What Is Your Financial Foundation? – Episode 564

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[00:01] Welcome to the Prosperity Podcast. Prosperity thinkers, in this time right now, spring of 2024, a lot of us are thinking about what is our financial foundation. And I use the term of spring because spring is that time when we are planting things, when we are doing the work and we are waiting for it to grow and harvest. So this is not a podcast that is today and then in just a minute you have all of the successes and riches and everything else. No, it’s principle based. So Kim, I’m leading out this episode with saying, what is your financial foundation? Could be Kim specific, it could be client specific, it could be friend specific. Well, really, it’s people’s emergency and opportunity fund.

[00:57] And thankfully, it’s really, really the opportunity fund because most people will very quickly fund their emergency fund if they have the right place for it. And we have a wonderful structure that supports that. So if somebody is in need of help in that space, please email us. Hello at ProsperityThinkers.com. We will invite you into the structure to get your emergency fund created hands down, final over with, because you don’t want to keep thinking about emergencies. You want to think about opportunities. And so this is truly the financial foundation, a liquid fund that is earning a decent rate, ideally that is not taxed, that will serve you the rest of your life, that is the opportunity filter that you want to seek.

[01:48] Liquid, I mean, like ready to go three to seven days, not because you have to sell something that doesn’t count liquid and earning a rate that’s competitive with today’s marketplace and can help you beat inflation and ideally not taxed and ready to go at a moment’s notice where you buy, you can take advantage of opportunities. And then really the question of this foundational fund is how high is up. Now, listeners on our podcast know that we personally, Kim and Todd and many of our clients like to store our opportunity fund inside the life insurance industry, because they have a lot of the pieces and parts, especially the can use it the rest of your life, stop relitigating your opportunity fund decisions.

[02:41] You don’t want to be moving it from bank to bank and Oh, trying to get 5.2 interest instead of 5.0. It’s a waste of time and paperwork and complexity and your money being locked up because sometimes when you move from one bank to another, your money has to stay in hiding for a little while. If you choose the life insurance industry to store this opportunity fund, it will meet all four of those criteria literally for the rest of your life. And you never have to make another decision again, other than how high is up, how big do you want your opportunity fund to be? For some people, that’s a hundred thousand. For some people, it’s a million. For other people, it’s a hundred million. I mean, I don’t throw that number out as an example of anybody in my circle.

[03:24] Nevertheless, there are people that have that as their opportunity fund because that is the size of the deals that they are seeking. And so your opportunity fund needs to be bigger than the size of the deals that you are seeking. And this is your foundation. If you do not have this, you are building a house of cards. Absolutely. You are. And so one, we see so many people in a rush to the finish line and they get tripped up, where do they get tripped up? Because again, right now you’re talking about the race. It’s not necessarily the finish line. You’re talking about the race. Where are they getting tripped up in the race? Because they’re starting out too fast. And with a fast start can come a failure in the middle, and possibly

[04:26] not even getting to the end. I heard a story recently of somebody that had sold a business and had millions invested that millions in another business that failed and failed and failed on so many fronts. The cashflow failed, the real estate failed, the business itself failed, the model failed. And this person didn’t take the time to put in a solid foundation, to put in the guarantee of cash flow that everybody is seeking, even if they don’t use those words. And again, the life insurance industry has some very unique products that this person, when he was in his sixties and sold that first business, if he had guaranteed some cashflow, even a minimal level of cashflow, a foundational level whereby he knew that he and his family

[05:22] were always going to be fine at that foundational level. If he had taken the time to put some of that in place, and it’s not a lot of time, it would have just been focus in his case, then he could have gone on with all those other dollars and risked the way that he did that money on this opportunity that ended up failing while not risking his family’s day to day place of living and ability to eat. And I’m not being overly dramatic there. There were so many dollars at risk there that he subjected his family to a lot of unnecessary consternation, mental and physical and financial challenge because some basic cashflow elements were not locked in and guaranteed that foundation of the amount of money to live a very basic

[06:20] life can be locked in and guaranteed for life with some very simple products. And that is so peace of mind oriented. It lets all of the rest of your money be free for opportunities. That’s so does so does you if we are using this analogy and symbolism, as I mentioned, like a race to the finish line, etc. So with being a cheesy dad that I am, I’m going to keep going down that path. Are you are you familiar with the three letters in the racing world called DNF? When you see that across the scoreboard, are you familiar with that? Some people are not. I’m not. So the three letters, if you see this on the racing scoreboard, DNF means did not finish. OK, and it’s funny because there are some racers out there, usually a

[07:18] lot of time. This is people that are really good sprinters. So they’re good fast for a short amount of time, but they’re DNFers, like they do not finish the long races. Yeah, that happens so much in the financial world. So let’s say this, let’s retool our message just a little bit. And let’s say what’s the message for our sprinters out there for our to create that financial foundation? Because again, the business owner you mentioned in the 60s, maybe he was a sprinter, maybe he just didn’t get to the to the hydration station. So let’s go and let’s talk about that. Well, it’s just so appealing to find the thing on YouTube or on whatever space you’re looking or listening to that is the sexy investment that’s going to have this amazing return and where people

[08:17] make the mistake is they believe that that’s actually going to happen. And so there are investments that are amazing, that get incredible returns, that you should put some of your money in. And as I have said forever, please go slow and start small on those investments. In other words, only put the minimum in and go slow. Don’t move all of your dollars into any investment that promises something that is like that fast race. And literally 99 percent of the financial information out there that you are reading about is the sprinters and it’s the starters. It doesn’t talk about the marathon racers and the finishers and really even the ultra marathoners, right, because that’s a more likely analogy for life.

[09:07] And it all comes back to cash flow. Cash flow starts your life when you first start your life, whatever age you are, when you start your financial life, the ability to save money as a verb, that’s that cash flow out and then cash flow finishes your life cash flow in. And people talk about wanting mailbox money. Yes, I get that. And let’s make sure that we are making that mailbox money guaranteed, absolutely flat out, guaranteed, guaranteed to come in, guaranteed for the rest of your life, no matter how long you live, guaranteed no matter what the stock market or the real estate market is doing. And then with all of your other dollars, you can, frankly, gamble because that’s what a lot of investing is.

[09:54] It’s flat out gambling. And there’s nothing wrong with gambling for fun. If you prefer to do that, I don’t, but people do. And that’s fine. And there’s nothing wrong with gambling some of our dollars, as long as our cash flow is guaranteed on both sides. And then I think along with that comes serving. If you look at the foundation of somebody’s life financially, it’s cash flow. If you look at the foundation of somebody’s life from a human standpoint or a spiritual standpoint, it’s serving. We were put on this earth to serve. We were not put on this earth to have pure luxury and sitting around all day and traveling constantly with a eye to being self-serving. We were put on this earth if we are going to do all those things to

[10:46] serving others. And I believe that that’s just as critical to life as cash flow. Absolutely. It is, you know, that’s the financial foundation. So you talked emergency fund, the opportunity. We went into the route of talking about this as a marathon or ultra marathon. I want to circle back and just touch on one last piece, which is when you are in a long running event, you have to hydrate yourself. You have to have checkpoints in there. So give me a couple of checkpoints so that one, we don’t end up not finishing and two, so that we don’t end up hurting ourselves in order just trying to complete the race. Cause that happens too. I think a really logical one is every decade, right? Every time the, the human speedometer or odometer rolls over another

[11:52] decade, it’s just a logical check in place. And in our perpetual wealth book, we actually have seven phases of prosperity and they are talked about in your 20s, 30s, 40s, 50s, 60s, 70s. Nevertheless, it doesn’t matter what decade you’re in. What matters is what phase of the prosperity you’re in. And for some people, those seven phases will be compressed between say their fifties and their hundreds. Other people, it will be from their twenties all the way until their 120s because they’re literally going to live that long. Absolutely. There are statistics all over the place today that say a 20 year old will easily live to 120. I mean, people are looking at life insurance illustrations that say

[12:38] 120 every single day of the week. So we need to be stretching our perspective of time and knowing that that foundation can just be a support there all along the way in order to create and support what is going on in our lives, which again, all comes back to cash flow, cash flow. All right. I can go with that because that’s what it is. I hear this and I’m like, come on, Kim teach something new. And then I listened to it. I was like, no, there’s nothing now. All right. Come on, Kim teach us some other, some other piece in here. Like, come on, like we can, we can let some of these people skip the emergency opportunity and go restrict. No, it just doesn’t work. That way. I love it. Always back to the basics.

[13:28] It does. It’s so good listeners. Uh, we really want to thank you for investing your time with us and for coming to, to get content that is going to be valuable to you. If you listen to it today, or if you take this recording through it and your email inbox and say, come back to it in a year, it’s going to be helpful or if you hand it to a grand kid and they listen to it in three years, regardless, this is information that is here to outlive and for you to create that legacy that you want. So thank you for listening to this episode today. Thank you for listening to the prosperity podcast to take control of your money and have it work for you visit prosperity thinkers.