I think that’s really helpful is as listeners are climbing that prosperity ladder that you go through. And if there are tools that will help you in that process,

[17:21] reach out, ask hello at ProsperityThinkers.com you know, what tools make sense and the occurrence app is an invite only. So you’re gonna have to ask there, you know, getting the right type of product for your situation, for your family, you’re gonna have to ask. So hello at ProsperityThinkers.com. Thank you for listening to the Prosperity Podcast. To take control of your money and have it work for you, visit ProsperityThinkers.com.