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Where’s Wealthy?

Where's Wealthy?

Originally aired 4/28/2021

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Trying to find valuable, useful information as you work toward financial independence is about like playing Where’s Waldo. You know it’s there, but there are a lot of distractions you have to get through first. 

You’ll learn:
– 4 tips to help you avoid distractions as you build wealth
– The best defense against the noise from media and self-proclaimed “experts”

Downloadable Content:

What’s The Plan: A Manifesto for Your Life, Your Worth, and What Happens Next

Links:

How to Put Some FIRE In Your Financial Plan

Fastest Four Minutes in Finance

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SHOW NOTES

The Incredible Paper Chase

  • Trying to find valuable, useful information as you work toward financial independence is about like playing Where’s Waldo.
    • You know it’s there, but there are a lot of distractions you have to get through first.
  • Both the news and social media are full of noise.
    • Social media has turned everyone into self-proclaimed “experts” on everything from health to financial wellness.
    • Articles and information from the news are now judged on how click-worthy it is, not how reliable and applicable it is.
  • The media sells you “strategies” to get rich quick, retire early, dodge the IRS, and keep your money safe.
    • A simple google search of “build financial independence” brings up articles like:
      • “7 ways to achieve financial independence and retire by 40
      • “Get Started with the FIRE Movement”
      • “Ways to Build Wealth Fast (that Your Financial Advisor Won’t Tell You)”
      • And other potentially damaging approaches to your financial life.
    • Now, we won’t get into all the details on the show today, but if you want to better understand the harm the FIRE movement can cause your financial future, we’ve got a Get Ready For The Future episode for you!
      • You can check it out here
    • How do you cut through the noise and distractions to find what works for you as you build wealth?
      • Today’s show is full of tips and straight talk to help you figure that out!
  • #1: Don’t be a Paper Chaser (Play the Long Game)
    • Let’s talk about these promises of fast wealth.
    • Fact is: almost no one wakes up one morning to instant, overnight wealth.
    • At best, these could be a fast track to nowhere. At worst, they could take hold of your money and keep you from the future you want and deserve.
    • Consider the risk
      • Possibility for a higher payoff means you’re likely accepting a larger risk.
    • Prioritize your overall financial health.
  • Playing the long game starts with knowing what your end goal is.
    • You’ve got to know where you’re going in order to know how to get there.
    • You don’t set off on a road trip without a destination.
      • You likely have a specific place you want to get to and a map to help you get there.
  • Feeling secure about your future starts with how you see your future.
    • We’ve got 10 ways to shift your perspective of planning with our free download What’s The Plan: A Manifesto for Your Life, Your Worth, and What Happens Next.
    • Click here for your free copy!

Now?

  • Now that you’ve set your goal and determined that playing the long game is the way to go, there are still some things you may face to tempt you to buy into the media hype and scare tactics.
  • #2: Avoid Emotional Decisions
    • It’s no secret that there are emotions tied to our money.
      • When you consider how large of a role your finances play in your life, it’s easy to understand why we can become emotionally led.
        • Your money is integral to every choice you make: Whether you work or stop working, to stay here or move there.
    • But, fact is, when we allow emotions to drive our decisions, logic gets pushed to the back seat.
      • The role of the media is to keep you emotional so they can keep you clicking.
      • In reality, there’s always been market volatility and there always will be market volatility.
        • If you know and understand that, you may be less likely to make rash decisions based on media hype.
      • There are always going to be reasons not to invest in your future.
  • Some of the most common emotional decisions (reactions, really) we see people make:
    • Trying to time the market.
      • This is a losing game.
      • Equities are long-term investments
    • Money moves based on politics.
      • “The new administration is going to increase taxes and i want to take all my money out of my 401k because taxes will be a lot higher later.”
    • Selling and getting out of investing entirely.
      • A lot of people moved to cash after 2008 and never went back.
      • But, let’s look at what would have happened if you invested $10,000 at the bottom of the financial crisis:
        • The absolute bottom for the financial crisis was March 9, 2009, when the S&P 500 hit 676.53.1.
        • For simplicity purposes, we’ll call it 676.
        • Investing $10,000 at that time would have bought you 148 shares of the SPDR S&P 500 ETF (SPY) at $67.95 (this is rounded up from 147.17 assuming you could have thrown in a few extra bucks). As of October 2020, the S&P 500 stands at 3,477.13 and SPY trades at $346.85.
        • 13 – 676 = 2,801.13 for a 414% gain or 3.14x increase
        • $346.85 – $67.95 = $278.90 for a 410% gain or 4.10x increase
        • Thus, holding all of your shares, your investment would be worth $51,333.80. Pretty good for a $10,000 investment!
        • Now, the S&P 500 can be a good reference point for the market, but it cannot be directly invested in, and this is for demonstration purposes only.
      • If you aren’t investing, you may be avoiding market risk but you’re fully accepting a risk you may not have thought of: inflation.
  • Feeling secure about your future starts with how you see your future.
    • We’ve got 10 ways to shift your perspective of planning with our free download What’s The Plan: A Manifesto for Your Life, Your Worth, and What Happens Next.
    • Download your free copy here!

The Fantastic Journey

  • The hunt for Waldo continues, but lookalikes are scattered in to throw you off course.
    • Odlaw, Waldo’s nemesis, appears nearly the same as Waldo, except that his clothes are yellow and black striped instead of red and white; his glasses have a blue tint to them; and he has a mustache.
  • In a similar way, knowledge and information can seem to be the same, but information can throw you off track from true knowledge.
  • #3: Focus on Knowledge, Not Information
    • The world is full of information. But you can consume all the information you want and still feel lost.
      • Knowledge isn’t just being able to regurgitate information. It’s being able to locate information that is significant, understand how it applies to your situation, and filter out what doesn’t matter.
    • Understand what’s significant to you and recognize the rest isn’t worth your emotional investment.
      • If you don’t know what information is significant to you, seek advice from a trusted professional that knows your situation. That’s the value of having a financial advisor.
    • Just about anyone can tell you “OMG THE MARKET’S TANKING!” Not many can tell you what that means for you, and that includes the people writing the headlines.
      • The news of a market downturn means different things for different people.
        • Understanding this and how to navigate the different circumstances people might be facing is our job.
        • That’s why we held town hall meetings in 2008 and 2020. The news was in panic mode and seemed to be trying to put everyone watching in panic mode, too. There’s nothing beneficial about that.
  • Part of the GenWealth Difference is that we’re education-driven. But what does that mean exactly?
    • We don’t just throw numbers and financial jargon at you and hope it sticks.
      • Philosopher Noam Chomsky said:
        • “You can’t expect somebody to become a biologist by giving them access to the Harvard University biology library and saying, ‘Just look through it.’ That will give them nothing.
        • The internet is the same, except magnified enormously. The person who wins the Nobel Prize in biology is not the person who read the most journal articles and took the most notes on them. It’s the person who knew what to look for.
        • Cultivating that capacity to seek what’s significant, always willing to question whether you’re on the right track, that’s what education is going to be about.”
    • We offer our insight at the level you are comfortable with
      • If you want to know the small details of what goes into your plan, we can talk to you about that. If you just want a 30,000-foot view to know it’s taken care of, we can do that, too.
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        • If you’ve missed one you wanted to see, we’ve got replays available anytime here.
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The Wonder Book

  • In The Wonder Book, Waldo ventures through a world of dreams and fantasies including a cake factory, a fantastic flower garden and the corridors of time.
  • As you journey through the corridors of time, what’s your wonder book?
    • Said another way, what’s the plan?
  • #4: Have a Plan (and Stick To It)
    • A personalized plan for you is the best defense against the noise from the media and self-proclaimed experts.
      • Fact is, all the noise comes from people who know nothing about you, your money, or your goals.
      • If your car broke down and someone who didn’t know the make or model of your car or the circumstances around it breaking down began giving you advice that was “guaranteed” to make it work again, would you listen?
    • Your financial advice shouldn’t just assume you’re average.
      • Every person that walks through our door has a different story, different financial circumstances, different goals.. Quite frankly, it would be dumb for us to give them all the same advice.
  • So, what does a personalized plan look like?
    • Financial planning is about more than your assets, investments, and net worth.
      • It’s about what you want to do with your money and why.
      • It’s about identifying your concerns, expectations, and goals.
    • MoneyGuide takes your goals into consideration, both before and during retirement, and gauges how likely you are to reach them.
    • It helps address common fears and concerns such as:
      • Healthcare costs
      • Outliving your money
      • The best time to file for Social Security benefits
  • Your plan is designed for you to stick to it.
    • That doesn’t mean your plan never changes – it’s a living, breathing document that grows and evolves with you.
    • That does mean that it remains focused on your long-term goals and the steps you should take to get there, and it doesn’t cater to short-term whims (or the news cycle).
  • If you’re ready for a personalized plan to help you work toward your goals, click here.

 

FINAL THOUGHTS

    • Headlines are designed to capture your attention and your money.
      • Don’t fall for the hype.
      • Cut through the noise and find what works for you.
  •  
    • How to cut through the noise:
      • Don’t be a paper chaser – play the long game
      • Avoid emotional decisions
      • Focus on knowledge, not information
      • Have a plan (and stick to it)
  •  
    • Feeling secure about your future starts with how you see your future.
      • We’ve got 10 ways to shift your perspective of planning with our free download What’s The Plan: A Manifesto for Your Life, Your Worth, and What Happens Next.
      • Click here to get your free copy!