Stealth Wealth – Episode 602

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[00:01] Welcome to the Prosperity Podcast. Prosperity thinkers, we’re going to be talking about stealth wealth. And no, this is not about hidden bank accounts. It is not about overseas funds and doing this and that. This is the real stealth wealth. What does that mean to you, Kim? Well, I have such fun examples for this because thankfully, my husband, Todd Langford, owner of Truth Concepts and the suite of calculators that proves all things financial, has taken a look recently of some things that both of us knew. I mean, you can’t help people with finances for 30 years and not learn a few things. So we both knew these intellectually, maybe even intuitively, but he’s proven them numerically or mathematically.

[00:56] And so I’m going to share with you three specific things that are a way to build wealth that are so under the radar screen, which is what I define as stealth wealth. And so, again, we’re going to talk about the building aspect of that stealth wealth, but let’s also talk about the storing aspect of stealth wealth, because storing is storing your money under the radar screen. And that is so easy. But again, I’ll reiterate, as you did, we’re not talking about hidden bank accounts or anything offshore. This is simple stuff, everyday Americans and Canadians can do. Okay. So why are they not doing it? Let’s get that out of the way, because we have to explain. It’s boring. And who is doing it? It’s small. So the boring small steps are done

[01:55] by people that have a structure that enables those boring small steps to happen automatically. So think about your morning habits. I’m not a coffee drinker, but if you turn the coffee maker on to give you coffee at 6am, you’ve automated a morning habit where you can go downstairs and have your coffee and it’s ready to go. And it just happens like clockwork. So let’s apply that to our money and our actions around our money so that we get that same automaticity. Such a cool word that’s being floated around these days. And let’s use that automaticity for the rest of our lives, because the things that I’m going to recommend are not going to help you this year. And they’re not going to help you in the second year. But they might start to help you around the third year, and then they

[03:01] will help you for a hundred years. And that’s why people don’t do them. Too long time frame. It sounds like the new year resolution that we all need. Because most of us will see that the gems get packed at the beginning of the year. By week two, week three, they’re empty. So you’re already letting us know that we’re not going to shed all of that Thanksgiving weight on the first day. We’re aware of it. So we’re not going to have instant wealth overnight. Okay. We all agree. Let’s keep going. Awesome. And we know that automaticity in a gem by having an accountability buddy or sleeping in your workout clothes is a thing. I know some people do or whatever it is that you need to get those habits put in place with a structure

[03:53] that will support the implementation of the things that you want to have happen. And so that’s what we have inside our space at Prosperity Thinkers specifically for those that are in our pledge membership is that structure and that automating of the money movements so that the things that we want to have happen will happen. Shall we have some examples? I would love it. Let’s hear it. The very first one for those people that get a paycheck every couple weeks, which is a good part of America. I mean, even if you own a business, you’ve probably set yourself up on some kind of at least base payroll. There are two months out of the year that you get three paychecks. Those third paychecks typically go straight into the checking account

[04:40] and are spent immediately on basically nothing. I’m aware of a friend that actually took a look at the target and Amazon buying habits of a fairly high income family, asked that family, what on this list of the last year of your purchases are you most excited about? The guy said these gym shorts, these $30 gym shorts, I love them. They are so awesome. The gal said, truly nothing on this list. There were over $200,000. This is a high income family of Amazon and target purchases. All just basically unconscious spending. So again, if we can stop putting our income in our checking account so that when we have some extra paychecks or a bonus, it does not go into our checking account immediately. If we’re just a basic, call it $150,000 a year family, maybe one person earns that or

[05:49] two people earn that together. Basic $150,000 a year. All we do is peel off two of the paychecks because we’re basically paid 26 times but we only have 24 expectations of our money. I believe it’s about half a million dollars over 30 years. Not a huge number, but that’s not investing that money. That’s just half a million bucks for $150,000 a year family. So step one, do not put your earned income into your checking account. If you want an automated process for this, go take a look at our Prosperity Pledge membership which will help you automate the process so that those extra checks do not go into the checking account. Ready for the next one? I am. So first, part of stealth wealth, get that automated so you don’t have to think about it. That’s correct. Okay, what’s number

[06:49] two? Second is the bulk of our expenses go up. Okay, we know that. It’s called inflation. There are two things that inflation benefits. One is 30-year fixed mortgage payments. Now, I realize you may move houses a couple times, but the bottom line is you have fixed mortgage payments. Most people that choose 30-year fixed mortgage payments hint, if you don’t, you should have one. Because all of our other expenses are going up and all of our income is going up, it might be a bumpy up, but it’s still up, but our mortgage payments are flat. If we can capture that difference, it’s like $90 the first year. It’s like $180 the second year. We’re not talking about exciting money at all. But over a 30-year period,

[07:31] for a normal $150k a year income family, it’s $2 million. Let me say that again. For a 30-year period, for a normal $150k a year income family, it’s $2 million. The difference between that flat mortgage payment, think about it like a pie, you know, a piece of pie starts out super tiny at the tip and that increase of expenses and increase of income and increase of expenses and increase of income. If we have a structure in place to save that difference, it will be $2 million. That’s significant. That’s not just a small amount of money. That’s significant. Nope. You’re correct. Stealth. Wealth. Yeah. Boring. Now give us an example of stealth wealth on the accumulation side. So we’ve talked in the automatic, the saving side,

[08:24] which again, if you only focus on accumulation, if you skip over steps one and two, you are just going to repeat the problem and repeat the problem. So like do it in order. But once that has been in place on the accumulation side, what are you seeing with stealth wealth? So let’s define accumulation. I think of it as the building of wealth, right? It’s not what you earn, it’s what you keep. Well, it’s at the early stages, it really doesn’t matter where you keep what you’ve kept, right? You can put in a savings account in a bank and be happy. And really everybody should have one, right? Your very first thing when you go to the bank, and I’m talking like age three, is you open a checking account, you open a

[09:10] savings account, right? I mean, you’re probably not going to do that for a three year old, but there are three year olds out there that have them with good reason. And you absolutely should do that when you’re 18 and first actually able to own your own account, checking savings, okay? But after a while, let’s call it 10 grand. You know, that savings account at 10 grand, once it gets above that, it really needs to be stored somewhere else. And the somewhere else is cash value of whole life insurance at a mutual dividend paying company. So in case you’re new to this space, cash value, learn the terms, whole life insurance, W-H-O-L-E, dividend paying, it’s sometimes called participating, mutual company. Examples

[09:58] are Guardian, Mass Mutual, Northwestern Mutual, New York Life, Penn Mutual, Lafayette, Mutual Trust, Security Life of New York, I think, Forrester’s, I’m sure I could think of a few more, but that’s about the end of the list. Now, if you have whole life and you didn’t hear me say your company, don’t be overly concerned. I could have forgotten a couple. Nevertheless, there are whole life products out there that are not dividend paying, and there are definitely life insurance products out there called universal life that are not whole life, and they’re not from a mutual company, and they’re not dividend paying or participating, and those do not count. You want to have whole life, so this is the place that you store

[10:44] your foundational wealth. It’s not an investment, it’s not for retirement monies, it’s not what’s going to knock it out of the park, but the examples that I just gave earlier are monthly money, right? It’s 500 bucks a month, a thousand a month. It’s 5,000 a month, maybe at the most, right? Like your mortgage payment differential, it could get up in there in the 6,000, 7,000 a month range maybe for upper income space, but it’s all monthly money. Monthly money is very hard to store because there’s no good investment out there that wants your 5K a month or your 500 a month. The good investments out there want 100K or a million or whatever their minimum is. So where do you put your monthly money? Again, after the 10 grand

[11:35] of the savings account. Dividend paying, participating, cash value of whole life insurance from a mutual company. So if you need some help learning about this, please think about how you learn best. Do you like to read, watch, or listen? And then go seek out material. I have Amazon books you can read. I have Audible’s books that you can listen to, and I have a YouTube channel. And so the best book to learn about this, yes, I am biased, is called Live Your Life Insurance. It is a one hour read and maybe about 90 minutes to listen to. Okay, maybe it’s two hours to read. Learn about it. Learn the language. There’s an entire glossary in the back. And the reason that I’m biased about this book, other than the obvious

[12:24] fact that I wrote it and read it, is because my clients tell me it’s the best owner’s manual for the oldest financial product on the face of this earth. You know, take that last sentence. You piece everything you said to that, which is here. If a person talks with the old man, the old wealthy man in town, that isn’t the Scrooge McDuck, okay? I’m going to preface it this way, okay? Not the angry tyrant old man, but the person that seems content. Most of the time, that was a stealth wealth type of person. And it just kept moving along. I think of Sam Walton from Walmart driving in his stealth pickup truck. I think of the other wealthy people. And don’t get me wrong. There are some people that like

[13:20] to be flashy, and there are some people that like to lose money, and those two people tend to be together. That’s okay. That’s what it is. It’s not my world. Kim, thanks for sharing the owner’s manual on stealth wealth and sharing the principles. Thank you for listening to the Prosperity Podcast. To take control of your money and have it work for you, visit ProsperityThinkers.com.