Addressing Your Top 8 Financial Concerns – Episode 122

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[00:01] Welcome to the Prosperity Podcast, fresh alternative personal finance talk for independent thinkers who prosper outside of Wall Street. Here’s your host, bestselling author, Kim D.H. Butler and No BS Money Guy, Todd Strobel. Hey everybody, welcome to another edition of the Prosperity Podcast. This is No BS Money Guy, Todd Strobel. Once again, we have my co-host and bestselling financial author, Kim Butler with us. And today we’re going to be addressing the top eight financial worries of Americans. And I can’t think of a better topic for us to be discussing. So welcome, Kim, and I can’t wait to dive into this. Well this is going to be a fun one. I can’t wait to hear what Americans are worried about so that we can help our clients

[00:54] not worry about those things. So let’s dig in. Super. I mean, just to let all of our listeners know, Kim has not been prepared for this at all. These are the top eight questions that are on the internet, the top eight concerns on the internet. So we’ve prepared her for nothing. So she’s going to be answering this from her vast knowledge not being prepared ahead of time. I think that’s great. Love it. Okay. Okay, so the solution to that is to have a forced way to save that you’re excited about and confident about and where every year or every month or even every quarter, whatever works for you, a bill shows up that causes the action of saving. Because when you’re saving for something, my daughter’s a great example of this right

[01:57] now, she wants to go to Peru. So she’s not shopping, she’s not starbucking, she’s not bar hopping, she doesn’t drink anyway, but she’s not doing any of the things that we spend so much money on because she wants to go to Peru. So whether you’re saving for an emergency or an opportunity or a trip or whatever it is, make it automatic, make it forced, like get a bill in some way if you can or make an automatic transaction and make it exciting. And it’s why we talk so much about the emergency slash opportunity fund because it’s no fun to save for emergencies. It’s a ton of fun to save for opportunities. And of course, the best place to store that savings is good old fashioned whole life insurance with a pay to petition writer where you do get the premium bill

[02:47] and you remember that premium contributes to savings. But if you’re too young to do that or too old to do that or can’t do that or don’t want to do that, just make it a savings account, but you’ve got to make it automatic. And this is once once more an example of why cash flow is more important than net worth, correct? Absolutely, because cash flow needs to flow away before it can flow to and net worth is completely irrelevant. Plus, there are so many people today that have tons of savings capabilities like monthly savings and essentially no net worth at all. Who cares? Focus on your savings ability. Super. Well, number two, and I know you don’t like this word, but it’s planning for retirement, which word plan or retirement?

[03:37] I don’t like either one of them. So, all right, let’s address plan. Well, let’s just go with what they’re trying to convey there, what they’re trying to convey is that you’re putting money away for the future. And I am totally OK with that. I don’t like the word plan because Russia did it, Cuba did it, it didn’t work. I don’t like the retirement word because lots of people are doing it and that doesn’t work either. But being committed to your future, that works. And when we want to save money for our future, if we want to also invest for our future to totally different things, then that is awesome. But if we will stop thinking about the shortened time frame, I just got an email from a 52 year old guy and he’s so stressed about quote saving for

[04:25] retirement, but then when I helped him realize, look, you got another 20 years, 52 to 72, that’s nothing. Then he can relax about it. Maybe 50 years. Oh, no doubt. Yes, yes, yes. Without a doubt. I was just talking about the amount of time where he can absolutely earn an income and save a portion of that money. And so if we focus on strategizing our future or focusing on our future, rather than trying to plan for retirement, it’s so much more peaceful because we don’t have this weird time frame of age 65 that means nothing. It’s so much more energizing because we’re strategizing for the future. And just the word future has so much more potential and excitement and opportunity tied into it than the word retirement, which is like the

[05:17] opposite of all those three things. And it will be so much more interesting to save slash invest. Again, two different things for our future. If we can be excited about it and we’re not limited by society’s definition of retirement, which we do not want to be limited by. I completely agree. Well, number three is the rising costs of higher education. Oh, gosh, isn’t that a fun one? You know, there is a hilarious YouTube video. If you’ll get on YouTube and search for the four year plan, it is comical. And so education is fabulous. But again, if we will start focusing our future on education, in other words, no matter how old you are, you want to be continually educating yourself and stop trying to jam education into this four year period where we’re so restricted by

[06:21] the typical college environment and these kids are so stressed and the time frame is too short. So they’ve got the huge student loan issue. We can be confident that the internet is going to solve this problem because it will make education last our entire lifetimes. It will enable us to have them the way that benefits us. It will drastically reduce the cost of that education. And I’m not saying that everybody’s going to go online to get everything educated by on the online system because they’ll benefit from the structure of the physical location of college. But that, too, is going to change. And so we just need to be confident. We need to hang in there. We need to trust that good is going to prevail in this area.

[07:08] And while it’s very messy right now, and I’ve got kids in college, I got it. It’s going to get fixed and there will be some clarity as we inch forward on this one. Okay. I mean, can you imagine comparing the value of an education at a four year institution, maybe even Princeton to a two year mentorship with somebody like Michael Dell? You can’t compare it. That’s a great way to put it. I mean, that that’s incredible, incredible distinction. I mean, you just got to know that mentoring really is going to be a good potential solution for the cost of college. But so will online education. Super. Well, number four is no emergency fund. And I know you’re going to love this one. None like zero. Yep.

[07:58] Like these people have no emergency fund. That’s the number four concern is no emergency fund. Well, I’ll say so first, I guess you have to start with the use of a credit card because that’s really what credit cards are supposed to be. Now, if somebody is entirely maxed out on their credit card, maxed out, I didn’t say that very well. If they’re maxed out on their credit cards, then okay. Yes, that’s a problem. And so that probably goes back to, was it number two with the shopping issue? So we’ve absolutely got to just instill some habits. It’s not even a discipline issue. I mean, it may start there, but for Pete’s sakes, find a way to save some money. And there are some great books out there for pinching pennies and cutting

[08:40] costs and that kind of thing. And I’ll admit, I’m not an expert in that because I believe very firmly that if you will just save first, that you do not have to have a budget or any other type of thing that restricts spending because it will be naturally restricted. So find a way to get some money set aside and use your credit card first in order to have the peace of mind that you can say, yes, I have an emergency fund because I have money or limit available on my credit card. But as fast as you can get yourself an online bank account or whatever it takes and put some money in there on an automatic basis, even if it’s $10 or $20 so that you can start to build that emergency fund. And for clients that already have an emergency fund, keep funding it.

[09:25] The older you get, and especially when we add the word opportunity to the emergency idea, the older you get, the bigger opportunity fund you’re going to want to have. So whether that’s paying premiums on your life insurance policies or just continuing to add to your savings account, build up bigger and bigger and bigger emergency funds. They are what provide us the peace of mind, the capacity and the opportunity to seek out fabulous things, whether they’re truly dealing with emergencies or an awesome trip or a great investment or whatever it is, the bigger that fund is, the bigger opportunity you’re going to have. And I can’t let you off the hook without mentioning the fact that you have talked about the ability to have dollars do multiple jobs.

[10:11] That’s even more important when you have a limited number of dollars as it is when you have a lot of dollars, isn’t it? Absolutely. So you want to get a tiny little whole life policy, get some term insurance, get your dollars doing lots of things and get that forced savings habit started. And it’ll solve three out of the four things we’ve talked about. Awesome. All right. Well, number five is steep housing prices. Interesting. All right. So yes, housing prices are up again and yes, they will probably go down again. So if it’s really, really a problem for you, then potentially move to another part of the country because I know that there are parts of the country where the deals are much better.

[11:00] And if that’s not feasible, then you can find other ways to adjust to the cost of housing largely by not being as close to jobs, which is a challenge. I understand that. But unless you’re truly trying to buy a house right now today, which obviously only a small segment of the population is at any one point in time, that’s not a concern that we really need to spend time focusing on. And if you are trying to buy a house today, if there’s any way that you can rent for a while, because I believe firmly that we’re going to see another correction in our entire economy, stock market, housing prices, everything I think will come back down sometime in the next year or two. Wait a little bit and you can get a better deal.

[11:44] Well, and I mean, don’t you think you also need to separate two things? One is your primary residence and two is potential rental property, because those steep prices could be an advantage in the fact that you can collect rent. But those same steep housing prices could be a detriment in that if that’s your primary house, because you don’t have a chance to recover those monies by rents. Absolutely. Yeah, that’s well said. And we’ve got investments where people can put their dollars and get good rental properties in parts of the country where they don’t live. In other words, parts of the country where something is more reasonably priced and that should help people. So if they’re truly looking on the investment side, we can solve that problem.

[12:38] And again, if they’re looking on their own side, maybe they ought to sell their primary residence today while prices are up and then rent for a while until prices come back down and then they could buy and that would make more sense. You know, one of our clients just the other day was saying that, you know, they don’t know any properties under a million dollars. They’re all residential and they’re receiving a 15% rate of return on their money. I mean, that’s pretty good. Yes, it is. Absolutely. So, I mean, it’s not always a bad thing. So, all right. Well, number six is overwhelming debts. And I mean, I guess this would be a combination of credit card debt, student loan debt. It’s just a matter of, you know, it’s such a, such a temptation to sign on

[13:28] the bottom line instead of spending cash and sometimes spending credit makes sense, but sometimes it doesn’t. So address that. Absolutely. So I have a resource for anybody that can benefit from this. And it’s a company out of Colorado called National Credit Care, nationalcreditcare.com. And the phone number is 866-595-6313. And I’ll give that number again in a little bit. They help people get a handle on their own personal debt. They have a couple of different programs that they take people through. I’ve been very pleased. We’ve had a lot of individual clients use them and they can help you get your credit cleaned up. They can help deal with overwhelming debt. They can help you in this area.

[14:18] And just like any time we want results, we need to get help. I work with a personal trainer still three days a week because I want good results with my body and I know I need help to do it. So pay a little bit of money. These guys take monthly income for their fee. It doesn’t cost that much. They’re super, super helpful and they can provide the value that people are looking for to get out of debt in terms of strategies and even personal disciplines and that kind of thing. And then for those of us that are in mortgage debt, I want to be clear that having mortgage debt is not the same as being in debt. And that’s so important to understand because we have a home value, which typically is larger than the cost of our mortgage.

[15:14] There’s a few people probably still underwater, but not very many. And it is so important to understand that there’s a difference between having debt, which is home of a million dollars, debt of 800,000 as an example, and being in debt, which is no net worth and $20,000 of credit card. Got it. All right. And you’re going to love the next one. Number seven is the volatility of the stock market. Oh gosh, just get out of it. It’s so sad to me that I have to say this, but the stock market for me personally and professionally is no longer a place for me to be comfortable with my dollars. I do not like the roller coaster ride. And so if you have a 401k account and there’s nothing that you can do because you’re still employed at that company, you can have the

[16:09] money be in the cash account or the fixed account or some place where it is no longer affected. And then if you can not do that, you can surely try to find some super secure conservative account that is still in your 401k plan. And then for just money that are not in the 401k plan, we want to focus on just disconnecting from the stock market. Good heavens. These accounts are up right now. If you are not comfortable with them, then please seek alternative investments. We have a variety of ones. Some of them are income oriented. Some of them are growth oriented and they have nothing to do with the stock market. And if you don’t want to work with us, when you ask for alternative investments, make darn sure that you’re not being

[17:02] shown something like a REIT or an exchange traded fund or something like that. That’s basically still right back in the stock market. So, yes, you’re looking for non correlated investments. There you go. That’s a wonderful word. And number two, you have to realize that compensation is based upon money moving. So volatility pays the people who are giving you advice. And that is horrible. Yep. It’s just a misalignment of interests. Absolutely correct. It’s almost like going to the doctor and realizing that the sicker you are, the more money they make. Same type of concept. All right. So we’re on the last one, which number eight is a lack of a financial plan. And I’m saying it because that’s the way it says.

[17:59] I know you hate the word plan, but I do think we need to have a strategy. We can take out the word plan, but just doing absolutely nothing and hoping for the best doesn’t usually work the best either, does it? Very well said. And so whether you call it a financial plan or a strategy or goals or a focus or whatever, I get what they’re saying there. So I’ll get off my soap box around the word plan. And this should be your strategy. Very simple. Save 15 to 20% of your income. Spend the rest. And once your savings builds up to an amount greater than your emergency opportunity fund, which I don’t know that that ever stops, but you want to keep building that. Nevertheless, get your dollars where they can grow.

[18:51] And your goals should be low, double digit growth. So if you have IRA money or that type of longer term asset, you want to be seeking that double digit growth. If it’s more of a shorter term thing, something you’re going to need in four to six years maybe, then we have some great short term investments that are not required of you of anything. Like you don’t have to be accredited or anything else. They’re $25,000 minimums. You can put your money in there. They’re very short term. They earn amazing interest rates compared to what the banks are paying. And so you want to get all of your dollars to be really growing as much as possible so that they’re doing the work for you. And then you just want to keep saving.

[19:37] And again, Kim has taken her lifetime experience and poured it into a book called Financial Planning Has Failed. And tell our listeners how they might get that book. Absolutely. You know, I have to admit, I just reread this book and I hadn’t read it in a while. I was really pleased with what was in there. There’s a fabulous history of information about our economy and what goes on and why the typical financial planning message is so ineffective. And there’s my story, which can provide value for anybody, whether you’re a potential advisor or an actual client. And then there’s also some great information about our three solutions for dollars. And those are a place to store cash, a place to create income, and a place to grow your assets.

[20:34] Super. And again, would you give the address where people can pick that up? Yes. Partners number four, Prosperity.com slash ebook. And it’s available as both a PDF, immediate download, and an audio book. And I would encourage each of our listeners to check that out. There’s some valuable information in there. And again, this is No BS Money Guy, Todd Strobel for the Prosperity podcast. Special thanks to Kim Butler. Again, if you have not checked out that book, I encourage you to do that. If you have questions, we encourage you to send those in. We will address those on the air. Take care, everybody. And thank you so very much. Thank you for listening to the Prosperity podcast. To take control of your money and have it

[21:20] work for you, visit us at partnersforprosperity.com If you liked this episode, make sure you subscribe and leave a review.